FOURTH AMENDED AND RESTATED CREDIT AGREEMENT AMONG THE NAVIGATORS GROUP, INC.,

Exhibit 10.1

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

AMONG

THE NAVIGATORS GROUP, INC.,

as Borrower,

THE LENDERS NAMED HEREIN,

JPMORGAN CHASE BANK, N.A.

as Administrative Agent,

and

BARCLAYS BANK PLC,

as Joint Lead Arranger and Syndication Agent

DATED AS OF

April 3, 2009

J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and
Joint Lead Arranger

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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

This Fourth Amended and Restated Credit Agreement, dated as of April 3, 2009, is among THE NAVIGATORS GROUP, INC., a Delaware corporation, the Lenders and JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent and Barclays Bank PLC, as Joint Lead Arranger and Syndication Agent.

R E C I T A L S :

A. The Borrower, JPMorgan Chase Bank, N.A., as agent and certain financial institutions have entered into that certain Third Amended and Restated Credit Agreement, dated as of February 2, 2007 (as heretofore amended, the “ Existing Credit Agreement ”), pursuant to which the lenders party thereto agreed to make financial accommodations to the Borrower under revolving credit and letter of credit facilities.

B. The Borrower has requested that the Existing Credit Agreement be amended and restated in order to make changes to the Existing Credit Agreement.

C. The Borrower, the Agent and the Lenders desire to amend and restate the Existing Credit Agreement to, among other things, accomplish such amendments.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the Agent hereby agree to amend and restate the Existing Credit Agreement as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement:

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries (a) acquires any on-going business or all or substantially all of the assets of any firm, corporation or limited liability company, or division thereof, whether through purchase of assets, merger, amalgamation or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership or limited liability company.

“Additional Lender” is defined in Section 2.10 .

“Adjusted Fair Market Value” means with respect to any Cash Collateral Investment, an amount equal to the product of the Fair Market Value of such Cash Collateral Investment and the applicable percentage with respect to such Cash Collateral Investment as set forth on Schedule 1.1 .

“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.

“Agent” means JPMorgan Chase Bank in its capacity as administrative agent pursuant to Article X and not in its individual capacity as a Lender and any successor Agent appointed pursuant to Article X .

“Agreement” means this Fourth Amended and Restated Credit Agreement, as it may be amended, modified or restated and in effect from time to time.

“Agreement Accounting Principles” means generally accepted accounting principles as in effect from time to time, applied in a manner consistent with those used in preparing the financial statements referred to in Section 5.4 ; provided , however , that for purposes of all computations required to be made with respect to compliance by the Borrower with Section 6.23 , such term shall mean generally accepted accounting principles as in effect on the Closing Date, applied in a manner consistent with those used in preparing the financial statements referred to in Section 5.4 .

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to the highest of (a) the Prime Rate in effect for such day, (b) the Federal Funds Effective Rate on such day plus 1/2% per annum or (c) the Eurodollar Rate that would be applicable for a one month loan equal to the amount of the applicable Letter of Credit (or after a Default, all outstanding Letters of Credit) beginning on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%.

“A.M. Best Rating” means, as to any insurance company, its financial strength rating assigned by The A.M. Best Company, Inc.

“Annual Statement” means the annual statutory financial statement of any Insurance Subsidiary required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of incorporation, which statement shall be in the form required by such Insurance Subsidiary’s jurisdiction of incorporation or, if no specific form is so required, in the form of financial statements permitted by such insurance commissioner (or such similar authority) to be used for filing annual statutory financial statements and shall contain the type of information permitted by such insurance commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules filed therewith.

“Applicable Letter of Credit Participation Fee Rate” means, at any time, the percentage per annum at which letter of credit participation fees are accruing on the Letters of Credit at such time as set forth in the Pricing Schedule.

“Applicable Margin” means the percentage rate per annum which is applicable at such time as set forth in the Pricing Schedule.

“Applicable Unused Fee Rate” means, at any time, the percentage per annum at which unused fees are accruing on the unused portion of the Letter of Credit Commitment at such time as set forth in the Pricing Schedule.

“Approved Reinsurer” means a reinsurer which satisfies the criteria set forth in the Reinsurance Guidelines for entering into reinsurance or retrocession agreements with the Borrower.

“Arranger” means J.P. Morgan Securities Inc. and its successors.

“Article” means an article of this Agreement unless another document is specifically referenced.

“Asset Disposition” means any sale, transfer or other disposition of any asset of the Borrower or any Subsidiary in a single transaction or in a series of related transactions (other than the sale of Investments (other than stock in Subsidiaries) in the ordinary course).

“Authorized Officer” means any of the president, chief financial officer or treasurer of the Borrower, acting singly.

“Bankruptcy Code” means Title 11, United States Code, sections 1 et seq ., as the same may be amended from time to time and any successor thereto or replacement therefor which may be hereafter enacted.

“Borrower” means The Navigators Group, Inc., a Delaware corporation and its successors and assigns.

“Borrower’s Moody’s Rating” means, at any time, the rating issued by Moody’s with respect to the Borrower’s senior unsecured long-term debt securities without third-party credit enhancement.

“Borrower’s S&P Rating” means, at any time, the rating issued by S&P with respect to the Borrower’s senior unsecured long-term debt securities without third-party credit enhancement.

“Business Day” means a day (other than a Saturday or Sunday) on which banks generally are open in New York for the conduct of substantially all of their commercial lending activities.

“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Cash Collateral Investments” means (a) short-term obligations of, or fully guaranteed by, the United States of America, (b) commercial paper rated A-1 or better by S&P or P1 or better by Moody’s, (c) cash and (d) certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $1,000,000,000 and a rating of A-1 or better; provided in each case that the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest and has a maturity of not more than six months.

“Cash Collateral Security Agreement” means (i) that certain Second Amended and Restated Pledge Agreement, dated as of the date hereof, and (ii) any security agreement in form and substance satisfactory to the Agent executed by the Borrower in favor of the Agent, on behalf of itself and the Lenders, pursuant to this Agreement, pledging to the Agent a security interest in a Collateral Account and all Cash Collateral Investments delivered to the Agent pursuant to the terms hereof, as the same may be amended, supplemented or otherwise modified from time to time.

“Cash Equivalent Investments” means (a) short-term obligations of, or fully guaranteed by, the United States of America, (b) commercial paper rated A-1 or better by S&P or P1 or better by Moody’s, (c) demand deposit accounts maintained in the ordinary course of business and (d) certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $500,000,000; provided in each case that the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest.

