Document:

Exhibit 106 Excess Catastrophe Reinsurance Contract Effective 070116 - Federated National Insurance Comp

		
			Excess Catastrophe Reinsurance Contract
		

		
			Effective:  July 1, 2016
		

		
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			Federated National Insurance Company
		

		
			Sunrise, Florida
		

		
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						_______________________

					
						 

					
						*****Portions of this document omitted pursuant to an application for an order for confidential treatment pursuant to Rule 24b-2 under the Exchange Act. Confidential portions of this document have been filed separately with the Securities and Exchange Commission.

					
						 

					
						 

					
					
						 

				
	
					
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						*****Portions of this document omitted pursuant to an application for an order for confidential treatment pursuant to Rule 24b-2 under the Exchange Act. Confidential portions of this document have been filed separately with the Securities and Exchange Commission.

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

				

		 

			

					

						 

					

					

						 

				
	

					

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						First Excess Catastrophe

					
					
						 

				
	
					
						Reinsurer(s)

					
					
						Participation(s)

				
	
					
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						Aeolus Re Ltd. in respect of Keystone Segregated Account**

					
					
						*%

				
	
					
						Arch Reinsurance Ltd.

					
					
						*%

				
	
					
						Endurance Specialty Insurance Ltd.**

					
					
						*%

				
	
					
						Hamilton Re, Ltd.

					
					
						*%

				
	
					
						RLI Insurance Company

					
					
						*%

				
	
					
						Tokio Millennium Re AG, Bermuda Branch (Securis Investments Business)

					
					
						*%

				
	
					
						Transatlantic Reinsurance Company

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield (Placement Only)

					
					
						 

				
	
					
						China Reinsurance (Group) Corporation**

					
					
						*%

				
	
					
						General Insurance Corporation of India**

					
					
						*%

				
	
					
						MS Amlin AG Bermuda Branch**

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield

					
					
						 

				
	
					
						Lloyd's Underwriters Per Signing Page(s)**

					
					
						*%

				
	
					
						Total

					
					
						*%

				

		
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			**Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.
		

		
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						Second Excess Catastrophe

				
	
					
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						Reinsurer(s)

					
					
						Participation(s)

				
	
					
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						Arch Reinsurance Ltd.

					
					
						*%

				
	
					
						Ariel Re Bda Limited
  for and on behalf of Ariel Syndicate No. 1910

					
					
						*%

				
	
					
						Chubb Tempest Reinsurance Ltd.**

					
					
						*%

				
	
					
						DaVinci Reinsurance Ltd.**

					
					
						*%

				
	
					
						Endurance Specialty Insurance Ltd.**

					
					
						*%

				
	
					
						Fidelis Insurance Bermuda Limited

					
					
						*%

				
	
					
						Hamilton Re, Ltd.

					
					
						*%

				
	
					
						Hiscox Insurance Company (Bermuda) Limited

					
					
						*%

				
	
					
						Partner Reinsurance Company Ltd.

					
					
						*%

				
	
					
						Renaissance Reinsurance Ltd.**

					
					
						*%

				
	
					
						The Cincinnati Insurance Company

					
					
						*%

				
	
					
						Transatlantic Reinsurance Company

					
					
						*%

				
	
					
						XL Bermuda Ltd

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield (Placement Only)

					
					
						 

				
	
					
						Ascot Underwriting (Bermuda) Limited
  for and on behalf of American International Reinsurance Company, Ltd.**

					
					
						*%

				
	
					
						China Reinsurance (Group) Corporation**

					
					
						*%

				
	
					
						General Insurance Corporation of India**

					
					
						*%

				
	
					
						Liberty Syndicates LIB 4472, Paris Office Underwriting for and on behalf of
  Lloyd's Syndicate No. 4472**

					
					
						*%

				
	
					
						MS Amlin AG Bermuda Branch**

					
					
						*%

				
	
					
						Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
						Pioneer Underwriting Limited
  for and on behalf of Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield

					
					
						 

				
	
					
						Lloyd's Underwriters and Companies**

					
						  Per Signing Page(s)

					
					
						*%

				
	
					
						Total

					
					
						*%

				

		
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			**Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.
		

		
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						Third Excess Catastrophe

				
	
					
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						Reinsurer(s)

					
					
						Participation(s)

				
	
					
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						Allied World Assurance Company, Ltd

					
					
						*%

				
	
					
						Argo Re Ltd.

					
					
						*%

				
	
					
						Ariel Re Bda Limited
  or and on behalf of Ariel Syndicate No. 1910

					
					
						*%

				
	
					
						Aspen Bermuda Limited

					
					
						*%

				
	
					
						Endurance Specialty Insurance Ltd.**

					
					
						*%

				
	
					
						Fidelis Insurance Bermuda Limited

					
					
						*%

				
	
					
						Hamilton Re, Ltd.

					
					
						*%

				
	
					
						Odyssey Reinsurance Company

					
					
						*%

				
	
					
						QBE Reinsurance Corporation

					
					
						*%

				
	
					
						The Cincinnati Insurance Company

					
					
						*%

				
	
					
						XL Bermuda Ltd

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield (Placement Only)

					
					
						 

				
	
					
						Ascot Underwriting (Bermuda) Limited
  for and on behalf of American International Reinsurance Company, Ltd.**

					
					
						*%

				
	
					
						China Reinsurance (Group) Corporation**

					
					
						*%

				
	
					
						General Insurance Corporation of India**

					
					
						*%

				
	
					
						Liberty Syndicates LIB 4472, Paris Office Underwriting for and on behalf of
  Lloyd's Syndicate No. 4472**

					
					
						*%

				
	
					
						MS Amlin AG Bermuda Branch**

					
					
						*%

				
	
					
						Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
						Pioneer Underwriting Limited
  for and on behalf of Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield

					
					
						 

				
	
					
						Lloyd's Underwriters and Companies**

					
						  Per Signing Page(s)

					
					
						*%

				
	
					
						Total

					
					
						*%

				

		
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			**Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.
		

		
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						Fourth Excess Catastrophe

				
	
					
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						Reinsurer(s)

					
					
						Participation(s)

				
	
					
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						Allied World Assurance Company, Ltd

					
					
						*%

				
	
					
						American Agricultural Insurance Company

					
					
						*%

				
	
					
						Arch Reinsurance Ltd.

					
					
						*%

				
	
					
						Aspen Bermuda Limited

					
					
						*%

				
	
					
						BGS Services (Bermuda) Limited 
  for and on behalf of Lloyd's Syndicate No. 2987

					
					
						*%

				
	
					
						Chubb Tempest Reinsurance Ltd.**

					
					
						*%

				
	
					
						Fidelis Insurance Bermuda Limited

					
					
						*%

				
	
					
						Hamilton Re, Ltd.

					
					
						*%

				
	
					
						Odyssey Reinsurance Company

					
					
						*%

				
	
					
						Qatar Reinsurance Company Limited

					
					
						*%

				
	
					
						QBE Reinsurance Corporation

					
					
						*%

				
	
					
						Transatlantic Reinsurance Company

					
					
						*%

				
	
					
						XL Bermuda Ltd

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield (Placement Only)

					
					
						 

				
	
					
						Ascot Underwriting (Bermuda) Limited
  for and on behalf of American International Reinsurance Company, Ltd.**

					
					
						*%

				
	
					
						China Reinsurance (Group) Corporation**

					
					
						*%

				
	
					
						Fubon Insurance Co., Ltd.**

					
					
						*%

				
	
					
						General Insurance Corporation of India**

					
					
						*%

				
	
					
						Liberty Syndicates LIB 4472, Paris Office Underwriting for and on behalf of
  Lloyd's Syndicate No. 4472**

					
					
						*%

				
	
					
						MS Amlin AG Bermuda Branch**

					
					
						*%

				
	
					
						Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
						Pioneer Underwriting Limited 
  for and on behalf of Taiping Reinsurance Co. Ltd.**

					
					
						*%

				
	
					
						Pioneer Underwriting Limited
  for and on behalf of Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield

					
					
						 

				
	
					
						Lloyd's Underwriters and Companies**

					
						   Per Signing Page(s)

					
					
						*%

				
	
					
						Total

					
					
						*%

				

		
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			**Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.
		

		
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						Fifth Excess Catastrophe

				
	
					
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						Reinsurer(s)

					
					
						Participation(s)

				
	
					
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						Allied World Assurance Company, Ltd

					
					
						*%

				
	
					
						Arch Reinsurance Ltd.

					
					
						*%

				
	
					
						Chubb Tempest Reinsurance Ltd.**

					
					
						*%

				
	
					
						DaVinci Reinsurance Ltd.**

					
					
						*%

				
	
					
						Fidelis Insurance Bermuda Limited

					
					
						*%

				
	
					
						Odyssey Reinsurance Company

					
					
						*%

				
	
					
						Partner Reinsurance Company Ltd.

					
					
						*%

				
	
					
						Qatar Reinsurance Company Limited

					
					
						*%

				
	
					
						Renaissance Reinsurance Ltd.**

					
					
						*%

				
	
					
						Swiss Reinsurance America Corporation
  By: Swiss Re Underwriters Agency Inc., its authorized representative**

					
					
						*%

				
	
					
						Transatlantic Reinsurance Company

					
					
						*%

				
	
					
						XL Bermuda Ltd

					
					
						*%

				
	
					
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						Through Aon UK Limited trading as Aon Benfield (Placement Only)

					
					
						 

				
	
					
						Ascot Underwriting (Bermuda) Limited
  for and on behalf of American International Reinsurance Company, Ltd.**

					
					
						*%

				
	
					
						China Reinsurance (Group) Corporation**

					
					
						*%

				
	
					
						Liberty Syndicates LIB 4472, Paris Office Underwriting for and on behalf of
  Lloyd's Syndicate No. 4472**

					
					
						*%

				
	
					
						MS Amlin AG Bermuda Branch**

					
					
						*%

				
	
					
						Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
						Pioneer Underwriting Limited 
  for and on behalf of Taiping Reinsurance Co. Ltd.**

					
					
						*%

				
	
					
						Pioneer Underwriting Limited
 for and on behalf of Peak Reinsurance Company Limited**

					
					
						*%

				
	
					
						﻿

					
					
						 

				
	
					
						Through Aon UK Limited trading as Aon Benfield

					
					
						 

				
	
					
						Lloyd's Underwriters Per Signing Page(s)**

					
					
						*%

				
	
					
						Total

					
					
						*%

				

		
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**Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.
		

		
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		Table of Contents
		

		
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						Article

					
					
						 

					
					
						Page

				
	1 
					
					
						Classes of Business Reinsured

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	2 
					
					
						Commencement and Termination

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	3 
					
					
						Territory

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	4 
					
					
						Exclusions

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	5 
					
					
						Retention and Limit

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	6 
					
					
						Florida Hurricane Catastrophe Fund

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	7 
					
					
						Other Reinsurance

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	8 
					
					
						Reinstatement

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	9 
					
					
						Definitions

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	10 
					
					
						Loss Occurrence

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	11 
					
					
						Loss Notices and Settlements

					10 
				
	12 
					
					
						Cash Call

					10 
				
	13 
					
					
						Salvage and Subrogation

					10 
				
	14 
					
					
						Reinsurance Premium

					11 
				
	15 
					
					
						Sanctions

					12 
				
	16 
					
					
						Late Payments

					12 
				
	17 
					
					
						Offset

					13 
				
	18 
					
					
						Access to Records

					13 
				
	19 
					
					
						Liability of the Reinsurer

					13 
				
	20 
					
					
						Net Retained Lines (BRMA 32E)

					14 
				
	21 
					
					
						Errors and Omissions (BRMA 14F)

					14 
				
	22 
					
					
						Currency (BRMA 12A)

					14 
				
	23 
					
					
						Taxes (BRMA 50B)

					14 
				
	24 
					
					
						Federal Excise Tax (BRMA 17D)

					15 
				
	25 
					
					
						Foreign Account Tax Compliance Act

					15 
				
	26 
					
					
						Reserves

					15 
				
	27 
					
					
						Insolvency

					16 
				
	28 
					
					
						Arbitration

					17 
				
	29 
					
					
						Service of Suit (BRMA 49C)

					18 
				
	30 
					
					
						Severability (BRMA 72E)

					18 
				
	31 
					
					
						Governing Law (BRMA 71B)

					19 
				
	32 
					
					
						Confidentiality

					19 
				
	33 
					
					
						Non-Waiver

					20 
				
	34 
					
					
						Notices and Contract Execution

					20 
				
	35 
					
					
						Intermediary

					20 
				
	
					
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						Schedule A

					
					
						 

				

		
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		Excess Catastrophe Reinsurance Contract
		

		
			Effective: July 1, 2016
		

		
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			entered into by and between 
		

		
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			Federated National Insurance Company
		

		
			Sunrise, Florida
		

		
			(hereinafter referred to as the "Company")
		

		
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			and
		

		
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			The Subscribing Reinsurer(s) Executing the
		

		
			Interests and Liabilities Agreement(s)
		

		
			Attached Hereto
		

		
			(hereinafter referred to as the "Reinsurer")
		

		
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			Article 1 - Classes of Business Reinsured
		

		
			By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the Company under its policies in force at the effective time and date hereof or issued or renewed at or after that time and date, and classified by the Company as Property business, including but not limited to, Dwelling Fire, Inland Marine, Mobile Home, Commercial and Homeowners business (including any business assumed from Citizens Property Insurance Corporation), subject to the terms, conditions and limitations set forth herein and in Schedule A attached hereto.
		

