Document:

dex1018.htm

    AMENDMENT
2008-2

     

    MERCURY
GENERAL CORPORATION

     

    PROFIT
SHARING PLAN

     

    WHEREAS, Mercury General
Corporation (the “Company”) maintains the Mercury General Corporation Profit
Sharing Plan (the “Plan”); and

     

    WHEREAS, pursuant to Section
9.1 of the Plan, the Company is authorized to amend the Plan; and

     

    WHEREAS, the Company desires
to amend the Plan to reflect certain changes in the federal tax laws and related
Treasury Regulations; and

     

    WHEREAS, the Company desires
to amend the Plan to amend the Plan to provide for the acceptance, at the
Company’s discretion, of in-kind rollovers of participant loan balances in
connection with a merger, acquisition or similar corporate
transaction.

     

    NOW, THEREFORE, the Plan is
amended, effective as of the dates specified below, as follows.

     

    1. The
definition of “Compensation” in Section 1.2 of the Plan is hereby amended by
adding the following to the end of the first full paragraph
thereof:

    

    “, and
all compensation paid or includible following a Break in
Employment.”

     

    2. The last
sentence of Section 3.4(a) of the Plan is amended to read in its entirety as
follows:

    

    “Amounts
transferred to the Trust must be in cash, except that individuals who become
Eligible Employees as a result of a merger, acquisition or similar transaction
may, if permitted by the Company, make in-kind rollovers of participant loans
that are distributed to such Eligible Employees in connection with such merger,
acquisition or transaction.”

     

    3. The
definition of “Section 415 Compensation” in Section A.1 of Appendix A of the
Plan is hereby amended by adding the following to the end of the first sentence
immediately following subsection “(d)” to read in its entirety as
follows”

    

    “, and
excluding all compensation paid or includible following a Break in Employment,
except as provided under applicable Treasury Regulations.”

     

    4. Section
A.2(d) of Appendix A of the Plan is deleted.

    

    IN WITNESS WHEREOF, the
Company has caused its duly authorized officers to execute this amendment to the
Plan this 7th day of
November, 2008.

     

    

    

    
      	
              MERCURY
      GENERAL CORPORATION

            
	 
      
	 
      
	
              By:   /s/
      GABRIEL TIRADOR

            
	 
      
	
              Its:    President
      and CEOdex1028.htm

    Exhibit
10.28

    

    

    MERCURY
GENERAL CORPORATION BOARD FEES

    

    

    
      	 
      	
              PRIOR
      FEES

            	
              NEW
      FEES

            
	
              Director
      Compensation – Quarterly

            	
              $3,000
      per quarter

            	
              $4,000
      per quarter

            
	
              Director
      Compensation – Attendance

            	
              $3,000
      per meeting

            	
              $4,000
      per meeting held in person or telephonically lasting 1 hour or
      more

            
	 
      	 
      	
              $500
      per meeting held telephonically

            
	
              lasting
      less than 1 hour

            
	 
      	 
      	 
      
	
              Audit
      Committee (Chair) – Attendance

            	
              $2,500
      per meeting

            	
              $3,500
      per meeting

            
	
              Audit
      Committee (Non Chair) – Attendance

            	
              $2,500
      per meeting

            	
              $2,500
      per meeting

            
	
              Audit
      Committee (Chair) – Annual Retainer

            	
              $1,500
      annual retainer

            	
              $4,000
      annual retainer

            
	 
      	 
      	 
      
	
              Compensation
      Committee – Attendance

            	
              $500
      per meeting

            	
              $500
      per meeting

            
	
              Compensation
      Committee (Chair) – Annual Retainer

            	
              $150
      per hour

            	
              $2,500
      annual retainer

            
	 
      	 
      	 
      
	
              Corporate
      Governance (Chair) – Attendance

            	
              $1,500
      per meeting

            	
              $1,500
      per meeting

            
	
              Corporate
      Governance Committee (Non Chair) -

            	
              $1,000
      per meeting

            	
              $1,000
      per meeting

            
	
                   Attendance

            	 
      	 
      
	
              Corporate
      Governance (Chair) – Annual Retainer

            	
              $1,500
      annual retainer

            	
              $1,500
      annual retainer

            
	 
      	 
      	 
      
	
              Investment
      Committee – Attendance

            	
              $1,500
      per meeting

            	
              $1,500
      per meeting

            
	 
      	 
      	 
      
	
              Lead
      Director – Annual Retainer

            	
              None

            	
              $10,000
      annual retainerdex1034.htm

    EXECUTION
VERSION

     

     

    CREDIT
AGREEMENT

     

    

    Dated as
of January 2, 2009

    

    Among

    

    MERCURY CASUALTY
COMPANY,

    as the
Borrower,

    

    MERCURY GENERAL
CORPORATION,

    as the
Guarantor,

    

    BANK
OF AMERICA, N.A.,

    as
Administrative Agent

    

    And

    

    The Other
Lenders Party Hereto

    

    BANC
OF AMERICA SECURITIES LLC,

    as Sole
Lead Arranger and Sole Book Manager

    

    

     

    
      	
              TABLE OF CONTENTS

            	 
	
              ARTICLE
      I.

            	
                   DEFINITIONS
      AND ACCOUNTING TERMS

            	 	 	1	 
	 	1.01	 	
              Defined
      Terms

            	 	 	1	 
	 	1.02	 	
              Other
      Interpretive Provisions

            	 	 	17	 
	 	1.03	 	
              Accounting
      Terms

            	 	 	18	 
	 	1.04	 	
              Rounding

            	 	 	18	 
	 	1.05	 	
              Times
      of Day

            	 	 	19	 
	
              ARTICLE
      II.

            	
                   THE
      LOANS

            	 	 	19	 
	 	2.01	 	
              Loans

            	 	 	19	 
	 	2.02	 	
              Initial
      Borrowing, Conversions and Continuations of Loans

            	 	 	19	 
	 	2.03	 	
              Prepayments

            	 	 	20	 
	 	2.04	 	
              Repayment
      of Loans

            	 	 	21	 
	 	2.05	 	
              Interest

            	 	 	21	 
	 	2.06	 	
              Fees

            	 	 	21	 
	 	2.07	 	
              Computation
      of Interest and Fees

            	 	 	22	 
	 	2.08	 	
              Evidence
      of Debt

            	 	 	22	 
	 	2.09	 	
              Payments
      Generally; Administrative Agent’s Clawback

            	 	 	22	 
	 	2.10	 	
              Sharing
      of Payments by Lenders

            	 	 	23	 
	
              ARTICLE
      III.

            	
                   TAXES,
      YIELD PROTECTION AND ILLEGALITY

            	 	 	24	 
	 	3.01	 	
              Taxes

            	 	 	24	 
	 	3.02	 	
              Illegality

            	 	 	27	 
	 	3.03	 	
              Inability
      to Determine Rates

            	 	 	27	 
	 	3.04	 	
              Increased
      Costs; Reserves on Eurodollar Rate Loans

            	 	 	28	 
	 	3.05	 	
              Compensation
      for Losses

            	 	 	29	 
	 	3.06	 	
              Mitigation
      Obligations; Replacement of Lenders

            	 	 	30	 
	 	3.07	 	
              Survival

            	 	 	30	 
	
              ARTICLE
      IV.

            	
                   CONDITIONS
      PRECEDENT TO LOANS

            	 	 	30	 
	 	4.01	 	
              Conditions
      of Effective Date

            	 	 	30	 
	 	4.02	 	
              Conditions
      to all Loans

            	 	 	32	 
	
              ARTICLE
      V.

            	
                   REPRESENTATIONS
      AND WARRANTIES

            	 	 	33	 
	 	5.01	 	
              Existence,
      Qualification and Power

            	 	 	33	 
	 	5.02	 	
              Authorization;
      No Contravention

            	 	 	33	 
	 	5.03	 	
              Governmental
      Authorization; Other Consents

            	 	 	33	 
	 	5.04	 	
              Binding
      Effect

            	 	 	33	 
	 	5.05	 	
              Financial
      Statements; No Material Adverse Effect

            	 	 	34	 
	 	5.06	 	
              Litigation

            	 	 	34	 
	 	5.07	 	
              No
      Default

            	 	 	35	 
	 	5.08	 	
              Ownership
      of Property; Liens

            	 	 	35	 
	 	5.09	 	
              Environmental
      Compliance

            	 	 	35	 
	 	5.10	 	
              Insurance

            	 	 	35	 

    

    

     

    

     

    
      	 	5.11	 	
              Taxes

            	 	 	35	 
	 	5.12	 	
              ERISA
      Compliance

            	 	 	35	 
	 	5.13	 	
              Subsidiaries;
      Equity Interests

            	 	 	36	 
	 	5.14	 	
              Margin
      Regulations; Investment Company Act

            	 	 	36	 
	 	5.15	 	
              Disclosure

            	 	 	37	 
	 	5.16	 	
              Compliance
      with Laws

            	 	 	37	 
	 	5.17	 	
              Taxpayer
      Identification Number

            	 	 	37	 
	 	5.18	 	
              First
      Priority Security Interest

            	 	 	37	 
	
              ARTICLE
      VI.

            	
                   AFFIRMATIVE
      COVENANTS

            	 	 	37	 
	 	6.01	 	
              Financial
      Statements

            	 	 	37	 
	 	6.02	 	
              Certificates;
      Other Information

            	 	 	38	 
	 	6.03	 	
              Notices

            	 	 	41	 
	 	6.04	 	
              Payment
      of Obligations

            	 	 	41	 
	 	6.05	 	
              Preservation
      of Existence, Etc

            	 	 	42	 
	 	6.06	 	
              Maintenance
      of Properties

            	 	 	42	 
	 	6.07	 	
              Maintenance
      of Insurance

            	 	 	42	 
	 	6.08	 	
              Compliance
      with Laws

            	 	 	42	 
	 	6.09	 	
              Books
      and Records

            	 	 	42	 
	 	6.10	 	
              Inspection
      Rights

            	 	 	42	 
	 	6.11	 	
              Use
      of Proceeds

            	 	 	43	 
	 	6.12	 	
              Bank
      as Principal Depository

            	 	 	43	 
	 	6.13	 	
              Further
      Assurances

            	 	 	43	 
	 	6.14	 	
              Collateral
      Value

            	 	 	44	 
	
              ARTICLE
      VII.

            	
                   NEGATIVE
      COVENANTS

            	 	 	44	 
	 	7.01	 	
              Liens

            	 	 	44	 
	 	7.02	 	
              Investments

            	 	 	45	 
	 	7.03	 	
              Indebtedness

            	 	 	46	 
	 	7.04	 	
              Fundamental
      Changes

            	 	 	47	 
	 	7.05	 	
              Dispositions

            	 	 	47	 
	 	7.06	 	
              Restricted
      Payments

            	 	 	48	 
	 	7.07	 	
              Change
      in Nature of Business

            	 	 	49	 
	 	7.08	 	
              Transactions
      with Affiliates

            	 	 	49	 
	 	7.09	 	
              Burdensome
      Agreements

            	 	 	49	 
	 	7.10	 	
              Use
      of Proceeds

            	 	 	49	 
	 	7.11	 	
              Financial
      Covenants

            	 	 	49	 
	
              ARTICLE
      VIII.

            	
                   EVENTS
      OF DEFAULT AND REMEDIES

            	 	 	49	 
	 	8.01	 	
              Events
      of Default

            	 	 	49	 
	 	8.02	 	
              Remedies
      Upon Event of Default

            	 	 	51	 
	 	8.03	 	
              Application
      of Funds

            	 	 	52	 

    

    

     

    
      	
              ARTICLE
      IX.

            	
                   ADMINISTRATIVE
      AGENT

            	 	 	52	 
	 	9.01	 	
              Appointment
      and Authority

            	 	 	52	 
	 	9.02	 	
              Rights
      as a Lender

            	 	 	53	 
	 	9.03	 	
              Exculpatory
      Provisions

            	 	 	53	 
	 	9.04	 	
              Reliance
      by Administrative Agent

            	 	 	54	 
	 	9.05	 	
              Delegation
      of Duties

            	 	 	54	 
	 	9.06	 	
              Resignation
      of Administrative Agent

            	 	 	54	 
	 	9.07	 	
              Non-Reliance
      on Administrative Agent and Other Lenders

            	 	 	55	 
	 	9.08	 	
              No
      Other Duties, Etc

            	 	 	55	 
	 	9.09	 	
              Administrative
      Agent May File Proofs of Claim

            	 	 	55	 
	 	9.10	 	
              Collateral
      Matters

            	 	 	55	 
	 	 	 	 
      	 	 	 	 
	
              ARTICLE
      X.

            	
                   PARENT
      GUARANTEE

            	 	 	56	 
	 	10.01	 	
              Unconditional
      Guarantee

            	 	 	56	 
	 	10.02	 	
              Guarantee
      Absolute

            	 	 	56	 
	 	10.03	 	
              Waivers

            	 	 	57	 
	 	10.04	 	
              Subrogation

            	 	 	57	 
	 	10.05	 	
              Survival

            	 	 	58	 
	 	10.06	 	
              Severability

            	 	 	58	 
	
              ARTICLE
      XI.

            	
                   MISCELLANEOUS

            	 	 	58	 
	 	11.01	 	
              Amendments,
      Etc

            	 	 	58	 
	 	11.02	 	
              Notices;
      Effectiveness; Electronic Communication

            	 	 	59	 
	 	11.03	 	
              No
      Waiver; Cumulative Remedies; Enforcement

            	 	 	62	 
	 	11.04	 	
              Expenses;
      Indemnity; Damage Waiver

            	 	 	62	 
	 	11.05	 	
              Payments
      Set Aside

            	 	 	64	 
	 	11.06	 	
              Successors
      and Assigns

            	 	 	64	 
	 	11.07	 	
              Treatment
      of Certain Information; Confidentiality

            	 	 	67	 
	 	11.08	 	
              Right
      of Setoff

            	 	 	68	 
	 	11.09	 	
              Interest
      Rate Limitation

            	 	 	69	 
	 	11.10	 	
              Counterparts;
      Integration; Effectiveness

            	 	 	69	 
	 	11.11	 	
              Survival
      of Representations and Warranties

            	 	 	69	 
	 	11.12	 	
              Severability

            	 	 	69	 
	 	11.13	 	
              Replacement
      of Lenders

            	 	 	69	 
	 	11.14	 	
              Governing
      Law; Jurisdiction; Etc

            	 	 	70	 
	 	11.15	 	
              Waiver
      of Jury Trial

            	 	 	71	 
	 	11.16	 	
              California
      Proceedings

            	 	 	71	 
	 	11.17	 	
              No
      Advisory or Fiduciary Responsibility

            	 	 	72	 
	 	11.18	 	
              Electronic
      Execution of Assignments and Certain Other Documents

            	 	 	72	 
	 	11.19	 	
              USA
      PATRIOT Act

            	 	 	72	 
	 	11.20	 	
              Time
      of the Essence

            	 	 	73	 
	 	11.21	 	
              Entire
      Agreement

            	 	 	73	 

    

    

     

    
      	
              SCHEDULES

            	 	 
      
	 	1.01	 	 	 	 	
              Collateral
      Advance Rates

            
	 	2.01	 	 	 	 	
              Commitments
      and Applicable Percentages

            
	 	5.13	 	 	 	 	
              Subsidiaries;
      Other Equity Investments

            
	 	11.02	 	 	 	 	
              Administrative
      Agent’s Office; Certain Addresses for Notices

            
	 	 	 	 	 	 	 
      
	
              EXHIBITS

            	 	 	 	 	 
      
	
              Form
      of

            	 	 
      
	 	A	 	 	 	 	
              Loan
      Notice

            
	 	B	 	 	 	 	
              Note

            
	 	C	 	 	 	-1	 	
              Compliance
      Certificate

            
	 	C	 	 	 	-2	 	
              Collateral
      Value Certificate

            
	 	D	 	 	 	-1	 	
              Assignment
      and Assumption

            
	 	D	 	 	 	-2	 	
              Administrative
      Questionnaire

            
	 	E	 	 	 	-1	 	
              Security
      Agreement

            
	 	E	 	 	 	-2	 	
              Control
      Agreement

            
	 	F	 	 	 	 	 	
              Opinion
      Matters

            

    

    

     

    

    CREDIT
AGREEMENT

    

    This
CREDIT AGREEMENT (“Agreement”) is
entered into as of January 2, 2009, among MERCURY CASUALTY COMPANY, a California
corporation (the “Borrower”), MERCURY
GENERAL CORPORATION, a California corporation (the “Parent”), each lender
from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and BANK OF
AMERICA, N.A., as Administrative Agent.