“Change” is defined in Section 3.2 .

“Change in Control” means (a) the acquisition by any Person, or two or more Persons acting in concert of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of (i) 20% or more of the outstanding shares of voting stock of the Borrower or (ii), if less, a percentage of such stock, greater than the percentage owned by members of the Terence Deeks Family, or (b) the members of the Terence Deeks Family shall cease to own, in the aggregate, free and clear of all Liens and other encumbrances, at least 10% of the outstanding shares of voting stock of the Borrower on a fully diluted basis.

“Closing Date” means April 3, 2009.

“Code” means the Internal Revenue Code of 1986, as amended or otherwise modified from time to time.

“Collateral” means any property or asset in which the Borrower has granted a security interest to the Agent for the benefit of the Secured Parties.

“Collateral Account” means each of (a) 2748001563 and (b) any other “demand deposit account”, “securities account” or “custodial account” (as such terms are defined in the UCC) maintained by the Agent or its Affiliate as to which the Agent has “control” (as such term is defined in the UCC) into which Cash Collateral Investments are deposited from time to time pursuant to the terms of this Agreement. Each Collateral Account and the related Cash Collateral Investments shall be subject to documentation satisfactory to the Agent and the taking of all steps required to give the Agent a perfected security interest in the Cash Collateral Investments.

“Collateral Excess” is defined in Section 2.12 .

“Collateral Shortfall” is defined in Section 2.12 .

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

“Condemnation” is defined in Section 7.8 .

“Consolidated” or “consolidated”, when used in connection with any calculation, means a calculation to be determined on a consolidated basis for the Borrower and its Consolidated Subsidiaries in accordance with Agreement Accounting Principles.

“Consolidated Net Income” means, for any period, the net income (or loss) of the Borrower and its Consolidated Subsidiaries calculated on a consolidated basis for such period, all as determined in accordance with Agreement Accounting Principles.

“Consolidated Net Worth” means, for any period, the consolidated stockholders’ equity of the Borrower and its Consolidated Subsidiaries calculated on a consolidated basis for such period, all as determined in accordance with Agreement Accounting Principles, excluding , however , for the purposes of Section 6.23(c) , the effect of any unrealized gain or loss reported under Statement of Financial Accounting Standards No. 115.

“Consolidated Person” means, for the taxable year of reference, each Person which is a member of the affiliated group of the Borrower if Consolidated returns are or shall be filed for such affiliated group for federal income tax purposes or any combined or unitary group of which the Borrower is a member for state income tax purposes.

“Consolidated Subsidiaries” means all Subsidiaries of the Borrower which should be included in the Borrower’s consolidated financial statements, all as determined in accordance with Agreement Accounting Principles.

“Consolidated Tangible Net Worth” means the excess of (a) Consolidated Total Tangible Assets over (b) Consolidated Total Liabilities, excluding , however , for the purposes of Section 6.23(a) , the effect of any unrealized gain or loss reported under Statement of Financial Accounting Standards No. 115.

“Consolidated Total Assets” means, at any time, the total assets of the Borrower and its Consolidated Subsidiaries calculated on a consolidated basis as of such time, all as determined in accordance with Agreement Accounting Principles.

“Consolidated Total Intangible Assets” means, at any time, the total intangible assets of the Borrower and its Consolidated Subsidiaries calculated on a consolidated basis as of such time including, but not limited to, goodwill, patents, trademarks, tradenames, copyrights and franchises and excluding deferred policy acquisition costs.

“Consolidated Total Liabilities” means, at any time, the total liabilities of the Borrower and its Consolidated Subsidiaries calculated on a consolidated basis as of such time, all as determined in accordance with Agreement Accounting Principles.

“Consolidated Total Tangible Assets” means, at any time, Consolidated Total Assets minus Consolidated Total Intangible Assets.

“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership. The term “Contingent Obligation” shall not include (a) the obligations of any Insurance Subsidiary arising under any insurance policy or reinsurance agreement entered into in the ordinary course of business or (b) operating leases.

“Controlled Group” means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.

“Conversion Differential” is defined in Section 2.1(f) .

“Default” means an event described in Article VII .

“Defaulting Lender” means any Lender that (i) has not reimbursed the Issuer for such Lender’s pro-rata share of the amount of a payment made by the Issuer under a Letter of Credit within three (3) Business Days after the date due therefor in accordance with Section 2.4(c) , (ii) has notified the Borrower or the Agent that it does not intend to comply with its obligations under Section 2.4(c) or (iii) is the subject of a bankruptcy, insolvency or similar receivership proceeding.

“Department” is defined in Section 5.5 .

“Designated Lender” means a Defaulting Lender or a Downgraded Lender.

“Dollars” and the sign “$” mean lawful money of the United States of America.

“Downgraded Lender” means any Lender that (a) has a rating below BBB- from S&P, below Baa3 from Moody’s or below BBB- from Fitch, Inc. or (b) is a Subsidiary of a Person that is the subject of a bankruptcy, insolvency or similar proceeding.

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (a) the protection of the environment, (b) the effect of the environment on human health, (c) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land or (d) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and any rule or regulation issued thereunder.

“Eurodollar Rate” means the applicable British Bankers’ Association LIBOR rate for deposits in U.S. dollars having a maturity of a one month period, as reported by any generally recognized financial information service as of 11:00 A.M. (London time) two Business Days prior to the first day of such applicable period; provided that if no such British Bankers’ Association LIBOR rate is available to the Agent, the Eurodollar Rate shall instead be the rate determined by the Agent to be the rate at which JPMorgan Chase Bank or one of its Affiliate banks offers to place deposits in U.S. dollars with first class banks in the London interbank market, in the approximate amount of the related Letter of Credit and having a maturity of one month.

“Excluded Taxes” means, in the case of each Lender or applicable Lending Installation and the Agent, taxes imposed on its overall net income and franchise taxes imposed on it, by (a) the jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (b) the jurisdiction in which the Agent’s or such Lender’s principal executive office or such Lender’s applicable Lending Installation is located.

“Exhibit” refers to an exhibit to this Agreement, unless another document is specifically referenced.

“Existing Credit Agreement” is defined in the Recitals hereto.

“Existing Lines of Business” is defined in Section 5.23 .

