Document:

Exhibit 10.2

 

May 10, 2005

 

STRICTLY PERSONAL AND CONFIDENTIAL

 

Hand delivered, original to employee file

 

Mark Wilson

5 Heatherington Drive

Toronto, ON M1T 1N3

 

 

Dear Mark,

 

The following shall confirm the terms and conditions of your employment
with Alderwoods Group Inc (herein referred to as “the Company”).

 

	
  Position:

  	
   

  	
  Senior Vice President, Human Resources

  
	
   

  	
   

  	
   

  
	
  Reports to:

  	
   

  	
  Paul Houston, President and Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  Effective:

  	
   

  	
  May 1,
  2005

  
	
   

  	
   

  	
   

  
	
  Base Pay:

  	
   

  	
  $205,000.00 gross pre annum.

  
	
   

  	
   

  	
   

  
	
  Bonus:

  	
   

  	
  You will be eligible to participate in the
  Company’s Executive bonus program, calculated at 40% (target) to 80%
  (maximum) of your salary. The details to the plan will be explained under
  separate cover.

  
	
   

  	
   

  	
   

  
	
  Stock
  Options:

  	
   

  	
  You will continue to be eligible to participate
  in the companies stock option program at the Senior
  Vice President level.

  
	
   

  	
   

  	
   

  
	
  Benefits:

  	
   

  	
  You
  will continue to be eligible to participate in the company benefits program.
  Furthermore, you will be eligible for a $3,000 medical spending account. More
  details on the above will be covered under separate cover.

  
	
   

  	
   

  	
   

  
	
  Club
  Membership:

  	
   

  	
  You
  will be eligible to expense up to $1,500 towards a club membership.

  
	
   

  	
   

  	
   

  
	
  Car
  Allowance:

  	
   

  	
  You
  will be entitled to a car allowance of $600.00/month (paid bi-weekly).

  
	
   

  	
   

  	
   

  
	
  Vacation
  Entitlement:

  	
   

  	
  You
  are eligible for four (4) weeks vacation per year.

  
	
   

  	
   

  	
   

  
	
  Termination
  of Employment:

  	
   

  	
  If
  you should be terminated for any reason other than just cause, you will be
  entitled to receive twelve (12) months severance consisting of base salary
  and standard health and dental benefits. All other benefits would cease on
  your last day of active employment. Similarly your health and dental benefits
  would cease should you obtain alternate coverage during the 12 month period.
  The severance benefit would be paid over a 12 month period.

  
	
   

  	
   

  	
   

  
	
  Change of Control:

  	
   

  	
  If there is a change in control, as defined
  under the 2005 Equity Incentive Plan, and as a result your employment is
  terminated, you will receive twenty-four (24) months severance as defined
  above.

  

 

 

Mark,
I am extremely excited about the challenges that await us as a team.  I hope this offer demonstrates our Company’s
continued belief that you are a key member of our team and our future
success.  Should you have any questions
please do not hesitate to contact me.

 

Sincerely,

per

 

	
  /s/ Paul Houston

  	
   

  
	
   

  
	
  Paul Houston

  
	
  President and Chief Executive Officer

  

 

 

I have read, understand and voluntarily agree to the terms and
conditions for my employment with Alderwoods Group Inc.

 

 

	
  /s/ Mark Wilson

  	
   

  	
  May 10, 2005

  	
   

  
	
  Mark Wilson

  	
  DateExhibit 10.1

 

 

$300,000,000

 

3-YEAR REVOLVING CREDIT
FACILITY

 

CREDIT
AGREEMENT

 

 

Among

 

ASSURED GUARANTY LTD.,

 

ASSURED GUARANTY CORP.,

 

ASSURED GUARANTY (UK) LTD.,

 

ASSURED GUARANTY RE
INTERNATIONAL LTD.,

 

ASSURED GUARANTY RE OVERSEAS
LTD.

 

and

 

THE BANKS PARTY HERETO

 

and

 

ABN AMRO BANK N.V.,

As Administrative Agent

 

Dated as of April 15, 2005

 

 

 

ABN AMRO INCORPORATED AND BANK
OF AMERICA SECURITIES LLC.,

as Lead Arrangers

 

and

 

BANK OF AMERICA, N.A. AND KEY
BANK, N.A.,

As Syndication Agents,

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I CERTAIN DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01  Certain
  Definitions

  	
   

  
	
  Section 1.02  Construction

  	
   

  
	
  (a)

  	
  Number; Inclusion

  	
   

  
	
  (b)

  	
  Determination

  	
   

  
	
  (c)

  	
  Agent’s Discretion and Consent

  	
   

  
	
  (d)

  	
  Documents Taken as a Whole

  	
   

  
	
  (e)

  	
  Headings

  	
   

  
	
  (f)

  	
  Implied References to this Agreement

  	
   

  
	
  (g)

  	
  Persons

  	
   

  
	
  (h)

  	
  Modifications to Documents

  	
   

  
	
  (i)

  	
  From, To and Through

  	
   

  
	
  (j)

  	
  Shall; Will

  	
   

  
	
  Section 1.03  Accounting
  Principles; Computations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II REVOLVING CREDIT AND LETTER
  OF CREDIT FACILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01  Credit
  Commitments

  	
   

  
	
  Section 2.02  Nature of
  Banks’ Obligations with Respect to Revolving Credit Loans

  	
   

  
	
  Section 2.03  Facility Fees;
  Letter of Credit Fee

  	
   

  
	
  Section 2.04  Utilization
  Fee

  	
   

  
	
  Section 2.05  Revolving
  Credit Loan Requests

  	
   

  
	
  Section 2.06  Making
  Revolving Credit Loans

  	
   

  
	
  Section 2.07  Use of
  Proceeds

  	
   

  
	
  Section 2.08  Bid Loan
  Facility

  	
   

  
	
  (a)

  	
  Bid Loan Requests

  	
   

  
	
  (b)

  	
  Bidding

  	
   

  
	
  (c)

  	
  Accepting
  Bids

  	
   

  
	
  (d)

  	
  Funding
  Bid Loans

  	
   

  
	
  (e)

  	
  Several Obligations

  	
   

  
	
  (f)

  	
  Bid Notes

  	
   

  
	
  Section 2.09  Restriction on
  Loans and Letters of Credit

  	
   

  
	
  Section 2.10  Letters of
  Credit

  	
   

  
	
  Section 2.11  Conditions to
  the Issuance of all Letters of Credit

  	
   

  
	
  Section 2.12  Letter of
  Credit Requests

  	
   

  
	
  Section 2.13  Agreement to
  Repay Letter of Credit Drawings

  	
   

  
	
  Section 2.14  Letter of
  Credit Expiration Extensions

  	
   

  
	
  Section 2.15  Changes to
  Stated Amount

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III INTEREST RATES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01  Interest Rate
  Options

  	
   

  

 

i

 

	
  (a)

  	
  Revolving Credit Interest Rate Options

  	
   

  
	
  (b)

  	
  Rate Quotations

  	
   

  
	
  (c)

  	
  Change in Fees or Interest Rates

  	
   

  
	
  Section 3.02  Revolving
  Credit Loans Interest Periods

  	
   

  
	
  (a)

  	
  Amount of Borrowing Tranche

  	
   

  
	
  (b)

  	
  Renewals

  	
   

  
	
  Section 3.03  Interest After
  Default

  	
   

  
	
  (a)

  	
  Interest
  Rate

  	
   

  
	
  (b)

  	
  Other Obligations

  	
   

  
	
  (c)

  	
  Acknowledgment

  	
   

  
	
  Section 3.04  LIBOR
  Unascertainable; Illegality; Increased Costs; Deposits Not Available

  	
   

  
	
  (a)

  	
  Uncertainable

  	
   

  
	
  (b)

  	
  Illegality; Increased Costs; Deposits Not
  Available

  	
   

  
	
  (c)

  	
  Agent’s and Bank’s Rights

  	
   

  
	
  Section 3.05  Selection of
  Interest Rate Options

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01  Payments

  	
   

  
	
  Section 4.02  Pro Rata
  Treatment of Banks

  	
   

  
	
  Section 4.03  Interest
  Payment Dates

  	
   

  
	
  Section 4.04  Voluntary
  Prepayments

  	
   

  
	
  (a)

  	
  Right
  to Prepay

  	
   

  
	
  (b)

  	
  Replacement of a Bank

  	
   

  
	
  (c)

  	
  Change of Lending Office

  	
   

  
	
  Section 4.05  Reduction or
  Termination of Commitments

  	
   

  
	
  Section 4.06  Additional
  Compensation in Certain Circumstances

  	
   

  
	
  (a)

  	
  Increased
  Costs or Reduced Return Resulting From Taxes, Reserves, Capital Adequacy
  Requirements, Expenses, Etc.

  	
   

  
	
  (b)

  	
  Indemnity

  	
   

  
	
  Section 4.07  Taxes

  	
   

  
	
  (a)

  	
  No
  Deductions

  	
   

  
	
  (b)

  	
  Stamp
  Taxes

  	
   

  
	
  (c)

  	
  Indemnification for Taxes Paid by a Bank

  	
   

  
	
  (d)

  	
  Certificate

  	
   

  
	
  (e)

  	
  Survival

  	
   

  
	
  Section 4.08  Judgment
  Currency

  	
   

  
	
  (a)

  	
  Currency Conversion Procedures for
  Judgments

  	
   

  
	
  (b)

  	
  Indemnity in Certain Events

  	
   

  
	
  Section 4.09  Notes,
  Maturity

  	
   

  
	
  Section 4.10  Mandatory
  Prepayments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01  Representations
  and Warranties

  	
   

  
	
  (a)

  	
  Organization and Qualification

  	
   

  
	
  (b)

  	
  Capitalization and Subsidiaries

  	
   

  

 

ii

 

	
  (c)

  	
  Power and Authority

  	
   

  
	
  (d)

  	
  Validity and Binding Effect

  	
   

  
	
  (e)

  	
  No Conflict

  	
   

  
	
  (f)

  	
  Litigation

  	
   

  
	
  (g)

  	
  Title to Properties

  	
   

  
	
  (h)

  	
  Financial Statements, Reinsurance Coverage

  	
   

  
	
  (i)

  	
  Use of Proceeds; Margin Stock

  	
   

  
	
  (j)

  	
  Full
  Disclosure

  	
   

  
	
  (k)

  	
  Taxes

  	
   

  
	
  (l)

  	
  Consents and Approvals

  	
   

  
	
  (m)

  	
  No Event of Default; Compliance With
  Instruments

  	
   

  
	
  (n)

  	
  Licenses, Etc.

  	
   

  
	
  (o)

  	
  Insurance

  	
   

  
	
  (p)

  	
  Compliance With Laws

  	
   

  
	
  (q)

  	
  Material Contracts; Burdensome Restrictions

  	
   

  
	
  (r)

  	
  Investment Companies; Regulated Entities

  	
   

  
	
  (s)

  	
  Plans and Benefit Arrangements

  	
   

  
	
  (t)

  	
  Senior Debt Status

  	
   

  
	
  (u)

  	
  Holdings

  	
   

  
	
  Section 5.02  Continuation
  of Representations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS OF LENDING

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01  Closing Date

  	
   

  
	
  (a)

  	
  Representations and Warranties True and
  Complete, No Defaults

  	
   

  
	
  (b)

  	
  Secretary’s Certificate

  	
   

  
	
  (c)

  	
  Delivery of Notes, Guaranty Agreements, and
  Loan Request

  	
   

  
	
  (d)

  	
  Opinion of Counsel

  	
   

  
	
  (e)

  	
  Legal
  Details

  	
   

  
	
  (f)

  	
  Payment
  of Fees

  	
   

  
	
  (g)

  	
  No Material Adverse Change

  	
   

  
	
  (h)

  	
  Existing Agreement

  	
   

  
	
  Section 6.02  Each Credit
  Event

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01  Affirmative
  Covenants

  	
   

  
	
  (a)

  	
  Preservation of Existence, Etc.

  	
   

  
	
  (b)

  	
  Payment of Liabilities, Including Taxes,
  Etc.

  	
   

  
	
  (c)

  	
  Maintenance of Insurance

  	
   

  
	
  (d)

  	
  Maintenance of Properties and Leases

  	
   

  
	
  (e)

  	
  Maintenance of Licenses, Etc.

  	
   

  
	
  (f)

  	
  Visitation
  Rights

  	
   

  
	
  (g)

  	
  Keeping of Records and Books of Account

  	
   

  
	
  (h)

  	
  Plans and Benefit Arrangements

  	
   

  
	
  (i)

  	
  Compliance With Laws

  	
   

  

 

iii

 

	
  (j)

  	
  Use
  of Proceeds

  	
   

  
	
  (k)

  	
  Senior Debt Status

  	
   

  
	
  Section 7.02  Negative
  Covenants

  	
   

  
	
  (a)

  	
  Indebtedness

  	
   

  
	
  (b)

  	
  Liens

  	
   

  
	
  (c)

  	
  Guaranties

  	
   

  
	
  (d)

  	
  Loans and Investments

  	
   

  
	
  (e)

  	
  Dividends and Related Distributions

  	
   

  
	
  (f)

  	
  Liquidations, Mergers, Consolidations,
  Acquisitions

  	
   

  
	
  (g)

  	
  Dispositions of Assets or Subsidiaries

  	
   

  
	
  (h)

  	
  Affiliate Transactions

  	
   

  
	
  (i)

  	
  Subsidiaries, Partnerships and Joint
  Ventures

  	
   

  
	
  (j)

  	
  Continuation of or Change in Business

  	
   

  
	
  (k)

  	
  Plans and Benefit Arrangements

  	
   

  
	
  (l)

  	
  Fiscal Year

  	
   

  
	
  (m)

  	
  Minimum Statutory Capital

  	
   

  
	
  (n)

  	
  Maximum Exposure Ratio (Company)

  	
   

  
	
  (o)

  	
  Maximum Debt to Total Capitalization Ratio
  (Holdings)

  	
   

  
	
  (p)

  	
  Minimum
  Net Worth

  	
   

  
	
  (q)

  	
  Interest Coverage Ratio

  	
   

  
	
  Section 7.03  Reporting
  Requirements

  	
   

  
	
  (a)

  	
  Quarterly Financial Statements

  	
   

  
	
  (b)

  	
  Annual Financial Statements

  	
   

  
	
  (c)

  	
  Certificate of the Company

  	
   

  
	
  (d)

  	
  Notice
  of Default

  	
   

  
	
  (e)

  	
  Off-Balance Sheet Financing

  	
   

  
	
  (f)

  	
  Notice of Litigation

  	
   

  
	
  (g)

  	
  Notice of Change in Insurer Financial
  Strength Rating

  	
   

  
	
  (h)

  	
  Sale
  of Assets

  	
   

  
	
  (i)

  	
  Budgets, Other Reports and Information

  	
   

  
	
  Section 7.04  Bermuda Law
  Event

  	
   

  
	
   

  	
   

  
	
  ARTICLE VIII DEFAULT

  	
   

  
	
   

  	
   

  
	
  Section 8.01  Events of
  Default

  	
   

  
	
  (a)

  	
  Payments Under Loan Documents

  	
   

  
	
  (b)

  	
  Breach of Warranty

  	
   

  
	
  (c)

  	
  Breach of Negative Covenants or Visitation
  Rights

  	
   

  
	
  (d)

  	
  Breach of Other Covenants

  	
   

  
	
  (e)

  	
  Defaults in Other Agreements or
  Indebtedness

  	
   

  
	
  (f)

  	
  Final Judgments or Orders

  	
   

  
	
  (g)

  	
  Loan Document Unenforceable

  	
   

  
	
  (h)

  	
  Losses; Proceedings Against Assets

  	
   

  
	
  (i)

  	
  Notice of Lien or Assessment

  	
   

  
	
  (j)

  	
  Insolvency

  	
   

  
	
  (k)

  	
  Events Relating to Plans and Benefit
  Arrangements

  	
   

  
	
  (l)

  	
  Change
  of Control

  	
   

  

 

iv

 

	
  (m)

  	
  Involuntary Proceedings

  	
   

  
	
  (n)

  	
  Voluntary Proceedings

  	
   

  
	
  (o)

  	
  Bermuda
  Law Event

  	
   

  
	
  Section 8.02  Consequences
  of Event of Default

  	
   

  
	
  (a)

  	
  Events of Default Other Than Bankruptcy,
  Insolvency or Reorganization Proceedings

  	
   

  
	
  (b)

  	
  Bankruptcy, Insolvency or Reorganization
  Proceedings

  	
   

  
	
  (c)

  	
  Set-off

  	
   

  
	
  (d)

  	
  Suits, Actions, Proceedings

  	
   

  
	
  (e)

  	
  Application of Proceeds

  	
   

  
	
  (f)

  	
  Other Rights and Remedies

  	
   

  
	
  Section 8.03  Right of
  Competitive Bid Loan Banks

  	
   

  
	
   

  	
   

  
	
  ARTICLE IX THE AGENT

  	
   

  
	
   

  	
   

  
	
  Section 9.01  Appointment

  	
   

  
	
  Section 9.02  Delegation of
  Duties

  	
   

  
	
  Section 9.03  Nature of
  Duties; Independent Credit Investigation

  	
   

  
	
  Section 9.04  Actions in
  Discretion of Agent; Instructions From the Banks

  	
   

  
	
  Section 9.05  Reimbursement
  and Indemnification of Agent by the Borrowers

  	
   

  
	
  Section 9.06  Exculpatory
  Provisions; Limitation of Liability

  	
   

  
	
  Section 9.07  Reimbursement
  and Indemnification of Agent and Issuing Banks by Banks

  	
   

  
	
  Section 9.08  Reliance by
  Agent and Issuing Banks

  	
   

  
	
  Section 9.09  Notice of Default

  	
   

  
	
  Section 9.10  Notices

  	
   

  
	
  Section 9.11  Banks in Their
  Individual Capacities; Agents in Its Individual Capacity

  	
   

  
	
  Section 9.12  Holders of
  Notes

  	
   

  
	
  Section 9.13  Equalization
  of Banks

  	
   

  
	
  Section 9.14  Successor
  Agent

  	
   

  
	
  Section 9.15  Agent’s Fee

  	
   

  
	
  Section 9.16  Availability
  of Funds

  	
   

  
	
  Section 9.17  Calculations

  	
   

  
	
  Section 9.18  Beneficiaries

  	
   

  
	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 10.01  Modifications,
  Amendments, or Waivers

  	
   

  
	
  (a)

  	
  Increase of Commitment; Extension of Expiration Date

  	
   

  
	
  (b)

  	
  Extension of Payment; Reduction of Principal Interest or Fees;
  Modification of Terms of Payment

  	
   

  
	
  (c)

  	
  Release of Collateral or Guarantor

  	
   

  
	
  (d)

  	
  Miscellaneous

  	
   

  
	
  Section 10.02  No Implied
  Waivers; Cumulative Remedies; Writing Required

  	
   

  
	
  Section 10.03  Reimbursement
  and Indemnification of Banks by the Borrowers; Taxes

  	
   

  
	
  Section 10.04  Holidays

  	
   

  

 

v

 

	
  Section 10.05  Funding by
  Branch, Subsidiary, or Affiliate

  	
   

  
	
  (a)

  	
  National
  Funding

  	
   

  
	
  (b)

  	
  Actual
  Funding

  	
   

  
	
  Section 10.06  Notices

  	
   

  
	
  Section 10.07  Severability

  	
   

  
	
  Section 10.08  Governing Law

  	
   

  
	
  Section 10.09  Prior
  Understanding

  	
   

  
	
  Section 10.10  Duration;
  Survival

  	
   

  
	
  Section 10.11  Successors
  and Assigns

  	
   

  
	
  Section 10.12  Confidentiality

  	
   

  
	
  (a)

  	
  General

  	
   

  
	
  (b)

  	
  Sharing Information With Affiliates of the Banks

  	
   

  
	
  Section 10.13  Counterparts

  	
   

  
	
  Section 10.14  Agent’s or
  Bank’s Consent

  	
   

  
	
  Section 10.15  Exceptions

  	
   

  
	
  Section 10.16  CONSENT TO FORUM; WAIVER OF JURY TRIAL

  	
   

  
	
  Section 10.17  Tax
  Withholding Clause

  	
   

  
	
  Section 10.18  Joinder of
  Guarantors

  	
   

  
	
  Section 10.19  Limited Recourse

  	
   

  
	
  Section 10.20  Change of
  Lending Office

  	
   

  
	
  Section 10.21  USA Patriot
  Act

  	
   

  

 

LIST OF
SCHEDULES AND EXHIBITS

 

	
  SCHEDULES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1.01(A)

  	
  -

  	
  PRICING GRID

  	
   

  
	
  SCHEDULE 1.01(B)

  	
  -

  	
  COMMITMENTS OF BANKS AND ADDRESSES FOR
  NOTICES

  	
   

  
	
  SCHEDULE 1.01(M)

  	
  -

  	
  MATERIAL SUBSIDIARIES

  	
   

  
	
  SCHEDULE 1.01(P)

  	
  -

  	
  EXISTING LIENS

  	
   

  
	
  SCHEDULE 5.01(b)

  	
  -

  	
  SUBSIDIARIES

  	
   

  
	
  SCHEDULE 5.01(h)

  	
  -

  	
  REINSURANCE COVERAGE

  	
   

  
	
  SCHEDULE 7.02(a)

  	
  -

  	
  EXISTING INDEBTEDNESS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT 1.01(A)

  	
  -

  	
  ASSIGNMENT AND ASSUMPTION AGREEMENT

  	
   

  
	
  EXHIBIT 1.01(B)

  	
  -

  	
  BID NOTE

  	
   

  
	
  EXHIBIT 1.01(G)(1)

  	
  -

  	
  GUARANTOR JOINDER

  	
   

  
	
  EXHIBIT 1.01(G)(2)-1

  	
  -

  	
  GUARANTY AGREEMENT OF MATERIAL NON-AGC
  SUBSIDIARIES

  	
   

  
	
  EXHIBIT 1.01(G)(2)-2

  	
  -

  	
  GUARANTY AGREEMENT OF ASSURED GUARANTY
  CORP.

  	
   

  

 

vi

 

	
  EXHIBIT 1.01(G)(2)-3

  	
  -

  	
  GUARANTY AGREEMENT OF ASSURED GUARANTY LTD.

  	
   

  
	
  EXHIBIT 1.01(R)

  	
  -

  	
  REVOLVING CREDIT NOTE

  	
   

  
	
  EXHIBIT 2.05

  	
  -

  	
  REVOLVING CREDIT LOAN REQUEST

  	
   

  
	
  EXHIBIT 2.08(a)

  	
  -

  	
  BID LOAN REQUEST

  	
   

  
	
  EXHIBIT 2.12

  	
  -

  	
  LETTER OF CREDIT REQUEST

  	
   

  
	
  EXHIBIT 6.01(d)

  	
  -

  	
  OPINION(S) OF COUNSEL

  	
   

  
	
  EXHIBIT 7.03(c)

  	
  -

  	
  QUARTERLY COMPLIANCE CERTIFICATE

  	
   

  

 

vii

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT is
dated as of April 15, 2005, and is made by and among ASSURED GUARANTY
LTD., a company organized under the laws of Bermuda, ASSURED GUARANTY CORP., a
Maryland corporation, ASSURED GUARANTY (UK) LTD., a company organized under the
laws of England and Wales, ASSURED GUARANTY RE INTERNATIONAL LTD., a company
organized under the laws of Bermuda, ASSURED GUARANTY RE OVERSEAS LTD.,  a company organized under the laws of
Bermuda, the BANKS (as hereinafter defined), and ABN AMRO BANK N.V., in its
capacity as administrative agent for the Banks under this Agreement and sole
bookrunner.

 

W
I  T  N  E  S  S  E  T  H
:

 

WHEREAS, the Borrowers
have requested the Banks to provide a three-year revolving credit facility,
including the issuance of letters of credit, to the Borrowers in an aggregate
principal amount not to exceed the Commitments of the Banks; and

 

WHEREAS, such revolving
credit facility shall be used for the general corporate purposes of the
Borrowers; and

 

WHEREAS, the Banks are
willing to provide such credit upon the terms and conditions hereinafter set
forth;

 

NOW, THEREFORE, the
parties hereto, in consideration of their mutual covenants and agreements
hereinafter set forth, hereby covenant and agree as follows:

 

ARTICLE I

 

CERTAIN DEFINITIONS

 

Section 1.01  Certain
Definitions.  In addition to words
and terms defined elsewhere in this Agreement, the following words and terms
shall have the following meanings, respectively, unless the context hereof
clearly requires otherwise:

 

ABN AMRO Bank
or ABN AMRO shall mean ABN AMRO Bank N.V., its successors and assigns.

 

ACE
shall mean ACE Limited, a Cayman Islands company.

 

Affiliate
as to any Person shall mean any other Person (i) which directly or
indirectly controls, is controlled by, or is under common control with, such
Person, (ii) which beneficially owns or holds 5% or more of any class of
the voting or other equity interests of such Person, or (iii) 5% or more
of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person.  Control, as used in this

 

 

definition, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be.

 

Agent
shall mean ABN AMRO Bank N.V., and its successors and permitted assigns, in
their respective capacities as administrative agent for the Banks under this
Agreement.

 

Agent’s Fee
shall have the meaning assigned to that term in Section 9.15.

 

Agent’s Letter
shall have the meaning assigned to that term in Section 9.15.

 

Aggregate Outstandings
shall have the meaning assigned to that term in Section 4.10(a).

 

Agreement
shall mean this Credit Agreement, as the same may be supplemented or amended
from time to time, including all schedules and exhibits.

 

AGRI
shall mean Assured Guaranty Re International Ltd., a Bermuda company.

 

AGRO
shall mean Assured Guaranty Re Overseas Ltd., a Bermuda company.

 

Alternate Currency
shall mean each of Euros and Pounds Sterling.

 

Alternate Currency Loan
shall mean any Loan denominated in an Alternate Currency.

 

Applicable Company
Facility Fee Rate shall mean the percentage rate per annum
corresponding to the indicated level of Insurer Financial Strength Rating in
the pricing grid on Schedule 1.01(A) below the heading “Company
Facility Fee.”  The Applicable Company
Facility Fee Rate shall be computed in accordance with the parameters set forth
on Schedule 1.01(A).

 

Applicable Holdings
Facility Fee Rate shall mean the percentage rate per annum
corresponding to the indicated level of the Holdings Debt Rating in the pricing
grid on Schedule 1.01(A) below the heading “Holdings Facility
Fee.”  The Applicable Holdings Facility
Fee Rate shall be computed in accordance with the parameters set forth on Schedule 1.01(A).

 

Applicable Margin
shall mean, as applicable:

 

(A)                              the
percentage spread to be added to Base Rate under the Base Rate Option
corresponding to the indicated level of Insurer Financial Strength Rating or
Holdings Debt Rating, as the case may be, in the pricing grid on Schedule 1.01(A) below
the heading “Applicable Margin for Base Rate Loans,” or

 

(B)                                the
percentage spread to be added to LIBOR under the Revolving Credit LIBOR Option
corresponding to the indicated level of Insurer Financial Strength Rating

 

2

 

or Holdings Debt
Rating, as the case may be, in the pricing grid on Schedule 1.01(A) below
the heading “Applicable Margin for LIBOR Loans.”

 

The Applicable Margin
shall be computed in accordance with the parameters set forth on Schedule 1.01(A).

 

Applicable Usage Premium
shall mean the percentage rate per annum corresponding to the indicated level
of Insurer Financial Strength Rating or Holdings Debt Rating, as the case may
be, in the pricing grid on Schedule 1.01(A) below the heading “Usage
Premium.”  The Applicable Usage Premium
shall be computed in accordance with the parameters set forth on Schedule 1.01(A).

 

Approved Currency
shall mean each of Dollars and each Alternate Currency.

 

Assignment and Assumption
Agreement shall mean an Assignment and Assumption Agreement
by and among a Purchasing Bank, a Transferor Bank and the Agent, as Agent and
on behalf of the remaining Banks, substantially in the form of Exhibit 1.01(A).

 

Associated
Cost Rate shall
mean, with respect to any Interest Period for Pounds Sterling denominated
Loans, the amount (expressed as a percentage rate per annum, rounded up to the
nearest four decimal places, as determined by the Agent on the first day of
such Interest Period) required to compensate the Banks lending from facility
offices in the United Kingdom for the portion of the cost of each such Bank of
complying with the cash ratio and special deposit requirements of the Bank of
England and/or capital adequacy requirements and banking supervision or other
fees imposed by the United Kingdom Financial Services Authority, which, in the
reasonable determination of such Bank, is attributable to the Loans made by
such Bank from its facility office in the United Kingdom and outstanding during
such Interest Period.

 

Authorized Officer
shall mean those individuals, designated by written notice to the Agent from
each Borrower, authorized to execute notices, reports and other documents
required hereunder on behalf of such Borrower. 
Each Borrower may amend such list of individuals from time to time by
giving written notice of such amendment to the Agent.

 

Banks
shall mean the financial institutions named on Schedule 1.01(B) and
their respective successors and assigns as permitted hereunder, each of which
is referred to herein as a “Bank”.

 

Base Rate
shall mean the greater of (i) the interest rate per annum announced from
time to time by the Agent at its Principal Office as its then prime rate, which
rate may not be the lowest rate then being charged commercial borrowers by the
Agent, or (ii) the Federal Funds Effective Rate plus 0.5% per annum.

 

Base Rate Loan
shall mean each Loan designated or deemed designated as such by any Borrower at
the time of incurrence thereof or conversion thereto.