     

    The
Borrower has requested that the Lenders provide a term loan facility, and the
Lenders are willing to do so on the terms and conditions set forth
herein.

     

    In
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

     

    ARTICLE
I.                                

     

    DEFINITIONS
AND ACCOUNTING TERMS

     

    1.01   Defined Terms.

     

    As used
in this Agreement, the following terms shall have the meanings set forth
below:

     

    "Account Bank" means
any "bank" within the meaning of Section 9-102(a)(8)
of the UCC at which any deposit account constituting a Collateral Account is
held, which shall be

     

    (a)
located in the United States and (b) reasonably acceptable to the Administrative
Agent.

     

    “Act” has the meaning
specified in Section
11.17.

     

    “Acquisition” means
the acquisition of all outstanding capital stock of AIS Management, LLC, a
California limited liability company (“AIS”) which is the parent
company of Auto Insurance Specialists, LLC, a California limited liability
company, and Poliseek AIS Insurance Solutions, Inc.

     

    “Acquisition
Agreement” means the Stock Purchase Agreement by and among Aon
Corporation, Aon Services Group, Inc. and the Borrower dated as of October 10,
2008 entered into in connection with the Acquisition.

     

    “Acquisition
Documents” means the Acquisition Agreement and the related documents
delivered pursuant thereto.

     

    “Adjusted Fair Market Value”
means with respect to any Eligible Collateral, an amount equal to the
product of the Fair Market Value of such Eligible Collateral and the applicable
percentage with respect to such Eligible Collateral as set forth on Schedule
1.01.

     

    “Administrative Agent”
means Bank of America in its capacity as administrative agent under any of the
Loan Documents, or any successor administrative agent.

     

    “Administrative
Agent’s Office” means the
Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 11.02,
or such other address or account as the Administrative Agent may from time to
time notify to the Borrower and the Lenders.

     

    “Administrative
Questionnaire” means an Administrative Questionnaire in substantially the
form of Exhibit
D-2 or any other form approved by the Administrative Agent.

     

    “Affiliate” means,
with respect to any Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

     

    “Aggregate
Commitments” means the Commitments of all the Lenders.

     

    “Agreement” means this
Credit Agreement.

     

    “Annual Statement”
means with respect to any Insurance Subsidiary, the annual financial
statement of such Insurance Subsidiary as required to be filed with the
Applicable Insurance Regulatory Authority, together with all exhibits or
schedules filed therewith, prepared in conformity with SAP.

     

    “Applicable
Percentage” means with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of such Lender’s Loans divided by the
Outstanding Amount.  The initial Applicable Percentage of each Lender
is set forth opposite the name of such Lender on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable.

     

    “Applicable Insurance
Regulatory Authority” means, with respect to any Material Insurance Subsidiary,
the California Department of Insurance or similar Governmental Authority located
in (x) the jurisdiction in which such Person is domiciled or (y) such other
jurisdiction which due to the nature of such Person's activities, has regulatory
authority over such Person, and any federal Governmental Authority regulating
the insurance industry.

     

    “Applicable Rate”
means 1.25%.

     

    “Approved Fund” means
any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

     

    “Arranger” means Banc
of America Securities LLC, in its capacity as sole lead arranger and sole book
manager.

     

    “Assignee Group” means
two or more Eligible Assignees that are Affiliates of one another or two or more
Approved Funds managed by the same investment advisor.

     

    “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section
11.06(b)), and accepted by the Administrative Agent, in substantially the
form of Exhibit
D-1 or any other form approved by the Administrative Agent.

     

    “Attributable
Indebtedness” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP, and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP if such
lease were accounted for as a capital lease.

     

    “Bank of America”
means Bank of America, N.A. and its successors.

     

    “Base Rate” means for
any day a fluctuating rate per annum equal to the highest of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as
publicly announced from time to time by Bank of America as its “prime rate” and
(c) the Eurodollar Rate for a one-month Interest Period commencing on such day
plus 0.50%  The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced by Bank of America shall take
effect at the opening of business on the day specified in the public
announcement of such change.

     

    “Base Rate Loan” means
a Loan that bears interest at a rate based on the Base Rate.

     

    “Borrower” has the
meaning specified in the introductory paragraph hereto.

     

    “Borrower Materials”
has the meaning specified in Section
6.02.

     

    “Borrower Statutory
Surplus” means, on any date, the amount (determined in accordance with
SAP) of the Borrower’s surplus as at the last day of any fiscal quarter ending
on or most recently ended prior to such date.

     

    “Business Day” means
any day other than a Saturday, Sunday or other day on which commercial banks are
authorized to close under the Laws of, or are in fact closed in, the state where
the Administrative Agent’s Office is located or Los Angeles, California and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

     

    “Cash” means Dollars
held in a Collateral Account.

     

    “Cash Equivalents”
means at any time:

     

    (a)           time
deposits and certificates of deposit, maturing not more than two years after the
date of determination, which are issued by the applicable Securities
Intermediary; and

     

    (b)           investments
in money market funds or short-term asset management accounts offered by the
Securities Intermediary which are acceptable to the Administrative
Agent.

     

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

     

    “Change of Control”
means an event or series of events by which:

     

    (a)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such
person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan) becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time (such right, an “option right”)),
directly or indirectly, of 50% or more of the equity securities of the Parent
entitled to vote for members of the board of directors or equivalent governing
body of the Parent on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any
option right);

     

    (b)           during
any period of 12 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Parent cease to be composed
of individuals (i) who were members of that board or equivalent governing body
on the first day of such period, (ii) whose election or nomination to that board
or equivalent governing body was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors);
or

     

    (c)           the
Parent ceases to own, directly or indirectly, 100% of the Equity Interests in
the Borrower, free and clear of Liens.

     

    “Closing Date” means
the first date all the conditions precedent in Sections 4.01 and
4.02 are
satisfied or waived in accordance with Section
11.01.

     

    “Code” means the
Internal Revenue Code of 1986.

     

    “Collateral” means all
property and assets that are from time to time subject to the Security
Agreement.

     

    Collateral Account”
means (a) account no. 244398 at The Bank of New York
Mellon Trust Company, National Association as to which the Borrower, The Bank of
New York Mellon Trust Company, National Association and the Administrative Agent
have entered into a Control Agreement, and (b) any other account at The Bank of
New York Mellon Trust Company, National Association or another Securities
Intermediary or Account Bank as to which such Securities Intermediary or Account
Bank, as the case may be, the Borrower and the Administrative Agent have entered
into a Control Agreement.

     

    “Collateral Value”
means, on any date, an amount equal to the sum of the Adjusted Fair Market Value
of all Eligible Collateral.

     

    “Collateral Value
Certificate” means a certificate substantially in the form of Exhibit C-2 with such
changes therein as the Administrative Agent and the Borrower may reasonably
agree from time to time.

     

    “Compliance
Certificate” means a certificate substantially in the form of Exhibit
C-1.

     

    “Consolidated Parent
Debt” means, as of any date of determination, the balance sheet amount of
the consolidated Indebtedness of the Parent and its Subsidiaries on that
date.

     

    “Consolidated Parent Net
Worth” means, as of any date of determination, for the Parent and its
Subsidiaries on a consolidated basis, Shareholders’ Equity of the Parent and its
Subsidiaries on that date.

     

    “Consolidated Statutory Net
Income” means, for any period, for the Borrower, the net statutory income
of the Borrower for that period excluding (a) extraordinary gains and
extraordinary losses and (b) dividends and other distributions from its
Subsidiaries and other Affiliates for such period, calculated in accordance with
SAP.

     

    “Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is
bound.

     

    “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled”
have meanings correlative thereto.

     

    “Control Agreement”
means an agreement between the Borrower, the applicable Securities Intermediary
or Account Bank, as the case may be, and the Administrative Agent with respect
to any Collateral Account substantially in the form of Exhibit E-2 or such
other form as may be reasonably acceptable to the Administrative
Agent.

     

    “Corporate Securities”
means publicly traded debt securities (other than preferred stock) denominated
in Dollars issued by a corporation, limited liability company, limited
partnership or similar entity organized in the United States.

     

    “Debtor Relief Laws”
means the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors
generally.

     

    “Default” means any
event or condition that constitutes an Event of Default or that, with the giving
of any notice, the passage of time, or both, would be an Event of
Default.

     

    “Default Rate” means
an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per
annum; provided, however, that with
respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate
equal to the interest rate (including any Applicable Rate) otherwise applicable
to such Loan plus 2% per annum.

     

    “Disposition” or
“Dispose” means
the sale, transfer, license, lease or other disposition (including any sale and
leaseback transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated
therewith.

     

    “Dollar” and “$” mean lawful money
of the United States.

     

    “Eligible Assignee”
means any Person that meets the requirements to be an assignee under Section
11.06(b)(iii), (v) and (vi) (subject to such
consents, if any, as may be required under Section
11.06(b)(iii)).

     

    “Eligible Collateral”
means Cash, Cash Equivalents, Corporate Securities, Federal Agency Debt,
Government Debt and Municipal Securities which (a) are denominated in Dollars,
(b) if applicable, have the required rating and/or maximum tenor as set forth on
Schedule 1.01,
(c) are capable of being marked to market on a daily basis and capable of being
cleared by the Depository Trust Company and (d) are held in a Collateral
Account.

     

    “Environmental Laws”
means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

     

    “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Parent or any of its Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

     

    “Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or
other ownership or profit interests in) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of
determination.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974.

     

    “ERISA Affiliate”
means any trade or business (whether or not incorporated) under common control
with the Parent within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).

     

    “ERISA Event” means
(a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the
Parent or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a “substantial employer” (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal (within the meanings of Sections 4203 and 4205 of ERISA) by the
Parent or any ERISA Affiliate from a Multiemployer Plan or receipt by the Parent
or any ERISA Affiliate of notice from any Multiemployer Plan that it is in
“reorganization” (within the meaning of Section 4241 of ERISA); (d) the filing
of a notice of intent by the plan administrator to terminate, the treatment of a
Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; or (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan.

     

    “Eurodollar Rate”
means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at such time for any reason,
then the “Eurodollar Rate” for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest
Period.

     

    “Eurodollar Rate Loan”
means a Loan that bears interest at a rate based on the Eurodollar
Rate.

     

    “Event of Default” has
the meaning specified in Section
8.01.

     

    “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender or any other
recipient of any payment to be made by or on account of any obligation of a Loan
Party hereunder, (a) Taxes imposed on or measured by its overall net income or
gross receipts (however denominated), and franchise Taxes imposed on it (in lieu
of net income taxes), by the jurisdiction (or any political subdivision thereof)
under the Laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable Lending
Office is located, (b) any branch profits Taxes imposed by the United States or
any similar Tax imposed by any other jurisdiction in which such Loan Party is
located, (c) any backup withholding Tax that is withheld from amounts payable to
a Lender that has failed to comply with clause (A) of Section 3.01(e)(ii),
and (d) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 11.13 in
which the Borrower has agreed to pay the applicable withholding taxes), any
United States withholding tax that (i)
is imposed on amounts payable to such Foreign Lender pursuant to the Laws in
force at the time such Foreign Lender becomes a party hereto (or designates a
new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with clause (B)
of Section
3.01(e)(ii), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from such Loan Party with
respect to such withholding tax pursuant to Section 3.01(a)(ii) or
(iii).

     

    “Existing Term Loan
Agreement” means that certain Amended and Restated Loan Agreement dated
as of January 2, 2009 between the Borrower and Bank of America.

     

    “Fair Market Value”
means (a) with respect to any Government Debt, Federal Agency Debt, or other
publicly-traded security (other than those set forth in clause (b)) the closing
price for such security on Bloomberg, Inc. or, if Bloomberg, Inc. is not
available, another quotation service reasonably acceptable to the Administrative
Agent, (b) with respect to Cash and Cash Equivalents, the amounts thereof, and
(c) with respect to any Eligible Collateral (other than those set forth in
clauses (a), and (b)), the price for such Eligible Collateral on the date of
calculation obtained from a generally recognized source reasonably approved by
the Administrative Agent or the most recent bid quotation from such approved
source (or, if no generally recognized source exists as to such Eligible
Collateral, any other source specified by the Borrower to which the
Administrative Agent does not reasonably object).

     

    “Federal Agency” means
any of the following agencies of the federal government of the United
States:  (a) Government National Mortgage Association; (b) the
Export-Import Bank of the United States; (c) the Farmers Home Administration, an
agency of the United States Department of Agriculture; (d) the United States
General Services Administration; (e) the United States Maritime Administration;
(f) the United States Small Business Administration; (g) the Commodity Credit
Corporation; (h) the Rural Electrification Administration; (i) the Rural
Telephone Bank; (j) Washington Metropolitan Area Transit Authority; (k) the
Federal Home Loan Mortgage Corporation; (l) the Federal National Mortgage
Association; (m) the Federal Housing Finance Board; (n) the Federal Home Loan
Bank; and (o) such other federal agencies as are reasonably acceptable to the
Administrative Agent.

     

    “Federal Agency Debt”
means evidence of Freely Transferable Indebtedness that constitutes obligations
of a Federal Agency.

     

    “Federal Funds Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to Bank of America on such day on such transactions as
determined by the Administrative Agent.

     

    “Fee Letter” means the
letter agreement, dated December 15, 2008, among the Loan Parties, the
Administrative Agent and Bank of America and the Arranger.

     

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

     

    “Freely Transferable”
means securities which are freely transferable and traded in established and
recognized markets and as to which there are readily available price
quotations.

     

    “FRB” means the Board
of Governors of the Federal Reserve System of the United States.

     

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

     

    “GAAP” means generally
accepted accounting principles in the United States set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or such other principles as may be approved
by a significant segment of the accounting profession in the United States, that
are applicable to the circumstances as of the date of determination,
consistently applied.

     

    “Governmental
Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central
Bank).

     

    “Government Debt”
means Freely Transferable Indebtedness issued by the U.S. Treasury Department or
backed by the full faith and credit of the United States.

     

    “Guarantee” means, as
to any Person, any (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness
or other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien).  The amount of any Guarantee shall be deemed to
be an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good
faith.  The term “Guarantee” as a verb has a corresponding
meaning.

     

    “Hazardous Materials”
means all explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

     

    “Indebtedness” means,
as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

     

    (a)           all
obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments;

     

    (b)           all
direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;

     

    (c)           net
obligations of such Person under any Swap Contract;

     

    (d)           all
obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of
business);

     

    (e)           indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;

     

    (f)           capital
leases and Synthetic Lease Obligations;

     

    (g)           all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other
Person, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

     

    (h)           all
Guarantees of such Person in respect of any of the foregoing.

     

    For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.  The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.  The amount of any capital lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

     

    “Indemnified Taxes”
means Taxes other than Excluded Taxes.

     

    “Indemnitees” has the
meaning specified in Section
11.04(b).

     

    “Information” has the
meaning specified in Section
11.07.

     

    “Insurance License”
means any license, certificate of authority, permit or other authorization which
is required to be obtained from any Governmental Authority in connection with
the operation, ownership or transaction of insurance or reinsurance
business.

     

    “Insurance Subsidiary”
means each of the Borrower and any other Subsidiary of the Parent which is
licensed by any Governmental Authority to engage in the insurance and/or
reinsurance business.

