Document:

<PAGE>
                                                                   Exhibit 10.17

                                                                  EXECUTION COPY

================================================================================

                                CREDIT AGREEMENT

                                      Among

                          RAM REINSURANCE COMPANY LTD.,

                                 VARIOUS BANKS,

                                       And

                             BAYERISCHE LANDESBANK,
                                NEW YORK BRANCH,
                                    as Agent

                                   ----------

                          Dated as of February 3, 2006

                                   ----------

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>              <C>                                                        <C>
                                    SECTION 1
                   DEFINITIONS AND PRINCIPLES OF CONSTRUCTION

Section 1.01.    Defined Terms...........................................     1
Section 1.02.    Principles of Construction..............................    10

                                    SECTION 2
                           AMOUNT AND TERMS OF CREDIT

Section 2.01.    The Loans...............................................    10
Section 2.02.    Amount of Each Borrowing................................    11
Section 2.03.    Notice of Borrowing.....................................    11
Section 2.04.    Disbursement of Funds...................................    11
Section 2.05.    Notes...................................................    12
Section 2.06.    Interest................................................    12
Section 2.07.    Capital Adequacy........................................    12
Section 2.08.    Obligations of Defaulting Banks.........................    13

                                    SECTION 3
        COMMITMENT FEES, FEES; AND TERMINATIONS, EXTENSIONS AND INCREASES
                   OF COMMITMENTS AND CONTINGENT COMMITMENTS

Section 3.01.    Fees....................................................    13
Section 3.02.    Voluntary Termination of Unutilized Commitments and
                 Unutilized Contingent Commitments.......................    14
Section 3.03.    Termination of Commitments and Contingent Commitments...    14
Section 3.04.    Expiry Date.............................................    14

                                    SECTION 4
                              PREPAYMENTS: PAYMENTS

Section 4.01.    Voluntary Prepayments...................................    15
Section 4.02.    Mandatory Prepayments...................................    16
Section 4.03.    Method and Place of Payment.............................    16
Section 4.04.    Net Payments............................................    16
Section 4.05.    Limitations on Sources of Payment.......................    16

                                    SECTION 5
                    CONDITIONS PRECEDENT TO ALL CREDIT EVENTS

Section 5.01.    Loss Threshold Incurrence Date..........................    17
Section 5.02.    Notice of Borrowing.....................................    17
Section 5.03.    Part C Loans............................................    17
</TABLE>

<PAGE>

<TABLE>
<S>              <C>                                                        <C>
                                    SECTION 6
                   REPRESENTATIONS, WARRANTIES AND AGREEMENTS

Section 6.01.    Corporate Status........................................    17
Section 6.02.    Corporate Power and Authority...........................    18
Section 6.03.    No Violation............................................    18
Section 6.04.    Governmental Approvals..................................    18
Section 6.05.    Financial Statements; Financial Condition; Undisclosed
                 Liabilities; Etc........................................    18
Section 6.06.    Litigation..............................................    19
Section 6.07.    True and Complete Disclosure............................    19
Section 6.08.    Use of Proceeds; Margin Regulations.....................    19
Section 6.09.    Tax Returns and Payments................................    19
Section 6.10.    No ERISA Plans..........................................    19
Section 6.11.    Capitalization..........................................    20
Section 6.12.    Subsidiaries............................................    20
Section 6.13.    Compliance with Statutes, Etc...........................    20
Section 6.14.    Investment Company Act..................................    20
Section 6.15.    Public Utility Holding Company Act......................    20
Section 6.16.    Compliance with Insurance Law...........................    20
Section 6.17.    Covered Portfolio.......................................    21
Section 6.18.    Ratings.................................................    21

                                    SECTION 7
                              AFFIRMATIVE COVENANTS

Section 7.01.    Information Covenants...................................    21
Section 7.02.    Books, Records and Inspections..........................    23
Section 7.03.    Corporate Franchises....................................    23
Section 7.04.    Compliance with Statutes, Etc...........................    24
Section 7.05.    ERISA...................................................    24
Section 7.06.    Performance of Obligations..............................    24
Section 7.07.    Use of Proceeds.........................................    24
Section 7.08.    Conduct of Business.....................................    24
Section 7.09.    Underwriting Criteria...................................    24
Section 7.10.    Collection of Pledged Recoveries and Pledged Premiums...    24
Section 7.11.    Pledged Reserve Release Notice..........................    24
Section 7.12.    Registry................................................    25

                                    SECTION 8
                               NEGATIVE COVENANTS

Section 8.01.    Liens...................................................    25
Section 8.02.    Consolidation, Merger, Sale of Assets, Etc..............    26
Section 8.03.    Amendments..............................................    26
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>              <C>                                                        <C>

                                    SECTION 9
                                EVENTS OF DEFAULT

Section 9.01.    Payments................................................    27
Section 9.02.    Representations, Etc....................................    27
Section 9.03.    Covenants...............................................    27
Section 9.04.    Default Under Other Agreements..........................    27
Section 9.05.    Bankruptcy, Etc.........................................    27
Section 9.06.    Security Agreement......................................    28
Section 9.07.    Judgments...............................................    28
Section 9.08.    Change of Control.......................................    28
Section 9.09.    Other Default...........................................    28

                                   SECTION 10
                                    THE AGENT

Section 10.01.   Appointment.............................................    29
Section 10.02.   Nature of Duties........................................    29
Section 10.03.   Lack of Reliance on the Agent...........................    29
Section 10.04.   Certain Rights of the Agent.............................    30
Section 10.05.   Reliance................................................    30
Section 10.06.   Indemnification.........................................    30
Section 10.07.   The Agent in Its Individual Capacity....................    30
Section 10.08.   Resignation by the Agent................................    30

                                   SECTION 11
                                  MISCELLANEOUS

Section 11.01.   Payment of Expenses, Etc................................    31
Section 11.02.   Right of Setoff.........................................    31
Section 11.03.   Notices.................................................    32
Section 11.04.   Benefit of Agreement....................................    32
Section 11.05.   No Waiver; Remedies Cumulative..........................    35
Section 11.06.   Calculations; Computations..............................    35
Section 11.07.   Governing Law; Submission to Jurisdiction; Venue........    35
Section 11.08.   Obligation to Make Payments in Dollars..................    36
Section 11.09.   Counterparts............................................    36
Section 11.10.   Headings Descriptive....................................    36
Section 11.11.   Amendment or Waiver.....................................    36
Section 11.12.   Survival................................................    37
Section 11.13.   Exclusions from Covered Portfolio.......................    37
Section 11.14.   Confidentiality.........................................    37
Section 11.15.   No Default..............................................    38
</TABLE>

                                       iii

<PAGE>

SCHEDULE I    COMMITMENTS AND CONTINGENT COMMITMENTS
SCHEDULE II   REINSURANCE AGREEMENTS
EXHIBIT A     NOTICE OF BORROWING
EXHIBIT B     FORM OF NOTE
EXHIBIT C     FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

                                       iv

<PAGE>

                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT, dated as of February 3, 2006, among RAM REINSURANCE
COMPANY LTD., a limited liability company organized under the laws of Bermuda
(the "Borrower"), the Banks party hereto from time to time, and BAYERISCHE
LANDESBANK, NEW YORK BRANCH, acting in its capacity as Agent pursuant to Section
11 (in such capacity, the "Agent").

                                   WITNESSETH:

     WHEREAS, subject to and upon the terms and conditions herein set forth, the
Banks are willing to make available to the Borrower the credit facility provided
for herein;

     NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:

                                    SECTION 1

                   DEFINITIONS AND PRINCIPLES OF CONSTRUCTION

     SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

     "Affiliate" shall mean, with respect to any Person, any other Person (other
than an individual) directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person; provided, however, that an
Affiliate of the Borrower shall include any Person that directly or indirectly
owns more than 10% of the Borrower and any officer or director of the Borrower
or any such Person. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.

     "Agent" shall mean Bayerische Landesbank, New York Branch, in its capacity
as Agent for the Banks hereunder, and shall include any successor to the Agent
appointed pursuant to Section 10.08.

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

     "Applicable Margin" shall mean a percentage per annum equal to 2.0%.

     "Assignment and Assumption Agreement" shall mean any Assignment and
Assumption Agreement substantially in the form of Exhibit C entered into
pursuant to the terms of this Agreement.

<PAGE>

     "Authorized Officer" shall mean the president, any vice president, the
chief financial officer or the controller of the Borrower.

     "Average Annual Debt Service" as of a specified date with respect to an
Insured Obligation shall mean the applicable Retained Percentage times the sum
of (i) the aggregate outstanding principal amount of such Insured Obligation and
(ii) the aggregate amount of interest thereafter required to be paid on such
Insured Obligation (giving effect to all mandatory sinking fund payments or
other regularly scheduled required redemptions, prepayments or other retirement
of principal), divided by the number of whole and fractional years from the date
of determination to the latest maturity date of such Insured Obligation, and as
of a specified date with respect to the Covered Portfolio shall mean the sum of
the Annual Average Debt Service as of such date of all Insured Obligations of
the type defined in clause (i) of the definition thereof contained in the
Covered Portfolio. In the event that an Insured Obligation bears interest at a
variable rate, the interest thereon for purposes of the determination of Average
Annual Debt Service shall be calculated at the rate employed by the Borrower to
compute average annual debt service with respect to such Insured Obligation in
accordance with its customary business practices.

     "Bank" shall mean each of the banks listed on the signature pages hereof
and any institution which becomes a Bank hereunder pursuant to Section 11.04(b).

     "Base Rate" shall mean the higher of (i) 1/4 of 1% in excess of the Federal
Funds Rate and (ii) the Prime Lending Rate.

     "Bankruptcy Code" shall have the meaning provided in Section 9.05.

     "Borrower" shall have the meaning provided in the first paragraph of this
Agreement.

     "Borrower's Rating" shall mean the Borrower's claims-paying rating.

     "Borrowing" shall mean the borrowing of Loans on a given date.

     "Business Day" shall mean any day except Saturday, Sunday and any day which
shall be in New York, New York or Hamilton, Bermuda a legal holiday or a day on
which banking institutions are authorized or required by law or other government
action to close.

     "Change of Control" shall mean and include the occurrence of any of the
following events: any Person, entity or "group" (within the meaning of Sections
13(d) or 14(d) of the Securities Exchange Act of 1934) (i) shall have acquired
beneficial ownership of 20% or more of any outstanding class of capital stock of
the Borrower having ordinary voting power in the election of directors, provided
that any Person, entity or group shall be permitted to acquire up to 25% of the
outstanding capital stock of any such class in a transaction approved before the
consummation of same by a majority of the directors of the Borrower or (ii)
shall have obtained the power (whether or not exercised) to elect the majority
of the Board of Directors of the Borrower.

     "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code

                                        2

<PAGE>

are to the Code, as in effect at the date of this Agreement and any subsequent
provisions of the Code, amendatory thereof, supplemental thereto or substituted
therefor.

     "Collateral" shall mean all "Collateral" as defined in the Security
Agreement.

     "Collateral Account" shall have the meaning set forth in the Security
Agreement.

     "Collateral Agent" shall have the meaning set forth in the Security
Agreement.

     "Commitment" shall mean for each Bank (excluding the Part C Banks) the
amount set forth opposite such Bank's name in Part A of Schedule I hereto
directly below the column entitled "Commitment", as the same may be (i) reduced
from time to time pursuant to Section 3.02 and/or 3.03 and (ii) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
3.04 or 11.04.

     "Commitment Fees" shall have the meaning provided in Section 3.01(a).

     "Contingent Commitment" shall mean for each Part C Bank the amount set
forth opposite such Part C Bank's name in Part C of Schedule I hereto directly
below (i) the column entitled "Contingent Commitment," as the same may be (i)
reduced from time to time pursuant to Section 3.02 and/or 3.03 and (ii) adjusted
from time to time as a result of assignments to or from such Part C Bank
pursuant to Section 3.04 or 11.04.

     "Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (a) for the
purchase or payment of any such primary obligation or (b) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the holder of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business or
obligations under insurance or reinsurance contracts entered into in the
ordinary course of business to secure reinsurance obligations. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

     "Covered Portfolio" shall mean and include each Insured Obligation as of
December 31, 2005 and each Insured Obligation issued thereafter and prior to the
Loss Threshold Incurrence Date other than any Insured Obligation which is
excluded from the Covered Portfolio pursuant to Section 11.13.

                                        3

<PAGE>

     "Credit Documents" shall mean this Agreement, each Note and the Security
Agreement.

     "Credit Event" shall mean the making of any Loan.

     "Cumulative Losses" for any Loss Incurrence Period shall mean the aggregate
Losses of the Borrower determined cumulatively during such period without regard
to Pledged Recoveries; provided, however, that the aggregate amount of
Cumulative Losses related to (i) Insured Obligations of the type described in
the definition thereof issued on behalf of health care providers of any type
cannot exceed 10% of the Total Coverage Amount and Insured Obligations of the
type described in the definition thereof issued on behalf of health care
providers of any type which at the time of reinsurance by the Borrower (and
without giving effect to any insurance or other guaranty of an Eligible Insurer)
were unrated or rated lower than A- by S&P cannot exceed 3.33% of the Total
Coverage Amount.

     "Declining Bank" shall have the meaning provided in Section 3.04(b).

     "Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.

     "Defaulted Loan" shall mean, with respect to any Bank at any time, the Loan
or portion of any Loan required to be made by such Bank to the Borrower pursuant
to Section 2.01 at or prior to such time that has not been made by such Bank as
of such time.

     "Defaulting Bank" shall mean, at any time, any Bank that, at such time,
owes a Defaulted Loan.

     "Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.

     "Eligible Insurer" shall mean any of AMBAC, MBIA, FSA, FGIC or any other
financial guaranty insurer rated Aaa by Moody's and AAA by S&P at the time of
any determination thereof.

     "Eligible Transferee" shall mean and include a commercial bank, financial
institution or other "accredited investor" (as defined in Regulation D of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder) assigned, or the parent of which is assigned, an unsecured senior
debt rating (or shadow rating as reflected in a letter) by each of Moody's and
S&P.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement, and to any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.

     "ERISA Affiliate" shall mean any person (as defined in Section 3(9) of
ERISA) which together with the Borrower or any of its Subsidiaries would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.

                                        4

<PAGE>

     "Event of Default" shall have the meaning provided in Section 9.

     "Expiry Date" shall have the meaning set forth in Section 3.04(a).

     "Extending Bank" shall have the meaning provided in Section 3.04(b).

     "Extension Request" shall have the meaning set forth in Section 3.04(a).

     "Federal Funds Rate" shall mean for any period, a fluctuating interest rate
equal for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal Funds brokers of recognized standing
selected by the Agent.

     "Fees" shall mean all amounts payable pursuant to or referred to in Section
3.01.

     "Group" shall mean, collectively, the Borrower, the Owners and each other
Person that is combined with the Borrower and the Owners for financial reporting
purposes.

     "Holder of any Note" shall mean any Federal Reserve Bank to which a Bank
has pledged its Note to the extent such Federal Reserve Bank has foreclosed upon
such Note.

     "Increasing Extending Bank" shall have the meaning provided in Section
3.04(b).

     "Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the face amount of all letters of credit issued for the account of such
Person and all drafts drawn thereunder, (iii) all liabilities secured by any
Lien on any property owned by such Person, whether or not such liabilities have
been assumed by such Person, (iv) the aggregate amount required to be
capitalized under leases under which such Person is the lessee and (v) all
Contingent Obligations of such Person.

     "Installment Premiums" shall mean any and all premiums which are required
to be paid or claimed to be required to be paid to or for the account of the
Borrower in respect of Insured Obligations in the Covered Portfolio on a
periodic basis rather than by payment in full on the date of the effectiveness
of the relevant Insurance Contract.

     "Insurance Contracts" shall have the meaning set forth in Section 6.16.

     "Insured Obligation" shall mean "municipal obligation bonds," "special
revenue bonds," "industrial development bonds" and "utility first mortgage
obligations," in any event issued by a U.S. municipal or governmental unit or
political subdivision, which an Eligible Insurer is permitted to insure under
the provisions of Section 6904(b)(1)(A), (B) or (C) of the New York Insurance
Law (without regard to clause (J) thereof).

                                        5

<PAGE>

     "Lending Office" shall mean the office of the Agent located at 560
Lexington Avenue, New York, New York 10022 or such other office, Subsidiary or
Affiliate of the Agent as the Agent may from time to time specify as such to the
Borrower.

     "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).

     "Loan" shall have the meaning provided in Section 2.01.

     "Loss" shall mean at any time the aggregate sum of (i) the amount paid by
the Borrower at such time or required at such time to be paid by the Borrower on
claims under an Insurance Contract with respect to an Insured Obligation in the
Covered Portfolio by reason of the failure by the issuer thereof or other
obligor with respect thereto to pay insured amounts on such Insured Obligations
when due (including adjustment expenses with respect to such claims), plus (ii)
Permitted Reserves at such time minus (iii) amounts paid at such time or
reasonably expected by the Borrower at such time to be paid to the Borrower
under reinsurance agreements (whether facultative or treaty) and similar
arrangements with respect to the claims referred to in clause (i) provided that,
without limiting the generality of the foregoing, the term "Loss" shall not
include any damages or penalties required to be paid by the Borrower in respect
of an Insurance Contract by reason of the breach by the Borrower of its
obligations thereunder or the cancellation or termination thereof other than in
accordance with its terms.

     "Loss Incurrence Period" shall mean the seven year period preceding the
Expiry Date.

     "Loss Threshold Incurrence Date" shall mean the date on which the Borrower
has Cumulative Losses (net of recoveries) during the relevant Loss Incurrence
Period equal to the greater of $170,000,000 and 5% of the Average Annual Debt
Service as of any date of determination thereof.

     "Majority Banks" shall mean at any time Banks owed at least 51% of the
aggregate principal amount of the Loans outstanding at such time or, if no Loans
are outstanding at such time, Banks holding at least 51% of the aggregate
Commitments at such time; provided, however, that if any Bank shall be a
Defaulting Bank at such time, there shall be excluded from the determination of
Majority Banks at such time (i) the aggregate principal amount of the Loans
owing to such Bank and outstanding at such time and (ii) the Commitment of such
Bank at such time.

     "Majority Participants" shall have the meaning set forth in Section 11.04.

     "Margin Stock" shall have the meaning provided in Regulation U of the Board
of Governors of the Federal Reserve System.

     "Moody's" shall mean Moody's Investors Service, Inc.

                                        6

<PAGE>

     "Note" shall have the meaning provided in Section 2.05.