 

Base Rate Option
shall mean the option of the Borrowers to have Revolving Credit Loans bear
interest at the rate and under the terms and conditions set forth in Section 3.01(a)(i).

 

3

 

Benefit Arrangement
shall mean at any time an “employee benefit plan,” within the meaning of Section 3(3) of
ERISA, which is neither a Plan nor a Multiemployer Plan and which is
maintained, sponsored or otherwise contributed to by any member of the ERISA
Group.

 

Bermuda Law Event
shall have the meaning assigned to that term in Section 7.04.

 

Bid
shall have the meaning assigned to such term in Section 2.08(b).

 

Bid Deadline
shall have the meaning assigned to such term in Section 2.08(b).

 

Bid Loan Borrowing Date
shall mean, with respect to any Bid Loan, the date for the making thereof,
which date shall be a Business Day.

 

Bid Loan Fixed Rate
Option shall mean the option of each Borrower to request that
the Banks submit Bids to make Bid Loans bearing interest at a fixed rate per
annum quoted by such Banks as a numerical percentage (and not as a spread over
another rate such as the LIBOR).

 

Bid Loan Interest Period
shall have the meaning assigned to such term in Section 2.08(a).

 

Bid Loan LIBOR Rate
Option shall mean the option of each Borrower to request that
the Banks submit Bids to make Bid Loans bearing interest at a rate per annum
quoted by such Banks at the LIBOR in effect two Business Days before the
Borrowing Date of such Bid Loan plus a LIBOR Bid Loan Spread.

 

Bid Loan Request
shall have the meaning assigned to such term in Section 2.08(a).

 

Bid Loans
shall mean collectively all of the Bid Loans and Bid Loan shall mean separately
any Bid Loan, made by any of the Banks to either Borrower pursuant to Section 2.08.

 

Bid Notes
shall mean collectively all of the Bid Notes and Bid Note shall mean separately
any Bid Note, of each Borrower in the form of Exhibit 1.01(B) evidencing
the Bid Loans made to such Borrower together with all amendments, extensions,
renewals, replacements, refinancings or refunds thereof in whole or in part.

 

Borrower
shall mean the Company, the UK Borrower and, at all times after the conditions
precedent set forth in Section 6.02(b) have been satisfied, Holdings,
AGRI and AGRO.

 

Borrowing Date
shall mean, with respect to any Loan, the date for the making thereof or the
renewal or conversion thereof at or to the same or a different Interest Rate
Option, which date shall be a Business Day.

 

Borrowing Tranche
shall mean specified portions of Loans outstanding as follows:  (i) any Loans to which a LIBOR Option or
a Bid Loan Fixed Rate Option applies which become subject to the same Interest
Rate Option under the same Loan Request by a Borrower

 

4

 

and which have the
same Interest Period shall constitute one Borrowing Tranche, and (ii) all
Loans to which a Base Rate Option applies shall constitute one Borrowing
Tranche.

 

Business Day
shall mean any day other than a Saturday or Sunday or a legal holiday on which
commercial banks are authorized or required to be closed for business in
New York, New York and, if the applicable Business Day (i) relates
to any Loan to which the LIBOR Option applies, such day must also be a day on
which dealings are carried on in the London interbank market and, with respect
to any payments due by Holdings, AGRI or AGRO, such day must also be a day
which is not a national or public holiday in Bermuda, and (ii) any Letter
of Credit Outstandings due from the UK Borrower, such day must also be a day
other than a legal holiday on which commercial banks are authorized or required
to be closed for business in London, England.

 

Cash Collateral Account
shall have the meaning assigned to such term in Section 4.10.

 

Closing Date
shall mean the date on which the conditions precedent set forth in Section 6.01
have been satisfied.

 

Commitment
shall mean as to any Bank its Revolving Credit Commitment, and Commitments
shall mean the aggregate of the Revolving Credit Commitments of all of the
Banks.

 

Company
shall mean Assured Guaranty Corp., a Maryland corporation.

 

Company Facility Fee
shall have the meaning assigned to such term in Section 2.03(a).

 

Company Consolidated
Assets shall mean, at any time, the assets of the Company and
its Subsidiaries at such time, determined on a consolidated basis in accordance
with GAAP; provided that the foregoing shall be calculated without
giving effect to Financial Accounting Standards Board Statements No. 115
and 133.

 

Compliance Certificate
shall have the meaning assigned to such term in Section 7.03(c).

 

Consideration
shall mean a greater than de minimis monetary return for the sale or provision
of a service or product or for the undertaking of an obligation or liability,
except that with respect to a Permitted Acquisition, Consideration shall mean
the aggregate of (i) the cash paid by any of the Company or any Material
Subsidiary, as buyer, directly or indirectly, to the seller in connection with
such Permitted Acquisition, (ii) the Indebtedness incurred or assumed by
the Company or any of the Material Subsidiaries, as buyer, with respect to such
Permitted Acquisition, whether in favor of the seller or otherwise and whether
fixed or contingent, (iii) any Guaranty given or incurred by the Company
or any Material Subsidiary in connection therewith, and (iv) any other
consideration given or obligation incurred by the Company or any of the
Material Subsidiaries in connection with such Permitted Acquisition.

 

5

 

Consolidated Debt
shall mean, at any time, an amount equal to the sum (without duplication) of
the then outstanding Indebtedness of Holdings or the Company, as the case may
be, and of each Subsidiary of Holdings or the Company, as the case may be,
(excluding, however, (i) the amount of all Insurance-Related Guaranties, (ii) the
amount of any Soft Capital, (iii) the obligations of Holdings with respect
to any preferred stock of Holdings, (iv) the obligations of any of
Holdings or its Subsidiaries under Guaranteed Investment Contracts, and (v) the
amount of any preferred stock issued in connection with the Contingent Capital
Facility), determined and consolidated in accordance with GAAP.

 

Consolidated Interest
Coverage Ratio for any period shall mean the ratio of
Consolidated Net Income to Consolidated Interest Expense for such period.

 

Consolidated Interest
Expense shall mean, for any period, the total consolidated
interest expense of Holdings and its Subsidiaries for such period.

 

Consolidated Net Income
shall mean, for any period, the net income for such period for Holdings and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

 

Consolidated Net Worth
shall mean, at any time, the net worth of Holdings and its Subsidiaries at such
time, determined on a consolidated basis in accordance with GAAP.

 

Contingent Capital
Facility shall mean, collectively (i) the put agreement
between the Company and Woodbourne Capital Trust I, Woodbourne Capital Trust
II, Woodbourne Capital Trust III and Woodbourne Capital Trust IV pursuant to
which the Company has the right to cause each of such trusts to purchase up to
$50 million of preferred stock of the Company and (ii) the put agreement
between AGRI and Hamilton Preferred Trust I and Hamilton Preferred Trust II
pursuant to which AGRI has the right to cause each of such trusts to purchase
up to $50 million of preferred stock of AGRI.

 

Credit Derivative
Guaranties shall have the meaning assigned to such term in Section 7.02(c).

 

Credit Event
shall mean the incurrence of each Loan and the issuance of each Letter of
Credit.

 

Dollar,
Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.

 

Dollar Equivalent
shall mean, at any time for the determination thereof, the amount of Dollars
which could be purchased with the amount of the relevant Alternate Currency
involved in such computation at the spot exchange rate therefor as quoted by
the Administrative Agent as of 11:00 A.M., London time, on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.

 

ERISA
shall mean the Employee Retirement Income Security Act of 1974, as the same may
be amended or supplemented from time to time, and any successor statute of
similar import, and the rules and regulations thereunder, as from time to
time in effect.

 

6

 

ERISA Group
shall mean, at any time, Holdings and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control and all other entities which, together with Holdings, are
treated as a single employer under Section 414 of the Internal Revenue
Code.

 

Euro
shall mean the single currency of participating member states of the European
Union.

 

Eurodollar Rate
shall mean, with respect to the Loans comprising any Borrowing Tranche
denominated in Dollars to which the LIBOR Option applies for any Interest
Period, an interest rate per annum determined on the basis of the rate for
deposits in Dollars for a period comparable to such Interest Period commencing
on the first day of such Interest Period appearing on Page 3750 of the
Telerate screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period. 
In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the Eurodollar Rate shall be
determined by reference to such other publicly available service for displaying
eurodollar rates as may be agreed upon by the Agent and the Borrowers or, in
the absence of such agreement, the Eurodollar Rate shall be the rate of
interest per annum determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error)
equal to the rate per annum at which Dollar deposits approximately equal in
principal amount to such Borrowing Tranche for a period and with a maturity
comparable to such Interest Period are offered to the principal London office
of Agent in immediately available funds in the London interbank market at
approximately 11:00 A.M., London time, two Business Days prior to the
commencement of such Interest Period. 
The Agent shall give prompt notice to the Borrowers of the Eurodollar
Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.

 

Eurodollar Reserve
Percentage shall mean as of any day and with respect to any
Bank or the Agent, the maximum percentage in effect on such day for such Bank
or the Agent, as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements as it
affects such Bank or the Agent (including supplemental, marginal and emergency
reserve requirements) with respect to eurocurrency funding (currently referred
to as “Eurocurrency Liabilities”).

 

Euro-LIBOR shall mean, with respect to the
Loans comprising any Borrowing Tranche denominated in Euros to which the LIBOR
Option applies for any Interest Period, an interest rate per annum determined
on the basis of the rate for deposits in Euros for a period comparable to such
Interest Period commencing on the first day of such Interest Period appearing
on Page 3750 of the Telerate screen as of 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest Period.  In the event that such rate does not appear
on Page 3750 of the Telerate screen (or otherwise on such screen), Euro LIBOR shall be determined by
reference to such other publicly available service for displaying Euro-denominated
rates as may be agreed upon by the Agent and the Borrowers or, in the absence
of such agreement, the Euro LIBOR shall
be the rate of interest per annum determined by the Agent in accordance with
its usual procedures (which determination shall be conclusive absent manifest
error) equal to the rate per annum at which Euro deposits approximately equal
in principal amount to such Borrowing Tranche for a period and with a maturity
comparable to such Interest Period are offered to

 

7

 

the principal
London office of Agent in immediately available funds in the London interbank
market at approximately 11:00 A.M., London time, two Business Days prior
to the commencement of such Interest Period. 
The Agent shall give prompt notice to the Borrowers of the Euro LIBOR as
determined or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.

 

Event of Default
shall mean any of the events described in Section 8.01 and referred to
therein as an “Event of Default.”

 

Existing Credit Agreement
shall mean the Credit Agreement, dated as of April 29, 2004, among
Holdings, the Company, the UK Borrower, the banks party thereto, ABN AMRO Bank
N.V., as administrative agent, and ABN AMRO Incorporated, as syndication agent,
lead arranger and bookrunner.

 

Existing Reinsurance
Coverage shall have the meaning assigned to such term in Section 5.01(h)(C).

 

Expiration Date
shall mean the third anniversary of the Closing Date.

 

Facility Fee
shall mean the Company Facility Fee and the Holdings Facility Fee.

 

Facility Usage
shall mean at any time the sum of the principal amount of the Revolving Credit
Loans outstanding and the Letter of Credit Outstandings and, solely for
purposes of Section 2.04, the principal amount of the Bid Loans
outstanding.

 

Federal Funds Effective
Rate for any day shall mean the rate per annum (based on a
year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate” as of the date of this Agreement; provided, if such
Federal Reserve Bank (or its successor) does not announce such rate on any day,
the “Federal Funds Effective Rate” for such day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.

 

Fixed Rate
shall mean a fixed interest rate quoted by a Bank in its Bid to apply to such
Bank’s Bid Loan over the term of such Bid Loan if such Bank’s Bid is accepted.

 

Fixed Rate Bid Loan
shall mean a Bid Loan that bears interest under the Bid Loan Fixed Rate Option.

 

Fronting Fee
shall have the meaning assigned to such term in Section 2.03(c).

 

GAAP
shall mean generally accepted accounting principles as in effect from time to
time in the United States, subject to the provisions of Section 1.03,
applied on a consistent basis both as to classification of items and amounts.

 

8

 

Guaranteed Investment
Contract shall mean, with respect to any Person, a guaranteed
investment contract, funding agreement or similar agreement issued or entered
into by such Person wherein such Person guarantees a rate of return on invested
capital over the term of such contract or agreement.

 

Guarantor
shall mean Holdings, the Company and each Material Subsidiary which hereafter
becomes a Guarantor after the date hereof pursuant to Section 10.18.

 

Guarantor Joinder
shall mean a joinder by a Person as a Guarantor under this Agreement, the
Guaranty Agreement and the other Loan Documents in the form of Exhibit 1.01(G)(1).

 

Guaranty
of any Person shall mean any obligation of such Person guarantying or in effect
guarantying any liability or obligation of any other Person in any manner,
whether directly or indirectly, including any agreement to indemnify or hold
harmless any other Person (other than as an incidental part of another
transaction), any performance bond or other suretyship arrangement and any
other form of assurance against loss, except endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business.

 

Guaranty Agreement
shall mean one or more Guaranty Agreements in substantially the form of Exhibit 1.01(G)(2)-1,
Exhibit 1.01(G)(2)-2 or Exhibit 1.01(G)(2)-3,
or otherwise entered into pursuant to Section 7.01(l), and in each case
executed and delivered by a Guarantor to the Agent for the benefit of the
Banks.

 

Historical Statements
shall have the meaning assigned to that term in Section 5.01(h)(A).

 

Holdings
shall mean Assured Guaranty Ltd., a company organized under the laws of
Bermuda.

 

Holdings Debt Rating
shall mean the senior unsecured debt rating of Holdings as determined by either
of Standard & Poor’s or Moody’s.

 

Holdings Facility Fee
shall have the meaning assigned to such term in Section 2.03(a).

 

Holdings Sub-Limit
shall mean an amount equal to $100,000,000; provided that at any time
when all Commitments hereunder have been terminated, the Holdings Sub-Limit
shall mean an amount equal to zero.

 

Indebtedness
shall mean, as to any Person at any time, any and all indebtedness, obligations
or liabilities (whether matured or unmatured, liquidated or unliquidated,
direct or indirect, absolute or contingent, or joint or several) of such Person
for or in respect of:  (i) borrowed
money, (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) payment obligations
(contingent or otherwise) under any letter of credit, currency swap agreement,
interest rate swap, cap, collar or floor agreement or other interest rate
management device, (iv) any other transaction (including forward sale or
purchase agreements, capitalized leases and conditional sales agreements)
having the commercial effect of

 

9

 

a borrowing of
money entered into by such Person to finance its operations or capital
requirements (but not including trade payables and accrued expenses incurred in
the ordinary course of business which are not represented by a promissory note
or other evidence of indebtedness and which are not more than ninety (90) days
past due), (v) any Guaranteed Investment Contract, or (vi) any
Guaranty of Indebtedness.

 

Insolvency Proceeding
shall mean, with respect to any Person, (a) a case, action or proceeding
with respect to such Person (i) before any court or any other Official
Body under any bankruptcy, insolvency, reorganization or other similar Law now
or hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar
official) of Holdings or any Material Subsidiary, or otherwise relating to the
liquidation, dissolution, winding-up or relief of such Person, or (b) any
general assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other similar arrangement in respect of such Person’s
creditors generally or any substantial portion of its creditors, undertaken
under any Law.

 

Insurance-Related
Guaranties shall have the meaning assigned to that term in Section 7.02(c).

 

Insurer Financial
Strength Rating shall mean the insurer financial strength rating of the Company as determined by
either of Standard & Poor’s and Moody’s.

 

Interest Period
shall mean either a Revolving Credit Loan Interest Period or a Bid Loan
Interest Period.

 

Interest Rate Hedge
shall mean an interest rate exchange, collar, cap, swap, adjustable strike cap,
adjustable strike corridor, or similar agreement entered into by Holdings or
any Material Subsidiary in order to provide protection to, or minimize the
impact upon, Holdings or any Material Subsidiary of increasing floating rates
of interest applicable to Indebtedness.

 

Interest Rate Option
shall mean any Revolving Credit LIBOR Option, Bid Loan LIBOR Option, Bid Loan
Fixed Rate Option, or Base Rate Option.

 

Internal Revenue Code
shall mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.

 

Issuing Bank
shall mean (a) ABN AMRO Bank N.V. and (b) PNC Bank, National
Association.

 

Law
shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ,
decree, bond, judgment, authorization, or approval, lien or award of or
settlement agreement with any Official Body.

 

Letter of Credit
shall have the meaning assigned to such term in Section 2.10(a).

 

10

 

Letter of Credit Fee
shall have the meaning assigned to such term in Section 2.03(b).

 

Letter of Credit
Outstandings shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit at
such time.

 

Letter of Credit Request
shall have the meaning assigned to such term in Section 2.12(a).

 

LIBOR
shall mean, with respect to any Borrowing Tranche of Loans, the relevant
interest rate, i.e., Eurodollar Rate, Euro LIBOR or Sterling LIBOR.

 

LIBOR Bid Loan
shall mean any Bid Loan that bears interest under the Bid Loan LIBOR Option.

 

LIBOR Bid Loan Spread
shall mean the spread quoted by a Bank in its Bid to apply to such Bank’s Bid
Loan if such Bank’s Bid is accepted.  The
LIBOR Bid Loan Spread shall be quoted as a percentage rate per annum and
expressed in multiples of 1/1000th of one percentage point to be either added
to (if it is positive) or subtracted from (if it is negative) the LIBOR in
effect two (2) Business Days before the Borrowing Date with respect to
such Bid Loan.  Interest on LIBOR Bid
Loans shall be computed based on a year of 360 days for the actual days
elapsed.

 

LIBOR Interest Period
shall mean the Interest Period applicable to a LIBOR Bid Loan or a Revolving
Credit Loan that is subject to the Revolving Credit LIBOR Option.

 

LIBOR Loan
shall mean each Loan designated or deemed designated as such by any Borrower at
the time of incurrence thereof or conversion thereto.

 

LIBOR Option
shall mean either the Revolving Credit LIBOR Option or the Bid Loan LIBOR-Rate
Option.

 

Lien
shall mean any mortgage, deed of trust, pledge, lien, security interest,
charge, or other encumbrance or security arrangement of any nature whatsoever,
whether voluntarily or involuntarily given, including any conditional sale or
title retention arrangement, and any assignment, deposit arrangement, or lease
intended as, or having the effect of, security and any filed financing
statement or other notice of any of the foregoing (whether or not a lien or
other encumbrance is created or exists at the time of the filing).

 

Loan Documents
shall mean this Agreement, the Agent’s Letter, each Guaranty Agreement, and any
other instruments, certificates, or documents delivered or contemplated to be
delivered hereunder or thereunder or in connection herewith or therewith, as
the same may be supplemented or amended from time to time in accordance
herewith or therewith, and “Loan Document” shall mean any of the Loan
Documents.

 

Loan Request
shall mean either a Bid Loan Request or a Revolving Credit Loan Request.

 

11

 

Loans
shall mean collectively all Revolving Credit Loans and Bid Loans and Loan shall
mean separately any Revolving Credit Loan or Bid Loan.

 

Material Adverse Change
shall mean any set of circumstances or events which (a) has or could
reasonably be expected to have any material adverse effect whatsoever upon the
validity or enforceability of this Agreement or any other Loan Document, (b) is
or could reasonably be expected to be material and adverse to the business,
properties, assets, financial condition, results of operations or prospects of
Holdings and its Material Subsidiaries taken as a whole or the Company and its
Material Subsidiaries taken as a whole, (c) impairs materially or could
reasonably be expected to impair materially the ability of Holdings and the
Material Subsidiaries taken as a whole duly and punctually to pay or to perform
their respective obligations under the Loan Documents, or (d) impairs
materially or could reasonably be expected to impair materially the ability of
the Agent or any of the Banks, to the extent permitted, to enforce their legal
remedies pursuant to this Agreement or any other Loan Document.

 

Material Non-AGC
Subsidiary shall mean any Material Subsidiary of Holdings
other than (a) Assured Guaranty US Holdings Inc. and its  Subsidiaries (including the Company and its
Subsidiaries), (b) any Material Subsidiary of Holdings which is regulated
by a state insurance regulatory authority in the U.S. and (c) Assured
Guaranty Barbados Holdings Ltd.

 

Material Subsidiary
shall mean (i) any Subsidiary of Holdings which has at any time, or which
will have after giving effect to any contemplated transaction, acquisition,
loan or investment, a net worth equal to or greater than an amount which is the
greater of five percent (5%) of the consolidated tangible net worth of Holdings
and its Subsidiaries or $25,000,000, (ii) any Subsidiary of Holdings as to
which Holdings requests in writing that it be a Material Subsidiary, and (iii) any
Subsidiary or Subsidiaries of Holdings which own(s) in the aggregate 30% or
more of any Material Subsidiary; and Material Subsidiaries shall mean all such
Subsidiaries.  Notwithstanding the
foregoing, each of the Company, AGRI, AGRO and the UK Borrower shall be deemed
to be a Material Subsidiary for all purposes of this Agreement and the other
Loan Documents; provided, however, that neither the Company nor
the UK Borrower shall be required to be a Guarantor (except for the requirement
that the Company guaranty all obligations of the UK Borrower).  As of the date hereof, “Material Subsidiary”
shall include, without limitation, the Subsidiaries listed on Schedule 1.01(M).

 

Month,
with respect to an Interest Period under the LIBOR Option, shall mean the
interval between the days in consecutive calendar months numerically
corresponding to the first day of such Interest Period.  If any LIBOR Interest Period begins on a day
of a calendar month for which there is no numerically corresponding day in the
month in which such Interest Period is to end, the final month of such Interest
Period shall be deemed to end on the last Business Day of such final month.

 

Moody’s
shall mean Moody’s Investors Service, Inc. and its successors.

 

Multiemployer Plan
shall mean any employee benefit plan which is a “multiemployer plan” within the
meaning of Section 4001(a)(3) of ERISA and to which Holdings or any
member of the ERISA Group is then making or accruing an obligation to make

 

12

 

contributions or,
within the preceding five Plan years, has made or had an obligation to make
such contributions.

 

Multiple Employer Plan
shall mean a Plan which has two or more contributing sponsors (including
Holdings or any member of the ERISA Group) at least two of whom are not under
common control, as such a plan is described in Sections 4063 and 4064 of
ERISA.

 

Net Par
shall mean the aggregate maximum par amount of insurance and reinsurance
coverage under all obligations of insurance or reinsurance (or similar
arrangements) provided by a Person less the aggregate maximum par amount of
reinsurance (or similar arrangements including hedging arrangements) coverage
in favor of such Person with respect to its insurance or reinsurance
obligations.

 

Notes
shall mean the Revolving Credit Notes and Bid Notes.

 

Notice of Non-Extension
shall have the meaning assigned to such term in Section 2.14.

 

Notices
shall have the meaning assigned to that term in Section 10.06.

 

Obligation
shall mean any obligation or liability of any Borrower, any Guarantor or any
Material Subsidiary to the Agent or any of the Banks, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due, under or in connection with
this Agreement, any Notes, the Agent’s
Letter or any other Loan Document.

 

Off-Balance
Sheet Transactions shall have
the meaning assigned to that term in Section 7.03(e).

 

Offered Amount
shall have the meaning assigned to such term in Section 2.08(b).

 

Official Body
shall mean any national, federal, state, local, or other government or
political subdivision or any agency, authority, board, bureau, central bank,
commission, department, or instrumentality of either, or any court, tribunal,
grand jury, or arbitrator, in each case whether foreign or domestic.

 

Participant
shall have the meaning assigned to such term in Section 2.10(b).

 

PBGC
shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.

 

Permitted Acquisitions
shall have the meaning assigned to such term in Section 7.02(f).

 

Permitted Investments
shall mean:

 

(i)                                     direct
obligations of the United States of America or the United Kingdom or any agency
or instrumentality thereof or obligations backed by the full faith and credit

 

13

 

of the United
States of America or the United Kingdom maturing in twelve (12) months or less
from the date of acquisition;

 

(ii)                                  commercial
paper maturing in 180 days or less rated not lower than A-1, by Standard &
Poor’s or P-1 by Moody’s on the date of acquisition;

 

(iii)                               demand
deposits, time deposits or certificates of deposit maturing within one year in
commercial banks whose obligations are rated A-1, A or the equivalent or
better by Standard & Poor’s on the date of acquisition;

 

(iv)                              fixed
income securities with a weighted average credit quality of A by Standard &
Poor’s or A2 by Moody’s on the date of acquisition; and

 

(v)                                 investments
of the types specified in Sections 1402(b) and 1404(a)(1), (2), (3), (8),
and (10) of the New York Insurance Law.

 

Permitted Liens
shall mean:

 

(i)                                     Liens
for taxes, assessments, or similar charges, incurred in the ordinary course of
business and which are not yet due and payable;

 

(ii)                                  Liens
and pledges or deposits made in the ordinary course of business of Holdings or
any Material Subsidiary with respect to employee’s salaries and benefits, to
secure payment of workmen’s compensation, or to participate in any fund in
connection with workmen’s compensation, unemployment insurance, old-age
pensions or other social security programs with respect to such Person’s
officers or employees;

 

(iii)                               Liens
of mechanics, materialmen, warehousemen, carriers, or other like Liens,
securing obligations incurred in the ordinary course of business that are not
yet due and payable and Liens of landlords securing obligations to pay lease
payments that are not yet due and payable or in default;

 

(iv)                              Good-faith
pledges or deposits made in the ordinary course of business of Holdings or any
Material Subsidiary to secure statutory or regulatory obligations of Holdings
or any Material Subsidiary;

 

(v)                                 Encumbrances
consisting of zoning restrictions, easements or other restrictions on the use
of real property, none of which materially impairs the use of such property or
the value thereof, and none of which is violated in any material respect by
existing or proposed structures or land use;

 

(vi)                              Liens,
security interests and mortgages in favor of the Agent for the benefit of the
Banks securing the Obligations;

 

(vii)                           Liens
on property leased by Holdings or any Material Subsidiary under capital and
operating leases;

 

14

 

(viii)                        Any Lien
described on Schedule 1.01(P), provided that the principal
amount secured thereby is not hereafter increased;

 

(ix)                                Purchase
Money Security Interests;

 

(x)                                   Liens
on assets received by any Borrower from a third Person and held in trust by any
Borrower in respect of liabilities assumed by any Borrower in the course of the
reinsurance business of such Borrower;

 

(xi)                                Liens
securing Credit Derivative Guaranties;

 

(xii)                             To
the extent that they would constitute “Liens”, Insurance-Related Guaranties;
and

 

(xiii)                          The
following, (A) if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings diligently conducted so long
as levy and execution thereon have been stayed and continue to be stayed or (B) if
a final judgment is entered and such judgment is discharged within thirty (30)
days of entry, and they do not in the aggregate materially impair the ability
of any Borrower or any Material Subsidiary to perform its Obligations hereunder
or under the other Loan Documents:

 

(1)                                  Claims
or Liens for taxes, assessments or charges due and payable and subject to
interest or penalty, provided that the applicable Borrower or applicable
Material Subsidiary maintains such reserves or other appropriate provisions as
shall be required by GAAP and pays all such taxes, assessments or charges
forthwith upon the commencement of proceedings to foreclose any such Lien;

 

(2)                                  Claims,
Liens, or encumbrances upon, and defects of title to, real or personal
property, including any attachment of personal or real property or other legal
process prior to adjudication of a dispute on the merits;

 

(3)                                  Claims
or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory
nonconsensual Liens; or

 

(4)                                  Liens
resulting from final judgments or orders described in Section 8.01(f).

 

Person
shall mean any individual, company, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization,
joint venture, government or political subdivision or agency thereof, or any
other entity.

 

Plan
shall mean at any time an employee pension benefit plan (including a Multiple
Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of
ERISA or is subject to the minimum funding standards under Section 412 of
the Internal Revenue Code and either (i) is maintained by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has
at any time within the preceding five years been maintained by any entity which
was at such time a member of the ERISA Group for employees of any entity which
was at such time a member of the ERISA Group.

 

15

 

Potential Default
shall mean any event or condition which with notice, passage of time or a
determination by the Agent or the Required Banks, or any combination of the
foregoing, would constitute an Event of Default.

 

Pounds Sterling
shall mean freely transferable lawful money of the United Kingdom.

 

Principal Amount
shall mean (i) the stated principal amount of each Loan denominated in
Dollars, and/or (ii) the Dollar Equivalent of the stated principal amount
of each Alternate Currency Loan, as the context may require.

 

Principal Office
shall mean the main banking office of the Agent in New York,
New York.

 

Prohibited Transaction
shall mean any “prohibited transaction” as defined in Section 4975 of the
Internal Revenue Code or Section 406 of ERISA for which neither an
individual nor a class exemption has been issued by the United States
Department of Labor.

 

Property
shall mean all real property, both owned and leased, of Holdings or any
Material Subsidiary.

 

Purchase Money Security
Interest shall mean Liens upon tangible personal property
securing loans to the Company or any Material Subsidiary, or deferred payments
by such Person, in either case for the purchase of such tangible personal
property.

 

Purchasing Bank
shall mean a Bank which becomes a party to this Agreement by executing an
Assignment and Assumption Agreement.

 

Ratable Share
shall mean the proportion that a Bank’s Commitment bears to the Commitments
(or, if the Commitments have terminated, the proportion that a Bank’s
Commitment immediately prior to such termination bears to the Commitments
immediately prior to such termination).

 

Regulation U
shall mean any of Regulations T, U, or X as promulgated by the Board of
Governors of the Federal Reserve System, as amended from time to time.

 

Reportable Event
shall mean a reportable event described in Section 4043 of ERISA and
regulations thereunder with respect to a Plan or Multiemployer Plan.