		
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			Article 2 - Commencement and Termination
		

		
			A.    This Contract shall become effective at 12:01 a.m., Eastern Standard Time, July 1, 2016, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Eastern Standard Time, July 1, 2017.
		

		
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			B.    Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event any of the following circumstances occur:
		

		
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			1.     The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at the inception of this Contract has been reduced by 20.0% or more of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or
		

		
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			2.     The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time during the term of this Contract has been reduced by 20.0% or more of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial 
		

		 

			

					

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		statement filed with regulatory authorities and available to the public as of the inception of this Contract; or
		

		
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			3.     The Subscribing Reinsurer's A.M. Best's rating has been assigned or downgraded below A- and/or Standard & Poor's rating has been assigned or downgraded below BBB+; or
		

		
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			4.     The Subscribing Reinsurer has become, or has announced its intention to become, merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or
		

		
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			5.     A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease writing business; or
		

		
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			6.     The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or
		

		
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			7.     The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or
		

		
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			8.     The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business; or
		

		
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			9.     The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid; or
		

		
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			10.   The Subscribing Reinsurer has failed to comply with the funding requirements set forth in the Reserves Article.
		

		
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			C.    The "term of this Contract" as used herein shall mean the period from 12:01 a.m., Eastern Standard Time, July 1, 2016 to 12:01 a.m., Eastern Standard Time, July 1, 2017.  However, if this Contract is terminated, the "term of this Contract" as used herein shall mean the period from 12:01 a.m., Eastern Standard Time, July 1, 2016 to the effective time and date of termination.
		

		
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			D.    If this Contract is terminated or expires while a loss occurrence covered hereunder is in progress, the Reinsurer's liability hereunder shall, subject to the other terms and conditions of this Contract, be determined as if the entire loss occurrence had occurred prior to the termination or expiration of this Contract, provided that no part of such loss occurrence is claimed against any renewal or replacement of this Contract.
		

		
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			Article 3 - Territory
		

		
			The territorial limits of this Contract shall be identical with those of the Company's policies.
		

		
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			Article 4 - Exclusions
		

		
			A.    This Contract does not apply to and specifically excludes the following:
		

		
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			1.     Reinsurance assumed by the Company under obligatory reinsurance agreements, except business assumed by the Company from Citizens Property Insurance Corporation.
		

		
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			2.     Hail damage to growing or standing crops.
		

		
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			3.     Business rated, coded or classified as Flood insurance or which should have been rated, coded or classified as such.
		

		
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			4.     Business rated, coded or classified as Mortgage Impairment and Difference in Conditions insurance or which should have been rated, coded or classified as such.
		

		
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			5.     Title insurance and all forms of Financial Guarantee, Credit and Insolvency.
		

		
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			6.     Aviation, Ocean Marine, Boiler and Machinery, Fidelity and Surety, Accident and Health, Animal Mortality and Workers Compensation and Employers Liability.
		

		
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			7.     Errors and Omissions, Malpractice and any other type of Professional Liability insurance. 
		

		
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			8.     Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.
		

		
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			9.     Loss or liability as excluded under the provisions of the "War Exclusion Clause" attached to and forming part of this Contract.
		

		
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			10.   Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.
		

		
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			11.   Loss or liability excluded by the Pools, Associations and Syndicates Exclusion Clause (Catastrophe) attached to and forming part of this Contract  and any assessment or similar demand for payment related to the FHCF or Citizens Property Insurance Corporation.
		

		
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			12.   Loss or liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any insolvency fund.  "Insolvency fund" includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, however denominated, established or 
		

		 

			

					

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		governed, which provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee or other obligation of an insurer, or its successors or assigns, which has been declared by any competent authority to be insolvent, or which is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.
		

		
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			13.   Losses in the respect of overhead transmission and distribution lines other than those on or within 150 meters (or 500 feet) of the insured premises.
		

		
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			14.   Mold, unless resulting from a peril otherwise covered under the policy involved.
		

		
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			15.   Loss or liability as excluded under the provisions of the "Terrorism Exclusion" attached to and forming part of this Contract.
		

		
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			16.   All property loss, damage, destruction, erasure, corruption or alteration of Electronic Data from any cause whatsoever (including, but not limited to, Computer Virus) or loss of use, reduction in functionality, cost, expense or whatsoever nature resulting therefrom, unless resulting from a peril otherwise covered under the policy involved.
		

		
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			"Electronic Data" as used herein means facts, concepts and information converted to a form usable for communications, interpretation or processing by electronic and electromechanical data processing or electronically-controlled equipment and includes programs, software and other coded instructions for the processing and manipulation of data or the direction and manipulation of such equipment. 
		

		
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			"Computer Virus" as used herein means a set of corrupting, harmful or otherwise unauthorized instructions or code, including a set of maliciously-introduced, unauthorized instructions or code, that propagate themselves through a computer system network of whatsoever nature.
		

		
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			However, in the event that a peril otherwise covered under the policy results from any of the matters described above, this Contract, subject to all other terms and conditions, will cover physical damage directly caused by such listed peril.
		

		
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			Article 5 - Retention and Limit
		

		
			A.    The Company shall retain and be liable for the first $20,500,000 of ultimate net loss arising out of each loss occurrence.  The Reinsurer shall then be liable, as respects each excess layer, for the amount by which such ultimate net loss exceeds the Company's retention, but the liability of the Reinsurer under each excess layer shall not exceed the amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects any one loss occurrence.
		

		
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			Whether a loss occurrence results in an ultimate net loss under one or more of the excess layers set forth in Schedule A attached hereto, the Company's retention will not exceed the first $20,500,000 of ultimate net loss arising out of such loss occurrence.
		

		
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			B.    Recoveries shall always be made, in the first instance, under the lowest excess layer that is not entirely exhausted.  If there is any amount of ultimate net loss arising out of a loss 
		

		 

			

					

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		occurrence in excess of the Company's retention under the lowest excess layer that has not been recovered thereunder, such amount shall be recovered under the next or subsequent excess layer or layers, as appropriate.  Recoveries under each excess layer set forth in Schedule A attached to and forming part of this Contract shall inure as follows:
		

		
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			1.     Recoveries under the First Excess layer shall inure to the benefit of the Second Excess layer; 
		

		
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			2.     Recoveries under the First and Second Excess layers shall inure to the benefit of the Third Excess layer; and
		

		
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			3.     Recoveries under the First, Second and Third Excess layers shall inure to the benefit of the Fourth Excess layer.
		

		
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			4.     Recoveries under the First, Second, Third and Fourth Excess layers shall inure to the benefit of the Fifth Excess layer.
		

		
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			It is understood, however, that any fully exhausted excess layer or the exhausted portion of any excess layer shall no longer inure to the benefit of any subsequent excess layer(s).
		

		
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			C.    Notwithstanding the provisions above, no claim shall be made hereunder as respects losses arising out of loss occurrences commencing during the term of this Contract unless at least two risks insured or reinsured by the Company are involved in such loss occurrence.  For purposes hereof, the Company shall be the sole judge of what constitutes "one risk."
		

		
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			Article 6 - Florida Hurricane Catastrophe Fund
		

		
			The Company has purchased 75.0% of the FHCF mandatory layer of coverage and shall be deemed to inure to the benefit of this Contract.  Further, any FHCF loss reimbursement shall be deemed to be paid to the Company in accordance with the FHCF reimbursement contract at the full payout level set forth therein and will be deemed not to be reduced by any reduction or exhaustion of the FHCF's claims-paying capacity as respects the mandatory FHCF coverage.
		

		
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			Article 7 - Other Reinsurance
		

		
			A.    The Company shall be permitted to carry other reinsurance, recoveries under which shall inure solely to the benefit of the Company and be entirely disregarded in applying all of the provisions of this Contract.
		

		
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			B.    Any loss reimbursement received under the Company's FHCF Supplement Layer Reinsurance Contract (16\F7V1085), which shall be deemed to be placed at 15.0%, shall be deemed to inure to the benefit of this Contract.
		

		
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			Article 8 - Reinstatement
		

		
			A.    In the event all or any portion of the reinsurance under any excess layer of reinsurance coverage provided by this Contract is exhausted by ultimate net loss, the amount so exhausted shall be reinstated immediately from the time the loss occurrence commences hereon.  For each amount so reinstated the Company agrees to pay additional premium equal to the product of the following:
		

		
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			1.     The percentage of the occurrence limit for the excess layer reinstated (based on the ultimate net loss paid by the Reinsurer under that excess layer); times
		

		
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			2.     The earned reinsurance premium for the excess layer reinstated for the term of this Contract (exclusive of reinstatement premium).
		

		
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			B.    Whenever the Company requests payment by the Reinsurer of any ultimate net loss under any excess layer hereunder, the Company shall submit a statement to the Reinsurer of reinstatement premium due the Reinsurer for that excess layer.  If the earned reinsurance premium for any excess layer for the term of this Contract has not been finally determined as of the date of any such statement, the calculation of reinstatement premium due for that excess layer shall be based on the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, and shall be readjusted when the earned reinsurance premium for that excess layer for the term of this Contract has been finally determined.  Any reinstatement premium shown to be due the Reinsurer for any excess layer as reflected by any such statement (less prior payments, if any, for that excess layer) shall be payable by the Company concurrently with payment by the Reinsurer of the requested ultimate net loss for that excess layer.  Any return reinstatement premium shown to be due the Company shall be remitted by the Reinsurer as promptly as possible after receipt and verification of the Company's statement.
		

		
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			C.    Notwithstanding anything stated herein, the liability of the Reinsurer for ultimate net loss under any excess layer of reinsurance coverage provided by this Contract shall not exceed either of the following:
		

		
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			1.     The amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects loss or losses arising out of any one loss occurrence; or
		

		
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			2.     The amount, shown as "Reinsurer's  Term Limit" for that excess layer in Schedule A attached hereto, in all during the term of this Contract.
		

		
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			Article 9 - Definitions
		

		
			A.    "Loss adjustment expense," regardless of how such expenses are classified for statutory reporting purposes, as used in this Contract shall mean all costs and expenses allocable to a specific claim that are incurred by the Company in the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim, including court costs and costs of supersedeas and appeal bonds, and including a) pre-judgment interest, unless included as part of the award or judgment; b) post-judgment interest; c) legal expenses and costs incurred in connection with coverage questions and legal actions 
		

		 

			

					

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		connected thereto, including Declaratory Judgment Expense; and d) expenses and a pro rata share of salaries of the Company field employees, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract.
		

		
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			Loss adjustment expense as defined above does not include unallocated loss adjustment expense.  Unallocated loss adjustment expense includes, but is not limited to, salaries and expenses of employees, other than in (d) above, and office and other overhead expenses.
		

		
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			B.    "Loss in excess of policy limits" and "extra contractual obligations" as used in this Contract shall mean:
		

		
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			1.     "Loss in excess of policy limits" shall mean 90.0% of any amount paid or payable by the Company in excess of its policy limits, but otherwise within the terms of its policy, such loss in excess of the Company's policy limits having been incurred because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.    Any loss in excess of policy limits that is made in connection with this Contract shall not exceed 25.0% of the actual catastrophe loss.
		

		
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			2.     "Extra contractual obligations" shall mean 90.0% of any punitive, exemplary, compensatory or consequential damages paid or payable by the Company, not covered by any other provision of this Contract and which arise from the handling of any claim on business subject to this Contract, such liabilities arising because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.  An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.    Any extra contractual obligations that are made in connection with this Contract shall not exceed 25.0% of the actual catastrophe loss.
		

		
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			Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.
		

		
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			C.    "Policies" as used in this Contract shall mean all policies, contracts and binders of insurance or reinsurance.
		

		
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			D.    "Ultimate net loss" as used in this Contract shall mean the sum or sums (including loss in excess of policy limits, extra contractual obligations and loss adjustment expense, as defined herein) paid or payable by the Company in settlement of claims and in satisfaction of judgments rendered on account of such claims, after deduction of all salvage, all recoveries and all claims on inuring insurance or reinsurance, whether collectible or not.  
		

		 

			

					

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		Nothing herein shall be construed to mean that losses under this Contract are not recoverable until the Company's ultimate net loss has been ascertained.
		

		
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			Article 10 - Loss Occurrence
		

		
			A.    The term "loss occurrence" shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:
		

		
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			*****
		

		
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			2.     As regards storm or storm systems that are not a named storm, including, by way of example and not limitation, ensuing wind, gusts, typhoon, tropical storm, hail, rain, tornados, cyclones, ensuing flood, storm surge, fire following, sprinkler leakage, riots, vandalism, collapse and water damage, all individual losses sustained by the Company occurring during any period of 144 consecutive hours arising out of, caused by, occurring during, occasioned by or resulting from the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.
		

		
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			3.     As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 96 consecutive hours may be extended in respect of individual losses which occur beyond such 96 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.
		

		
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			4.     As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in paragraph A of this Article) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's loss occurrence.
		

		
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			5.     As regards freeze, only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting frozen pipes and tanks) may be included in the Company's loss occurrence.
		

		
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			6.     As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 3 and 4 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within the area of one state of the United States or province of Canada and 
		

		 

			

					

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		states or provinces contiguous thereto and to one another may be included in the Company's loss occurrence.
		

		
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			B.    For all loss occurrences hereunder, the Company may choose the date and time when any such period of consecutive hours commences, provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident, or loss or series of disasters, accidents, or losses.  Furthermore:
		

		
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			1.     For all loss occurrences other than those referred to in subparagraphs A.1., A.2., and A.3. above, only one such period of 168 consecutive hours shall apply with respect to one event.
		