     "Notice of Borrowing" shall have the meaning provided in Section 2.03.

     "Notice Office" shall mean the office of the Agent located at 560 Lexington
Avenue, New York, New York 10022, Attention: Patricia Healy, or such other
office as the Agent may hereafter designate in writing as such to the Borrower.

     "Obligations" shall mean all amounts owing to the Agent, Collateral Agent
or any Bank pursuant to the terms of this Agreement or any other Credit
Document.

     "Owners" shall mean RAM Holdings Ltd. and RAM Holdings II Ltd. and any
entity resulting from an amalgamation of the two.

     "Part B Bank" shall mean each Bank listed on Part B of Schedule I hereto.

     "Part C Bank" shall mean each Bank listed on Part C of Schedule I hereto.

     "Part C Loan" shall have the meaning provided in Section 2.08.

     "Payment Office" shall mean the office of the Agent located at 560
Lexington Avenue, New York, New York 10022, or such other office as the Agent
may hereafter designate in writing as such to the Borrower.

     "Permitted Liens" shall have the meaning set forth in Section 8.01.

     "Permitted Reserves" shall mean, with respect to any Insured Obligation, an
amount equal to the reserves established in accordance with New York State
statutory accounting practices which are deemed necessary or prudent in the
reasonable judgment of the Borrower by reason of the failure or anticipated
failure by the issuer of such Insured Obligation or other obligor with respect
thereto to pay such Insured Obligation when due, all as determined by the
Borrower on a quarterly basis and as reflected on the Borrower's books and
records.

     "Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

     "Plan" shall mean an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code, which is maintained or contributed to by (or to which there is an
obligation to contribute of), or at any time during the five calendar years
preceding the date of this Agreement was maintained or contributed to by (or to
which there was an obligation to contribute of), the Borrower or an ERISA
Affiliate.

     "Pledged Premiums" shall mean at any time on and after the Loss Threshold
Incurrence Date (i) any and all Installment Premiums which are paid or payable
to the Borrower at such time with respect to defaulted Insured Obligations in
the Covered Portfolio minus (ii) the aggregate amount of such Installment
Premiums referred to in the next preceding clause (i) paid

                                        7

<PAGE>

or payable to any Person other than the Borrower at such time under reinsurance
agreements (whether facultative or treaty) and similar arrangements. The
security interest granted to the Collateral Agent for the benefit of the Banks
in and the right to receive and apply the Pledged Premium is subject to the
rights of the Prior Collateral Agent and the Banks (as defined in the Prior
Credit Agreement) under the Prior Credit Agreement).

     "Pledged Recoveries" shall mean at any time on and after the Loss Threshold
Incurrence Date any and all moneys and other payments, property and other
consideration and compensation received or receivable by or for the account of
the Borrower at such time (excluding the aggregate amount of any and all monies,
payments, property, consideration and compensation paid or payable to any Person
other than the Borrower under reinsurance agreements (whether facultative or
treaty) and similar arrangements) as repayment or reimbursement of, or otherwise
in respect of or arising out of, the payment of a claim by the Borrower under an
Insurance Contract covering any Insured Obligation in the Covered Portfolio
(without regard to whether such claim was paid from the proceeds of a Loan),
whether from the issuer thereof or any other Person including without limitation
under or pursuant to (i) such Insurance Contract, any reimbursement agreement,
guaranty, letter of credit, mortgage, security agreement, pledge agreement or
other contract, agreement or arrangement, (ii) any account or account
receivable, (iii) any compromise, settlement or similar arrangement, (iv) any
voluntary payment or gift, (v) any reinsurance of such Insured Obligation to the
extent that payment or expected payment under such reinsurance was not deducted
in determining the Loss attributed to the Borrower's payment or required payment
of such claim, (vi) any contractual, statutory, common law or other right of
subrogation, (vii) any realization upon any mortgage, security interest or other
Lien, (viii) any cause of action, whether sounding in tort, contract or
otherwise, and any judicial, arbitration or other proceeding by or before any
court, agency, tribunal, association or other governmental or private body, or
(ix) any other legal or equitable right or claim, whether or not similar to the
foregoing), less the out-of-pocket costs and expenses, including without
limitation attorneys fees and court costs, reasonably incurred by the Borrower
in connection with the collection or other realization of such moneys and other
payments, property and other consideration and compensation. The security
interest granted to the Collateral Agent for the benefit of the Banks in and the
right to receive and apply the Pledged Recoveries is subject to the rights of
the Prior Collateral Agent and the Banks (as defined in the Prior Credit
Agreement) under the Prior Credit Agreement.

     "Pledged Reserves Account" shall have the meaning set forth in the Security
Agreement.

     "Pledged Reserves Account Funds" shall mean at any time the aggregate
amount of proceeds of Loans borrowed hereunder for the purpose of establishing
or maintaining Permitted Reserves, such proceeds to be deposited in the Pledged
Reserves Account in accordance with Section 2.1(b) of the Security Agreement.

     "Pledged Reserve Release Notice" shall have the meaning set forth in
Section 7.11.

     "Pledged Reserve Repayment Date" shall mean the date on which the Borrower
delivers the Pledged Reserve Release Notice required by Section 7.11.

                                        8

<PAGE>

     "Prime Lending Rate" shall mean the rate as established by Bayerische
Landesbank, New York Branch, from time to time as its prime lending rate, the
Prime Lending Rate to change when and as such prime lending rate changes. The
Prime Lending Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Bayerische Landesbank, New
York Branch, may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.

     "Prior Credit Agreement" means the Amended and Restated Credit Agreement
dated as of June 22, 2005 among the Borrower, Various Banks and Norddeutsche
Landesbank Girozentrale, New York Branch, as Agent.

     "Prior Collateral Agent" shall mean the Collateral Agent as defined in the
Prior Pledge Agreement.

     "Prior Pledge Agreement" shall mean the Amended and Restated Pledge and
Security Agreement between the Borrower and Norddeutsche Landesbank
Girozentrale, New York Branch, as Collateral Agent dated as of December 1, 2003.

     "Replacement Bank" shall have the meaning provided in Section 3.04(b).

     "Retained Percentage" of an Insured Obligation shall mean the percentage of
risk assumed by the Borrower under Insurance Contracts with respect thereto
minus the percentage of aggregate risk with respect to such Insurance Contracts
that has been ceded by the Borrower to other Persons pursuant to a reinsurance
agreement (whether facultative or treaty) or a similar arrangement.

     "Security Agreement" shall mean the Pledge and Security Agreement, dated as
of February 3, 2006, between the Borrower and Bayerische Landesbank, New York
Branch, as Collateral Agent, as modified, supplemented or amended from time to
time.

     "S&P" shall mean Standard & Poor's Corporation.

     "Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.

     "Taxes" shall have the meaning provided in Section 4.04.

     "Total Coverage Amount" shall mean, at the time of any determination
thereof, the sum of (i) the aggregate Commitment of all Banks (excluding
Contingent Commitments) under the Loan Facility at such time and (ii) the dollar
amount of Cumulative Losses (net of recoveries) at such time that results in the
occurrence of the Loss Threshold Incurrence Date.

                                        9

<PAGE>

     "UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.

     "United States" and "U.S." shall each mean the United States of America.

     "Unutilized Commitment" shall mean, for any Bank, at any time, the
Commitment of such Bank at such time less the aggregate principal amount of all
Loans made by such Bank pursuant to Section 2.01(a) prior to such time.

     "Unutilized Contingent Commitment" shall mean, for any Part C Bank, at any
time, the Contingent Commitment of such Bank at such time less the aggregate
principal amount of all Loans made by such Bank pursuant to Section 2.01(b)
prior to such time.

     "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose capital stock is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.

     SECTION 1.02. PRINCIPLES OF CONSTRUCTION.

          (a) All references to sections, schedules and exhibits are to
     sections, schedules and exhibits in or to this Agreement unless otherwise
     specified. The words "hereof," "herein" and "hereunder" and words of
     similar import when used in this Agreement shall refer to this Agreement as
     a whole and not to any particular provision of this Agreement.

          (b) The term generally accepted accounting principles means generally
     accepted accounting principles in the United States, and all accounting
     terms not specifically defined herein shall be construed in accordance
     therewith.

                                    SECTION 2

                           AMOUNT AND TERMS OF CREDIT

     SECTION 2.01. THE LOANS.

          (a) Subject to and upon the terms and conditions set forth herein,
     each Bank which is not a Part C Bank severally agrees, at any time and from
     time to time prior to the Expiry Date applicable to it, to make loans (such
     loans, together with any loans made pursuant to Section 2.01(b), being each
     a "Loan" and collectively, the "Loans") to the Borrower, provided, however,
     that the principal amount of any Loan made by any such Bank at any time
     pursuant to this Section 2.01(a) shall not exceed the Unutilized Commitment
     of such Bank at such time.

          (b) In the event that (i) the Borrower requests a Borrowing under
     Section 2.01(a) and (ii) any Part B Bank shall fail to make on the date
     specified in the Notice of Borrowing for such requested Borrowing any Loan
     or any portion of a Loan required to be made by such Bank hereunder
     representing such Bank's pro rata portion

                                       10

<PAGE>

     (in accordance with the Commitment of such Bank and the aggregate
     Commitments of all of the Banks as in effect on such date) of the amount of
     such requested Borrowing, then each Part C Bank severally agrees to make a
     Loan to the Borrower on such date in an amount equal to such Part C Bank's
     pro rata portion (in accordance with the Contingent Commitment of such Part
     C Bank and the aggregate Contingent Commitments of all of the Part C Banks
     as in effect on such date) of such Part B Bank's Defaulted Loan, provided,
     however, that the principal amount of any Loan made by a Part C Bank at any
     time pursuant to this Section 2.01(b) shall not exceed the Unutilized
     Contingent Commitment of such Part C Bank at such time.

          (c) Once repaid, Loans incurred hereunder may not be reborrowed.

     SECTION 2.02. AMOUNT OF EACH BORROWING. The aggregate principal amount of
each Borrowing hereunder shall not (i) be less than $2,000,000, and if greater,
shall be in an integral multiple of $1,000,000 and (ii) exceed the lesser of (a)
Cumulative Losses incurred after the occurrence of the Loss Threshold Incurrence
Date less the aggregate principal amount of all Loans previously made and (b)
the aggregate Unutilized Commitments of all Banks as in effect on the date such
Borrowing is made.

     SECTION 2.03. NOTICE OF BORROWING. Whenever the Borrower desires to make a
Borrowing hereunder, it shall give the Agent at its Notice Office at least two
Business Days' prior notice made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if given before 12:00 Noon
(New York time) on such day. Each such notice (each a "Notice of Borrowing")
shall be in the form of Exhibit A, appropriately completed to specify the
aggregate principal amount of the Loans to be made pursuant to such Borrowing,
and the date of such Borrowing (which shall be a Business Day).

     SECTION 2.04. DISBURSEMENT OF FUNDS.

          (a) No later than 11:00 A.M. (New York time) on the date specified in
     each Notice of Borrowing, (i) each Bank which is not a Part C Bank will
     make available at the Payment Office of the Agent its pro rata portion (in
     accordance with the Commitment of such Bank and the aggregate Commitments
     of all of the Banks as in effect on such date) of the amount of the
     Borrowing requested to be made on such date, in Dollars and in immediately
     available funds and (ii) the Agent will make available to the Borrower the
     aggregate of the amounts so made available by the Banks pursuant to clause
     (i) of this Section 2.04(a) on such day at its Payment Office.

          (b) In the event that any Part B Bank shall fail to make available at
     the Payment Office of the Agent its pro rata portion (in accordance with
     the Commitment of such Bank and the aggregate Commitments of all of the
     Banks as in effect on such date) of the amount of the Borrowing requested
     to be made in any Notice of Borrowing, at or prior to 11:00 A.M. (New York
     time) on the date specified in such Notice of Borrowing, the Agent shall
     immediately notify each Part C Bank that such Part B Bank has so defaulted
     and no later than 1:00 P.M. (New York time) on the Business Day following
     the day on which the Agent so notifies the Part C Banks, (i) each Part C
     Bank will (subject to the proviso at the end of Section 2.01(b) make
     available at the Payment Office

                                       11

<PAGE>

     of the Agent its pro rata portion (in accordance with the Contingent
     Commitment of such Part C Bank and the aggregate Contingent Commitments of
     all of the Part C Banks as in effect on such date) of such Part B Bank's
     Defaulted Loan, in Dollars and in immediately available funds and (ii) the
     Agent will make available to the Borrower the aggregate of the amounts so
     made available by the Part C Banks on such day at its Payment Office.

     SECTION 2.05. NOTES. The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced by a promissory note
duly executed and delivered by the Borrower substantially in the form of Exhibit
B with blanks appropriately completed in conformity herewith (each a "Note" and,
collectively, the "Notes"). Each Note shall (i) be payable to the order of such
Bank and be dated the date of its issuance, (ii) be in a stated principal amount
equal to such Bank's Commitment or such Bank's Contingent Commitment, as
appropriate, and be payable in the principal amount of the Loans evidenced
thereby, (iii) mature and become due and payable in full, with respect to each
Loan evidenced thereby, on the Expiry Date established pursuant to this
Agreement, (iv) bear interest as provided in the appropriate clause of Section
2.06 in respect of the Loans evidenced thereby and (v) be entitled to the
benefits of this Agreement and be secured by the Security Agreement. Each Bank
will note on its internal records the amount of each Loan made by it and each
payment in respect thereof and will prior to any transfer of its Note endorse on
the reverse side thereof the outstanding principal amount of Loans evidenced
thereby. Failure to make any such notation shall not affect the Borrower's
obligations in respect of such Loans. Notes in the amount of the initial
Commitment and initial Contingent Commitment of each Bank shall be delivered to
each such Bank in connection with the execution and delivery of this Agreement.

     SECTION 2.06. INTEREST.

          (a) The Borrower agrees to pay interest in respect of the unpaid
     principal amount of each Loan from the date the proceeds thereof are made
     available to the Borrower until the maturity thereof (whether by
     acceleration or otherwise) at a rate per annum which shall be equal to the
     Base Rate in effect from time to time plus the Applicable Margin.

          (b) Overdue principal and, to the extent permitted by law, overdue
     interest in respect of each Loan and any other overdue amount payable by
     the Borrower hereunder shall bear interest from the date payment thereof
     was due until (but not including) the date of actual payment at a rate per
     annum equal to 4.0% per annum in excess of the Base Rate in effect from
     time to time.

          (c) Accrued (and theretofore unpaid) interest shall be payable (i) in
     respect of each Loan, quarterly in arrears on the last Business Day of each
     March, June, September and December, and (ii) in respect of each Loan, on
     any prepayment (on the amount prepaid), at maturity (whether by
     acceleration or otherwise) and, after such maturity, on demand.

     SECTION 2.07. CAPITAL ADEQUACY. If any Bank determines at any time that any
applicable law or governmental rule, regulation, order or request (whether or
not having the force of law) concerning capital adequacy, or any change in
interpretation or administration

                                       12

<PAGE>

thereof by any governmental authority, central bank or comparable agency, will
have the effect of increasing the amount of capital required or expected to be
maintained by such Bank based on the existence of its Commitment and/or
Contingent Commitment hereunder or its obligations hereunder, then the Borrower
shall pay to such Bank, upon its written demand therefor, such additional
amounts as shall be required to compensate such Bank for the increased cost to
such Bank as a result of such increase of capital. In determining such
additional amounts, such Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that such
Bank's determination of compensation owing under this Section 2.07 shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
Each Bank, upon determining that any additional amounts will be payable pursuant
to this Section 2.07, will give prompt written notice thereof to the Borrower,
which notice shall show the basis for the calculation of such additional
amounts. The failure to give any such notice shall not be deemed to be a waiver
of any of the Borrower's obligations to pay additional amounts pursuant to this
Section 2.07, provided that the Borrower shall not be required to pay any such
amounts until it receives written notice from a Bank in accordance with this
Section 2.07.

     SECTION 2.08. OBLIGATIONS OF DEFAULTING BANKS. Anything contained in this
Agreement to the contrary notwithstanding, in the event any Part C Bank makes a
Loan pursuant to Section 2.01(b) (a "Part C Loan") because of a Part B Bank
failing to make a Loan required to be made pursuant to this Agreement, such Part
C Bank, in addition to any other right or remedy it may have pursuant to this
Agreement or any other Credit Document, shall be entitled to receive, from such
Part B Bank, upon demand, the principal amount of such Part C Loan, plus
interest thereon, from the date made until paid, at the Federal Funds Rate for
the first three days and at the Base Rate plus 2% per annum thereafter. Upon any
such payment by a Part B Bank, such Part B Bank shall be subrogated to the
rights of the relevant Part C Bank with respect to the relevant Part C Loan to
the extent of such payment. In addition, for so long as any amounts are owed to
any Part C Bank with respect to any Part C Loan, any amounts otherwise owing by
a Part B Bank pursuant to this Agreement or any other Credit Document shall be
paid on a pro rata basis to the Part C Banks until all amounts with respect to
outstanding Part C Loans have been repaid.

                                    SECTION 3

             COMMITMENT FEES, FEES; AND TERMINATIONS, EXTENSIONS AND
               INCREASES OF COMMITMENTS AND CONTINGENT COMMITMENTS

     SECTION 3.01. FEES.

          (a) The Borrower agrees to pay to each Bank which is not a Part C Bank
     a commitment fee (such commitment fee, together with the commitment fee
     payable pursuant to Section 3.01(b), being referred to herein as the
     "Commitment Fees") as agreed in writing from time to time by the Borrower
     and such Bank; provided, however, that any Commitment Fee accrued with
     respect to the Unutilized Commitment of a Defaulting Bank during the period
     prior to the time such Bank became a Defaulting Bank and unpaid at such
     time shall not be payable by the Borrower so long as such Bank shall be a
     Defaulting Bank except to the extent that such Commitment Fee shall
     otherwise

                                       13

<PAGE>

     have been due and payable by the Borrower prior to such time; and provided
     further that no Commitment Fee shall accrue on the Unutilized Commitment of
     a Defaulting Bank so long as such Bank shall be a Defaulting Bank.

          (b) The Borrower agrees to pay each Part C Bank a Commitment Fee as
     agreed in writing from time to time by the Borrower and such Part C Bank.

          (c) Accrued Commitment Fees shall be due and payable quarterly in
     arrears on the last Business Day of each March, June, September and
     December of each year and, with respect to each Bank, on the Expiry Date
     applicable to the Commitment or Contingent Commitment of each Bank, as
     applicable or upon such earlier date as the Commitments or the Contingent
     Commitments, as the case may be, shall be terminated, and shall be based on
     a 365/366-day year and actual days elapsed.