 

Requested Amount
shall have the meaning assigned to such term in Section 2.08(a).

 

Required Banks
shall mean

 

(A)                              if
there are no Loans, Required Banks shall mean Banks whose Commitments aggregate
greater than 50% of the Commitments of all of the Banks, or

 

16

 

(B)                                if
there are Loans, Required Banks shall mean:

 

(i)                                     prior
to a termination of the Commitments hereunder pursuant to Section 8.02(a) or
Section 8.02(b), any Bank or group of Banks if the sum of (x) the
Principal Amount of the Revolving Credit Loans of such Banks then outstanding
plus (y) such Banks’ participating interests in the Letter of Credit
Outstandings at such time aggregates greater than 50% of the sum of (x) the
total Principal Amount of all of the Revolving Credit Loans then outstanding
plus (y) all Letter of Credit Outstandings at such time; and

 

(ii)                                  after
a termination of the Commitments hereunder pursuant to Section 8.02(a) or
Section 8.02(b), any Bank or group of Banks if the sum of (x) the
Principal Amount of the Loans of such Banks then outstanding plus (y) such
Banks’ participating interests in the Letter of Credit Outstandings at such
time aggregates greater than 50% of the sum of (x) the total principal amount
of all of the Loans then outstanding plus (y) all Letter of Credit Outstandings
at such time.

 

Revolving Credit
Commitment shall mean, as to any Bank at any time, the amount
initially set forth opposite its name on Schedule 1.01(B) in
the column labeled “Amount of Commitment for Revolving Credit Loans,” and
thereafter on Schedule I to the most recent Assignment and Assumption
Agreement, and Revolving Credit Commitments shall mean the aggregate Revolving
Credit Commitments of all of the Banks.

 

Revolving Credit LIBOR
Option shall mean the option of the Borrowers to have
Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 3.01(a)(ii).

 

Revolving Credit Loan
Interest Period shall mean the period of time selected by a
Borrower in connection with (and to apply to) any election permitted hereunder
by such Borrower to have Revolving Credit Loans bear interest under the LIBOR
Option.  Subject to the last sentence of
this definition, such period shall be one, two, three or six Months or, subject
to availability to each Bank, nine or twelve Months.  Such Interest Period shall commence on the
effective date of borrowing of any Loan bearing interest at a rate determined
with reference to the LIBOR Option, which shall be (i) the Borrowing Date
if the respective Borrower is requesting new Loans, or (ii) the date of
renewal of or conversion to the LIBOR Option if the respective Borrower is
renewing or converting to the LIBOR Option applicable to outstanding
Loans.  Notwithstanding the second sentence
hereof: (A) any Interest Period which would otherwise end on a date which
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the directly preceding Business Day, and (B) such
Borrower shall not select, convert to or 
renew an Interest Period for any portion of the Loans that would end
after the Expiration Date.

 

Revolving Credit Loan
Request shall mean a request for a Revolving Credit Loan or a
request to select, convert to or renew a Base Rate Option or LIBOR Option with
respect to an outstanding Revolving Credit Loan in accordance with Section 2.05,
Section 3.01 and Section 3.02.

 

17

 

 

Revolving Credit Loans shall mean
collectively all Revolving Credit Loans made by the Banks to the Borrowers and
Revolving Credit Loan shall mean separately any Revolving Credit Loan, made by
one of the Banks to a Borrower, pursuant to Section 2.01.  A Bid Loan is not a Revolving Credit Loan,
except that it will be treated as a Revolving Credit Loan following a
termination of the Commitments hereunder pursuant to Section 8.02(a) or
Section 8.02(b) as provided in Section 8.03.

 

Revolving Credit Note shall mean any
Revolving Credit Note of a Borrower in the form of Exhibit 1.01(R)
issued by such Borrower to a Bank evidencing the Revolving Credit Loans of such
Bank to such Borrower, together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in part.

 

SEC shall mean the Securities and
Exchange Commission or any governmental agencies substituted therefor.

 

Soft Capital shall have the meaning
assigned to that term in Section 7.02(a).

 

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

 

Stated Amount shall mean, at any
time, (i) the maximum amount available to be drawn under any Letter of
Credit denominated in Dollars (regardless of whether any conditions for drawing
could then be met) and (ii) the Dollar Equivalent of the maximum amount
available to be drawn under any Letter of Credit denominated in an Alternate
Currency (regardless of whether any conditions for drawing could then be met).

 

Statutory Capital shall mean the
aggregate of policyholders’ surplus of the Company and the contingency reserve
of the Company, each determined in a manner consistent with that used in
preparing the Historical Statements referred to in Section 5.01(h)(A) [Historical
Statements].

 

Sterling LIBOR shall mean,
with respect to the Loans comprising any Borrowing Tranche denominated in
Pounds Sterling to which the LIBOR Option applies for any Interest Period, (A) an
interest rate per annum determined on the basis of the rate for deposits in
Pounds Sterling for a period comparable to such Interest Period commencing on
the first day of such Interest Period appearing on Page 3750 of the
Telerate screen as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period plus (B) the Associated Cost Rate for
such Loans for such Interest Period.  In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), Sterling LIBOR shall be determined by
reference to such other publicly available service for displaying Pounds
Sterling-denominated rates as may be agreed upon by the Agent and the Borrowers
or, in the absence of such agreement, Sterling
LIBOR shall be the rate of interest per annum determined by the Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) equal to the rate per annum at which Pounds Sterling
deposits approximately equal in principal amount to such Borrowing Tranche for
a period and with a maturity comparable to such Interest Period are offered to
the principal London office of Agent in immediately available funds in the
London interbank market at approximately 11:00 A.M., London time, two
Business

 

18

 

Days prior to the
commencement of such Interest Period. 
The Agent shall give prompt notice to the Borrowers of the Sterling
LIBOR as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.

 

Subsidiary of any Person at any time
shall mean (i) any corporation, company or trust of which 50% or more (by
number of shares or number of votes) of the outstanding capital stock or shares
of beneficial interest normally entitled to vote for the election of one or
more directors or trustees (regardless of any contingency which does or may
suspend or dilute the voting rights) is at such time owned directly or
indirectly by such Person or one or more of such Person’s Subsidiaries, (ii) any
partnership of which such Person is a general partner or of which 50% or more
of the partnership interests is at the time directly or indirectly owned by
such Person or one or more of such Person’s Subsidiaries, (iii) any
limited liability company of which such Person is a member or of which 50% or
more of the limited liability company interests is at the time directly or
indirectly owned by such Person or one or more of such Person’s Subsidiaries or
(iv) any corporation, trust, partnership, limited liability company or
other entity which is controlled or capable of being controlled by such Person
or one or more of such Person’s Subsidiaries. 
Notwithstanding the foregoing, the 
Company, AGRI, AGRO and the UK Borrower shall be deemed to be a “Subsidiary”
of Holdings and, with respect to the UK Borrower, of the Company, for all
purposes in this Agreement and the other Loan Documents; provided, however,
that neither the Company nor the UK Borrower shall be required to be a
Guarantor (except for the requirement that the Company guaranty all obligations
of the UK Borrower).

 

Test Period shall mean each period
of four consecutive fiscal quarters of Holdings (taken as one accounting
period) ending after the date hereof; provided that for each fiscal
quarter ending prior to June 30, 2005, Test Period shall mean the period
from July 1, 2004 through the end of such fiscal quarter.

 

Total Capitalization shall mean, at
any time, an amount (without duplication) equal to (i) the then
outstanding Consolidated Debt of Holdings or the Company, as the case may be,
and its Subsidiaries, plus (ii) consolidated stockholders equity of
Holdings or of the Company, as the case may be, and its Subsidiaries.

 

Transferor Bank shall mean the
selling Bank pursuant to an Assignment and Assumption Agreement.

 

UK Borrower shall mean Assured
Guaranty (UK) Ltd., a company organized under the laws of England and Wales.

 

Unpaid Drawing has the meaning
provided in Section 2.13(a).

 

US Holdco shall mean Assured
Guaranty US Holdings Inc., a Delaware corporation which is a direct
wholly-owned Subsidiary of Holdings and which owns, inter  alia,
100% of the capital stock of the Company.

 

19

 

Section 1.02  Construction.  Unless the context of this Agreement
otherwise clearly requires, the following rules of construction shall
apply to this Agreement and each of the other Loan Documents:

 

(a)           Number; Inclusion.  References to the plural include the
singular, the plural, the part and the whole; “or” has the inclusive meaning
represented by the phrase “and/or,” and “including” is not a term of limitation
and has the meaning represented by the phrase “including without limitation”;

 

(b)           Determination.  References to “determination” of or by
the Agent or the Banks shall be deemed to include good-faith estimates by the
Agent or the Banks (in the case of quantitative determinations) and good-faith
beliefs by the Agent or the Banks (in the case of qualitative determinations)
and such determination shall be conclusive absent manifest error;

 

(c)           Agent’s Discretion and Consent.  Whenever the Agent or the Banks are
granted the right herein to act in its or their sole discretion or to grant or
withhold consent such right shall be exercised in good faith;

 

(d)           Documents Taken as a Whole.  The words “hereof,” “herein,” “hereunder,”
“hereto” and similar terms in this Agreement or any other Loan Document refer
to this Agreement or such other Loan Document as a whole and not to any
particular provision of this Agreement or such other Loan Document;

 

(e)           Headings.  The section and other headings
contained in this Agreement or such other Loan Document and the Table of
Contents (if any), preceding this Agreement or such other Loan Document are for
reference purposes only and shall not control or affect the construction of
this Agreement or such other Loan Document or the interpretation thereof in any
respect;

 

(f)            Implied References to this
Agreement.  Article, section,
subsection, clause, schedule and exhibit references are to this Agreement
or other Loan Document, as the case may be, unless otherwise specified;

 

(g)           Persons.  Reference to any Person includes such
Person’s successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement or such other Loan Document, as the
case may be, and reference to a Person in a particular capacity excludes such
Person in any other capacity;

 

(h)           Modifications to Documents.  Reference to any agreement (including
this Agreement and any other Loan Document together with the schedules and
exhibits hereto or thereto), document or instrument means such agreement,
document or instrument as amended, modified, replaced, substituted for,
superseded or restated;

 

(i)            From,
To and Through.  Relative to the
determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “through and including”; and

 

20

 

(j)            Shall;
Will.  References to “shall” and “will”
are intended to have the same meaning.

 

Section 1.03  Accounting
Principles; Computations.  (a) 
Except as otherwise provided in this Agreement (as, for example, where
reference is made to statutory or regulatory financial matters), all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP as in effect on the date hereof applied
on a basis consistent with that used in preparing the Historical Statements
referred to in Section 5.01(h)(A) [Historical Statements].  In the event of any change after the date
hereof in GAAP, and if such change would result in the inability to determine
compliance with the financial covenants set forth in Section 7.02 based
upon Holdings’ regularly prepared financial statements by reason of the preceding
sentence, then the parties hereto agree to endeavor, in good faith, to agree
upon an amendment to this Agreement that would adjust such financial covenants
in a manner that would not affect the substance thereof, but would allow
compliance therewith to be determined in accordance with Holdings’ financial
statements at that time.

 

(b)           For purposes of this Agreement, the
Dollar Equivalent of each Loan that is an Alternate Currency Loan and the
Stated Amount of each Letter of Credit denominated in an Alternate Currency
shall be calculated on the date when any such Loan is made or Letter of Credit
is issued, on the second Business Day of each month, or such date as a Borrower
may request and at such other times as designated by the Agent at any time when
a Potential Default or an Event of Default exists.  Such Dollar Equivalent shall remain in effect
until the same is recalculated by the Agent as provided above and notice of
such recalculation is received by the Borrowers, it being understood that until
such notice is received, the Dollar Equivalent shall be that Dollar Equivalent
as last reported to the Borrowers by the Agent. 
The Agent shall promptly notify the Borrowers and the Banks of each such
determination of the Dollar Equivalent.

 

ARTICLE II

 

REVOLVING CREDIT AND LETTER OF CREDIT
FACILITY

 

Section 2.01  Credit
Commitments.  Subject to the terms
and conditions hereof and relying upon the representations and warranties
herein set forth, each Bank severally agrees to make Revolving Credit Loans to
any Borrower (on a several basis) at any time or from time to time on or after
the date hereof to the Expiration Date, which Revolving Credit Loans (i) may
be made and maintained in such Approved Currency as is requested by the
applicable Borrower; (ii) shall not exceed in aggregate Principal Amount
outstanding an amount which, when added to the aggregate outstanding Principal
Amount of all Bid Loans and the Letter of Credit Outstandings at such time, is
equal to the sum of the Revolving Credit Commitments at such time; (iii) shall
not, in the case of Revolving Credit Loans incurred by Holdings, AGRI and AGRO,
exceed in aggregate Principal Amount outstanding an amount which, when added to
the outstanding Principal Amount of all Bid Loans incurred by all such Borrowers
in the aggregate and the Letter of Credit Outstandings in respect of Letters of
Credit issued for the account of all such

 

21

 

Borrowers in the aggregate, is
equal to the Holdings Sub-Limit; and (iv) shall not, in the case of
Revolving Credit Loans incurred by the UK Borrower, exceed in aggregate
Principal Amount outstanding an amount which, when added to the outstanding
Principal Amount of all Bid Loans incurred by the UK Borrower and the Letter of
Credit Outstandings in respect of Letters of Credit issued for the account of
the UK Borrower, is equal to $12,500,000. 
Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrowers may borrow, repay, and reborrow Revolving
Credit Loans pursuant to this Section 2.01.

 

Section 2.02  Nature
of Banks’ Obligations with Respect to Revolving Credit Loans.  Each Bank shall be obligated to participate
in each request for Revolving Credit Loans pursuant to Section 2.05 [Revolving
Credit Loan Requests] in accordance with its Ratable Share.  The aggregate Principal Amount of each Bank’s
Revolving Credit Loans outstanding hereunder to the Borrowers at any time shall
never exceed its Revolving Credit Commitment. 
The obligations of each Bank hereunder are several and not joint.  The failure of any Bank to perform its
obligations hereunder shall not affect the Obligations of the Borrowers to any
other party nor shall any other party be liable for the failure of such Bank to
perform its obligations hereunder.  The
Banks shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.

 

Section 2.03  Facility
Fees; Letter of Credit Fee.  (a) 
Accruing from the date hereof until but not including the Expiration Date,
Holdings and the Company agree to pay, on a joint and several basis, to the
Agent for the account of each Bank, as consideration for such Bank’s Revolving
Credit Commitment hereunder, an amount equal to such Bank’s Ratable Share of (i) a
non-refundable facility fee (the “Holdings Facility Fee”) equal to the product
of (A) the Applicable Holdings Facility Fee Rate (computed on the basis of
a year of 360 days for the actual days elapsed)
and (B) the Holdings Sub-Limit from time to time and (ii) a
non-refundable facility fee (the “Company Facility Fee”) equal to the product
of (A) the Applicable Company Facility Fee Rate (computed on the basis of
a year of 360 days for the actual days elapsed)
and (B) an amount equal to the average daily amount of the total Revolving
Credit Commitments, as the same may be constituted from time to time,
regardless of usage, minus the Holdings Sub-Limit as in effect at such
time.  All Facility Fees shall be payable
in arrears on the first Business Day of each June, September, December, and March after
the date hereof and on the Expiration Date or upon acceleration of the Loans.

 

(b)           Each
Borrower severally agrees to pay to the Agent for pro rata distribution to each
Bank (based on their respective Ratable Share) a non-refundable letter of
credit fee (the “Letter of Credit Fee”) equal to the product of (i) a rate
per annum equal to the Applicable Margin with respect to Revolving Credit Loans
outstanding as LIBOR Loans and (ii) the average daily Stated Amount of all
Letters of Credit issued for the account of such Borrower.  Accrued Letter of Credit Fees shall be due
and payable in arrears on the first Business Day of each June, September, December and
March after the date hereof and upon the first Business Day on or after
the termination of the Commitments upon which no Letters of Credit remain
outstanding.

 

(c)           Each
Borrower severally agrees to pay to each Issuing Bank, for its own account, a
fronting fee (the “Fronting Fee”) in respect of each Letter of Credit issued by
such Issuing Bank for the account of such Borrower in an amount and on dates as
shall have separately been agreed to by such Borrower and such Issuing Bank.

 

22

 

Section 2.04  Utilization
Fee.  On each day on which the
Facility Usage exceeds 33.3% of the amount of the Commitments, the Applicable
Margin shall be increased for such day by the Applicable Usage Premium.

 

Section 2.05  Revolving
Credit Loan Requests.  Except as
otherwise provided herein, a Borrower may from time to time prior to the
Expiration Date request the Banks to make Revolving Credit Loans in Dollars, or
renew or convert the Interest Rate Option applicable to existing Revolving
Credit Loans pursuant to Section 3.01(c) [Interest Periods], by delivering
to the Agent, not later than 10:00 a.m., New York time, (i) three
(3) Business Days prior to the proposed Borrowing Date with respect to the
making of Revolving Credit Loans to which the LIBOR Option applies, or with
respect to the conversion to or the renewal of the LIBOR Option for any Loans, provided
that at any time when an Event of Default shall have occurred and be
continuing, a LIBOR Option shall not be available to a Borrower if the Required
Banks have so notified the Borrower; and (ii) one (1) Business Day
prior to either the proposed Borrowing Date with respect to the making of a
Revolving Credit Loan to which the Base Rate Option applies or the last day of
the preceding Revolving Credit Loan Interest Period with respect to the
conversion to the Base Rate Option for any Loan, of a duly completed Revolving
Credit Loan Request therefor substantially in the form of Exhibit 2.05 or
a Revolving Credit Loan Request by telephone immediately confirmed in writing
by letter, facsimile, email, or telex in the form of such Exhibit.  In addition, a Borrower may from time to time
prior to the Expiration Date request to make Revolving Credit Loans in
Alternate Currencies by delivering to the Agent, not later than 1:00 P.M.,
New York time, at least four Business Days prior to the Borrowing Date a
duly completed Revolving Credit Loan Request substantially in the form of Exhibit 2.05
or a Revolving Credit Loan Request by telephone immediately confirmed in
writing by letter, facsimile, email or telex in the form of such Exhibit.  Each Revolving Credit Loan Request shall be
irrevocable and shall specify (i) the identity of the applicable Borrower;
(ii) the respective Approved Currency for such Loan; (iii) the
proposed Borrowing Date; (iv) the aggregate amount of the proposed Loans
comprising each Borrowing Tranche (stated in the applicable Approved Currency),
which shall be (A) for all Loans made to Holdings, the Company, AGRI and
AGRO, in integral multiples of $1,000,000 and not less than $10,000,000 for
each Borrowing Tranche to which the LIBOR Option applies and not less than the
lesser of $500,000 or the maximum amount available for Borrowing Tranches to
which the Base Rate Option applies and (B) for all Loans made to the UK
Borrower, in integral multiples of $1,000,000 for each Borrowing Tranche to
which the LIBOR Option applies and not less than $500,000 or the maximum amount
available for Borrowing Tranches to which the Base Rate Option applies; (v) whether
Revolving Credit LIBOR Option or Base Rate Option shall apply to the proposed
Loans comprising the applicable Borrowing Tranche; and (vi) in the case of
a Borrowing Tranche to which the Revolving Credit LIBOR Option applies, an
appropriate Revolving Credit Interest Period for the Loans comprising such Borrowing
Tranche.

 

Section 2.06  Making
Revolving Credit Loans.  The Agent
shall, promptly after receipt by it of a Revolving Credit Loan Request pursuant
to Section 2.05 [Revolving Credit Loan Requests], notify the Banks of its
receipt of such Loan Request specifying: 
(i) the applicable Borrower making the Loan Request; (ii) the
proposed Borrowing Date and the time and method of disbursement of the
Revolving Credit Loans requested thereby; (iii) the amount and type of
each such Revolving Credit Loan (stated in the applicable Approved Currency)
and the applicable Interest Period (if any); and (iv) the apportionment
among the Banks of such

 

23

 

Revolving Credit Loans as determined by the Agent in
accordance with Section 2.02 [Nature of Banks’ Obligations].  Each Bank shall remit the principal amount of
each Revolving Credit Loan to the Agent such that the Agent is able to, and the
Agent shall, to the extent the Banks have made funds available to it for such
purpose and subject to Section 6.02 [Each Additional Loan], fund such
Revolving Credit Loans to the applicable Borrower in the applicable Approved
Currency and immediately available funds at the Principal Office prior to 2:00 p.m.,
New York time, on the applicable Borrowing Date, provided that if
any Bank fails to remit such funds to the Agent in a timely manner, the Agent
may elect in its sole discretion to fund with its own funds the Revolving
Credit Loans of such Bank on such Borrowing Date, and such Bank shall be
subject to the repayment obligation in Section 9.16 [Availability of
Funds].

 

Section 2.07  Use of
Proceeds.  The proceeds of the Loans
and Letters of Credit shall be used for the working capital and other general
corporate purposes of the Borrowers and in accordance with Section 7.01(j)
[Use of Proceeds].

 

Section 2.08  Bid Loan
Facility.  (a)  Bid Loan 
Requests.  Except as otherwise
provided herein, any Borrower may from time to time prior to the Expiration
Date request that the Banks make Bid Loans by delivery to the Agent not later
than 10:00 A.M., New York time, of a duly completed request therefor
substantially in the form of Exhibit 2.08(a) hereto or a
request by telephone immediately confirmed in writing by letter, facsimile,
email, or telex (each, a “Bid Loan Request”) at least three (3) Business
Days prior to the proposed Bid Loan Borrowing Date if the applicable Borrower
is requesting Fixed Rate Bid Loans and four (4) Business Days prior to the
proposed Bid Loan Borrowing Date if the applicable Borrower is requesting Bid
Loans with the Bid Loan LIBOR Rate Option of one, two, three, or six months’
duration.  Each Bid Loan Request shall be
irrevocable and shall specify (i) the identity of the applicable Borrower;
(ii) the respective Approved Currency for such Loan; (iii) the
proposed Bid Loan Borrowing Date; (iv) whether the applicable Borrower is
electing the Bid Loan Fixed Rate Option or the Bid Loan LIBOR Option; (v) the
term of the proposed Bid Loan (the “Bid Loan Interest Period”), which may be no
less than seven (7) day(s) and no longer than one hundred eighty (180)
days if the applicable Borrower is requesting a Fixed Rate Bid Loan and one,
two, three, or six months if the applicable Borrower is requesting a LIBOR Bid
Loan; and (vi) the maximum principal amount (the “Requested Amount”) of
such Bid Loan, which (x) in the case of Bid Loans to Holdings, the Company,
AGRI and AGRO, shall be not less than $10,000,000 and shall be an integral
multiple of $1,000,000 and (y) in the case of Bid Loans to the UK Borrower,
shall be not less than $1,000,000 and shall be an integral multiple of
$1,000,000.  After giving effect to such
Bid Loan and any other Loan made on or before the Bid Loan Borrowing Date, the
sum of the aggregate Principal Amount of all Revolving Credit Loans and Bid
Loans outstanding plus the Letter of Credit Outstandings shall not exceed the
aggregate amount of the Revolving Credit Commitments of the Banks.  In addition, after giving effect to any such
Bid Loan incurred by (i) Holdings, AGRI and AGRO and any other Loan made
on or before the Bid Loan Borrowing Date, the aggregate outstanding Principal
Amount of all Bid Loans and Revolving Credit Loans incurred by all such
Borrowers plus the Letter of Credit Outstandings in respect of Letters of
Credit issued for the account of all such Borrowers shall not exceed the
Holdings Sub-Limit; and (ii) the UK Borrower and any other Loan made on or
before the Bid Loan Borrowing Date, the aggregate outstanding Principal Amount
of all Bid Loans and Revolving Credit Loans incurred by the UK Borrower plus
the Letter of Credit Outstandings  in
respect of Letters of Credit issued for the account of the UK Borrower shall
not exceed

 

24

 

$12,500,000. 
Notwithstanding any provision hereof to the contrary, no Bid Loan may be
requested for a period that would end beyond the Expiration Date.

 

(b)           Bidding.  The Agent shall promptly after receipt by
it of a Bid Loan Request pursuant to Section 2.08(a) notify the Banks
of its receipt of such Bid Loan Request specifying (i) the identity of the
applicable Borrower, (ii) the proposed Bid Loan Borrowing Date, (iii) whether
the proposed Bid Loan shall be a Fixed Rate Bid Loan or a LIBOR Bid Loan, (iv) the
Bid Loan Interest Period, (v) the principal amount of the proposed Bid
Loan and (vi) the Approved Currency for such Bid Loan.  Each Bank may submit a bid (a “Bid”) to the
Agent by telephone (immediately confirmed in writing by letter, facsimile,
email, or telex) not later than the following (each, as applicable, a “Bid
Deadline”): 10:00 A.M. New York time two (2) Business Day before
the proposed Bid Loan Borrowing Date if the applicable Borrower is requesting a
Fixed Rate Bid Loan or 10:00 A.M. New York time three (3) Business
Days before the proposed Bid Loan Borrowing Date if the applicable Borrower is
requesting a LIBOR Bid Loan of one, two, three, or six months’ duration.  Each Bid shall specify: (A) the
principal amount of proposed Bid Loans offered by such Bank (the “Offered
Amount”) which (i) may be less than, but shall not exceed, the Requested
Amount, (ii) shall be at least $1,000,000 and shall be an integral
multiple of $1,000,000 and (iii) may exceed such Bank’s Revolving Credit
Commitment; and (B) the Fixed Rate which shall apply to such proposed Bid
Loan if the applicable Borrower has requested a Fixed Rate Bid Loan or the
LIBOR Bid Loan Spread which shall apply to such proposed Bid Loan if the
applicable Borrower has requested a LIBOR Bid Loan and which may be a positive
or negative number.  If any Bid omits
information required hereunder, the Agent may in its sole discretion attempt to
notify the Bank submitting such Bid.  If
the Agent so notifies a Bank, such Bank may resubmit its Bid, provided
that it does so prior to the applicable Bid Deadline.  The Agent shall promptly notify the
applicable Borrower of the Bids which it timely received from the Banks.  If the Agent in its capacity as a Bank shall,
in its sole discretion, make a Bid, it shall notify the Borrower of such Bid at
least one-half hour before the applicable Bid Deadline.

 

(c)           Accepting
Bids.  The applicable Borrower,
at its option, shall irrevocably accept or reject Bids by notifying the Agent
of such acceptance or rejection by telephone (immediately confirmed in writing
by letter, facsimile, email, or telex) not later than one hour after the
applicable Bid Deadline.  If the
applicable Borrower elects to accept any Bids, its acceptance must meet the
following conditions: (1) the total amount which (A) Holdings, the
Company, AGRI and AGRO accepts from all Banks must not be less than $10,000,000
and shall be in integral multiples of $1,000,000 and (B) the UK Borrower
accepts from all Banks shall be in integral multiples of $1,000,000, and may
not exceed the Requested Amount; (2) the applicable Borrower must accept
Bids based solely on the amount of the Fixed Rates or LIBOR Bid Loan Spreads,
as the case may be, which each of the Banks quoted in their Bids in ascending
order of the amount of Fixed Rates or LIBOR Bid Loan Spreads; (3) the
applicable Borrower may not borrow Bid Loans from any Bank on the Bid Loan
Borrowing Date in an amount exceeding such Bank’s Offered Amount; (4) if
two or more Banks make Bids at the same Fixed Rate (if the applicable Borrower
Requested a Fixed Rate Bid Loan) or LIBOR Bid Loan Spread (if the applicable
Borrower Requested a LIBOR Bid Loan) and the applicable Borrower desires to
accept a portion but not all of the Bids at such Fixed Rate or LIBOR Bid Loan
Spread, as the case may be, the applicable Borrower shall accept a portion of
each Bid equal to the product of the Offered Amount of such Bid times the
fraction obtained by dividing the total amount of Bids

 

25

 

which the applicable Borrower desires to accept at
such Fixed Rate or LIBOR Bid Loan Spread, as the case may be, by the sum of the
Offered Amounts of the Bids at such Fixed Rate or LIBOR Bid Loan Spread, provided
that the applicable Borrower shall round the Bid Loans allocated to each such
Bank upward or downward as the applicable Borrower may select to integral
multiples of $1,000,000.  The Agent shall
(i) promptly notify a Bank that has made a Bid of the amount of its Bid
that was accepted or rejected by the applicable Borrower and (ii) as
promptly as practical notify all of the Banks of all Bids submitted and those
which have been accepted.

 

(d)           Funding
Bid Loans.  Each Bank whose Bid
or portion thereof is accepted shall remit the principal amount of its Bid Loan
to the Agent by 12:00 Noon on the Bid Loan Borrowing Date.  The Agent shall make such funds available to
the applicable Borrower on or before 1:00 P.M. on the Borrowing Date, provided
that the conditions precedent to the making of such Bid Loan set forth in Section 6.02
have been satisfied not later than 10:00 A.M. New York time on the
proposed Bid Loan Borrowing Date.  If
such conditions precedent have not been satisfied prior to such time, then (i) the
Agent shall not make such funds available to the applicable Borrower, (ii) the
Bid Loan Request shall be deemed to be canceled, (iii) the Agent shall
return the amount previously funded to the Agent by each applicable Bank no
later than the next following Business Day, and (iv) the applicable
Borrower shall be obligated to each such Bank for any loss, costs, and expenses
applicable pursuant to Section 4.06(b) [Indemnity].  The applicable Borrower shall immediately
notify the Agent of any failure to satisfy the conditions precedent to the
making of Bid Loans under Section 6.02. 
The Agent may assume that the applicable Borrower has satisfied such
conditions precedent if the applicable Borrower (i) has delivered to the
Agent any documents required to be delivered under Section 6.02, (ii) the
applicable Borrower has not notified the Agent that any other conditions
precedent have not been satisfied, and (iii) the Agent has no actual
notice of such a failure.