		
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			2.     As regards those loss occurrences referred to in subparagraphs A.1. and A.2., only one such period of consecutive hours (as set forth therein) shall apply with respect to one event, regardless of the duration of the event.  
		

		
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			3.     As regards those loss occurrences referred to in subparagraph A.3. above, if the disaster, accident, or loss or series of disasters, accidents, or losses occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident, or loss or series of disasters, accidents, or losses into two or more loss occurrences, provided that no two periods overlap and no individual loss is included in more than one such period.
		

		
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			C.    It is understood that losses arising from a combination of two or more perils as a result of the same event may be considered as having arisen from one loss occurrence.  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and no single loss occurrence shall encompass a time period greater than 168 consecutive hours, except as regards those loss occurrences referred to in subparagraphs A.1., A.4. and A.6. above.
		

		
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			Article 11 - Loss Notices and Settlements
		

		
			A.    Whenever losses sustained by the Company are reserved by the Company for an amount greater than 50.0% of the Company's retention under any excess layer hereunder and/or appear likely to result in a claim under such excess layer, the Company shall notify the Subscribing Reinsurers under that excess layer and shall provide updates related to development of such losses.  The Reinsurer shall have the right to participate in the adjustment of such losses at its own expense.
		

		
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			B.    All loss settlements made by the Company, provided they are within the terms of this Contract and the terms of the original policy (with the exception of loss in excess of policy limits or extra contractual obligations coverage, if any, under this Contract), shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt of reasonable evidence of the amount paid by the Company.
		

		
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			Article 12 - Cash Call
		

		
			Notwithstanding the provisions of the Loss Notices and Settlements Article, upon the request of the Company, the Reinsurer shall pay any amount with regard to a loss settlement or settlements that are scheduled to be made (including any payments projected to be made) within the next 20 days by the Company, subject to receipt by the Reinsurer of a satisfactory proof of loss.  Such agreed payment shall be made within 10 days from the date the demand for payment was transmitted to the Reinsurer.
		

		
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			Article 13 - Salvage and Subrogation
		

		
			The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  Salvage thereon shall always be used to reimburse the excess carriers in the reverse order of their priority according to their participation before being used in any way to reimburse the Company for its primary loss.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rights, if, in the Company's opinion, it is economically reasonable to do so.
		

		
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			Article 14 - Reinsurance Premium
		

		
			A.    As premium for each excess layer of reinsurance coverage provided by this Contract, the Company shall pay the Reinsurer a premium equal to the product of the following (or a pro rata portion thereof in the event the term of this Contract is less than 12 months), subject to a minimum premium of the amount, shown as "Minimum Premium" for that excess layer in Schedule A attached hereto (or a pro rata portion thereof in the event the term of this Contract is less than 12 months):
		

		
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			1.     The amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto; times 
		

		
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			2.     The percentage calculated by dividing (a) the actual Average Annual Loss ("AAL") determined by the Company's wind insurance in force on September 30, 2016, by (b) the original AAL of the amount, shown as "AAL" for that excess layer in Schedule A attached hereto.
		

		
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			However, if the difference between the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, and the premium calculated in accordance with this paragraph A for the excess layer is less than a 10.0% increase or decrease, the premium due the Reinsurer will equal the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto.
		

		
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			The Company's AAL shall be derived by averaging the applicable data produced by Applied Insurance Research (AIR) Touchstone v3.1 and Risk Management Solutions (RMS) RiskLink v15 catastrophe modeling software, in the long-term perspective, including 
		

		 

			

					

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		secondary uncertainty and loss amplification, but excluding storm surge.  It is understood that the calculation of the actual AAL shall be based on the amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, net of (1) the FHCF mandatory layer of coverage purchased by the Company using the current estimates of the mandatory FHCF coverage of 75% of ***** excess of *****, and of (2) the Company's FHCF Supplement Layer Reinsurance Contract (16\F7V1085), which shall be deemed to be placed at 15%.
		

		
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			B.    The Company shall pay the Reinsurer an annual deposit premium for each excess layer of the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, in four equal installments of the amount, shown as "Deposit Premium Installment" for that excess layer in Schedule A attached hereto, on July 1 and October 1 of 2016, and on January 1 and April 1 of 2017.  However, in the event this Contract is terminated, there shall be no deposit premium installments due after the effective date of termination.
		

		
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			C.    On or before June 30, 2017, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder for each excess layer for the term of this Contract, computed in accordance with paragraph A above, and any additional premium due the Reinsurer or return premium due the Company for each such excess layer shall be remitted promptly.
		

		
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			Article 15 - Sanctions
		

		
			Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.
		

		
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			Article 16 - Late Payments
		

		
			A.    The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.
		

		
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			B.    In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest charge on the amount past due calculated for each such payment on the last business day of each month as follows:
		

		
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			1.     The number of full days which have expired since the due date or the last monthly calculation, whichever the lesser; times
		

		
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			2.     1/365ths of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times
		

		
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			3.     The amount past due, including accrued interest.
		

		

		

		 

			

					

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			It is agreed that interest shall accumulate until payment of the original amount due plus interest charges have been received by the Intermediary.
		

		
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			C.    The establishment of the due date shall, for purposes of this Article, be determined as follows:
		

		
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			1.     As respects the payment of routine deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.
		

		
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			2.     Any claim or loss payment due the Company hereunder shall be deemed due 10 days after the proof of loss or demand for payment is transmitted to the Reinsurer.  If such loss or claim payment is not received within the 10 days, interest will accrue on the payment or amount overdue in accordance with paragraph B above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.
		

		
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			3.     As respects any payment, adjustment or return due either party not otherwise provided for in subparagraphs 1 and 2 of this paragraph C, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 10 days following transmittal of written notification that the provisions of this Article have been invoked.
		

		
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			For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.
		

		
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			D.    Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.
		

		
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			E.    Interest charges arising out of the application of this Article that are $1,000 or less from any party shall be waived unless there is a pattern of late payments consisting of three or more items over the course of any 12-month period.
		

		
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			Article 17 - Offset
		

		
			The Company and the Reinsurer may offset any balance or amount due from one party to the other under this Contract or any other contract heretofore or hereafter entered into between the 
		

		 

			

					

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		Company and the Reinsurer, whether acting as assuming reinsurer or ceding company.  The provisions of this Article shall not be affected by the insolvency of either party.
		

		
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			Article 18 - Access to Records
		

		
			The Reinsurer or its designated representatives shall have access at any reasonable time to all records of the Company which pertain in any way to this reinsurance, provided the Reinsurer gives the Company at least 15 days prior notice of request for such access.  However, a Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.  
		

		
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			Article 19 - Liability of the Reinsurer
		

		
			A.    The liability of the Reinsurer shall follow that of the Company in every case and be subject in all respects to all the general and specific stipulations, clauses, waivers and modifications of the Company's policies and any endorsements thereon.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.
		

		
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			B.    Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.
		

		
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			Article 20 - Net Retained Lines (BRMA 32E)
		

		
			A.    This Contract applies only to that portion of any policy which the Company retains net for its own account (prior to deduction of any underlying reinsurance specifically permitted in this Contract), and in calculating the amount of any loss hereunder and also in computing the amount or amounts in excess of which this Contract attaches, only loss or losses in respect of that portion of any policy which the Company retains net for its own account shall be included.
		

		
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			B.    The amount of the Reinsurer's liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts which may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.
		

		
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			Article 21 - Errors and Omissions (BRMA 14F)
		

		
			Inadvertent delays, errors or omissions made in connection with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.
		

		
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			Article 22 - Currency (BRMA 12A)
		

		
			A.    Whenever the word "Dollars" or the "$" sign appears in this Contract, they shall be construed to mean United States Dollars and all transactions under this Contract shall be in United States Dollars.
		

		
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			B.    Amounts paid or received by the Company in any other currency shall be converted to United States Dollars at the rate of exchange at the date such transaction is entered on the books of the Company.
		

		
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			Article 23 - Taxes (BRMA 50B)
		

		
			In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.
		

		
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			Article 24 - Federal Excise Tax (BRMA 17D)
		

		
			A.    The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 4371 of the Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.
		

		
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			B.    In the event of any return of premium becoming due hereunder the Reinsurer will deduct the applicable percentage from the return premium payable hereon and the Company or its agent should take steps to recover the tax from the United States Government.
		

		
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			Article 25 - Foreign Account Tax Compliance Act
		

		
			A.    To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract. 
		

		
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			B.    In the event of any return of premium becoming due hereunder, the return premium shall be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent shall reimburse the Reinsurer for such amounts.
		

		
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			Article 26 - Reserves
		

		
			A.    The Reinsurer agrees to fund its share of amounts, including but not limited to, the Company's ceded unearned premium and outstanding loss and loss adjustment expense 
		

		 

			

					

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		reserves (including all case reserves plus any reasonable amount estimated to be unreported from known loss occurrences) (hereinafter referred to as "Reinsurer's Obligations") by:
		

		
			﻿
		

		
			1.     Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or
		

		
			﻿
		

		
			2.     Escrow accounts for the benefit of the Company; and/or
		

		
			﻿
		

		
			3.     Cash advances;
		

		
			﻿
		

		
			if the Reinsurer:
		

		
			﻿
		

		
			1.     Is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or
		

		
			﻿
		

		
			2.     Has an A.M. Best Company's rating equal to or below B++ at the inception of this Contract.
		

		
			﻿
		

		
			The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.
		

		
			﻿
		

		
			B.    With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:
		

		
			﻿
		

		
			1.     To reimburse itself for the Reinsurer's share of unearned premiums returned to insureds on account of policy cancellations, unless paid in cash by the Reinsurer;
		

		
			﻿
		

		
			2.     To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;
		

		
			﻿
		

		
			3.     To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;
		

		
			﻿
		

		
			4.     To fund a cash account in an amount equal to the Reinsurer's share of amounts, including but not limited to, the Reinsurer's Obligations as set forth above, funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;
		

		

		

		 

			

					

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		﻿
		

		
			5.     To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of amounts, including but not limited to, the Reinsurer's Obligations as set forth above, if so requested by the Reinsurer.
		

		
			﻿
		

		
			In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1), B(2) or B(4), or in the case of B(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.
		

		
			﻿
		

		
			﻿
		

		
			Article 27 - Insolvency
		

		
			A.    In the event of the insolvency of the Company, this reinsurance shall be payable directly to the Company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the Company without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.
		

		
			﻿
		

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

		
			﻿
		

		
			C.    It is further understood and agreed that, in the event of the insolvency of the Company, the reinsurance under this Contract shall be payable directly by the Reinsurer to the Company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) where this Contract specifically provides another payee of such reinsurance in the event of the insolvency of the Company or (2) where the Reinsurer with the consent of the direct insured or insureds has assumed such policy obligations of the Company as direct obligations of the Reinsurer to the payees under such policies and in substitution for the obligations of the Company to such payees.
		

		
			﻿
		

		
			﻿
		

		
			Article 28 - Arbitration
		

		
			A.    As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually 
		

		 

			

					

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		agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.
		

		
			﻿
		

		
			B.    Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction.
		

		
			﻿
		

		
			C.    If more than one Subscribing Reinsurer is involved in the same dispute, all such Subscribing Reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the Subscribing Reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such Subscribing Reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the Subscribing Reinsurers participating under the terms of this Contract from several to joint.
		

		
			﻿
		

		
			D.    Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.
		

		
			﻿
		

		
			E.    Any arbitration proceedings shall take place at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the state in which the Company has its principal office.
		

		
			﻿
		

		
			﻿
		

		
			Article 29 - Service of Suit (BRMA 49C)
		

		
			(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)
		

		
			﻿
		

		
			A.    It is agreed that in the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer's rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a 
		

		 

			

					

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		United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.
		

		
			﻿
		

		
			B.    Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.
		

		
			﻿
		

		
			﻿
		

		
			Article 30 - Severability (BRMA 72E)
		

		
			If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.
		

		
			﻿
		

		
			﻿
		

		
			Article 31 - Governing Law (BRMA 71B)
		

		
			This Contract shall be governed by and construed in accordance with the laws of the State of Florida.
		

		
			﻿
		

		
			﻿
		

		
			Article 32 - Confidentiality
		

		
			A.    The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract, including all information obtained through any audits and any claims information between the Company and the Reinsurer, and any submission or other materials relating to any renewal (hereinafter referred to as "Confidential Information") are proprietary and confidential to the Company.  
		

		
			﻿
		

		
			B.    Except as provided for in paragraph C below, the Reinsurer shall not disclose any Confidential Information to any third parties, including but not limited to the Reinsurer's subsidiaries and affiliates, other insurance companies and their subsidiaries and affiliates, underwriting agencies, research organizations, any unaffiliated entity engaged in modeling insurance or reinsurance data, and statistical rating organizations.  
		

		
			﻿
		

		
			C.    Confidential Information may be used by the Reinsurer only in connection with the performance of its obligations or enforcement of its rights under this Contract and will only be disclosed when required by (1) retrocessionaires subject to the business ceded to this Contract, (2) regulators performing an audit of the Reinsurer's records and/or financial condition, (3) external auditors performing an audit of the Reinsurer's records in the normal course of business, or (4) the Reinsurer's legal counsel; provided that the Reinsurer advises such parties of the confidential nature of the Confidential Information and their obligation to maintain its confidentiality.  The Company may require that any third-party representatives of the Reinsurer agree, in writing, to be bound by this Confidentiality Article 
		

		 

			

					

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		or by a separate written confidentiality agreement, containing terms no less stringent than those set forth in this Article.  If a third-party representative of the Reinsurer is not bound, in writing, by this Confidentiality Article or by a separate written confidentiality agreement, the Reinsurer shall be responsible for any breach of this provision by such third-party representative of the Reinsurer.
		