     

    “Interim Statement”
means with respect to any Insurance Subsidiary, any interim statutory financial
statement or financial report (whether quarterly, semiannually or otherwise) of
such Insurance Subsidiary as required to be filed with the Applicable Insurance
Regulatory Authority, together with all exhibits or schedules filed therewith,
prepared in conformity with SAP.

     

    “Interest Payment
Date” means, (a) as to any Loan other than a Base Rate Loan, the last day
of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any
Interest Period for a Eurodollar Rate Loan exceeds three months, the respective
dates that fall every three months after the beginning of such Interest Period
shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last
Business Day of each March, June, September and December, and the Maturity
Date.

     

    “Interest Period”
means, as to each Eurodollar Rate Loan, the period commencing on the date such
Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar
Rate Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Loan Notice or such other period that is twelve
months or less requested by the Borrower and consented to by all the Lenders;
provided
that:

     

    (i)           any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day;

     

    (ii)           any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and

     

    (iii)           no
Interest Period shall extend beyond the Maturity Date.

     

    “Investment” means, as
to any Person, any direct or indirect acquisition or investment by such Person,
whether by means of (a) the purchase or other acquisition of capital stock or
other securities of another Person or (b) a loan, advance or capital
contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other Person
and any arrangement pursuant to which the investor Guarantees Indebtedness of
such other Person.  For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

     

    “IRS” means the United
States Internal Revenue Service.

     

    “Laws” means,
collectively, all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.

     

    “Lender” and “Lenders” have the
meaning specified in the introductory paragraph hereto.

     

    “Lending Office”
means, as to any Lender, the office or offices of such Lender described as such
in such Lender’s Administrative Questionnaire, or such other office or offices
as a Lender may from time to time notify the Borrower and the Administrative
Agent.

     

    “Lien” means any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge, or preference, priority or other security
interest or preferential arrangement in the nature of a security interest of any
kind or nature whatsoever (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on title to
real property, and any financing lease having substantially the same economic
effect as any of the foregoing).

     

    “Loan” has the meaning
specified in Section
2.01.

     

    “Loan Documents” means
this Agreement, each Note, the Security Agreement, the Control Agreement and the
Fee Letter.

     

    “Loan Notice” means a
notice of (a) the initial borrowing hereunder, (b) a conversion of Loans from
one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant
to Section
2.02(a), which, if in writing, shall be substantially in the form of
Exhibit
A.

     

    “Loan Parties” means,
collectively, the Borrower and the Parent.

     

    “Margin Stock” has the
meaning specified in Regulation U issued by the FRB.

     

    “Material Adverse
Effect” means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or
contingent), operations or financial condition of the Borrower and its
Subsidiaries taken as a whole or the Parent and its Subsidiaries taken as a
whole; (b) a material impairment of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document to which it is a party.

     

    “Material Insurance
Subsidiary” means the Borrower and each other Insurance Subsidiary which
is Material Party.

     

    “Material Party” means
each Loan Party and each Subsidiary of the Parent whose consolidated assets or
revenues exceed 10% of the consolidated assets or revenues of the Parent and its
Subsidiaries for the most recent fiscal quarter for which financial statements
have been delivered pursuant to Section 6.01(a) or
(b).

     

    “Maturity Date” means
January 2, 2012 if such date is not a Business Day, the Maturity Date shall be
the next succeeding Business Day.

     

    “Moody’s” means
Moody’s Investors Service, Inc. and any successor thereto.

     

    “Multiemployer Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) of the type described in Section 4001(a)(3) of ERISA, to which the
Parent or any ERISA Affiliate makes or is obligated to make contributions, or
during the preceding five plan years, has made or been obligated to make
contributions.

     

    “Municipal Securities”
means publicly traded debt securities issued by any state or municipality or
subdivision or instrumentality thereunder located in the United
States.

     

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

     

    “Note” means a
promissory note made by the Borrower in favor of a Lender evidencing Loans made
by such Lender, substantially in the form of Exhibit
B.

     

    “Obligations” means
all advances to, and debts, liabilities, obligations, covenants and duties of,
any Loan Party arising under any Loan Document or otherwise with respect to any
Loan, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Loan Party or any Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such
proceeding.

     

    “Organization
Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

     

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

     

    “Outstanding Amount”
means the aggregate outstanding principal amount of Loans on any date after
giving effect to any prepayments of Loans, occurring on such date.

     

    “Parent” has the
meaning specified in the introductory paragraph.

     

    “Parent Debt to Capital
Ratio” means the ratio, expressed as a percentage, of (a) Consolidated
Parent Debt to (b) Parent Net Worth plus Consolidated Parent Debt.

     

    “Parent Net Worth”
means, as of any date of determination, the consolidated shareholders’ equity of
the Parent calculated in accordance with GAAP.

     

    “Participant” has the
meaning specified in Section
11.06(d).

     

    “PBGC” means the
Pension Benefit Guaranty Corporation.

     

    “Pension Plan” means
any “employee pension benefit plan” (as such term is defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by the Parent or any ERISA Affiliate or to which
the Parent or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.

     

    “Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.

     

    “Plan” means any
“employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
established by the Parent or, with respect to any such plan that is subject to
Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

     

    “Platform” has the
meaning specified in Section
6.02.

     

    “Post-Closing Filings”
has the meaning specified in Section
5.03.

     

    “Public Lender” has
the meaning specified in Section
6.02.

     

    “Register” has the
meaning specified in Section
11.06(c).

     

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

     

    “Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA, other than events
for which the 30 day notice period has been waived.

     

    “Required Lenders”
means, as of any date of determination, Lenders holding in the aggregate more
than 50% of the
Outstanding Amount.  In the event that the Borrower or any of its
Affiliates become the owner of Loans in accordance with Section 11.06(b)(v)
or a participant in Loans in accordance with Section 11.06(d),
such Person shall not have a vote and such Person’s Loans shall be excluded in
calculating the Outstanding Amount for purposes of determining Required Lenders
unless 100% of the Lenders approved the assignment of such Loans to such
Person.

     

    “Responsible Officer”
means the chief executive officer, president, chief financial officer, corporate
secretary, treasurer, assistant treasurer or controller of a Loan Party and,
solely for purposes of notices given pursuant to Article II, any other officer
of the applicable Loan Party so designated by any of the foregoing officers in a
notice to the Administrative Agent.  Any document delivered hereunder
that is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Loan Party and such Responsible Officer shall
be conclusively presumed to have acted on behalf of such Loan
Party.

     

    “Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any capital stock or other Equity Interest of the
Borrower, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
capital stock or other Equity Interest, or on account of any return of capital
to the Borrower’s stockholders, partners or members (or the equivalent Person
thereof).

     

    “Risk Based Capital
Ratio” means, as to any Material Insurance Subsidiary, the “risk based
capital ratio” calculated in accordance with SAP pursuant to the requirements of
the Applicable Insurance Regulatory Authority in such Material Insurance
Subsidiary’s domicile.

     

    “SAP” means, as to any
Material Insurance Subsidiary, the accounting practices prescribed or permitted
by NAIC, if then applicable to such Material Insurance Subsidiary, or the
Applicable Insurance Regulatory Authority of the jurisdiction of domicile of
such Material Insurance Subsidiary for the preparation of Annual Statements,
Interim Statements and other financial reports by insurance companies of the
same type as such Material Insurance Subsidiary.

     

    “S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc. and any successor thereto.

     

    “SEC” means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

     

    “Securities
Intermediary” means any “securities intermediary” within the meaning of
Section 8.102(a)(14) of the UCC at which any securities account constituting a
Collateral Account is held, which shall be (a) located in the United States and
(b) reasonably acceptable to the Administrative Agent.

     

    “Security Agreement”
means a security agreement substantially in the form of Exhibit E-1 entered
into on the Closing Date.

     

    “Subsidiary” of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities
or other interests having ordinary voting power for the election of directors or
other governing body (other than securities or interests having such power only
by reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person.  Unless
otherwise specified, all references herein to a “Subsidiary” or to
“Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the
Parent.

     

    “Swap Contract” means
(a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master
Agreement.

     

    “Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to
such Swap Contracts, (a) for any date on or after the date such Swap Contracts
have been closed out and termination value(s) determined in accordance
therewith, such termination value(s), and (b) for any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

     

    “Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

     

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

     

    “Threshold Amount”
means $25,000,000.

     

    “Type” means, with
respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate
Loan.

     

    "UCC" means the
Uniform Commercial Code as in effect from time to time in the State of New
York.

     

    “Unfunded Pension
Liability” means the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

     

    “United States” and
“U.S.” mean the
United States of America.

     

    “Unmatured Surviving
Obligations” means, as of any date, Obligations that by their terms
survive the termination of this Agreement or any other Loan Document and are not
due and payable as of such date.

     

    1.02   Other Interpretive
Provisions.

     

    With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

     

    (a) The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms.  The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.”  The word
“will” shall be
construed to have the same meaning and effect as the word “shall.”  Unless
the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document (including any Organization Document)
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein,”
“hereof” and
“hereunder,”
and words of similar import when used in any Loan Document, shall be construed
to refer to such Loan Document in its entirety and not to any particular
provision thereof, (iv) all references in a Loan Document to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, the Loan Document in which such references
appear, (v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

     

    (b) In the
computation of periods of time from a specified date to a later specified date,
the word “from”
means “from and
including;” the words “to” and “until” each mean
“to but
excluding;” and the word “through” means “to and
including.”

     

    (c) Section
headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.

     

    1.03   Accounting Terms.

     

    (a) Generally.  All
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with GAAP or SAP, as
applicable.

     

    (b) Changes in GAAP or
SAP.  If any change in GAAP or SAP from that used in preparing
the financial statements described in Section 5.05 would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP or SAP, as applicable (subject to the approval
of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP or SAP, as applicable prior to such change therein and
(ii) the Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP or SAP, as applicable.

     

    1.04   Rounding.

     

    Any
financial ratios required to be maintained by any Loan Party pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).

     

    1.05   Times of Day.

     

    Unless
otherwise specified, all references herein to times of day shall be references
to California time (daylight or standard, as applicable).

     

    ARTICLE
II.                                

     

    THE
COMMITMENTS AND LOANS

     

    2.01   Loans.

     

    Subject
to the terms and conditions set forth herein, each Lender severally agrees to
make loans (each such loan, a “Loan”) to the
Borrower on the Closing Date not to exceed $120,000,000.  Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.

     

    2.02   Initial Borrowing, Conversions and
Continuations of Loans.

     

    (a) The
initial borrowing hereunder and each conversion of Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the
Borrower’s irrevocable notice to the Administrative Agent, which may be given by
telephone.  Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of the initial borrowing hereunder of, or the conversion to or continuation
of, Eurodollar Rate Loans or (ii) on the Business Day of the requested date of
the initial borrowing hereunder of, or conversion to, Base Rate Loans; provided, however, that if the
Borrower wishes to request Eurodollar Rate Loans having an Interest Period other
than one, two, three or six months in duration as provided in the definition of
“Interest Period,” the applicable notice must be received by the Administrative
Agent not later than 11:00 a.m. four Business Days prior to the requested date
of such conversion or continuation, whereupon the Administrative Agent shall
give prompt notice to the Lenders of such request and determine whether the
requested Interest Period is acceptable to all of them.  Not later
than 11:00 a.m., three Business Days before the requested date of such
conversion or continuation, the Administrative Agent shall notify the Borrower
(which notice may be by telephone) whether or not the requested Interest Period
has been consented to by all the Lenders..  Each telephonic notice by
the Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower.  The initial borrowing hereunder of and each conversion to
or continuation of Eurodollar Rate Loans shall be in a principal amount of
$3,000,000 or a whole multiple of $500,000 in excess thereof.  The
initial borrowing hereunder of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof.  Each Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting the initial borrowing hereunder
of, a conversion of Loans from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the requested date of the initial borrowing
hereunder, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Loans are
to be converted, and (v) if applicable, the duration of the Interest Period with
respect thereto.  If the Borrower fails to specify a Type of Loan in a
Loan Notice or if the Borrower fails to give a timely notice requesting a
conversion or continuation, then the applicable Loans shall be made as, or
converted to, Eurodollar Rate Loans with a one-month Interest
Period.  Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurodollar Rate Loans.  If the Borrower requests a
conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice,
but fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.  Notwithstanding the foregoing, the
Borrower may request that Loans made on the Closing Date bear interest at a rate
equal to the sum of (x) the “overnight rate” as quoted by the Administrative
Agent on the Closing Date plus (y) the Applicable Rate provided the Borrower
delivers to the Administrative Agent no later than 10:00 a.m. on the Closing
Date (1) a Loan Notice requesting such rate and (2) a Loan Notice requesting
conversion of the Loans made on the Closing Date to a Eurodollar Loan(s) on the
second Business Day after the Closing Date.  Thereafter, all
conversions and continuations shall be made in accordance with the provisions of
this Section
2.02(a).

     

    (b) Following
receipt of a Loan Notice, the Administrative Agent shall promptly notify each
Lender of the contents thereof, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Eurodollar Rate Loans
with a one-month Interest Period described in the preceding
subsection.

     

    (c) Except as
otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of an Interest Period for such Eurodollar Rate
Loan.  During the existence of an Event of Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.

     

    (d) The
Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
determination of such interest rate.  At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America’s prime rate used in determining the
Base Rate promptly following the public announcement of such
change.

     

    (e) After
giving effect to the outstanding Loans, all conversions of Loans from one Type
to the other, and all continuations of Loans as the same Type, there shall not
be more than five Interest Periods in effect with respect to Loans.

     

    2.03   Voluntary
Prepayments.

     

    The
Borrower may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay Loans in whole or in part without premium or penalty;
provided that
(i) such notice must be received by the Administrative Agent not later than
11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar
Rate Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of $3,000,000
or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of
Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding.  Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Loans to be prepaid and,
if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such
Loans.  The Administrative Agent will promptly notify each Lender of
its receipt of each such notice, and of the amount of such Lender’s Applicable
Percentage of such prepayment.  If the Borrower gives notice of
voluntary prepayment to the Administrative Agent, the Borrower shall pay all
accrued interest, together with any additional amounts required pursuant to
Section
3.05.  Each such prepayment shall be applied to the Loans of
the Lenders in accordance with their respective Applicable
Percentages.  If such notice is given by the Borrower and such
prepayment is not made on the date stipulated in the notice, the applicable
Loans shall be automatically converted to Base Rate Loans on such date, and the
Borrower shall pay all accrued interest and any additional amounts required
pursuant to Section
3.05.  Amounts repaid may not be reborrowed.

     

    2.04   Repayment of
Loans.

     

    The
Borrower shall repay to the Lenders on the Maturity Date the aggregate principal
amount of Loans outstanding on such date.

     

    2.05   Interest.

     

    (a) Subject
to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest
Period at a rate per annum equal to the Eurodollar Rate for such Interest Period
plus the
Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing or conversion
date at a rate per annum equal to the Base Rate plus the Applicable
Rate.

     

    (b) (i)           If
any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

     

    (ii) If any
amount (other than principal of any Loan) payable by the Borrower under any Loan
Document is not paid when due (without regard to any applicable grace periods),
whether at stated maturity, by acceleration or otherwise, then upon the request
of the Required Lenders, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

     

    (iii) Upon the
request of the Required Lenders, while any Event of Default exists, the Borrower
shall pay interest on the principal amount of all outstanding Obligations
hereunder at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

     

    (iv) Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

     

    (v) The
Administrative Agent shall notify the Borrower in writing of the imposition of
the Default Rate.

     

    (c) Interest
on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified
herein.  Interest hereunder shall be due and payable in accordance
with the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

     

    2.06   Fees.

     

    The
Borrower shall pay to the Arranger and the Administrative Agent for their own
respective accounts fees in the amounts and at the times specified in the Fee
Letter.  Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.