          (d) The Borrower shall pay to the Agent such fees in connection with
     the Credit Documents as may be agreed to from time to time between the
     Borrower and the Agent.

     SECTION 3.02. VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS AND
UNUTILIZED CONTINGENT COMMITMENTS. Upon at least five Business Days' prior
notice to the Agent at its Notice Office, the Borrower shall have the right to
terminate the Unutilized Commitments or the Unutilized Contingent Commitments,
or both, in whole or in part, in minimum aggregate amounts of $5,000,000 (or, if
greater, in integral multiples of $1,000,000) for the Unutilized Commitments and
the Unutilized Contingent Commitments, provided that the Borrower shall
concurrently satisfy its obligations, if any at such time, under Section 3.01.

     SECTION 3.03. TERMINATION OF COMMITMENTS AND CONTINGENT COMMITMENTS.

          (a) The Commitment of each Bank which is not a Part C Bank shall be
     permanently reduced on each date a Loan is made by such Bank pursuant to
     Section 2.01(a) by the amount of such Loan. The Contingent Commitment of
     each Part C Bank shall be permanently reduced on each date a Loan is made
     by such Bank pursuant to Section 2.01(b) by the amount of such Loan.

          (b) Notwithstanding anything herein to the contrary, the Borrower
     shall have the right to unilaterally terminate the Commitment and/or
     Contingent Commitment, as applicable, of any Bank if the unsecured senior
     debt rating (or shadow rating as reflected in a letter) of such Bank or its
     parent shall be downgraded by Moody's or S&P, such termination to be
     effective 60 days after providing to such Bank a notice of termination. The
     Borrower shall, concurrent with such termination, pay to such Bank the
     aggregate amount, if any, payable at such time by the Borrower to such Bank
     under this Agreement.

          (c) In addition to any other mandatory Commitment reductions pursuant
     to this Section 3.03, the Commitment of each Bank which is not a Part C
     Bank, and the Contingent Commitment of each Part C Bank, shall each
     terminate in its entirety on the Expiry Date applicable to such Bank.

     SECTION 3.04. EXPIRY DATE.

                                       14

<PAGE>

          (a) The expiration of the Commitments and the Contingent Commitments
     shall be February 3, 2013 (the "Expiry Date"); provided, however, that
     before (but not earlier than 120 days nor later than 90 days before) each
     February 3rd (commencing with February 3, 2007), the Borrower may make a
     written request (an "Extension Request") to the Agent at its Notice Office
     (who shall forward a copy to each Bank) that the Expiry Date as to each
     Bank be extended by one calendar year. Such Extension Request shall include
     a certification by a senior officer of the Borrower that no Default or
     Event of Default has occurred and is continuing and all representations and
     warranties contained herein and the other Credit Documents are true and
     correct in all material aspects on and as of the date of the Extension
     Request (it being understood and agreed that any representation or warranty
     which expressly refers by its terms to a specified date shall be required
     to be true only as of such date). If by the date occurring 30 days next
     succeeding the Agent's receipt of such Extension Request, any Bank agrees
     thereto in writing by so indicating on counterparts of the Extension
     Request and delivering such counterpart to the Borrower, "Expiry Date" as
     to such Bank shall mean the February 3, occurring in the calendar year next
     succeeding the Expiry Date then in effect, provided that any failure to so
     notify the Borrower shall be deemed to be a disapproval by such Bank of the
     Borrower's Extension Request. The Commitment and/or Contingent Commitment,
     as applicable, of any Bank which does not so agree shall terminate upon the
     Expiry Date then in effect as to such Bank. No Bank shall be obligated to
     grant any extension pursuant to this Section 3.04(a) and any such extension
     shall be in the sole discretion of each Bank. The Borrower shall pay to
     each Bank which does not so agree all amounts owing under its Note and this
     Agreement on the effective date of the termination of such Bank's
     Commitment.

          (b) If less than all of the Banks to which an Extension Request is
     delivered consent to an Extension Request (each Bank that has not so
     consented being a "Declining Bank", and each other Bank being an "Extending
     Bank"), the Borrower shall have the right to require any Declining Bank to
     assign in full its rights and obligations under this Agreement (i) to any
     one or more Extending Banks designated by the Borrower that have offered in
     their returned counterpart of the Extension Request to increase their
     respective Commitments (and, if any such Extending Bank is a Part C Bank,
     its Contingent Commitment) in an aggregate amount at least equal to the
     amount of such Declining Bank's Commitment (and, if such Declining Bank is
     a Part C Bank, its Contingent Commitment) (each such Extending Bank being
     an "Increasing Extending Bank") and (ii) to the extent of any shortfall in
     the aggregate amount of extended Commitments or extended Contingent
     Commitments, to any one or more Eligible Transferees designated by the
     Borrower that agree to assume all of such rights and obligations (each such
     Eligible Transferee being a "Replacement Bank"), provided that (1) such
     Declining Bank shall have received payment of all amounts owing under its
     Note and this Agreement on the effective date of such assignment, (2) such
     assignment shall otherwise have occurred in compliance with Section 11.04
     including, without limitation, clauses (iii) and (iv) of subsection (b)
     thereof and (3) the effective date of such assignment shall be the date
     specified by the Borrower and agreed to by the Replacement Bank or
     Increasing Extending Bank, as the case may be, which date shall be on or
     prior to the applicable Expiry Date.

                                       15

<PAGE>

                                    SECTION 4

                              PREPAYMENTS: PAYMENTS

     SECTION 4.01. VOLUNTARY PREPAYMENTS. The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part from time to
time, provided that the Borrower shall give the Agent at its Notice Office at
least three Business Days' prior notice of its intent to prepay the Loans.

     SECTION 4.02. MANDATORY PREPAYMENTS. On each Pledged Reserve Repayment
Date, an amount equal to 100% of the Pledged Reserves Account Funds with respect
to which the Borrower has delivered a Pledged Reserve Release Notice as required
by Section 7.11 shall be applied as a mandatory prepayment of principal of
outstanding Loans.

     SECTION 4.03. METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Agent not later than 12:00 Noon (New York time) on the date when due and
shall be made in Dollars in immediately available funds at the Agent's Payment
Office. Whenever any payment to be made hereunder or under the Note shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable at the applicable rate during
such extension.

     SECTION 4.04. NET PAYMENTS. All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense. All
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payment (but excluding any tax imposed on or
measured by the net income or gross income or gross receipts of any Bank (other
than withholding taxes or taxes in lieu of withholding taxes) pursuant to the
laws of the jurisdiction (or any political subdivision or taxing authority
thereof or therein) in which the principal office or lending office of such Bank
is located or in which such Bank is organized or in which such Bank is doing
business through a branch or office from which such jurisdiction treats a Loan
as having been made) and all interest, penalties or similar liabilities with
respect thereto (collectively, "Taxes"). If any Taxes are so levied or imposed,
the Borrower agrees to pay the full amount of such Taxes and such additional
amounts as may be necessary so that every payment of all amounts due hereunder
or under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such Note. The
Borrower shall also reimburse each Bank, upon its written request, which request
shall show the basis for calculation of such reimbursement, for taxes imposed on
or measured by the net income of such Bank pursuant to the laws of the
jurisdiction (or any political subdivision or taxing authority thereof or
therein) in which its principal office or lending office is located or in which
such Bank is organized or in which such Bank is doing business through a branch
or office from which such jurisdiction treats a Loan as having been made as it
shall determine are payable by it in respect of amounts paid to or on behalf of
such Bank pursuant to the preceding sentence. The Borrower will furnish to the
applicable Bank within 45 days after the date the payment of any Taxes is due
pursuant to applicable law certified copies of any tax receipts available to the
Borrower evidencing such

                                       16

<PAGE>

payment by the Borrower. The Borrower will indemnify and hold harmless each
Bank, and reimburse each Bank upon its written request, for the amount of any
Taxes so levied or imposed and paid by such Bank.

     SECTION 4.05. LIMITATIONS ON SOURCES OF PAYMENT. Notwithstanding any other
provision of this Agreement or of any other Credit Document, the obligations of
the Borrower to make payments of principal and interest on the Loans and the
Notes are limited recourse obligations of the Borrower payable solely from the
Pledged Recoveries, the Pledged Premiums, the Pledged Reserves Account Funds and
the other Collateral, and none of the Agent, the Collateral Agent, any Bank or
any other Person shall be entitled to procure any money judgment against or to
levy or foreclose upon or attach any other assets or properties of the Borrower
for payment of such obligations; provided, however, that nothing herein
contained shall limit, restrict or impair the lien created by the Security
Agreement or the right of any Bank to exercise any of its rights herein or in
any of the other Credit Documents upon the occurrence of an Event of Default or
otherwise, or to bring suit and obtain a judgment against the Borrower (recourse
thereon being limited as to payment of principal and interest on the Loans and
the Notes as provided in this Section 4.05).

                                    SECTION 5

                    CONDITIONS PRECEDENT TO ALL CREDIT EVENTS

     The obligation of the Banks to make Loans is subject, at the time of each
such Credit Event, to the satisfaction of the following conditions:

     SECTION 5.01. LOSS THRESHOLD INCURRENCE DATE. At or prior to the time of
each such Credit Event, the Loss Threshold Incurrence Date shall have occurred.

     SECTION 5.02. NOTICE OF BORROWING. Prior to the making of each Loan, the
Agent shall have received a Notice of Borrowing meeting the requirements of
Section 2.03.

     The acceptance of the proceeds of each Credit Event shall constitute a
representation and warranty by the Borrower to each Bank that the Loss Threshold
Incurrence Date has occurred.

     SECTION 5.03. PART C LOANS. In the case of any Part C Loans, the Part C
Banks shall have received the notice from the Agent described in Section
2.04(b).

                                    SECTION 6

                   REPRESENTATIONS, WARRANTIES AND AGREEMENTS

     In order to induce the Banks to enter into this Agreement, the Borrower
makes the following representations, warranties and agreements as of the date
hereof, which shall survive the execution and delivery of this Agreement and the
Notes (it being understood and agreed that any representation or warranty which
expressly refers by its terms to a specified date shall be required to be true
and correct in all material respects only as of such date):

                                       17

<PAGE>

     SECTION 6.01. CORPORATE STATUS. The Borrower (i) is a duly organized and
validly existing limited liability company in good standing under the laws of
Bermuda, (ii) has the power and authority to own its property and assets and to
transact the business in which it is engaged and (iii) is duly qualified as a
foreign corporation and in good standing in each jurisdiction where the
ownership, leasing or operation of property or the conduct of its business
requires such qualification, except where the failure to qualify would not have
a material adverse effect on the business, operations, property, assets,
liabilities, prospects or condition (financial or otherwise) of the Borrower.

     SECTION 6.02. CORPORATE POWER AND AUTHORITY. The Borrower has the corporate
power to execute, deliver and perform the terms and provisions of each of the
Credit Documents to which it is party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of each of
such Credit Documents. The Borrower has duly executed and delivered each of the
Credit Documents to which it is party, and each of such Credit Documents
constitutes or, in the case of each such other Credit Document when executed and
delivered, will constitute, its legal, valid and binding obligation enforceable
in accordance with its terms.

     SECTION 6.03. NO VIOLATION. Neither the execution, delivery or performance
by the Borrower of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, nor the use of the proceeds of the
Loans (i) will contravene any provision of any law, statute, rule or regulation
or any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (other than Permitted Liens) upon any
of the property or assets of the Borrower pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement, contract or instrument to which the Borrower is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the Memorandum of Association or Bye-laws
of the Borrower.

     SECTION 6.04. GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Credit Document to which the Borrower is a party or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.

     SECTION 6.05. FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; ETC.

          (a) The combined balance sheet of the Group at September 30, 2005, and
     the related combined statements of income and retained earnings and changes
     in financial position of the Group for the fiscal year ended on such date,
     all heretofore furnished to the Banks, present fairly the combined
     financial condition of the Group at September 30, 2005 and the combined
     results of the operations of the Group for the fiscal year ended on such
     date. All such financial statements have been prepared in accordance with
     generally accepted accounting principles and practices consistently
     applied. Since September 30,

                                       18

<PAGE>

     2005, there has been no material adverse change in the business,
     operations, property, assets, liabilities, prospects or condition
     (financial or otherwise) of the Borrower or of the Group taken as a whole.

          (b) Except as fully reflected in the financial statements delivered
     pursuant to Section 6.05(a), there are no liabilities or obligations with
     respect to the Group of any nature whatsoever (whether absolute, accrued,
     contingent or otherwise and whether or not due) which, either individually
     or in aggregate, would be material to the Borrower or to the Group taken as
     a whole. The Borrower does not know of any basis for the assertion against
     the Borrower or the Group of any liability or obligation of any nature
     whatsoever that is not fully reflected in the financial statements
     delivered pursuant to Section 6.05(a) which, either individually or in the
     aggregate, could reasonably be expected to be material to the Borrower or
     to the Group taken as a whole. At September 30, 2005 Average Annual Debt
     Service was $1,747,000,000. As of September 30, 2005 the Borrower had
     aggregate Losses (net of recoveries) since formation of less than
     $1,000,000.

     SECTION 6.06. LITIGATION. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened (i) with respect
to any Credit Document or (ii) that are reasonably likely to materially and
adversely affect the business, operations, property, assets, liabilities,
prospects or condition (financial or otherwise) of the Borrower.

     SECTION 6.07. TRUE AND COMPLETE DISCLOSURE. All factual information (taken
as a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower in writing to the Banks (including without limitation all information
contained in the Credit Documents) for purposes of or in connection with this
Agreement or any transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of the
Borrower in writing to the Banks will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading at such time in light of the circumstances
under which such information was provided.

     SECTION 6.08. USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of each
Loan shall be used by the Borrower only to establish and/or maintain Permitted
Reserves in the Pledged Reserves Account and/or to pay or reimburse itself for
the payment of Losses in respect of the Covered Portfolio and no part of the
proceeds of any Loan will be used by the Borrower to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof will violate or be inconsistent with the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System.

     SECTION 6.09. TAX RETURNS AND PAYMENTS. The Borrower has filed all tax
returns required to be filed by it and has paid all income taxes payable by it
which have become due pursuant to such tax returns and all other taxes and
assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith and for which adequate
reserves have been established. The Borrower has paid, or has provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the

                                       19

<PAGE>

payment of, all federal and state income taxes applicable for all prior fiscal
years and for the current fiscal year to the date hereof.

     SECTION 6.10. NO ERISA PLANS. The Borrower has not maintained or
contributed to any Plan.

     SECTION 6.11. CAPITALIZATION. The authorized share capital of the Borrower
consists of 250,000 shares of Class A common shares, $1.00 par value, of which
107,448 shares were issued and outstanding at December 31, 2005, 2,500,000
shares of Class B common shares, $1.00 par value, of which 1,883,687 shares were
issued and outstanding at December 31, 2005, 500.01 shares of Class B preference
shares, $1,000 per value, of which no shares were issued and outstanding at
December 31, 2005, and 40,000,000 shares of Class A preference shares, $1.00 par
value, of which 40,000,000 shares were issued and outstanding at December 31,
2005. All such outstanding shares have been duly and validly issued, and are
fully paid and non-assessable.

     SECTION 6.12. SUBSIDIARIES. The Borrower has no Subsidiaries.

     SECTION 6.13. COMPLIANCE WITH STATUTES, ETC. The Borrower is in compliance
with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls), except such noncompliances as would not
reasonably be expected to have, in the aggregate, a material adverse effect on
the business, operations, property, assets, liabilities, prospects or condition
(financial or otherwise) of the Borrower.

     SECTION 6.14. INVESTMENT COMPANY ACT. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

     SECTION 6.15. PUBLIC UTILITY HOLDING COMPANY ACT. The Borrower is not a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

     SECTION 6.16. COMPLIANCE WITH INSURANCE LAW. The Borrower is duly licensed
to transact business as a Class 3 insurance limited liability company by the
Bermuda Registrar of Companies and (a) has all other requisite federal, state
and other governmental licenses, authorizations, permits, consents and approvals
to conduct its insurance and other business as presently conducted and proposed
to be conducted in Bermuda and in each jurisdiction in which it writes or issues
policies of insurance (including without limitation any form of financial
guaranty insurance, fidelity and surety insurance or credit insurance), surety
bonds, guaranties, contracts of reinsurance or other undertakings similar to the
foregoing (collectively, "Insurance Contracts") or in which it conducts
business, except for failures, if any, to have such licenses, authorizations,
permits, consents and approvals which singly or in the aggregate could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, prospects or condition (financial or
otherwise) of the Borrower or the ability of the Borrower to perform its
obligations under this Agreement or any of the other Credit

                                       20

<PAGE>

Documents, (b) has duly established and maintains all reserves required under
the Bermuda Insurance Act 1978 (the "Bermuda Insurance Act") and related
regulations, except for failures, if any, to maintain reserves which could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, prospects or condition (financial or
otherwise) of the Borrower or the ability of the Borrower to perform its
obligations under this Agreement or any of the other Credit Documents, (c) has
duly filed all annual statements, financial statements and other information and
reports required to have been filed with the Bermuda Registrar of Companies,
except for failures, if any, to file which singly or in the aggregate could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, prospects or condition (financial or
otherwise) of the Borrower or the ability of the Borrower to perform its
obligations under this Agreement or any of the Credit Documents, and (d) is in
compliance (and has not received any notice from any administrative or
governmental body or an authorized representative thereof claiming that it is
not in compliance) with the Bermuda Insurance Act and related regulations,
except with respect to failures, if any, to comply which singly or in the
aggregate could not reasonably be expected to have a material adverse effect on
the business, operations, property, assets, liabilities, prospects or condition
(financial or otherwise) of the Borrower or the ability of the Borrower to
perform its obligations under this Agreement or any of the other Credit
Documents.

     SECTION 6.17. COVERED PORTFOLIO. Substantially all of the Insured
Obligations in the Covered Portfolio are reinsured by the Borrower under
Insurance Contracts in the form or forms heretofore supplied to the Agent in
accordance with the Borrower's underwriting criteria. The Borrower has no reason
to believe that its rights included among the Collateral are not valid and
binding against the obligors thereunder in accordance with their respective
terms, except insofar as enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and the availability of equitable remedies, except
for such Collateral which, in the aggregate, could not reasonably be expected to
have a material adverse effect on the right and ability of the Collateral Agent,
in accordance with the Security Agreement, to realize upon the Collateral as a
whole. Schedule II attached hereto sets forth a listing, as of December 31,
2005, of the reinsurer and the related amounts (both ceded par in force and
ceded principal and interest in force) of reinsured Insured Obligations as of
such date.