		
			﻿
		

		
			D.    Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure, to the extent legally permissible, and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.
		

		
			﻿
		

		
			E.    Any disclosure of Non-Public Personally Identifiable Information shall comply with all state and federal statutes and regulations governing the disclosure of Non-Public Personally Identifiable Information.  "Non-Public Personally Identifiable Information" shall be defined as this term or a similar term is defined in any applicable state, provincial, territory, or federal law.  Disclosing or using this information for any purpose not authorized by applicable law is expressly forbidden without the prior consent of the Company.
		

		
			﻿
		

		
			F.    The parties agree that any information subject to privilege, including the attorney-client privilege or attorney work product doctrine (collectively "Privilege") shall not be disclosed to the Reinsurer until, in the Company's opinion, such Privilege is deemed to be waived or otherwise compromised by virtue of its disclosure pursuant to this Contract.  Furthermore, the Reinsurer shall not assert that any Privilege otherwise applicable to the Confidential Information has been waived or otherwise compromised by virtue of its disclosure pursuant to this Contract.  
		

		
			﻿
		

		
			G.    The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.
		

		
			﻿
		

		
			﻿
		

		
			Article 33 - Non-Waiver
		

		
			The failure of the Company or Reinsurer to insist on compliance with this Contract or to exercise any right, remedy or option hereunder shall not:  (1) constitute a waiver of any rights contained in this Contract, (2) prevent the Company or Reinsurer from thereafter demanding full and complete compliance, (3) prevent the Company or Reinsurer from exercising such remedy in the future, nor (4) affect the validity of this Contract or any part thereof.
		

		
			﻿
		

		
			﻿
		

		
			Article 34 - Notices and Contract Execution
		

		
			A.    Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.
		

		
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		B.    The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:
		

		
			﻿
		

		
			1.     Paper documents with an original ink signature;
		

		
			﻿
		

		
			2.     Facsimile or electronic copies of paper documents showing an original ink signature; and/or
		

		
			﻿
		

		
			3.     Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.
		

		
			﻿
		

		
			C.    This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.
		

		
			﻿
		

		
			﻿
		

		
			Article 35 - Intermediary
		

		
			Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed payment to the Company only to the extent that such payments are actually received by the Company.
		

		
			﻿
		

		
			﻿
		

		
			In Witness Whereof, the Company by its duly authorized representative has executed this Contract as of the date specified below:
		

		
			﻿
		

		
			This ________________ day of ____________________________ in the year ____________.
		

		
			﻿
		

		
			Federated National Insurance Company
		

		
			﻿
		

		
			/s/ Michael H. Braun           
		

		
			/s/ signed by all participating reinsurers
		

		
			 
		

		 

			

					

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			Schedule A
		

		
			Excess Catastrophe Reinsurance Contract
		

		
			Effective:  July 1, 2016
		

		
			﻿
		

		
			Federated National Insurance Company
		

		
			Sunrise, Florida
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						First

					
						Excess

					
					
						Second

					
						Excess

					
					
						Third

					
						Excess

					
					
						Fourth

					
						Excess

					
					
						Fifth

					
						Excess

				
	
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Reinsurer's Per Occurrence Limit

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						Reinsurer's Term Limit

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						Minimum Premium

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						AAL

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						Annual Deposit Premium

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						Deposit Premium Installments

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			The figures listed above for each excess layer shall apply to each Subscribing Reinsurer in the percentage share for that excess layer as expressed in its Interests and Liabilities Agreement attached hereto.
		

		
			 
		

		

		

		 

			

					

						 

					

					

						 

				
	

					

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						Schedule A

					

					

						

				
	

					

						 

					

					

						 

				

		

			 

		

 

		War Exclusion Clause
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			As regards interests which at time of loss or damage are on shore, no liability shall attach hereto in respect of any loss or damage which is occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority.
		

		
			﻿
		

		
			 
		

		

		

		 

		

			16\F7V1054

		

		

			 

		

 

		Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)
		

		
			﻿
		

		
			﻿
		

		
			1.      This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.
		

		
			﻿
		

		
			2.      Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:
		

		
			﻿
		

			
					
						﻿

					
					
						 

				
	
					
						I.

					
						 

					
					
						Nuclear reactor power plants including all auxiliary property on the site, or

					
						 

				
	
					
						II.

					
						 

					
					
						Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or

					
						 

				
	
					
						III.

					
						 

					
					
						Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or

					
						 

				
	
					
						IV.

					
					
						Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

				

		
			﻿
		

		
			3.      Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate
		

		
			﻿
		

		
			(a)      where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or
		

		
			﻿
		

		
			(b)      where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.
		

		
			﻿
		

		
			4.      Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.
		

		
			﻿
		

		
			5.      It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.
		

		
			﻿
		

		
			6.      The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.
		

		
			﻿
		

		
			7.      Reassured to be sole judge of what constitutes:
		

		
			﻿
		

		
			(a)      substantial quantities, and
		

		
			﻿
		

		
			(b)      the extent of installation, plant or site.
		

		
			﻿
		

		
			Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that
		

		
			﻿
		

		
			(a)      all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.
		

		
			﻿
		

		
			(b)      with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.
		

		
			﻿
		

		
			12/12/57
		

		
			N.M.A. 1119
		

		
			BRMA 35B
		

		
			 
		

		

		

		 

		

			16\F7V1054

		

		

			 

		

 

		Pools, Associations and Syndicates Exclusion Clause
		

		
			(Catastrophe)
		

		
			﻿
		

		
			﻿
		

		
			It is hereby understood and agreed that:
		

		
			﻿
		

		
			A.    This Contract excludes loss or liability arising from:
		

		
			﻿
		

		
			1.     Business derived directly or indirectly from any pool, association, or syndicate which maintains its own reinsurance facilities.  This subparagraph 1 shall not apply with respect to:
		

		
			﻿
		

		
			a.    Residual market mechanisms created by statute.  This Contract shall not extend, however, to afford coverage for liability arising from the inability of any other participant or member in the residual market mechanism to meet its obligations, nor shall this Contract extend to afford coverage for liability arising from any claim against the residual market mechanism brought by or on behalf of any insolvency fund (as defined in the Insolvency Fund Exclusion Clause incorporated in this Contract).  For the purposes of this Clause, the California Earthquake Authority shall be deemed to be a "residual market mechanism."
		

		
			﻿
		

		
			b.    Inter-agency or inter-government joint underwriting or risk purchasing associations (however styled) created by or permitted by statute or regulation.
		

		
			﻿
		

		
			2.     Those perils insured by the Company that the Company knows, at the time the risk is bound, to be insured by or in excess of amounts insured or reinsured by any pool, association or syndicate formed for the purpose of insuring oil, gas, or petro-chemical plants; oil or gas drilling rigs; and/or aviation risks.  This subparagraph 2 shall not apply:
		

		
			﻿
		

		
			a.    If the total insured value over all interests of the risk is less than $250,000,000.
		

		
			﻿
		

		
			b.    To interests traditionally underwritten as Inland Marine or Stock or Contents written on a blanket basis.
		

		
			﻿
		

		
			c.    To Contingent Business Interruption liability, except when it is known to the Company, at the time the risk is bound, that the key location is insured by or through any pool, association or syndicate formed for the purpose of insuring oil, gas, or petro-chemical plants; oil or gas drilling rigs; and/or aviation risks; unless the total insured value over all interests of the risk is less than $250,000,000.
		

		
			﻿
		

		
			B.    With respect to loss or liability arising from the Company's participation or membership in any residual market mechanism created by statute, the Company may include in its ultimate net loss only amounts for which the Company is assessed as a direct consequence of a covered loss occurrence, subject to the following provisions:
		

		
			﻿
		

		
			1.     Recovery is limited to perils otherwise protected hereunder.
		

		
			﻿
		

		
			2.     In the event the terms of the Company's participation or membership in any such residual market mechanism permit the Company to recoup any such direct 
		

		 

		

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			Page 1 of 2

		

		

			 

		

 

		assessment attributed to a loss occurrence by way of a specific policy premium surcharge or similar levy on policyholders, the amount received by the Company as a result of such premium surcharge or levy shall reduce the Company's ultimate net loss for such loss occurrence.
		

		
			﻿
		

		
			3.     The result of any rate increase filing permitted by the terms of the Company's participation or membership in any such residual market mechanism following any assessment shall have no effect on the Company's ultimate net loss for any covered loss occurrence.
		

		
			﻿
		

		
			4.     The result of any premium tax credit filing permitted by the terms of the Company's participation or membership in any such residual market mechanism following any assessment shall reduce the Company's ultimate net loss for any covered loss occurrence.
		

		
			﻿
		

		
			5.     The Company may not include in its ultimate net loss any amount resulting from an assessment that, pursuant to the terms of the Company's participation or membership in the residual market mechanism, the Company is required to pay only after such assessment is collected from the policyholder.
		

		
			﻿
		

		
			6.     The ultimate net loss hereunder shall not include any monies expended to purchase or retire bonds as a consequence of being a member of a residual market mechanism nor any fines or penalties imposed on the Company for late payment.
		

		
			﻿
		

		
			7.     If, however, a residual market mechanism only provides for assessment based on an aggregate of losses in any one contract or plan year of said mechanism, then the amount of that assessment to be included in the ultimate net loss for any one loss occurrence shall be determined by multiplying the Company's share of the aggregate assessment by a factor derived by dividing the Company's ultimate net loss (net of the assessment) with respect to the loss occurrence by the total of all of its ultimate net losses (net of assessments) from all loss occurrences included by the mechanism in determining the assessment. 
		

		
			﻿
		

		
			8/1/2012
		

		
			﻿
		

		
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			﻿
		

		
			 
		

		

		

		 

		

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			Page 2 of 2

		

		

			 

		

 

		Terrorism Exclusion
		

		
			(Property Treaty Reinsurance)
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.
		

		
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			An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:
		

		
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			1.     Involves violence against one or more persons, or
		

		
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			2.     Involves damage to property; or
		

		
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			3.     Endangers life other than the person committing the action; or
		

		
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			4.     Creates a risk to health or safety of the public or a section of the public; or
		

		
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			5.     Is designed to interfere with or disrupt an electronic system.
		

		
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			This Contract also excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against or responding to any act of terrorism.
		

		
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			Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract will pay actual loss or damage (but not related cost and expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with radiological, biological, chemical, or nuclear pollution or contamination.
		

		
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			16\F7V1054Exhibit

Exhibit 10.1

Execution Version

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED 
BANK OF AMERICA, N.A. 
One Bryant Park 
New York, New York 10036
September 25, 2016
CBOE Holdings, Inc. 
400 South LaSalle Street 
Chicago, IL 60605
Attention: Alan Dean, Executive Vice President and  
Chief Financial Officer

Project Radar 
Bridge Facility Commitment Letter

Ladies and Gentlemen:
You (“you” or the “Borrower”) have advised Bank of America, N.A. (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates, “MLPFS”) that you and your consolidated subsidiaries intend to acquire, directly or indirectly (the “Acquisition”), all of the outstanding common stock of an entity previously identified to us as Radar (“Radar” or the “Target” and, together with its subsidiaries, the “Acquired Business”), from the existing shareholders of the Target pursuant to an agreement and plan of merger (including the exhibits and schedules thereto, the “Acquisition Agreement”) for consideration consisting of shares of the Borrower’s common stock and cash and, in connection therewith, to repay certain existing indebtedness of the Acquired Business (the “Refinancing”).  The Acquisition will be effected through the merger of a newly-created wholly-owned subsidiary of the Borrower into the Target, with the Target being the surviving corporation and a direct, wholly-owned subsidiary of the Borrower, followed by a merger of the surviving corporation into a newly-created wholly-owned subsidiary of the Borrower, with such newly-created wholly-owned subsidiary of the Borrower being the surviving company.  
You have also advised Bank of America and MLPFS that you intend to finance the cash consideration for the Acquisition and the costs and expenses related to the Transactions (as hereinafter defined) with gross proceeds from the issuance of $1,650 million in debt, including a senior unsecured term loan facility (the “Term Facility”) and senior unsecured notes (the “Notes”) or, if the Notes and the Term Facility do not result in gross proceeds to the Borrower on or prior to the date of consummation of the Acquisition (the “Closing Date”) of at least $1,650 million and/or such gross proceeds are not available on the Closing Date or such gross proceeds generate less than $1,650 million in gross cash proceeds are issued and sold in the Closing Date, up to $1,650 million in senior unsecured loans (the “Bridge Facility”) made available to the Borrower as interim financing to the Term Facility, the Notes or any other securities or loans of the Borrower, the Target or any of their respective subsidiaries that may be issued after the Closing Date for the purpose of refinancing all or a portion of the outstanding amounts under the Bridge Facility (the “Permanent Financing”).  The Acquisition, the Refinancing, the entering into and funding of the Term Facility, the issuance and sale of the Notes or the entering into and funding of the Bridge Facility, the issuance of any 

