Exhibit 10.1

CONFORMED COPY

Standby Letter of Credit Facility

Chaucer Holdings Limited

As Borrower

Chaucer Corporate Capital (No. 3) Limited

As Account Party

Lloyds Bank plc and ING Bank N.V., London Branch

As Mandated Lead Arrangers

Lloyds Bank plc

As Bookrunner

Lloyds Bank plc

As Facility Agent

Lloyds Bank plc

As Security Agent

15 October 2015

1

CONTENTS

2

3

THIS AGREEMENT is made on 15 October 2015.

BETWEEN:

THE PARTIES AGREE AS FOLLOWS:

In this agreement:

“Accession Date” means, in relation to an accession by a New Lender pursuant to clauses 7 (Extension of the Facility) and 27 (Changes to the Lenders), the later of:

“Accession Letter” means:

“Additional Guarantor” means a company which becomes an Additional Guarantor in accordance with clause 28 (Changes to the Obligors);

“Affiliate” means in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company;

1

“Approved Credit Institution” means a credit institution within the meaning of the Council Directive on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions (No. 2006/48/EC) which has been approved by the Council of Lloyd’s for the purpose of providing guarantees and issuing or confirming letters of credit comprising a Member’s Funds at Lloyd’s;

“Approved New Lender” has the meaning given to it in clause 7(e) (Extension of the Facility);

“Assignment Agreement” means an agreement substantially in the form set out in schedule 7 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee;

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration;

“Authorised Signatory” means, in relation to any Obligor, any person who is duly authorised (in such manner as may be reasonably acceptable to the Facility Agent) and in respect of whom the Facility Agent has received a certificate signed by a director or authorised officer of that Obligor setting out the name and signature of that person and confirming that person’s authority to act;

“Authority” means any of the European Union, Her Majesty’s Treasury of the United Kingdom or the United States government including OFAC or the U.S. Department of State;

“Availability Period” means the period from and including the Effective Date to and including 31 December 2016;

“Available Commitment” means, in relation to a Lender at any time and save as otherwise provided in this agreement, its Commitment minus:

For the purposes of calculating a Lender’s Available Commitment in relation to any proposed Utilisation, the amount of that Lender’s participation in any Letter of Credit that is due to expire or be returned as cancelled on or before the proposed Utilisation Date shall not be deducted from a Lender’s Commitments;

“Available Facility” means, at any time, the aggregate of the Available Commitments of the Lenders;

“Basel III” means:

2

“Borrower Group” means the Borrower, each of its Subsidiaries for the time being and the Original Guarantor;

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London;

“Cash Collateral” means, in relation to a Letter of Credit or (as applicable) any Lender’s Proportion of a Letter of Credit, a cash deposit in the Specified Account and “Cash Collateralised” shall be construed accordingly;

“Change in Control” means any of the following events:

“Charge Over Account” means the charge over account dated on or about the date of this agreement and executed by the Borrower and the Security Agent pursuant to which a charge is granted by the Borrower to the Security Agent in respect of the Specified Account;

“Charged Property” means all of the assets which from time to time are, or are expressed to be, the subject of the Security;

“Code” means the US Internal Revenue Code of 1986;

“Commencement Date” means, in relation to any Letter of Credit, the date as and from which the Lenders’ liabilities (whether actual or contingent) under that Letter of Credit start to accrue;

“Commitment” means:

3

“Compliance Certificate” means a certificate substantially in the form set out in schedule 10 (Form of Compliance Certificate);

“Confidential Information” means all information relating to the Parent, the Borrower, the Account Party, any Guarantor, the Group, the Borrower Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:

“Confidentiality Undertaking” means a confidentiality undertaking substantially in a recommended form of the LMA as set out in schedule 12 (LMA Form of Confidentiality Undertaking) or in any other form agreed between the Borrower and the Facility Agent;

“Corporate Member” means a corporate member of Lloyd’s;