     SECTION 6.18. RATINGS. The Borrower's Rating assigned by S&P is AAA and the
Borrower's Rating assigned by Moody's is Aa3.

                                    SECTION 7

                              AFFIRMATIVE COVENANTS

     The Borrower covenants and agrees that on and after the date hereof and
until the Commitments have terminated and the Loans and the Notes, together with
interest, Fees and all other obligations incurred hereunder and thereunder, are
paid in full:

     SECTION 7.01. INFORMATION COVENANTS. The Borrower will furnish directly to
each Bank:

                                       21

<PAGE>

          (a) QUARTERLY FINANCIAL STATEMENTS. Within 60 days after the close of
     each of the first three quarterly accounting periods in each fiscal year of
     the Borrower, the combined balance sheet of the Group as at the end of such
     quarterly period and the related combined statements of income and retained
     earnings for such quarterly period and for the elapsed portion of the
     fiscal year ended with the last day of such quarterly period, in each case
     setting forth comparative figures for the related periods in the prior
     fiscal year, all of which shall be certified by the chief financial officer
     or the treasurer of the Borrower, subject to normal year-end audit
     adjustments.

          (b) ANNUAL FINANCIAL STATEMENTS. Within 120 days after the close of
     each fiscal year of the Borrower, (i) the combined balance sheet of the
     Group as at the end of such fiscal year and the related combined statements
     of income and retained earnings and of cash flows for such fiscal year
     setting forth comparative figures for the preceding fiscal year and audited
     by PricewaterhouseCoopers or such other independent certified public
     accountants of recognized national standing reasonably acceptable to the
     Agent, together with a report of such accounting firm stating that in the
     course of its regular audit of the financial statements of the Group and
     its Subsidiaries, the audit was conducted in accordance with generally
     accepted auditing standards, (ii) the balance sheet of the Borrower as at
     the end of such fiscal year and the related statements of income and
     retained earnings and of cash flows for such fiscal year setting forth
     comparative figures for the preceding fiscal year and audited by
     PricewaterhouseCoopers or such other public accountants of recognized
     national standing reasonably acceptable to the Agent, together with a
     report of such accounting firm stating that in the course of its regular
     audit of the financial statements of the Borrower, the audit was conducted
     in accordance with generally accepted auditing standards and (iii) if
     prepared, management's discussions and analysis of the important
     operational and financial developments during such fiscal year.

          (c) MANAGEMENT LETTERS. Promptly after the receipt thereof by the
     Borrower or any of its Subsidiaries, a copy of any "management letter"
     received by the Borrower or such Subsidiary from its certified public
     accountants and the management's responses thereto.

          (d) OFFICER'S CERTIFICATES. At the time of the delivery of the
     financial statements provided for in Section 7.01(a) or 7.01(b), a
     certificate of the chief financial officer or treasurer of the Borrower (i)
     listing the Insured Obligations in the Covered Portfolio (and if the Loss
     Threshold Incurrence Date has occurred identifying the Insurance Contracts
     with respect thereto) and calculating in reasonable detail as of the date
     of such financial statements (A) if such date is prior to the Loss
     Threshold Incurrence Date, (1) the Borrower's Cumulative Losses (stating
     separately any Permitted Reserves included therein) for the current Loss
     Incurrence Period and (2) the Average Annual Debt Service, and (B) if such
     date is on or after the occurrence of the Loss Threshold Incurrence Date,
     (1) the date of the occurrence thereof, (2) evidence of the occurrence
     thereof, (3) the amount of Permitted Reserves as of the date of such
     financial statements, and (4) the aggregate amount of Pledged Recoveries
     received by or for the account of the Borrower during the current Loss
     Incurrence Period on or prior to the date of such financial statements,
     (ii) certifying information with respect to reinsured Insured Obligations
     as of the date of such financial statements in a format reasonably
     satisfactory

                                       22

<PAGE>

     to the Agent and (iii) to the effect that, to the best of his knowledge, no
     Default or Event of Default has occurred and is continuing or, if any
     Default or Event of Default has occurred and is continuing, specifying the
     nature and extent thereof.

          (e) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event within
     four Business Days, after an Authorized Officer obtains knowledge thereof,
     written notice of (i) the occurrence of any event which constitutes a
     Default or Event of Default, (ii) any litigation or governmental proceeding
     pending (A) against the Borrower or any of its Subsidiaries which could
     reasonably be expected to have a materially adverse effect upon the
     business, operations, property, assets, liabilities, prospects or condition
     (financial or otherwise) of the Borrower or any of its Subsidiaries or (B)
     with respect to any Credit Document, (iii) any other event which could
     reasonably be expected to have a materially adverse effect upon the
     business, operations, property, assets, liabilities, prospects or condition
     (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv)
     any rating report received by the Borrower published by Moody's, S&P or, if
     either Moody's or S&P no longer rates the claims-paying ability of the
     Borrower, any other nationally recognized rating agency which, with the
     consent of the Borrower, rates the creditworthiness of obligations insured
     by the Borrower, (v) each Loss in excess of $10,000, including without
     limitation, identification of the Insured Obligation with respect to which
     such Loss occurred, (vi) each default by the issuer of any Insured
     Obligation in the Covered Portfolio or other obligor with respect thereto
     which could form the basis of a claim in excess of $10,000 under an
     Insurance Contract and (vii) each default by any party to a reinsurance
     agreement or similar arrangement with the Borrower which covers any
     material amount of Insured Obligations in the Covered Portfolio.

          (f) OTHER REPORTS AND FILINGS. Promptly, copies of all financial
     information, proxy materials and other information and reports, if any,
     which the Group, the Borrower or any Subsidiary of the Borrower shall file
     with the Securities and Exchange Commission or any successor thereto.

          (g) OTHER INFORMATION. From time to time, such other information or
     documents (financial or otherwise) as any Bank may reasonably request,
     including, without limitation, information with respect to, and copies of,
     any relevant reinsurance agreement.

     SECTION 7.02. BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with generally accepted
accounting principles in the United States and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Agent or any Bank to visit
and inspect, during regular business hours and under guidance of officers of the
Borrower or such Subsidiary, any of the properties of the Borrower or such
Subsidiary, and to examine the books of account of the Borrower or such
Subsidiary and discuss the affairs, finances and accounts of the Borrower or
such Subsidiary with, and be advised as to the same by, its and their officers
and independent accountants, all at such reasonable times and intervals and to
such reasonable extent as the Agent or such Bank may request.

                                       23

<PAGE>

     SECTION 7.03. CORPORATE FRANCHISES. The Borrower will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and its material rights, franchises, licenses and patents; provided,
however, that nothing in this Section 7.03 shall prevent (i) transactions by the
Borrower or any of its Subsidiaries which are permitted as exceptions to the
restrictions of Section 8.02 or (ii) the withdrawal by the Borrower of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, prospects or condition
(financial or otherwise) of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.

     SECTION 7.04. COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, prospects or condition
(financial or otherwise) of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.

     SECTION 7.05. ERISA. The Borrower covenants and agrees that neither it nor
any ERISA Affiliate will maintain or contribute to (or have an obligation to
contribute to) a Plan.

     SECTION 7.06. PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, prospects or condition
(financial or otherwise) of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.

     SECTION 7.07. USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans only to pay or reimburse itself for the payment of Losses (including
establishing and/or maintaining Permitted Reserves in the Pledged Reserves
Account) in respect of the Covered Portfolio.

     SECTION 7.08. CONDUCT OF BUSINESS. The Borrower will continue to engage in
business of the same general type as conducted by it on the date hereof.

     SECTION 7.09. UNDERWRITING CRITERIA. The Borrower shall maintain its
criteria for underwriting (i.e., reinsuring) Insurance Contracts substantially
as heretofore in effect.

     SECTION 7.10. COLLECTION OF PLEDGED RECOVERIES AND PLEDGED PREMIUMS. The
Borrower shall at all times use its commercially reasonable efforts to collect
and otherwise realize upon all Pledged Recoveries and Pledged Premiums in
compliance with applicable law and in a commercially reasonable manner.

     SECTION 7.11. PLEDGED RESERVE RELEASE NOTICE. The Borrower hereby
acknowledges and agrees that if, at any time, it shall cease to maintain all or
any portion of Permitted Reserves

                                       24

<PAGE>

in respect of which Pledged Reserves Account Funds have been deposited in the
Pledged Reserves Account, the Borrower as promptly as possible (and in any event
within three Business Days) after it shall cease to maintain such Permitted
Reserves shall give written notice thereof (each such notice, a "Pledged Reserve
Release Notice") to the Agent and the Collateral Agent which notice shall
provide the amount of such Pledged Reserves Account Funds that have been
released.

     SECTION 7.12. REGISTRY. The Borrower hereby covenants that it shall
maintain a register on which it will record the Commitment and Contingent
Commitment from time to time of each of the Banks, the Loans made by each of the
Banks and each repayment in respect of the principal amount of the Loans of each
Bank. Failure to make any such recordation, or any error in such recordation,
shall not affect the Borrower's obligations in respect of such Loans. Upon the
request of the Borrower, the Agent hereby agrees to use its reasonable efforts
to provide to the Borrower such information not otherwise available to the
Borrower, as the Borrower shall reasonably request from time to time in order to
enable it to fulfill its obligations pursuant to this Section 7.12.

                                    SECTION 8

                               NEGATIVE COVENANTS

     The Borrower covenants and agrees that on and after the date hereof and
until the Commitments have terminated and the Loans and the Notes, together with
interest, Fees and all other obligations incurred hereunder and thereunder, are
paid in full:

     SECTION 8.01. LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any Pledged Recoveries, Pledged Premiums, Pledged Reserves Account
Funds or other Collateral, provided that the provisions of this Section 8.01
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):

          (a) the Lien in favor of the Collateral Agent for the benefit of the
     Banks under the Security Agreement or otherwise permitted thereunder;

          (b) inchoate Liens for taxes, assessments or governmental charges or
     levies not yet due or Liens for taxes, assessments or governmental charges
     or levies being contested in good faith and by appropriate proceedings for
     which adequate reserves have been established in accordance with generally
     accepted accounting principles;

          (c) Liens in respect of property or assets of the Borrower or any of
     its Subsidiaries imposed by law, which were incurred in the ordinary course
     of business and do not secure Indebtedness for borrowed money, such as
     carriers', warehousemen's, materialmen's and mechanics' liens and other
     similar Liens arising in the ordinary course of business, which relate to
     Indebtedness which has not been paid when due and payable in accordance
     with its terms and which are being contested in good faith by appropriate
     proceedings, which proceedings have the effect of preventing the forfeiture
     or sale of the property or assets subject to any such Lien;

                                       25

<PAGE>

          (d) Liens incurred in connection with reinsurer trust agreements
     entered into pursuant to Section 114 of the New York Insurance Law;

          (e) a Lien on the Collateral in favor of any provider of a "backstop"
     facility with respect to any Commitment or Contingent Commitment, provided
     such Lien is subordinate and junior (to the extent acceptable to the Agent
     and the Majority Banks) to the Lien in favor of the Collateral Agent for
     the benefit of the Banks pursuant to the Security Agreement; and

          (f) the Lien created pursuant to the Prior Pledge Agreement.

     By executing this Agreement, each Bank acknowledges and agrees to the
Collateral Agent's execution of that letter dated, February 3, 2006 addressed to
Norddeutsche Landesbank Girozentrale regarding the priority of the Lien granted
under the Prior Pledge Agreement.

     SECTION 8.02. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The Borrower will
not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger, amalgamation or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any substantial part of its
property or assets, or purchase or otherwise acquire (in one or a series of
related transactions) all or substantially all of the property or assets (other
than purchases or other acquisitions of inventory, materials and equipment in
the ordinary course of business) of any Person, or permit any of its
Subsidiaries so to do any of the foregoing, except that:

          (a) each of the Borrower and its Subsidiaries may in the ordinary
     course of business sell or lease assets;

          (b) any Subsidiary may wind up its affairs or liquidate or dissolve
     into, and may consolidate or merge with or into, the Borrower or any other
     Subsidiary of the Borrower;

          (c) the assets or stock of any Subsidiary of the Borrower may be
     purchased or otherwise acquired by the Borrower or any other Subsidiary of
     the Borrower;

          (d) the Borrower or any of its Subsidiaries may purchase or otherwise
     acquire all or substantially all of the properties or assets of any Person
     (other than the Borrower) or acquire such Person by merger so long as (i)
     no Default or Event of Default has occurred and is continuing or would
     occur after giving effect thereto, (ii) such purchase, acquisition or
     merger shall not result in any downgrading of the Borrower's Rating
     assigned by Moody's or S&P from that in effect immediately prior to such
     purchase, acquisition or merger and (iii) the Borrower shall deliver to the
     Agent a certificate of the chief financial officer of the Borrower stating
     that such purchase, merger or acquisition complied with the conditions
     contained in this clause (d); and

          (e) the Borrower or any Subsidiary may merge into another entity so
     long as (i) the surviving corporation assumes all obligations of the
     Borrower or such Subsidiary under the Credit Documents and (ii) no Default
     or Event of Default has occurred and is continuing or would occur after
     giving effect thereto.

                                       26

<PAGE>

     SECTION 8.03. AMENDMENTS. The Borrower shall amend, modify or supplement
the Prior Credit Agreement or the Prior Pledge Agreement without the prior
written consent of the Banks.

                                    SECTION 9

                                EVENTS OF DEFAULT

     Upon the occurrence of any of the following specified events (each an
"Event of Default"):

     SECTION 9.01. PAYMENTS. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for two or more Business Days, in the payment when due
of any interest on any Loan or any Note or any Fees or any other amounts owing
hereunder or under any Note; or

     SECTION 9.02. REPRESENTATIONS, ETC. Any representation, warranty or
statement made by or on behalf of the Borrower herein or in any other Credit
Document or in any certificate delivered pursuant hereto or thereto shall prove
to be untrue in any material respect on the date as of which made or deemed
made; or

     SECTION 9.03. COVENANTS. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(e)(i), 7.07, 7.08, 7.09, 7.10, 7.11 or 8 or (ii) default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in Sections 9.01 and 9.02 and clause (i) of this Section 9.03)
contained in this Agreement and such default shall continue unremedied for a
period of 30 days after written notice to the Borrower by the Agent or any Bank;
or

     SECTION 9.04. DEFAULT UNDER OTHER AGREEMENTS. The Borrower or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Notes) with an outstanding principal balance in excess of $10,000,000 beyond
the period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created or (ii) default in the observance or performance
of any agreement or condition relating to any such Indebtedness beyond the grace
period as provided therein (other than the Notes) or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of any such default or other event or
condition 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) to cause any such
Indebtedness to become due prior to its stated maturity; or any Indebtedness of
the Borrower or any of its Subsidiaries shall be declared to be due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof; or

     SECTION 9.05. BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after

                                       27

<PAGE>

commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries, or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries, or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed or unstayed for a period of 60 days, or the Borrower
or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Borrower or any of its Subsidiaries suffers any appointment of any custodian or
the like for it or any substantial part of its property to continue undischarged
or unstayed for a period of 60 days; or the Borrower or any of its Subsidiaries
makes a general assignment for the benefit of creditors; or any corporate action
is taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or

     SECTION 9.06. SECURITY AGREEMENT. (i) The Security Agreement or any
provision thereof shall cease to be in full force and effect, or shall cease in
any material respect to give the Collateral Agent for the benefit of the Banks,
the Liens, rights, powers and privileges purported to be created thereby, or
(ii) the Borrower shall otherwise default in any material respect in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Security Agreement and such default shall
continue unremedied for a period of 30 days after written notice to the Borrower
by the Agent or, in the event there is no Agent, any Bank; or

     SECTION 9.07. JUDGMENTS. One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the aggregate for
the Borrower and its Subsidiaries a liability (not paid or fully covered by
insurance) of $1,000,000 or more at any one time, and all such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 60 days after the entry thereof; or

     SECTION 9.08. CHANGE OF CONTROL. A Change of Control shall occur; or

     SECTION 9.09. OTHER DEFAULT. An Event of Default, as defined in the Prior
Credit Agreement shall have occurred;

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent may or shall upon direction from the
Majority Banks, by written notice to the Borrower, take the following actions to
the extent permitted below (provided, that, if an Event of Default specified in
Section 9.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice to the Borrower as specified below shall
occur automatically without the giving of any such notice): if any Event of
Default has occurred and is continuing, the Agent may declare the principal of
and any accrued interest in respect of all Loans and the Notes and all
obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.

                                       28

<PAGE>

                                   SECTION 10

                                    THE AGENT

     SECTION 10.01. APPOINTMENT. The Banks hereby designate Bayerische
Landesbank, New York Branch, as Agent (for purposes of this Section 10, the term
"Agent" shall also include Bayerische Landesbank, New York Branch, in its
capacity as Collateral Agent pursuant to the Security Agreement) to act as
specified herein and in the other Credit Documents. Each Bank hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Agent to take such action on its behalf
under the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may perform any of
its duties hereunder by or through its officers, directors, agents or employees.

     SECTION 10.02. NATURE OF DUTIES. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
Security Agreement. Neither the Agent nor any of its officers, directors, agents
or employees shall be liable for any action taken or omitted by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
in respect of this Agreement or any other Credit Document except as expressly
set forth herein or therein.

     SECTION 10.03. LACK OF RELIANCE ON THE AGENT. Independently and without
reliance upon the Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of the Borrower and, except as expressly provided in this
Agreement, the Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. The Agent shall not be
responsible to any Bank or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectability, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or the existence or possible existence of
any Default or Event of Default.

                                       29

<PAGE>

     SECTION 10.04. CERTAIN RIGHTS OF THE AGENT. If the Agent shall request
instructions from the Banks with respect to any act or action (including failure
to act) in connection with this Agreement or any other Credit Document, the
Agent shall be entitled to refrain from such act or taking such action unless
and until the Agent shall have received instructions from the Majority Banks or
all the Banks to the extent required by Section 11.11; and the Agent shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Bank or the holder of any Note shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder or under any other Credit Document in accordance with the
instructions of the Majority Banks or all the Banks to the extent required by
Section 11.11, as the case may be.

     SECTION 10.05. RELIANCE. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Agent believed to be the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Credit Document and
its duties hereunder and thereunder, upon advice of counsel selected by the
Agent.

     SECTION 10.06. INDEMNIFICATION. To the extent the Agent is not reimbursed
and indemnified by the Borrower, each Bank will reimburse and indemnify the
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Agent in performing its duties hereunder or under any other Credit
Document, in any way relating to or arising out of this Agreement or any other
Credit Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct.