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Permanent Financing, the payment of all fees and expenses associated therewith and all related transactions are hereinafter collectively referred to as the “Transactions.”  
In connection with the foregoing, Bank of America (in such capacity, together with any other person hereafter joined hereto in such capacity, each a “Commitment Party” and, collectively, the “Commitment Parties”) is pleased to advise you of its commitment to provide the full principal amount of the Bridge Facility and to act as the sole administrative agent (in such capacity, the “Administrative Agent”) for the Bridge Facility, all upon the terms set forth in this letter and in the Summary of Terms and Conditions attached as Exhibit A hereto and incorporated herein by this reference (the “Summary of Terms”, and together with this letter and all other exhibits, annexes and schedules attached hereto, the “Commitment Letter”) and subject only to the Bridge Facility Conditions (as defined below).  MLPFS is pleased to advise you of its agreement, as the sole lead arranger and sole bookrunner (in such capacities, the “Arranger”) for the Bridge Facility, and in connection therewith to form a syndicate of financial institutions (including Bank of America) (collectively, the “Lenders”) in consultation with, and reasonably acceptable to, you for the Bridge Facility; provided that you shall have the right to appoint additional Lenders as syndication agents and documentation agents for the Bridge Facility in consultation with the Arranger.
The commitment of the Commitment Parties hereunder and the undertaking of MLPFS to provide the services described herein are subject solely to (a) the satisfaction or waiver of the conditions precedent expressly set forth in Exhibit B hereto and (b) one or more investment banks reasonably satisfactory to Bank of America and MLPFS shall have been engaged to publicly sell or privately place the Permanent Financing for the purpose of replacing or refinancing the Bridge Facility (it being understood that, with respect to debt securities, any investment bank ranked in the top 7 institutions in the Dealogic league tables for investment grade debt securities offerings and, with respect to loans, any investment bank ranked in the top 5 insitutions in the Dealogic league tables for investment grade syndicated bank loans, in either case, for the full year most recently completed, shall be deemed satisfactory) (clauses (a) and (b), collectively the “Bridge Facility Conditions”); it being understood that there are no conditions (implied or otherwise) to the commitments hereunder (including compliance with the terms of this Commitment Letter, the Fee Letter (as defined below) and the Bridge Facility Documentation (as defined below)) other than the Bridge Facility Conditions (and upon satisfaction or waiver of the Bridge Facility Conditions, the initial funding under the Bridge Facility shall occur).  Notwithstanding anything in this Commitment Letter, the Fee Letter referred to below, the definitive documentation for the Bridge Facility consistent with the Summary of Terms (the “Bridge Facility Documentation”) or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (a) the only representations and warranties (whether relating to you and your subsidiaries, the Acquired Business and their respective businesses or otherwise) the accuracy of which shall be a condition to the availability of the Bridge Facility on the Closing Date shall be (i) the representations made by or with respect to the Acquired Business in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that you or your affiliates have the right (taking into account any applicable cure periods) to terminate your obligations under the Acquisition Agreement, or to decline to consummate the Acquisition pursuant to the Acquisition Agreement (in each case, in accordance with the terms of the Acquisition Agreement), as a result of a breach of such representations in the Acquisition Agreement (the “Specified Acquisition Agreement Representations”) and (ii) the Specified Representations (as hereinafter defined) and (b) the terms of the Bridge Facility Documentation shall be in a form such that they do not impair availability of the Bridge Facility on the Closing Date if the Bridge Facility Conditions are satisfied or waived.  For purposes hereof, “Specified Representations” means the representations and warranties of the Borrower relating to corporate status, corporate power and authority, execution and delivery (solely, in each case, to enter into the Bridge Facility Documentation), due authorization and enforceability of the Bridge Facility Documentation, no conflicts with material laws or charter documents relating to entering into and performance of the Bridge Facility Documentation, solvency as of the Closing Date (the 

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representation and warranty of which shall be documented in a solvency certificate in the form attached hereto as Schedule 1 and received by the Administrative Agent in connection with the initial borrowing under the Bridge Facility from the chief financial officer of the Borrower certifying that, on the Closing Date, the Borrower and its subsidiaries, on a consolidated basis after giving effect to the Transactions, are solvent), Federal Reserve margin regulations, the U.S.A. Patriot Act, OFAC, FCPA and the Investment Company Act.  This paragraph shall be referred to as the “Certain Funds Provision”.
The Arranger intends to commence syndication efforts in respect of the Bridge Facility as soon as is practicable after the execution of this Commitment Letter by the parties hereto but in any event not prior to the public announcement by the Borrower of the execution of the Acquisition Agreement.  In connection with the foregoing, the Arranger will, in consultation with you, manage decisions as to the selection of institutions reasonably acceptable to you (including any lenders designated by you in consultation with, and reasonably acceptable to, the Commitment Parties (our consent not to be unreasonably withheld, delayed or conditioned)) to be approached and when they will be approached, when their commitments will be accepted, the allocations of the commitments among the Lenders and the amount and distribution of fees among the Lenders; provided that the decision of which Lenders to approach and the ultimate selection of Lenders and the allocations of the commitments among the Lenders shall be subject to your consent (such consent not to be unreasonably withheld), it being agreed that you consent, subject to the immediately following sentence, to syndication and assignment of the commitments in respect of the Bridge Facility prior to the date that is 60 days after the date hereof, to Lenders identified in the “syndication plan” agreed upon between you and the Arranger prior to the date hereof (and it being further agreed that it shall not be unreasonable for you to withhold consent for syndication and assignment to any person that is a competitor of you or any of your subsidiaries or of the Target or any of its subsidiaries or any affiliate of the foregoing).  The commitments of Bank of America hereunder with respect to the Bridge Facility shall be reduced dollar-for-dollar on a ratable basis as and when commitments for the Bridge Facility are received from any additional Lender selected in accordance with the immediately preceding sentence to the extent that such Lender becomes party to (i) this Commitment Letter as an additional “Commitment Party” and extends a commitment directly to you on the terms set forth herein pursuant to a customary joinder agreement, which shall not add any conditions to the availability of the Bridge Facility or change the terms of the Bridge Facility or increase compensation payable by you in connection therewith except as set forth in this Commitment Letter and the Fee Letter and which shall otherwise be reasonably satisfactory to you and us; or (ii) the Bridge Facility Documentation.  Notwithstanding anything in this Commitment Letter to the contrary, the Commitment Parties expressly agree that neither the commencement nor the completion of such syndication of, nor compliance with any other provision set forth in this Commitment Letter, nor the receipt of commitments or participations in respect of, all or any portion of its commitment hereunder prior to the initial funding of the Bridge Facility is a condition to its commitment hereunder.
Until the earlier of (a) 60 days following the Closing Date and (b) the completion of a Successful Syndication (as defined in the Fee Letter) for the Bridge Facility (such earlier date, the “Syndication Date”), you shall actively assist the Arranger, as the Arranger may reasonably request, in forming a syndicate of Lenders reasonably acceptable to you and the Arranger.  Your assistance in forming such a syndicate shall include but not be limited to using commercially reasonable efforts to (i) make your senior management and representatives available to participate in (x) one or more information meetings with potential Lenders at mutually agreed times and places and (y) a reasonable number of conference calls with such potential Lenders; (ii) ensure that the syndication efforts benefit from your existing banking relationships; (iii) assist (including requesting that the Target and its advisors assist (but only to the extent consistent with the Target’s obligations under the Acquisition Agreement and to the extent practical and not in contravention of the Acquisition Agreement)) in the preparation of a customary confidential information memorandum and other customary marketing materials to be used in connection with syndication of the Bridge Facility; (iv) establish and 

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maintain a public corporate credit rating from Standard & Poor’s Financial Services LLC (“S&P”) and a public corporate family rating from Moody’s Investors Service, Inc. (“Moody’s”) (the foregoing credit ratings, collectively, the “Ratings”), in each case with respect to the Borrower, prior to the Closing Date; (v) provide (upon request) the Arranger with all customary information the Arranger reasonably deems necessary to successfully complete the syndication of the Bridge Facility and (vi) without limiting the foregoing, (A) deliver to the financial institutions engaged in the offering of the Notes (the “Financial Institutions”), at least 15 business days prior to the Closing Date, a complete printed preliminary prospectus supplement or preliminary offering memorandum or preliminary private placement memorandum that is suitable for use in a customary road show relating to the Notes that contains (or incorporates by reference) all financial statements (including all audited financial statements, all unaudited financial statements (which shall have been reviewed by the independent accountants for the Borrower or the Acquired Business, as applicable, as provided in Statement on Auditing Standards No. 100) and all pro forma financial statements prepared in accordance with generally accepted accounting principles in the United States and prepared in accordance with Regulation S-X and all other data (including selected financial data), in each case that the Securities and Exchange Commission would require in a registration statement on form S-3 for a registered offering of the Notes or that would be necessary for the Financial Institutions to receive customary “comfort” letters (including “negative assurance” comfort letters) from the independent auditors of the Borrower and the Acquired Business and such disclosure as is necessary for outside counsel of the Borrower to render customary opinions and negative assurance letters, in each case in connection with the offering of the Notes and (B) cause the senior management and representatives of the Borrower to participate in a customary road show for any registered offering or private placement of the Notes.  Without any implication to the contrary, but without limiting the Bridge Facility Conditions and without limiting your obligations to assist with syndication above, compliance with any such obligations to assist with syndication (or any other obligations not specified in the Bridge Facility Conditions), including the obtaining of certain Ratings, shall not constitute a condition to the commitments hereunder or the funding of the Bridge Facility on the Closing Date.  Notwithstanding the foregoing, with respect to any cooperation provided by Target, (i) such requested cooperation does not unreasonably interfere with the ongoing operations of the Acquired Business and (ii) such requested cooperation and information required to be provided by the Target is limited to information available to it, and about the Target and its operations.
To ensure an effective syndication of the Bridge Facility, you agree that until the Syndication Date, you will not, and will not permit any of your subsidiaries to (and will request that the Acquired Business will not (but only to the extent consistent with the Target’s obligations under the Acquisition Agreement and to the extent practical and not in contravention of the Acquisition Agreement)) arrange, attempt to arrange, announce or authorize the announcement of the arrangement of any syndicated credit facility of the Borrower or its subsidiaries (other than the Bridge Facility and the Term Facility) that, in each case, could reasonably be expected to materially impair the primary syndication of the Bridge Facility, the Term Facility or the Notes, without the prior written consent of the Arranger (which consent shall not be unreasonably withheld or delayed); it being understood that the foregoing shall not (a) limit your or the Target’s ability to (i) amend, refinance, extend, renew or increase any existing credit facility, commercial paper or other short-term debt program currently in place, (ii) obtain the issuance any letter of credit, bank guaranty or similar instrument, (iii) enter into any facility to obtain or support bid, appeal or similar bonds, (iv) enter into any letter of credit, working capital, liquidity or overdraft facility, in each case in the ordinary course of business, (v) incur purchase money indebtedness in the ordinary course of business or (vi) enter into any capital lease or sale leaseback; or (b) limit the ability of the Acquired Business to incur debt permitted under the Acquisition Agreement.
You acknowledge that MLPFS and/or Bank of America on your behalf will make available Information (as hereinafter defined) and the Projections (as hereinafter defined) (collectively, the “Information Materials”) 

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to the proposed syndicate of Lenders by posting the Information Materials on SyndTrak or another similar electronic system.  In connection with the syndication of the Bridge Facility, unless the parties hereto otherwise agree in writing, you shall be under no obligation to provide Information Materials suitable for distribution to any prospective Lender (each, a “Public Lender”) that has personnel who do not wish to receive material non-public information (within the meaning of the United States federal securities laws, “MNPI”) with respect to you, the Target or any or your or its respective affiliates or any other entity, or the respective securities of any of the foregoing.  You agree, however, that the Bridge Facility Documentation will contain provisions concerning Information Materials to be provided to Public Lenders and the absence of MNPI therefrom. Prior to distribution of Information Materials to prospective Lenders, you shall provide us with a customary letter authorizing the dissemination thereof.
You hereby represent and covenant (but only, with respect to information related to the Acquired Business prior to the Closing Date, to your knowledge) that (a) all written information (other than the Projections, estimates, forward-looking information and information of a general economic or industry nature) (the “Information”), taken as a whole, that has been or will be made available to us by you or on your behalf by any of your representatives on or prior to any date of determination and all information contained in publicly available current or periodic reports and registration statements filed by you (or the Target) with the Securities and Exchange Commission prior to and including such date, is or will be (as of the date made available) correct in all material respects and does not or will not (as of the date made available) contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, taken as a whole, not misleading in light of the circumstances under which such statements were or are made and (b) the projections and other forward-looking information that have been or will be made available to us by you or on your behalf by any of your representatives (the “Projections”) have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time when made and at the time furnished (it being understood that (i) the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, (ii) the Projections, by their nature, are inherently uncertain and no assurances are being given that the results reflected in the Projections will be achieved and (iii) actual results may differ from the Projections and such differences may be material).  If, at any time from the date hereof until the later of the Closing Date and the Syndication Date, any of the representations and warranties contained in the foregoing sentence would not be correct in any material respect if the Information or Projections were being furnished, and such representations and warranties were being made, at such time, then you agree to promptly supplement, cause to be supplemented, or, with respect to any Information or Projections related to the Target prior to the occurrence of the Closing Date, to use commercially reasonable efforts to cause to be supplemented to the extent consistent with the Acquisition Agreement, the Information or Projections from time to time so that the representations and warranties contained in this paragraph remain correct in all material respects under those circumstances.
You acknowledge that MLPFS and the Commitment Parties will be relying on the accuracy of the Information and Projections furnished to them by you or on your behalf without independent verification thereof.
By executing this Commitment Letter, you agree to reimburse Bank of America and MLPFS from time to time on demand for all reasonable and documented out-of-pocket fees and expenses (including, but not limited to, (a) the reasonable fees, disbursements and other charges (subject to estimates and periodic updates) of Shearman & Sterling LLP, as counsel to the Arranger and the Administrative Agent, and of special and one local counsel (if applicable and necessary, in any appropriate jurisdiction) to the Lenders retained by the Arranger or the Administrative Agent, in each case, on behalf of all Lenders and (b) syndication and due diligence expenses) incurred in connection with the Bridge Facility, the syndication thereof and the preparation of the definitive documentation therefor, and with any other aspect of the Transactions and any of the financing transactions contemplated hereby.  You acknowledge that we may receive a benefit, including 