“Expiry Notice” means, with respect to a Lloyd’s Letter of Credit, written notice from the Issuer to the beneficiary of any such Lloyd’s Letter of Credit stating that such Lloyd’s Letter of Credit shall expire four (4) years from the date of such notice.

“Extension Request” is defined in Section 2.10 .

“Facility Documents” means this Agreement, the Security Documents, the Reimbursement Agreements and the other documents and agreements contemplated hereby and executed by the Borrower in favor of the Agent or any Lender.

“Fair Market Value” means (a) with respect to any Cash Collateral Investments described in clauses (a) or (b) of the definition thereof, the closing price for such security on Bloomberg, Inc. or, if Bloomberg, Inc. is not available, another quotation service reasonably acceptable to the Agent, and (b) with respect to any Cash Collateral Investments described in clauses (c) or (d) of the definition thereof, the amounts thereof.

“Federal Funds Effective Rate” means, for any day, a fluctuating interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations on such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion.

“Fee Letter” is defined in Section 9.4 .

“Fiscal Quarter” means one of the four three-month accounting periods comprising a Fiscal Year.

“Fiscal Year” means the twelve-month accounting period commencing on January 1 and ending December 31 of each year.

“Governmental Authority” means any government (foreign or domestic) or any state or other political subdivision thereof or any governmental body, agency, authority, department or commission (including without limitation any taxing authority or political subdivision) or any instrumentality or officer thereof (including without limitation any court or tribunal and any board of insurance, insurance department or insurance commissioner) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or indirectly owned or controlled by or subject to the control of any of the foregoing.

“Indebtedness” of a Person means such Person’s (a) obligations for borrowed money, (b) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (c) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (d) obligations which are evidenced by notes, acceptances, or other instruments, (e) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (f) Capitalized Lease Obligations, (g) Contingent Obligations, (h) actual and contingent reimbursement obligations in respect of letters of credit, (i) any other obligation for borrowed money or other financial accommodation which in accordance with Agreement Accounting Principles would be shown as a liability on the consolidated balance sheet of such Person, (j) any liability under any financing lease or so-called “synthetic lease” transaction entered into by such Person and (k) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheet of such Person.

“Insurance Subsidiary” means each of Navigators, NSIC and any other domestic Subsidiary acquired or formed after the Closing Date which is engaged in, or is authorized to engage in, the insurance business.

“Investment” of a Person means (a) any loan, advance (other than commission, travel and similar advances to officers and employees made in the ordinary course of business), extension of credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade) or contribution of capital by such Person, (b) stocks, bonds, mutual funds, partnership interests, membership interests, notes, debentures or other securities owned by such Person, (c) any deposit accounts and certificate of deposit owned by such Person and (d) structured notes, derivative financial instruments and other similar instruments or contracts owned by such Person.

“Issuance Request” is defined in Section 2.5 .

“Issue Date” means a date on which a Letter of Credit is issued hereunder.

“Issuer” means JPMorgan Chase Bank.

“JPMorgan Chase Bank” means JPMorgan Chase Bank, N.A., in its individual capacity and its successor.

“Lenders” means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns.

“Lending Installation” means, with respect to a Lender or the Agent, the office, branch, subsidiary or affiliate of such Lender or the Agent listed on the signature pages hereof or on a Schedule or otherwise selected by such Lender or the Agent.

“Letter of Credit” means a letter of credit issued pursuant to Article II .

“Letter of Credit Availability Termination Date” means April 2, 2010 or any later date as may be specified as the Letter of Credit Availability Termination Date in accordance with Section 2.10 or any earlier date on which the Letter of Credit Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

“Letter of Credit Commitment” means the aggregate Letter of Credit Participation Amounts of all of the Lenders, as reduced or increased from time to time pursuant to the terms hereof. The Letter of Credit Commitment as of the date hereof is $75,000,000.

“Letter of Credit Obligations” means, at the time of determination thereof, the sum of (a) the Reimbursement Obligations then outstanding and (b) the aggregate then undrawn face amount of the then outstanding Letters of Credit.

“Letter of Credit Participation Amount” means, for each Lender, the maximum face amount of Letters of Credit in which such Lender participates not exceeding the amount set forth on Schedule 1 or as set forth in any Notice of Assignment relating to any assignment that has become effective pursuant to Section 12.3(b) , as such amount may be modified from time to time pursuant to the terms hereof.

“Leverage Ratio” means, at any time, the ratio of (a) the consolidated Indebtedness of the Borrower and its Consolidated Subsidiaries (excluding any letter of credit obligations incurred by the Borrower and its Consolidated Subsidiaries in the ordinary course of business prior to any drawing under such a letter of credit but including any letter of credit obligations after any drawing) at such time to (b) the sum of (i) the consolidated Indebtedness of the Borrower and its Consolidated Subsidiaries (excluding any letter of credit obligations incurred by the Borrower and its Consolidated Subsidiaries in the ordinary course of business) plus (ii) Consolidated Net Worth at such time.

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

“Lien” means any security interest, lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).

“Lloyd’s Letters of Credit” is defined in Section 2.1 .

“Loss Reserves” means, with respect to any Insurance Subsidiary at any time, the sum of (a) all losses, including incurred losses of such Insurance Subsidiary at such time shown on page 3, line 1 of the Annual Statement of such Insurance Subsidiary plus (b) all loss adjustment expenses of such Insurance Subsidiary at such time shown on page 3, line 3 of the Annual Statement of such Insurance Subsidiary, as determined in accordance with SAP.

“Margin Stock” has the meaning assigned to that term under Regulation U.

“Material Adverse Effect” means a material adverse effect on (a) the business, Property, condition (financial or otherwise) or results of operations of any of (i) the Borrower or (ii) the Subsidiaries taken as a whole, (b) the ability of the Borrower to perform its obligations under the Facility Documents, or (c) the validity or enforceability of any of the Facility Documents or the rights or remedies of the Agent or the Lenders thereunder.

“Moody’s” means Moody’s Investors Service, Inc.

“MUL” means Millennium Underwriting Limited, which entity is a corporate name with limited liability at Lloyd’s of London.

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Borrower or any member of the Controlled Group is a party to which more than one employer is obligated to make contributions.

“NAIC” means the National Association of Insurance Commissioners or any successor thereto, or in lieu thereof, any other association, agency or other organization performing advisory, coordination or other like functions among insurance departments, insurance commissioners and similar Governmental Authorities of the various states of the United States toward the promotion of uniformity in the practices of such Governmental Authorities.