     SECTION 10.07. THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to make Loans under this Agreement, the Agent shall have the rights
and powers specified herein for a "Bank" and may exercise the same rights and
powers as though it was not performing the duties specified herein; and the term
"Banks," "holders of Notes" or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with the Borrower or any Affiliate of the
Borrower as if they were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower for services in connection
with this Agreement and otherwise without having to account for the same to the
Banks.

     SECTION 10.08. RESIGNATION BY THE AGENT.

          (a) The Agent may resign from the performance of all its functions and
     duties hereunder and/or under the other Credit Documents at any time by
     giving 15 Business Days' prior written notice to the Borrower and the
     Banks. In the case of the resignation by the Agent, such resignation shall
     take effect upon the appointment of a successor Agent pursuant to Section
     10.08(b) or 10.08(c) or as otherwise provided in Section 10.08(d).

                                       30

<PAGE>

          (b) Upon any such notice of resignation by the Agent, the Banks shall
     appoint a successor Agent hereunder or thereunder who shall be a commercial
     bank or trust company reasonably acceptable to the Borrower (it being
     understood and agreed that any Bank is deemed to be acceptable to the
     Borrower).

          (c) If a successor Agent shall not have been so appointed within such
     15 Business Day period, the Agent, with the consent of the Borrower, shall
     then appoint a successor Agent who shall serve as Agent hereunder or
     thereunder until such time, if any, as the Banks appoint a successor Agent
     as provided above.

          (d) If no successor Agent has been appointed pursuant to Section
     10.08(b) or 10.08(c) by the 20th Business Day after the date such notice of
     resignation was given by the Agent, the Agent may appoint any other Bank
     which agrees to such appointment to act as successor Agent.

                                   SECTION 11

                                  MISCELLANEOUS

     SECTION 11.01. PAYMENT OF EXPENSES, ETC. The Borrower shall: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses (a) of the Agent (including, without
limitation, the reasonable fees and disbursements of Kutak Rock LLP, counsel for
the Agent) in connection with the preparation, execution and delivery of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto and (b) of the Agent and the Banks in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Agent and the Banks);
(ii) pay and hold each Bank harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters and
save such Bank harmless from and against any and all liabilities with respect to
or resulting from any delay or omission (other than to the extent attributable
to such Bank) to pay such taxes; and (iii) except as otherwise provided in
Section 4.05, indemnify each Bank, its officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, and reasonable costs, expenses and disbursements incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or not
such Bank is a party thereto) related to the entering into and/or performance of
this Agreement or any other Credit Document or the use of the proceeds of any
Loans hereunder or the consummation of any transactions contemplated herein or
in any other Credit Document, including, without limitation, the reasonable fees
and disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such liabilities, obligations,
losses, etc., to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).

     SECTION 11.02. RIGHT OF SETOFF. Except as otherwise provided in Section
4.05, in addition to any rights now or hereafter granted under applicable law or
otherwise, and not by

                                       31

<PAGE>

way of limitation of any such rights and to the extent permitted by applicable
law, during the continuance of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special), and any other Indebtedness at
any time held or owing by such Bank (including without limitation by branches
and agencies of such Bank wherever located) to or for the credit or the account
of the Borrower against and on account of the Obligations and liabilities of the
Borrower to such Bank under this Agreement or under any of the other Credit
Documents, and all other claims of any nature or description arising out of or
connected with this Agreement or any other Credit Document, irrespective of
whether or not the Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured, provided however that (i) except to the extent provided in the next
succeeding clause (ii), no Bank is authorized hereunder to take any of the
foregoing actions, nor shall any Bank exercise any other right of setoff or
bankers' lien or any other right now or hereafter granted under applicable law
with respect to the Pledged Reserves Account or any portion of the Pledged
Reserves Account Funds or any Collateral contained in the Pledged Reserves
Account (each of the Agent, the Collateral Agent and each Bank hereby waiving,
to the extent permitted by applicable law, any such right) and (ii) from and
after receipt by the Agent or the Collateral Agent of any Pledged Reserve
Release Notice, the Agent, the Collateral Agent or any Bank is authorized to and
may exercise, to the extent permitted by applicable law, any of such foregoing
actions or such rights only with respect to the amount of Pledged Reserves
Account Funds described in such Pledged Reserve Release Notice and the other
Collateral contained in the Pledged Reserves Account in an amount equal to the
interest and other earnings on such Pledged Reserves Account Funds.

     SECTION 11.03. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Borrower or any
Bank, at its address listed opposite its name on the signature page hereto; and
if to the Agent at its Notice Office; or, as to any Bank or the Agent, at such
other address as shall be designated by such party in a written notice to the
other parties hereto and, as to each other party, at such other address as shall
be designated by such party in a written notice to the Borrower and the Agent.
All such notices and communications shall not be effective until received by the
Agent or the Borrower.

     SECTION 11.04. BENEFIT OF AGREEMENT.

          (a) This Agreement shall be binding upon and inure to the benefit of
     and be enforceable by the respective successors and assigns of the parties
     hereto; provided, however, that the Borrower may not assign or transfer any
     of its rights or obligations hereunder without the prior written consent of
     the Banks and, provided further, that, no Bank may transfer or assign its
     rights or obligations hereunder or under any of the other Credit Documents,
     except as provided in this Section 11.04, provided further, that no Bank
     shall transfer, grant or assign any participation under which the
     participant shall have rights to approve any amendment to or waiver of this
     Agreement or any of the other Credit Documents (i) except to the extent
     such amendment or waiver (A) extends the final maturity of any Loan or Note
     other than in accordance with Section 3.04, or reduces

                                       32

<PAGE>

     the rate or extends the time of payment of interest or Fees thereon, or
     reduces the principal amount thereof, or increases the Commitment of any
     Bank which is not a Part C Bank or the Contingent Commitment of any Part C
     Bank over the amount thereof then in effect (it being understood that a
     waiver of any Default or Event of Default shall not constitute a change in
     the terms of any Commitment of any Bank which is not a Part C Bank or the
     Contingent commitment of any Part C Bank), (B) releases any material
     portion of the Collateral under the Security Agreement except as shall be
     otherwise provided in any Credit Document, (C) consents to the assignment
     or transfer by the Borrower of any of its rights and obligations under any
     Credit Document, (D) amends the definition of Loss Threshold Incurrence
     Date other than to increase the dollar amount or the percentage specified
     therein, (E) reduces the percentage specified in the definition of Majority
     Participants or (F) amends, modifies or waives any provision of this
     Section 11.04 or (ii) except to the extent that a Bank may permit its
     Majority Participants to approve any material written amendment,
     modification, waiver or release of any other provision of this Agreement or
     any other Credit Document which would, if effected, materially adversely
     affect the interests of its participants. "Majority Participants" for
     purposes of this Section 11.04 shall mean, with respect to each Bank, at
     any time participants of such Bank participating in at least 51% of the
     aggregate principal amount of Loans made by such Bank and outstanding at
     such time, or if no such Loans are outstanding at such time, participants
     of such Bank participating in at least 51% of the Commitment of such Bank
     which is not a Part C Bank or Contingent Commitment of any such Bank that
     is a Part C Bank at such time. In the case of any such participation, the
     participant shall not constitute a "Bank" hereunder and shall not have any
     rights under this Agreement or any of the other Credit Documents (the
     participant's rights against any Bank in respect of such participation to
     be those set forth in the agreement executed by such Bank in favor of the
     participant relating thereto) and all amounts payable by the Borrower
     hereunder shall be determined as if such Bank had not sold such
     participation, except that the participant shall be entitled to the
     benefits of Section 2.07 or 4.04 of this Agreement to the extent that such
     Bank would be entitled to such benefits if the participation had not been
     transferred, granted or assigned.

          (b) Notwithstanding the foregoing, any Bank (or any Bank together with
     one or more other Banks) may (and, at the direction of the Borrower
     following a rating downgrade of such Bank, shall) assign all or a portion
     of its Commitment (plus, if such Bank shall be a Part C Bank, such Bank's
     Contingent Commitment) and related outstanding rights and Obligations
     hereunder to one or more Eligible Transferees, each of which assignees
     shall become a party to this Agreement as a Bank and, if applicable, a Part
     C Bank, by execution of an Assignment and Assumption Agreement and delivery
     of such Assignment and Assumption Agreement to the Borrower and the Agent,
     provided that (i) new Notes will be issued to such new Bank in the stated
     amount of its assumed Commitment (plus, if such Bank shall be a Part C
     Bank, such Bank's Contingent Commitment), and to the assigning Bank in the
     stated amount of the Commitment (plus, if such Bank shall be a Part C Bank,
     the Contingent Commitment) if any, retained by it upon the request of such
     new Bank or assigning Bank and the surrender of the Note previously issued
     to the assigning Bank (or the execution and delivery to the Borrower of an
     indemnity satisfactory to the Borrower), such new Notes to be in conformity
     with the requirements of Section 2.05 to the extent needed to reflect the
     revised Commitments

                                       33

<PAGE>

     and, if applicable, Contingent Commitments, (ii) unless such assignment is
     to an Affiliate of such assigning Bank with the same or higher unsecured
     senior debt rating, and so long as no Default or Event of Default exists at
     the time of such assignment, the Borrower shall have consented to such
     assignment, (iii) at the time of such assignment, the new Bank or (except
     to the extent the new Bank is an affiliate of the assigning Bank) its
     parent shall have an unsecured senior debt rating (or shadow rating as
     reflected in a letter) by each of Moody's and S&P (A) acceptable to the
     Borrower (if such assignment is at the direction of the Borrower) or (B) no
     lower than the unsecured senior debt rating (or shadow rating as reflected
     in a letter) by each of Moody's and S&P of the assigning Bank or its parent
     (if such assignment is not at the direction of the Borrower), (iv) in the
     case of any assignment of all or a portion of a Part C Bank's Contingent
     Commitment, the new Part C Bank or its parent shall have, at the time of
     such assignment, an unsecured senior debt rating (or shadow rating as
     reflected in a letter) by each of Moody's and S&P of Aaa and AAA,
     respectively, (v) such assignment shall not result in a downgrading of the
     Borrower's Rating by Moody's or S&P from that in effect immediately prior
     to such assignment, (vi) the assigning Bank shall provide notice of any
     such assignment to the Agent and the Borrower and the Borrower shall
     provide notice of same to Moody's and S&P and (vii) the new Bank shall
     deliver a legal opinion addressed to each of the Borrower, Moody's and S&P
     dated the effective date of the applicable assignment to the effect that
     this Agreement constitutes its legal, valid and binding obligation
     enforceable in accordance with its terms, except to the extent that the
     enforceability thereof may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or other similar laws generally affecting
     creditor's rights and by equitable principles (regardless of whether
     enforcement is sought in equity or at law) as the same may be applied in
     the event of bankruptcy or similar proceedings with respect to such new
     Bank. To the extent of any assignment pursuant to this Section 11.04(b),
     the assigning Bank shall be relieved of its obligations hereunder with
     respect to its assigned Commitment. To the extent that an assignment of all
     or any portion of a Bank's Commitment and related outstanding Obligations
     pursuant to this Section 11.04(b) would at the time of such assignment,
     result in increased costs under Section 2.07 or 4.04 from those being
     charged by the respective assigning Bank prior to such assignment, then the
     Borrower shall not be obligated to pay such increased costs (although the
     Borrower shall be obligated to pay any other increased costs of the type
     described above resulting from changes in applicable law, or government
     rules, regulations, orders or requests after the date of the respective
     assignment).

          (c) Upon the execution and delivery of an Assignment and Assumption
     Agreement in accordance with, and subject to the restrictions of, Section
     11.04(b), the assignee thereunder shall be a party hereto and, to the
     extent that rights and obligations hereunder and under the other Credit
     Documents have been assigned to it pursuant to such Assignment and
     Assumption Agreement, have the rights and obligations of a "Bank" or Part C
     Bank, as applicable hereunder and thereunder.

          (d) Any Bank claiming any amounts payable pursuant to Section 4.04
     shall use reasonable efforts (consistent with legal and regulatory
     restrictions and subject to overall policy considerations of such Bank) to
     designate another lending office for its Commitment or Loans or take such
     other action to minimize such amounts, as may be

                                       34

<PAGE>

     reasonably requested by the Borrower, provided that such designation is
     made or such other action is taken on such terms that such Bank and its
     lending office suffer no economic, legal or regulatory disadvantage.

          (e) Nothing in this Agreement shall prevent or prohibit any Bank from
     pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
     of borrowings made by such Bank from such Federal Reserve Bank.

          (f) Each Bank shall promptly notify the Borrower of any change in the
     location of its applicable lending office.

     SECTION 11.05. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of any Bank or the holder of any Note in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and any Bank or the holder of any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. Except as otherwise expressly provided herein or in any
other Credit Document, the rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which any Bank would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Bank or the holder of any Note to any other or
further action in any circumstances without notice or demand.

     SECTION 11.06. CALCULATIONS; COMPUTATIONS.

          (a) The financial statements to be furnished to the Banks pursuant to
     Section 7.01(a) and (b) shall be made and prepared in accordance with
     generally accepted accounting principles in the United States consistently
     applied throughout the periods involved (except as set forth in the notes
     thereto or as otherwise disclosed in writing by the Borrower to the Banks).

          (b) All computations of interest hereunder shall be made on the basis
     of a year of 360 days for the actual number of days (including the first
     day but excluding the last day) occurring in the period for which such
     interest is payable.

     SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

          (a) This Agreement and the other Credit Documents and the rights and
     obligations of the parties hereunder and thereunder shall be construed in
     accordance with and be governed by the law of the State of New York. Any
     legal action or proceeding against the Borrower with respect to this
     Agreement or any other Credit Document may be brought in the courts of the
     State of New York or of the United States for the Southern District of New
     York, and, by execution and delivery of this Agreement, the Borrower hereby
     irrevocably accepts for itself and in respect of its property, generally
     and unconditionally, the jurisdiction of the aforesaid courts. The Borrower
     irrevocably consents to the service of process out of any of the
     aforementioned courts in any such

                                       35

<PAGE>

     action or proceeding by the mailing of copies thereof by registered or
     certified mail, postage prepaid, to the Borrower at its address set forth
     opposite its signature below, such service to become effective 30 days
     after such mailing. Except as otherwise provided in Section 4.05, nothing
     herein shall affect the right of the Agent or any Bank under this Agreement
     to serve process in any other manner permitted by law or to commence legal
     proceedings or otherwise proceed against the Borrower in any other
     jurisdiction.

          (b) The Borrower hereby irrevocably waives any objection which it may
     now or hereafter have to the laying of venue of any of the aforesaid
     actions or proceedings arising out of or in connection with this Agreement
     or any other Credit Document brought in the courts referred to in Section
     11.07(a) and hereby further irrevocably waives and agrees not to plead or
     claim in any such court that any such action or proceeding brought in any
     such court has been brought in an inconvenient forum.

     SECTION 11.08. OBLIGATION TO MAKE PAYMENTS IN DOLLARS. Subject to the
provisions of Section 4.05, the obligation of the Borrower to make payment in
Dollars of the principal of and interest on the Notes and any other amounts due
hereunder or under any other Credit Document to the Payment Office of the Agent
as provided in Section 4.03 shall not be discharged or satisfied by any tender,
or any recovery pursuant to any judgment, which is expressed in or converted
into any currency other than Dollars, except to the extent such tender or
recovery shall result in the actual receipt by the Agent at its Payment Office
of the full amount of Dollars expressed to be payable in respect of the
principal of and interest on the Notes and all other amounts due hereunder or
under any other Credit Document. Subject to the provisions of Section 4.05, the
obligation of the Borrower to make payments in Dollars as aforesaid shall be
enforceable as an alternative or additional cause of action for the purpose of
recovery in Dollars of the amount, if any, by which such actual receipt shall
fall short of the full amount of Dollars expressed to be payable in respect of
the principal of and interest on the Notes and any other amounts due under any
other Credit Document, and shall not be affected by judgment being obtained for
any other sums due under this Agreement or under any other Credit Document.

     SECTION 11.09. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Agent.

     SECTION 11.10. HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.

     SECTION 11.11. AMENDMENT OR WAIVER. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Majority Banks and the Agent; provided, however, that
no such change, waiver, discharge or termination shall, without the consent of
each Bank (other than any Bank that is, at the time of the proposed extension,
release, amendment, reduction or consent, a Defaulting Bank; provided, however,
that, with respect to any matter described in clause (i) or (ii) of this Section
11.11, the consent of

                                       36

<PAGE>

each Defaulting Bank which at such time has a Loan outstanding shall also be
required) (i) extend the final maturity of any Loan or Note other than in
accordance with Section 3.04 or reduce the rate or extend the time of payment of
interest or Fees thereon, or reduce the principal amount thereof, or increase
the Commitment of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default shall not constitute
a change in the terms of any Commitment of any Bank), (ii) release any material
portion of the Collateral under the Security Agreement except as shall be
otherwise provided in any Credit Document, (iii) amend, modify or waive any
provision of this Section 11.11, (iv) reduce the percentage specified in the
definition of Majority Banks, (v) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under any Credit Document or (vi)
amend the definition of Loss Threshold Incurrence Date other than to increase
the dollar amount or the percentage specified therein.

     SECTION 11.12. SURVIVAL. All indemnities set forth herein including,
without limitation, in Sections 2.07, 4.04 and 11.01 shall survive the execution
and delivery of this Agreement and the Notes and the making and repayment of the
Loans.

     SECTION 11.13. EXCLUSIONS FROM COVERED PORTFOLIO. In the event that any
Bank (or any participant to whom such Bank has transferred, granted or assigned
any participation in its rights and obligations hereunder and under the other
Credit Documents) is, or upon the occurrence of any contingency would be,
obligated under the terms of a line of credit, standby bond purchase agreement,
letter of credit, liquidity agreement or similar agreement or arrangement to
purchase any Insured Obligation listed in a certificate delivered by the
Borrower to the Agent pursuant to Section 7.01(d), such Bank (or such
participant) shall promptly notify the Agent, and the Agent shall promptly
notify the Borrower, that such Bank (or such participant) is or would be so
obligated to purchase such Insured Obligation. Upon delivery by the Agent to the
Borrower of any such notice with respect to an Insured Obligation, such Insured
Obligation shall, effective upon delivery of such notice by the Agent to the
Borrower, be excluded from the Covered Portfolio.