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without limitation, a discount, credit or other accommodation, from any of such counsel based on the fees such counsel may receive on account of their relationship with us including, without limitation, fees paid pursuant hereto.
You agree to indemnify and hold harmless Bank of America, MLPFS, each Commitment Party and each Lender, and each of their affiliates and their respective officers, directors, employees, agents, advisors and other representatives (together with each Related Party (as defined below), each an “Indemnified Party”), from and against (and will reimburse each Indemnified Party within 30 days following written demand therefor (together with reasonable backup documentation supporting such reimbursement request)) any and all claims, damages, losses, liabilities and expenses (including, without limitation, the reasonable and documented fees, disbursements and other charges of counsel; provided that you shall be responsible for the reasonable and documented fees and expenses of only one counsel for all Indemnified Parties in connection with indemnification claims arising out of the same facts or circumstances and, if necessary in the judgment of a Commitment Party, a single local counsel to the Indemnified Parties in each relevant jurisdiction and, in the case of an actual or perceived conflict of interest, one additional counsel in each applicable jurisdiction to all affected Indemnified Parties or similarity situated Indemnified Party) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) the (a) any aspect of the financing transactions contemplated hereby or (b) Bridge Facility, or any use made or proposed to be made with the proceeds thereof, except to the extent such claim, damage, loss, liability or expense (x) is found in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from (i) such Indemnified Party’s (or its Related Party’s) gross negligence, bad faith or willful misconduct or (ii) any Indemnified Party’s (or its Related Party’s) material breach of its obligations under this Commitment Letter or (y) arises solely from a dispute between Indemnified Parties which (i) do not arise, in whole or in part, from any action or omission by the Borrower, and (ii) are not brought against any person in its capacity as agent, arranger or a similar capacity.  In the case of any claim, investigation, litigation or proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such claim, investigation, litigation or proceeding is brought by you, your equityholders or creditors or an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto (but subject to clause (y) of the immediately preceding sentence) and whether or not any aspect of the Transactions is consummated.  You also agree that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to you or your subsidiaries or affiliates or to your or their respective equity holders or creditors arising out of, related to or in connection with any aspect of the financing transactions contemplated by the Commitment Letter, except to the extent of direct, as opposed to special, indirect, consequential or punitive, damages determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s (or its Related Party’s) gross negligence, bad faith, willful misconduct or material breach of obligations.  Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials obtained through electronic telecommunications or other information transmission systems, other than for direct or actual damages resulting from the gross negligence, bad faith or willful misconduct of such Indemnified Party (or its Related Party) as determined by a final and nonappealable judgment of a court of competent jurisdiction.  For purposes hereof, a “Related Party” of an Indemnified Party means (1) any controlling person or controlled affiliate of such Indemnified Party, (2) the respective directors, officers or employees of such Indemnified Person or any of its controlling persons or controlled affiliates and (3) the respective agents of such Indemnified Party or any of its controlling persons or controlled affiliates, in the case of this clause (3), acting on behalf of, or at the express instructions of, such Indemnified Party, controlling person or such controlled affiliate; provided that each reference to a controlling person, controlled affiliate, director, officer or employee in this sentence pertains to a controlling 

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person, controlled affiliate, director, officer or employee involved in the negotiation or syndication of this Commitment Letter and the Bridge Facility.
This Commitment Letter, the bridge facility fee letter among you, Bank of America and MLPFS of even date herewith (the “Fee Letter”) and the contents hereof and thereof are confidential and may not be disclosed by you in whole or in part to any person or entity without our prior written consent, except you may make such disclosures (i) on a confidential basis to your board of directors, officers and employees, attorneys and other professional advisors retained by you in connection with the Transactions, and your independent auditors, (ii) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case you agree to inform the Commitment Parties promptly thereof prior to such disclosure to the extent not prohibited by law, rule or regulation), (iii) upon the request or demand of any regulatory authority having jurisdiction over you, (iv) to the extent that such information becomes publicly available other than by reason of disclosure in violation of this agreement by you, (v) of this Commitment Letter (including the Term Sheet) and, solely with respect to clause (A), the Fee Letter may be disclosed on a confidential basis to (A) the Target and the board of directors, officers, employees, accountants, attorneys and other advisors of any of the foregoing in connection with their consideration of the Transactions, (B) to rating agencies and (C) after your acceptance of this Commitment Letter and the Fee Letter, in filings with the Securities and Exchange Commission and other applicable regulatory authorities and stock exchanges or as you may otherwise determine is reasonably advisable to comply with your obligations under securities and other applicable laws and regulations and (vi) you may disclose the aggregate amount of the fees payable under the Fee Letter as part of generic disclosure regarding sources and uses (but without disclosing any specific fees set forth therein) in connection with any syndication of the Bridge Facility.  MLPFS and the Commitment Parties hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), each of them is required to obtain, verify and record information that identifies you, the Target and your and its subsidiaries, which information includes your name and address and other information that will allow MLPFS or the relevant Commitment Party, as applicable, to identify you in accordance with the Act.
Each of MLPFS and the Commitment Parties shall use all confidential information provided to them by or on behalf of you hereunder or in connection with the Transactions (the “Confidential Information”) solely for the purpose of providing the services which are the subject of this letter agreement and shall treat confidentially all such information; provided, however, that nothing herein shall prevent either MLPFS or any Commitment Party from disclosing any such information (i) pursuant to the order of any court or administrative agency or in connection with the enforcement of any of our rights and remedies hereunder or under the Fee Letter, or otherwise as required by applicable law or compulsory legal process, (ii) upon the request or demand of any regulatory authority having jurisdiction over MLPFS or such Commitment Party, or any of their respective affiliates, in each case of clause (i) and this clause (ii) (except with respect to any routine or ordinary course audit or examination conducted by bank accountants or any governmental bank or regulatory authority exercising examination or regulatory authority), MLPFS and the Commitment Parties agree (A) to inform you promptly thereof prior to such disclosure to the extent not prohibited by law, rule or regulation, (B) use their respective reasonable efforts, at your request and expense, to cooperate with you to the extent you may seek to limit such disclosure, (C) exercise reasonable efforts, at your expense, to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded to the information and (D) only disclose that portion of information MLPFS’ counsel advises that it is legally required to disclose, (iii) to the extent that such information becomes publicly available other than by reason of disclosure in violation of this agreement by MLPFS or such Commitment Party, (iv) to MLPFS’ and the Commitment Parties’ respective affiliates, and their and such affiliates’ respective directors, officers, employees, legal counsel, independent auditors and other experts or agents who need to know such 

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information in connection with the Transactions and are informed of the confidential nature of such information and are directed to treat such information confidentially in accordance with the provisions of this paragraph, (v) for purposes of establishing a “due diligence” defense, (vi) to the extent that such information is or was received by MLPFS or such Commitment Party from a third party that is not to MLPFS’ or such Commitment Party’s knowledge subject to confidentiality obligations to you, (vii) to the extent that such information is independently developed by MLPFS or such Commitment Party or (viii) to potential Lenders, participants assignees or potential counterparties to any swap or derivative transaction relating to the Borrower or any of its subsidiaries or any of their respective obligations, in each case, who agree in writing to be bound by the terms of this paragraph (or language substantially similar to this paragraph or as otherwise reasonably acceptable to you, MLPFS and the Commitment Parties, including as may be agreed in any confidential information memorandum or other marketing material).  This paragraph shall terminate on the earlier of (x) third anniversary of the date hereof and (y) the execution of the Bridge Facility Documentation.  Each of MLPFS and the Commitment Parties will be responsible for any breach of this paragraph by any of its affiliates or any of its or their respective partners, employees, officers, directors, agents, legal counsel, other advisors or representatives assuming such persons were parties hereto and had MLPFS or the Commitment Parties’, as applicable, obligations under this paragraph.
You acknowledge that MLPFS and the Commitment Parties, or their affiliates, may be providing financing or other services to parties whose interests may conflict with yours; provided, however, that without the Borrower’s prior written consent, from the date hereof until the Expiration Date (as defined in the Summary of Terms), none of MLPFS, Bank or America, the Commitment Parties or their respective affiliates shall provide such aforementioned financing or services in contravention of the applicable provisions pertaining to such financings and services as described in that certain financial services advisory letter agreement, dated of as August 1, 2016, by and among MLPFS and the Borrower.  MLPFS and the Commitment Parties agree that they will not furnish confidential information obtained from you to any of their other customers and that they will treat confidential information relating to you, the Target and your and their respective affiliates with the same degree of care as they treat their own confidential information.  MLPFS and the Commitment Parties further advise you that they will not make available to you confidential information that they have obtained or may obtain from any other customer.  
In connection with all aspects of each financing transaction contemplated by this Commitment Letter, subject to the provisions of the preceding paragraph (and excluding the engagement of any affiliate of any Commitment Party as a financial advisor in connection with the Acquisition or any related Transactions), you acknowledge and agree that:  (a) (i) the arranging and other services described herein regarding the Bridge Facility are arm’s-length commercial transactions between you and your affiliates, on the one hand, and MLPFS and the Commitment Parties, on the other hand, (ii) you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate, and (iii) you are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby; (b) (i) MLPFS and each Commitment Party each has been, is, and will be acting solely as a principal and, except as otherwise expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for you, any of your affiliates or any other person or entity and (ii) neither MLPFS nor any Commitment Party has any obligation to you or your affiliates with respect to any financing transactions contemplated hereby except those obligations expressly set forth herein; and (c) MLPFS and the Commitment Parties, and each of their respective affiliates, may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and neither MLPFS nor any Commitment Party has any obligation to disclose any of such interests to you or your affiliates.  To the fullest extent permitted by law, you hereby waive and release any claims that you may have against MLPFS and the Commitment Parties with respect to any breach or alleged breach of agency or 

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fiduciary duty in connection with any aspect of any financing transaction contemplated by this Commitment Letter.
This Commitment Letter (including the Summary of Terms) and the Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York; provided, that (a) the interpretation of the definition of “Material Adverse Effect” under Paragraph 3 of Exhibit B hereto, (b) the accuracy of any Acquisition Agreement representation and whether as a result of any inaccuracy thereof you or your applicable affiliate has the right to terminate your or their obligations under the Acquisition Agreement or refuse to consummate the Acquisition and (c) the determination of whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement and, in any case, claims or disputes arising out of any such interpretation or determination or any aspect thereof, in each case, shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.  Each of you, MLPFS and each Commitment Party hereby irrevocably waives any and all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Commitment Letter (including the Summary of Terms), the Fee Letter, the Transactions and the other transactions contemplated hereby and thereby or the actions of MLPFS or any Commitment Party in the negotiation, performance or enforcement hereof.  Each of MLPFS, the Commitment Parties and you hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the provisions of this Commitment Letter (including the Summary of Terms), the Fee Letter and the transactions contemplated hereby and thereby and irrevocably agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court.  Nothing in this Commitment Letter, the Summary of Terms or the Fee Letter shall affect any right that MLPFS or any Commitment Party, or any of their respective affiliates, may otherwise have to bring any claim, action or proceeding relating to this Commitment Letter (including the Summary of Terms), the Fee Letter and/or the transactions contemplated hereby and thereby in any court of competent jurisdiction to the extent necessary or required as a matter of law to assert such claim, action or proceeding against any assets of the Borrower or any of its subsidiaries or enforce any judgment arising out of any such claim, action or proceeding.  Each of MLPFS, the Commitment Parties and you agree that service of any process, summons, notice or document by registered mail addressed to you shall be effective service of process against you for any suit, action or proceeding relating to any such dispute.  Each of MLPFS, the Commitment Parties and you waive, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceedings brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction you are or may be subject by suit upon judgment.  
The syndication, information, compensation, reimbursement, indemnification and confidentiality provisions of the preceding paragraphs shall remain in full force and effect regardless of whether any definitive documentation for the Bridge Facility shall be executed and delivered, and notwithstanding the termination of this Commitment Letter or any commitment or undertaking of MLPFS or any Commitment Party hereunder; provided that the reimbursement and indemnification obligations shall automatically terminate and be superseded by the provisions of the Bridge Facility Documentation to the extent covered thereby upon the initial funding thereunder, and you shall automatically be released from all liability in connection therewith at such time.

9

    

This Commitment Letter and the Fee Letter may be executed in counterparts which, taken together, shall constitute an original.  Delivery of an executed counterpart of this Commitment Letter or the Fee Letter by telecopier or facsimile shall be effective as delivery of a manually executed counterpart thereof.
This Commitment Letter (including the Summary of Terms) and the Fee Letter embody the entire agreement and understanding among MLPFS, the Commitment Parties, you, and your affiliates with respect to the Bridge Facility and supersede all prior or contemporaneous agreements and understandings relating to the specific matters hereof.  However, please note that the terms and conditions of the commitment of Commitment Parties and the undertaking of MLPFS hereunder are not limited to those set forth herein or in the Summary of Terms.  Those matters that are not covered or made clear herein or in the Summary of Terms or the Fee Letter are subject to mutual agreement of the parties.  No party has been authorized by MLPFS or any Commitment Party to make any oral or written statements that are inconsistent with this Commitment Letter.
This Commitment Letter is not assignable by you without Bank of America’s prior written consent and is intended to be solely for the benefit of the parties hereto and the Indemnified Parties.  The parties hereby agree that MLPFS may, without notice to the Borrower, assign its rights and obligations under this Commitment Letter and the Fee Letter to any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Commitment Letter.
This Commitment Letter and all commitments and undertakings of MLPFS and the Commitment Parties hereunder will expire at 5:00 p.m. (New York City time) on September 25, 2016 unless you execute this Commitment Letter and the Fee Letter and return them to us prior to that time (which may be by facsimile transmission), whereupon this Commitment Letter (including the Summary of Terms) and the Fee Letter (each of which may be signed in one or more counterparts) shall become binding agreements.  Thereafter, all commitments and undertakings of MLPFS and the Commitment Parties hereunder will expire on the Expiration Date.  