“Navigators” means Navigators Insurance Company, a New York corporation.

“NCUL” means Navigators Corporate Underwriters Limited, which entity is a corporate name with limited liability at Lloyd’s of London.

“Net Available Proceeds” means (a) with respect to any Asset Disposition, the sum of cash or readily marketable cash equivalents received (including by way of a cash generating sale or discounting of a note or account receivable) therefrom, whether at the time of such disposition or subsequent thereto, or (b) with respect to any sale or issuance of any debt or equity securities of the Borrower or any Subsidiary, cash or readily marketable cash equivalents received therefrom, whether at the time of such disposition or subsequent thereto, net, in either case, of all legal, title and recording tax expenses, commissions and other fees and all costs and expenses incurred and, in the case of an Asset Disposition, net of all payments made by the Borrower or any of its Subsidiaries on any Indebtedness which is secured by such assets pursuant to a permitted Lien upon or with respect to such assets or which must, by the terms of such Lien, in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition.

“Non-U.S. Lender” is defined in Section 3.3(d) .

“Notice of Assignment” is defined in Section 12.3(b) .

“NSIC” means Navigators Specialty Insurance Company, a New York corporation.

“Obligations” means the Letter of Credit Obligations and all other liabilities (if any), whether actual or contingent, of the Borrower with respect to Letters of Credit, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrower to the Lenders or to any Lender, the Agent or any indemnified party hereunder arising under any of the Facility Documents.

“Other Taxes” is defined in Section 3.3(b) .

“Participants” is defined in Section 12.2(a) .

“Payment Date” means the last day of each March, June, September and December.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Person” means any natural person, corporation, firm, joint venture, partnership, association, enterprise, limited liability company, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.

“Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which the Borrower or any member of the Controlled Group may have any liability.

“Pledge Agreement” means that certain Second Amended and Restated Stock Pledge Agreement, dated as of the Closing Date, between the Borrower and the Agent, as the same may be amended, supplemented or otherwise modified from time to time.

“Pounds” and the sign “£” mean lawful money of the United Kingdom.

“Pricing Schedule” means the Schedule attached hereto identified as such.

“Prime Rate” means the rate of interest per annum publicly announced by JPMorgan Chase Bank from time to time as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.

“pro-rata” means, when used with respect to a Lender and any described aggregate or total amount, an amount equal to such Lender’s pro-rata share or portion based on its percentage of the Letter of Credit Commitment.

“Purchasers” is defined in Section 12.3(a) .

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and shall include any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.

“Regulation T” means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and shall include any successor thereto or other regulation or official interpretation of such Board of Governors relating to the extension of credit by securities brokers and dealers for the purpose of purchasing or carrying margin stocks applicable to such Persons.

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and shall include any successor thereto or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.

“Regulation X” means Regulation X of the Board of Governors of the Federal Reserve Systems from time to time in effect and shall include any successor thereto or other regulation or official interpretation of said Board of Governors relating to the extension of credit by the specified lenders for the purpose of purchasing or carrying margin stocks applicable to such Persons.

“Reimbursement Agreement” means a letter of credit application and reimbursement agreement in such form as the Issuer may from time to time employ in the ordinary course of business.

“Reimbursement Obligations” means, at any time, the aggregate (without duplication) of the Obligations of the Borrower to the Lenders, the Issuer and/or the Agent in respect of all unreimbursed payments or disbursements made by the Lenders, the Issuer and/or the Agent under or in respect of draws made under the Letters of Credit.

“Reinsurance Guidelines” is defined in Section 6.21(c) .

“Release” is defined in the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. 39601 et seq .

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event; provided , however , that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

“Required Amount” means the aggregate amount required to be deposited and held in Collateral Accounts pursuant to Sections 2.1(d) , 2.1(f) , 2.8 , 2.12(a) and 8.1 hereof.

“Required Lenders” means Lenders in the aggregate having at least 75% of the Letter of Credit Commitment or, if the Letter of Credit Commitment has been terminated, the aggregate amount of the outstanding Letter of Credit Obligations; provided , however , the Letter of Credit Commitment or pro-rata share of any outstanding Letter of Credit Obligations of any Defaulting Lender shall be deemed to be zero (and the Letter of Credit Commitment or pro-rata shares any outstanding Letter of Credit Obligations of the other Lenders shall be correspondingly increased).

“Response Date” is defined in Section 2.10 .

“Risk-Based Capital Guidelines” is defined in Section 3.2 .

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

“SAP” means, with respect to any Insurance Subsidiary, the statutory accounting practices prescribed or permitted by the insurance commissioner (or other similar authority) in the jurisdiction of such Person for the preparation of annual statements and other financial reports by insurance companies of the same type as such Person in effect from time to time, applied in a manner consistent with those used in preparing the Statutory Financial Statements referred to in Section 5.5 .

“Schedule” refers to a specific schedule to this Agreement, unless another document is specifically referenced.

“Section” means a numbered section of this Agreement, unless another document is specifically referenced.

“Secured Parties” means the Agent, the Issuer and the Lenders.

“Security Documents” means the Pledge Agreement and each Cash Collateral Security Agreement.

“Significant Insurance Subsidiary” means a Significant Subsidiary which is an Insurance Subsidiary.

“Significant Subsidiary” means, at any time, a direct domestic Subsidiary of the Borrower the assets of which are greater than or equal to five percent (5%) of the Consolidated Total Assets of the Borrower and its Consolidated Subsidiaries.

“Single Employer Plan” means a Plan maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group.

“Statutory Financial Statements” is defined in Section 5.5 .

“Statutory Net Income” means, with respect to any Insurance Subsidiary for any computation period, the net income earned by such Insurance Subsidiary during such period, as determined in accordance with SAP (“Underwriting and Investment Exhibit, Statement of Income” statement, Page 4, Line 20 of the Annual Statement).

“Statutory Surplus” means, with respect to any Insurance Subsidiary at any time, the statutory capital and surplus of such Insurance Subsidiary at such time, as determined in accordance with SAP (“Liabilities, Surplus and Other Funds” statement, page 3, line 35 of the Annual Statement).

“Subsidiary” of a Person means (a) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries or (b) any partnership, association, joint venture, limited liability company or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of the Borrower.