     SECTION 11.14. CONFIDENTIALITY. Each of the Agent and each Bank agrees to
take and cause its respective Affiliates to take normal and reasonable
precautions and exercise due care to maintain the confidentially of all
financial information and all other information reasonably identified as
"confidential" or "secret" by the Borrower and provided to it by either Owner or
the Borrower or by the Agent on the Borrower's behalf, and neither it nor any of
its Affiliates shall use such information other than is connection with or in
enforcement of this Agreement and the other Credit Documents or in connection
with other business now or hereafter existing or contemplated with the Borrower,
except to the extent such information (i) was or becomes generally available to
the public other than as a result of a disclosure by the Agent or any Bank or
(ii) was or becomes available on a non-confidential basis from a source other
than the Borrower, provided that such source is not bound by a confidentiality
agreement with the Borrower known to the Agent or such Bank; provided, however,
that the Agent or any Bank may disclose such information (a) at the request or
pursuant to any requirement of any authority to which the Agent or such Bank is
subject or in connection with an examination of the Agent or such Bank by any
such authority; (b) pursuant to subpoena or other court process, provided that
if not provided by law, the Agent or such Bank will make reasonable efforts to
provide notice to the Borrower of the receipt of such subpoena prior to
delivering confidential material in response

                                       37

<PAGE>

thereto; (c) when required to do so in accordance with the provisions of any
applicable law or regulation; (d) to the extent reasonably required in
connection with any litigation or proceeding with respect to the transactions
contemplated hereby to which the Agent or any Bank or their respective
Affiliates may be party; (e) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Credit Document;
(f) to the Agent's or such Bank's independent auditors and other professional
advisors with a need to know and who agrees to keep such information
confidential to the extent required of the Agent or such Bank hereunder; and (g)
to any assignee or participant, actual or potential, provided that such Person
agrees to keep such information confidential to the same extent required of the
Agent or the Bank hereunder.

     SECTION 11.15. NO DEFAULT. No Default or Event of Default exists or will
exist as of the date hereof upon execution of this Agreement.

                  [Remainder of page intentionally left blank]

                                       38

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused their respective duly
authorized officers to execute and deliver this Agreement as of the date first
above written.

Address:                                RAM REINSURANCE COMPANY LTD.

RAM Re House
46 Reid Street                          By
Hamilton, HM 12                            -------------------------------------
Bermuda                                 Name Richard Lutenski
Attention: Chief Financial Officer      Title Chief Financial Officer
           with a copy to the General
           Counsel
Facsimile No.: (441) 296-6509

560 Lexington Avenue                    BAYERISCHE LANDESBANK, NEW YORK BRANCH,
New York, New York  10022               Individually and as Agent
Attention: Patricia Healy
Facsimile No.: (212) 230-9114
                                        By
                                           -------------------------------------
                                        Name
                                             -----------------------------------
                                        Title
                                              ----------------------------------

                                        By
                                           -------------------------------------
                                        Name
                                             -----------------------------------
                                        Title
                                              ----------------------------------

                    [Signatures continued on following page]

<PAGE>

                      [Signature page to Credit Agreement]

R'schibachstrasse 24                    ZURCHER KANTONALBANK
CH-8037 Zurich
Switzerland
                                        By
                                           -------------------------------------
                                        Name
                                             -----------------------------------
                                        Title
                                              ----------------------------------

                                        By
                                           -------------------------------------
                                        Name
                                             -----------------------------------
                                        Title
                                              ----------------------------------

<PAGE>

                                   SCHEDULE I

                                     PART A

                                   COMMITMENTS

<TABLE>
<CAPTION>
NAME                                      COMMITMENT
----                                     -----------
<S>                                      <C>
Bayerische Landesbank, New York Branch   $40,000,000
                                         -----------
   Total Commitment                      $40,000,000
                                         ===========
</TABLE>

                                     PART B

                                  PART B BANKS

<TABLE>
<S>                                      <C>
Bayerische Landesbank, New York Branch   $40,000,000
</TABLE>

                                     PART C

                       PART C BANKS/CONTINGENT COMMITMENTS

<TABLE>
<CAPTION>
NAME                                     CONTINGENT COMMITMENT
----                                     ---------------------
<S>                                      <C>
Zurcher Kantonalbank                          $40,000,000
   Total Contingent Commitment                $40,000,000
                                              ===========
</TABLE>

<PAGE>

                                   SCHEDULE II

                                COVERED PORTFOLIO

<PAGE>

                                    EXHIBIT A

                               NOTICE OF BORROWING

                                     [Date]

Bayerische Landesbank
New York Branch, as Agent
560 Lexington Avenue
New York, New York 10022

Ladies and Gentlemen:

     The undersigned, RAM Reinsurance Company Ltd. (the "Borrower"), refers to
the Credit Agreement, dated as of February 3, 2006 (as amended, modified and
supplemented from time to time, the "Credit Agreement", the terms defined
therein being used herein as therein defined), among the Borrower, various Banks
from time to time party thereto, and you, as Agent for such banks, and hereby
give you notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement,
that the undersigned hereby requests a Borrowing under the Credit Agreement, and
in that connection sets forth below the information relating to such Borrowing
(the "Proposed Borrowing") as required by Section 2.03 of the Credit Agreement:

     (i) The Business Day of the Proposed Borrowing is _________________.(1)

     (ii) The aggregate principal amount of the Proposed Borrower is
$_______________.

     [(iii) Schedule 1 hereto contains a description of the Loss which the
proceeds of the Loan will be applied to pay, including (a) identification of
Insured Obligation which has given rise to such Loss, (b) the amount of such
Loss, (c) the amount of the Permitted Reserves, if any, being established with
respect to such Loss and (d) the amount of Pledged Premiums, if any, hereafter
payable to the Borrower in respect of such Insured Obligation.](2)

     [(iii) Schedule 1 hereto contains a description of the Permitted Reserve
which the proceeds of the Loan will be applied to establish, including (a) an
identification of the Insured Obligation which is in default or is anticipated
to be in default, (b) the amount of such default, and (c) the amount of Pledged
Premiums, if any, hereafter payable to the Borrower in respect of such Insured
Obligation.](3)

     (iv) The Borrower hereby represents and warrants the following:

----------
(1)  Shall be a Business Day at least two Business Days after the date hereof.

(2)  Include one version of subparagraph (iii).

(3)  Include one version of subparagraph (iii).

<PAGE>

          (a) the Loss Threshold Incurrence Date has occurred;

          (b) after advancing the funds requested hereunder, the aggregate
     principal amount of all Loans made under the Credit Agreement, without
     regard to payments or prepayments (other than prepayments of Loans in
     respect of Reserves not applied to pay Losses), do not exceed Cumulative
     Losses minus the Loss Threshold Amount; and

          (c) the principal amount of the Loan hereby requested does not exceed
     the sum of the Unutilized Commitments.

     The undersigned hereby certifies that the Loss Threshold Incurrence Date
has occurred on or prior to the date of this Notice of Borrowing.

                                        Very truly yours,

                                        RAM REINSURANCE COMPANY LTD.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                      A-2

<PAGE>

                                    EXHIBIT B

                                  FORM OF NOTE

$______________                                                           [Date]

     FOR VALUE RECEIVED, RAM REINSURANCE COMPANY LTD., a Bermuda limited
liability company (the "Borrower"), hereby promises to pay to the order of
____________________________ (the "Bank"), in lawful money of the United States
of America in immediately available funds, at the office of Bayerische
Landesbank, New York Branch, as Agent, located at 560 Lexington Avenue, New
York, New York 10022, on the Expiry Date (as defined in the hereinafter defined
Agreement) the principal sum of $____________________ DOLLARS or, if less, the
then unpaid principal amount of all Loans (as defined in the Agreement) made by
the Bank pursuant to the Agreement.

     The Borrower promises also to pay interest on the unpaid principal amount
hereof in like money at such office at the rates and at the times provided in
Section 2.06 of the Agreement.

     This Note is one of the Notes referred to in the Credit Agreement, dated as
of February 3, 2006 (as amended from time to time, the "Agreement"), among the
Borrower, the lenders from time to time party thereto (including the Bank) and
Bayerische Landesbank, New York Branch, as Agent, and is entitled to the
benefits thereof. This Note is secured by the Security Agreement (as defined in
the Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Expiry Date, in whole or in
part.

     In case an Event of Default (as defined in the Agreement) shall occur and
be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.

     Except as otherwise provided in the Agreement, the Borrower hereby waives
presentment, demand, protest and notice of any kind in connection with this
Note.

     The Bank is authorized to record the date and amount of each Loan and each
payment, prepayment and conversion with respect thereto on the grid attached
hereto or on a continuation thereof which shall be attached hereto and made a
part hereof, and any such notation shall constitute prima facie evidence of the
accuracy of the information so recorded; provided, however, that the failure to
make any such notation shall not affect the validity of the Borrower's
obligations hereunder.

     THE PAYMENT OBLIGATIONS OF THE BORROWER UNDER THIS NOTE ARE LIMITED AS
PROVIDED IN SECTION 4.05 OF THE AGREEMENT.

     THIS NOTE IS TRANSFERABLE ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT.

<PAGE>

     THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF
SUCH STATE.

     IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and
delivered by its duly authorized officer on the date first above written.

                                        RAM REINSURANCE COMPANY LTD.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                      B-2

<PAGE>

                           LOAN AND REPAYMENT SCHEDULE

<TABLE>
<CAPTION>
                   AMOUNT OF     UNPAID
       AMOUNT OF   PRINCIPAL   PRINCIPAL   MATURITY   INTEREST   NOTATION
DATE      LOAN     REPAYMENT    BALANCE      DATE       RATE      MADE BY
----   ---------   ---------   ---------   --------   --------   --------
<S>    <C>         <C>         <C>         <C>        <C>        <C>

</TABLE>

                                      B-3

<PAGE>

                                    EXHIBIT C

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

                                     [Date]

     Reference is made to the Credit Agreement described in Item 2 of Annex I
hereto (as such Credit Agreement may hereafter be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless defined in
Annex I hereto, terms defined in the Credit Agreement are used herein as therein
defined. _____________________ (the "Assignor") and ______________________ (the
"Assignee") hereby agree as follows:

     1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Item 4 of Annex I hereto (the "Assigned Share") of all of the
outstanding rights and obligations under the Credit Agreement relating to the
facilities listed in Item 4 of Annex I hereto, including, without limitation,
(i) in the case of any assignment of all or any portion of the Commitment (if
not theretofore terminated), all rights and obligations with respect to the
Assigned Share of such Commitment, (ii) in the case of the assignment of all or
any portion of the Contingent Commitment (if not theretofore terminated), all
rights and obligations with respect to the Assigned Share of such Contingent
Commitment, and (iii) in the case of any assignment of outstanding Loans, all
rights and obligations with respect to the Assigned Share of such outstanding
Loans. After giving effect to such sale and assignment, the Assignee's
Commitment, the Assignee's Contingent Commitment and the amount of the
outstanding Loans owing to the Assignee will be as set forth in Item 4 of Annex
I hereto.

     2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
the Borrower's Subsidiaries or the performance or observance by the Borrower or
the Borrower's Subsidiaries of any of their obligation under the Credit
Agreement or the other Credit Documents to which they are a party or any other
instrument or document furnished pursuant thereto.

     3. The Assignee (i) confirms that is has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement; (ii) agrees that it

<PAGE>

will, independently and without reliance upon the Assignor or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Transferee
permitted under Section 11.04(b) of the Credit Agreement; (iv) agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Bank and;
(v) has delivered the opinion required by Section 11.04(b) of the Credit
Agreement.

     4. Following the execution of this Assignment and Assumption Agreement by
the Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Agent. The effective date of this
Assignment and Assumption shall be the date specified in Item 5 of Annex I (the
"Settlement Date").

     5. Upon the delivery of a fully executed original hereof to the Assignor
and the Borrower, as of the Settlement Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other Credit
Documents.

     6. It is agreed that the Assignee shall be entitled to (i) all interest on
the Assigned Share of the Loans at the rates specified in Item 6 of Annex I,
(ii) all Commitment Fees (if applicable) on the Assigned Share of the Commitment
at the rate specified in Item 7 of Annex I hereto and (iii) commitment fees on
the Applicable Share of the Contingent Commitment (if applicable) as agreed in a
separate writing between the Assignee and the Assignor, which in each case
accrue on and after the Settlement Date, such interest and, if applicable,
Commitment Fees to be paid by the Agent directly to the Assignee and such
commitment fees on the Applicable Share of the Contingent Commitment (if
applicable) to be paid by the Borrower directly to the Assignee. It is further
agreed that all payments of principal made on the Assigned Share of the Loans
which occur on and after the Settlement Date will be payable directly by the
Borrower to the Assignee. Upon the Settlement Date, the Assignee shall pay to
the Assignor an amount specified by the Assignor in writing which represents the
Assigned Share of the principal amount of the respective Loans made by the
Assignor pursuant to the Credit Agreement which are outstanding on the
Settlement Date, net of any closing costs, and which are being assigned
hereunder. The Assignor and the Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Settlement Date
directly between themselves on the Settlement Date.

     7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW PROVISIONS THEREOF.

                                      C-2

<PAGE>

     8. IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Assignment and Assumption Agreement, as of
the date first above written, such execution also being made on Annex I hereto.

                                        [NAME OF ASSIGNOR],
                                        as Assignor

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        [NAME OF ASSIGNEE],
                                        as Assignee

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

[Consented to as of the
dated hereof:

RAM REINSURANCE COMPANY LTD.

By:                                   (1)
    ---------------------------------
Name:
      -------------------------------
Title:                                ]
       ------------------------------

----------
(1)  Include if Assignee is not an Affiliate of the Assignor with the same or
     higher unsecured senior debt rating.

                                      C-3

<PAGE>

                                                                         ANNEX I

                  ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT

1.   Borrower: RAM Reinsurance Company Ltd.

2.   Name and Date of Credit Agreement:

     Credit Agreement, dated as of February 3, 2006, among RAM Reinsurance
     Company Ltd., various Banks and Bayerische Landesbank, New York Branch, as
     Agent, as amended, modified and supplemented to the date hereof.

3.   Date of Assignment Agreement:

4.   Amounts (as of date of item #3 above):

<TABLE>
<CAPTION>
                                                Contingent       Outstanding
                                   Commitment   Commitment   Principal of Loans
                                   ----------   ----------   ------------------
<S>                                <C>          <C>          <C>
     a. Aggregate Amount for all
        Banks                      $________    $________        $________

     b. Assigned Share(1)           ________%    ________%        ________%

     c. Amount of Assigned Share   $________    $________        $________
</TABLE>

5.   Settlement Date: __________________

6.   Rate of Interest to the Assignee:

     As set forth in Section 2.06 of the Credit Agreement (unless otherwise
     agreed to by the Assignor and the Assignee)(2)

7.   Commitment Fees:

     As set fort in Section 3.01(a) of the Credit Agreement (unless otherwise
     agreed to by the Assignor and the Assignee)(3)

----------
(1)  Percentage taken to 12 decimal places.

(2)  RAM Reinsurance Company Ltd. and the Agent shall direct the entire amount
     of the interest to the Assignee at the rate set forth in Section 2.06 of
     the Credit Agreement, with the Assignor and Assignee effecting any agreed
     upon sharing of the interest through payments by the Assignee to the
     Assignor.

<PAGE>

8.   Notice:

     ASSIGNOR:

9. ___________________________

______________________________
______________________________
Attention: ___________________
Telephone: ___________________
Telecopier: __________________
Reference: ___________________

          ASSIGNEE:

          ______________________________
          ______________________________
          ______________________________
          Attention: ___________________
          Telephone: ___________________
          Telecopier: __________________
          Reference: ___________________

10. Payment Instructions:

          ASSIGNOR:

          ______________________________
          ______________________________
          ______________________________
          Attention: ___________________
          Reference: ___________________

----------
(...continued)

(3)  RAM Reinsurance Company Ltd. shall direct the entire amount of the
     Commitment Fees to the Assignee at the rate set forth in Section 3.01(a) of
     the Credit Agreement, with the Assignor and the Assignee effecting any
     agreed upon sharing of the Commitment Fees through payment by the Assignee
     to the Assignor.

                                      I-2

<PAGE>

          ASSIGNEE:

          ______________________________
          ______________________________
          ______________________________
          Attention: ___________________
          Reference: ___________________

Accepted and Agreed:

[NAME OF ASSIGNEE]                      [NAME OF ASSIGNOR]

By:                                     By:
   ----------------------------------       ------------------------------------
Name:                                   Name:
     --------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

                                      I-3<PAGE>
                                                                   Exhibit 10.18

                                                                  Execution Copy

================================================================================

                              PUT OPTION AGREEMENT

                                     between

                          RAM REINSURANCE COMPANY LTD.

                                       and

                               BLUE WATER TRUST I

                          Dated as of December 23, 2003

================================================================================

<PAGE>

                         PUT OPTION AGREEMENT dated as of December 23, 2003
                    (this "Agreement"), between RAM Reinsurance Company Ltd., a
                    company organized under the laws of Bermuda (the "Company"),
                    and Blue Water Trust I, a Delaware statutory trust (the
                    "Trust").

          WHEREAS, the Company is authorized to issue 500.01 shares of
non-cumulative, redeemable, perpetual preference shares, par value U.S. $1,000
per share, designated as "Class B Preference Shares" (the "Preference Shares"),
which shares have not been and will not be registered with the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"); and

          WHEREAS, the Company and the Trust desire to enter into this Agreement
pursuant to which the Company will have the right to sell, at its option, the
Preference Shares to the Trust, and the Trust will have an obligation to
purchase the Preference Shares upon the Company's exercise of its option and
upon the other terms and conditions agreed upon by the parties and set forth
herein.

          NOW, THEREFORE, in consideration of the foregoing and for other
valuable consideration, the adequacy of which is hereby acknowledged, the
parties hereto agree as follows:

Section 1. Definitions; Interpretation

     1.1 The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular section,
clause or other subdivision, and references to "Sections" refer to sections of
this Agreement except as otherwise expressly provided.

     1.2 In this Agreement the following terms have such meanings as set forth
below:

          "1940 Act" means the Investment Company Act of 1940, as amended.

          "Agreement" has the meaning set forth above in the Preamble.

          "Auction Date" has the meaning set forth in the General Terms.

          "Auction Rate" has the meaning set forth in the General Terms.

          "Broker-Dealer" has the meaning set forth in the Declaration.

          "Business Day" has the meaning set forth in the Declaration.

          "Class A Preference Shares" means such Class A Preference Shares of
the Company as issued and outstanding from time to time.

          "Company" has the meaning set forth above in the preamble.