“Corporate Member’s Deed” means Lloyd’s Security and Trust Deed or such other deed or document as Lloyd’s may from time to time require the Account Party (being or having applied to become a Member) to execute and deliver for the purposes of providing a Lloyd’s Deposit;

“CRD IV” means:

4

“CTA” means the Corporation Tax Act 2009;

“Debt Rating” means, as of any date of determination, the rating of the Parent’s senior, unsecured, non-credit enhanced, long-term debt obligations then outstanding most recently announced by Standard & Poor’s and Moody’s, provided that:

“Default” means an Event of Default or any event or circumstance specified in clause 26 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default;

“Defaulting Lender” means any Lender:

“Delegate” means any delegate, agent, attorney or co-trustee appointed by the Security Agent;

“Disruption Event” means either or both of:

5

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted;

“Effective Date” means the date on which the Facility Agent notifies the Borrower that all the conditions precedent listed in part 1 of schedule 2 (Conditions Precedent) have been fulfilled to its satisfaction;

“Encumbrance” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect;

“ERISA Event” has the meaning given to it in the Parent Guarantee;

“Equity Interests” has the meaning given to it in the Parent Guarantee;

“Event of Default” means any event or circumstance specified as such in clause 26 (Events of Default);

“Existing Facility Agreement” means the £130,000,000 standby letter of credit facility agreement dated 28 November 2011 as amended and restated on 15 November 2013 between, amongst others, the Borrower and Lloyds Bank plc;

“Expiry Date” means, in relation to any Letter of Credit, the date on which the maximum aggregate liability thereunder is reduced to zero;

“Extreme Stress Scenario” means an extreme event which is not a Realistic Disaster Scenario and which falls outside the guidelines issued by Lloyd’s’ Franchise Performance Directorate department;

“Facility” means the Sterling letter of credit facility granted to the Borrower in this agreement;

“Facility Extension” means the exercising by the Borrower of the option to increase the Total Commitments of the Facility by up to the Facility Extension Amount in accordance with clause 7 (Extension of the Facility);

“Facility Extension Amount” means an additional amount of up to £65,000,000;

“Facility Extension Request” means a request in the form set out in schedule 14 (Form of Facility Extension Request);

“Facility Office” means the office or offices notified by a Finance Party to the Facility Agent in writing on or before the date it becomes a Finance Party (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this agreement;

“FATCA” means:

6

“FATCA Application Date” means:

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this agreement;

“FATCA Deduction” means a deduction or withholding from a payment under a Finance Document required by FATCA;

“FATCA Exempt Party” means a Party that is entitled to receive payments free from any FATCA Deduction;

“FCA” means the Financial Conduct Authority in the United Kingdom and any regulatory body which succeeds to one or more of the functions and/or duties performed by it as at the date of this agreement;

“Fee Letter” means any letter or letters dated on or about the date of this agreement between the Arrangers and the Borrower (or the Facility Agent and the Borrower or the Security Agent and the Borrower) setting out any of the fees referred to in clause 12 (Commission and Fees);

“Finance Document” means this agreement, any Fee Letter, any Accession Letter, any Resignation Letter, each Compliance Certificate, the Mandate Letter, each Utilisation Request, a Facility Extension Request, the Security Documents, the Parent Guarantee and any other document designated as such by the Facility Agent and the Borrower;

“Finance Party” means the Facility Agent, the Security Agent, an Arranger or a Lender;

“Financial Indebtedness” means any indebtedness for or in respect of:

7

“Funding Rate” means any individual rate notified by a Lender to the Facility Agent pursuant to paragraph (a)(ii) of clause 20.4 (Cost of Funds);

“Funds at Lloyd’s” or “FAL” has the meaning given in paragraph 16 of the Membership Byelaw (No. 5 of 2005);

“GAAP” means generally accepted accounting principles in the United Kingdom, including IFRS;