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

10

We are pleased to have the opportunity to work with you in connection with this important financing.
Very truly yours,
BANK OF AMERICA, N.A.

By:    /s/ Maryanne Fitzmaurice            
Name:    Maryanne Fitzmaurice            
Title:    Director                

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

By:    /s/ Jonathan Mullen                
Name:    Jonathan Mullen            
Title:    Managing Director            

[Project Radar — Signature Page to Bridge Facility Commitment Letter]

    

ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:

CBOE HOLDINGS, INC.

By:    /s/ Alan J. Dean                    
Name:    Alan J. Dean                
Title:    CFO                    

[Project Radar — Signature Page to Bridge Facility Commitment Letter]

Exhibit A
PROJECT RADAR 
$1,650 MILLION SENIOR UNSECURED BRIDGE LOAN FACILITY
Summary of Terms and Conditions

Exhibit A

PROJECT RADAR 
$1,650 MILLION SENIOR UNSECURED BRIDGE LOAN FACILITY1 
Summary of Terms and Conditions

September 25, 2016

		
	BORROWER:
	CBOE Holdings, Inc., a Delaware corporation (the “Borrower”).

		
	GUARANTORS:
	None.

ADMINISTRATIVE
		
	AGENT:
	Bank of America, N.A. (“Bank of America”) will act as sole and exclusive administrative agent (the “Administrative Agent”).

SOLE LEAD ARRANGER AND
		
	BOOKRUNNER:
	Merrill Lynch, Pierce, Fenner & Smith Incorporated will act as sole lead arranger and bookrunner (the “Lead Arranger” or “MLPFS”).

		
	LENDERS:
	A syndicate of financial institutions (including Bank of America) arranged by the Lead Arranger (collectively, the “Lenders”).

		
	FACILITY:
	A 364-day bridge term loan facility in an aggregate principal amount of up to $1,650 million (the “Bridge Facility” the bridge term loans thereunder, the “Loans”).

		
	TRANSACTION:
	The proceeds of the Loans shall be used to finance in part (i) the acquisition (the “Acquisition”) of all of the outstanding shares of common stock of RADAR, a Delaware corporation (the “Target” and, together with its subsidiaries, the “Acquired Business”), pursuant to an agreement and plan of merger (including the exhibits and schedules thereto, the “Acquisition Agreement”), (ii) the repayment of certain existing indebtedness of the Acquired Business and (iii) the payment of fees and expenses in connection with the Transactions (as defined below) (the Acquisition, debt repayments, the entering into and the borrowings under the Bridge Facility and/or the issuance by the Borrower of senior unsecured debt securities in a public or private offering and/or senior unsecured term loans (the “Term Facility” and, together with the Securities (as defined below), the “Permanent Financing”), in each case, for the purpose of financing the Transactions (the “Securities”) the payment of all fees and expenses associated therewith and all related transactions are hereinafter collectively referred to as the “Transactions”).

1All capitalized terms used but not defined herein shall have the meaning given them in the Commitment Letter to which this Term Sheet is attached.

A-1

		
	AVAILABILITY:
	The loans shall be available in a single borrowing on the Closing Date (as defined below). 

        
		
	CLOSING DATE:
	The date of funding under the Bridge Facility Documentation (the “Closing Date”) to occur on or before the Expiration Date.

INTEREST RATES:        As set forth in Addendum I.
		
	MATURITY:
	The Bridge Facility shall terminate and all amounts outstanding thereunder shall be due and payable 364 days from the Closing Date (the “Maturity Date”).

MANDATORY
PREPAYMENTS
AND COMMITMENT
		
	REDUCTIONS:
	On or prior to the Closing Date, the aggregate commitments in respect of the Bridge Facility shall be automatically and permanently reduced by an amount equal to, and after the Closing Date the Borrower shall make prepayments of Loans from (in each case, subject to exceptions to be agreed):

(a)    100.0% of the committed amount of all credit facilities entered into for the purpose of financing the Transactions (such reduction to occur automatically upon the effectiveness of definitive documentation for such credit facility and receipt by the Arranger of a notice from the Borrower that such credit facility constitutes a Qualifying Credit Facility (as defined below));
(b)    100% of the net cash proceeds from all non-ordinary course sales or other dispositions (for any such disposition or series of related dispositions) of assets in excess of $50 million in the aggregate for all such sales or dispositions (including as a result of casualty or condemnation) by the Borrower and its subsidiaries (which shall include, solely after the Closing Date, the Acquired Business) (subject to exceptions and reinvestment rights to be agreed (with a reinvestment period not to exceed 180 days));
(c)    (without duplication of any amounts in the foregoing clause (a)) 100% of the net cash proceeds from all issuances or incurrences of debt for borrowed money by the Borrower and its subsidiaries in excess of $50 million in the aggregate for all such issuances or incurrences of debt for borrowed money (which shall include, solely after the Closing Date, the Acquired Business) (other than (i) working capital facilities, letter of credit facilities, purchase money indebtedness, capital leases, sale leasebacks and subsidiaries’ lines of credit, in each case in the ordinary course of business and (ii) intercompany debt); and
(d)    100% of the net cash proceeds received by the Borrower from actual cash received in all Equity Issuances (as defined below), whether before or 

A-2

after the Closing Date, in excess of $50 million in the aggregate for all such Equity Issuances.
For purposes of the foregoing: 
“Qualifying Credit Facility” means a term loan facility entered into by the Borrower for the purpose of financing the Transactions that is subject to conditions precedent to funding the Transactions on the Closing Date that are no less favorable to the Borrower than the conditions set forth herein to the funding of the Bridge Facility.
“Equity Issuance” means any issuance of equity or equity-linked securities by the Borrower, whether pursuant to a public offering or in a Rule 144A or other private placement.
For the avoidance of doubt the commitments in respect of the Bridge Facility provided pursuant to the Commitment Letter shall be reduced to zero upon the occurrence of the Expiration Date and/or immediately after the funding thereof on the Closing Date.
OPTIONAL PREPAYMENTS
AND COMMITMENT
		
	REDUCTIONS:
	At its option, the Borrower may (i) prepay borrowings under the Bridge Facility in whole or in part at any time without premium or penalty, subject to reimbursement of the Lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings and (ii) irrevocably reduce or terminate the unutilized portion of the commitments under the Bridge Facility in whole or in part at any time without premium or penalty.

		
	EXPIRATION DATE:
	The earliest of (i) July 25, 2017, (or if the Outside Date (as defined in the Acquisition Agreement) is extended pursuant to Section 7.1(b)(iv) of the Acquisition Agreement, October 23, 2017), (ii) the closing of the Acquisition without the use of the Bridge Facility and (iii) the termination of the Acquisition Agreement (in accordance with the terms of the Acquisition Agreement) (the “Expiration Date”).

DOCUMENTATION 
		
	PRINCIPLES
	The Bridge Facility Documentation shall be generally not less favorable to the Borrower than the Borrower’s Revolving Credit Facility Agreement, dated as of December 23, 2008, among the Borrower, Bank of America, N.A., as administrative agent and the other parties thereto (including the exceptions and qualifications contained therein and such additional exceptions and qualifications as the Borrower and the Arranger shall negotiate in good faith and reasonably agree), modified as agreed for transactions of this type, and with other modifications (a) to reflect the terms set forth in the Commitment Letter (including the exhibits thereto) (including the nature of the Bridge Facility as a bridge facility) and the Fee Letter, (b) to reflect the operational or administrative requirements of the Administrative Agent as reasonably agreed by the Borrower, (c) to 

A-3

accommodate the structure of the Acquisition and (d) to the extent not inconsistent with the terms of the Commitment Letter (including all exhibits thereto), as agreed by the Borrower and the Arranger.  The provisions of this paragraph are referred to as the “Documentation Principles”.

CONDITIONS PRECEDENT
		
	TO CLOSING:
	Subject to the terms of the next paragraph, the closing and the extension of credit under the Bridge Facility will solely be subject to (i), subject to the Certain Funds Provision, the making of all the representations and warranties in the Bridge Facility Documentation and (ii) the satisfaction (or waiver) of the Bridge Facility Conditions.  For the avoidance of doubt but without limiting the terms of the next paragraph, any failure of any representation or warranty set forth in the Bridge Facility Documentation to be true and correct in any material respect shall be an event of default as set forth in the Bridge Facility Documentation.

Notwithstanding anything in the Bridge Facility Documentation to the contrary (a) the only representations relating to you and your subsidiaries, the Target and its subsidiaries and their respective businesses the accuracy of which shall be a condition to the availability of the Bridge Facility on the Closing Date shall be the Specified Acquisition Agreement Representations and the Specified Representations, and (b) the terms of the Bridge Facility Documentation shall be in a form such that they do not impair availability of the Bridge Facility on the Closing Date if the conditions described above are satisfied or waived.  
REPRESENTATIONS
		
	AND WARRANTIES:
	Consistent with Documentation Principles, and limited to the following: (i) legal existence, qualification and power, (ii) due authorization and no contravention of law, contracts or organizational documents, (iii) governmental and third party approvals and consents, (iv) enforceability, (v) specified financial statements and no Material Adverse Effect, (vi) no material litigation, (vii) no default, (viii) ownership of property (including intellectual property), (ix) tax matters, (x) use of proceeds and not engaging in business of purchasing/carrying margin stock (subject to necessary carve outs for broker/dealer subsidiaries), (xi) status under Investment Company Act, (xii) accuracy of disclosure and (xiii) compliance with laws (including the Patriot Act, anti-corruption laws and sanctions). 

		
	COVENANTS:
	Consistent with Documentation Principles, and limited to the following: (i) delivery of financial statements, SEC filings, compliance certificates and other information, (ii) notices of default and ERISA events, (iii) payment of taxes, (iv) preservation of existence, (v) compliance with laws, (vi) maintenance of books and records, (vii) inspection rights, (viii) use of proceeds, (ix) compliance with anti-corruption laws and sanctions and (x) limitations on (a) liens, (b) indebtedness of subsidiaries, (c) restricted payments and (d) mergers and other fundamental changes. 

Financial covenants limited to the following:

A-4

		
	•
	Consolidated Leverage Ratio (to be defined as total debt to trailing four-quarter EBITDA) not to exceed 3.50 to 1.00.

		
	•
	Consolidated Interest Coverage Ratio (to be defined as trailing four-quarter EBIT to interest expense (on an annualized basis for the first three fiscal quarters and on a trailing four-quarter basis thereafter)) not to be less than 4.00 to 1.00. 

The financial definitions of “EBITDA” and “EBIT” shall exclude (i) non-cash charges, (ii) restructuring charges (A) related to the Transactions and (B) related to any future event which could result in current or future cash charges in an aggregate amount not to exceed during any 12-month period the greater of (x) $35 million and (y) 5.0% of EBITDA, (iii) transaction expenses and (iv) other customary exceptions to be agreed.
		
	EVENTS OF DEFAULT:
	Consistent with Documentation Principles, and limited to the following:  (i) nonpayment of principal, interest, fees or other amounts (with a 5 business day grace period for payments other than payments of principal), (ii) failure to perform or observe covenants set forth in the Bridge Facility Documentation, (iii) any representation or warranty proving to have been materially incorrect when made or confirmed, (iv) cross-default to other indebtedness in an aggregate principal amount of $50 million or more, (v) bankruptcy and insolvency defaults, (vi) inability to pay debts, (vii) monetary judgment defaults in an amount of $50 million or more, (viii) customary ERISA defaults, (ix) actual or asserted invalidity or impairment of any Bridge Facility Documentation and (x) change of control.

ASSIGNMENTS AND
		
	PARTICIPATIONS:
	Subject to the consents described below (which consents will not be unreasonably withheld or delayed), each Lender will be permitted to make assignments to other financial institutions in respect of the Bridge Facility in a minimum amount equal to $5 million.  

Consents:  The consent of the Borrower will be required unless (i) an event of default has occurred and is continuing or (ii) the assignment is to a Lender, an affiliate of a Lender or an Approved Fund.  The consent of the Administrative Agent (not to be unreasonably withheld or delayed) will be required for any assignment of any outstanding Loan to an entity that is not a Lender, an affiliate of a Lender or an Approved Fund.
Assignments Generally:  An assignment fee in the amount of $3,500 will be charged to the assigning Lender or the assignee Lender, as such Lenders may agree, with respect to each assignment unless waived by the Administrative Agent in its sole discretion.  Each Lender will also have the right, without consent of the Borrower or the Administrative Agent, to assign as security all or part of its rights under the Bridge Facility Documentation to any Federal Reserve Bank.  
Participations:  Lenders will be permitted to sell participations with voting rights limited to significant matters such as changes in amount, rate and maturity date. 