<PAGE>

          "Company Bye-laws" means the bye-laws of the Company, a copy of which
is attached hereto as Annex C.

          "CPS Securities" has the meaning set forth in the Declaration.

          "Declaration" means the Amended and Restated Declaration of Trust
governing the Trust and dated as of the date hereof, as the same may be amended
or restated from time to time under the terms thereof and hereof.

          "Delaware Statutory Trust Act" means the Delaware Statutory Trust Act,
12 Del. C. ss. 3801, et seq.

          "Delayed Auction" has the meaning set forth in the General Terms.

          "Delayed Auction Date" has the meaning set forth in the General Terms.

          "Delayed Auction Period" has the meaning set forth in the General
Terms.

          "Delayed Auction Rate" has the meaning set forth in the General Terms.

          "Delayed Put Option Premium" has the meaning set forth in Section 5.2.

          "Delayed Put Option Premium Certificate" has the meaning set forth in
Section 5.3.

          "Distribution Payment Date" has the meaning set forth in the General
Terms.

          "Distribution Period" has the meaning set forth in the General Terms.

          "Dividend" has the meaning set forth in the Preference Share
Designation.

          "Eligible Assets" means, as applicable, (i) commercial paper and any
other investments that conform to the guidelines set forth in Exhibit I to the
Declaration, (ii) Preference Shares, (iii) this Agreement, (iv) the Property
Account (as defined in the Declaration), and (v) any and all distributions of
principal and interest and any other payments made on the foregoing.

          "Expense Reimbursement Agreement" has the meaning set forth in Section
3.2(a).

          "Federal Funds Effective Rate" has the meaning set forth in the
Declaration.

          "Fixed-Rate Distribution Event" has the meaning set forth in the
Preference Share Designation.

          "Fixed-Rate Election" means an election by the Company to pay
Dividends on the Preference Shares at the rate described in clause (iii) of the
definition of "Dividend Rate" set forth in the Preference Share Designation.

                                        1

<PAGE>

          "General Terms" means the General Terms of the CPS Securities attached
to the Declaration as Appendix A.

          "Holder" has the meaning set forth in the Declaration.

          "Liquidation Preference" has the meaning set forth in the Preference
Share Designation.

          "Maximum Rate" has the meaning set forth in the Preference Share
Designation.

          "Moody's" means Moody's Investors Service, Inc., and its successors.

          "Overnight Rate of Return" means the rate earned on the interest and
on the principal of the Eligible Assets during the period from each Auction Date
until the related Distribution Payment Date and during any Delayed Auction
Period, which rate shall be equal to the Federal Funds Effective Rate then in
effect (as adjusted to reflect any applicable reserve requirement).

          "Preference Share Designation" means the Certificate of Designation,
Preferences and Rights of Class B Preference Shares of the Company, as set forth
in the Company Bye-laws.

          "Preference Shares" has the meaning set forth above in the recitals.

          "Preference Shares Payment Date" has the meaning set forth in Section
3.2(a).

          "Preference Shares Purchase Price" has the meaning set forth in
Section 4.1.

          "Proceedings" has the meaning set forth in Section 16.

          "Put Notice" means a written notice substantially in the form attached
hereto as Annex A.

          "Put Option Premium" has the meaning set forth in Section 5.1.

          "Put Option Premium Certificate" has the meaning set forth in Section
5.3.

          "Ratings Agencies" means collectively Moody's and Standard & Poor's.

          "Redemption Price" has the meaning set forth in the Preference Share
Designation.

          "Redemption Proceeds" has the meaning set forth in Section 3.2(d).

          "SEC" has the meaning set forth above in the recitals.

          "Securities Act" has the meaning set forth above in the recitals.

                                        2

<PAGE>

          "Senior Note Issuance" means the initial issuance of senior notes of
the Company substantially on the terms described in the preliminary offering
memorandum of the Company dated October 2003, as the same may be amended or
modified.

          "Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., and its successors.

          "Stated Yield" means all amounts of interest (including accreted
interest) and other payments due and payable (upon maturity or otherwise) on the
principal amount of the Eligible Assets (excluding any repayment of principal)
held by the Trust during a Distribution Period, plus the amount of interest to
be earned based on the Overnight Rate of Return, as calculated on or prior to
11:00 a.m. on the Auction Date for each respective Distribution Period.

          "Tax Matters Partner" has the meaning set forth in the Declaration.

          "Trust" has the meaning set forth above in the preamble.

          "Trustee" has the meaning set forth in the Declaration.

     1.3 In this Agreement, any reference to a "company" shall be construed so
as to include any corporation, trust, partnership, limited liability company or
other legal entity, wheresoever incorporated or established.

     1.4 In this Agreement, save where the contrary is indicated, any reference
to:

          (a) this Agreement or any other agreement or document shall be
     construed as a reference to this Agreement or, as the case may be, such
     other agreement or document as the same may have been, or may from time to
     time be, amended, varied, novated or supplemented in accordance with its
     terms; and

          (b) a statute shall be construed as a reference to such statute as the
     same may have been, or may from time to time be, amended or re-enacted.

     1.5 In this Agreement, any definition shall be equally applicable to both
the singular and plural forms of the defined terms.

Section 2. Put Option; Agreement Term

     2.1 In consideration of the payment of the Put Option Premium, or the
Delayed Put Option Premium, as the case may be, the Trust hereby grants to the
Company the right to cause the Trust to purchase the Preference Shares on the
terms set forth herein.

     2.2 The put option created hereby shall remain in effect and be exercisable
by the Company at any time prior to termination of this Agreement.

     2.3 This Agreement shall terminate upon the earliest to occur of any of the
following events:

                                        3

<PAGE>

          (a) the Company delivers a written termination notice to the Trust
     while the Trust is holding Eligible Assets, stating that the Company is
     electing not to pay the Put Option Premium for the next succeeding
     Distribution Period that follows the termination notice by at least three
     Business Days and indicating the Distribution Payment Date on which the
     termination shall become effective (delivery of such a termination notice
     by the Company shall be irrevocable);

          (b) the Company fails to pay the Put Option Premium or the Delayed Put
     Option Premium, if any, for a Distribution Period on the related
     Distribution Payment Date, and such failure has not been cured within three
     Business Days following notice thereof;

          (c) the Company makes a Fixed-Rate Election;

          (d) the Company fails to pay Dividends on the Preference Shares, or
     the fees and expenses of the Trust pursuant to the Expense Reimbursement
     Agreement for a Distribution Period on the related Distribution Payment
     Date and such failure continues for three Business Days following notice
     thereof;

          (e) the Company fails to pay the Redemption Price and such failure has
     not been cured within three Business Days following notice thereof;

          (f) the aggregate face amount of the outstanding CPS Securities is
     less than Twenty million U.S. dollars (U.S. $20,000,000);

          (g) at any time that the Trust owns any Preference Shares, the
     aggregate Liquidation Preference thereof is less than Twenty million U.S.
     dollars (U.S. $20,000,000); or

          (h) at any time that the Trust owns any Eligible Assets within the
     meaning of clause (i) of the definition thereof, the principal amount
     thereof is less than Ten million U.S. dollars (U.S. $10,000,000).

Section 3. Exercise of Put Option; Redemption

     3.1 The Trust agrees that it shall, upon exercise of the put option as
provided in Section 3.2, purchase the Preference Shares from the Company for a
purchase price equal to the Preference Shares Purchase Price, which Preference
Shares Purchase Price shall be payable on the Preference Shares Payment Date in
accordance with Section 4.

     3.2 (a) The Company may exercise the put option (with respect to all or a
     portion of the Preference Shares covered thereby) at any time by delivering
     (i) a Put Notice to the Trustee, specifying (x) the number of Preference
     Shares with respect to which the put option is exercised and (y) a payment
     date (the "Preference Shares Payment Date"), which shall be the next
     succeeding Distribution Payment Date after the date on which the Put Notice
     is delivered to the Trustee, and (ii) the Expense Reimbursement Agreement
     to the Trust in the form attached hereto as Annex E (the "Expense
     Reimbursement

                                        4

<PAGE>

     Agreement"), in either case not more than fifteen days but not less than
     ten days prior to the next succeeding scheduled Distribution Payment Date.

          (b) On the Preference Shares Payment Date, after payment of the Put
     Option Premium by the Company to the Trust and payment of the distribution
     amount by the Trust to the Holders of the CPS Securities, in each case for
     the immediately preceding Distribution Period, the Company shall issue and
     deliver to the Trust, or its designee, Preference Shares with an aggregate
     Liquidation Preference equal to the applicable Preference Shares Purchase
     Price. The Preference Shares shall be delivered free and clear of any
     defect in title, together with all transfer and registration documents (or
     all notices, instructions or other communications) as are necessary to
     convey title to the Preference Shares to the Trust (or its nominee).

          (c) For the avoidance of doubt, (i) any cash received by the Trust as
     interest or other payments earned on the principal amount of the Eligible
     Assets (net of fees and expenses and excluding any repayment of principal)
     and not previously distributed to the Holders of CPS Securities shall be
     distributed to the Holders of CPS Securities prior to payment by the Trust
     of the Preference Shares Purchase Price, and shall not be used to purchase
     Preference Shares, (ii) the aggregate Liquidation Preference of Preference
     Shares purchased from the Company shall be reduced by the amount, if any,
     by which the aggregate face amount of CPS Securities is reduced as a result
     of losses of principal of or interest on Eligible Assets as required by
     Section 6.01(g) of the Declaration and Section 6(b) of the General Terms,
     and (iii) the maximum aggregate amount of proceeds which the Company shall
     receive upon exercise of the put option hereunder, in whole or in part,
     shall not exceed the aggregate face amount of CPS Securities then
     outstanding reduced, as applicable, as a result of losses of principal of
     or interest on Eligible Assets as required by Section 6.01(g) of the
     Declaration and Section 6(b) of the General Terms (taking into account
     aggregate Redemption Proceeds received by the Trust).

          (d) The Company shall have the right to redeem all or a portion of the
     Preference Shares on any Distribution Payment Date upon payment of the
     Redemption Price for the Preference Shares to be redeemed (the "Redemption
     Proceeds"). Notwithstanding the foregoing, the Company shall not redeem any
     Preference Shares if after giving effect to a partial redemption, the
     aggregate Liquidation Preference of the Preference Shares outstanding
     immediately after such partial redemption would be less than Twenty million
     U.S. dollars (U.S. $20,000,000). Payment of the Redemption Price will be
     made on the first Distribution Payment Date after the Company elects to
     redeem Preference Shares in accordance with Section 3.2(e).

          (e) The Company may redeem all or a portion of the Preference Shares
     at any time by providing notice to the Trustee, specifying a redemption
     date, which shall be the next succeeding Distribution Payment Date after
     the date of such notice, not less than twenty days prior to the next
     succeeding scheduled Distribution Payment Date. Notice of any redemption of
     Preference Shares shall be mailed to the holders of the Preference Shares
     not less than ten days nor more than fifteen days prior to the date fixed
     for such redemption. At any time before or after a notice of redemption has
     been given, the Company shall deposit the aggregate Redemption Price of the
     Preference Shares to be

                                        5

<PAGE>

     redeemed with any bank or trust company in New York, New York, with
     directions to pay the holders of the Preference Shares being redeemed the
     Redemption Proceeds in exchange for the Preference Shares.

          (f) Upon a partial redemption of the Preference Shares held by the
     Trust prior to a Fixed-Rate Distribution Event, the Trust shall apply the
     Redemption Proceeds to the purchase of Eligible Assets (it being understood
     that no partial redemption may be made by the Company if after giving
     effect thereto, the aggregate Liquidation Preference of the Preference
     Shares outstanding immediately thereafter would be less than Twenty million
     U.S. dollars (U.S. $20,000,000)).

          (g) Upon a complete redemption of all Preference Shares held by the
     Trust prior to a Fixed-Rate Distribution Event, the Trust shall apply the
     Redemption Proceeds to the purchase of a portfolio of Eligible Assets.

          (h) For the avoidance of doubt, there is no limitation on the number
     of times the Company may put the Preference Shares to the Trust and no
     limitation on the number of times the Company may redeem Preference Shares,
     in each case pursuant to and in accordance with the terms of this
     Agreement.

          (i) Following a Fixed-Rate Distribution Event, the Company shall not
     redeem the Preference Shares for a period of two years thereafter.

Section 4. Payments for Preference Shares

     4.1 On the Preference Shares Payment Date, after payment of the Put Option
Premium by the Company to the Trust and payment of the distribution amount by
the Trust to the Holders of the CPS Securities, in each case for the immediately
preceding Distribution Period, the Trust will deliver in U.S. dollars to the
Company an amount equal to the product of (x) the proceeds attributable to
principal received upon the maturity of the Eligible Assets of the Trust (and,
if applicable, principal proceeds attributable to the liquidation of defaulted
Eligible Assets), net of fees and expenses of the Trust and after any principal
is returned to Holders of the CPS Securities pursuant to Section 6.01(g) of the
Declaration and Section 6(b) of the General Terms and (y) a fraction the
numerator of which is the aggregate Liquidation Preference of the number of
Preference Shares with respect to which the put option is then being exercised
and the denominator of which is the aggregate Liquidation Preference of the
number of Preference Shares the put option would be exercised with respect to if
the put option were then being exercised in full (the "Preference Shares
Purchase Price").

     4.2 Payment by the Trust of the Preference Shares Purchase Price shall be
made on or prior to 2:00 p.m. on the Preference Shares Payment Date and to the
account of the Company as specified in the Put Notice.

     4.3 Payment of the Preference Shares Purchase Price by the Trust shall be
made as provided in Section 4.1 and Section 4.2 without setoff, claim,
recoupment, deduction or counterclaim; provided, however, that if the Company
exercises its put option under Section 3 hereof at any time that it has failed
to pay all or a portion of the Put Option Premium, and such failure has not been
cured on or before the Preference Shares Payment Date, the Trust shall be

                                        6

<PAGE>

entitled to setoff against the Preference Shares Purchase Price such unpaid
portion of the Put Option Premium.

Section 5. Put Option Premium

     5.1 In consideration of the Trust's agreement to purchase the Preference
Shares in accordance with the terms of this Agreement, the Company will pay an
amount to the Trust, in U.S. dollars, on each Distribution Payment Date during
which the put option remains in effect and is exercisable as set forth in
Section 2.2 hereof (such amount, the "Put Option Premium"), equal to the product
of (A) the Auction Rate on the CPS Securities for the respective Distribution
Period less the excess of (i) the Stated Yield for such Distribution Period over
(ii) the expenses of the Trust for such Distribution Period, provided that such
expenses shall be annualized and expressed as an annual rate with respect to the
face amount of the CPS Securities outstanding on the date the Put Option Premium
is determined, (B) the aggregate face amount of the CPS Securities outstanding
at the time the Put Option Premium is calculated and (C) a fraction, the
numerator of which will be the actual number of calendar days in the respective
Distribution Period, and the denominator of which will be 360 days. The Put
Option Premium for each Distribution Period will be calculated on the Auction
Date.

     5.2 If as a result of losses of principal of or interest on Eligible Assets
there is a Delayed Auction, the Company will pay an amount to the Trust, in U.S.
dollars, on each Distribution Payment Date during which the put option remains
in effect and is exercisable as set forth in Section 2.2 hereof, (such amount,
the "Delayed Put Option Premium"), equal to the product of (A) the Delayed
Auction Rate on the CPS Securities for the Delayed Auction Period less the
excess of (i) the Stated Yield for such Delayed Auction Period over (ii) the
expenses of the Trust for such Delayed Auction Period, provided that such
expenses shall be annualized and expressed as an annual rate with respect to the
face amount of the CPS Securities outstanding on the date the Put Option Premium
is determined, (B) the aggregate face amount of the CPS Securities outstanding
at the time the Delayed Put Option Premium is calculated and (C) a fraction, the
numerator of which will be the actual number of calendar days in the respective
Delayed Auction Period, and the denominator of which will be 360 days. The
Delayed Put Option Premium for each Delayed Auction Period will be calculated on
the Delayed Auction Date.

     5.3 The amount of the Put Option Premium shall be calculated by the Trustee
and delivered in writing (the "Put Option Premium Certificate") to the Company
prior to 5:00 p.m. on each Auction Date. The amount of the Delayed Put Option
Premium shall be calculated by the Trustee and delivered in writing (the
"Delayed Put Option Premium Certificate") to the Company prior to 5:00 p.m. on
the Delayed Auction Date. The Put Option Premium Certificate, and any Delayed
Put Option Premium Certificate, also shall set forth the Eligible Assets held by
the Trust, the Stated Yield on each Eligible Asset, any fees to be incurred or
accrued by the Trustee on behalf of the Trust and the computation of the Put
Option Premium, or the Delayed Put Option Premium, as the case may be, in each
case for the respective Distribution Period and the Delayed Auction Period,
respectively, and shall be in the form attached hereto as Annex B.

     5.4 The Company shall have three Business Days from notice thereof by the
Trust to cure any failure to pay when due the Put Option Premium or Delayed Put
Option Premium, if

                                        7

<PAGE>

any; provided that the Put Option Premium during such cure period will be set at
the Maximum Rate then in effect.

     5.5 The Company shall have three Business Days from notice thereof by the
Trust to cure any failure to pay when due the Redemption Price; provided that
the Put Option Premium during such cure period will be set at the Maximum Rate
then in effect.

Section 6. Obligations Absolute

     6.1 The Trust acknowledges that, provided the Company has complied with the
terms of this Agreement, the obligations of the Trust undertaken under this
Agreement are absolute, irrevocable and unconditional irrespective of any
circumstances whatsoever, including any defense otherwise available to the
Trust, in equity or at law, including, without limitation, the defense of fraud,
any defense based on the failure of the Company to disclose any matter, whether
or not material, to the Trust or any other person, and any defense of breach of
warranty or misrepresentation, and irrespective of any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of an
insurer, surety or guarantor under any and all circumstances. The enforceability
and effectiveness of this Agreement and the liability of the Trust, and the
rights, remedies, powers and privileges of the Company under this Agreement
shall not be affected, limited, reduced, discharged or terminated, and the Trust
hereby expressly waives, to the fullest extent permitted by applicable law, any
defense now or in the future arising by reason of:

          (a) the illegality, invalidity or unenforceability of all or any part
     of the Declaration;

          (b) any action taken by the Company;

          (c) any change in the direct or indirect ownership or control of the
     Company or of any shares or ownership interests thereof; and

          (d) any other circumstance whatsoever that might otherwise constitute
     a legal or equitable discharge or defense of or for the Trust;

provided, however, that notwithstanding the provisions of this Section 6.1, the
Trust shall have no further obligations under this Agreement after the
termination of this Agreement pursuant to Section 2.3. In addition, the breach
of any covenant made in this Agreement by the Trust shall not terminate this
Agreement or limit the rights of the Company hereunder.