 

(e)           Several
Obligations.  The obligations of
the Banks to make Bid Loans after their Bids have been accepted are several.  No Bank shall be responsible for the failure
of any other Bank to make any Bid Loan which another Bank has agreed to make.

 

(f)            Bid
Notes.  The obligation of the
applicable Borrower to repay the aggregate unpaid principal amount of the Bid
Loans made to it by each Bank, together with interest thereon, shall be
evidenced by a Bid Note dated as of the Closing Date payable to the order of
such Bank in a face  amount equal to the
aggregate Revolving Credit Commitments of all of the Banks.

 

Section 2.09  Restriction
on Loans and Letters of Credit. 
Notwithstanding anything to the contrary in this Agreement, none of
AGRO, AGRI nor the UK Borrower will be permitted to borrow or incur any new
Loans hereunder or have any new Letters of Credit issued for its account at any
time after such Person ceases to be a wholly-owned Subsidiary of Holdings.

 

Section 2.10  Letters
of Credit.  (a) Subject to and
upon the terms and conditions set forth herein, each Borrower may request that
any Issuing Bank issue at any time and from time to time on or after the
Closing Date and prior to the Expiration Date one or more letters of credit for
the account of such Borrower or any of its Subsidiaries to any other Person and
in

 

26

 

support of, on a standby basis, obligations of such
Borrower to any other Person and subject to and upon the terms and conditions
herein set forth each Issuing Bank agrees to issue at any time and from time to
time on or after the Closing Date and prior to the Expiration Date one or more
irrevocable standby letters of credit in such form as may be approved by such
Issuing Bank, which approval shall not be unreasonably withheld (each such
letter of credit, a “Letter of Credit” and, collectively, the “Letters of
Credit”).

 

(b)           Immediately
upon the issuance by any Issuing Bank of any Letter of Credit, such Issuing
Bank shall be deemed to have sold and transferred to each Bank other than such
Issuing Bank (each such Bank, in its capacity under this Section 2.10(b),
a “Participant”), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant’s Ratable Share, in such Letter of Credit, each drawing made
thereunder and the obligations of each Borrower under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto.  Upon any change in the Commitments or Ratable
Shares of the Banks pursuant to this Agreement, it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings, there shall
be an automatic adjustment to the participation amounts pursuant to this Section 2.10
to reflect the new Ratable Shares of the assignor and assignee Bank or of all
Banks with Commitments, as the case may be.

 

(c)           In
the event that any Issuing Bank makes any payment under any Letter of Credit
and the respective Borrower shall not have reimbursed such amount in full to
such Issuing Bank pursuant to Section 2.13, such Issuing Bank shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant, of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Bank the amount of such Participant’s
Ratable Share of such unreimbursed payment in the respective Approved Currency
and in immediately available funds.  If,
prior to 11:00 a.m., New York time, on any Business Day, the
Administrative Agent so notifies any Participant required to fund a payment
under a Letter of Credit, such Participant shall make available to such Issuing
Bank in the respective Approved Currency and in immediately available funds
such Participant’s Ratable Share of the amount of such payment on such Business
Day (or, if notice is given after 11:00 a.m., New York time, on any
Business Day, on the next Business Day). 
If and to the extent such Participant shall not have so made its Ratable
Share of the amount of such payment available to such Issuing Bank, such
Participant agrees to pay to such Issuing Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date to but
excluding the date such amount is paid to such Issuing Bank at the overnight
Base Rate.  The failure of any
Participant to make available to such Issuing Bank its Ratable Share of any
payment under any Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to such Issuing Bank its Ratable Share
of any payment on the date required, as specified above, but no Participant
shall be responsible for the failure of any other Participant to make available
to such Issuing Bank such other Participant’s Ratable Share of any such
payment.

 

(d)           Whenever
any Issuing Bank receives any payment by any Borrower as to which it has also
received payments from the Participants pursuant to paragraph (c) above,
such Issuing Bank shall forward such payment to the Agent, which in turn shall
distribute to each Participant which has paid its Ratable Share thereof, in the
respective Approved Currency and in

 

27

 

immediately available funds, an amount equal to such
Participant’s share (based upon the amount funded by such Participant to the
aggregate amount funded by all Participants and retained by the Issuing Bank)
of the principal amount of such payment and interest thereon accruing after the
purchase of the respective participations.

 

(e)           The
obligations of the Participants to make payments to each Issuing Bank with
respect to Letters of Credit issued by it shall be irrevocable and not subject
to any qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:

 

(i)            any
lack of validity or enforceability of this Agreement or any of the other Loan
Documents or any amendment, supplement or modification to any of the foregoing;

 

(ii)           the
existence of any claim, setoff, defense or other right which the Participant or
any of its Affiliates may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, any Issuing Bank, any
Participant, any Bank, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between any
Borrower or any of its Affiliates and the beneficiary named in any such Letter
of Credit);

 

(iii)          any
draft, certificate or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

 

(iv)          the
surrender or impairment of any security for the performance or observance of
any of the terms of any of the Loan Documents; or

 

(v)           the
occurrence of any Event of Default or Potential Default; or

 

(vi)          any
matter or event set forth in subsection 2.13(b).

 

(b)           Upon
the request of any Participant, each Issuing Bank shall furnish to such
Participant copies of any Letter of Credit issued by it and such other documentation
as may reasonably be requested by such Participant.

 

Section 2.11  Conditions
to the Issuance of all Letters of Credit. 
(a)  Notwithstanding anything to the contrary set forth in this Article II,
no Issuing Bank shall be under any obligation to issue any Letter of Credit if
at the time of such issuance:

 

(i)            any order, judgment or decree of any
Official Body or arbitrator shall purport by its terms to enjoin or restrain
such Issuing Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any Bank or any request or directive
(whether or not having the force of law) from any Official Body with
jurisdiction over such Issuing Bank or any Bank shall prohibit, or request that
such Issuing Bank or any Banks refrain from, the issuance of letters of credit
generally or such

 

28

 

Letter of Credit in particular or shall impose upon such Issuing Bank
or any Bank with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Bank is not otherwise compensated)
not in effect on the Closing Date, or any unreimbursed loss, cost or expense
which was not applicable, in effect or known to such Issuing Bank as of the
Closing Date;

 

(ii)           the conditions precedent set forth in
Section 6.02 are not satisfied at that time; or

 

(iii)          such Issuing Bank shall have received
notice from any Borrower or the Required Banks prior to the issuance of such
Letter of Credit of the type described in clause (vi) of Section 2.11(b).

 

(b)           Notwithstanding anything to the
contrary set forth in this Article II;

 

(i)            Letters of Credit may only be
denominated in Approved Currencies;

 

(ii)           no Letter of Credit shall be issued
if after giving effect thereto the Letter of Credit Outstandings, when added to
the aggregate outstanding Principal Amount of all Revolving Credit Loans and
Bid Loans at such time, would exceed the Revolving Credit Commitments at such
time;

 

(iii)          no Letter of Credit shall be issued at
any time if after giving effect thereto the Letter of Credit Outstandings in
respect of all Letters of Credit would exceed $100,000,000;

 

(iv)          no Letter of Credit shall be issued if
after giving effect to any such Letter of Credit issued for the account of (i) Holdings,
AGRI and AGRO and any other Loan made on or before the issuance of such Letter
of Credit, the aggregate Principal Amount of all Bid Loans and Revolving Credit
Loans incurred by all such Borrowers and the Letter of Credit Outstandings in
respect of Letters of Credit issued for the account of all such Borrowers would
exceed the Holdings Sub-Limit and (ii) the UK Borrower and any other Loan
made on or before the issuance of such Letter of Credit, the aggregate
Principal Amount of all Bid Loans and Revolving Credit Loans incurred by the UK
Borrower and the Letter of Credit Outstandings in respect of Letters of Credit
issued for the account of the UK Borrower would exceed $12,500,000;

 

(v)           each Letter of Credit shall have an
expiry date occurring not later than one year after such Letter of Credit’s
date of issuance, provided that each such Letter of Credit may by its terms
automatically renew annually for one additional year unless the respective
Issuing Bank notifies the beneficiary thereof, in accordance with the terms of
such Letter of Credit, that such Letter of Credit will not be renewed; and

 

(vi)          no Issuing Bank will issue any Letter
of Credit after it has received written notice from any Borrower or the
Required Banks stating that an Event of Default or a Potential Default exists
until such time as the Issuing Bank shall have received a written notice of (x)
rescission of such notice from the party or parties originally delivering the

 

29

 

same or (y) a waiver of such
Event of Default or Potential Default by the Required Banks.

 

(c)           Subject to and on the terms and
conditions set forth herein, each Issuing Bank is hereby authorized by each
Borrower and the Banks to arrange for the issuance of any Letter of Credit
pursuant to Section 2.10 and the amendment of any Letter of Credit
pursuant to Section 2.15 and/or 10.01 by:

 

(i)            completing the commencement date and
the expiry date of such Letter of Credit; and

 

(ii)           (in the case of an amendment increasing
or reducing the amount thereof) amending such Letter of Credit in such manner
as such Issuing Bank and the respective beneficiary may agree.

 

Section 2.12  Letter
of Credit Requests.  (a)  Whenever a Borrower desires that a
Letter of Credit be issued for its account, such Borrower shall give the Agent
and the respective Issuing Bank written notice (including by way of facsimile
transmission, immediately confirmed in writing by submission of the original of
such request by mail to the Issuing Bank) thereof prior to 12:00 Noon, New York
time, at least three Business Days prior to the proposed date of issuance
(which shall be a Business Day), which written notice shall be in the form of Exhibit 2.12
(each, a “Letter of Credit Request”). 
Each Letter of Credit Request shall include any other documents as the
respective Issuing Bank customarily requires in connection therewith.

 

(b)           The
making of each Letter of Credit Request shall be deemed to be a representation
and warranty by the respective Borrower that such Letter of Credit may be
issued in accordance with, and it will not violate the requirements applicable
to such Borrower and/or such Letter of Credit of, Sections 2.10 and 2.11.

 

(c)           Upon
its issuance of, or amendment to, any Letter of Credit, the respective Issuing
Bank shall promptly notify the respective Borrower and each Bank of such
issuance or amendment, which notice shall include a summary description of the
Letter of Credit actually issued and any amendments thereto.

 

(d)           The
Stated Amount of each Letter of Credit upon issuance shall be not less than
$1,000,000.

 

Section 2.13  Agreement
to Repay Letter of Credit Drawings.  (a)  Each
Borrower severally agrees to reimburse  the respective Issuing Bank
directly for any payment or disbursement made by such Issuing Bank under any
Letter of Credit issued for the account of such Borrower (each such amount so
paid or disbursed until reimbursed, an “Unpaid Drawing”), in each case,
no later than one Business Day following the date of such payment or disbursement,
with interest on the amount so paid or disbursed by such Issuing Bank, to the
extent not reimbursed prior to 3:00 p.m., New York time, on the date of
such payment or disbursement, from and including the date paid or disbursed to
but not including the date such Issuing Bank is reimbursed therefor at a rate
per annum which shall be the Base Rate as in effect from time to time plus the
Applicable Margin for Base Rate Loans incurred by such Borrower (plus an
additional 2% per annum, payable on demand, if not reimbursed by the third
Business

 

30

 

Day after the date on which the respective Borrower
receives notice from the respective Issuing Bank of such payment or
disbursement).

 

(b)           Each
Borrower’s obligation under this Section 2.13 to reimburse each  Issuing Bank with respect to Unpaid Drawings
of such Borrower (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which such Borrower may have or have
had against such Issuing Bank, or any Issuing Bank, including, without
limitation, any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit or any non-application
or misapplication by the beneficiary of the proceeds of such drawing; provided,
however, that no Borrower shall be obligated to reimburse any Issuing Bank for
any wrongful payment made by such Issuing Bank under a Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Issuing Bank (as determined by a court of competent
jurisdiction in a final and non-appealable decision).

 

(c)           In
determining whether to pay under any Letter of Credit, no Issuing Bank shall
have any obligation relative to the other Banks other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear to substantially comply on their face with
the requirements of such Letter of Credit. 
Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
such Issuing Bank’s gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision), shall
not create for such Issuing Bank any resulting liability to any Borrower or any
of its Affiliates or any Bank.

 

31

 

Section 2.14  Letter
of Credit Expiration Extensions. 
Each Bank acknowledges that to the extent provided under the terms of
any Letter of Credit, the expiration date of such Letter of Credit will be
automatically extended for an additional year, without written amendment,
unless within a set period of time prior to the expiration date of such Letter
of Credit, notice is given by the respective Issuing Bank in accordance with
the terms of the respective Letter of Credit (a “Notice of Non-Extension”) that
the expiration date of such Letter of Credit will not be extended beyond its
current expiration date.  The respective
Issuing Bank will give Notices of Non-Extension as to any or all outstanding
Letters of Credit issued by it if requested to do so by the Required Banks
pursuant to Article VIII.  In
addition, the respective Issuing Bank will give Notices of Non-Extension as to
all outstanding Letters of Credit issued by it if the Expiration Date has
occurred.  The respective Issuing Bank
will send a copy of each Notice of Non-Extension to the respective Borrower
concurrently with delivery thereof to the respective beneficiary, unless
prohibited by law from doing so.

 

Section 2.15  Changes
to Stated Amount.  At any time when any
Letter of Credit is outstanding, at the request of the respective Borrower, the
Issuing Bank will enter into an amendment increasing or reducing the Stated
Amount of such Letter of Credit, provided that (i) the Stated
Amount of a Letter of Credit may not be increased at any time if the conditions
set forth in Sections 2.10 and 2.11 or the conditions precedent set forth in Section 6.02
are not satisfied at such time, and (ii) the Stated Amount of a Letter of
Credit may not be increased at any time after the Expiration Date.

 

ARTICLE III

 

INTEREST
RATES

 

Section 3.01  Interest
Rate Options.  Each Borrower shall
pay interest in respect of the outstanding unpaid principal amount of the
Revolving Credit Loans as selected by it from the Base Rate Option or Revolving
Credit LIBOR Option set forth below applicable to the Revolving Credit Loans,
it being understood that, subject to the provisions of this Agreement, the
Borrowers may select different Interest Rate Options and different Interest
Periods to apply to different Borrowing Tranches of the Revolving Credit Loans,
and may convert to or renew one or more Interest Rate Options with respect to
all or any portion of the Revolving Credit Loans comprising any Borrowing
Tranche, provided that there shall not be at any one time outstanding
more than eight (8) Borrowing Tranches in the aggregate among all of the
Revolving Credit Loans.  If at any time
the designated rate applicable to any Revolving Credit Loan made by any Bank
exceeds such Bank’s highest lawful rate, the rate of interest on such Bank’s
Revolving Credit Loan shall be limited to such Bank’s highest lawful rate.

 

(a)           Revolving Credit Interest
Rate Options.  Each Borrower
shall have the right to select from the following Interest Rate Options
applicable to the Revolving Credit Loans incurred by it:

 

(i)            Revolving
Credit Base Rate Option:  A
fluctuating rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, for the actual days elapsed)
equal to the Base Rate plus the Applicable Margin, such

 

32

 

interest rate to change
automatically from time to time effective as of the effective date of each
change in the Base Rate; or

 

(ii)           Revolving
Credit LIBOR Option:  A rate per
annum (computed on the basis of a year of 360 days for the actual days elapsed)
equal to the applicable LIBOR plus the Applicable Margin.

 

(b)           Rate
Quotations.  The Borrowers may
call the Agent on or before the date on which a Revolving Credit Loan Request
is to be delivered to receive an indication of the rates then in effect, but it
is acknowledged that such projection shall not be binding on the Agent or the
Banks nor affect the rate of interest which thereafter is actually in effect
when the election is otherwise made in accordance with the terms of this
Agreement.

 

(c)           Change in Fees or Interest Rates.  If the Applicable Margin or Applicable
Facility Fee Rate is increased or reduced with respect to any period for which
any Borrower has already paid interest or Facility Fees, the Agent shall
recalculate the additional interest or Facility Fees due from, or the amount of
the refund of interest or Facility Fees due to, such Borrower and shall, within
fifteen (15) Business Days after the Agent received the information which gave
rise to such increase or decrease, give the applicable Borrower and the Banks
notice of such recalculation.

 

(i)            Any
additional interest or Facility Fee due from any Borrower shall be paid to the
Agent for the account of the Banks on the next date on which an interest or fee
payment is due; provided, however, that if there are no Loans
outstanding or if the Loans are due and payable, such additional interest or
Facility Fee shall be paid promptly after receipt of written request for
payment from the Agent.

 

(ii)           Any
interest or Facility Fee refund due to any Borrower shall be credited against
payments otherwise due from such Borrower on the next interest or fee payment
date or, if the Loans have been repaid and the Banks are no longer committed to
lend under this Agreement, the Banks shall pay the Agent for the account of
such Borrower such interest or Facility Fee refund not later than five Business
Days after written notice from the Agent to the Banks.

 

Section 3.02  Revolving
Credit Loans Interest Periods.  At
any time when any Borrower shall select, convert to, or renew a Revolving
Credit Loan LIBOR Option, the applicable Borrower shall notify the Agent
thereof at least three (3) Business Days prior to the effective date of
such LIBOR Option by delivering a Loan Request. 
The notice shall specify a Revolving
Credit Loan Interest Period during which such Interest Rate Option shall
apply.  Notwithstanding the preceding
sentence, the following provisions shall apply to any selection of, renewal of,
or conversion to a Revolving Credit Loan LIBOR Option:

 

(a)           Amount of Borrowing Tranche.  Each Borrowing
Tranche of Revolving Credit Loans shall be in integral multiples of $1,000,000
and not less than $5,000,000 (or, in the case of Borrowing Tranches of Revolving
Credit Loans to the UK Borrower, not less than $1,000,000); and

 

33

 

(b)           Renewals.  In the case of the renewal of a Revolving
Credit Loan LIBOR Option at the end of an Interest Period, the first day of the
new Interest Period shall be the last day of the preceding Interest Period,
without duplication in payment of interest for such day.

 

Section 3.03  Interest
After Default.  To the extent
permitted by Law, upon the occurrence of an Event of Default and until such
time such Event of Default shall have been cured or waived:

 

(a)           Interest
Rate.  The rate of interest
otherwise applicable for each Loan pursuant to Section 3.01 [Interest Rate
Options] shall be increased by 2.0% per annum; and

 

(b)           Other
Obligations.  Each other
Obligation hereunder if not paid when due shall bear interest at a rate per
annum equal to the sum of the rate of interest applicable under the Base Rate
Option plus an additional 2.0% per annum from the time such Obligation becomes
due and payable and until it is paid in full.

 

(c)           Acknowledgment.  The Borrowers acknowledge that the
increase in rates referred to in this Section 3.03 reflects, among other
things, the fact that such Loans or other amounts have become a substantially
greater risk given their default status and that the Banks are entitled to
additional compensation for such risk; and all such interest referred to in
this Section 3.03 shall be payable by the Borrowers upon demand by the
Agent.

 

Section 3.04  LIBOR
Unascertainable; Illegality; Increased Costs; Deposits Not Available.  (a)  Unascertainable.  If on any date on which LIBOR would
otherwise be determined with respect to Revolving Credit Loans or Bid Loans,
the Agent shall have determined that:

 

(i)               adequate and fair means do not
exist for ascertaining such LIBOR, or

 

(ii)              a contingency has occurred which
materially and adversely affects the respective London interbank market
relating to LIBOR, the Agent shall have the rights specified in Section 3.04(c).

 

(b)           Illegality; Increased Costs;
Deposits Not Available.  If at
any time any Bank shall have determined that:

 

(i)            the making, maintenance or funding
of any Loan to which a LIBOR Option applies has been made unlawful by
compliance by such Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of
any such Official Body (whether or not having the force of Law), or

 

(ii)           such LIBOR Option will not adequately
and fairly reflect the cost to such Bank of the establishment or maintenance of
any such Loan, or

 

34

 

(iii)          after making all reasonable efforts,
deposits of the relevant amount in the relevant Approved Currency for the
relevant Interest Period for a Loan to which a LIBOR Option applies are not
available to such Bank with respect to such Loan in the respective London
interbank market,

 

then the Agent
shall have the rights specified in Section 3.04(c).

 

(c)           Agent’s
and Bank’s Rights.  In the case
of any event specified in Section 3.04(a) above, the Agent shall
promptly so notify the Banks and the Borrowers thereof, and in the case of an
event specified in Section 3.04(b) above, such Bank shall promptly so
notify the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrowers.  Upon such date as shall be specified in such
notice (which shall not be earlier than the date such notice is given), the
obligation of (A) the Banks, in the case of such notice given by the
Agent, or (B) such Bank, in the case of such notice given by such Bank, to
allow the Borrowers to select, convert to or renew a LIBOR Option shall be
suspended until the Agent shall have later notified the Borrowers, or such Bank
shall have later notified the Agent, of the Agent’s or such Bank’s, as the case
may be, determination that the circumstances giving rise to such previous
determination no longer exist.  If at any
time the Agent makes a determination under Section 3.04(a) and any
Borrower has previously notified the Agent of its selection of, conversion to
or renewal of a LIBOR Option and such Interest Rate Option has not yet gone
into effect, such notification shall be deemed to provide for the termination
of the applicable Borrower’s Bid Loan request (without penalty) for such Loans
if the applicable Borrower has requested Bid Loans under the Bid Loan LIBOR
Option and for the selection of, conversion to or renewal of the Base Rate
Option otherwise available with respect to such Loans if the applicable
Borrower has requested the Revolving Credit Loan LIBOR Option.  If any Bank notifies the Agent of a determination
under Section 3.04(b), the Borrowers shall, subject to the Borrowers’
indemnification Obligations under Section 4.06(b) [Indemnity], as to
any Loan of the Bank to which a LIBOR Option applies, on the date specified in
such notice either convert such Loan to the Base Rate Option otherwise
available with respect to such Loan (in the case of Dollar-denominated Loans)
or prepay such Loan in accordance with Section 4.04 [Voluntary
Prepayments].  Absent due notice from the
Borrowers of conversion or prepayment, such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date in the case of Dollar-denominated Loans, or prepaid on
such date in the case of all other Loans.

 

35

 

Section 3.05  Selection
of Interest Rate Options.  If any
Borrower fails to select a new Interest Period to apply to any Borrowing
Tranche of Revolving Credit Loans under the Revolving Credit Loan LIBOR Option
at the expiration of an existing Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 3.01(c) [Interest
Periods], the applicable Borrower shall be deemed to have (i) in the case
of Dollar-denominated Loans, converted such Borrowing Tranche to the Base Rate
Option commencing upon the last day of the existing Interest Period and (ii) in
the case of Alternate Currency Loans, selected a one-month Interest Period
commencing upon the last day of the existing Interest Period.

 

ARTICLE IV

 

PAYMENTS

 

Section 4.01  Payments.  All payments and prepayments to be made in
respect of principal, interest, Facility Fees, Letter of Credit Fees, Fronting
Fees, Agent’s Fee, or other fees or amounts due from the Borrowers hereunder
shall be payable prior to 11:00 A.M., New York time, on the date when
due without presentment, demand, protest, or notice of any kind, all of which
are hereby expressly waived by the Borrowers, and without set-off,
counterclaim, or other deduction of any nature, and an action therefor shall
immediately accrue.  Such payments shall
be made to the Agent at the Principal Office for the ratable accounts of the
Banks with respect to the Revolving Credit Loans and Letters of Credit and for
the account of the lending Bank with respect to the Bid Loans, in the
applicable Approved Currency and in immediately available funds, and the Agent
shall promptly distribute such amounts to the Banks in immediately available
funds, provided that in the event payments are received by 11:00 A.M.,
New York time, by the Agent with respect to the Loans and such payments
are not distributed to the Banks on the same day received by the Agent, the
Agent shall pay the Banks the Federal Funds Effective Rate with respect to the
amount of such payments for each day held by the Agent and not distributed to
the Banks.  The Agent’s and each Bank’s
statement of account, ledger, or other relevant record shall, in the absence of
manifest error, be conclusive as the statement of the amount of principal of
and interest on the Loans and other amounts owing under this Agreement.

 

Section 4.02  Pro Rata
Treatment of Banks.  Each borrowing
of Revolving Credit Loans shall be allocated to each Bank according to its
Ratable Share (irrespective of the amount of Bid Loans outstanding), and each
selection of, conversion to or renewal of any Interest Rate Option applicable
to Revolving Credit Loans and each payment or prepayment by the Borrowers with
respect to principal or interest on the Revolving Credit Loans, Facility Fees
or Letter of Credit Fees or other fees (except for the Agent’s Fee, the Bid
Loan Processing Fee and the Fronting Fees) or amounts due from the Borrowers
hereunder to the Banks with respect to the Revolving Credit Loans shall (except
as provided in Section 3.04(c) [Agent’s and Bank’s Rights] in the
case of an event specified in Section 3.04 [Euro-Rate Unascertainable;
Etc.], Section 4.04 [Replacement of a Bank] or Section 4.06
[Additional Compensation in Certain Circumstances]) be made in proportion to
the applicable Revolving Credit Loans outstanding from each Bank and, if no
such Loans are then outstanding, in proportion to the Ratable Share of each
Bank.  Each borrowing of a Bid Loan shall
be made according to the provisions in Section 2.08 hereof and each
payment or prepayment by the Borrowers of principal, interest, fees, or other
amounts

 

36

 

from the Borrowers with respect to Bid Loans shall be
made to the Banks in proportion to the amounts due to such Banks with respect
to Bid Loans then outstanding.

 

Section 4.03  Interest
Payment Dates.  Interest on Revolving
Credit Loans to which the Base Rate Option applies shall be due and payable in
arrears on the first Business Day of each June, September, December, and March after
the date hereof and on the Expiration Date or upon acceleration of the
Loan.  Interest on Revolving Credit Loans
and Bid Loans to which the LIBOR Option applies and Bid Loans to which the Bid
Loan Fixed Rate Option applies shall be due and payable on the last day of each
Interest Period for those Loans and, if such Interest Period is longer than
three (3) Months, also at the end of the third Month of such Interest
Period.  Interest on payments of
principal and other monetary Obligations shall be due on the date such payment
is due (whether on the stated maturity date, upon acceleration, or otherwise)
or if principal or such other Obligation is paid earlier than the date when
due, then on the date when paid.

 

Section 4.04  Voluntary
Prepayments.  (a)  Right to Prepay.  Each Borrower shall have the right at its
option from time to time to prepay the Revolving Credit Loans incurred by it in
whole or in part without premium or penalty (except as provided in Section 4.04(b) below
or in Section 4.06 [Additional Compensation in Certain Circumstances]):

 

(i)          at any time with respect to any
Revolving Credit Loan to which the Base Rate Option applies,

 

(ii)         on the last day of the applicable
Interest Period with respect to Revolving Credit Loans to which a LIBOR Option
applies,

 

(iii)        on the date specified in a notice by any
Bank pursuant to Section 3.04 [LIBOR Unascertainable, Etc.] with respect
to any Revolving Credit Loan to which a LIBOR Option applies.

 

Whenever any Borrower desires to prepay any part of
the Revolving Credit Loans, it shall provide a prepayment notice to the Agent
by 12:00 Noon, New York time, at least one (1) Business Day prior to
the date of prepayment of Revolving Credit Loans to which a Base Rate Option
applies and at least three (3) Business Days prior to the date of
prepayment of Revolving Credit Loans to which a LIBOR Option applies setting
forth the following information:

 

(x)         the date, which shall be a Business
Day, on which the proposed prepayment is to be made;

 

(y)        a statement indicating the application
of the prepayment among the Borrowing Tranches of such Loans; and

 

(z)         the total principal amount of such
prepayment, which shall not be less than $1,000,000 or such lesser amount as
may be outstanding under the Borrowing Tranche to be prepaid.

 

37

 

The principal amount of the Revolving Credit Loans for
which a prepayment notice is given, together with such interest and fees as
have accrued on such principal amount, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed
prepayment is to be made; provided, however, that failure of any
Borrower to make payment in accordance with a prepayment notice given by it
shall not be an Event of Default in and of itself.  Except as provided in Section 3.04(c) [Agent’s
and Bank’s rights], if any Borrower prepays a Revolving Credit Loan, but fails
to specify the applicable Borrowing Tranche which the applicable Borrower is
prepaying, the prepayment shall be applied first to Revolving Credit Loans to
which the Base Rate Option applies, then to Loans to which the Revolving Credit
Loan LIBOR Option applies.  Any
prepayment hereunder and any failure of the applicable Borrower to make payment
in accordance with a prepayment notice provided by it shall be subject to the
applicable Borrower’s Obligation to indemnify the Banks under Section 4.06(b) [Indemnity].