“Substantial Portion” means, with respect to the Property of the Borrower and its Consolidated Subsidiaries, Property which (a) represents more than 10% of the Consolidated Total Assets of the Borrower and its Consolidated Subsidiaries, as would be shown in the consolidated financial statements of the Borrower and its Consolidated Subsidiaries as at the end of the quarter next preceding the date on which such determination is made or (b) is responsible for more than 10% of the consolidated net sales or of the Consolidated Net Income of the Borrower and its Consolidated Subsidiaries for the 12-month period ending as of the end of the quarter next preceding the date of determination.

“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings and any and all liabilities with respect to the foregoing, but excluding Excluded Taxes.

“Terence Deeks Family” means, collectively, Terence N. Deeks; his spouse; any natural person who is a lineal descendant of Terence N. Deeks; the spouse, children, or grandchildren of any such natural person; any trust of which any of the foregoing is or are the sole beneficiary or beneficiaries; or the estate, executor, administrator, or legal guardian of any of the foregoing.

“Termination Event” means, with respect to a Plan which is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any other member of the Controlled Group from such Plan during a plan year in which the Borrower or any other member of the Controlled Group was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a notice of intent to terminate such Plan or the treatment of an amendment of such Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to terminate such Plan or (e) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or appointment of a trustee to administer, such Plan.

“Transferee” is defined in Section 12.4 .

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

“Unfunded Liabilities” means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.

“Unmatured Default” means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.

“Wholly-Owned Subsidiary” of a Person means (a) any Subsidiary all (or, in the case of Navigators N.V., all but one) of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person, or (b) any partnership, limited liability company, association, joint venture or similar business organization 100% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II

THE LETTER OF CREDIT FACILITY

2.1 Issuance of Letters of Credit . (a) From and after the date hereof to but excluding the Letter of Credit Availability Termination Date, the Issuer agrees, upon the terms and conditions set forth in this Agreement, to issue at the request and for the account of the Borrower, one or more Letters of Credit for the account of the Borrower (x) to support the obligations of Wholly-Owned Subsidiaries of the Borrower with respect to specific syndicates at the Society of Lloyd’s (the Letters of Credit issued under this clause (x) being called the “Lloyd’s Letters of Credit”) and (y) to support other obligations, provided that the aggregate face amount of all outstanding Letter of Credit Obligations with respect to this clause (y) does not at any time exceed the lesser of (A) the Letter of Credit Commitment and (B) $5,000,000; provided , however , that the Issuer shall not be under any obligation to issue, and shall not issue, any Letter of Credit if: (i) any order, judgment or decree of any governmental authority or other regulatory body with jurisdiction over the Issuer shall purport by its terms to enjoin or restrain such Issuer from issuing such Letter of Credit, or any law or governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) from any governmental authority or other regulatory body with jurisdiction over the Issuer shall prohibit, or request that the Issuer refrain from, the issuance of Letters of Credit in particular or shall impose upon the Issuer with respect to any Letter of Credit any restriction or reserve or capital requirement (for which the Issuer is not otherwise compensated) or any unreimbursed loss, cost or expense which was not applicable, in effect and known to the Issuer as of the date of this Agreement and which the Issuer in good faith deems material to it, (ii) one or more of the conditions to such issuance contained in Section 4.2 is not then satisfied or (iii) after giving effect to such issuance, the aggregate outstanding amount of the Letter of Credit Obligations would exceed the Letter of Credit Commitment. For purposes of clause (iii) of the immediately preceding sentence, at any time there is a Defaulting Lender, the Letter of Credit Commitment shall be automatically reduced by an amount equal to the remainder of (A) such Defaulting Lender’s pro-rata share of the Letter of Credit Commitment minus (B) such Defaulting Lender’s pro-rata share of the Letter of Credit Obligations then outstanding; provided , however , the Letter of Credit Commitment shall be restored if either (i) such Defaulting Lender provides cash collateral to the Agent for the account of such Defaulting Lender pursuant to Section 10.11 in the amount of such Defaulting Lender’s pro-rata share of the Letter of Credit Commitment or (ii) the Borrower has entered into satisfactory arrangements with the Issuer to eliminate the Issuer’s risk with respect to such Defaulting Lender, it being agreed that such satisfactory arrangements may include collateral or the charging of a fee and the Lenders agree that any such collateral or fee shall belong solely to the Issuer and shall not be subject to the sharing provisions of this Agreement. Letters of Credit shall be denominated, at the Borrower’s option, in either Dollars or Pounds.

(b) In no event shall: (i) the aggregate amount of the Letter of Credit Obligations at any time exceed the Letter of Credit Commitment or (ii) the expiration date of any Letter of Credit (other than the Letters of Credit identified on Schedule 2.1 hereto) or the date for payment of any draft presented thereunder and accepted by the Issuer, be later than (x) the date one (1) year after the effective date of such Letter of Credit or (y) in the case of the Lloyd’s Letters of Credit, four (4) years after the date of the related Expiry Notice. The Issuer shall not permit the renewal or extension of any Letter of Credit at any time (A) during the continuation of a Default or Unmatured Default or (B) after the Letter of Credit Availability Termination Date.

(c) The Issuer (i) shall issue an Expiry Notice on the Letter of Credit Availability Termination Date and (ii) may, and upon the request of the Required Lenders shall, issue an Expiry Notice when a Default has occurred and is continuing; provided , however , that upon the occurrence of an Unmatured Default pursuant to Sections 7.6 and 7.7 , the Issuer shall immediately issue an Expiry Notice.

(d) The Borrower agrees that, if at any time as a result of reductions in the Letter of Credit Commitment pursuant to Section 2.3 or otherwise the aggregate balance of the Letter of Credit Obligations exceeds the Letter of Credit Commitment, the Borrower shall cash collateralize the Letter of Credit Obligations by depositing, into a Collateral Account, Cash Collateral Investments with a Collateral Value equal to the product of one hundred and three percent (103%) of the amount as may be necessary to eliminate such excess.

(e) The Letters of Credit identified on Schedule 2.1 hereto (the “ Existing Letter of Credit ”) which are issued and outstanding under the Existing Credit Agreement shall, upon satisfaction of the conditions set forth in Article IV hereto, automatically and without further action on the part of the Agent, the Issuer, the Lenders or the Borrower be deemed Letters of Credit issued under this Agreement.