     

    2.07   Computation of Interest and
Fees.

     

    (a) All
computations of interest for Base Rate Loans when the Base Rate is determined by
Bank of America’s “prime rate” shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).  Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid.  Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

     

    2.08   Evidence of Debt.

     

    The Loans
made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and by the Administrative Agent in the ordinary course
of business.  The accounts or records maintained by the Administrative
Agent and each Lender shall be conclusive absent manifest error of the amount of
the Loans made by the Lenders to the Borrower and the interest and payments
thereon.  Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Obligations.  In the event of
any conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.  Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loans in addition to such accounts or records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.

     

    2.09   Payments Generally; Administrative
Agent’s Clawback.

     

    (a) General.  All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein.  The Administrative Agent will promptly distribute
to each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.  If
any payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be.

     

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

     

    (c)  Obligations of Lenders
Several.  The obligations of the Lenders hereunder to make
Loans and to make payments pursuant to Section 11.04(c) are
several and not joint.  The failure of any Lender to make any Loan, or
to make any payment under Section 11.04(c) on
any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan, or to make
its payment under Section
11.04(c).

     

    (d) Funding
Source.  Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

     

    2.10   Sharing of Payments by
Lenders.

     

    If any
Lender shall, by exercising any right of setoff or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of the Loans
made by it, resulting in such Lender’s receiving payment of a proportion of the
aggregate amount of such Loans and accrued interest thereon greater than its
pro rata share thereof as
provided herein, then the Lender receiving such greater proportion shall (a)
notify the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and other amounts
owing them, provided
that:

     

    (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest;
and

     

    (ii) the
provisions of this Section shall not be construed to apply to (x) any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant (provided, however, if such assignment or participation was made to
the Parent or any of its Affiliates or Subsidiaries other than in accordance
with Section
11.06(b)(v) or (c), as applicable,
the provisions of this Section shall apply to such payment).

     

    Each Loan
Party consents to the foregoing and agrees, to the extent it may effectively do
so under applicable law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against such Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Loan Party in the amount of such
participation.

     

    ARTICLE
III.                                

     

    TAXES,
YIELD PROTECTION AND ILLEGALITY

     

    3.01   Taxes.

     

    (a) Payments Free of Taxes;
Obligation to Withhold; Payments on Account of Taxes.

     

    (i) Any and
all payments by or on account of any obligation of the Borrower hereunder or
under any other Loan Document shall to the extent permitted by applicable Laws
be made free and clear of and without reduction or withholding for any
Taxes.  If, however, applicable Laws require the Borrower or the
Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld
or deducted in accordance with such Laws as determined by the Borrower or the
Administrative Agent, as the case may be, upon the basis of the information and
documentation to be delivered pursuant to subsection (e) below.

     

    (ii) If the
Borrower or the Administrative Agent shall be required by the Code to withhold
or deduct any
Taxes, including both United States Federal backup withholding and withholding
taxes, from any payment, then (A) the Administrative Agent shall withhold or
make such deductions as are determined by the Administrative Agent to be
required based upon the information and documentation it has received pursuant
to subsection (e) below, (B) the Administrative Agent shall timely pay the full
amount withheld or deducted to the relevant Governmental Authority in accordance
with the Code, and (C) to the extent that the withholding or deduction is made
on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrower
shall be increased as necessary so that after any required withholding or the
making of all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or Lender, as the case
may be, receives an amount equal to the sum it would have received had no such
withholding or deduction been made.

     

    (b) Payment of Other Taxes by
the Borrower.  Without limiting the provisions of subsection
(a) above, the Borrower shall timely pay, without duplication, any Other Taxes
to the relevant Governmental Authority in accordance with applicable
Laws.

     

    (c) Tax
Indemnifications.  (i) Without limiting the provisions of
subsection (a) or (b) above, the Borrower shall, without duplication, and does
hereby, indemnify the Administrative Agent and each Lender, and shall make
payment in respect thereof within 10 days after demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) withheld or deducted by the Borrower or the Administrative Agent or
paid by the Administrative Agent or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental
Authority.  The Borrower shall also, and does hereby, indemnify the
Administrative Agent, and shall make payment in respect thereof within 10 days
after demand therefor, for any amount which a Lender for any reason fails to pay
indefeasibly to the Administrative Agent as required by clause (ii) of this
subsection.  A certificate as to the amount of any such payment or
liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

     

    (ii) Without
limiting the provisions of subsection (a) or (b) above, each Lender shall, and
does hereby, indemnify the Borrower and the Administrative Agent, and shall make
payment in respect thereof within 10 days after demand therefor, against any and
all Taxes and any and all related losses, claims, liabilities, penalties,
interest and expenses (including the fees, charges and disbursements of any
counsel for the Borrower or the Administrative
Agent) incurred by or asserted against the Borrower or the Administrative Agent
by any Governmental Authority as a result of the failure by such Lender to
deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any
documentation required to be delivered by such Lender to the Borrower or the
Administrative Agent pursuant to subsection (e).  Each Lender hereby
authorizes the Administrative Agent to set off and apply any and all amounts at
any time owing to such Lender under this Agreement or any other Loan Document
against any amount due to the Administrative Agent under this clause
(ii).  The agreements in this clause (ii) shall survive the
resignation and/or replacement of the Administrative Agent, any assignment of
rights by, or the replacement of, a Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all other
Obligations.

     

    (d) Evidence of Payments.
 Upon request by
the Borrower or the Administrative Agent, as the case may be, after any payment
of Taxes by the Borrower or by the Administrative Agent to a Governmental
Authority as provided in this Section 3.01, the
Borrower shall deliver to the Administrative Agent or the Administrative Agent
shall deliver to the Borrower, as the case may be, the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of any return required by Laws to report such payment or other evidence
of such payment reasonably satisfactory to the Borrower or the Administrative
Agent, as the case may be.

     

    (e) Status of Lenders; Tax
Documentation.  (i)  Each Lender shall deliver to the
Borrower and to the Administrative Agent, at the time or times prescribed by
applicable Laws or when reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable Laws or by the taxing authorities of any jurisdiction
and such other reasonably requested information as will permit the Borrower or
the Administrative Agent, as the case may be, to determine (A) whether or not
payments made hereunder or under any other Loan Document are subject to Taxes,
(B) if applicable, the required rate of withholding or deduction, and (C) such
Lender’s entitlement to any available exemption from, or reduction of,
applicable Taxes in respect of all payments to be made to such Lender by the
Borrower pursuant to this Agreement or otherwise to establish such Lender’s
status for withholding tax purposes in the applicable jurisdiction.

     

    (ii) Without
limiting the generality of the foregoing, if the Borrower is resident for tax
purposes in the United States,

     

    (A) any
Lender that is a “United States person” within the meaning of Section
7701(a)(30) of the Code shall deliver to the Borrower and the Administrative
Agent executed originals of Internal Revenue Service Form W-9 or such other
documentation or information prescribed by applicable Laws or reasonably
requested by the Borrower or the Administrative Agent as will enable the
Borrower or the Administrative Agent, as the case may be, to determine whether
or not such Lender is subject to backup withholding or information reporting
requirements; and

     

    (B) each
Foreign Lender that is entitled under the Code or any applicable treaty to an
exemption from or reduction of withholding tax with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

     

    (1) executed
originals of Internal Revenue Service Form W-8BEN claiming eligibility for
benefits of an income tax treaty to which the United States is a
party,

     

    (2) executed
originals of Internal Revenue Service Form W-8ECI,

     

    (3) executed
originals of Internal Revenue Service Form W-8IMY and all required supporting
documentation,

     

    (4) in the
case of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under section 881(c) of the Code, (x) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section
881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within
the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code and (y) executed
originals of  Internal Revenue Service Form W-8BEN, or

     

    (5) executed
originals of any other form prescribed by applicable Laws as a basis for
claiming exemption from or a reduction in United States Federal withholding tax
together with such supplementary documentation as may be prescribed by
applicable Laws to permit the Borrower or the Administrative Agent to determine
the withholding or deduction required to be made.

     

    (iii) Each
Lender shall promptly (A) notify the Borrower and the Administrative Agent of
any change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (B) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws of any jurisdiction that the Borrower
or the Administrative Agent make any withholding or deduction for taxes from
amounts payable to such Lender.

     

    (f) Treatment of Certain
Refunds.  Unless required by applicable Laws, at no time shall
the Administrative Agent have any obligation to file for or otherwise pursue on
behalf of a Lender, or have any obligation to pay to any Lender, any refund of
Taxes withheld or deducted from funds paid for the account of such
Lender.  If the Administrative Agent or any Lender determines, in its
sole discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses incurred by the Administrative Agent or such Lender, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental
Authority.  This subsection shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.

     

    3.02   Illegality.  If any
Lender determines that any Law has made it unlawful, or that any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable
Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine
or charge interest rates based upon the Eurodollar Rate, or any Governmental
Authority has imposed material restrictions on the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the London interbank
market, then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist.  Upon receipt of such notice, the Borrower shall, upon demand
from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or
converted.

     

    3.03   Inability to Determine
Rates.  If the Required Lenders determine that for any reason
in connection with any request for a conversion to or continuation of a
Eurodollar Rate Loan that (a) Dollar deposits are not being offered to
banks in the London interbank eurodollar market for the applicable amount and
Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable
means do not exist for determining the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Borrower and each Lender.  Thereafter, the obligation of the
Lenders to convert to or maintain Eurodollar Rate Loans shall be suspended until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice.  Upon receipt of such notice, the Borrower may revoke any
pending request for a conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
conversion to or continuation of Base Rate Loans in the amount specified
therein.

     

    3.04   Increased Costs; Reserves on
Eurodollar Rate Loans.

     

    (a) Increased Costs
Generally.  If any Change in Law shall:

     

    (i) impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender (except any
reserve requirement contemplated by Section
3.04(e));

     

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

     

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

     

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

     

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

     

    (c) Certificates for
Reimbursement.  A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest
error.  The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 Business Days after receipt thereof.

     

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

     

    (e) Reserves on Eurodollar Rate
Loans.  The Borrower shall pay to each Lender, as long as such
Lender shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan, provided the Borrower
shall have received at least 10 Business Days’ prior notice (with a copy to the
Administrative Agent) of such additional interest from such
Lender.  If a Lender fails to give notice 10 Business Days prior to
the relevant Interest Payment Date, such additional interest shall be due and
payable 10 Business Days from receipt of such notice.

     

    3.05   Compensation for
Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

     

    (a) any
continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

     

    (b) any
failure by the Borrower to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower;
or

     

    (c) any
assignment of a Eurodollar Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to
Section 11.13;

     

    including
any loss of anticipated profits and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were
obtained.  The Borrower shall also pay any customary administrative
fees charged by such Lender in connection with the
foregoing.  Notwithstanding the foregoing, the Borrower shall not be
liable to pay such amounts in the event that a Eurodollar Loan is not continued
or a Base Rate Loan is not converted into a Eurodollar Loan in accordance with
the Borrower’s Loan Notice for the same due to a written request of a Lender
pursuant to Section
3.02 or a written notice from the Required Lenders pursuant to Section
3.03.

     

    For
purposes of calculating amounts payable by the Borrower to the Lenders under
this Section
3.05, each Lender shall be deemed to have funded each Eurodollar Rate
Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or
other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.

     

    3.06   Mitigation Obligations; Replacement
of Lenders.

     

    (a) Designation of a Different
Lending Office.  If any Lender requests compensation under
Section 3.04,
or the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, or if
any Lender gives a notice pursuant to Section 3.02, then
such Lender shall use reasonable efforts to designate a different Lending Office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may
be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

     

    (b) Replacement of
Lenders.  If any Lender requests compensation under Section 3.04, or if
any Lender gives a notice pursuant to Section 3.02, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, the
Borrower may replace such Lender in accordance with Section
11.13.

     

    3.07   Survival.

     

    All of
the Borrower’s obligations under this Article III shall
survive, repayment of all other Obligations hereunder and resignation of the
Administrative Agent.

     

    ARTICLE
IV.                                

     

    CONDITIONS
PRECEDENT TO LOANS

     

    4.01   Documentary Conditions of Closing
Date.

     

    The
obligation of each Lender to make the Loans hereunder is subject to the
Administrative Agent’s receipt of the following, each of which shall be
originals, electronic copies or facsimiles (followed promptly by originals)
unless otherwise specified, each properly executed by a Responsible Officer of
the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance and number reasonably satisfactory to the
Administrative Agent and each of the Lenders:

     

    (a) Executed
counterparts of this Agreement and the Security Agreement.

     

    (b) Such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party.

     

    (c) Such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that each Loan
Party is validly existing, in good standing and qualified to engage in business
in each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification including, in the case
of the Borrower, certificates from the California Department of Insurance and
any other Applicable Insurance Regulatory Authority having jurisdiction over the
Borrower, except to the extent that failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect.

     

    (d) A
favorable opinion of legal counsel to the Loan Parties,  addressed to
the Administrative Agent and each Lender, as to the matters set forth in Exhibit F and such
other matters concerning the Loan Parties and the Loan Documents as the Required
Lenders may reasonably request.

     

    (e) A
certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and such consents,
licenses and approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required.

     

    (f) A
certificate of a Responsible Officer of the Borrower certifying (A) a true and
correct copy of the Acquisition Documents, (B) that concurrent with making of
the Loans, the closing of the Acquisition will occur in accordance with the
terms of the Acquisition Documents without waiver of any material condition
thereof, and (C) the Acquisition complies in all material respects with
applicable legal requirements, and all necessary consents and approvals from any
Governmental Authority required for the consummation of the Acquisition were
duly obtained, and continue to be in full force and effect, except for such
requirements, consents or approvals that would not, in the aggregate, have a
Material Adverse Effect.

     

    (g) A
certificate signed by a Responsible Officer of the Borrower certifying that
after giving effect to the closing of the Acquisition and making of the Loans
(A) no Default or Event of Default shall have occurred and be continuing under
the Loan Documents or will result from the making of the Loan, (B) all
warranties and representations contained in this Agreement are  true
and correct in all material respects as of the date hereof; and (C) no Material
Adverse Effect has occurred since September 30, 2008.

     

    (h) A duly
completed Compliance Certificate on a proforma basis after giving effect to the
Acquisition as of the last day of the fiscal quarter of the Parent ended on
September 30, 2008, signed by a Responsible Officer of the Borrower and the
Parent.

     

    (i) A duly
completed Collateral Value Certificate calculated as of the most recent Business
Day signed by a Responsible Officer of the Borrower.

     

    (j) A Control
Agreement with respect to the Collateral Account executed by the parties
thereto.

     

    (k) Such
other assurances, certificates, documents, consents or opinions as the
Administrative Agent or the Lenders reasonably may require.

     

    4.02   Conditions
Precedent to Loans.

     

    The
obligation of each Lender to make Loans is further subject to the following
conditions precedent:

     

    (a) The
Administrative Agent shall have received reasonably satisfactory evidence that
the Lenders have a valid and perfected first priority lien and security interest
in the Collateral.

     

    (b) The
absence of any action, suit, investigation or proceeding pending or, to the
knowledge of the Borrower, threatened in any court or before any arbitrator or
governmental authority that could reasonably be expected to have a Material
Adverse Effect or restrain, enjoin or otherwise prohibit the
Acquisition.

     

    (c) The
Borrower shall have a financial strength rating by A.M. Best Company, Inc. of A-
stable or better.

     

    (d) There
shall have been no amendment to the Acquisition Agreement that is adverse to the
Lenders (and the Lenders shall have received a copy of all amendments) except
such amendments as have received the written approval of the Administrative
Agent (such approval not to be unreasonably withheld or delayed).

     

    (e) The
receipt of any material governmental and other third party approvals required
for the intended use of the proceeds of the Senior Credit Facility, the granting
of the Collateral and the Acquisition.

     

    (f) All
conditions precedent in the Acquisition Documents (other than payment of the
purchase price thereunder) have been satisfied or otherwise waived (with the
approval of the Administrative Agent (such approval not to be unreasonably
withheld or delayed)) and the closing thereunder shall occur on the Closing
Date.

     

    (g) The
Existing Credit Agreement shall have been (or concurrently with the Closing Date
is being) amended in a manner reasonably satisfactory to the Administrative
Agent to revise the statutory surplus covenant and provide for collateral for
the obligations thereunder on the same terms and conditions as this
Agreement.