     6.2 For the avoidance of doubt, no failure or delay by the Company in
exercising its rights hereunder shall operate as a waiver of its rights
hereunder (except as specifically provided in this Agreement, including, without
limitation, in respect of the notice periods and payment dates set forth in
Section 3.2(a)) and, subject to the termination of this Agreement not having
occurred, the Company may continue to exercise its rights hereunder at any time.

                                        8

<PAGE>

Section 7. Covenants

     7.1 The Company hereby covenants and agrees that, at all times prior to the
earlier of the termination of this Agreement (a) it shall not amend, restate,
revise or otherwise alter the rights, terms and preferences of the Preference
Shares, whether by operation of merger, reorganization or otherwise, without the
prior consent of the Trust, and (b) it will not register the Preference Shares
with the SEC under the Securities Act. Notwithstanding the foregoing, nothing
contained in this Section 7.1 shall be deemed to prohibit the Company from
taking any action allowed to be taken pursuant to Section 14.2.

     7.2 The Trust hereby covenants and agrees that, at all times prior to the
termination of this Agreement, it shall not amend, restate, revise or otherwise
alter the rights, terms and preferences of the CPS Securities, whether by
operation of merger, reorganization or otherwise, and it will not register the
CPS Securities with the SEC under the Securities Act.

     7.3 The Company hereby covenants and agrees that any Preference Shares
delivered to the Trust shall rank, at the time of delivery (a) senior to the
common shares of the Company and (b) senior to or pari passu with the most
senior preference shares of the Company then authorized by its Bye-laws or then
issued and outstanding; provided, however, that Class A Preference Shares shall
rank senior to the Preference Shares and any such rights and preferences of
holders of Class A Preference Shares shall in no way be affected by the rights
and preferences of holders of the Preference Shares, except that upon the
occurrence of a voluntary or involuntary liquidation, dissolution or winding up
of the Company, the Class A Preference Shares shall rank in all respects pari
passu with the Preference Shares; provided, further, that this Section 7.3 may
be amended with the consent of the Company and at least a majority of the face
amount of the CPS Securities.

     7.4 The Company hereby covenants and agrees that prior to any issuance of
Class A Preference Shares not made in connection with the Senior Note Issuance,
it shall notify the Ratings Agencies and shall obtain a confirmation of the
rating of the CPS Securities, which shall have a rating of at least "A2" by
Moody's and "A+" by Standard & Poor's, respectively.

     7.5 The Company hereby covenants and agrees that if the Company's financial
strength rating is lowered while this Agreement remains effective, the Company
shall provide written notice to the Trust of such lowered rating.

     7.6 The Company agrees to notify the Trust and the Broker-Dealer not less
than five nor more than thirty days in advance if any Distribution Payment Date
is scheduled to occur on a day on which banks in City of New York are scheduled
to be open, but banks in the city of Hamilton, Bermuda are authorized or
obligated by law to be closed; provided, however, that if a Delayed Auction Date
occurs, the Company agrees to notify the Trust and the Broker-Dealer on such
date if the day which would otherwise be a Distribution Payment Date (but for
the requirement that banks in the city of Hamilton, Bermuda must be open in
order for such day to be considered a Business Day) is a day on which banks in
the City of New York are scheduled to be open, but banks in the city of
Hamilton, Bermuda are authorized or obligated by law to be closed.

                                        9

<PAGE>

Section 8. Inconsistency

          If there is any inconsistency between any provision of this Agreement
and any other agreement, the provisions of this Agreement shall prevail to the
extent of such inconsistency but not otherwise.

Section 9. Representations and Warranties

     9.1 The Trust represents and warrants to the Company that, as of the date
hereof:

          (a) it is duly organized and validly existing under the Delaware
     Statutory Trust Act and has the power and authority to own its assets and
     to conduct the activities which it conducts;

          (b) its entry into, exercise of its rights and performance of and
     compliance with its obligations under this Agreement and the transactions
     contemplated hereby, do not and will not violate (i) any law to which it is
     subject, (ii) any of its constituent documents or (iii) any agreement to
     which it is a party or which is binding on it or its assets;

          (c) it has the power to enter into, exercise its rights and perform
     and comply with its obligations under this Agreement and has taken all
     necessary action to authorize the execution, delivery and performance of
     this Agreement;

          (d) it will obtain and maintain in effect and comply with the terms of
     all necessary consents, registrations and approvals of or with any
     government or other regulatory body or authority applicable to this
     Agreement or required in connection with fulfilling its obligations
     hereunder or effecting the transactions contemplated hereby;

          (e) its obligations under this Agreement are valid, binding and
     enforceable;

          (f) it is not in default under any agreement to which it is a party or
     by which it or its assets is or are bound and no litigation, arbitration or
     administrative proceedings are current or pending;

          (g) it is not necessary or advisable in order to ensure the validity,
     effectiveness, performance or enforceability of this Agreement or required
     in connection with it fulfilling its obligations hereunder or effecting the
     transactions contemplated hereby, that any document be filed, registered or
     recorded in any public office or elsewhere (other than filings, resolutions
     and recordings as have been made);

          (h) each of the above representations and warranties will be true and
     correct in all respects during the term of this Agreement;

          (i) no consent, approval, authorization or order of any court or
     governmental authority, agency, commission or commissioner or other
     regulatory authority is required for the consummation by the Trust of any
     of the transactions contemplated by this Agreement; and

                                       10

<PAGE>

          (j) assuming compliance with the transfer restrictions with respect to
     the CPS Securities set forth in the Declaration, the Trust is not required
     to register with the SEC as an investment company under the Investment
     Company Act of 1940, as amended (the "1940 Act").

     9.2 The Company represents and warrants to the Trust that, as of the date
hereof:

          (a) it is duly organized and validly existing as a company under the
     laws of Bermuda and has the power and authority to own its assets and to
     conduct its activities;

          (b) its entry into, exercise of its rights and performance of and
     compliance with its obligations under this Agreement and the transactions
     contemplated hereby, do not and will not violate (i) any law to which it is
     subject, (ii) any of its constituent documents or (iii) any agreement to
     which it is a party or which is binding on it or its assets;

          (c) it has the power to enter into, exercise its rights and perform
     and comply with its obligations under this Agreement and has taken all
     necessary action to authorize the execution, delivery and performance of
     this Agreement;

          (d) it will obtain and maintain in effect and comply with the terms of
     all necessary consents, registrations and approvals of or with any
     government or other regulatory body or authority applicable to this
     Agreement or required in connection with fulfilling its obligations
     hereunder or effecting the transactions contemplated hereby;

          (e) its obligations under this Agreement are valid, binding and
     enforceable;

          (f) it is not in default under any agreement to which it is a party or
     by which it or its assets is or are bound and no litigation, arbitration or
     administrative proceedings are current or pending, which default,
     litigation, arbitration or administrative proceedings are material in the
     context of this Agreement;

          (g) it is not necessary or advisable in order to ensure the validity,
     effectiveness, performance or enforceability of this Agreement or required
     in connection with fulfilling its obligations hereunder or effecting the
     transactions contemplated hereby, that any document be filed, registered or
     recorded in any public office or elsewhere (other than filings, resolutions
     and recordings as have been made);

          (h) each of the above representations and warranties will be true and
     correct in all respects during the term of this Agreement;

          (i) no consent, approval, authorization or order of any court or
     governmental authority, agency, commission or commissioner or other
     regulatory authority is required for the consummation by the Company of the
     transactions contemplated by this Agreement and the sale of the Preference
     Shares, pursuant to the terms hereof, need not be registered with the SEC
     under the Securities Act; and

                                       11

<PAGE>

          (j) as of the date of this Agreement, the Preference Shares will be
     duly authorized for issuance and sale, pursuant to the terms hereof, and,
     when issued and delivered by the Company, pursuant to the terms of this
     Agreement, against payment of the Preference Shares Purchase Price, will be
     validly issued, fully paid and nonassessable; the Preference Shares will
     conform in all respects to the terms of the Preference Shares set forth in
     the Preference Share Designation of the Company attached hereto as Annex D;
     and the Preference Shares will not be subject to preemptive or other
     similar rights.

Section 10. Severability

          Any provision of this Agreement which is or becomes illegal, invalid
or unenforceable in any jurisdiction may be severed from the other provisions of
this Agreement without invalidating the remaining provisions hereof, and any
such illegality, invalidity or unenforceability shall not invalidate or render
illegal or unenforceable such provision in any other jurisdiction.

Section 11. Notices

          Each communication to be made hereunder shall be deemed to have been
given (i) three Business Days after deposit of such communication with a
reputable national courier service addressed to such party at its address
specified below (or at such other address as such party shall specify to the
other party hereto in writing) or (ii) when transmitted by facsimile to such
party at its facsimile number specified below (or at such other facsimile number
as such party shall specify to the other party hereto in writing):

If to the Company at:                    If to the Trust at:

RAM Reinsurance Company Ltd.             The Bank of New York (Delaware)
RAM Re House                             P.O. Box 6973
46 Reid Street                           White Clay Center, Route 273
Hamilton, Bermuda HM 12                  Newark, Delaware 19714
Attention: General Counsel               Attention: Kristine Gullo
Telephone: (441) 296-6501                Facsimile: (302) 283-8279
Facsimile: _____________
                                         Copy to: The Bank of New York
Copy to: Michael Groll, Esq.             Corporate Trust Division
LeBoeuf, Lamb, Greene & MacRae, L.L.P.   100 Church Street, 8th Floor
125 West 55th Street                     New York, New York 10286
New York, New York 10019                 Attention: Dealing & Trading Group
Telephone: (212) 424-8000                Facsimile: (212) 437-6155
Facsimile: (212) 424-8500

     In the case of any event under Sections 2.3, 7.3 or 14 of this Agreement,
the Company shall give notice to:

                                       12

<PAGE>

Moody's at:                              Standard & Poor's at:

Moody's Investors Service, Inc.          Standard & Poor's Ratings Services
99 Church Street                         55 Water Street
New York, New York 10007                 New York, New York 10041

Section 12. Counterparts

          This Agreement may be executed in any number of counterparts each of
which when executed and delivered shall constitute an original, but all the
counterparts shall together constitute one and the same instrument.

Section 13. Benefit of Agreement and Disclaimer

          This Agreement shall enure to the benefit of each party hereto and its
successors and assigns and transferees; provided that neither party hereto may
transfer its rights and obligations hereunder, by operation of law or otherwise,
except in accordance with Section 14 or upon obtaining the prior written consent
of the other party.

Section 14. Amendment and Assignment

     14.1 This Agreement may not be amended or modified in any respect, nor may
any provision be waived, without the written agreement of both parties. No
waiver by one party of any obligation of the other hereunder shall be considered
a waiver of any other obligation of such party.

     14.2 Neither the Trust nor the Company may assign its rights or obligations
under this Agreement to any other person, except that the Company may assign its
rights and obligations under this Agreement to another person as a result of a
merger or consolidation of the Company with another person or as a result of the
transfer or sale of all or substantially all of the assets of the Company to
another person, in a single transaction or series of transactions, if such other
person expressly assumes all of the rights and obligations of the Company under
this Agreement, and immediately following the merger, amalgamation or
consolidation, transfer or sale of substantially all of the assets of the
Company, the rating of the substitute preference shares or the general unsecured
debt obligations of the other person is at least as high as the rating of the
Preference Shares or the general unsecured debt obligations of the Company (or
if no such ratings exist, the financial strength rating of the Company), in each
case as in effect immediately prior to the merger or consolidation, transfer or
sale.

Section 15. Governing Law

          THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAW RULES).

                                       13

<PAGE>

Section 16. Jurisdiction

          Each of the parties hereto irrevocably submits to the non-exclusive
jurisdiction of the courts of the State of New York in respect of any action or
proceeding arising out of or in connection with this Agreement ("Proceedings").
Each of the parties hereto irrevocably waives, to the fullest extent permitted
by applicable law, any objection that it may now or hereafter have to the laying
of the venue of any such Proceedings in the courts of the State of New York and
any claim that any Proceeding brought in any such court has been brought in an
inconvenient forum. Each of the Trust and the Company agrees that it shall at
all times have an authorized agent in the State of New York upon whom process
may be served in connection with any Proceedings, and each of the Trust and the
Company hereby authorizes and appoints the Trustee to accept service of all
legal process arising out of or connected with this Agreement in the State of
New York and service on such person (or substitute) shall be deemed to be
service on the Trust or the Company, as the case may be (provided in the case of
service upon the Company, the Trust provides prompt notification of such
service, and delivery of any documents in connection therewith, to the Company).
Except upon the substitution of another person for the Trustee as authorized
agent, the Trust and the Company shall not revoke any such authority or
appointment and in any event shall at all times maintain an agent for service of
process in the State of New York. If for any reason the Trustee (or any
substitute therefore) shall cease to act as agent for the service of process,
the Trust and/or the Company shall promptly appoint another such agent, and
shall forthwith notify each other of such appointment. The submission to
jurisdiction reflected in this paragraph shall not (and shall not be construed
so as to) limit the right of any person to take Proceedings in any court of
competent jurisdiction, nor shall the taking of Proceedings in any one or more
jurisdictions preclude the taking of Proceedings in any other jurisdiction
(whether concurrently or not) if and to the extent permitted by law.

Section 17. Limitation of Liability

          It is expressly understood that (a) this Agreement is executed and
delivered by The Bank of New York (Delaware), not individually or personally but
solely as Trustee, in the exercise of the powers and authority conferred and
vested in it under the Declaration, (b) each of the representations,
undertakings and agreements herein made on the part of the Trust, is made and
intended not as personal representations, undertakings and agreements by The
Bank of New York (Delaware), but is made and intended for the purpose of binding
only the Trust, and (c) under no circumstances shall The Bank of New York
(Delaware) be personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust, under this
Agreement or the other related documents, except as otherwise expressly provided
in the Declaration.

Section 18. Tax Confidentiality Waiver

          Notwithstanding anything to the contrary contained in this Agreement
all persons may disclose to any and all persons, without limitation of any kind,
the U.S. federal, state and local tax treatment of the Trust and the CPS
Securities, any fact relevant to understanding the U.S. federal, state and local
tax treatment of the Trust and the CPS Securities, and all materials of any kind
(including opinions or other tax analyses) relating to such U.S. federal, state
and

                                       14

<PAGE>

local tax treatment other than the name of any of the parties referenced herein
or information that would permit identification of any of the parties referenced
herein.

Section 19. Replacement of Broker-Dealer

     19.1 The Company shall have the right to direct the Trust to replace the
Broker-Dealer at any time that the Company believes, in the reasonable good
faith exercise of its discretion, the continued service of such Broker-Dealer
could have an adverse effect on the rights and benefits conferred on the Company
pursuant to this Agreement.

     19.2 In the event the Company elects to exercise its right set forth in
Section 19.1, the Company shall propose to the Trust a replacement
Broker-Dealer. The Trust shall enter into an agreement with such replacement
Broker-Dealer, unless it has a reasonable basis for failing to do so, in which
case the parties shall repeat such process until an acceptable Broker-Dealer is
so selected.

                                       15

<PAGE>

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

                                        BLUE WATER TRUST I

                                        By: The Bank of New York (Delaware), not
                                            in its individual capacity but
                                            solely as Trustee

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        RAM REINSURANCE COMPANY LTD.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                       16

<PAGE>

                                                                         ANNEX A

                               Form of Put Notice

To: Blue Water Trust I
    c/o The Bank of New York (Delaware), as Trustee
    502 White Clay Center, Route 273
    Newark, Delaware 19714

    with a copy to:

    The Bank of New York
    100 Church Street, 8th Floor
    New York, New York 10286
    Attention: Dealing and Trading Group

                                                             Date: _____________

Ladies and Gentlemen:

          We refer to the put option agreement dated as of December 23, 2003,
between us and you (as heretofore amended, the "Put Option Agreement"). Terms
defined therein shall have the same respective meanings herein.

          This notice is the notice for the purposes of Section 3.2(a) of the
Put Option Agreement. We hereby elect to exercise the put option with regard to
Preference Shares having a liquidation preference of [__$ integral multiple of
$100,000], and hereby require you to pay the Preference Shares Purchase Price on
the Preference Shares Payment Date, which shall be [___], to the following
account:

                                        [__________________]
                                        [__________________]
                                        [__________________]

                                        RAM REINSURANCE COMPANY LTD.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

<PAGE>

                                                                         ANNEX B

                         Put Option Premium Certificate/
                     Delayed Put Option Premium Certificate
            Class B Preference Shares of RAM Reinsurance Company Ltd.

     1. Distribution Period: [first day of Period]-[last day of Period]: [number
of days in period - 28]

     2. Auction Rate determined for the Distribution Period on [insert Auction
Date].                                                                 0.000000%

     3. Eligible Assets:

<TABLE>
<CAPTION>
Issuer   Ratings Purchase   Price   Yield to Maturity Interest
------   ----------------   -----   --------------------------
<S>      <C>                <C>     <C>

</TABLE>

<TABLE>
<S>        <C>                                              <C>   <C> <C>
     4.    Applicable Federal Funds Effective Rate: 0.00%   0.0   %   $0.0

     5.    Broker-Dealer Fees                               0.0   %   $0.0

     6.    Trustee and Custodian Fees                       0.0   %   $0.0

     7.    Investment Manager Fee                           0.0   %   $0.0

     8.    Tax Matters Partner Fee                          0.0   %   $0.0

     9.    Servicing Agent Fee                              0.0   %   $0.0

     10.   Rating Agency Fees                               0.0   %   $0.0

     11.   Tax Fees (including preparation of returns)      0.0   %   $0.0

     12.   Other Fees and Expenses, if any,
           as specified in an attachment hereto.            0.0   %   $0.0

     13.   Computation of Put Premium Due on [insert
           Distribution Payment Date] by 11:00 a.m. NYT:    0.0   %   $0.0
</TABLE>

     14. The Investment Manager is in compliance with the Investment Management
Agreement.

<PAGE>

                                                                         ANNEX C

                                   Bye-laws of
                          RAM Reinsurance Company Ltd.

<PAGE>

                                                                         ANNEX D

               Certificate of Designation, Preferences and Rights
                                       of
                            Class B Preference Shares
                                       of
                          RAM Reinsurance Company Ltd.

<PAGE>

                                                                         ANNEX E

                         Expense Reimbursement Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]