(f) For purposes of determining usage and availability under this Section 2.1 , when a Letter of Credit is issued in Pounds, such Pounds will be converted to Dollars upon issuance, upon the proposed issuance of any other Letter of Credit and at the end of each calendar quarter and at any time thereafter as requested by the Agent or any Lender (including the Issuer) and such determination shall be made by the Agent in its sole determination based upon the spot exchange rate between Dollars and Pounds as quoted by the Agent’s foreign exchange desk as of such date of determination. Notwithstanding any other provisions of this Agreement, if at any time, after giving effect to the conversion of Pounds into Dollars as set forth above, the aggregate face amount of all outstanding Letters of Credit is greater than the Letter of Credit Commitment (“Conversion Differential”), then the Borrower shall cash collateralize such Conversion Differential by depositing into a Collateral Account Cash Collateral Investments with a Collateral Value equal to the product of one hundred and three percent (103%) of the Conversion Differential.

(g) At the request of the Borrower, Letters of Credit may be issued with any Wholly-Owned Subsidiary of the Borrower as a co-applicant, so long as the Borrower is also a co-applicant under the applicable Reimbursement Agreement. The fact that such Subsidiary is an applicant shall not affect the obligations of the Borrower with respect to such Letters of Credit hereunder or under any Facility Document in any way. Any Reimbursement Agreement for a Letter of Credit with respect to which such Subsidiary is a co-applicant shall include language substantially similar to that set forth in Exhibit C or otherwise acceptable to the Agent.

2.2 Participating Interests . Immediately upon the issuance by the Issuer of a Letter of Credit in accordance with Section 2.5 (and with respect to the Letters of Credit identified on Schedule 2.1 hereto, upon satisfaction of the conditions set forth in Article IV hereof), each Lender shall be deemed to have irrevocably and unconditionally purchased and received from the Issuer, without recourse, representation or warranty, an undivided participation interest equal to its pro-rata share of the Letter of Credit Commitment (including as may be adjusted pursuant to Section 2.1(a) ) of the face amount of such Letter of Credit and each draw paid by the Issuer thereunder. Each Lender’s obligation to pay its proportionate share of all draws under the Letters of Credit, absent gross negligence or willful misconduct by the Issuer in honoring any such draw, shall be absolute, unconditional and irrevocable and in each case shall be made without counterclaim or set-off by such Lender.

2.3 Reductions in Letter of Credit Commitment . (a) The Borrower may permanently reduce the Letter of Credit Commitment in whole, or in part ratably among the Lenders in integral multiples of $2,500,000, upon at least five (5) Business Days’ written notice to the Agent, which notice shall specify the amount of such reduction; provided , however , that the amount of the Letter of Credit Commitment may not be reduced below the aggregate amount of the outstanding Letter of Credit Obligations.

(b) At any time a Lender is a Designated Lender, the Borrower may terminate in full the commitment of such Designated Lender by giving notice to such Designated Lender and the Agent; provided that (i) at the time of such termination, no Default or Unmatured Default exists (or the Required Lenders consent to such termination) and (ii) concurrently with such termination, (A) the Letter of Credit Commitment shall be reduced by the commitment amount of such Designated Lender (it being understood that the Borrower may not terminate the commitment of a Designated Lender if, after giving effect to such termination, the Letter of Credit Obligations would exceed the reduced Letter of Credit Commitment), (B) the Borrower shall pay all amounts owed to such Designated Lender hereunder and (C) the Agent shall return to such Lender any cash collateral held for the account of such Lender pursuant to Section 2.9(d) . The termination of the commitment of a Defaulting Lender pursuant to this Section 2.3 shall not be deemed to be a waiver of any right that (x) the Borrower, the Agent, the Issuer or any other Lender may have against such Defaulting Lender or (y) such Defaulting Lender may have against the Borrower based on the estimate described in clause (B) of the preceding sentence.

2.4 Reimbursement Obligations . (a) The Borrower agrees to pay to the Issuer of a Letter of Credit (i) on each date that any amount is drawn under each Letter of Credit (or, if any draw is paid by the Issuer after 3:00 p.m. (New York time) on such date, on the next succeeding Business Day) a sum (and interest on such sum as provided in clause (ii) below) equal to the amount so drawn plus all other charges and expenses with respect thereto specified in Section 2.9 or in the applicable Reimbursement Agreement and (ii) interest on any and all amounts remaining unpaid under this Section 2.4 until payment in full at the rate per annum, computed for actual days elapsed based on a 365 or 366 day year, as applicable, equal to (A) the Alternate Base Rate plus the Applicable Margin for such day for the first two days following the due date of any Reimbursement Obligations and (B) the Alternate Base Rate plus the Applicable Margin for such day plus 2% per annum thereafter. The Borrower agrees to pay to the Issuer the amount of all Reimbursement Obligations owing in respect of

any Letter of Credit immediately when due, under all circumstances, including, without limitation, any of the following circumstances: (w) any lack of validity or enforceability of this Agreement or any of the other Facility Documents, (x) the existence of any claim, set-off, defense or other right which the Borrower 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), any Lender 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 the Borrower and the beneficiary named in any Letter of Credit), (y) the validity, sufficiency or genuineness of any document which the Issuer has determined in good faith complies on its face with the terms of the applicable Letter of Credit, even if such document should later prove to have been forged, fraudulent, invalid or insufficient in any respect or any statement therein shall have been untrue or inaccurate in any respect or (z) the surrender or impairment of any security for the performance or observance of any of the terms hereof.

(b) Notwithstanding any provisions to the contrary in any Reimbursement Agreement, the Borrower agrees to reimburse the Issuer for amounts which the Issuer pays under such Letter of Credit no later than the time specified in this Agreement. If the Borrower does not pay any such Reimbursement Obligations when due at any time prior the Letter of Credit Termination Date, such Reimbursement Obligations, if in Pounds, shall be deemed to have been converted into the equivalent amount of Dollars on the date due based upon the spot rate of exchange between Dollars and Pounds as determined by the Agent on the Reuters WRLD Page as of the time of determination on such date. In the event that such rate does not appear on any Reuters WRLD Page, the exchange rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Agent and the Borrower, or, in the absence of such an agreement, such exchange rate shall instead be the arithmetic average of the spot rates of exchange of the Agent in London at or about such time between Dollars and Pounds for delivery two Business Days later; provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Agent may use any reasonable method it deems appropriate to determine such rate and such determination shall be presumed correct absent manifest error.