     

    (h) The
Lenders shall have received two year projections for the Loan Parties giving
effect to the Acquisition.

     

    (i) Any fees
required to be paid on or before the Closing Date shall have been
paid.

     

    (j) Unless
waived by the Administrative Agent, the Borrower shall have paid all fees,
charges and disbursements of counsel to the Administrative Agent (directly to
such counsel if requested by the Administrative Agent) to the extent invoiced
prior to the Closing Date, plus such additional amounts of such fees, charges
and disbursements as shall constitute its reasonable estimate of such fees,
charges and disbursements incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Borrower and the Administrative
Agent).

     

    ARTICLE
V.                                

     

    REPRESENTATIONS
AND WARRANTIES

     

    Each Loan
Party represents and warrants to the Administrative Agent and the Lenders on the
Closing Date that:

     

    5.01   Existence, Qualification and
Power.

     

    The
Parent and each Subsidiary (a) is duly organized or formed, validly existing
and, as applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i)
own or lease its assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a party, and (c)
is duly qualified and is licensed and, as applicable, in good standing under the
Laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification or license; except in
each case referred to in clause (b)(i) or (c), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse
Effect.

     

    5.02   Authorization; No
Contravention.

     

    The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is party, have been duly authorized by all necessary corporate
or other organizational action, and do not and will not (a) contravene the terms
of any of such Person’s Organization Documents; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under, or require
any payment to be made under (i) any Contractual Obligation to which such Person
is a party or affecting such Person or the properties of such Person or any of
its Subsidiaries, which could reasonably be expected to have a Material Adverse
Effect, or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law.

     

    5.03   Governmental Authorization; Other
Consents.

     

    No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document; except (a) for approvals, consents, exemptions, authorizations,
actions, notices or filings (i) which have already been obtained or made or (ii)
for which the failure to obtain or make could not reasonably be expected to have
a Material Adverse Effect and such failure could be cured without unreasonable
delay or cost and (b) the Borrower is required to file post-closing reports
pursuant to California Insurance Code section 1185 et seq. with the California
Department of Insurance and NAIC with respect to the Acquisition and the
Borrower’s granting of Collateral pursuant to the Loan Documents (the “Post-Closing
Filings”).

     

    5.04   Binding Effect.

     

    This
Agreement has been, and each other Loan Document, when delivered hereunder, will
have been, duly executed and delivered by each Loan Party that is party
thereto.  This Agreement constitutes, and each other Loan Document
when so delivered will constitute, a legal, valid and binding obligation of such
Loan Party, enforceable against each Loan Party that is party thereto in
accordance with its terms.

     

    5.05   Financial Statements; No Material
Adverse Effect.

     

    (a) The
unaudited consolidated balance sheet of the Parent and its Subsidiaries dated
September 30, 2008, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for the fiscal quarter ended on
that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present the financial condition of the Parent and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

     

    (b) (i)           The
Annual Statement of the Borrower as of and for the year ending December 31, 2007
(including, without limitation, the provisions made therein for investments and
the valuation thereof, reserves, policy and contract claims and statutory
liabilities) as filed with the Applicable Insurance Regulatory Authority and the
Interim Statement of the Borrower as of and for the calendar quarter ended
September 30, 2008 as filed with the Applicable Insurance Regulatory Authority
(collectively, the “Statutory Financial Statements”), have been prepared in all
material respects in accordance with SAP applied on a consistent basis (except
as noted therein).  Each such Statutory Financial Statement was in
material compliance with applicable Law when filed.  The Statutory
Financial Statements fairly present the financial position, the results of
operations, changes in equity and changes in financial position of the Borrower
as of and for the respective dates and periods indicated therein in accordance
with SAP applied on a consistent basis, except as set forth in the notes
thereto.

     

    (c) The
Investments of the Borrower reflected in the Statutory Financial Statements
comply in all material respects with all applicable requirements of the
California Department of Insurance as well as those of any other Applicable
Insurance Regulatory Authority relating to Investments in respect of which the
Borrower may invest its funds.

     

    (d) The
provisions made by the Borrower in the Statutory Financial Statements for
reserves, policy and contract claims and statutory liabilities are in compliance
in all material respects with the requirements of the Applicable Insurance
Regulatory Authority, and have been computed in accordance with
SAP.

     

    (e) Marketable
securities and short term investments reflected in the Statutory Financial
Statements are valued at cost, amortized cost or market value, as required by
applicable Law.

     

    (f) Since
September 30, 2008, there has been no event or circumstance, either individually
or in the aggregate, that has had or could reasonably be expected to have a
Material Adverse Effect.

     

    5.06   Litigation.

     

    There are
no actions, suits, proceedings, claims or disputes pending or, to the knowledge
of either Loan Party after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Parent or any of its Subsidiaries or against any of
their properties or revenues that (a) purport to affect the validity or
enforceability of this Agreement or any other Loan Document, or the consummation
of any of the transactions contemplated hereby, or (b) either individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.

     

    5.07   No Default.  Neither
the Parent nor any Subsidiary is in default under or with respect to any
Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  No Default
has occurred and is continuing or would result from the consummation of the
Acquisition or the transactions contemplated by this Agreement or any other Loan
Document.

     

    5.08   Ownership of Property;
Liens.  Each of the Parent and each Subsidiary has good record
and marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of its business, except for
such defects in title as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

     

    5.09   Environmental
Compliance.  The Parent and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Parent has reasonably concluded that such Environmental Laws
and claims could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

     

    5.10   Insurance.  The
properties of the Parent and its Subsidiaries are insured with financially sound
and reputable insurance companies not Affiliates of the Parent, in such amounts
(after giving effect to any self-insurance compatible with the following
standards), with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Parent or the applicable Subsidiary
operates.

     

    5.11   Taxes.  The
Parent and its Subsidiaries have filed all material Federal, state and other tax
returns and reports required to be filed (taking into account extensions), and
have paid all material Federal, state and other taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with
GAAP.  To the knowledge of the Borrower, there is no proposed tax
assessment against the Parent or any Subsidiary that could reasonably be
expected to have a Material Adverse Effect.  

     

    5.12   ERISA Compliance.

     

    (a) Except as
could not reasonably be expected to have a Material Adverse Effect, (i) each
Plan is in compliance with the applicable provisions of ERISA, the Code and
other Federal or state Laws; (ii)  each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being
processed by the IRS with respect thereto and, to the best knowledge of each
Loan Party, nothing has occurred which would prevent, or cause the loss of, such
qualification; and (iii) the Parent and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any
Plan.

     

    (b) There are
no pending or, to the best knowledge of either Loan Party, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan that could reasonably be expected to have a Material Adverse
Effect.  There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse
Effect.

     

    (c) Except as
could not reasonably be expected to have a Material Adverse Effect, (i) no ERISA
Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has
any Unfunded Pension Liability; (iii) neither the Loan Party nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the Loan Party nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither the Loan Party nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.

     

    5.13   Subsidiaries; Equity
Interests.  As of the Closing Date, (a) the Parent has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and
all of the outstanding Equity Interests in such Subsidiaries have been validly
issued, are fully paid and nonassessable and are owned by the Person and in the
amounts specified on Part (a) of Schedule 5.13 free
and clear of all consensual Liens and such Schedule correctly indicates, as of
the Closing Date, whether such Subsidiary is a Material Party, an Insurance
Subsidiary or a Material Insurance Subsidiary, and (b) the Parent and its
Subsidiaries do not have any equity investments in any other corporation or
entity other than those specifically disclosed in Part(b) of Schedule 5.13 or, in
the case of Insurance Subsidiaries, maintained in their investment portfolio in
the ordinary course of business.  

     

    5.14   Margin Regulations; Investment
Company Act.

     

    (a) The
Borrower is not engaged, principally or as one of its important activities, in
the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock.  Less than 25% of the assets of
the Borrower and its Subsidiaries (taken as a whole) consists of Margin
Stock.

     

    (b) None of
the Parent, any Person Controlling the Parent, or any Subsidiary is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.

     

    5.15   Disclosure.  The
Parent has disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.  No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any Loan
Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time such projected financial information was
prepared.

     

    5.16   Compliance with
Laws.  The Parent and each Subsidiary is in compliance in all
material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its properties, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.

     

    5.17   Taxpayer Identification
Number.  Each Loan Party’s true and correct U.S. taxpayer
identification number is set forth on Schedule
11.02.

     

    5.18   First Priority Security
Interest.  The Administrative Agent, for the benefit of the
Lenders, has a first priority perfected security interest in the Collateral
pledged by the Borrower pursuant to the Security Agreement.

     

    5.19   Insurance
Licenses.  Each Insurance Subsidiary has all Insurance Licenses
necessary to conduct its business except to the extent the failure to have such
Insurance License would not have a Material Adverse Effect.  Except as
set forth in its SEC filings, to the best of the each Loan Party’s knowledge,
(a) no Insurance License of any Insurance Subsidiary is the subject of a
proceeding for suspension or revocation or any similar proceedings, (b) there is
no sustainable basis for such a suspension or revocation, and (c) no such
suspension or revocation is threatened by any Applicable Insurance Regulatory
Authority; except, in each case referred to in clauses (a)-(c), to
the extent that such event could not reasonably be expected to have a Material
Adverse Effect.

     

    ARTICLE
VI.                                

     

    AFFIRMATIVE
COVENANTS

     

    So long
as any Loan or other Obligation (other than Unmatured Surviving Obligations)
hereunder shall remain unpaid or unsatisfied, the Loan Parties shall, and shall
(except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03, and 6.14) cause each
Subsidiary to:

     

    6.01   Financial
Statements.  Deliver to the Administrative Agent:

     

    (a) as soon
as available, but in any event within ninety (90) days after the end of each
fiscal year of the Parent (commencing with the fiscal year ended December 31,
2008), a consolidated balance sheet of the Parent and its Subsidiaries as at the
end of such fiscal year, and the related consolidated statements of income or
operations, statement of shareholders’ equity, and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to be audited and accompanied
by a report and opinion of KPMG or another independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any “going
concern” or like qualification or exception or any qualification or exception as
to the scope of such audit;

     

    (b) as soon
as available, but in any event within fifty-five (55) days after the end of each
of the first three fiscal quarters of each fiscal year of the Parent (commencing
with the fiscal quarter ended March 31, 2009), a consolidated balance sheet of
the Parent and its Subsidiaries as at the end of such fiscal quarter, the
related consolidated statements of income or operations for such fiscal quarter
and for the portion of the Parent's fiscal year then ended, and cash flows for
the portion of the Parent's fiscal year then ended, in each case setting forth
in comparative form, as applicable, the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail, certified by the chief executive
officer, chief financial officer, treasurer or controller of the Parent as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Parent and its Subsidiaries in accordance with
GAAP, subject only to year-end audit adjustments and the absence of
footnotes;

     

    (c) within
five (5) Business Days after the applicable regulatory filing date, but in any
event not later than fifty-five (55) days after the end of each calendar quarter
(commencing with the calendar quarter ended March 31, 2009) in respect of which
an Interim Statement is required to be filed, a copy of each Interim Statement
of the Borrower for such calendar quarter, prepared in accordance with
SAP;

     

    (d) within
five (5) Business Days after the applicable regulatory filing date for each
calendar year (commencing with the filing for calendar year ended December 31,
2008), but in any event within ninety (90) days after the end of each calendar
year, a copy of the Annual Statement of the Borrower for such calendar year
prepared in accordance with SAP; and

     

    (e) within
five (5) Business Days after the applicable regulatory filing date for each
calendar year (commencing with the filing for calendar year ended December 31,
2008), but in any event prior to June 10th of the year in which such filing is
required, a copy of the annual audit for the Borrower for such calendar year
prepared in accordance with the Annual Audited Financial Reports instructions
contained in the annual statement instructions prepared by the NAIC from time to
time by KPMG or other independent public accountants of recognized national
standing.

     

    As to any
information contained in materials furnished pursuant to Section 6.02(c), the
Parent shall not be separately required to furnish such information under clause
(a) or (b) above, but the foregoing shall not be in derogation of the obligation
of the Borrower to furnish the information and materials described in clauses
(a) and (b) above at the times specified therein.

     

    6.02   Certificates; Other
Information.  Deliver to the Administrative Agent:

     

    (a) concurrently
with the delivery of the financial statements referred to in Sections 6.01(a)
and (b)
(commencing with the delivery of the financial statements for the fiscal year
ended December 31, 2008), a duly completed Compliance Certificate signed by the
chief executive officer, chief financial officer, treasurer or controller of the
Borrower and the Parent;

     

    (b) promptly
after any written request by the Administrative Agent or any Lender, copies of
any detailed audit reports, management letters or recommendations submitted to
the board of directors (or the audit committee of the board of directors) of a
Loan Party by independent accountants in connection with the accounts or books
of the Parent or any Subsidiary, or any audit of any of them;

     

    (c) promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the
Parent, and copies of all annual, regular, periodic and special reports and
registration statements which the Parent may file or be required to file with
the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and
not otherwise required to be delivered to the Administrative Agent pursuant
hereto;

     

    (d) within
fifteen (15) days after being delivered to any Material Insurance Subsidiary,
any final Report on Examination issued by the Applicable Insurance Regulatory
Authority or the NAIC that results in material adjustments to the financial
statements referred to in Sections 6.01(c),
(d) or (e);

     

    (e) promptly,
upon written request of the Administrative Agent, a copy of each “Statement of
Actuarial Opinion” and “Management Discussion and Analysis” for any Material
Insurance Subsidiary which is required to be provided to the Applicable
Insurance Regulatory Authority as to the adequacy of loss reserves of such
Person;

     

    (f) within
five (5) Business Days of receipt, a copy of any financial examination reports
by any Applicable Insurance Regulatory Authority with respect to any Material
Insurance Subsidiary relating to the insurance business of such Person (when,
and if, prepared); provided, such Material Insurance Subsidiary shall only be
required to deliver any interim report hereunder at such time as such Material
Insurance Subsidiary has knowledge that a final report will not be issued and
delivered to the Administrative Agent, within ninety (90) days of any such
interim report;

     

    (g) within
five (5) Business Days of such notice, notice of actual suspension, termination
or revocation of any material Insurance License of any Material Insurance
Subsidiary by any Applicable Insurance Regulatory Authority;

     

    (h) promptly
upon notice thereof, any change in the A.M. Best Rating financial strength
rating of any Material Insurance Subsidiaries;

     

    (i) as soon
as available, but in any event within 10 Business Days after the end of each
calendar month of each fiscal year, a Collateral Value Certificate executed by a
Responsible Officer of the Borrower calculated as of the last Business Day of
such calendar month;

     

    (j) promptly,
at the request of the Administrative Agent, a Collateral Value Certificate for
any given Business Day executed by a Responsible Officer of the Borrower
calculated as of the close of business on such Business Day; and

     

    (k) promptly,
such additional information regarding the business, financial or corporate
affairs of the Parent or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Administrative Agent or any Lender may from time to time
reasonably request;

     

    (l) promptly
after filing, a copy of the Post-Closing Filings.

     

    Documents
required to be delivered pursuant to Section 6.01(a) or
(b) or Section 6.02(c) (to
the extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date on which such documents are posted on the
Parent’s behalf on an Internet or intranet website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: (i)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests in writing the Borrower to deliver such paper
copies until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Borrower shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of
such documents.  Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.02(b) to
the Administrative Agent.  Except for such Compliance Certificates,
the Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

     

    The Loan
Parties hereby acknowledge that (a) the Administrative Agent and/or the Arranger
will make available to the Lenders materials and/or information provided by or
on behalf of the Loan Parties hereunder (collectively, “Borrower Materials”)
by posting the Borrower Materials on IntraLinks or another similar electronic
system (the “Platform”) and (b)
certain of the Lenders (each, a “Public Lender”) may
have personnel who do not wish to receive material non-public information with
respect to the Parent or its Affiliates, or the respective securities of any of
the foregoing, and who may be engaged in investment and other market-related
activities with respect to such Persons’ securities.  Each Loan Party
hereby agrees that (w) all Borrower Materials that are to be made available to
Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first
page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be
deemed to have authorized the Administrative Agent, the Arranger and the Lenders
to treat such Borrower Materials as not containing any material non-public
information with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as
set forth in Section 11.07); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Side Information;” and (z) the
Administrative Agent and the Arranger shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform that is not designated “Public Side
Information.”