A-5

No assignments or participations may be made to natural persons or to the Borrower or its subsidiaries.  
WAIVERS AND
		
	AMENDMENTS:
	Amendments and waivers of the provisions of the loan agreement and other definitive credit documentation will require the approval of Lenders holding loans and commitments representing more than 50% of the aggregate amount of the loans and commitments under the Bridge Facility (the “Required Lenders”), except that (a) the consent of each Lender shall be required with respect to (i) the waiver of certain conditions precedent to be agreed to for the credit extension under the Bridge Facility, (ii) the amendment of pro rata sharing provisions, and (iii) the amendment of the voting percentages of the Lenders, and (b) the consent of each Lender affected thereby shall be required with respect to (i) increases or extensions in the commitment of such Lender, (ii) reductions of principal, interest or fees, and (iii) extensions of scheduled maturities or times for payment. 

		
	INDEMNIFICATION:
	The Borrower will indemnify and hold harmless the Administrative Agent, the Lead Arranger, each Lender and their respective affiliates and their partners, directors, officers, employees, agents and advisors from and against all losses, claims, damages, liabilities and expenses arising out of or relating to the Bridge Facility, the Borrower’s use of loan proceeds or the commitments, including, but not limited to, reasonable attorneys’ fees and settlement costs of one counsel for all indemnified parties (and, if necessary, of a single local counsel in each required jurisdiction and, in the case of an actual or perceived conflict of interest, one additional counsel in each applicable jurisdiction to affected or similarity situated indemnified parties), but excluding any such losses, claims, damages, liabilities and expenses resulting from disputes solely among the indemnified parties or found in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such person’s gross negligence, willful misconduct or material breach of the Bridge Facility Documentation.  This indemnification shall survive and continue for the benefit of all such persons or entities.

		
	GOVERNING LAW:
	State of New York.

ADMINISTRATIVE 
		
	AGENT’S COUNSEL:
	Shearman & Sterling LLP

PRICING/FEES/
		
	EXPENSES:
	As set forth in Addendum I.

		
	DEFAULTING LENDERS:
	Usual and customary for transactions of this type (including the ability to classify a Lender as a defaulting lender if such Lender or its parent becomes subject to a bail-in action).

		
	EU BAIL-IN:
	The Bridge Facility Documentation shall contain customary language relating to the EU Bail-in regime.

A-6

		
	OTHER:
	Each of the parties shall (i) waive its right to a trial by jury and (ii) submit to New York jurisdiction.  The Bridge Facility Documentation will contain customary increased cost, withholding tax, capital adequacy and yield protection provisions.  The Borrower shall have the right to replace any Lender that (i) makes a claim for compensation under certain of the foregoing provisions, (ii) is a defaulting lender (including by failing to fund a requested borrowing after satisfaction of the conditions precedent thereto), and/or (iii) fails to consent to a requested amendment to the Bridge Facility Documentation that has obtained the approval of the Required Lenders but also requires the approval of such Lender. 

A-7

ADDENDUM I
PRICING, FEES AND EXPENSES
		
	INTEREST RATES:
	At the Borrower’s option, any loan under the Bridge Facility will bear interest at a rate equal to (i) LIBOR plus the Applicable Margin, as determined in accordance with the Performance Pricing grid set forth below or (ii) the Base Rate (to be defined as the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.50% and (c) the one-month LIBOR rate (determined on a daily basis by reference to such rate without application of breakage or redeployment costs, and which if less than zero shall be deemed to be zero), if available, plus 0.50%) plus the Applicable Margin.

The Borrower may select interest periods of one, two, three or six months for LIBOR loans, subject to availability.  Interest shall be payable at the end of the selected interest period, but no less frequently than quarterly.
During the continuance of any Event of Default under the Bridge Facility Documentation, the Applicable Margin on obligations owing under the Bridge Facility Documentation may be increased by 2% per annum (subject, in all cases other than a default in the payment of principal when due, to the request of the Required Lenders).
PERFORMANCE
		
	PRICING:
	The Applicable Margin for LIBOR Loans and Base Rate Loans, for any fiscal quarter, shall be the applicable rate per annum set forth in the pricing grid below opposite the applicable Level.  Additionally, the Applicable Margin for LIBOR Loans and for Base Rate Loans for each Level will increase by 0.25% on the 90th day following the Closing Date and by an additional 0.25% on each 90th day thereafter.

Pricing Grid: 

	
				
	Level
	Ratings (Moody’s/ 
S&P)
	Applicable Margin for LIBOR Loans
	Applicable Margin for Base Rate Loans

	I
	≥A3/A-  
or better
	1.125%
	0.125%

	II
	≥Baa1/BBB+ but < A3/A-
	1.25%
	0.25%

	III
	< Baa1/BBB+ or not rated
	1.50%
	0.50%

If the Borrower’s Ratings are at different Levels, the applicable Level will be determined as follows: (i) if the lower Rating is one Level below 

A-8

the higher rating, the Level applicable to the higher Rating shall apply and (ii) if the lower rating is two Levels below the higher Rating, the Rating one Level below the higher Rating shall apply.  At any time the Borrower fails to attain any Rating, Level III shall apply.

		
	DURATION FEES:
	The Borrower shall pay non-refundable duration fees based on the following percentages of the aggregate principal amount of Loans outstanding on the dates below, each such duration fee to be payable on such applicable date:

                       90 days after the Closing Date: 0.50%
                      180 days after the Closing Date: 0.75%
                      270 days after the Closing Date: 1.00%

CALCULATION OF
		
	INTEREST AND FEES:
	Other than calculations in respect of interest at the Administrative Agent’s prime rate (which shall be made on the basis of actual number of days elapsed in a 365/366 day year), all calculations of interest and fees shall be made on the basis of actual number of days elapsed in a 360 day year.

COST AND YIELD
		
	PROTECTION:
	Customary for transactions and facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes in capital adequacy and capital requirements or their interpretation, illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes.

		
	EXPENSES:
	As further detailed in the Commitment Letter (and subject to receipt of estimates and periodic updates), the Borrower will pay all reasonable and documented costs and expenses associated with the preparation, due diligence, administration, syndication and closing of all Bridge Facility Documentation, including, without limitation, the legal fees of outside counsel to the Administrative Agent and the Lead Arranger (but not counsel to any other Lender), regardless of whether or not the Bridge Facility is closed.  The Borrower will also pay the expenses of the Administrative Agent and each Lender in connection with the enforcement of any of the Bridge Facility Documentation.

A-9

Exhibit B
PROJECT RADAR 
$1,650 MILLION SENIOR UNSECURED BRIDGE LOAN FACILITY
Conditions Precedent to Closing
Capitalized terms not otherwise defined herein shall have the same meaning as specified with respect thereto in the Commitment Letter to which this Exhibit B is attached or Exhibit A thereto, as the context may require.
Subject in all respects to the Certain Funds Provision, the initial borrowing under the Bridge Facility will be subject to the satisfaction or waiver of following conditions precedent:
(1)    The Administrative Agent shall have received the Bridge Facility Documentation, executed by each party thereto, as applicable, in form and substance consistent with the Summary of Terms.
(2)    The Acquisition shall be consummated on the Closing Date substantially concurrently with the closing of the Bridge Facility in all material respects in accordance with the Acquisition Agreement without giving effect to any amendments, modifications, supplements or waivers by you thereto or consents by you thereunder that are materially adverse to the Lenders or the Arranger without the Administrative Agent’s and the Arranger’s prior written consent (such consent not to be unreasonably conditioned, withheld or delayed), it being understood that (i) any decrease in the consideration for the Acquisition that, together with all other such decreases since the date of the Commitment Letter, does not exceed 15% of the aggregate consideration for the Transactions (measured as of the date hereof) will not be deemed materially adverse, so long as such decrease is accompanied by a dollar-for-dollar reduction in commitments in respect of the Bridge Facility, (ii) any increase in the consideration for the Acquisition will not be deemed materially adverse, so long as such increase is funded with the proceeds or issuance of equity or with cash on hand (and not funded with new indebtedness in excess of $50 million incurred outside of the ordinary course) and (iii) any waiver or modification of Sections 7.4, 8.6, 8.7, 8.8, 8.10 and 8.13 of the Acquisition Agreement (as in effect on the date hereof) shall be deemed to be materially adverse to the Lenders.
(3)    The Arranger shall have received for each of the Borrower and the Acquired Business (a) U.S. GAAP audited consolidated balance sheets and related statements of income and cash flows, for the three most recent fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013 and for any subsequent fiscal year ended at least 90 days prior to the Closing Date, (b) U.S. GAAP unaudited consolidated balance sheets and related statements of income and cash flows for each of the three subsequent fiscal quarter ended at least 45 days before the Closing Date and the Arranger shall have received from the Borrower, and (c) customary pro forma financial statements prepared by the Borrower that shall meet the requirements of Regulation S-X under the Securities Act of 1933, as amended (the “Act”) to the extent applicable in a registration statement of the Borrower’s debt securities under such Act on Form S-4 (collectively, the “Pro Forma Financial Statements” together with the financial statements described in clauses (a) and (b), the “Required Bank Information”).  The arranger acknowledges receipt of (i) the audited financial statements referred to in clause (a) above for the three most recent fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013 and (ii) the unaudited financial statements referred to in clause (b) above for the two most recent fiscal quarters ended March 31, 2016 and June 30, 2016.  The Borrower’s or Acquired Business’, as the case may be, filing of any required audited financial statements with respect to the Borrower or Acquired Business, as the case may be, on Form 10-K 

or required unaudited financial statements with respect to the Borrower or Acquired Business, as the case may be, on Form 10-Q, in each case, will satisfy the requirements under clauses (2)(a) or (2)(b), as applicable, of this paragraph.  If the Borrower in good faith reasonably believes that it has delivered such Required Bank Information, it may deliver to the Arranger written notice to that effect (stating when it believes it completed such delivery), in which case the Required Bank Information shall be deemed to have been delivered, unless the Arranger in good faith reasonably believes that the Borrower has not completed delivery of the Required Bank Information, and, within three (3) business days after delivery of such notice by the Borrower, the Arrangers delivers a written notice to the Borrower to that effect (stating with specificity the Required Bank Information that has not been delivered).
(4)     Except as (a) set forth in the Company Disclosure Letter (as defined in the Acquisition Agreement) or (b) disclosed in the Company SEC Documents filed with, or furnished to, the SEC since April 14, 2016 and publicly available on the SEC’s EDGAR website not less than two (2) Business Days prior to the date of the Acquisition Agreement (excluding any disclosures contained in the “Risk Factors” section thereof, any disclosure contained in any “forward-looking statements” disclaimer or any other disclosure of risks or any other statements that are predictive or forward-looking in nature in each case other than any specific factual information contained therein, which shall not be excluded), since December 31, 2015, there shall not have been any event, change, effect, development, state of facts, condition, circumstance or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect (as defined in the Acquisition Agreement) that is continuing. 
(5)    (A) The Administrative Agent shall have received (x) the following with respect to the Borrower:  customary legal opinions, corporate organizational documents, a good standing certificate from the jurisdiction of its incorporation, resolutions and other customary closing certificates, and (y) a borrowing notice and (B) the Specified Acquisition Agreement Representations shall be true and correct to the extent required by the Certain Funds Provision and the Specified Representations shall be true and correct in all material respects as of the Closing Date (except in the case of any Specified Representation which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be); provided that to the extent any representation and warranty is qualified as to “materiality,” “Material Adverse Effect” or similar language (a) the definition thereof shall be the definition of “Parent Material Adverse Effect” (as defined in the Acquisition Agreement) for purposes of the making or deemed making of such Specified Representation on, or as of, the Closing Date (or any date prior thereto) and (b) shall be true and correct (after giving effect to any qualification therein) in all respects on such date.
(6)    The Arranger, the Administrative Agent and the Lenders shall have received all fees and expenses required to be paid on or prior to the Closing Date pursuant to the Fee Letter or hereunder and, with respect to expenses, invoiced to the Borrower at least three business days prior to the Closing Date.
(7)    The Administrative Agent shall have received, at least three business days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act, reasonably requested in writing by the Administrative Agent (on behalf of any Lender) at least 10 business days prior to the Closing Date.

Schedule 1
PROJECT RADAR 
364-DAY SENIOR UNSECURED BRIDGE TERM LOAN FACILITY
Form of Solvency Certificate
[_________], 201_
This Solvency Certificate is delivered pursuant to Section [______] of the Bridge Loan Agreement dated as of [______], 201_, among [________] (the “Loan Agreement”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.
The undersigned hereby certifies, solely in his capacity as an officer of the Borrower and not in his individual capacity, as follows:
1.    I am the Chief Financial Officer of the Borrower.  I am familiar with the Transactions, and have reviewed the Loan Agreement, the financial statements referred to in Section [  ] of the Loan Agreement and such other documents and made such investigation as I have deemed relevant for the purposes of this Solvency Certificate.
2.    As of the date hereof, immediately after giving effect to the consummation of the Transactions, on and as of such date (i) the fair value of the assets of the Borrower and its subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, direct, subordinated, contingent or otherwise, of the Borrower and its subsidiaries on a consolidated basis; (ii) the present fair saleable value of the property of the Borrower and its subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Borrower and its subsidiaries on a consolidated basis on their debts and other liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrower and its subsidiaries on a consolidated basis will be able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Borrower and its subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing Date.
3.    As of the date hereof, immediately after giving effect to the consummation of the Transactions, the Borrower does not intend to, and the Borrower does not believe that it or any of its subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing and amounts of cash to be received by it or any such subsidiary and the timing and amounts of cash to be payable on or in respect of its debts or the debts of any such subsidiary.
This Solvency Certificate is being delivered by the undersigned officer only in his capacity as Chief Financial Officer of the Borrower and not individually and the undersigned shall have no personal liability to the Administrative Agent or the Lenders with respect thereto.
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