 

(b)           Replacement
of a Bank.  In the event any Bank
(i) gives notice under Section 3.04 [LIBOR Unascertainable, Etc.] or Section 4.06
[Additional Compensation in Certain Circumstances], (ii) does not fund
Revolving Credit Loans, Bid Loans or Unpaid Drawings because the making of such
Loans would contravene any Law applicable to such Bank, or (iii) becomes
subject to the control of an Official Body (other than normal and customary
supervision), then Holdings or the Company shall have the right at its option,
with the consent of the Agent and each Issuing Bank, which shall not be
unreasonably withheld, to prepay the Loans of such Bank in whole, together with
all interest accrued thereon, and terminate such Bank’s Commitment at any time
after (x) receipt of such Bank’s notice under Section 3.04 [LIBOR
Unascertainable, Etc.] or Section 4.06(a) [Increased Costs, Etc.],
(y) the date such Bank has failed to fund Revolving Credit Loans, Bid
Loans or Unpaid Drawings because the making of such Loans would contravene Law
applicable to such Bank, or (z) the date such Bank became subject to the
control of an Official Body, as applicable; provided that the applicable
Borrower shall also pay to such Bank at the time of such prepayment any amounts
required under Section 4.06 [Additional Compensation in Certain
Circumstances] and any accrued interest due on such amount and any related
fees; provided, however, that the Commitment and any Bid Loan of
such Bank shall be provided by one or more of the remaining Banks or a
replacement bank acceptable to the Agent and each Issuing Bank; provided,
further, the remaining Banks shall have no obligation hereunder to
increase their Commitments or provide the Bid Loan of such Bank.  Notwithstanding the foregoing, the Agent may
only be replaced subject to the requirements of Section 9.14 [Successor
Agent].

 

(c)           Change of Lending Office.  Each Bank agrees that, upon the
occurrence of any event giving rise to increased costs or other special
payments under Section 3.04(b) [Illegality, Etc.] or Section 4.06(a) [Increased
Costs, Etc.] with respect to such Bank, it will, if requested by Holdings or
the Company, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office for any Loans affected by
such event, provided that such designation is made on terms that such Bank and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the
operation of such Section.  Nothing in
this Section 4.04(c) shall affect or postpone any of the Obligations
or the rights of the Agent or any Bank provided in this Agreement.

 

38

 

Section 4.05  Reduction
or Termination of Commitments.  The
aggregate amount of the Commitments shall be automatically reduced to zero on
the Expiration Date.  The aggregate
amount of Commitments shall be automatically reduced to zero on the 90th
day following the date hereof unless the Closing Date has occurred by such
time.  In addition, the Borrower shall
have the right to terminate or reduce the then unused portion of Commitments at
any time or from time to time; provided that (a) each partial
reduction shall be in an aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof; (b) at no time shall the total
amount of the Commitments be less than the sum of the current Loans outstanding
and the Letter of Credit Outstandings at such time (except following the
Expiration Date to the extent no Loans are outstanding and all Letters of
Credit are cash collateralized in accordance with Section 4.10); and (c) any
Borrower shall provide at least five (5) Business Days’ prior written
notice of each such termination or reduction to the Agent specifying the amount
of the Commitments to be reduced or terminated. 
Each such notice shall be irrevocable, and Commitments once terminated
or reduced may not be reinstated.  Any
partial reduction of Commitments pursuant to this Section 4.05 will apply
ratably to all Banks based upon each such Bank’s Commitment.

 

Section 4.06  Additional
Compensation in Certain Circumstances. 
(a)  Increased Costs
or Reduced Return Resulting From Taxes, Reserves, Capital Adequacy
Requirements, Expenses, Etc.  If any
Law, guideline or interpretation or any change in any Law, guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of Law) of any central bank or other
Official Body:

 

(i)            subjects
any Bank or Issuing Bank to any tax or changes the basis of taxation with
respect to this Agreement, the Revolving Credit Loans, the Bid Loans or Letters
of Credit or payments by any Borrower of principal, interest, Facility Fees,
Letter of Credit Fees, Unpaid Drawings or other amounts due from the Borrowers
hereunder (except for taxes on the overall net income of such Bank or Issuing
Bank),

 

(ii)           imposes,
modifies or deems applicable any reserve (including the Eurodollar Reserve
Percentage), special deposit or similar requirement against credits or
commitments to extend credit extended by, or assets (funded or contingent) of,
deposits with or for the account of, or other acquisitions of funds by, any
Bank or Issuing Bank, or

 

(iii)          imposes,
modifies or deems applicable any capital adequacy or similar requirement (A) against
assets (funded or contingent) of, or letters of credit, other credits or
commitments to extend credit extended by, any Bank or Issuing Bank, or (B) otherwise
applicable to the obligations of any Bank or Issuing Bank under this Agreement,

 

and
the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank or Issuing Bank with respect to this Agreement, or the making, maintenance
or funding of any part of the Revolving Credit Loans or the Bid Loans, or the
issuance of or participation in any Letter of Credit (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the
rate of return on any Bank’s capital or Issuing Bank, taking into consideration
such Bank’s or Issuing

 

39

 

Bank’s
customary policies with respect to capital adequacy) by an amount which such
Bank or Issuing Bank in its sole discretion deems to be material, such Bank or
Issuing Bank shall from time to time notify the Borrowers and the Agent of the
amount determined in good faith (using any averaging and attribution methods
employed in good faith) by such Bank or Issuing Bank to be necessary to compensate
such Bank or Issuing Bank for such increase in cost, reduction of income,
additional expense or reduced rate of return. 
Such notice shall set forth in reasonable detail the basis for such
determination.  Such amount shall be due
and payable by the applicable Borrower to such Bank or Issuing Bank ten (10) Business
Days after such notice is given.

 

(b)           Indemnity.  In addition to the compensation required
by Section 4.06 (a) [Increased Costs, Etc.], each Borrower, with
respect to Loans incurred or requests therefor made by such Borrower, shall
indemnify each Bank against all liabilities, losses, or expenses (including
loss of margin, any loss or expense incurred in liquidating or employing
deposits from third parties and any loss or expense incurred in connection with
funds acquired by a Bank to fund or maintain Loans subject to a LIBOR Option or
the Bid Loan Fixed Rate Option) which such Bank sustains or incurs as a
consequence of any

 

(i)            payment,
prepayment, conversion, or renewal of any Loan to which a LIBOR Option or the
Bid Loan Fixed Rate Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or prepayment is
mandatory, voluntary, or automatic and whether or not such payment or
prepayment is then due),

 

(ii)           attempt
by such Borrower to revoke (expressly, by later inconsistent notices or
otherwise) in whole or part any Loan Requests under Section 2.05
[Revolving Credit Loan Requests], Section 2.08 [Bid Loan Facility] or Section 3.02
[Interest Periods] or notice relating to prepayments under Section 4.04
[Voluntary Prepayments],

 

(iii)          default
by such Borrower in the performance or observance of any covenant or condition
contained in this Agreement or any other Loan Document, including any failure of
such Borrower to pay when due (by acceleration or otherwise) any principal of
or interest on the Revolving Credit Loans or the Bid Loans, Facility Fee,
Letter of Credit Fee or any other amount due hereunder, or

 

(iv)          payment
or prepayment of any Bid Loan on a day other than the maturity date thereof
(whether or not such payment or prepayment is mandatory or voluntary).

 

If any Bank sustains or incurs any such loss or
expense, it shall from time to time notify the applicable Borrower of the
amount determined in good faith by such Bank (which determination may include
such assumptions, allocations of costs and expenses, and averaging or
attribution methods as such Bank shall deem reasonable) to be necessary to
indemnify such Bank for such loss or expense. 
Such notice shall set forth in reasonable detail the basis for such
determination.  Such amount shall be due
and payable by such Borrower to such Bank ten (10) Business Days after
such notice is given.

 

Section 4.07  Taxes.  (a)  No
Deductions.  All payments made by
each Borrower hereunder and under each Note or for Unpaid Drawings shall be
made free and clear of and

 

40

 

without deduction for any present or future taxes,
levies, imposts, deductions, charges, or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on the net income of any Bank or
Issuing Bank and all income and franchise taxes applicable to any Bank or
Issuing Bank of the United States (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities being hereinafter
referred to as “Taxes”).  If any Borrower
shall be required by Law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note or for Unpaid Drawings, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 4.07(a)) each Bank or Issuing Bank receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the
applicable Borrower shall make such deductions, and (iii) the applicable
Borrower shall timely pay the full amount deducted to the relevant tax
authority or other authority in accordance with applicable Law.

 

(b)           Stamp
Taxes.  In addition, each
Borrower agrees to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges, or similar levies which arise from any
payment made by such Borrower hereunder or from the execution, delivery, or
registration of, or otherwise with respect to, this Agreement or any Note
executed and delivered by such Borrower (hereinafter referred to as “Other
Taxes”).

 

(c)           Indemnification for Taxes
Paid by a Bank.  Each Borrower,
with respect to Loans incurred or requests therefor made by such Borrower,
shall indemnify each Bank for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.07(c)) paid by any
Bank and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted.  This
indemnification shall be made within 30 days from the date a Bank makes written
demand therefor.

 

(d)           Certificate.  Within 30 days after the date of any
payment of any Taxes by any Borrower, the applicable Borrower shall furnish to
each Bank, at its address referred to herein, the original or a certified copy
of a receipt evidencing payment thereof.

 

(e)           Survival.  Without prejudice to the survival of any
other agreement of the Borrowers hereunder, the agreements and obligations of
the Borrowers contained in this Section 4.07 shall survive the payment in
full of principal and interest hereunder and under any instrument delivered
hereunder.

 

41

 

Section 4.08  Judgment
Currency.  (a)  Currency Conversion
Procedures for Judgments.  If for
the purposes of obtaining judgment in any court it is necessary to convert a
sum due hereunder or under a Note in any currency (the “Original Currency”)
into another currency (the “Other Currency”), the parties hereby agree, to the
fullest extent permitted by Law, that the rate of exchange used shall be that
at which in accordance with normal banking procedures each Bank could purchase
the Original Currency with the Other Currency after any premium and costs of
exchange on the Business Day preceding that on which final judgment is given.

 

(b)           Indemnity
in Certain Events.  The
obligation of each Borrower in respect of any sum due from such Borrower to any
Bank hereunder shall, notwithstanding any judgment in an Other Currency,
whether pursuant to a judgment or otherwise, be discharged only to the extent
that, on the Business Day following receipt by any Bank of any sum adjudged to
be so due in such Other Currency, such Bank may in accordance with normal
banking procedures purchase the Original Currency with such Other
Currency.  If the amount of the Original
Currency so purchased is less than the sum originally due to such Bank in the
Original Currency, each Borrower agrees, with respect to Loans incurred and
requests therefor made by such Borrower, as a separate obligation and
notwithstanding any such judgment or payment, to indemnify such Bank against
such loss.

 

42

 

Section 4.09 
Notes, Maturity.  The
Revolving Credit Loans made by each Bank shall be evidenced by a Revolving
Credit Note in the form of Exhibit 1.01(R).  Notwithstanding anything to the contrary
contained elsewhere in this Agreement, all outstanding Revolving Credit Loans
shall be repaid in full on the Expiration Date.

 

Section 4.10 
Mandatory Prepayments. 
(a)  If on any date (including,
without limitation, (i) any date on which Dollar Equivalents are determined and
(ii) the Expiration Date) the sum of the aggregate outstanding Principal Amount
of Revolving Credit Loans and Bid Loans plus the Letter of Credit Outstandings
(all the foregoing, collectively, the “Aggregate Outstandings”) exceeds the
Commitments as then in effect, Holdings, the Company, AGRI, AGRO and/or the UK
Borrower (as they shall determine) shall repay no later than the next following
Business Day the principal amount of Revolving Credit Loans in an aggregate
Principal Amount equal to such excess. 
If, after giving effect to the prepayment of all outstanding Revolving
Credit Loans as set forth above, the remaining Aggregate Outstandings exceed
the Commitments, Holdings, the Company, AGRI, AGRO and/or the UK Borrower (as
they shall determine) shall repay on such date the principal of Bid Loans in an
aggregate amount equal to such excess. 
If, after giving effect to the prepayment of all outstanding Revolving
Credit loans and Bid Loans as set forth above, the remaining Aggregate
Outstandings exceed the Commitment, the Borrowers shall (i) establish an
account in the name and for the benefit of the Agent, as Agent for the Banks
(the “Cash Collateral Account”), (ii) enter into a control agreement over such
Cash Collateral Account satisfactory to the Agent, and (iii) fund the Cash
Collateral Account with cash to be held as security for the Borrowers’
reimbursement obligations in respect of Letters of Credit then outstanding,
equal to the Letter of Credit Outstandings in excess of the Commitment at such
time.  In addition, at all times on and
after the 90th day prior to the Expiration Date and continuing until
all Letters of Credit have been terminated and all Obligations paid in full,
the Borrowers will maintain in the Cash Collateral Account an amount of cash
equal to the Letter of Credit Outstandings at such time.

 

(b)           If
on any date (including, without limitation, any date on which Dollar
Equivalents are determined) the aggregate Principal Amount of Revolving Credit
Loans and Bid Loans incurred by the UK Borrower plus the Letter of Credit
Outstandings in respect of Letters of Credit issued for the account of the UK
Borrower exceeds $12,500,000, the UK Borrower shall repay no later than the
next following Business Day the principal amount of Revolving Credit Loans in
an aggregate Principal Amount equal to such excess.  If, after giving effect to the repayment of
all outstanding Revolving Credit Loans incurred by the UK Borrower as set forth
above, the sum of the outstanding Bid Loans incurred by the UK Borrower plus
the Letter of Credit Outstandings in respect of Letters of Credit issued for
the account of the UK Borrower exceeds $12,500,000, the UK Borrower shall repay
on such date the principal of Bid Loans in an aggregate amount equal to such
excess.  If, after giving effect to the
repayment of all Revolving Credit Loans and Bid Loans incurred by the UK
Borrower as set forth above, the Letter of Credit Outstandings in respect of
Letters of Credit issued for the account of the UK Borrower exceed $12,500,000,
the UK Borrower shall on such day (i) establish a Cash Collateral Account, (ii)
enter into a control agreement over such Cash Collateral Account satisfactory
to the Agent and (iii) fund such Cash Collateral Account with cash to be held
as security for the UK Borrower’s reimbursement obligations in respect of
Letters of Credit equal to such excess.

 

43

 

(c)           If
on any date (including, without limitation, any date on which Dollar
Equivalents are determined) the aggregate outstanding Principal Amount of
Revolving Credit Loans and Bid Loans incurred by any of Holdings, AGRI or AGRO
plus the Letter of Credit Outstandings in respect of Letters of Credit issued
for the account of all of such Borrowers exceeds the Holdings Sub-Limit,
Holdings, AGRI and/or AGRO shall repay no later than the next following
Business Day the principal amount of Revolving Credit Loans in an aggregate
Principal Amount equal to such excess. 
If, after giving effect to the repayment of all outstanding Revolving
Credit Loans incurred by Holdings, AGRI and AGRO plus the Letter of Credit
Outstandings in respect of Letter of Credit issued for the account of such
Borrowers, in the aggregate, exceeds the Holdings Sub-Limit, Holdings, AGRI
and/or AGRO shall repay on such date the principal of Bid Loans in an aggregate
amount equal to such excess.  If, after
giving effect to the repayment of all Revolving Credit Loans and Bid Loans
incurred by Holdings, AGRI and AGRO, in the aggregate, as set forth above, the
Letter of Credit Outstandings in respect of Letters of Credit issued for the
account of such Borrowers, in the aggregate, exceeds the Holdings Sub-Limit,
Holdings, AGRI and/or AGRO shall on such day (i) establish a Cash Collateral
Account, (ii) enter into a control agreement over such Cash Collateral Account
satisfactory to the Agent and (iii) fund such Cash Collateral Account with cash
to be held as security for such Borrowers’ reimbursement obligations in respect
of Letters of Credit equal to such excess.

 

(d)           If
on any date (including, without limitation, any date on which Dollar
Equivalents are determined) the Letter of Credit Outstandings exceed
$100,000,000, the Borrowers shall (i) establish a Cash Collateral Account, (ii)
enter into a control agreement over such Cash Collateral Account satisfactory
to the Agent and (iii) fund such Cash Collateral Account with cash to be held
as security for the Borrowers’ reimbursement obligations in respect of Letters
of Credit equal to such excess.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

Section 5.01 
Representations and Warranties. 
Each Borrower represents and warrants (in each case solely as to itself
and its Subsidiaries) to the Agent and each of the Banks as follows:

 

(a)           Organization and Qualification.  Such Borrower is a corporation duly incorporated,
validly existing, and in good standing under the laws of its jurisdiction of
organization.  Such Borrower has the
lawful power to own or lease its properties and to engage in the business it
presently conducts.  Such Borrower is
duly licensed or qualified and in good standing in each jurisdiction where the
property owned or leased by it or the nature of the business transacted by it
or both makes such licensing or qualification necessary.

 

(b)           Capitalization and Subsidiaries.  As of the Closing Date, Holdings has no
Subsidiaries other than those Subsidiaries listed on Schedule 5.01(b).  Assured Value Insurance Company is an
inactive corporation having no material liabilities or

 

44

 

Indebtedness.  All of the issued and outstanding share
capital of Holdings has been validly issued and is fully paid and
nonassessable.

 

(c)           Power and Authority.  Such Borrower has full power to enter into,
execute, deliver, and carry out this Agreement and the other Loan Documents to
which it is a party, to incur the Indebtedness contemplated by the Loan
Documents, and to perform its Obligations under the Loan Documents to which it
is a party, and all such actions have been duly authorized by all necessary
proceedings on its part.

 

(d)           Validity and Binding Effect.  This Agreement has been duly and validly
executed and delivered by such Borrower, and each other Loan Document which
such Borrower is required to execute and deliver as of the date hereof has been
duly executed and delivered by such Borrower. 
Assuming the due execution and delivery by Agent and the Banks of those
Loan Documents to which they are a party, this Agreement and each other Loan
Document to which such Borrower is a party constitute the legal, valid and
binding obligations of such Borrower on and after its date of delivery thereof,
enforceable against such Borrower in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforceability of creditors’ rights generally or limiting the
right of specific performance.

 

(e)           No Conflict.  Neither the execution and delivery of this
Agreement or the other Loan Documents by such Borrower nor the consummation of
the transactions herein or therein contemplated or compliance with the terms
and provisions hereof or thereof will conflict with, constitute a default under
or result in any breach of (i) the terms and conditions of the certificate
or articles of incorporation, bylaws, memorandum of association or other
organizational or constitutional documents of such Borrower, or (ii) any
Law or any material agreement or instrument or order, writ, judgment,
injunction, or decree to which such Borrower is a party or by which it is bound
or to which it is subject, or result in the creation or enforcement of any
Lien, charge or encumbrance whatsoever upon any property (now or hereafter
acquired) of such Borrower (other than Permitted Liens).

 

(f)            Litigation. 
Except as disclosed under the Legal Proceedings heading of the Annual
Report on Form 10-K filed by Holdings with the SEC on March 22, 2005, there are
no actions, suits, proceedings, or investigations pending or, to the knowledge
of such Borrower, threatened against such Borrower at law or in equity before
any Official Body which individually or in the aggregate may result in any
Material Adverse Change.  Such Borrower
is not in violation of any order, writ, injunction, or any decree of any
Official Body which may result in any Material Adverse Change.

 

(g)           Title to Properties.  Such Borrower has good and marketable title
to or valid leasehold interests in all properties, assets, and other rights
which it purports to own or lease or which are reflected as owned or leased on
its books and records, free and clear of all Liens and encumbrances except
Permitted Liens.  All leases of property
are in full force and effect and are subject only to the terms and conditions
of the applicable leases.

 

45

 

(h)           Financial Statements,
Reinsurance Coverage.

 

(A)          Historical Statements.  The Company has delivered to the Agent copies
of its audited consolidated year-end financial statements for and as of the end
of the three (3) fiscal years ended December 31, 2002, 2003 and 2004 (the “Historical
Statements”).  The Historical Statements
were compiled from the books and records maintained by the Company’s
management, are correct and complete and fairly represent the consolidated
financial condition of the Company and its Subsidiaries as of their dates and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP and statutory requirements consistently applied.

 

(B)           Accuracy of Financial Statements.  As of the Closing Date, neither the Company
nor any Subsidiary of the Company has any liabilities, contingent or otherwise,
or forward or long-term commitments or Off-Balance Sheet Transactions that are
not disclosed in the Historical Statements or in the notes thereto, and except
as disclosed therein there are no unrealized or anticipated losses from any
commitments of the Company or any Subsidiary of the Company which may cause a
Material Adverse Change.  Since December 31,
2004, no Material Adverse Change has
occurred.

 

(C)           Reinsurance Coverage.  The Company has delivered Schedule 5.01(h)
to the Agent setting forth the amount, terms, and provider(s) to the Company of
reinsurance and the extent of the Company’s insurance or reinsurance exposure
covered thereby; as of December 31, 2004, Schedule 5.01(h) is correct
and complete and fairly represents the reinsurance coverage pertaining to the
business of the Company and its Subsidiaries (“Existing Reinsurance Coverage”).

 

(i)            Use of Proceeds; Margin Stock.  Such Borrower intends to use the proceeds of
the Loans and Letters of Credit in accordance with Section 2.07 and Section
7.01(j).  Such Borrower does not engage
or intend to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (such term used herein
within the meaning of Regulation U).  No
part of the proceeds of any Loan has been or will be used, immediately,
incidentally or ultimately, to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
to refund Indebtedness originally incurred for such purpose, or for any purpose
which entails a violation of or which is inconsistent with the provisions of
the regulations of the Board of Governors of the Federal Reserve System.  Such Borrower does not hold or intend to hold
margin stock in such amounts that more than 25% of the reasonable value of its
assets are or will be represented by margin stock.

 

(j)            Full Disclosure.  Neither this Agreement nor any other Loan
Document, nor any certificate, statement, agreement, or other document
furnished to the Agent or any Bank by either of Holdings or the Company in
connection herewith or therewith, contains any untrue statement of a material
fact or omits to state a material fact necessary

 

46

 

in order to
make the statements contained herein and therein, in light of the circumstances
under which they were made, not misleading. 
There is no fact known to either of Holdings or the Company which
materially adversely affects the business, property, assets, financial
condition, results of operations, or prospects of Holdings and its Subsidiaries
taken as a whole or the Company and its Subsidiaries taken as a whole which has
not been set forth in this Agreement or in the certificates, statements,
agreements, or other documents furnished in writing to the Agent and the Banks
by either Holdings or the Company prior to or at the date hereof in connection
with the transactions contemplated hereby.

 

(k)           Taxes. 
All federal, state, local, and other tax returns required to have been
filed with respect to such Borrower have been filed, and payment or adequate
provision has been made for the payment of all taxes, fees, assessments, and
other governmental charges which have or may become due pursuant to said
returns or to assessments received, except to the extent that such taxes, fees,
assessments, and other charges are being contested in good faith by appropriate
proceedings diligently conducted and for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made.  There are no agreements or waivers
extending the statutory period of limitations applicable to any federal income
tax return of such Borrower for any period.

 

(l)            Consents and Approvals.  No consent, approval, exemption, order, or
authorization of, or a registration or filing with, any Official Body or any
other Person is required by any Law or any agreement in connection with the
execution, delivery, or carrying out of this Agreement or any of the other Loan
Documents by such Borrower, except such as have been obtained or made on or
prior to the Closing Date.

 

(m)          No Event of Default;
Compliance With Instruments.  No
event has occurred and is continuing and no condition exists or will exist
after giving effect to the borrowings or other extensions of credit to be made
under or pursuant to the Loan Documents which constitutes an Event of Default
or Potential Default.  Such Borrower is
not in violation of (i) any term of its certificate or articles of
incorporation, bylaws, memorandum of association or other organizational or
constitutional documents or (ii) any material agreement or instrument to
which it is a party or by which it or any of its properties may be subject or
bound, in each such case where such violation would constitute a Material
Adverse Change.

 

(n)           Licenses, Etc.  Such Borrower owns or possesses all the
material licenses, registrations, franchises, permits, and rights necessary to
own and operate its properties and to carry on its business as presently
conducted by such Borrower, without conflict with the rights of others.

 

(o)           Insurance. 
No notice has been given or claim made and no grounds exist to cancel or
avoid any insurance policy or bond in favor of such Borrower or any of its
property, or to reduce the coverage provided thereby.  Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to

 

47

 

insure the
assets and risks of such Borrower in accordance with prudent business practice
in the industry of such Borrower.

 

(p)           Compliance With Laws.  Such Borrower is in compliance in all
material respects with all applicable Laws 
in all jurisdictions in which such Borrower is doing business, except
where the failure to do so would not constitute a Material Adverse Change.

 

(q)           Material Contracts;
Burdensome Restrictions.  All
material contracts relating to the business operations of such Borrower are
valid, binding, and enforceable upon such Borrower and, to the knowledge of
such Borrower, each of the other parties thereto in accordance with their
respective terms, and there is no default thereunder, to such Borrower’s
knowledge, with respect to parties other than such Borrower.  Such Borrower is not bound by any contractual
obligation, or subject to any restriction in any organizational document or any
requirement of Law, which in and of itself is material and adverse to such
Borrower.

 

(r)            Investment Companies;
Regulated Entities.  Such
Borrower is not an “investment company” registered or required to be registered
under the Investment Company Act of 1940 or under the “control” of an “investment
company” as such terms are defined in the Investment Company Act of 1940 and
shall not become such an “investment company” or under such “control.”  Such Borrower is not subject to any other
Federal or state statute or regulation limiting its ability to incur
Indebtedness for borrowed money.

 

(s)           Plans and Benefit Arrangements.  To the extent of any Benefit Arrangement,
Plan or Multiemployer Plan in place during the term of this Agreement, Holdings
and each other member of the ERISA Group are in compliance in all material
respects with any applicable provisions of ERISA with respect to all Benefit
Arrangements, Plans, and Multiemployer Plans. 
There has been no Prohibited Transaction with respect to any Benefit
Arrangement or any Plan or, to the best knowledge of the Borrowers, with
respect to any Multiemployer Plan or Multiple Employer Plan, which could result
in any material liability of Holdings or any other member of the ERISA
Group.  To the extent of any Benefit
Arrangement, Plan or Multiemployer Plan in place during the term of this
Agreement, Holdings and all other members of the ERISA Group have made when due
any and all payments required to be made under any agreement relating to a
Multiemployer Plan or a Multiple Employer Plan or any Law pertaining
thereto.  With respect to each Plan and
Multiemployer Plan, if any, Holdings and each other member of the ERISA Group
(i) have fulfilled in all material respects their obligations under the
minimum funding standards of ERISA, (ii) have not incurred any liability
to the PBGC other than PBGC premiums due but not delinquent under Section 4007
of ERISA, and (iii) have not had asserted against them any penalty for
failure to fulfill the minimum funding requirements of ERISA.  All Plans, Benefit Arrangements and
Multiemployer Plans, if any, have been administered in accordance with their
terms and applicable Law.

 

48

 

Holdings and each other member of the ERISA Group are
in compliance in all material respects with any applicable provisions of ERISA
with respect to all Benefit Arrangements, Plans, and Multiemployer Plans, if
any.  There has been no Prohibited
Transaction with respect to any Benefit Arrangement or any Plan or, to the best
knowledge of Holdings, with respect to any Multiemployer Plan or Multiple
Employer Plan, which could result in any material liability of Holdings or any
other member of the ERISA Group.  To the
extent of any Benefit Arrangement, Plan or Multiemployer Plan in place during
the term of this Agreement, Holdings and all other members of the ERISA Group
have made when due any and all payments required to be made under any agreement
relating to a Multiemployer Plan or a Multiple Employer Plan or any Law
pertaining thereto.  With respect to each
Plan and Multiemployer Plan, if any, Holdings and each other member of the
ERISA Group (i) have fulfilled in all material respects their obligations
under the minimum funding standards of ERISA, (ii) have not incurred any
liability to the PBGC other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, and (iii) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of ERISA.  All Plans, Benefit Arrangements and
Multiemployer Plans have been administered in accordance with their terms and
applicable Law.

 

(A)             No event requiring notice to the
PBGC under Section 302(f)(4)(A) of ERISA has occurred or is reasonably
expected to occur with respect to any Plan, and no amendment with respect to
which security is required under Section 307 of ERISA has been made or is
reasonably expected to be made to any Plan.

 

(B)             Neither Holdings nor any other
member of the ERISA Group has incurred or reasonably expects to incur any
material withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan.  Neither Holdings nor any
other member of the ERISA Group has been notified by any Multiemployer Plan or
Multiple Employer Plan that such Multiemployer Plan or Multiple Employer Plan
has been terminated within the meaning of Title IV of ERISA and, to the
best knowledge of Holdings, no Multiemployer Plan or Multiple Employer Plan is
reasonably expected to be reorganized or terminated, within the meaning of
Title IV of ERISA.

 

(t)            Senior Debt Status.  The Obligations of such Borrower under this
Agreement and each of the other Loan Documents to which it is a party do rank
and will rank at least pari  passu in priority of payment with all
other Indebtedness of the such Borrower except (i) Indebtedness of such
Borrower to the extent secured by Permitted Liens, and (ii) Indebtedness which
constitutes a “preferred claim” under Section 9-227 of the Maryland Insurance
Law (or any analogous provision of United Kingdom or Bermuda law) in the event
of the liquidation, rehabilitation, reorganization, or conservation of the such
Borrower.  There is no Lien upon or with
respect to any of the properties or income of such Borrower which secures
indebtedness or other obligations of any Person except for Permitted Liens.

 

(u)           Holdings. 
Holdings was created on August 21, 2003 for the purpose of holding the
capital stock of the Company and its other subsidiaries (but it is recognized
that

 

49

 

Holdings has
the corporate capacity to carry on other business under the objects expressed
in its Memorandum of Association).

 

Section 5.02 
Continuation of Representations. 
Each Borrower makes the representations and warranties in this ARTICLE V
on the date hereof and on the Closing Date and each date thereafter on which a
Loan is made to such Borrower or a Letter of Credit is issued for the account
of such Borrower as provided in and subject to Section 6.01 and Section 6.02.