     

    6.03   Notices.  Promptly
notify the Administrative Agent and each Lender:

     

    (a) of the
occurrence of any Default;

     

    (b) of the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any of its Subsidiaries involving an amount in excess
of 10% of Borrower Statutory Surplus as calculated as of the most recently ended
fiscal quarter for which statutory statements were delivered or were required to
be delivered pursuant to Section 6.01(c) or
(d).

     

    (c) of the
commencement of, or any material development in, any litigation or proceeding
affecting the Parent or any Subsidiary other than the Borrower and its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect;

     

    (d) of
receipt of notice from any Governmental Authority notifying the Borrower or any
of its  Insurance Subsidiaries of a hearing relating to a suspension,
termination or revocation of any Insurance License, including any request by a
Governmental Authority which commits the Borrower or any of its Subsidiaries to
take, or refrain from taking, any action or which otherwise materially and
adversely affects the authority of the Borrower or any such Insurance Subsidiary
to conduct its business;

     

    (e) (i) any
breach or non-performance of, or any default under, a Contractual Obligation of
the Parent or any Subsidiary and (ii) of any dispute, litigation, investigation,
proceeding or suspension between a Material Insurance Subsidiary and any
Governmental Authority, in each case, to the extent the same has resulted or
could reasonably be expected to result in a Material Adverse
Effect;

     

    (f) of any matter that has resulted
or could reasonably be expected to result in a Material Adverse
Effect;

     

    (g) of the
occurrence of any ERISA Event;

     

    (h) of any
material change in accounting policies or financial reporting practices by the
Parent or any Material Party;

     

    (i) notice of
any actual or, to the Borrower’s knowledge, proposed set-off, claims,
withholdings or other defenses to which any material portion of the Collateral
or the Administrative Agent’s rights with respect to any material portion of the
Collateral are subject;

     

    (j) of any
announcement by A.M. Best & Company, Inc. of any change in or change in the
outlook for a financial strength rating by A.M Best Company, Inc. of any
Material Insurance Subsidiary, and

     

    (k) of any
announcement by S&P or Moody’s of any change in the Parent’s
non-credit-enhanced, senior unsecured long-term debt.

     

    Each
notice pursuant to this Section 6.03 (a), (b), (c)
or (d) shall be accompanied by a statement of a Responsible Officer of
the Borrower setting forth details of the occurrence referred to therein and
stating what action the Borrower has taken and proposes to take with respect
thereto.  Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

     

    6.04   Payment of
Obligations.  Pay and discharge as the same shall become due
and payable, all its material obligations and liabilities, including (a) all
material tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Parent or such Subsidiary; (b)
all material lawful claims which, if unpaid, would by law become a Lien upon its
property; and (c) all material Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.

     

    6.05   Preservation of
Existence, Etc.  (a) Preserve, renew and maintain in full force
and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse
Effect.

     

    6.06   Maintenance of
Properties.  (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; and (b) make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

     

    6.07   Maintenance of
Insurance.  Maintain with financially sound and reputable
insurance companies not Affiliates of the Parent, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts (after giving effect to any self-insurance compatible with the
following standards) as are customarily carried under similar circumstances by
such other Persons.

     

    6.08   Compliance with
Laws.  Comply in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its business or property, except in such instances in which (a) such requirement
of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse
Effect.

     

    6.09   Books and
Records.  (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP or SAP, as
applicable consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Parent or such Subsidiary, as
the case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Parent or such Subsidiary, as the case may
be.

     

    6.10   Inspection
Rights.  Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, that as long
as no Event of Default has occurred and is continuing, the Borrower shall not
bear the expense of more than one visit per year; provided, further,
that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.

     

    6.11   Use of
Proceeds.  Use the proceeds of the Loans to make the
Acquisition and pay fees and expenses in connection therewith and
hereunder.

     

    6.12   Bank as Principal
Depository.  To, and cause each of its Subsidiaries to,
maintain Bank of America as its primary depository bank, including for the
maintenance of business, cash management, operating and administrative deposit
accounts.  

     

    6.13   Further
Assurances.  Promptly upon the request of the Administrative
Agent, the Borrower shall execute, acknowledge, deliver and record and do any
and all such further acts and deeds as the Administrative Agent may reasonably
request from time to time in order to insure that the Obligations are secured by
a first priority perfected interest  in the assets of the Borrower
stated to be pledged pursuant to the Security Agreement and to perfect and
maintain the validity, effectiveness and priority of the Security Agreement and
the Liens created thereby.  Without the prior written consent of the
Administrative Agent, the Borrower shall not give directions or entitlement
orders to the Securities Intermediary party to any Control Agreement to make a
delivery to the Borrower or any other Person of assets or properties from the
Collateral Account except in connection with the sale of the Eligible Collateral
the proceeds of which will be deposited into the Collateral
Account.  The Administrative Agent, on behalf of the Lenders, agrees
that provided (i) no Default exists and is continuing and (ii) after giving
effect to the proposed delivery, the Collateral Value is equal to or in excess
of the Outstanding Amount, the Administrative Agent shall consent to and give
instructions to the holder of the Collateral Account permitting any such
delivery within one Business Day of a request.

     

    6.14   Collateral
Value.  (a) For purposes of calculating Collateral Value on any
date, the Adjusted Fair Market Value of the following shall be excluded: (i) any
Collateral which directly includes sub-prime mortgage assets, (ii) the portion
of any issue of Eligible Collateral (other than Government Debt) which exceeds
10% of the Adjusted Fair Market Value of all Eligible Collateral, (iii) without
duplication of any amount excluded pursuant to clause (ii), the portion of
Eligible Collateral of any issuer (other than Government  Debt) which
exceeds 10% of the Adjusted Fair Market Value of all Eligible Collateral, (iv)
the portion of the Eligible Collateral that is rated A-/A3, BBB+/Baa1 or
BBB/Baa2 and exceeds 20% of the Adjusted Fair Market Value of all Eligible
Collateral, and (v) without duplication of any amount excluded pursuant to
clause (iv), the portion of the Eligible Collateral that is rated BBB+/Baa1 or
BBB/Baa2 and exceeds 10% of the Adjusted Fair Market Value of all Eligible
Collateral.

     

    (b)           If
at any time the Outstanding Amount shall exceed (the amount of such excess, the
"Collateral
Shortfall") the Collateral Value for three consecutive Business Days, an
Event of Default shall occur unless within three Business Days of the date the
Collateral Shortfall occurred no Collateral Shortfall exists as a result of (i)
a change in the Collateral Value due to market fluctuations, (ii) a deposit of
additional securities in the Collateral Account and/or (iii) prepayment of the
Outstanding Amount.  Any prepayment made pursuant to this Section 6.14(b) shall
be made without premium or penalty provided any prepayment of a Eurodollar Rate
Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section
3.05.  Each such prepayment shall be applied to the Loans of
the Lenders in accordance with their respective Applicable
Percentages.  Amounts so prepaid may not be reborrowed.

     

    ARTICLE
VII.                                           

     

    NEGATIVE
COVENANTS

     

    The Loan
Parties agree that so long as any Loan or other Obligation (other than Unmatured
Surviving Obligations) hereunder shall remain unpaid or
unsatisfied:

     

    7.01   Liens.  The
Borrower shall not, and shall not permit its Subsidiaries to, create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, other than the following:

     

    (a) Liens
pursuant to any Loan Document;

     

    (b) Liens
securing the Existing Term Loan Agreement provided that the outstanding
principal amount thereof does not exceed $18,000,000 or any additional amount
permitted pursuant to Section
7.03(b);

     

    (c) Liens for
taxes not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with
GAAP;

     

    (d) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period of
more than 60 days or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with
GAAP;

     

    (e) pledges
or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA;

     

    (f) deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;

     

    (g) easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
applicable Person;

     

    (h) Liens on
assets other than the Collateral or any Equity Interests in any Subsidiary of
the Borrower provided the amount of outstanding Indebtedness and other
obligations (other than judicial judgments(including surety and appeal bonds))
secured thereby does not exceed $50,000,000 at any time; and

     

    (i) Liens on
assets other than the Collateral and any Equity Interest in any Subsidiary of
the Borrower securing judicial judgments (including surety and appeal bonds)
provided the outstanding amount secured thereby does not exceed $100,000,000 at
any time.

     

    7.02   Investments.  The
Material Insurance Subsidiaries shall not make any Investments,
except:

     

    (a) Investments
disclosed on Schedule
5.14;

     

    (b) Investments
maintained in such Material Insurance Subsidiary's investment portfolio in the
ordinary course of business and in compliance with applicable Law;

     

    (c) Investments
by such Material Insurance Subsidiary in its Subsidiaries or by a Subsidiary of
such Material Insurance Subsidiary in such Material Insurance Subsidiary;
and

     

    (d) Trade
accounts receivables.

     

    7.03   Indebtedness.  The
Borrower and its Subsidiaries shall not create, incur, assume or suffer to exist
any Indebtedness except:

     

    (a) Indebtedness
under the Loan Documents;

     

    (b) Indebtedness
under the Existing Term Loan Agreement  and refinancings, refundings,
renewals or extensions thereof; provided that the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or interest and other reasonable amounts paid, and fees and expenses
reasonably incurred, in connection with such refinancing;

     

    (c) obligations
(contingent or otherwise) existing or arising under any Swap Contract, provided
that (i) such obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly mitigating risks
associated with fluctuations in interest rates or foreign exchange rates, (ii)
such Swap Contract is not (and is not required by GAAP to be) accounted for as
speculative in nature, and (iii) such Swap Contract does not contain any
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party;

     

    (d) Guarantees
of Indebtedness permitted pursuant to this Section
7.03;

     

    (e) Indebtedness
owed to any Person providing property, casualty or liability insurance to the
Borrower or any Subsidiary of the Borrower, so long as the outstanding amount of
such Indebtedness does not exceed $5,000,000 at any time, and shall be incurred
only to defer the cost of, such insurance for the year in which such
Indebtedness is incurred and such Indebtedness shall be outstanding only during
such year;

     

    (f) (i)  Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business; provided that such
Indebtedness is extinguished within five Business Days of its incurrence, (ii)
Indebtedness in respect of credit cards provided the outstanding amount of such
Indebtedness does not exceed $500,000 at any time and is extinguished within 60
days from the date of invoice, and (iii) Indebtedness in respect of purchase
cards provided such Indebtedness is extinguished within 60 days from the date of
invoice;

     

    (g) contingent
(but not matured) reimbursement, indemnification or similar obligations
(including any arising by right of subrogation) of the Borrower or of one or
more Subsidiaries in respect of stay or appeal bonds; and

     

    (h) Indebtedness
not exceeding an aggregate principal amount of $150,000,000 at any time
outstanding.

     

    7.04   Fundamental
Changes.  The Parent shall not, and shall not permit any of its
Subsidiaries to, merge, dissolve, liquidate, consolidate with or into another
Person, or acquire (whether in one transaction or in a series of transactions)
all or substantially all of its assets of or Equity Interests in, or assets
which constitute a business unit of, any Person, or except that:

     

    (a) so long
as no Default exists or would result therefrom, the Borrower or any of its
Subsidiaries may acquire (in one transaction or a series of transactions) the
assets of any Person which constitute a business unit provided that the
aggregate purchase price paid for all such acquisitions in any fiscal year does
not exceed 10% of the Statutory Surplus of the Borrower as of the most recently
ended fiscal year;

     

    (b) so long
as no Default exists or would result therefrom, any Subsidiary (other than the
Borrower or its Subsidiaries) may merge with (i) the Parent, provided that the
Parent shall be the continuing or surviving person, or (ii) any one or more
other Subsidiaries (other than the Borrower or any of its
subsidiaries);

     

    (c) so long
as no Default exists or would result therefrom, any Subsidiary of the Borrower
may merge with (i) the Borrower, provided that the Borrower shall be the
continuing or surviving Person, or (ii) any one or more other Subsidiaries of
the Borrower;

     

    (d) so long
as no Default exists or would result therefrom, the Borrower may merge or
consolidate with any Person (other than the Parent) provided (i) either the
Borrower is the continuing or surviving Person or the continuing or surviving
Person is organized in the United States and assumes all obligations under this
Agreement and the other Loan Documents to which the Borrower is a party in a
manner reasonably satisfactory to the Administrative Agent and (ii) the Borrower
has provided the Lenders with advance notice of such merger or consolidation and
provided a pro forma Compliance Certificate giving effect to such merger or
consolidation;

     

    (e) so long
as no Default exists or would result therefrom, the Parent may merge or
consolidate with any Person (other than the Borrower) provided that (i) such
merger or consolidation does not result in a Change of Control, (ii) either the
Parent is the continuing or surviving Person or the continuing or surviving
Person is organized in the United States and assumes all obligations under this
Agreement and the other Loan Documents to which the Parent is a party in a
manner reasonably satisfactory to the Administrative Agent and (iii) the Parent
has provided the Lenders with advance notice of such merger or consolidation and
provided a pro forma Compliance Certificate giving effect to such merger or
consolidation; and

     

    (f) the
Parent or any of its Subsidiaries (other than the Borrower and its Subsidiaries)
may purchase or otherwise acquire all or substantially all the assets or Equity
Interests in, any other Person provided (i) no Default exists or would result
thereof and (ii) the Borrower has provided the Lenders with advance notice of
such acquisition and provided a pro forma Compliance Certificate giving effect
to such acquisition.

     

    7.05   Dispositions.  The
Parent and its Subsidiaries shall not make any Disposition or enter into any
agreement to make any Disposition, except:

     

    (a) Dispositions
of obsolete or worn out property or property no longer useful in the business of
Parent and its Subsidiaries, whether now owned or hereafter acquired, in the
ordinary course of business;

     

    (b) Dispositions
of Investments in the ordinary course of business;

     

    (c) Dispositions
of equipment or real property to the extent that (i) such property is exchanged
for credit against the purchase price of similar replacement property or (ii)
the proceeds of such Disposition are reasonably promptly applied to the purchase
price of such replacement property;

     

    (d) Dispositions
of property by any Subsidiary (other than the Borrower or one of its
Subsidiaries) to the Parent or another Subsidiary;

     

    (e) Dispositions
of property by the Parent or any Subsidiary (other than the Borrower or one of
its Subsidiaries) for fair market value;

     

    (f) Dispositions
by the Borrower or any of its Subsidiaries for fair market value in an aggregate
amount not exceeding 10% of the Borrower's Statutory Surplus in any calendar
year provided (x) no Default exists or would result therefrom and (y) after
giving effect to such transaction the Loan Parties would be in pro forma
compliance with Section
7.11;

     

    (g) leases,
subleases, licenses or sublicenses of property in the ordinary course of
business and which do not materially interfere with the business of the Parent
and its Subsidiaries;

     

    (h) transfers
of property subject to casualty events upon receipt of the insurance payments
with respect to such casualty event;

     

    (i) sales or
discounts without recourse of accounts receivable arising in the ordinary course
of business in connection with the compromise or collection thereof;
and

     

    (j) Dispositions
by any Subsidiary of the Borrower to the Borrower or another Subsidiary of the
Borrower.

     

    7.06   Restricted
Payments.  The Borrower shall not declare or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, (other than dividends paid in capital stock) if a Default
exists or would occur as a result of such payment. 