“General Prudential Sourcebook” means the General Prudential Sourcebook for Banks, Building Societies, Insurers and Investment Firms (as amended and replaced from time to time), which forms part of the Handbook;

“Group” means the Parent and each of its Subsidiaries (as defined in the Parent Guarantee) for the time being;

“Group Obligor” means the Parent or an Obligor;

“Guaranteed Documents” means the Finance Documents and the Overdraft Letter;

“Guaranteed Finance Parties” means the Finance Parties and the Overdraft Provider;

“Guarantor” means the Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with clause 28 (Changes to the Obligors);

“Handbook” means the PRA Handbook of Rules and Guidance or the FCA Handbook of Rules and Guidance, as applicable (each as amended from time to time);

“Hanover Credit Agreement” means the $200,000,000 credit agreement dated 12 November 2013 between, amongst others, the Parent as borrower, JPMorgan Chase Bank, N.A., as administrative agent, Wells Fargo Bank, National Association and Lloyds Bank plc as co-syndication agents and Branch Banking and Trust Company and Barclays Bank PLC as co-documentation agents;

“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;

“IFRS” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements;

“Impaired Agent” means the Agent at any time when:

“Indebtedness for Borrowed Money” means any indebtedness (other than such indebtedness incurred by a Managed Syndicate as a result of a Syndicate Arrangement) for or in respect of:

8

“Insolvency Event” means, in relation to a Finance Party:

“INSPRU” means the Prudential Sourcebook for Insurers (as amended and replaced from time to time), which forms part of the Handbook;

“Interest Period” means, save as otherwise provided herein, in relation to an Unpaid Sum, any of those periods mentioned in clause 19.1 (Default Interest Periods);

“Interpolated Screen Rate” means, in relation to LIBOR for any Utilisation, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

each as of the Specified Time for the currency of that Utilisation;

“ITA” means the Income Tax Act 2007;

9

“L/C Commission Rate” means:

provided that any change in the applicable L/C Commission Rate resulting from a publicly announced change in the Debt Rating shall be effective on the date on which the relevant change in such Debt Rating is first announced by Standard & Poor’s or Moody’s, as the case may be; and

“Legal Reservations” means:

“Lender” means:

which in each case has not ceased to be a Party in accordance with the terms of this agreement;

“Letter of Comfort” means a letter of comfort from Lloyd’s to the Borrower in substantially the form set out in schedule 5 (Letter of Comfort) or in such other form as may be agreed between the Facility Agent and the Borrower in order to procure the execution of that letter by Lloyd’s;

“Letter of Credit” means a letter of credit issued or to be issued pursuant to clause 6 (Utilisation) substantially in the form set out in schedule 4 (Form of Letter of Credit);

10

“LIBOR” means, in relation to any Unpaid Sum, the applicable Screen Rate as of the Specified Time for the currency of that Unpaid Sum and for a period equal in length to the Interest Period for that Unpaid Sum and, if that rate is less than zero, LIBOR shall be deemed to be zero;

“Lloyd’s” means the Society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s;

“Lloyd’s Deposit” has the meaning given in the Definitions Byelaw (No. 7 of 2005);

“Lloyd’s Syndicate Accounting Rules” means the Lloyd’s syndicate accounting rules within the meaning of the Definitions Byelaw (No. 7 of 2005);

“LMA” means the Loan Market Association;

“Majority Lenders” means a Lender or Lenders whose Commitments aggregate at least 66  ² ⁄ ₃  per cent of the Total Commitments (or, if the Commitments have been reduced to zero, aggregated at least 66  ² ⁄ ₃  per cent of the Commitments immediately prior to the reduction);

“Managed Syndicate” means:

“Managing Agent” means Chaucer Syndicates Limited, a company incorporated in England and Wales with company number 00184915;

“Mandate Letter” means the mandate letter dated on or about the date of this agreement from the Arrangers to the Parent;

“Material Adverse Effect” means a material adverse effect on:

“Material Company” means, at any time:

11

Compliance with the conditions set out in paragraph (c) above shall be determined by reference to the latest annual financial statements of that Subsidiary (consolidated in the case of a Subsidiary which itself has Subsidiaries) and the latest annual consolidated financial statements of the Borrower Group delivered pursuant to clause 23.1(a) (Financial Statements of the Borrower Group) or clause 23.1(b) (Financial Statements of the Borrower Group). However, if a Subsidiary has been acquired since the date as at which the latest consolidated financial statements of the Borrower Group were prepared, the financial statements shall be deemed to be adjusted in order to take into account the acquisition of that Subsidiary;

A report by the auditors of the Borrower that a Subsidiary is or is not a Material Company shall, in the absence of manifest error, be conclusive and binding on all Parties;

“Material Subsidiary” has the meaning given to it in the Parent Guarantee;

“Member” means a Corporate Member or an individual member of Lloyd’s;

“Member’s Share” means the Member’s Syndicate Premium Limit of the Account Party divided by the Syndicate Allocated Capacity of the Managed Syndicate on which the Lloyd’s Member writes business;

“Member’s Syndicate Premium Limit” means the Account Party’s syndicate premium limit within the meaning of paragraph 26 of the Membership Byelaw (No. 5 of 2005);

“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

The above exceptions will only apply to the last Month of any period; “Monthly” shall be construed accordingly;

“Moody’s” means Moody’s Investors Service Limited and any successor to the rating agency business of Moody’s Investors Service Limited;

“New Lender” has the meaning given to it in clause 27.1 (Assignments and Transfers by the Lenders);

“Notice of Termination” means a notice of the kind defined in clause 8.1 (Availability and Termination Provisions);

“Obligor” means the Account Party, the Borrower or a Guarantor;

“Obligors’ Agent” means the Borrower, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to clause 2.3 (Obligors’ Agent);

12

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury;

“Open Year Solvency Deficiency” has the meaning given to that expression in the Lloyd’s Membership and Underwriting Conditions and Requirements (Funds at Lloyd’s);

“Original Financial Statements” means:

“Other FAL” means, in relation to the Account Party, its Funds at Lloyd’s other than Own FAL, Reinsurance FAL and FAL provided under this agreement;

“Outstandings” means, at any time, the aggregate of the maximum actual and contingent liabilities of the Lenders in respect of any outstanding Letter of Credit;

“Overdraft” means the £2,000,000 overdraft facility made available to the Borrower by Lloyds TSB Bank plc (now known as Lloyds Bank plc) and which is documented by the Overdraft Letter;

“Overdraft Letter” means the overdraft facility letter between Lloyds TSB Bank plc (now known as Lloyds Bank plc) and the Borrower dated 25 November 2011, as amended, supplemented or extended from time to time, which documents the terms and conditions of a £2,000,000 overdraft facility made available to the Borrower;

“Own FAL” means, in relation to the Account Party, such part of its Funds at Lloyd’s as is provided by the Borrower or by the Account Party or any other member of the Group by way of cash and/or investments and/or covenant and charge or otherwise as permitted by Lloyd’s from time, to time excluding the Reinsurance FAL;

“Parent” means The Hanover Insurance Group, Inc. a Delaware corporation;

“Parent Guarantee” means the guarantee agreement dated on or about the date of this agreement, between the Parent, the Facility Agent and the Security Agent;

“Party” means a party to this agreement;

“Permitted Encumbrance” means:

13

“Permitted Financial Indebtedness” means Financial Indebtedness:

14

“PRA” means the Prudential Regulation Authority in the United Kingdom and any regulatory body which succeeds to one or more of the functions and/or duties performed by it as at the date of this agreement;

“Proportion” means, in relation to a Lender:

“Qualifying Lender” has the meaning given to it in clause 13 (Tax Gross-Up and Indemnities);

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, the first day of that period;