 

ARTICLE VI

 

CONDITIONS OF LENDING

 

The obligation of each Bank to make Loans hereunder
and the obligation of each Issuing Bank to issue Letters of Credit hereunder is
subject to the performance by the Borrowers of their Obligations to be
performed hereunder at or prior to the occurrence of each such Credit Event,
and to the satisfaction of the following further conditions:

 

Section 6.01 
Closing Date.  The Closing
Date shall occur when the following conditions have been satisfied:

 

(a)           Representations and
Warranties True and Complete, No Defaults.  The representations and warranties of the
Borrowers contained in Article V shall be true, complete, and accurate on and
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and the Borrowers shall have
performed and complied with all covenants and conditions hereof and thereof, no
Event of Default or Potential Default shall have occurred and be continuing.

 

(b)           Secretary’s Certificate.  There shall be delivered to the Agent for the
benefit of each Bank certificates dated the Closing Date and signed by the
Secretary or an Assistant Secretary of Holdings, the Company, AGRI, AGRO and
the UK Borrower certifying as appropriate as to:

 

(i)            resolutions
approving all actions taken by Holdings, the Company, AGRI, AGRO and the UK
Borrower in connection with this Agreement and the other Loan Documents;

 

(ii)           the
names of the officer or officers authorized to sign this Agreement and the
other Loan Documents and the true signatures of such officer or officers and
specifying certain Authorized Officers of Holdings, the Company, AGRI, AGRO and
the UK Borrower for purposes of this Agreement and the true signatures of such
officers, on which the Agent and each Bank may conclusively rely; and

 

50

 

(iii)          copies
of its organizational or constitutional documents, including its certificate or
articles of incorporation and bylaws as in effect on the Closing Date certified
by the appropriate state or governmental official where such documents are
filed in a state office and capable of being certified by the appropriate state
or governmental official, together with certificates from the appropriate state
officials as to the continued existence and good standing of Holdings, the
Company, AGRI, AGRO and the UK Borrower in each jurisdiction where organized to
the extent applicable.

 

(c)           Delivery of Notes, Guaranty
Agreements, and Loan Request. 
The Notes, the Guaranty
Agreement to be entered into by Holdings, the Guaranty Agreement to be entered
into by the Company and the Guaranty Agreement to be entered into by the
Material Non-AGC Subsidiaries (other than AGRI and AGRO) shall have been duly
executed and delivered to the Agent for the benefit of the Banks.

 

(d)           Opinion of Counsel.  There shall be delivered to the Agent for the
benefit of each Bank party hereto on the Closing Date one or more written
opinions of counsel for Holdings, the Company, AGRI, AGRO and the UK Borrower
dated the Closing Date and in form and substance satisfactory to the Agent and
its counsel:

 

(i)            as
to the matters set forth in Exhibit 6.01(d); and

 

(ii)           as
to such other matters incident to the transactions contemplated herein as the
Agent may reasonably request.

 

(e)           Legal Details.  All legal details and proceedings in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be in form and substance satisfactory to the Agent and
counsel for the Agent, and the Agent shall have received all such other
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
satisfactory to the Agent and said counsel, as the Agent or said counsel may
reasonably request.

 

(f)            Payment of Fees.  The Borrowers shall have paid or caused to be
paid to the Agent for itself and for the account of the Banks to the extent not
previously paid the Facility Fees, all other fees accrued through the Closing
Date and the costs and expenses for which the Agent and the Banks are entitled
to be reimbursed.

 

(g)           No Material Adverse Change.  There has not occurred a Material Adverse
Change since the date of the Historical Statements.

 

(h)           Existing Agreement.  The commitments under the Existing Credit
Agreement shall have been terminated, all loans thereunder shall have been
repaid in full, together with all accrued and unpaid interest thereon, all
accrued and unpaid fees thereon shall have been paid in full, and all other
amounts then owing pursuant to the Existing Credit Agreement shall have been
repaid in full, and the Agent shall have received evidence in form, scope and
substance reasonably satisfactory to it that the matters set forth in this Section
6.01(h) have been satisfied at such time.

 

51

 

Section 6.02 
Each Credit Event.  (a) At
the time of each Credit Event, and after giving effect to the proposed
extensions of credit:  the Closing Date
shall have occurred; the representations and warranties of the Borrowers
contained in ARTICLE V and in the other Loan Documents and the representations
and warranties of each Material Non-AGC Subsidiary contained or incorporated in
the Guarantor Joinder given by such Material Non-AGC Subsidiary pursuant to
Section 10.18 shall be true on and as of the date of such additional Loan with
the same effect as though such representations and warranties had been made on
and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times referred to
therein) and the Borrowers shall have performed and complied with all covenants
and conditions hereof that are required to be performed or complied with as of
the date of such Credit Event and each Material Non-AGC Subsidiary shall have
complied with Section 10.18 and all other covenants and conditions that are
required to be performed or complied with as of the date of such Loan and which
are set forth in or incorporated into the Guarantor Joinder given by such
Material Non-AGC Subsidiary pursuant to Section 10.18; no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; and the
applicable Borrower shall have delivered to the Agent a duly executed and
completed Loan Request.

 

(b)           Notwithstanding anything to the
contrary in this Agreement, Holdings, AGRI and AGRO shall not be permitted to
incur any Loans hereunder or have Letters of Credit issued for their respective
account unless and until both AGRI and AGRO have entered into the Guaranty
Agreement substantially in the form of Exhibit 1.01(G)(2)-1 hereto by executing
and delivering a counterpart thereof to the Agent.

 

ARTICLE VII

 

COVENANTS

 

Section 7.01 
Affirmative Covenants. 
Subject to Section 7.04, each Borrower covenants and agrees (in each
case solely on behalf of itself and its Subsidiaries) that, until payment in
full of the Loans, and interest thereon, satisfaction of all of the other
Obligations under the Loan Documents, expiration of all Letters of Credit and
termination of the Commitments, each Borrower shall comply at all times with
the following affirmative covenants:

 

(a)           Preservation of Existence, Etc.  Holdings shall, and shall cause each of its
Material Subsidiaries to, maintain its legal existence as a corporation,
limited partnership, or limited liability company and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary, except as otherwise expressly permitted in Section
7.02(f) [Liquidations, Mergers, Etc.].

 

(b)           Payment of Liabilities,
Including Taxes, Etc. 
Holdings shall, and shall cause each of its Material Subsidiaries to,
duly pay and discharge all liabilities to which it is subject or which are
asserted against it, promptly as and when the same shall become due and
payable, including all taxes, assessments,
and governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges,

 

52

 

are being
contested in good faith and by appropriate and lawful proceedings diligently
conducted and for which such reserve or other appropriate provisions, if any,
as shall be required by GAAP shall have been made, provided that Holdings will
pay, and cause its Material Subsidiaries to pay, all such liabilities forthwith
upon the commencement of proceedings to foreclose any Lien which may have
attached as security therefor.

 

(c)           Maintenance of Insurance.  Holdings shall, and shall cause each of its
Material Subsidiaries to, insure its properties and assets against loss or
damage by insurable hazards as such assets are commonly insured (including, to
the extent applicable to the respective industry of Holdings or any Subsidiary
thereof, fire, extended coverage, property damage, workers’ compensation,
public liability, and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers,
including self-insurance to the extent customary.

 

(d)           Maintenance of Properties and
Leases.  Holdings shall, and
shall cause each of its Material Subsidiaries to, maintain in good repair,
working order, and condition (ordinary wear and tear excepted) in accordance
with the general practice of other businesses of similar character and size,
all of those properties useful or necessary to its business, and from time to
time Holdings will make or cause to be made all appropriate repairs, renewals,
or replacements thereof.

 

(e)           Maintenance of Licenses, Etc.  Holdings shall, and shall cause each of its
Material Subsidiaries to, maintain in full force and effect all licenses,
franchises, permits, rights, and other authorizations necessary for the
ownership and operation of its properties and business if the failure so to
maintain the same would constitute a Material Adverse Change.

 

53

 

(f)            Visitation Rights.  Holdings shall, and shall cause each of its
Material Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or any Bank to visit and inspect any of its
properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such detail and at such times and as often as the Agent or any such Bank may
reasonably request and at the pro  rata expense of the Banks (if
requested by the Required Banks), the requesting Bank or, if the request has
not come from any Bank, the Agent, provided that the Agent or such Bank
shall provide the Company with reasonable notice prior to any visit or
inspection, provided further no Bank shall be permitted more than one
visit per one year period and provided further that during the
continuation of any Event of Default, (i) the limitation on visits in the
immediately preceding proviso shall not apply and (ii) all such visits and
inspections by Agent and or Bank shall be at the expense of the Borrowers.  In the event any Bank desires to conduct a
visitation or inspection as contemplated hereby of Holdings or any Subsidiary,
such Bank shall make a reasonable effort to conduct such visitation and
inspection contemporaneously with any visitation or inspection to be performed
by the Agent.

 

(g)           Keeping of Records and Books
of Account.  Holdings shall, and
shall cause each Subsidiary of Holdings to, maintain and keep proper books of
record and account which enable Holdings and its Material Subsidiaries to issue
financial statements in accordance with GAAP and as otherwise required by
applicable Laws of any Official Body having jurisdiction over Holdings or any
Subsidiary of Holdings, and in which full, true and correct entries shall be
made in all material respects of all its dealings and business and financial
affairs.

 

(h)           Plans and Benefit Arrangements.  Holdings shall, and shall cause each other
member of the ERISA Group to, comply with ERISA, the Internal Revenue Code and
other Laws applicable to any Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change.  Without
limiting the generality of the foregoing, Holdings shall cause all of its Plans
and all Plans maintained by any member of the ERISA Group, if any, to be funded
in accordance with the minimum funding requirements of ERISA and, to the extent
applicable shall make, and cause each member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.

 

(i)            Compliance With Laws.  Holdings shall, and shall cause each of its
Material Subsidiaries to, comply with all applicable Laws in all respects,
provided that it shall not be deemed to be a violation of this Section 7.01(i)
if any failure to comply with any Law would not result in fines, penalties,
remediation costs, other similar liabilities or injunctive relief which in the
aggregate would constitute a Material Adverse Change.

 

54

 

(j)            Use of Proceeds.  Each Borrower will use the proceeds of the
Loans and Letters of Credit only for the general corporate purposes and working
capital needs of the such Borrower.  No
Borrower shall use the proceeds of the Loans or Letters of Credit for any
purposes which contravenes any applicable Law or any provision hereof.

 

(k)           Senior Debt Status.  Holdings shall ensure that the Obligations of
Holdings and any Material Subsidiary under this Agreement, a Guarantor Joinder,
any Guaranty Agreement, and each of the other Loan Documents to which it is a
party shall at all times rank at least pari  passu in priority of
payment with all other senior unsecured Indebtedness of Holdings or such
Material Subsidiary (except to the extent of any Indebtedness which has a “preferred”
status under any Law governing the bankruptcy, liquidation, insolvency,
rehabilitation, reorganization, conservation, or like circumstance of Holdings
or such Material Subsidiary) and no such other senior unsecured Indebtedness of
Holdings or such Material Subsidiary shall at any time be governed by or
subject to covenants, defaults, or other provisions that are more restrictive
on Holdings or such Material Subsidiary than those set forth herein; and
provided that if payment of any present or future Indebtedness of Holdings or
any Material Subsidiary, except Indebtedness of Holdings or any Material
Subsidiary to the extent secured by Permitted Liens, shall at any time
hereafter become secured by any Lien on any property, Holdings or such Material
Subsidiary shall secure payment of the Obligations with a Lien of like priority
on the same or substantially similar property of the same or greater value
(but, in any event, such Lien shall secure an amount of Obligations not to
exceed the amount secured by the Lien given to secure payment of such other
Indebtedness).

 

(l)            Company
Consolidated Assets.  If at any time
the Company Consolidated Assets is less than $1,200,000,000, within 15 days
following such occurrence Holdings will enter into a Guaranty Agreement in form
and substance satisfactory to the Agent pursuant to which Holdings will
unconditionally and irrevocably guaranty all Obligations of the Company and the
UK Borrower.

 

Section 7.02 
Negative Covenants. 
Subject to Section 7.04, each Borrower covenants and agrees (in each
case on behalf of itself and its Subsidiaries) that until payment in full of
the Loans and interest thereon, satisfaction of all of the other Obligations
hereunder, expiration of all Letters of Credit and termination of the
Commitments, such Borrower shall comply with the following negative covenants:

 

(a)           Indebtedness.  Holdings shall not, and shall not permit any
of its Material Subsidiaries to, at any time create, incur, assume, or suffer
to exist any Indebtedness, except:

 

(i)            Indebtedness
under the Loan Documents;

 

(ii)           Existing
Indebtedness as set forth on Schedule 7.02(a) (including any
extensions or renewals thereof, provided there is no increase in the
amount thereof or other significant change in the terms thereof unless
otherwise specified on Schedule 7.02(a);

 

55

 

(iii)          Capitalized
and operating leases;

 

(iv)          Indebtedness
secured by Purchase Money Security Interests;

 

(v)           Indebtedness
of Holdings or any Material Subsidiary to the Company or any other Material
Subsidiary, or any of their respective Affiliates;

 

(vi)          Any
Interest Rate Hedge;

 

(vii)         Any
Guaranties permitted pursuant to Section 7.02(c);

 

(viii)        Other
Indebtedness of the Company which is non-recourse to the Company and in the
nature (as to its purpose and non-recourse structure) of that existing
Indebtedness in favor of Deutsche Bank shown on Exhibit 7.02(a) (“Soft
Capital”);

 

(ix)           Other
Indebtedness of Material Subsidiaries which are regulated insurance companies
consisting of letters of credit, trust accounts and similar collateral support
required in the ordinary course of business either by statute or by rating
agencies to support the insurance and/or reinsurance businesses of such
Material Subsidiaries;

 

(x)            All
obligations of any Affiliate of Holdings under Guaranteed Investment Contracts
issued by such Person in an aggregate amount of up to $1,000,000,000;

 

(xi)           Other
Indebtedness of Holdings, US Holdco, AGRI or AGRO from time to time so long as
such Indebtedness is permitted at such time by the other provisions of this
Agreement; and

 

(xii)          Any
obligations pursuant to the Contingent Capital Facility.

 

(b)           Liens. 
Holdings shall not, and shall not permit any of its Material
Subsidiaries to, at any time create, incur, assume, or suffer to exist any Lien
on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except
Permitted Liens.

 

(c)           Guaranties. 
Holdings shall not, and shall not permit any of its Material
Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guaranty, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
Guaranties of that Indebtedness of Holdings and the Material Subsidiaries
permitted hereunder and (the following, collectively, “Insurance-Related
Guaranties”): (i) reinsurance and insurance agreements and policies and
Guaranties which Holdings or any Material Subsidiary is authorized or licensed
to provide in the ordinary course of its reinsurance or insurance business,
(ii) Guaranties given by the Company to support credit derivative transactions
entered into by AG Financial Products Inc., a Delaware corporation and
Affiliate of the Company (“Credit Derivative

 

56

 

Guaranties”),
(iii) Guaranties given by the Company to support the obligations of any
Subsidiary of Holdings pursuant to Guaranteed Investment Contracts issued by
such Subsidiary; (iv) keepwell and similar agreements between and among various
Subsidiaries of Holdings, the purpose and effect of which is to transfer the
financial strength ratings of either of the Company or Assured Guaranty Re
International Ltd. to its Subsidiaries, and (v) letters of credit, trust
accounts or similar collateral support procured by Subsidiaries of Holdings
which are required in the ordinary course of business either by statute or by
rating agencies in order to support the respective reinsurance or insurance
business of such Subsidiaries.

 

(d)           Loans and Investments.  Holdings shall not, and shall not permit any
of its Material Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock, bonds,
notes or securities of, or any partnership interest (whether general or
limited) or limited liability company interest in, or any other investment or
interest in, or make any capital contribution
to, any other Person, or agree, become, or remain liable to do any of the
foregoing, except:

 

(i)            trade
credit extended on usual and customary terms in the ordinary course of
business;

 

(ii)           advances
to employees to meet expenses incurred by such employees in the ordinary course
of business;

 

(iii)          Permitted
Investments and Permitted Acquisitions; and

 

(iv)          loans,
advances and investments in Holdings and any Subsidiary of Holdings; provided that the Company may not make any
loans, advances and investments in Holdings or any Subsidiary of Holdings which
is not a Subsidiary of the Company (other than any such Subsidiary of Holdings
which issues or proposes to issue Guaranteed Investment Contracts).

 

(e)           Dividends and Related
Distributions.  Holdings shall
not, and shall not permit any of its Material Subsidiaries to, make or pay, or
agree to become or remain liable to make or pay, any dividend or other
distribution of any nature (whether in cash, property, securities or otherwise)
on account of or in respect of its shares of capital stock, partnership
interests, or limited liability company interests or on account of the
purchase, redemption, retirement, or acquisition of its shares of capital stock
(or warrants, options or rights therefor), partnership interests or limited
liability company interests, except (i) dividends or other distributions
payable to Holdings or any Material Subsidiary, (ii) so long as there shall
exist no Potential Default or Event of Default (both before and after giving
effect to the payment thereof), dividends payable by Holdings or the Company
and AGRI pursuant to clause (iv) below not in excess of an aggregate amount of
$20,000,000 in any fiscal year of Holdings, (iii) so long as there shall exist
no Potential Default or Event of Default (both before and after giving effect
to the payment thereof), the repurchase of shares of Holdings by Holdings
during any fiscal year not in excess of 3% of the Consolidated Net Worth of
Holdings as of the end of the most recently ended fiscal year minus the
amount of dividends paid pursuant to the clause (ii) or (iv) hereof during

 

57

 

such fiscal
year; provided that, in any event, the aggregate amount of share
repurchases made pursuant to this clause (iii) shall not exceed an amount equal
to 5% of the Consolidated Net Worth of Holdings as of the end of the most
recently ended fiscal year and (iv) so long as there shall exist no Potential
Default or Event of Default (both before and after giving effect to the payment
thereof), the Company and AGRI may pay accrued but unpaid dividends on any
preferred stock issued pursuant to the Contingent Capital Facility so long as
the aggregate amount paid under clause (ii) herein and this clause (iv) does
not exceed $20,000,000 in any fiscal year of Holdings.

 

(f)            Liquidations, Mergers,
Consolidations, Acquisitions. 
Holdings shall not, and shall not permit any of its Material
Subsidiaries to, dissolve, liquidate, or wind-up its affairs, or become a party
to any amalgamation, merger or consolidation, or acquire by purchase, lease, or
otherwise all or substantially all of the assets or capital stock of or other
ownership interest in any other Person, provided that

 

(1)           any
Material Subsidiary may consolidate, amalgamate or merge into Holdings or any
other Material Subsidiary provided that the Company may not merge, amalgamate
or consolidate with Holdings, and the Company may only merge, amalgamate or
consolidate with another Material Subsidiary if the Company is the surviving
entity of such merger, amalgamation or consolidation; and

 

(2)           Holdings
or any Material Subsidiary may acquire, whether by purchase, by amalgamation or
by merger, (A) all of the ownership interests of another Person or
(B) substantially all of the assets of another Person or of a business or
division of another Person (each a “Permitted Acquisition”), provided
that each of the following requirements is met:

 

(i)            if
Holdings or any Material Subsidiary is acquiring the ownership interests in
such Person and such Person meets the criteria for a Material Subsidiary set
forth in the definition of such term at Section 1.01, such Person shall execute
a Guarantor Joinder and join this Agreement as a Guarantor pursuant to Section
10.18 [Joinder of Guarantors] on or before the date of such Permitted
Acquisition;

 

(ii)           the
board of directors or other equivalent governing body of such Person shall have
approved such Permitted Acquisition and Holdings or the relevant Material
Subsidiary shall have delivered to the Banks written evidence of such approval
of the board of directors (or equivalent body) of such Person for such
Permitted Acquisition;

 

(iii)          the
business acquired, or the business conducted by the Person whose ownership
interests are being acquired, as applicable, shall be substantially the same
as, or otherwise complementary or related to, one or more lines of business
conducted by Holdings or any Material Subsidiary, or otherwise incidental to
the business of a financial services

 

58

 

company, and shall comply
with Section 7.02(j) [Continuation of or Change in Business];

 

(iv)          no
Potential Default or Event of Default shall exist immediately prior to and
after giving effect to such Permitted Acquisition; and

 

(v)           upon
the reasonable request of Agent, Holdings or the relevant Material Subsidiary
shall deliver to the Agent at least five (5) Business Days before such
Permitted Acquisition such information about such Person or its assets as Agent
may reasonably require.

 

(g)           Dispositions of Assets or
Subsidiaries.  Holdings shall
not, and shall not permit any of its Material Subsidiaries to, sell, convey,
assign, lease, abandon, or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including by sale, assignment, discount, or other disposition of accounts,
contract rights, chattel paper, equipment, or general intangibles with or
without recourse or of capital stock, shares of beneficial interest,
partnership interests or limited liability company interests of a Subsidiary of
Holdings), except:

 

(i)            transactions
involving the sale of inventory, if any, in the ordinary course of business;

 

(ii)           any
sale, transfer, or lease of assets, including any sale of investment assets, in
the ordinary course of business which are no longer necessary or required in
the conduct of Holdings’ or such Subsidiary’s business or which are incidental
to the management of Holdings’ or its Subsidiary’s investment portfolio in a
manner consistent with past practices;

 

(iii)          any
sale, transfer, lease or assignment of assets or novation of rights by any
wholly owned Subsidiary of Holdings to Holdings or any Material Subsidiary;

 

(iv)          any
sale, transfer or lease of assets in the ordinary course of business which are
replaced by reasonably equivalent substitute assets; or

 

(v)           any
sale, transfer or lease of assets, other than those specifically excepted
pursuant to clauses (i) through (iv) above, provided that (A) at
the time of any disposition, no Event of Default shall exist or shall result
from such disposition, and (B) the aggregate value of all assets so sold
by (x) Holdings shall not exceed in any fiscal year fifteen percent (15%) of
the consolidated tangible net worth of Holdings and its Subsidiaries or (y) any
Material Subsidiary in any fiscal year shall not exceed a material portion of
such Material Subsidiary’s tangible net worth.

 

(h)           Affiliate Transactions.  Holdings shall not, and shall not permit any
of its Material Subsidiaries to, enter into or carry out any transaction (including
purchasing

 

59

 

property or
services from or selling property or services to any Affiliate of Holdings or
any Material Subsidiary or other Person) unless such transaction is not
otherwise prohibited by this Agreement, is entered into upon fair and
reasonable arm’s-length terms and conditions which are fully disclosed to the
Agent, and is in accordance with all applicable Law and accounting standards.

 

(i)            Subsidiaries, Partnerships
and Joint Ventures.  Holdings
shall not, and shall not permit any of its Material Subsidiaries to, own,
acquire, or create directly or indirectly any Material Non-AGC Subsidiary other
than Material Non-AGC Subsidiaries each of which has joined this Agreement as a
Guarantor at any time after the Closing Date in accordance with Section 10.18
[Joinder of Guarantors]; provided, however, that the parties hereto
acknowledge and agree that AGRI and AGRO shall not be required to become
Guarantors and deliver all required documents pursuant to Section 10.18 unless
Loans have been incurred by, or Letters of Credit issued for the account of,
Holdings, AGRO and/or AGRI as contemplated in Section 6.02(b).  Each of Holdings and its Material
Subsidiaries shall not become or agree to become (1) a general or limited
partner in any general or limited partnership, except that Holdings or any of
its Material Subsidiaries may be general or limited partners in any other
Material Subsidiary, (2) a member or manager of, or hold a limited liability
company interest in, a limited liability company, except that Holdings or any
of its Material Subsidiaries may be members or managers of, or hold limited
liability company interests in, other Material Subsidiaries, or (3) a joint
venturer or hold a joint venture interest in any joint venture except that
Holdings or any of its Material Subsidiaries may be a party to a joint venture
(A) that would not otherwise be a Material Subsidiary were it a Subsidiary of
Holdings, and (B) as to which neither Holdings nor any Material Subsidiary is
directly or indirectly jointly or severally liable for any act or omission of
the joint venture beyond the amount of its investment therein.

 

(j)            Continuation of or Change in
Business.  Holdings shall not,
and shall not permit any of its Material Subsidiaries to, make a material
change in the nature of its business as substantially conducted and operated by
Holdings or such Subsidiary as of the Closing Date; provided, however,
that (A) it shall not be a material change hereunder for Holdings or any of its
Material Subsidiaries to alter the concentration percentages of products
offered or business conducted as of the Closing Date, nor to enter into any
business incidental to the offering of such products or the conduct of such
business and it shall not be a material change hereunder for a Material
Subsidiary to engage in any business incidental to the conduct of a financial
services company and (B) the parties hereto hereby acknowledge and agree that
the issuance of Guaranteed Investment Contracts is a business incidental to the
conduct of a financial services company.

 

(k)           Plans and Benefit Arrangements.  Holdings shall not, and shall not permit any
of its Material Subsidiaries to, engage in a Prohibited Transaction with any
Plan, Benefit Arrangement, or Multiemployer Plan which, alone or in conjunction
with any other circumstance or set of circumstances, would result in a material
liability under ERISA or otherwise violate ERISA in a material respect.

 

60

 

(l)            Fiscal Year.  Holdings shall not, and shall not permit any
Subsidiary of Holdings to, change its fiscal year from the twelve-month period
beginning January 1 and ending December 31 unless Holdings has (i) provided
thirty (30) days’ prior written notice to the Agent and the Banks of the
proposed change accompanied by an explanation in reasonable detail of the
effect thereof on Holdings and its Subsidiaries in general and on Holdings’ or
its Material Subsidiary’s financial reporting and covenant compliance
hereunder, and (ii) agreed to amend the covenants contained herein (including
the financial covenants set forth below) if reasonably requested by the Agent
and the Required Banks to maintain the continuity of the such covenants.

 

(m)          Minimum Statutory Capital.  The Company shall not at any time permit the
Statutory Capital of the Company to be less than eighty percent (80%) of the
Statutory Capital of the Company as of the most recent fiscal quarter of the
Company prior to the Closing Date.

 

(n)           Maximum Exposure Ratio (Company).  The Company shall not at any time permit the
ratio of the Net Par of the Company  to
the Statutory Capital of the Company to exceed 150 to 1.0.

 

(o)           Maximum Debt to Total
Capitalization Ratio (Holdings). 
Holdings shall maintain at all times a ratio of Consolidated Debt to
Total Capitalization of not more than 0.30 to 1.0.

 

(p)           Minimum Net Worth.  Holdings shall not permit at any time its
Consolidated Net Worth to be less than $1,200,000,000.

 

(q)           Interest Coverage Ratio.  Holdings will not permit the Consolidated
Interest Coverage Ratio for any Test Period ending on the last day of a fiscal
quarter of Holdings to be less than 2.5:1.0.

 

Section 7.03 
Reporting Requirements. 
Subject to Section 7.04, each Borrower covenants and agrees (in each
case solely on behalf of itself and its Subsidiaries) that until payment in
full of the Loans and interest thereon, satisfaction of all other Obligations
hereunder and under the other Loan Documents, expiration of all Letters of Credit
and termination of the Commitments, Holdings will furnish or cause to be
furnished to the Agent (which shall promptly furnish the same to each of the
Banks):

 

(a)           Quarterly Financial Statements.  As soon as available and in any event within
forty-five (45) calendar days after the end of each of the first three fiscal
quarters in each fiscal year, the Form 10-Q of Holdings as filed with the SEC
and two sets of financial statements of Holdings and the Company, each
consisting of a consolidated balance sheet as of the end of such fiscal quarter
and related consolidated statements of income, stockholders’ equity, and cash
flows for the fiscal quarter then ended and the fiscal year through that date,
all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President, Chief Financial
Officer, Treasurer, or Assistant Treasurer of Holdings or the Company, as the
case may be, as having been prepared as the set of financial statements of
Holdings in accordance with

 

61

 

GAAP,
consistently applied, and as to the set of financial statements of the Company
as having been prepared in accordance with statutory accounting principles
required by the State of Maryland.

 

(b)           Annual Financial Statements.  As soon as available and in any event within
ninety (90) days after the end of each fiscal year of Holdings, the Form 10-K
of Holdings as filed with the SEC and two sets of financial statements of
Holdings and the Company, each consisting of a consolidated balance sheet as of
the end of such fiscal year, and related consolidated statements of income,
stockholders’ equity, and cash flows for the fiscal year then ended, all in
reasonable detail with the set relating to Holdings being prepared in
accordance with GAAP, consistently applied, and the set relating to the Company
being prepared in accordance with statutory accounting principles required by
the State of Maryland, and, in each case, certified by independent certified
public accountants of nationally recognized standing satisfactory to the
Agent.  The certificate or report of
accountants shall be free of qualifications (other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such accountants concur) and shall not
indicate the occurrence or existence of any event, condition, or contingency
which would materially impair the prospect of payment or performance of any
covenant, agreement, or duty of Holdings and/or any Material Subsidiary under
any of the Loan Documents.