     

    7.07   Change in Nature of
Business.  The Parent shall not, and shall not permit any of
its Subsidiaries to , engage in any material line of business substantially
different from those lines of business conducted by the Parent and its
Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

     

    7.08   Transactions with
Affiliates.  The Parent shall not, and shall not permit any of
its Subsidiaries to, enter into any transaction of any kind with any Affiliate
of the Parent, whether or not in the ordinary course of business, other than on
fair and reasonable terms substantially as favorable to the Parent or such
Subsidiary as would be obtainable by the Parent or such Subsidiary at the time
in a comparable arm’s length transaction with a Person other than an Affiliate,
provided that the foregoing restriction shall not apply to transactions between
or among the Parent and any of its Subsidiaries or between and among any
Subsidiaries.

     

    7.09   Burdensome
Agreements.  The Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into any Contractual Obligation (other than this
Agreement or any other Loan Document or the Existing Term Loan Agreement) that
(a) limits the ability (i) of any Subsidiary of the Borrower to make Restricted
Payments to the Borrower to otherwise transfer property to the Borrower, (ii) of
any Subsidiary of the Borrower to Guarantee the Indebtedness of the Borrower or
(iii) of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist Liens on property of such Person; provided, however, that this
clause (iii) shall not prohibit any negative pledge incurred or provided in
favor of any holder of secured Indebtedness permitted under Section 7.01 and
Section 7.03)
solely to the extent any such negative pledge relates to the property financed
by or the subject of such Indebtedness; or (b) requires the grant of a Lien to
secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person, except in each case for prohibitions or restrictions
existing under or by reason of:

     

    (i)           customary
non-assignment provisions with respect to leases or licensing agreements entered
into by the Borrower or any of its Subsidiaries, in each case entered into in
the ordinary course of business and consistent with past practices;
and

     

    (ii)           any
restriction or encumbrance with respect to any asset of the Borrower or any of
its Subsidiaries imposed pursuant to an agreement which has been entered into
for the sale or disposition of such assets or all or substantially all of the
capital stock or assets of such Subsidiary, so long as such sale or disposition
is permitted under this Agreement.

     

    7.10   Use of
Proceeds.  Use the proceeds of any Loan, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose.

     

    7.11  Financial
Covenants.

     

    (a) Borrower Statutory
Surplus.  The Borrower shall not permit the Borrower Statutory
Surplus to be less than an amount equal to the sum of (a) $750,000,000 plus (b)
25% of Borrower Statutory Net Income earned in each calendar year commencing
with the calendar year ending December 31, 2008.

     

    (b) Debt to Capital
Ratio.  The Parent shall not permit the Parent Debt to Capital
Ratio to exceed thirty- percent (30%).

     

    (c) Risk Based Capital
Ratio.  The Loan Parties shall not permit the Risk Based
Capital Ratio of the Borrower or any other Material Insurance Subsidiary to be
less than 200%.

     

    ARTICLE
VIII.                                           

     

    EVENTS
OF DEFAULT AND REMEDIES

     

    8.01   Events of
Default.  Any of the following shall constitute an “Event of
Default”:

     

    (a) Non-Payment.  The
Borrower or any other Loan Party fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan, or (ii) within three days
after the same becomes due, any interest on any Loan, or any fee due hereunder,
or (iii) within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or

     

    (b) Specific
Covenants.  Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of Section 6.03, 6.05(a), 6.10, 6.11, 6.13 or 6.14 or Article VII; or Article
X.

     

    (c) Financial
Information.  Any Loan Party fails to perform or observe any
term, covenant or agreement contained in Section 6.01 or 6.02 on its part to
be performed or observed and such failure continues for 10 days after the
earlier of (i) written notice from the Administrative Agent of such failure or
(ii) the date a Responsible Officer becomes aware of such failure;

     

    (d) Other
Defaults.  Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a), (b) or (c) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days after the earlier of (i) written notice from the
Administrative Agent of such failure or (ii) the date a Responsible Officer
becomes aware of such failure; or

     

    (e) Representations and
Warranties.  Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

     

    (f) Cross-Default.  (i)
The Parent or any Material Subsidiary (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any Indebtedness (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate outstanding principal
amount (including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, or (B) fails
to observe or perform any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity; or (ii) there occurs under any Swap Contract an Early Termination Date
(as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which the Parent or any Material Subsidiary is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as so defined) under such Swap Contract as to which the Parent or any Material
Subsidiary is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by the Parent or such Material Subsidiary as a result
thereof is greater than the Threshold Amount; or

     

    (g) Insolvency Proceedings,
Etc.  Any Loan Party or any of its Subsidiaries that are
Material Parties institutes or consents to the institution of any proceeding
under any Debtor Relief Law, or makes an assignment for the benefit of
creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for 60 calendar days; or any proceeding under
any Debtor Relief Law relating to any such Person or to all or any material part
of its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

     

    (h) Inability to Pay Debts;
Attachment.  (i) The Parent or any Subsidiary that is a
Material Party becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and remains unsatisfied,
unreleased, unvacated or unfully bonded for a period of 30 consecutive days
after its issue or levy; or

     

    (i) Judgments.  There
is entered against the Parent or any Subsidiary that is a Material Party (i) one
or more final judgments or orders for the payment of money in an aggregate
amount (as to all such judgments or orders) exceeding the Threshold Amount (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B)
there is a period of 30 consecutive days during which a stay of enforcement of
such judgment, by reason of a pending appeal or otherwise, is not in effect and
such judgment is not satisfied; or

     

    (j) ERISA.  (i)
An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of the
Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or
the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the
Parent or any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan which has
resulted or could reasonably be expected to result in a liability of the
Borrower in an aggregate amount in excess of the Threshold Amount;
or

     

    (k) Invalidity of Loan
Documents.  Any Loan Document, at any time after its execution
and delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full of all the Obligations (other than Unmatured
Surviving Obligations), ceases to be in full force and effect; or any Borrower
or any other Person contests in any manner the validity or enforceability of any
Loan Document; or any Borrower denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; or the Administrative Agent shall cease to have a first
priority perfected Lien on any Collateral;

     

    (l) Government
Action.  (a) Any Insurance License of the Borrower or any of
its Material Insurance Subsidiaries (i) shall be revoked by the Applicable
Insurance Regulatory Authority, (ii) shall be suspended by the Applicable
Insurance Regulatory Authority for a period in excess of thirty days or (iii)
shall not be reissued or renewed by the Applicable Insurance Regulatory
Authority upon the expiration thereof following application for such reissuance
or renewal of such Person, or (b) any Applicable Insurance Regulatory Authority
shall issue any order of conservation or seizure, however denominated, relating
to the Borrower or any Material Insurance Subsidiary or shall take any other
action to exercise Control (i) over the Borrower or any Material Insurance
Subsidiary or (ii) over any assets of the Borrower or any Material Insurance
Subsidiary; which, in the case of each of clauses (a) and (b) above, would
reasonably be expected to have a Material Adverse Effect.

     

    (m) Change of
Control.  There occurs any Change of Control.

     

    8.02   Remedies Upon Event of
Default.  If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Required Lenders, take any or all of the following actions:

     

    (a) declare
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; and

     

    (b) exercise
on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents;

     

    provided, however, that upon
the occurrence of an actual or deemed entry of an order for relief with respect
to the Borrower under the Bankruptcy Code of the United States, the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, in each case without
further act of the Administrative Agent or any Lender.

     

    8.03   Application of
Funds.  After the exercise of remedies provided for in Section
8.02, any amounts received on account of the Obligations (including proceeds of
Collateral) shall be applied by the Administrative Agent in the following
order:

     

    First, to payment of
that portion of the Obligations constituting fees, indemnities, expenses and
other amounts (including fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under Article III) payable
to the Administrative Agent in its capacity as such;

     

    Second, to payment of
that portion of the Obligations constituting fees, indemnities and other amounts
(other than principal and interest) payable to the Lenders (including fees,
charges and disbursements of counsel to the respective Lenders (including fees
and time charges for attorneys who may be employees of any Lender) and amounts
payable under Article
III), ratably among them in proportion to the respective amounts
described in this clause Second payable to
them;

     

    Third, to payment of
that portion of the Obligations constituting accrued and unpaid interest on the
Loans and other Obligations, ratably among the Lenders in proportion to the
respective amounts described in this clause Third payable to
them;

     

    Fourth, to payment of
that portion of the Obligations constituting unpaid principal of the Loans,
ratably among the Lenders in proportion to the respective amounts described in
this clause Fourth held by
them;

     

    Last, the balance, if
any, after all of the Obligations (other than Unmatured Surviving Obligations)
have been indefeasibly paid in full, to the Borrower or as otherwise required by
Law.

     

    ARTICLE
IX.                                

     

    ADMINISTRATIVE
AGENT

     

    9.01   Appointment and
Authority.  Each of the Lenders hereby irrevocably appoints
Bank of America to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.  The provisions of
this Article (other than the consent right of the Borrower contained in Section 9.06) are
solely for the benefit of the Administrative Agent and the Lenders and no Loan
Party shall have rights as a third party beneficiary of any of such
provisions.

     

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

     

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

     

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

     

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

     

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

     

    The
Administrative Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.01 and
8.02) or (ii)
in the absence of its own gross negligence or willful misconduct.  The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given to the Administrative Agent by
the Borrower or a Lender.

     

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

     

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

     

    9.05   Delegation of
Duties.  The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties.  The exculpatory provisions
of this Article shall apply to any such sub-agent and to the Related Parties of
the Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative
Agent.

     

    9.06   Resignation of Administrative
Agent.  The Administrative Agent may at any time give notice of
its resignation to the Lenders and the Borrower.  Upon receipt of any
such notice of resignation, the Required Lenders shall have the right, with the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed), to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States.  If no such successor shall have been so appointed by the
Required Lenders and consented to by the Borrower and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may on behalf
of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above and consented to by the Borrower; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment or the Borrower has not
consented to such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders
under any of the Loan Documents, the retiring Administrative Agent shall
continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time as the
Required Lenders appoint a successor Administrative Agent and the Borrower
consents to such appointment, as provided for above in this
Section.  Notwithstanding the foregoing, consent of the Borrower shall
not be required during the existence of an Event of Default.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section).  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the retiring Administrative Agent’s
resignation hereunder and under the other Loan Documents, the provisions of this
Article and Section 11.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

     

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

     

    9.08   No Other Duties,
Etc.  Anything herein to the contrary notwithstanding, none of
the Bookrunners or Arrangers listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent or
a Lender hereunder.

     

    9.09   Administrative Agent May File Proofs
of Claim.  In case of the pendency of any proceeding under any
Debtor Relief Law or any other judicial proceeding relative to any Loan Party,
the Administrative Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Administrative Agent shall have made any demand
on the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise

     

    (a) to file
and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent under
Sections 2.06
and 11.04)
allowed in such judicial proceeding; and

     

    (b) to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

     

    and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.06 and
11.04.

     

    Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

     

    9.10           Collateral
Matters.  The Lenders irrevocably authorize the Administrative
Agent, at its option and in its discretion, to release any Lien on any property
granted to or held by the Administrative Agent under any Loan Document (i) upon
payment in full of all Obligations (other than Unmatured Surviving Obligations),
(ii) as permitted hereunder or under any other Loan Document, or (iii) subject
to Section
11.01, if approved, authorized or ratified in writing by the Required
Lenders.  Upon request by the Administrative Agent at any time, the
Required Lenders will confirm in writing the Administrative Agent’s authority to
release such Collateral

     

    ARTICLE
X.                                

     

    PARENT
GUARANTEE

     

    10.01   Unconditional
Guarantee.  For valuable consideration, receipt whereof is
hereby acknowledged, and to induce each Lender to make Loans to the Borrower and
to induce the Administrative Agent to act hereunder, the Parent hereby
unconditionally and irrevocably guarantees to each Lender and the Administrative
Agent the punctual payment when due, whether at stated maturity, by acceleration
or otherwise, of all Obligations of the Borrower, whether for principal,
interest, fees, expenses, indemnification or otherwise, whether direct or
indirect, absolute or contingent or now existing or hereafter arising (such
Obligations being the "Guaranteed
Obligations").  Without limiting the generality of the
foregoing, the Parent’s liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by the Borrower to the
Administrative Agent or any Lender under this Agreement but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower or its
Affiliates.  This is a guarantee of payment and not of collection
merely.

     

    10.02   Guarantee
Absolute.  The Parent guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this
Agreement, regardless of any law or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Lender or the
Administrative Agent with respect thereto.  The Obligations of the
Parent under this Article X are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against the Parent to enforce this Article X,
irrespective of whether any action is brought against the Borrower or whether
the Borrower is joined in any such action or actions.  The liability
of the Parent under this guarantee shall be irrevocable, absolute and
unconditional irrespective of, and the Parent hereby irrevocably waives any
defense it may now or hereafter have in any way relating to, any or all of the
following:

     

    (a) any lack
of validity or enforceability of this Agreement, any other Loan Document or any
other agreement or instrument relating thereto;

     

    (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or any
consent to departure from this Agreement (other than this Article X) (provided
that nothing in this clause (b) shall modify any right that the Parent has to
approve amendments to the Loan Documents);

     

    (c) any
taking, exchange, release or non-perfection of any collateral or any taking,
release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;

     

    (d) any
change, restructuring or termination of the corporate structure or existence of
the Borrower or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or any of its assets or any resulting release
or discharge of any obligation of the Borrower under this Agreement;
or

     

    (e) any other
circumstance (including, without limitation, any statute of limitations to the
fullest extent permitted by applicable law) which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Parent or the
Borrower (other than a discharge arising from the payment in full of the
Guaranteed Obligations).

     

    This
guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by any Lender or the Administrative Agent upon the
insolvency, bankruptcy or reorganization of the Parent or otherwise, all as
though such payment had not been made.

     

    10.03   Waivers.

     

    (a) The
Parent hereby expressly waives promptness, diligence, notice of acceptance,
presentment, demand for payment, protest, any requirement that any right or
power be exhausted or any action be taken against the Borrower or against any
other guarantor of all or any portion of the Guaranteed Obligations, and all
other notices and demands whatsoever.

     

    (b) The
Parent hereby waives any right to revoke this guaranty, and acknowledges that
this guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future and regardless of whether Guaranteed
Obligations are reduced to zero at any time or from time to time (other than a
reduction to zero due to the payment in full in cash of the Guaranteed
Obligations).

     

    (c) The
Parent acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated herein and that the
waivers set forth in this Article X are
knowingly made in contemplation of such benefits.

     

    10.04   Subrogation.  The
Parent will not exercise any rights that it may now or hereafter acquire against
the Borrower or any other guarantor that arise from the existence, payment,
performance or enforcement of the Guaranteed Obligations under this Agreement,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Administrative Agent, or any Lender against the Borrower
or any other guarantor or any Collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Borrower or any other
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Guaranteed Obligations (other than Unmatured
Surviving Obligations) shall have been paid in full in cash.  If any
amount shall be paid to the Parent in violation of the preceding sentence at any
time prior to the later of the payment in full in cash of the Guaranteed
Obligations (other than Unmatured Surviving Obligations), such amount shall be
held in trust for the benefit of the Administrative Agent, and the Lenders and
shall forthwith be paid to the Administrative Agent to be credited and applied
to the Guaranteed Obligations, whether matured or unmatured, in accordance with
the terms of this Agreement, or to be held as collateral for any Guaranteed
Obligations thereafter arising.

     

    10.05   Survival.  This
guaranty is a continuing guarantee and shall (a) remain in full force and effect
until payment in full in cash of the Guaranteed Obligations, (b) be binding upon
the Parent and its successors and assigns, (c) inure to the benefit of and be
enforceable by each Lender (including each assignee Lender pursuant to Section 11.06), and
the Administrative Agent and their respective successors, transferees and
assigns and (d) shall be reinstated if at any time any payment to a Lender or
the Administrative Agent hereunder is required to be restored by such Lender or
the Administrative Agent.  Without limiting the generality of the
foregoing clause
(c), any transferee of any interest in any Loan of a Lender pursuant to
Section 11.06
shall become vested with all the rights in respect thereof granted to such
Lender herein or otherwise.