15

“Realistic Disaster Scenario” means any realistic disaster scenario presented in a business plan prepared in relation to a Managed Syndicate under paragraph 35 of the Underwriting Byelaw (No. 2 of 2003) which shows the potential impact upon a Managed Syndicate of a catastrophic event, which for the avoidance of doubt, shall not be taken to include any Extreme Stress Scenario which may be requested to be covered by Lloyd’s from time to time;

“Receiver” means a receiver or receiver and manager, or administrative receiver, administrator or trustee (as the context requires) or other similar officer of the whole or any part of the Charged Property;

“Reference Banks” means the principal London office of Lloyds Bank plc and ING Bank N.V., London Branch or such other banks as may be appointed by the Facility Agent in consultation with the Borrower;

“Reference Bank Rate” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request by the Reference Banks, in relation to LIBOR:

“Reference Bank Quotation” means any quotation supplied to the Facility Agent by a Reference Bank;

“Reinsurance FAL” means any letter or letters of credit to be provided to Lloyd’s on behalf of the Borrower and/or the Account Party and which are supported by a reinsurance contract;

“Related Fund” in relation to a fund (the “First Fund” ), means a fund which is managed or advised by the same investment manager or adviser as the First Fund or, if it is managed by a different investment manager or adviser, a fund whose investment manager or adviser is an Affiliate of the investment manager or adviser of the First Fund;

“Relevant Interbank Market” means the London interbank market;

“Repeating Representations” means each of the representations set out in clauses 22.1 (Status) to 22.6 (Legality, Validity and Enforceability) (inclusive), clauses 22.10 (No Filing or Stamp Taxes) to 22.13 (Financial Statements) (inclusive), clauses 22.15 (No Proceedings Pending or Threatened) to 22.18 (Shares) (inclusive), clause 22.21 (No Breach of Borrowing Restrictions) and clause 22.22 (Sanctions);

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian;

“Resignation Letter” means a letter substantially in the form set out in schedule 9 (Form of Resignation Letter);

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Authority;

16

“Screen Rate” means, in relation to LIBOR, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR1 or LIBOR2 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or, on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower and the Lenders;

“SDN List” means the Specially Designated Nationals List maintained by OFAC, or any similar list maintained by any Authority;

“Secured Obligations” means all present and future obligations at any time due, owing or incurred by any Group Obligor to any Secured Party under the Guaranteed Documents, both actual and contingent and whether incurred solely or jointly and as principal or surety or in any other capacity;

“Secured Party” means the Security Agent, any Receiver or Delegate, or any other Guaranteed Finance Party;

“Security” means the security granted under or pursuant to the Security Documents;

“Security Documents” means the Charge Over Account together with any other document entered into by any Obligor or any other member of the Group, in form and substance acceptable to the Security Agent, creating or expressed to create any Encumbrance over all or any part of its assets in respect of the obligations of any of the Group Obligors under any of the Guaranteed Documents;

“Specified Account” means the Sterling interest-bearing account in the name of the Borrower held with the Security Agent, at the Security Agent’s branch at 39 Threadneedle Street, London EC2R 8AU, with account number 01193214, sort code 30-00-09 and designated LTSB plc re Chaucer Holdings plc Sterl;

“Specified Time” means a day or time determined in accordance with schedule 13 (Timetables);

“Standard & Poor’s” means Standard and Poor’s Rating Service and any successor to the rating agency business of Standard & Poor’s Rating Services;

“Sterling” and “£” means the lawful currency of the United Kingdom;

“Subordinated Funds at Lloyd’s ” has the meaning given to it in clause 4.1 (Ranking of Funds at Lloyd’s);

“Subsidiary” means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006;

“Substitution Letter” a letter dated on or about the date of this agreement from Lloyd’s to the Borrower in the form agreed between the Facility Agent and the Borrower relating to the substitution of a Letter of Credit for the letter of credit issued under the Existing Facility;