 

(c)           Certificate of the Company.  Concurrently with the financial statements of
Holdings and the Company furnished to the Agent and to the Banks pursuant to
Section 7.03(a) [Quarterly Financial Statements] and Section 7.03(b) [Annual
Financial Statements], a certificate (each a “Compliance Certificate”) of each
of Holdings and the Company signed by the Chief Executive Officer, President,
Chief Financial Officer, Treasurer, or Assistant Treasurer of Holdings or the
Company, in the form of Exhibit 7.03(c), to the effect that, except as
described pursuant to Section 7.03(d) [Notice of Default], (i) the
representations and warranties of the Borrowers contained in ARTICLE V and in
the other Loan Documents and the representations and warranties of each
Material Non-AGC Subsidiary, if any, contained or incorporated in the Guarantor
Joinder given by such Non-AGC Material Subsidiary pursuant to Section 10.18 are
true on and as of the date of such certificate with the same effect as though
such representations and warranties had been made on and as of such date
(except representations and warranties which expressly relate solely to an
earlier date or time) and each Borrower has performed and complied with all
covenants and conditions hereof and each Material Subsidiary, if any, shall
have complied with all covenants and conditions of or incorporated into the
Guarantor Joinder given by such Non-AGC Material Subsidiary pursuant to Section
10.18, (ii) no Event of Default or Potential Default exists and is
continuing on the date of such certificate, and (iii) containing
calculations in sufficient detail to (A) demonstrate compliance as of the date
of such financial statements with all applicable financial covenants contained
in Section 7.02 [Negative Covenants] and (B) determine the Net Par of the
Company and any material changes or loss experience in connection with Existing
Reinsurance Coverage from the components thereof set forth on Schedule
5.01(h).

 

62

 

(d)           Notice of Default.  Promptly after any officer of a Borrower has
learned of: (i) the occurrence of an Event of Default or Potential Default, a
certificate signed by the Chief Executive Officer, President, Chief Financial
Officer, Treasurer, or Assistant Treasurer of such Borrower setting forth the
details of such Event of Default or Potential Default and the action which such
Borrower proposes to take with respect thereto, or (ii) the creation or
acquisition of a Material Subsidiary (or the existence of a Material Non-AGC
Subsidiary other than AGRI or AGRO which has not executed and delivered a
Guaranty Agreement to Agent for the benefit of the Banks), a certificate signed
by the Chief Executive Officer, President, Chief Financial Officer, Treasurer,
or Assistant Treasurer of Holdings setting forth the legal name, jurisdiction
of organization, and such other relevant information reasonably requested by
Agent.

 

(e)           Off-Balance Sheet Financing.  None of Holdings or any of its Material
Subsidiaries shall engage in any off-balance
sheet transaction (i.e., the liabilities in respect of which do not
appear on the liability side of the balance sheet) providing the functional
equivalent of material Indebtedness or otherwise providing for a material
liability of Holdings or any of its Material Subsidiaries (collectively, “Off-Balance Sheet Transactions”), except the
Contingent Capital Facility and such other Off-Balance Sheet Transactions as
are fully disclosed to the Banks and Agent prior to their creation.

 

(f)            Notice of Litigation.  Promptly after the commencement thereof,
notice of all actions, suits, proceedings or investigations before or by any
Official Body or any other Person against Holdings or any Material Subsidiary
of Holdings, which involve a claim or series of claims in excess of $20,000,000
or which, if adversely determined, would constitute a Material Adverse Change.

 

(g)           Notice of Change in Insurer
Financial Strength Rating. 
Within two (2) Business Days after Standard & Poor’s or Moody’s
announces a change in the Company’s Insurer Financial Strength Rating, notice
of such change.  Holdings will deliver
together with such notice a copy of any written notification which the Company
received from the applicable rating agency regarding such change of its Insurer
Financial Strength Rating.

 

(h)           Sale of Assets.  At least fifteen (15) calendar days prior
thereto, notice with respect to any proposed sale or transfer of material
assets pursuant to Section 7.02(g)(v).

 

(i)            Budgets, Other Reports and
Information.  Promptly upon their
becoming available to Holdings or the Company, such reports and information as
any of the Banks may from time to time reasonably request.  Each Borrower shall also notify the Banks and
Agent promptly of the enactment, enforcement, or adoption of any Law which may
result in a Material Adverse Change with respect to such Borrower.

 

Section 7.04 
Bermuda Law Event.  To the
extent that the making by Holdings, the Company or any Guarantor of any
covenant set forth in Sections 7.01, 7.02 or 7.03 or in any of the Loan
Documents is for such Person not permitted by, or is unlawful under or is in
violation of, any Bermuda Law pertaining to fetters on statutory powers, then
such covenant

 

63

 

shall be deemed not made by nor
applicable to such Person, but if such Person shall take or fail to take any
action which would have breached such covenant had the same been applicable to
such Person, the action or failure to take action shall constitute a “Bermuda
Law Event”.

 

ARTICLE VIII

 

DEFAULT

 

Section 8.01 
Events of Default.  An
Event of Default shall mean the occurrence or existence of any one or more of
the following events or conditions (whatever the reason therefor and whether
voluntary, involuntary, or effected by operation of Law):

 

(a)           Payments Under Loan Documents.  Any Borrower shall fail to pay (i) any
principal of any Loan (including scheduled installments or mandatory
prepayments, if any, or the payment due at maturity) when such principal is due
hereunder or any reimbursement obligation in respect of any Letter of Credit
when due hereunder or (ii) any interest on any Loan or any other amount
owing hereunder or under the other Loan Documents within five (5) Business Days
after such interest or other amount becomes due in accordance with the terms
hereof or thereof;

 

(b)           Breach of Warranty.  Any representation or warranty made at any
time by any of Holdings and the Material Subsidiaries herein or by any of
Holdings and the Material Subsidiaries in any other Loan Document, or in any
certificate, other instrument, or statement furnished by Holdings or a Material
Subsidiary pursuant to the provisions hereof or thereof, shall prove to have
been false or misleading in any material respect as of the time it was made or
furnished;

 

(c)           Breach of Negative Covenants
or Visitation Rights.  Holdings
or any Material Subsidiary shall default in the observance or performance of
any covenant contained in Section 7.02 [Negative Covenants] or Section 7.01(l)
or shall default for a period of ten (10) days or more in the observance or
performance of any covenant contained in Section 7.01(f);

 

(d)           Breach of Other Covenants.  Holdings or any Material Subsidiary shall
default in the observance or performance of any other covenant, condition, or
provision hereof or of any other Loan Document and such default shall continue
unremedied for a period of thirty (30) days (such grace period to be applicable
only in the event such default can be remedied by corrective action);

 

(e)           Defaults in Other Agreements
or Indebtedness.  A default or
event of default shall occur at any time under the terms of any other agreement
involving borrowed money or the extension of credit or any other Indebtedness
under which Holdings or any Material Subsidiary of  Holdings may be obligated as a borrower or
guarantor in excess of $20,000,000 in the aggregate, and either (1) such
breach, default or event of default consists of the failure to pay (beyond any
period of grace permitted with respect thereto, whether waived or not) any
Indebtedness when due (whether at stated maturity, by acceleration or
otherwise) or (2) such breach or default causes (or permits

 

64

 

the holder or
holders of such Indebtedness to cause) the acceleration of any Indebtedness
(whether or not such right shall have been waived) or the termination of any
commitment to lend;

 

(f)            Final Judgments or Orders.  Any final judgments or orders for the payment
of money which results in an uninsured liability to pay in excess of
$20,000,000 in the aggregate shall be entered against Holdings or any Material
Subsidiary by a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded, or stayed pending appeal within a period of
forty-five (45) days from the date of entry;

 

(g)           Loan Document Unenforceable.  Any of the Loan Documents shall cease to be
legal, valid, and binding agreements enforceable against the party executing
the same or such party’s successors and assigns (as permitted under the Loan
Documents) in accordance with the respective terms thereof or shall in any way
be terminated (except in accordance with its terms) or become or be declared stayed,
ineffective, or inoperative or shall cease to give or provide the respective
Liens or security interests intended to be created thereby; provided, however,
if any of the foregoing is a result of an involuntary proceeding of the type
described in Section 8.01(m), such proceeding has not been contested by the
affected party or has not been dismissed after the passage of more than sixty
(60) days;

 

(h)           Losses; Proceedings Against
Assets.  Any of Holdings’ or the
Company’s assets having an aggregate value (reasonably determined) in excess of
five (5%) of the tangible net worth of Holdings and its Subsidiaries or the
Company and the Subsidiaries, as the case may be, or any of its Material
Subsidiaries’ assets having an aggregate value (reasonably determined) in
excess of a material amount of such Material Subsidiary’s tangible net worth,
are attached, seized, levied upon or subjected to a writ or distress warrant;
or such come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors and the same is not cured within sixty
(60) days thereafter;

 

(i)            Notice of Lien or Assessment.  A notice of Lien or assessment in excess of
$20,000,000 which is not a Permitted Lien is filed of record with respect to
all or any part of the Holdings’ or any of its Material Subsidiaries’ assets by
the United States, or any department, agency, or instrumentality thereof, or by
any state, county, municipal, or other governmental agency, including the PBGC,
or any taxes or debts owing at any time or times hereafter to any one of these
becomes payable and the same is not paid within thirty (30) days after the same
becomes payable;

 

(j)            Insolvency. 
Holdings or any Material Subsidiary of Holdings ceases to be solvent or
admits in writing its inability to pay its debts as they mature;

 

(k)           Events Relating to Plans and
Benefit Arrangements.  Any of the
following occurs:  (i) any
Reportable Event, which the Agent determines in good faith constitutes grounds
for the termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing;
(ii) proceedings shall have been instituted or other action taken to terminate
any Plan, or a termination

 

65

 

notice shall
have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give
notice of its intent to institute proceedings to terminate any Plan or Plans or
to appoint a trustee to administer or liquidate any Plan; and, in the case of
the occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good
faith that the amount of Holdings’ liability is likely to exceed 10% of its
Consolidated Net Worth; (v) Holdings or any member of the ERISA Group
shall fail to make any contributions when due to a Plan or a Multiemployer
Plan; (vi) Holdings or any other member of the ERISA Group shall make any
amendment to a Plan with respect to which security is required under Section 307
of ERISA; (vii) Holdings or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) Holdings or any
other member of the ERISA Group shall withdraw (or shall be deemed under
Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or
(ix) any applicable Law is adopted, changed or interpreted by any Official
Body with respect to or otherwise affecting one or more Plans, Multiemployer
Plans or Benefit Arrangements and, with respect to any of the events specified
in (v), (vi), (vii), (viii) or (ix), the Agent determines in good faith that
any such occurrence would be reasonably likely to materially and adversely
affect the total enterprise represented by Holdings and the other members of the
ERISA Group;

 

(l)            Change of Control.  (i) Any person or group of persons (within
the meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of
1934, as amended), other than ACE or an Affiliate of ACE, shall have acquired
beneficial ownership of (within the meaning of Rule 13d-3 promulgated by the
SEC under said Act) 30% or more of the voting capital stock of Holdings; or
(ii) within a period of twelve (12) consecutive calendar months,
individuals who were directors of Holdings on the first day of such period and
individuals approved by the existing board of directors of Holdings shall cease
to constitute a majority of the board of directors of Holdings; or (iii) the
Company, AGRI or AGRO shall cease to be a wholly-owned Subsidiary of Holdings; provided,
however, any issuance of preferred stock in connection with the Contingent
Capital Facility shall not be a violation of this Section 8.01(l) and shall not
be deemed an Event of Default; or (iv) the UK Borrower shall cease to be a
subsidiary of the Company at any time when any Loans are outstanding to the UK
Borrower or, Letters of Credit have been issued for the account of the UK
Borrower;

 

(m)          Involuntary Proceedings.  A proceeding shall have been instituted in a
court having jurisdiction in the premises seeking a decree or order for relief
in respect of Holdings or any Material Subsidiary of Holdings in an involuntary
case under any applicable bankruptcy, insolvency, reorganization, or other
similar law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, or conservator (or
similar official) of Holdings or any Material Subsidiary of Holdings or for any
substantial part of its property, or for the winding-up or liquidation of its affairs,
and such proceeding shall remain undismissed or unstayed and in effect for a
period of sixty (60) consecutive days or such court shall enter a decree or
order granting any of the relief sought in such proceeding;

 

(n)           Voluntary Proceedings.  Holdings or any Material Subsidiary of
Holdings shall commence a voluntary case under any applicable bankruptcy,
insolvency, reorganization,

 

66

 

or other
similar law now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall consent to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, or conservator (or other similar official) of
itself or for any substantial part of its property or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any action in furtherance of any of the
foregoing; or

 

(o)           Bermuda Law Event.  A Bermuda Law Event shall occur and be
continuing, provided that any grace period provided under the provisions of
this Section 8 or otherwise under this Agreement or under the other Loan
Documents applicable to an equivalent breach of covenant under Section 7 shall
apply to this Section 8.01(o).

 

Section 8.02 
Consequences of Event of Default. 
(a)  Events of Default Other Than
Bankruptcy, Insolvency or Reorganization Proceedings.  If an Event of Default or Potential Default
specified under Section 8.01(a) through Section 8.01(l) or Section 8.01(o)
shall occur and be continuing, the Banks, the Issuing Banks and the Agent shall
be under no further obligation to make Revolving Credit Loans or Bid Loans or
issue Letters of Credit, as the case may be, and if any such Event of Default
shall occur and be continuing, the Agent may, and upon the request of the
Required Banks, shall by written notice to the Borrowers, take any of the
following actions: (i) terminate the Commitments and thereupon the Commitments
shall be terminated and of no further force or effect, (ii) terminate any
Letter of Credit which may be terminated in accordance with its terms,
(iii) declare the unpaid principal amount of the Revolving Credit Notes
and Bid Notes then outstanding and all interest accrued thereon, any unpaid
fees, and all other Indebtedness of the Borrowers to the Banks or the Issuing
Banks hereunder and thereunder to be forthwith due and payable, and the same
shall thereupon become and be immediately due and payable to the Agent for the
benefit of each Bank without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived or (iv) require the
respective Borrowers to cash collateralize all Letters of Credit issued to the
account of such Borrower; and

 

(b)           Bankruptcy, Insolvency or
Reorganization Proceedings.  If
an Event of Default specified under Section 8.01(m) [Involuntary Proceedings]
or Section 8.01(n) [Voluntary Proceedings] shall occur, the Commitments shall
automatically terminate and be of no further force and effect, the Banks and
the Issuing Banks shall be under no further obligations to make Revolving
Credit Loans, Bid Loans, or issue Letters of Credit hereunder and the unpaid
principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrowers to the
Banks or the Issuing Bank hereunder and thereunder shall be immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived; and

 

(c)           Set-off. 
If an Event of Default shall occur and be continuing, any Bank or any
Issuing Bank to whom any Obligation is owed by any Borrower or any Material
Subsidiary hereunder or under any other Loan Document or any participant of
such Bank or Issuing Bank which has agreed in writing to be bound by the
provisions of Section 9.13 [Equalization of Banks] and any branch, Subsidiary,
or Affiliate of such Bank or participant anywhere shall have the right, in addition
to all other rights and remedies available to it, without notice to any

 

67

 

Borrower
or any Material Subsidiary, to set-off against and apply to the then unpaid
balance of all the Loans and all other Obligations hereunder or under any other
Loan Document any debt owing to, and any other funds held in any manner for the
account of, such Borrower or such Material Subsidiary by such Bank or
participant or by such branch, Subsidiary or Affiliate, including all funds in
all deposit accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or hereafter maintained by such
Borrower or such Material Subsidiary for its own account (but not including
funds of others held in custodian or trust accounts maintained by any Borrower
or any of its Material Subsidiaries) with such Bank or participant or such
branch, Subsidiary, or Affiliate.  Such
right shall exist whether or not any Bank or the Agent shall have made any
demand under this Agreement or any other Loan Document, whether or not such
debt owing to or funds held for the account of such Borrower or such Material
Subsidiary is or are matured or unmatured and regardless of the existence or
adequacy of any Guaranty or any other security, right, or remedy available to
any Bank or the Agent; and

 

(d)                                 Suits,
Actions, Proceedings.  If
an Event of Default shall occur and be continuing, and whether or not the Agent
shall have accelerated the maturity of Committed Loans pursuant to any of the
foregoing provisions of this Section 8.02, the Agent or any Bank or
Issuing Bank, upon the request or consent of the Required Banks, may proceed to
protect and enforce the Agent’s or any one or more Banks’ or Issuing Banks’
rights by suit in equity, action at law and/or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement or the other Loan Documents, including as permitted by
applicable Law the obtaining of the ex parte appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Agent,
such Bank or such Issuing Bank; and

 

(e)                                  Application
of Proceeds.  From
and after the date on which the Agent has taken any action pursuant to this Section 8.02
and until all Obligations have been paid in full, any and all proceeds received
by the Agent from the exercise of any remedy by the Agent, shall be applied as
follows:

 

(A)                    first, to reimburse the Agent, the Banks and
the Issuing Banks for out-of-pocket costs, expenses and disbursements,
including reasonable attorneys’ fees and legal expenses, incurred by the Agent,
the Banks or the Issuing Banks in connection with collection of any Obligations
under any of the Loan Documents;

 

(B)                      second, to the repayment of all Indebtedness
then due and unpaid of any Borrower or any Material Subsidiary to the Banks or
the Issuing Banks incurred under this Agreement or any of the other Loan
Documents, with such repayments to be applied in the following order: (i)
interest, (ii) principal, (iii) fees and (iv) expenses and other amounts owing
to the Banks; and

 

(C)                      the balance, if any, as required by Law; and

 

(f)                                    Other
Rights and Remedies.  In
addition to all of the rights and remedies contained in this Agreement or in
any of the other Loan Documents, the Agent shall have all of the rights and
remedies under applicable Law, all of which rights and remedies shall be

 

68

 

cumulative
and non-exclusive, to the extent permitted by Law.  The Agent may, and upon the request of the
Required Banks shall, exercise all post-default rights granted to the Agent,
the Banks and the Issuing Banks under the Loan Documents or applicable Law.

 

Section 8.03  Right of
Competitive Bid Loan Banks. 
If any Event of Default shall occur and be continuing, the Banks which
have any Bid Loans then outstanding to the Borrowers (the “Bid Loan Banks”)
shall not be entitled to accelerate payment of the Bid Loans or to exercise any
right or remedy related to the collection of the Bid Loans until the
Commitments shall be terminated hereunder pursuant to Section 8.02.  Upon such a termination of the
Commitments:  (i) references to
Revolving Credit Loans in Section 8.02 shall be deemed to apply also to
the Bid Loans and the Bid Loan Banks shall be entitled to all enforcement
rights given to a holder of a Revolving Credit Loan in Section 8.02, and
(ii) the definition of Required Banks shall be changed as provided in Section 1.01
so that each Bank shall have voting rights hereunder in proportion to its share
of the total Loans outstanding.

 

ARTICLE IX

 

THE AGENT

 

Section 9.01  Appointment.  Each Bank hereby irrevocably designates,
appoints and authorizes ABN AMRO Bank N.V. to act as Agent for such Bank under
this Agreement and to execute and deliver or accept on behalf of each of the
Banks the other Loan Documents.  Each
Bank hereby irrevocably authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and any
other instruments and agreements referred to herein, and to exercise such
powers and to perform such duties hereunder as are specifically delegated to or
required of the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto.  ABN AMRO
Bank N.V. agrees to act as the Agent on behalf of the Banks to the extent
provided in this Agreement.

 

Section 9.02  Delegation
of Duties.  The Agent may
perform any of its duties hereunder by or through agents or employees (provided
such delegation does not constitute a relinquishment of its duties as Agent)
and, subject to Section 9.05 [Reimbursement of Agent by Borrower, Etc.]
and Section 9.06, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts concerning all matters
pertaining to its duties hereunder and to rely upon any advice so obtained.

 

Section 9.03  Nature
of Duties; Independent Credit Investigation.  The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and no
implied covenants, functions, responsibilities, duties, obligations, or
liabilities shall be read into this Agreement or otherwise exist.  The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Agreement a fiduciary or trust relationship in respect of any Bank; and nothing
in this Agreement, expressed or implied, is intended to or shall be construed
as to impose upon the Agent any obligations in respect of this Agreement except
as expressly set forth herein.  Without
limiting the generality of the foregoing, the use of the term “agent” in this
Agreement with reference to the Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of

 

69

 

any
applicable Law.  Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.  Each Bank expressly acknowledges
(i) that the Agent has not made any representations or warranties to it
and that no act by the Agent hereafter taken, including any review of the
affairs of any of Holdings or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to any Bank;
(ii) that it has made and will continue to make, without reliance upon the
Agent, its own independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of each of Holdings and its
Subsidiaries in connection with this Agreement and the making and continuance
of the Loans hereunder; and (iii) except as expressly provided herein,
that the Agent shall have no 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 any
Loan or at any time or times thereafter.

 

Section 9.04  Actions
in Discretion of Agent; Instructions From the Banks.  The Agent agrees, upon the written request of
the Required Banks, to take or refrain from taking any action of the type
specified as being within the Agent’s rights, powers or discretion herein,
provided that the Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this Agreement or any
other Loan Document or applicable Law. 
In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks
or all of the Banks.  Any action taken or
failure to act pursuant to such instructions or discretion shall be binding on
the Banks, subject to Section 9.06 [Exculpatory Provisions, Etc.].  Subject to the provisions of Section 9.06,
no Bank shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Banks, or in the absence of such instructions, in
the absolute discretion of the Agent.

 

Section 9.05  Reimbursement
and Indemnification of Agent by the Borrowers.  Each Borrower (other than AGRI and AGRO) unconditionally,
jointly and severally, agrees to pay or reimburse the Agent and hold the Agent
harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses, and disbursements (including fees and expenses
of counsel) incurred by the Agent (i) in connection with the development,
negotiation, preparation, printing, execution, administration, syndication,
interpretation and performance of this Agreement and the other Loan Documents,
(ii) relating to any requested amendments, waivers or consents pursuant to
the provisions hereof, (iii) in connection with the enforcement of this
Agreement or any other Loan Document or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this Agreement
or any other Loan Document, whether in bankruptcy or receivership proceedings
or otherwise, and (iv) in any workout or restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings, and
(b) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
in its capacity as such, in any way relating to or arising out of this
Agreement or any other Loan Documents or any action taken or omitted by the
Agent hereunder or thereunder, provided that the Borrowers shall not be liable
for any portion of such

 

70

 

liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements if the same results from the Agent’s gross negligence
or willful misconduct, or if the Borrowers were not given notice of the subject
claim and the opportunity to participate in the defense thereof, at their
expense (except that the Borrowers shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrowers), or if the
same results from a compromise or settlement agreement entered into without the
consent of the Borrowers, which shall not be unreasonably withheld.

 

Section 9.06  Exculpatory
Provisions; Limitation of Liability. 
Neither the Agent nor any of its directors, officers, employees, agents,
attorneys or Affiliates shall (a) be liable to any Bank for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own
gross negligence or willful misconduct, (b) be responsible in any manner
to any of the Banks for the effectiveness, enforceability, genuineness, validity
or the due execution of this Agreement or any other Loan Documents or for any
recital, representation, warranty, document, certificate, report or statement
herein or made or furnished under or in connection with this Agreement or any
other Loan Documents, or (c) be under any obligation to any of the Banks
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions hereof or thereof on the part of the Borrowers
or any of their Subsidiaries, or the financial condition of the Borrowers or
any of their Subsidiaries, or the existence or possible existence of any Event
of Default or Potential Default.  No
claim may be made by the Borrowers or any of their Subsidiaries, any Bank, the
Agent or any of their respective Subsidiaries against the Agent, any Bank or
any of their respective directors, officers, employees, agents, attorneys or
Affiliates, or any of them, for any special, indirect or consequential damages
or, to the fullest extent permitted by Law, for any punitive damages in respect
of any claim or cause of action (whether based on contract, tort, statutory
liability, or any other ground) based on, arising out of or related to any Loan
Document or the transactions contemplated hereby or any act, omission or event
occurring in connection therewith, including the negotiation, documentation,
administration or collection of the Loans, and the Borrowers (for themselves
and on behalf of each of their Subsidiaries), the Agent and each Bank hereby
waive, release and agree never to sue upon any claim for any such damages,
whether such claim now exists or hereafter arises and whether or not it is now
known or suspected to exist in their favor. 
Each Bank agrees that, except for notices, reports and other documents
expressly required to be furnished to the Banks by the Agent hereunder or given
to the Agent for the account of or with copies for the Banks, the Agent and
each of its directors, officers, employees, agents, attorneys or Affiliates
shall not have any duty or responsibility to provide any Bank with an credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrowers or any
of their Subsidiaries which may come into the possession of the Agent or any of
its directors, officers, employees, agents, attorneys or Affiliates.

 

Section 9.07  Reimbursement
and Indemnification of Agent and Issuing Banks by Banks.  Each Bank agrees to reimburse and indemnify
the Agent and the Issuing Banks (to the extent not reimbursed by the Borrowers
and without limiting the Obligation of the Borrowers to do so) in proportion to
its Ratable Share from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements, including attorneys’ fees and disbursements (including the
allocated costs of staff counsel), and costs of appraisers and environmental
consultants, of any kind or nature whatsoever which may be

 

71

 

imposed
on, incurred by or asserted against the Agent or the Issuing Banks, in its
capacity as such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by the Agent or Issuing
Banks hereunder or thereunder, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results
from the Agent’s or such Issuing Bank’s gross negligence or willful misconduct,
or (b) if such Bank was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense (except that
such Bank shall remain liable to the extent such failure to give notice does
not result in a loss to the Bank), or (c) if the same results from a
compromise and settlement agreement entered into without the consent of such
Bank, which shall not be unreasonably withheld. 
In addition, each Bank agrees promptly upon demand to reimburse the
Agent (to the extent not reimbursed by the Borrowers and without limiting the
Obligation of the Borrowers to do so) in proportion to its Ratable Share for
all amounts due and payable by the Borrowers to the Agent in connection with
the Agent’s periodic audit of the Company’s or any of its respective Material
Subsidiaries’ books, records and business properties.

 

Section 9.08  Reliance
by Agent and Issuing Banks. 
The Agent and Issuing Banks shall be entitled to rely upon any writing,
telegram, telex or teletype message, resolution, notice, consent, certificate,
letter, cablegram, statement, order or other document or conversation by
telephone or otherwise believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon the advice
and opinions of counsel and other professional advisers selected by the Agent
or the Issuing Banks.  The Agent and
Issuing Banks shall be fully justified in failing or refusing to take any action
hereunder unless it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.

 

Section 9.09  Notice
of Default.  The Agent shall
not be deemed to have knowledge or notice of the occurrence of any Potential
Default or Event of Default unless the Agent has received written notice from a
Bank or a Borrower referring to this Agreement, describing such Potential
Default or Event of Default and stating that such notice is a “notice of
default.”

 

Section 9.10  Notices.  The Agent shall promptly send to each Bank a
copy of all notices received from any Borrower pursuant to the provisions of
this Agreement or the other Loan Documents promptly upon receipt thereof.  The Agent shall promptly notify the Borrowers
and the other Banks of each change in the Base Rate and the effective date
thereof.

 

Section 9.11  Banks in
Their Individual Capacities; Agents in Its Individual Capacity.  With respect to its Revolving Credit
Commitment, the Revolving Credit Loans and any Bid Loans made by it and any
other rights and powers given to it as a Bank hereunder or under any of the
other Loan Documents, the Agent shall have the same rights and powers hereunder
as any other Bank and may exercise the same as though it were not the Agent,
and the term “Bank” and “Banks” shall, unless the context otherwise indicates,
include the Agent in its individual capacity. 
ABN AMRO Bank and its Affiliates and each of the Banks and their
respective Affiliates may, without liability to account, except as prohibited
herein, make loans to, issue letters of credit for the account of, acquire
equity interests in, accept deposits from, discount drafts for, act as trustee
under indentures of, and generally engage in any kind of banking,

 

72

 

trust,
financial advisory, underwriting or other business with, Holdings and its
Subsidiaries and their Affiliates, in the case of the Agent, as though it were
not acting as Agent hereunder and in the case of each Bank, as though such Bank
were not a Bank hereunder, in each case without notice to or consent of the
other Banks.  The Banks acknowledge that,
pursuant to such activities, the Agent or its Affiliates may (i) receive
information regarding Holdings and any of its Subsidiaries or Affiliates
(including information that may be subject to confidentiality obligations in
favor of Holdings or any of its Subsidiaries or Affiliates) and acknowledge
that the Agent shall be under no obligation to provide such information to
them, and (ii) accept fees and other consideration from Holdings and any
of its Subsidiaries for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.

 

Section 9.12  Holders
of Notes.  The Agent may deem
and treat any payee of any Note as the owner thereof for all purposes hereof
unless and until written notice of the assignment or transfer thereof shall
have been filed with the Agent.  Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.

 

Section 9.13  Equalization
of Banks.  The Banks and the
holders of any participations in any Commitments, Loans or Letters of Credit or
other rights or obligations of a Bank hereunder agree among themselves that, with respect to all amounts received by
any Bank or any such holder for application on any Obligation hereunder or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker’s
lien, by counterclaim, or by any other non-pro  rata source,
equitable adjustment will be made in the manner stated in the following
sentence so that, in effect, all such excess amounts will be shared ratably
among the Banks and such holders in proportion to their interests in payments
on the Loans and the Letters of Credit, except as otherwise provided in Section 3.04(c)
[Agent’s and Bank’s Rights], Section 4.04(b) [Replacement of a Bank] or Section 4.06
[Additional Compensation in Certain Circumstances].  The Banks or any such holder receiving any
such amount shall purchase for cash from each of the other Banks an interest in
such Bank’s Loans in such amount as shall result in a ratable participation by
the Banks and each such holder in the aggregate unpaid amount of the Loans,
provided that if all or any portion of such excess amount is thereafter
recovered from the Bank or the holder making such purchase, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
together with interest or other amounts, if any, required by law (including
court order) to be paid by the Bank or the holder making such purchase.