     

    10.06   Severability.  Notwithstanding
any other provision of this Article X to the
contrary, in the event that any action is brought seeking to invalidate the
Parent’s obligations under this Article X under any
fraudulent conveyance or fraudulent transfer theory, the Parent shall be liable
under this Article
X only for an amount equal to the maximum amount of liability that could
have been incurred under applicable law by the Parent under any guarantee of the
Obligations of the Borrower (or any portion thereof) at the time of the
execution and delivery of this Agreement (or, if such date is determined not to
be the appropriate date for determining the enforceability of the Parent’s
obligations under this Article X for
fraudulent conveyance or transfer purposes, on the date determined to be so
appropriate) without rendering such a hypothetical guarantee voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer (the
“Maximum Guaranteed
Obligations”) and not for any greater amount, as if the stated amount of
the Guaranteed Obligations had instead been the Maximum Guaranteed
Obligations.

     

    ARTICLE
XI.                                

     

    MISCELLANEOUS

     

    11.01   Amendments, Etc.  No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower and the Parent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such
amendment, waiver or consent shall:

     

    (a) waive any
condition set forth in Section 4.01(a)
without the written consent of each Lender;

     

    (b) postpone
any date fixed by this Agreement or any other Loan Document for any payment
(excluding mandatory prepayments resulting from a Collateral shortfall) of
principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby;

     

    (c) reduce
the principal of, or the rate of interest specified herein on, any Loan or
(subject to clause (ii) of the second proviso to this Section 11.01) any
fees or other amounts payable hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby; provided, however, that only
the consent of the Required Lenders shall be necessary to amend the definition
of “Default Rate” or to waive any obligation of the Borrower to pay interest at
the Default Rate;

     

    (d) change
Section 2.09.
Section 2.10 or
Section 8.03 in
a manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender;

     

    (e) change
any provision of this Section or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder without the written consent of each
Lender; or

     

    (f) except as
expressly provided in this Agreement or any other Loan Document, release all or
substantially all of the Collateral without the consent of each Lender;
provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Eligible Collateral,” the “Adjusted Fair
Market Value,” or any other related definition or the Collateral advance rates
on Schedule
1.01;

     

    (g) release
the Parent from its obligations under the Article X without the written consent
of each Lender;

     

    and,
provided further, that (i) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (ii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties
thereto.

     

    11.02   Notices; Effectiveness; Electronic
Communication.

     

    (a) Notices
Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

     

    (i) if to a
Loan Party or the Administrative Agent, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on Schedule 11.02;
and

     

    (ii) if to any
other Lender, to the address, telecopier number, electronic mail address or
telephone number specified in its Administrative Questionnaire.

     

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

     

    (b) Electronic
Communications.  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
reasonably approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II if such
Lender has notified the Administrative Agent that it is incapable of receiving
notices under such Article by electronic communication.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

     

    Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such
notice or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next Business Day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of notification
that such notice or communication is available and identifying the website
address therefor.

     

    (c) The
Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE
PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent
or any of its Related Parties (collectively, the “Agent Parties”) have
any liability to the Borrower, any Lender or any other Person for losses,
claims, damages, liabilities or expenses of any kind (whether in tort, contract
or otherwise) arising out of the Borrower’s or the Administrative Agent’s
transmission of Borrower Materials through the Internet, except to the extent
that such losses, claims, damages, liabilities or expenses are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party;
provided, however, that in no
event shall any Agent Party have any liability to the Borrower, any Lender or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

     

    (d) Change of Address,
Etc.  Each of the Borrower and the Administrative Agent may
change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each
other Lender may change its address, telecopier or telephone number for notices
and other communications hereunder by notice to the Borrower and the
Administrative Agent.  In addition, each Lender agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent
has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such
Lender.  Furthermore, each Public Lender agrees to cause at least one
individual at or on behalf of such Public Lender to at all times have selected
the “Private Side Information” or similar designation on the content declaration
screen of the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and applicable Law,
including United States Federal and state securities Laws, to make reference to
Borrower Materials that are not made available through the “Public Side
Information” portion of the Platform and that may contain material non-public
information with respect to the Borrower or its securities for purposes of
United States Federal or state securities laws.

     

    (e) Reliance by Administrative
Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof.  The Borrower shall indemnify the Administrative
Agent, each Lender and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Borrower other than any
such losses, claims, damages, liabilities or expenses that are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of the Administrative
Agent, any Lender or any Related Party of any of them.  All telephonic
notices to and other telephonic communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

     

    11.03   No Waiver; Cumulative Remedies;
Enforcement.  No failure by any Lender or the Administrative
Agent to exercise, and no delay by any such Person in exercising, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.  The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

     

    Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
authority to enforce rights and remedies hereunder and under the other Loan
Documents against the Loan Parties or any of them shall be vested exclusively
in, and all actions and proceedings at law in connection with such enforcement
shall be instituted and maintained exclusively by, the Administrative Agent in
accordance with Section 8.02 for the
benefit of all the Lenders; provided, however, that the
foregoing shall not prohibit (a) the Administrative Agent from exercising on its
own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Loan Documents,
(b) any Lender from exercising setoff rights in accordance with Section 11.08
(subject to the terms of Section 2.10), or (c)
any Lender from filing proofs of claim or appearing and filing pleadings on its
own behalf during the pendency of a proceeding relative to any Loan Party under
any Debtor Relief Law; and provided, further, that if at
any time there is no Person acting as Administrative Agent hereunder and under
the other Loan Documents, then (i) the Required Lenders shall have the rights
otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii)
in addition to the matters set forth in clauses (b) and (c) of the preceding
proviso and subject to Section 2.10, any
Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.

     

    11.04   Expenses; Indemnity; Damage
Waiver.

     

    (a) Costs and
Expenses.  The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities (excluding any fees paid to the Lenders in connection with the
syndication) provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender (including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender), and
shall pay all reasonable fees and time charges for attorneys who may be
employees of the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or (B) in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

     

    (b) Indemnification by the
Borrower.  The Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all fees and time charges and disbursements for attorneys who
may be employees of any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Borrower or any other Loan
Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement and the other Loan Documents
(including in respect of any matters addressed in Section 3.01), (ii) any
Loan or the use or proposed use of the proceeds therefrom, (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN
PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE;
provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee, (y) result from a claim brought by the Borrower or any
other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower or such other Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent
jurisdiction, or (z) to the extent such amounts relate to Taxes and are governed
by Section
3.01.

     

    (c) Reimbursement by
Lenders.  To the extent that the Borrower for any reason fails
to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or against
any Related Party of any of the foregoing acting for the Administrative Agent
(or any such sub-agent) in connection with such capacity.  The
obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.09(c).

     

    (d) Waiver of Consequential
Damages, Etc.  To the fullest extent permitted by applicable
law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof.  No
Indemnitee referred to in subsection (b) above shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed to such unintended recipients by such Indemnitee through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby other than for direct or actual damages resulting
from the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent
jurisdiction.

     

    (e) Payments.  All
amounts due under this Section shall be payable not later than ten Business Days
after demand therefor.

     

    (f) Survival.  The
agreements in this Section shall survive the resignation of the Administrative
Agent, the replacement of any Lender and the repayment, satisfaction or
discharge of all the other Obligations.

     

    11.05   Payments Set
Aside.  To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The
obligations of the Lenders under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.

     

    11.06   Successors and
Assigns.

     

    (a) Successors and Assigns
Generally.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrower nor
any other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

     

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

     

    (i) Minimum
Amounts.

     

    (A) in the
case of an assignment of the entire remaining amount of the assigning Lender’s
Loans at the time owing to it or in the case of an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned;
and

     

    (B) in any
case not described in subsection (b)(i)(A) of this Section, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than $5,000,000 unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met.

     

    (ii) Proportionate
Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans
assigned.

     

    (iii) Required
Consents.  No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:

     

    (A) the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;

     

    (B) the
consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required if such assignment is to a Person that is
not a Lender, an Affiliate of such Lender or an Approved Fund with respect to
such Lender;

     

    (iv) Assignment and
Assumption.  The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however, that the
Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment.  The assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

     

    (v) No Assignment to
Borrower.  No such assignment shall be made to the Parent or
any of the Parent’s Affiliates or Subsidiaries without the consent of the
Required Lenders.

     

    (vi) No Assignment to Natural
Persons.  No such assignment shall be made to a natural
person.

     

    Subject
to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits and subject to the obligations of Sections 3.01, 3.04, 3.05, and 11.04 with respect to
facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, the Borrower (at its expense) shall execute
and deliver a Note to the assignee Lender.  Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this subsection shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

     

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

     

    (d) Participations.  Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person or, without the consent of the Required Lenders, the Parent or
any of the Parent’s Affiliates or Subsidiaries) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of the Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.

     

    Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of
any  provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 11.01 that
affects such Participant.  Subject to subsection (e) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01,
3.04 and 3.05 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section (other than Unmatured Surviving
Obligations).  To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 11.08 as though it were a
Lender, provided such
Participant agrees to be subject to Section 2.10 as
though it were a Lender.

     

    (e) Limitations upon Participant
Rights.  A Participant shall not be entitled to receive any
greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(e)
as though it were a Lender.  A Participant that would not be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 3.01, unless
such Participant complies with Section 3.01(e) as
though it were a Lender.

     

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

     

    11.07   Treatment of Certain Information;
Confidentiality.  Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, officers, employees,
agents, trustees, advisors and representatives (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the NAIC), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; provided that the
Person who is required to make such disclosure pursuant to a subpoena or similar
legal process shall, to the extent reasonably practical, provide notice thereof
to the Loan Parties and an opportunity to challenge such subpoena or legal
process, as applicable; provided, further,
that such Person shall not be liable for failure to provide such notice, (d) to
any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section, (y) becomes available to the Administrative
Agent, any Lender or any of their respective Affiliates on a nonconfidential
basis from a source other than the Parent and its Subsidiaries, unless the
Administrative Agent, any Lender or any of their respective Affiliates obtains
such information with knowledge that the source is violating a confidentiality
agreement with the Parent and its Subsidiaries.

     

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

     

    Each of
the Administrative Agent and the Lenders acknowledges that (a) the Information
may include material non-public information concerning the Parent or a
Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
United States Federal and state securities Laws.

     

    11.08   Right of
Setoff.  If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever currency)
at any time owing by such Lender or any such Affiliate to or for the credit or
the account of the Borrower or any other Loan Party against any and all of the
obligations of the Borrower or such Loan Party now or hereafter existing under
this Agreement or any other Loan Document to such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
any other Loan Document and although such obligations of the Borrower or such Loan Party may
be contingent or unmatured or are owed to a branch or office of such Lender
different from the branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender or its respective Affiliates
may have.  Each Lender agrees to notify the Borrower and the
Administrative Agent promptly after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application.

     

    11.09   Interest Rate
Limitation.  Notwithstanding anything to the contrary contained
in any Loan Document, the interest paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the “Maximum
Rate”).  If the Administrative Agent or any Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower.  In determining whether the
interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

     

    11.10   Counterparts;
Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Agreement and the other Loan
Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter
hereof.  Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic imaging means
shall be effective as delivery of a manually executed counterpart of this
Agreement.

     

    11.11   Survival of
Representations and Warranties.  All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Loan, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied.

     

    11.12   Severability.  If
any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     

    11.13   Replacement of
Lenders.  If (i) any Lender requests compensation under Section 3.04; (ii)
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01; (iii)
any Lender delivers notice pursuant to Section 3.02; or (iv)
pursuant to the provisions of Section 11.01, the
agreement of any Lender is required for any amendment, waiver or consent and the
Required Lenders have agreed to such amendment, waiver or consent, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.06), all
of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment), provided
that:

     

    (a) the
Borrower shall have paid or caused to be paid to the Administrative Agent the
assignment fee specified in Section
11.06(b);

     

    (b) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents (including
any amounts under Section 3.05) from
the assignee (to the extent of such outstanding principal and accrued interest
and fees) or the Borrower (in the case of all other amounts);

     

    (c) in the
case of any such assignment resulting from a claim for compensation under Section 3.04 or
payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments
thereafter; and

     

    (d) such
assignment does not conflict with applicable Laws.

     

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

     

    11.14   Governing Law; Jurisdiction;
Etc.

     

    (a) GOVERNING
LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK

     

    (b) SUBMISSION TO
JURISDICTION.  EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

     

    (c) WAIVER OF
VENUE.  EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

     

    (d) SERVICE OF
PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

     

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

     

    11.16   California
Proceedings.  If any action or proceeding is filed in a court
of the State of California by or against any party hereto in connection with any
of the transactions contemplated by this Agreement or any other Loan Document,
(a) the court shall, and is hereby directed to, make a general reference
pursuant to California Code of Civil Procedure Section 638 to a referee (who
shall be a single active or retired judge) to hear and determine all of the
issues in such action or proceeding (whether of fact or of law) and to report a
statement of decision, provided that at the
option of any party to such proceeding, any such issues pertaining to a
“provisional remedy” as defined in California Code of Civil Procedure Section
1281.8 shall be heard and determined by the court, and (b) without limiting the
generality of Section
11.04, the Borrower shall be solely responsible to pay all fees and
expenses of any referee appointed in such action or proceeding

     

    11.17   No Advisory or Fiduciary
Responsibility.  In connection with all aspects of each
transaction contemplated hereby (including in connection with any amendment,
waiver or other modification hereof or of any other Loan Document), each Loan
Party acknowledges and agrees that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arranger,
are arm’s-length commercial transactions between each Loan Party and its
respective Affiliates, on the one hand, and the Administrative Agent and the
Arranger, on the other hand, (B) each Loan Party has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate, and (C) each Loan Party is capable of evaluating, and
understands and accepts, the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative
Agent and the Arranger each is and has been acting solely as a principal and,
except as 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 any Loan Party
or any of its respective Affiliates, or any other Person and (B) neither the
Administrative Agent nor the Arranger has any obligation to any Loan Party or
any of its respective Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent and the Arranger and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of any Loan Party or any of its
respective Affiliates, and neither the Administrative Agent nor the
Arranger  has any obligation to disclose any of such interests to any
Loan Party or any of its respective Affiliates.  To the fullest extent
permitted by law, each Loan Party hereby waives and releases any claims that it
may have against the Administrative Agent and the Arranger with respect to any
breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

     

    11.18   Electronic Execution of Assignments
and Certain Other Documents.  The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption or in any
amendment or other modification hereof (including waivers and consents) shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

     

    11.19   USA PATRIOT
Act.  Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies each Loan Party that pursuant to the requirements of the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it
is required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of such Loan Party and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Loan Party in accordance with the
Act.  Each Loan Party shall, promptly following a request by the
Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Act.

     

    11.20   Time of the
Essence.  Time is of the essence of the Loan
Documents.

     

    11.21   Entire
Agreement.  This Agreement and the other Loan Documents
represent the final agreement among the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties.  There are no unwritten oral agreements among the
parties.

     

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

     

    MERCURY
CASUALTY COMPANY

    

    

    

    
      	
              By:
        /s/ THEODORE
      STALICK                         

            
	
              Name:  Theodore R.
      Stalick                                 

            
	
              Title:
      Vice President and Chief Financial
Officer

            

    

    MERCURY
GENERAL CORPORATION

    

    

    

    
      	
              By:   /s/ THEODORE
      STALICK                         

            
	
              Name:  Theodore
      R.
      Stalick                                 

            
	
              Title:
      Vice President and Chief Financial
Officer

            

    

    BANK OF
AMERICA, N.A., as

    Administrative
Agent

    

    

    

    
      	
              By:
        /s/ KIP
      DAVIS                                   

            
	
              Name:  Kipling
      Davis                                  

            
	
              Title:
      Senior Vice
      President                         

            

    

    BANK OF
AMERICA, N.A., as a Lender

    

    

    

    
      	
              By:
        /s/ KIP
      DAVIS                                   

            
	
              Name:  Kipling
      Davis                                  

            
	
              Title:
      Senior Vice
      President

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