(c) If the Issuer makes a payment on account of any Letter of Credit and is not concurrently reimbursed therefor by the Borrower, then as promptly as practical during normal banking hours on the date of its receipt of such notice or, if not practicable on such date, not later than noon (New York time) on the Business Day immediately succeeding such date of notification, each Lender shall deliver to the Agent for the account of the Issuer, in immediately available funds, the purchase price for such Lender’s interest in such unreimbursed Reimbursement Obligations, which shall be an amount equal to such Lender’s pro-rata share of such payment. Each Lender shall, upon demand by the Issuer, pay the Issuer interest on such Lender’s pro-rata share of such draw from the date of payment by the Issuer on account of such Letter of Credit until the date of delivery of such funds to the Issuer by such Lender at a rate per annum, computed for actual days elapsed based on a 360-day year, equal to the Federal Funds Effective Rate on the amount of the unreimbursed Reimbursement Obligations, if in Dollars, or the equivalent amount of Dollars calculated in the manner provided in paragraph (b) , if in Pounds, for such period; provided , that such payments shall be made by the Lenders only in the event and to the extent that the Issuer is not reimbursed in full by the Borrower for interest on the amount of any draw on the Letters of Credit.

(d) At any time after the Issuer has made a payment on account of any Letter of Credit and has received from any other Lender such Lender’s pro-rata share of such payment, such Issuer shall, forthwith upon its receipt of any reimbursement (in whole or in part) by the Borrower for such payment, or of any other amount from the Borrower or any other Person in respect of such payment (including, without limitation, any payment of interest or penalty fees and any payment under any collateral account agreement of the Borrower or any Facility Document but excluding any transfer of funds from any other Lender pursuant to Section 2.4(c) ), transfer to such other Lender such other Lender’s ratable share of such reimbursement or other amount; provided , that interest shall accrue for the benefit of such Lender from the time such Issuer has made a payment on account of any Letter of Credit; provided , further , that in the event that the receipt by the Issuer of such reimbursement or other amount is found to have been a transfer in fraud of creditors or a preferential payment under the United States Bankruptcy Code or is otherwise required to be returned, such Lender shall promptly return to the Issuer any portion thereof previously transferred by the Issuer to such Lender, but without interest to the extent that interest is not payable by the Issuer in connection therewith.

(e) All payments in respect of Reimbursement Obligations shall be in Dollars.

2.5 Procedure for Issuance . Prior to the issuance of each new Letter of Credit and as a condition of such issuance, the Borrower shall deliver to the Issuer (with a copy to the Agent) a Reimbursement Agreement signed by the Borrower, together with such other documents or items as may be required pursuant to the terms thereof, and the proposed form and content of such Letter of Credit shall be reasonably satisfactory to the Issuer. Each Letter of Credit shall be issued no earlier than two (2) Business Days after delivery of the foregoing documents, which delivery may be by the Borrower to the Issuer by telecopy, telex or other electronic means followed by delivery of executed originals within five (5) days thereafter. The documents so delivered shall be in compliance with the requirements set forth in Section 2.1(b) , and shall specify therein (a) the stated amount of the Letter of Credit requested, (b) the effective date of issuance of such requested Letter of Credit, which shall be a Business Day, (c) the date on which such requested Letter of Credit is to expire, which shall be no later than one (1) year from the date of issuance of such Letter of Credit or in the case of a Lloyd’s Letter of Credit, four years from the date of the related Expiry Notice, (d) whether the Letter of Credit is to be denominated in Dollars or Pounds and (e) the aggregate amount of Letter of Credit Obligations which are outstanding and which will be outstanding after giving effect to the requested Letter of Credit issuance. The delivery of the foregoing documents and information shall constitute an “ Issuance Request ” for purposes of this Agreement. Subject to the terms and conditions of Section 2.1 and provided that the applicable conditions set forth in Section 4.2 hereof have been satisfied, the Issuer shall, on the requested date, issue a Letter of Credit on behalf of the Borrower in accordance with the Issuer’s usual and customary business practices. In addition, any amendment of an existing Letter of Credit shall be deemed to be an issuance of a new Letter of Credit and shall be subject to the requirements set forth above. The Issuer shall give the Agent prompt written notice of the issuance of any Letter of Credit.

2.6 Nature of the Lenders’ Obligations . (a) As between the Borrower and the Lenders, the Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of the Letters of Credit; provided , however , that the Borrower may have a claim against the Issuer and the Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct (as opposed to consequential or exemplary) damages suffered by the Borrower which the Borrower proves were caused by the Issuer’s willful misconduct or gross negligence in determining whether documents presented under a Letter of Credit comply with the terms of such Letter of Credit. In furtherance and not in limitation of the foregoing, the Lenders shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged, (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason, (iii) the failure of the beneficiary of a Letter of Credit to comply fully with conditions required to be satisfied by any Person other than the Issuer in order to draw upon such Letter of Credit, (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, (v) errors in the interpretation of technical terms, (vi) the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit or (vii) any consequences arising from causes beyond control of the Issuer.

(b) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuer under or in connection with the Letters of Credit or any related certificates, if taken or omitted in good faith, shall not put the Agent or any Lender under any resulting liability to the Borrower or relieve the Borrower of any of its obligations hereunder to the Issuer or any such Person.

2.7 Notification of Issuance Requests . Promptly after receipt thereof, the Agent will notify each Lender of the contents of each Issuance Request received by it hereunder.

2.8 Cash Collateral for Letters of Credit . On the Letter of Credit Availability Termination Date, the Borrower shall pledge and deliver to the Agent, for the benefit of the Secured Parties, Cash Collateral Investments in a Collateral Account with a Collateral Value equal to the product of one hundred and three percent (103%) of the amount equal to the following percentage of the Letter of Credit Obligations outstanding from time to time during the following periods:

2.9 Fees.

(a) Unused Fee . The Borrower agrees to pay to the Agent for the account of each Lender with respect to its Letter of Credit Participation Amount an unused fee at a rate per annum equal to the Applicable Unused Fee Rate on the daily unused portion of such Lender’s Letter of Credit Participation Amount from the Closing Date to and including the Letter of Credit Availability Termination Date, payable on each Payment Date hereafter and on the Letter of Credit Availability Termination Date or, if later, upon receipt of a bill from the Agent. Accrued and unpaid unused fees under the Existing Credit Agreement shall be paid on the Closing Date or, if later, upon receipt of a bill from the Agent.