 

Section 9.14  Successor
Agent.  The Agent (i) may
resign as Agent or (ii) shall resign if such resignation is required by Section 4.04(b)
[Replacement of a Bank], in either case of (i) or (ii) by giving not less than
thirty (30) days’ prior written notice to the Borrowers.  If the Agent shall resign under this
Agreement, then either (a) the Required Banks shall appoint from among the
Banks a successor agent for the Banks, subject to the consent of the Borrowers,
such consent not to be unreasonably withheld, or (b) if a successor agent
shall not be so appointed and approved within the thirty (30) day period
following the Agent’s notice to the Banks of its resignation, then the Agent
shall appoint, with the consent of the Borrowers, such consent not to be
unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Required Banks appoint and the Borrowers consent to the appointment
of a successor agent.

 

73

 

Upon
its appointment pursuant to either clause (a) or (b) above, such successor
agent shall succeed to the rights, powers and duties of the Agent, and the term
“Agent” shall mean such successor agent, effective
upon its appointment, and the former Agent’s rights, powers and duties as Agent
shall be terminated without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement.  After the resignation of any Agent hereunder,
the provisions of this ARTICLE IX shall inure to the benefit of such
former Agent and such former Agent shall not by reason of such resignation be
deemed to be released from liability for any actions taken or not taken by it
while it was an Agent under this Agreement.

 

Section 9.15  Agent’s
Fee.  The Borrowers shall pay
to the Agent a nonrefundable fee (the “Agent’s Fee”) for Agent’s services
hereunder under the terms of a letter (the “Agent’s Letter”) between the
Borrowers and Agent, as amended from time to time.

 

Section 9.16  Availability
of Funds.  The Agent may
assume that each Bank has made or will make the proceeds of a Loan available to
the Agent unless the Agent shall have been notified by such Bank on or before
the later of (1) the close of Business on the Business Day preceding the
Borrowing Date with respect to such Loan or (2) two hours before the time on
which the Agent actually funds the proceeds of such Loan to the respective
Borrower (whether using its own funds pursuant to this Section 9.16 or
using proceeds deposited with the Agent by the Banks and whether such funding
occurs before or after the time on which Banks are required to deposit the proceeds
of such Loan with the Agent).  The Agent
may, in reliance upon such assumption (but shall not be required to), make
available to the respective Borrower a corresponding amount.  If such corresponding amount is not in fact
made available to the Agent by such Bank, the Agent shall be entitled to
recover such amount on demand from such Bank (or, if such Bank fails to pay
such amount forthwith upon such demand from the Borrowers) together with
interest thereon, in respect of each day during the period commencing on the
date such amount was made available to the Borrowers and ending on the date the
Agent recovers such amount, at a rate per annum equal to (i) the Federal Funds
Effective Rate during the first three (3) days after such interest shall begin
to accrue and (ii) the applicable interest rate in respect of such Loan after
the end of such three-day period.

 

Section 9.17  Calculations.  In the absence of gross negligence or willful
misconduct, the Agent shall not be liable for any error in computing the amount
payable to any Bank whether in respect of the Loans, fees or any other amounts
due to the Banks under this Agreement. 
In the event an error in computing any amount payable to any Bank is
made, the Agent, the Borrowers and each affected Bank shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and any compensation therefor will be calculated at the Federal
Funds Effective Rate.

 

Section 9.18  Beneficiaries.  Except as expressly provided herein, the
provisions of this ARTICLE IX are solely for the benefit of the Agent and
the Banks, and Holdings and its Subsidiaries shall not have any rights to rely
on or enforce any of the provisions hereof. 
In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for the Company or any of its Subsidiaries.

 

74

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.01  Modifications,
Amendments, or Waivers.  With the
written consent of the Required Banks, the Agent, acting on behalf of all the
Banks, and the Borrowers may from time to time enter into written agreements
amending or changing any provision of this Agreement or any other Loan Document
or the rights of the Banks or the Borrowers hereunder or thereunder, or may
grant written waivers or consents to a departure from the due performance of the
Obligations hereunder or thereunder.  Any
such agreement, waiver or consent made with such written consent shall be
effective to bind all the Banks and the Borrowers; provided that, without the
written consent of all the Banks, no such agreement, waiver, or consent may be
made which will:

 

(a)                                  Increase of Commitment;
Extension of Expiration Date.  Increase the amount of the Revolving Credit
Commitment of any Bank hereunder or extend the Expiration Date;

 

(b)                                 Extension of Payment; Reduction
of Principal Interest or Fees; Modification of Terms of Payment. 
Whether or not any Loans are outstanding, extend the time for payment of
principal or interest of any Loan (excluding the due date of any mandatory
prepayment of a Loan or any mandatory Commitment reduction in connection with
such a mandatory prepayment hereunder except for mandatory reductions of the
Commitments on the Expiration Date), the Facility Fee, the Letter of Credit Fee
or any other fee payable to any Bank, or reduce the principal amount of or the
rate of interest borne by any Loan or reduce the Facility Fee, the Letter of
Credit Fee or any other fee payable to any Bank, or otherwise affect the terms
of payment of the principal of or interest of any Loan, the Facility Fee or any
other fee payable to any Bank;

 

(c)                                  Release of Collateral or
Guarantor.  Release any Guarantor from its Obligations
under any Guaranty Agreement or any other security for any of the Obligations
except as otherwise may be permitted by the terms hereof or of the instrument
establishing the Lien; or

 

(d)                                 Miscellaneous.  Amend Section 4.02 [Pro Rata Treatment
of Banks], Section 9.06 [Exculpatory Provisions, Etc.] or Section 9.13
[Equalization of Banks] or this Section 10.01, alter any provision
regarding the pro  rata treatment of the Banks, change the
definition of Required Banks, or change any requirement providing for the Banks
or the Required Banks to authorize the taking of any action hereunder;

 

provided, further,
that (i) no agreement, waiver or consent which would modify the interests,
rights or obligations of the Agent in its capacity as Agent shall be effective
without the written consent of the Agent and (ii) no agreement, waiver or
consent which would modify the interests, rights or obligations of any Issuing
Bank in its capacity as an Issuing Bank shall be effective without the written
consent of such Issuing Bank.

 

75

 

Section 10.02  No
Implied Waivers; Cumulative Remedies; Writing Required.  No course of dealing and no delay or failure
of the Agent or any Bank in exercising any right, power, remedy or privilege
under this Agreement or any other Loan Document shall affect any other or
future exercise thereof or operate as a waiver thereof, nor shall any single or
partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power, remedy or privilege preclude any further exercise
thereof or of any other right, power, remedy or privilege.  The rights and remedies of the Agent and the
Banks under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have.  Any waiver, permit, consent or approval of
any kind or character on the part of any Bank of any breach or default under
this Agreement or any such waiver of any provision or condition of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing.

 

Section 10.03  Reimbursement
and Indemnification of Banks by the Borrowers; Taxes.  Each Borrower jointly and severally agrees
unconditionally upon demand to pay or reimburse to each Bank (other than the
Agent, as to which the Borrowers’ Obligations are set forth in Section 9.05
[Reimbursement of Agent By Borrower, Etc.]) and to save such Bank harmless
against (i) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements (including fees and expenses of counsel for
each Bank except with respect to (a) and (b) below), incurred by such Bank (a) in
connection with the review, execution, delivery, administration, or
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers, or consents
pursuant to the provisions hereof, (c) in connection with the enforcement
of this Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising
under this Agreement or any other Loan Document, whether in bankruptcy or
receivership proceedings or otherwise, and (d) in any workout or
restructuring or in connection with the protection, preservation, exercise, or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection, or
bankruptcy proceedings, or (ii) all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against such Bank (including such Bank’s officers,
directors and employees), in its capacity as such, in any way relating to or
arising out of this Agreement or any other Loan Documents, use of proceeds of
the Loans or the transactions contemplated by the Loan Documents or any action
taken or omitted by such Bank (including such Bank’s officers, directors and
employees) hereunder or thereunder, provided that the Borrowers shall not be
liable to a Bank (including such Bank’s officers, directors and employees) for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements (A) if the
same results from such Bank’s or its officer’s, director’s or employee’s gross
negligence or willful misconduct, or (B) if the Borrowers were not given
notice of the subject claim and the opportunity to participate in the defense
thereof, at their expense (except that the Borrowers shall remain liable to the
extent such failure to give notice does not result in a loss to the Borrowers),
or (C) if the same results from a compromise or settlement agreement
entered into without the consent of the Borrowers, which shall not be
unreasonably withheld.  The Banks will
attempt to minimize the fees and expenses of legal counsel for the Banks which
are subject to reimbursement by the Borrowers on a joint and several basis
hereunder by considering the usage of one law firm to represent the Banks and
the Agent if appropriate under the circumstances.  The Borrowers, jointly and severally, agree

 

76

 

unconditionally
to pay all stamp, document, transfer, recording or filing taxes or fees and
similar impositions now or hereafter determined by the Agent or any Bank to be
payable in connection with this Agreement or any other Loan Document, and the
Borrowers, jointly and severally, agree unconditionally to save the Agent and
the Banks harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.

 

Section 10.04  Holidays.  Whenever payment of a Loan to be made or
taken hereunder shall be due on a day which is not a Business Day such payment
shall be due on the next Business Day (except as provided in the definition of
Committed Loan Interest Period with respect to Interest Periods under the LIBOR
Option) and such extension of time shall be included in computing interest and
fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date if the Expiration Date is not a Business Day.  Whenever any payment or action to be made or
taken hereunder (other than payment of the Loans) shall be stated to be due on
a day which is not a Business Day, such payment or action shall be made or
taken on the next following Business Day, and such extension of time shall not
be included in computing interest or fees, if any, in connection with such
payment or action.

 

Section 10.05  Funding
by Branch, Subsidiary, or Affiliate. 
(a)  Notional Funding.  Each Bank shall have the right from time to
time, without notice to the Borrowers, to deem any branch, Subsidiary, or
Affiliate (which for the purposes of this Section 10.05 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to have made,
maintained, or funded any Loan to which the LIBOR Option applies at any time, provided
that immediately following (on the assumption that a payment was then due from
the Borrowers to such other office), and as a result of such change, the
Borrowers will not be under any greater financial obligation pursuant to Section 4.06
[Additional Compensation in Certain Circumstances] than they would have been in
the absence of such change.  Notional
funding offices may be selected by each Bank without regard to such Bank’s
actual methods of making, maintaining or funding the Loans or any sources of
funding actually used by or available to such Bank.

 

(b)                                 Actual
Funding.  Each
Bank shall have the right from time to time to make or maintain any Loan by
arranging for a branch, Subsidiary or Affiliate of such Bank to make or
maintain such Loan subject to the last sentence of this Section 10.05(b).  If any Bank causes a branch, Subsidiary or
Affiliate to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Loans to the same extent as if
such Loans were made or maintained by such Bank, but in no event shall any Bank’s
use of such a branch, Subsidiary or Affiliate to make or maintain any part of
the Loans hereunder cause such Bank or such branch, Subsidiary or Affiliate to
incur any cost or expenses payable by any Borrower hereunder or require any
Borrower to pay any other compensation to any Bank (including any expenses
incurred or payable pursuant to Section 4.06 [Additional Compensation in
Certain Circumstances]) which would otherwise not be incurred.

 

Section 10.06  Notices.  Any notice, request, demand, direction, or
other communication (for purposes of this Section 10.06 only, a “Notice”)
to be given to or made upon

 

77

 

any
party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes means of electronic transmission (i.e.,
“e-mail”) or facsimile transmission in accordance with this Section 10.06.  Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names on Schedule 1.01(B) hereof or in accordance with
any subsequent unrevoked Notice from any such party that is given in accordance
with this Section 10.06.  Any Notice
shall be effective:

 

(A)                              In the case of hand-delivery, when delivered;

 

(B)                                If given by mail, four days after such Notice
is deposited with the United States Postal Service, with first-class postage
prepaid, return receipt requested;

 

(C)                                In the case of a telephonic Notice, when a
party is contacted by telephone, if delivery of such telephonic Notice is
confirmed no later than the next Business Day by hand delivery, a facsimile or
electronic transmission, a Website Posting or overnight courier delivery of a
confirmatory notice (received at or before noon on such next Business Day);

 

(D)                               In the case of a facsimile transmission, when
sent to the applicable party’s facsimile machine’s telephone number if the
party sending such Notice receives confirmation of the delivery thereof from
its own facsimile machine;

 

(E)                                 In the case of electronic transmission, when
actually received;

 

(F)                                 In the case of a Website Posting, upon
delivery of a Notice of such posting (including the information necessary to
access such web site) by another means set forth in this Section 10.06;
and

 

(G)                                If given by any other means (including by
overnight courier), when actually received.

 

Any
Bank giving a Notice to any Borrower or any Material Subsidiary shall
concurrently send a copy thereof to the Agent, and the Agent shall promptly
notify the other Banks of its receipt of such Notice.

 

78

 

Section 10.07  Severability.  The provisions of this Agreement are intended
to be severable.  If any provision of
this Agreement shall be held invalid or unenforceable in whole or in part in
any jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.

 

Section 10.08  Governing
Law.  This Agreement and any other
documents delivered herewith and the rights and obligations of the parties
hereto and thereto shall be for all purposes governed by, and construed and
enforced in accordance with the internal Laws of the State of New York,
without giving effect to its conflicts of law principles.

 

Section 10.09  Prior
Understanding.  This Agreement and
the other Loan Documents supersede all prior understandings and agreements,
whether written or oral, between the parties hereto and thereto relating to the
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments.

 

Section 10.10  Duration;
Survival.  All representations and
warranties of the Borrowers and the Material Subsidiaries contained herein or
made in connection herewith shall survive the making of Loans and the issuance
of Letters of Credit and shall not be waived by the execution and delivery of
this Agreement, any investigation by the Agent or the Banks, the making of
Loans, the issuance of Letters of Credit, or payment in full of the Loans.  All covenants and agreements of the Borrowers
contained in Section 7.01 [Affirmative Covenants], Section 7.02
[Negative Covenants] and Section 7.03 [Reporting Requirements], and all
comparable covenants and agreements contained in or incorporated into the
Guarantor Joinder given by each Material Non-AGC Subsidiary pursuant to Section 10.18,
shall continue in full force and effect from and after the date hereof so long
as the Borrowers may borrow hereunder and until termination of the Commitments,
expiration of all Letters of Credit and payment in full of the Loans.  All covenants and agreements of the Borrowers
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in ARTICLE IV [Payments] and Section 9.05 [Reimbursement of
Agent by Borrowers, Etc.], Section 9.07 [Reimbursement of Agent by Banks,
Etc.] and Section 10.03 [Reimbursement of Banks by Borrowers; Etc.], and
all comparable covenants and agreements contained in or incorporated into the
Guarantor Joinder given by each Material Non-AGC Subsidiary pursuant to Section 10.18,
shall survive payment in full of the Loans, expiration of all Letters of Credit
and termination of the Commitments.

 

Section 10.11  Successors and Assigns.  (a)  This Agreement shall be
binding upon and shall inure to the benefit of the Banks, the Agent, the
Borrowers and, when party to this Agreement, each of the Material Subsidiaries,
and their respective successors and assigns, except that no Borrowers or any
Material Subsidiary may assign or transfer any of its rights or Obligations or
any interest herein or in any other Loan Document, except as may be permitted
by the terms hereof or otherwise approved by each Bank.  Each Bank may, at its own cost, make
assignments of or sell participations in all or any part of its Revolving
Credit Commitments and the Loans made by it to one or more banks or other
entities, subject to the consent of the Borrowers, the Agent and each Issuing
Bank with respect to any assignee, such consent not to be unreasonably
withheld, provided that (1) no consent of the Borrowers shall be
required (A) if an

 

79

 

Event
of Default exists and is continuing, or (B) in the case of an assignment by a
Bank to an Affiliate of such Bank, (2) any assignment by a Bank to a
Person other than an Affiliate of such Bank may not be made in amounts less
than the lesser of $5,000,000 or the amount of the assigning Bank’s Commitment,
(3) a Bank may assign an interest or sell a participation in less than 100% of
its Commitments, Revolving Credit Loans, or Bid Loans, provided that
such Bank sells an equal percentage interest or participation in each of its
Revolving Credit Commitment and Revolving Credit Loans, (4) a Bank may assign a
Bid Loan to another Person without assigning any portion of its Commitment to
such Person and (5) no consent of the Agent or any Issuing Bank shall be
required in the case of an assignment by a Bank to an Affiliate of such Bank or
to another Bank already party to this Agreement.  In the case of an assignment, upon receipt by
the Agent of the Assignment and Assumption Agreement, the assignee shall have,
to the extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it had been a signatory
Bank hereunder, the Commitments shall be adjusted accordingly, and upon
surrender of any Revolving Credit Note subject to such assignment, the
applicable Borrower shall execute and deliver a new Revolving Credit Note to
the assignee, if such assignee requests such a Note in an amount equal to the
amount of the Revolving Credit Commitment assumed by it and a new Revolving
Credit Note to the assigning Bank, if the assigning Bank requests such a Note
with respect to the Commitment it has retained. 
The assigning Bank shall surrender its Bid Note and the respective
Borrower shall execute and deliver to the assignee (and to the assignor if the
assignor is assigning less than all of its Revolving Credit Commitments and Bid
Loans) a new Bid Note in the form of Exhibit 1.01(B) as
appropriate.  Any Bank which assigns any
or all of its Commitment or Loans to a Person other than an Affiliate of such
Bank shall pay to the Agent a service fee in the amount of $3,500 for each
assignment.  In the case of a
participation, the participant shall only have the rights specified in Section 8.02
[Set-off] (the participant’s rights against such 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 not to include any voting rights
except with respect to changes of the type referenced in Section 10.01(a)
[Increase of Commitment, Etc.], Section 10.01(b) [Extension of Payment,
Etc.], or Section 10.01(c) [Release of Collateral or Guarantor]), all of
such Bank’s obligations under this Agreement or any other Loan Document shall
remain unchanged, and all amounts payable by any Borrower or any Material
Subsidiary hereunder or thereunder shall be determined as if such Bank had not
sold such participation.

 

(b)                                 Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state thereof
shall deliver to the Borrowers and the Agent the form of certificate described
in Section 10.17 [Tax Withholding Clause] relating to federal income tax
withholding.  Each Bank may furnish any
publicly available information concerning the Borrowers or its Subsidiaries and
any other information concerning the Borrowers or its Subsidiaries in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees or participants), provided that such
assignees and participants agree to be bound by the provisions of Section 10.12
[Confidentiality].

 

(c)                                  Notwithstanding any other provision in this
Agreement, any Bank may at any time pledge or grant a security interest in all
or any portion of its rights under this Agreement, its Note (if any) and the
other Loan Documents to any Federal Reserve Bank without notice to or consent
of the Borrowers or the Agent.  No such
pledge or grant of a security interest shall release the transferor Bank of its
obligations hereunder or under any other Loan Document.

 

80

 

Section 10.12  Confidentiality.  (a)  General. 
The Agent and the Banks each agree to keep confidential all information
obtained from the Borrowers or their Subsidiaries which is nonpublic and
confidential or proprietary in nature (including any information the Borrowers
specifically designate as confidential), except as provided below, and to use
such information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby.  The Agent and the Banks shall be permitted to
disclose such information (i) to outside legal counsel, accountants and
other professional advisors who need to know such information in connection
with the administration and enforcement of this Agreement, subject to agreement
of such Persons to maintain the confidentiality of such information as provided
herein, (ii) to assignees and participants as contemplated by Section 10.11,
and prospective assignees and participants, provided that Agent or such Bank,
as the case may be, exercises its best efforts to obtain the agreement of such
prospective assignees and participants to be bound by the confidentiality
provisions hereof, (iii) to the extent requested by any bank regulatory
authority, any self-regulatory body or, to the extent permissible and
practicable, with notice to the Borrowers, as otherwise required by applicable
Law or by any subpoena or similar legal process, or in connection with any
investigation or proceeding arising out of the transactions contemplated by
this Agreement, (iv) if it becomes publicly available other than as a
result of a breach of this Agreement or becomes available from a source not
known to be subject to confidentiality restrictions, or (v) if the
Borrowers shall have consented to such disclosure.

 

(b)                                 Sharing
Information With
Affiliates of the Banks.  The Borrowers acknowledge that from time to
time financial advisory, investment banking, and other services may be offered
or provided to the Borrowers or one or more of their Affiliates (in connection
with this Agreement or otherwise) by any Bank or by one or more Subsidiaries or
Affiliates of such Bank and the Borrowers hereby authorize each Bank to share
any information delivered to such Bank by the Borrowers or any of their
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Bank to enter into this Agreement, to any such Subsidiary or Affiliate of
such Bank, it being understood that any such Subsidiary or Affiliate of any
Bank receiving such information shall be bound by the provisions of Section 10.12
as if it were a Bank hereunder.  Such
authorization shall survive the repayment of the Loans and other Obligations
and the termination of the Commitments.

 

Section 10.13  Counterparts.  This Agreement may be executed by different
parties hereto on any number of separate counterparts, each of which, when so
executed and delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.

 

Section 10.14  Agent’s
or Bank’s Consent.  Whenever the
Agent’s or any Bank’s consent is required to be obtained under this Agreement
or any of the other Loan Documents as a condition to any action, inaction,
condition or event, the Agent and each Bank shall be authorized to give or
withhold such consent in its sole and absolute discretion and to condition its
consent upon the giving of additional collateral, the payment of money or any
other matter.

 

Section 10.15  Exceptions.  The representations, warranties and covenants
contained herein shall be independent of each other, and no exception to any
representation, warranty or

 

81

 

covenant
shall be deemed to be an exception to any other representation, warranty or
covenant contained herein unless expressly provided, nor shall any such
exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.

 

Section 10.16  CONSENT TO FORUM; WAIVER OF JURY TRIAL.  EACH OF THE BORROWERS HEREBY IRREVOCABLY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY,
AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT.  THE COMPANY CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO THE COMPANY AT
THE ADDRESS PROVIDED FOR IN SECTION 10.06 AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.  HOLDINGS AND THE UK BORROWER CONSENTS THAT
ALL SERVICE OF PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO
THE COMPANY AT THE ADDRESS PROVIDED IN SECTION 10.06 (AND HOLDINGS AND THE
UK BORROWER HEREBY IRREVOCABLY APPOINTS THE COMPANY AS ITS AGENT TO RECEIVE
SUCH SERVICE OF PROCESS), AND SERVICE SO MADE SHALL BE COMPLETED UPON ACTUAL
RECEIPT THEREOF.  EACH OF THE BORROWERS
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST
IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE.

 

EACH
BORROWER, THE AGENT, AND EACH OF THE BANKS HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY COLLATERAL TO THE FULL
EXTENT PERMITTED BY LAW.

 

Section 10.17  Tax
Withholding Clause.  Each Bank or
assignee or participant of a Bank that is not incorporated under the Laws of
the United States of America or a state thereof (and, upon the written request
of the Agent, each other Bank or assignee or participant of a Bank) agrees that
it will deliver to each of the Borrowers and the Agent two (2) duly completed
appropriate valid Withholding Certificates (as defined under § 1.1441-1(c)(16)
of the Income Tax Regulations (the “Regulations”)) certifying its status (i.e.,
U.S. or foreign person) and, if appropriate, making a claim of reduced, or
exemption from, U.S. withholding tax on the basis of an income tax treaty or an
exemption provided by the Internal Revenue Code.  The term “Withholding Certificate” means a
Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related
statements and certifications as required under § 1.1441-1(e)(2) and/or
(3) of the Regulations; a statement described in § 1.871-14(c)(2)(v) of
the Regulations; or any other certificates under the Internal Revenue Code or
Regulations that certify or establish the status of a payee or beneficial owner
as a U.S. or foreign person.  Each Bank,
assignee or participant required to deliver to the Borrowers and the Agent a
Withholding Certificate pursuant to the preceding sentence shall deliver such
valid Withholding Certificate as follows: 
(A) each Bank which is a party hereto on the Closing Date shall
deliver such valid Withholding Certificate at least five (5) Business Days
prior to the first date on which any interest or fees are payable by the
Borrowers hereunder for the account of such Bank; (B) each assignee or
participant shall deliver such valid Withholding Certificate at least five (5)
Business Days before the effective date of

 

82

 

such
assignment or participation (unless the Agent in its sole discretion shall
permit such assignee or participant to deliver such valid Withholding
Certificate less than five (5) Business Days before such date in which case it
shall be due on the date specified by the Agent).  Each Bank, assignee or participant which so
delivers a valid Withholding Certificate further undertakes to deliver to each
of the Borrowers and the Agent two (2) additional copies of such Withholding
Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent Withholding Certificate so delivered by
it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrowers or the Agent.  Notwithstanding the submission of a
Withholding Certificate claiming a reduced rate of or exemption from U.S.
withholding tax, the Agent shall be entitled to withhold United States federal
income taxes at the full 30% withholding rate if in its reasonable judgment it
is required to do so under the due diligence requirements imposed upon a
withholding agent under § 1.1441-7(b) of the Regulations.  Further, the Agent is indemnified under § 1.1461-1(e)
of the Regulations against any claims and demands of any Bank or assignee or
participant of a Bank for the amount of any tax it deducts and withholds in
accordance with regulations under § 1441 of the Internal Revenue Code.

 

Section 10.18  Joinder
of Guarantors.  Any Material Non-AGC
Subsidiary of Holdings which is required to be a Guarantor pursuant to Section 7.02(i)
[Subsidiaries, Partnerships and Joint Ventures] shall execute and deliver to
the Agent (i) a Guarantor Joinder in substantially the form attached
hereto as Exhibit 1.01(G)(1) pursuant to which it shall join as a
Guarantor each of the documents to which the Guarantors are parties; and
(ii) documents in the forms described in Section 6.01 [Closing Date]
modified as appropriate to relate to such Subsidiary.  Holdings shall deliver such Guarantor Joinder
and related documents to the Agent within five (5) Business Days after, as the
case may be, the date of the acquisition of such Subsidiary, the date upon
which a Subsidiary meets the criteria for a Material Non-AGC Subsidiary as set
forth in the definition thereof in Section 1.01, or the date the filing of
such Subsidiary’s certificate or articles of incorporation if the Subsidiary is
a corporation, the date of the filing of its certificate of limited partnership
if it is a limited partnership or the date of its organization if it is an
entity other than a limited partnership or corporation.

 

Section 10.19  Limited
Recourse.  Notwithstanding anything
contained in this Agreement or any other Loan Document, except as expressly
provided herein and therein the obligations of the Borrowers hereunder and
thereunder are several and not joint, and in no event shall the Banks or the
Agent have legal recourse to (i) Holdings with respect to Loans incurred by or
Letters of Credit issued for the account of the Company or the UK Borrower and
(ii) the Company or the UK Borrower with respect to Loans incurred by or
Letters of Credit for the account of Holdings, AGRI or AGRO (it being
understood and agreed that the Banks and the Agent shall have legal recourse to
the Company with respect to Loans incurred by and Letters of Credit issued for
the account of the UK Borrower in accordance with the terms of the Guaranty
Agreement entered into by the Company).

 

Section 10.20  Change
of Lending Office.  Each Bank may
transfer and carry its Loans and/or Commitments at, to or for the account of
any branch office, subsidiary or affiliate of such Bank; provided that
no Borrower shall be responsible for costs arising under Sections

 

83

 

3.04,
4.06 or 4.07 resulting from any such transfer to the extent such costs would
not otherwise be applicable to such Bank in the absence of such transfer.

 

Section 10.21  USA
Patriot Act.  Each Bank hereby
notifies the Borrowers and Guarantors that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information
that identifies the Borrowers and Guarantors, which information includes the
name and address of each Borrower and Guarantor and other information that will
allow such Bank to identify such Borrower and Guarantor in accordance with the
Act, and each Borrower and each Guarantor agrees to provide such information
from time to time to each Bank.

 

[SIGNATURE PAGES FOLLOW]

 

84

 

IN WITNESS WHEREOF, the parties hereto, by their
officers thereunto duly authorized, have executed this Agreement as of the day
and year first above written.

 

	
   

  	
  ASSURED GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. Mills

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. Mills

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY (UK) LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles J. Lester

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY RE
  INTERNATIONAL

  LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pierre Samson

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY RE OVERSEAS LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. Mills

  
	
   

  	
   

  	
  Title: Deputy Chairman
  & Chief Financial

  Officer

  

 

 

	
   

  	
  ABN AMRO BANK N.V.,
  Individually and as

  Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Neil R. Stein

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael DeMarco

  
	
   

  	
   

  	
  Title: Assistant Vice President

  

 

 

	
   

  	
  BANK OF AMERICA N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra Basler

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 

	
   

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary K. Young

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Helen L. Newcomb

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  DEUTSCHE BANK AG NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ruth Leung

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clinton Johnson

  
	
   

  	
   

  	
  Title: Managing Director

  

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joan Anderson

  
	
   

  	
   

  	
  Title: Director

  

 

 

	
   

  	
  THE BANK OF NEW YORK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sreecaran Ganesan

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  CITIBANK N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Maria G. Hackley

  
	
   

  	
   

  	
  Title: Managing Director

  

 

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward J. Chidiac

  
	
   

  	
   

  	
  Title: Managing Director

  

 

 

	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Mallett

  
	
   

  	
   

  	
  Title: Corporate Director

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