(b) Letter of Credit Fronting Fee . The Borrower hereby agrees to pay to the Agent, for the account of the Issuer, a letter of credit fronting fee with respect to each Letter of Credit from and including the date of issuance thereof (or, with respect to the Letters of Credit identified on Schedule 2.1 , the date on which such Letters of Credit are deemed issued under this Agreement pursuant to Section 2.1(d) ) until the date such Letter of Credit is fully drawn, canceled or expired, in an amount equal to the rate provided in the Fee Letter of the aggregate initial face amount of such Letter of Credit, calculated with respect to actual days elapsed on the basis of a 360-day year and payable quarterly in arrears on each Payment Date in each year and upon the expiration, cancellation or utilization in full of such Letter of Credit. In addition to the foregoing, the Borrower agrees to pay the Issuer any other fees customarily charged by it in respect of the issuance, amendment, cancellation, negotiation or transfer of each Letter of Credit and each drawing made thereunder. The letter of credit fronting fee is in addition to (and not included in) the letter of credit participation fee provided for in paragraph (c) below. Accrued and unpaid fronting fees under the Existing Credit Agreement shall be paid on the Closing Date or, if later, upon receipt of a bill from the Agent.

(c) Letter of Credit Participation Fee . The Borrower agrees to pay to the Agent for the pro-rata account of the Lenders (including the Issuer) a letter of credit participation fee with respect to each Letter of Credit from and including the date of issuance thereof until the date such Letter of Credit is fully drawn, canceled or expired, in an amount equal to the Applicable Letter of Credit Participation Fee Rate on the aggregate amount from time to time available to be drawn on such Letter of Credit, calculated with respect to actual days elapsed on the basis of a 360-day year and payable quarterly in arrears on each Payment Date in each year and upon the expiration, cancellation or utilization in full of such Letter of Credit. During the continuance of a Default, the Required Lenders may, at their option, by notice to the Borrower, declare that the Applicable Letter of Credit Participation Fee Rate shall be increased by 2% per annum; provided , that during the continuance of a Default under Section 7.6 or 7 .7 , the Applicable Letter of Credit Participation Fee Rate shall be increased by two percent (2%) without any election or action on the part of the Agent or any Lender. Accrued and unpaid Letter of Credit Participation Fees under the Existing Credit Agreement shall be paid on the Closing Date or, if later, upon receipt of a bill from the Agent.

(d) If at any time a Lender is a Defaulting Lender, then , to the extent permitted by applicable law (and notwithstanding any other provision of this Agreement), (i) any payment of Reimbursement Obligations with respect to Letters of Credit (including through sharing of payments pursuant to Section 10.2 , but excluding any payment pursuant to Section 2.3(b) shall, if the Borrower so directs at the time of making such payment, be applied first to amounts owed to Lenders other than such Defaulting Lender, as if the amount owed to such Defaulting Lender hereunder in respect of Reimbursement Obligations were zero, and then to amounts owed to such Defaulting Lender; (ii) such Defaulting Lender’s pro-rata share of the Letter of Credit Obligations shall be excluded for purposes of calculating facility fees pursuant to Section 2.9 in respect of each day on which such Lender is a Defaulting Lender, and such Defaulting Lender shall not be entitled to receive any facility fees for any such day and (iii) such Defaulting Lender’s pro-rata share shall be deemed to be zero for purposes of calculating letter of credit fees pursuant to Section 2.9 in respect of each day on which such Lender is a Defaulting Lender (and the pro-rata shares of the other Lenders shall be correspondingly increased for such purposes), and such Defaulting Lender shall not be entitled to receive any letter of credit fees for any such day. In addition, if any Lender is a Defaulting Lender at the time any payment is to be made by the Lenders to the Issuer pursuant to Section 2.4(c) and such Defaulting Lender fails to make its pro-rata share of such payment, then, solely for purposes of determining the amount of the payment to be made by each Lender to the Issuer (and without limiting the liability of such Defaulting Lender for its failure to make such payment), the pro-rata shares of the other Lenders shall be correspondingly increased so that, subject to the following proviso, the Issuer receives the full amount of the payments to which it is entitled from the Lenders; provided that under no circumstances shall any Lender be obligated to make a payment to the Issuer pursuant to this sentence that would cause the aggregate principal amount of such Lender’s pro-rata share (without giving effect to any adjustment pursuant to the foregoing provisions of this sentence) of all Letter of Credit Obligations to exceed such Lender’s commitment amount (or, if the Letter of Credit Commitment has terminated, such Lender’s commitment amount at the time of such termination, adjusted for any assignments by or to such Lender). Any payment made pursuant to this Section shall be taken into account for purposes of calculating the Unused Fee and Letter of Credit Participation Fee. The provisions of this Section 2.9(d) do not limit, but are in addition to, any other claim or right that the Borrower, the Agent, the Issuer or any other Lender may have against a Defaulting Lender.

2.10 Extension of Letter of Credit Availability Termination Date . The Borrower may request an extension of the Letter of Credit Availability Termination Date by submitting a request for an extension to the Agent (an “Extension Request”) on any Business Day that is not less than 30 days prior to the then Letter of Credit Availability Termination Date. The Extension Request must specify the new Letter of Credit Availability Termination Date requested by the Borrower and the date as of which date (which must be at least 30 days after the Extension Request is delivered to the Agent) the Lenders (including the Issuer) must respond to the Extension Request (the “Response Date”). The new Letter of Credit Availability Termination Date shall not be more than two years after the Letter of Credit Availability Termination Date in effect at the time the Extension Request is received, including the Letter of Credit Availability Termination Date as one of the days in the calculation of the days elapsed. Promptly upon receipt of an Extension Request, the Agent shall notify each Lender of the contents thereof and shall request the Issuer and each Lender to approve the Extension Request. Each Lender approving the Extension Request shall deliver its written consent no later than the Response Date. If the consent of all of the Lenders in their sole discretion is received by the Agent, the Letter of Credit Availability Termination Date specified in the Extension Request shall become effective on the existing Letter of Credit Availability Termination Date and the Agent shall promptly notify the Borrower and each Lender (including the Issuer) of the new Letter of Credit Availability Termination Date. Otherwise the Letter of Credit Availability Termination Date shall be unchanged.

2.11 Optional Increase in Letter of Credit Commitment . The Borrower may, from time to time, by means of a letter delivered to the Agent substantially in the form of Exhibit D , request that the Letter of Credit Commitment be increased by an aggregate amount (for all such increases) not exceeding $25,000,000 by (a) i