“Syndicate” means a group of Members or a single Corporate Member underwriting insurance business at Lloyd’s through the agency of a managing agent to which a particular syndicate number is assigned by the Council of Lloyd’s;

17

“Syndicate Allocated Capacity” means, in relation to any Syndicate, a reference to the aggregate of the Member’s Syndicate Premium Limits of all the Members for the time being that Syndicate;

“Syndicate Arrangement” means any arrangement (whether pursuant to guarantees, letters of credit or otherwise) entered into by a managing agent at Lloyd’s on behalf of the Account Party, together with the other Members of a Syndicate with respect to financing or reinsurance for the purposes of or in connection with the underwriting business carried on by all such Members of that Syndicate;

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same);

“Term” means, save as otherwise provided in this agreement:

“Third Party Syndicate” means a syndicate at Lloyd’s:

and which, in each case, is not a Managed Syndicate;

“Third Party Syndicate Managing Agent” means:

“Total Commitments” means, at any time, the aggregate of the Lenders’ Commitments, being £170,000,000 at the Effective Date;

“Transfer Certificate” means a certificate substantially in the form set out in schedule 6 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrower;

“Transfer Date” means, in relation to an assignment or a transfer, the later of:

“Uncollateralised Outstandings” means the Outstandings in respect of which the Borrower has not provided funds by way of Cash Collateral to the Security Agent;

“Uncovered Deficit” means the aggregate of any Open Year Solvency Deficiency of the Account Party in relation to which funds at Lloyd’s have not been provided by the date upon which Lloyd’s has requested such funds at Lloyd’s be provided;

18

“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents;

“US Dollars” and “$” means the lawful currency of the United States;

“US GAAP” means generally accepted accounting principles in the United States, including IFRS;

“Utilisation” means a utilisation of the Facility;

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Letter of Credit is to be issued (or, as applicable, amended);

“Utilisation Request” means a notice substantially in the form set out in schedule 3 (Requests);

“VAT” means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature;

“Voluntary Collateralisation Date” means, in any year, any of 1 January, 31 March, 30 June and 30 September or, if such date is not a Business Day, the next Business Day; and

“Voting Shares” means, with respect to any Person (as defined in the Hanover Credit Agreement) at any time, Equity Interests entitling the holder thereof to vote generally in an election of directors or other individuals performing similar functions.

19

Subject to the terms of this agreement, the Lenders make available to the Borrower a Sterling letter of credit facility in an aggregate principal amount equal to the Total Commitments.

20

and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

The Facility is made available to the Borrower for the purpose of providing one or more Letters of Credit to be used as Funds at Lloyd’s to support and stand security for the general business at Lloyd’s of the Account Party for the 2015, 2016 and 2017 years of account and each prior open year of account and, accordingly, the Borrower and the Account Party will each apply all amounts raised under this agreement towards the satisfaction of that purpose.

No Finance Party is bound to monitor or verify the application of any amount raised pursuant to this agreement.

21

It is acknowledged by the Parties that, subject to the duties of Lloyd’s as trustee of all Funds at Lloyd’s and to any conditions and requirements prescribed under the Membership Byelaw (No. 5 of 2005) which are for the time being applicable, the Facility will provide Funds at Lloyd’s for the Account Party for the 2015, 2016 and 2017 years of account and each prior open year of account which, to the extent that it is able to procure the same upon and subject to the terms of this agreement, shall rank senior to all Funds at Lloyd’s of the Account Party constituted from time to time by Own FAL, Reinsurance FAL and Other FAL (together the “Subordinated Funds at Lloyd’s” ).

The Borrower shall use all reasonable endeavours to ensure that the Subordinated Funds at Lloyd’s of the Account Party are applied or otherwise utilised to the fullest extent possible before any payment is requested under a Letter of Credit.

The Borrower may only deliver a Utilisation Request if the Facility Agent has received all of the documents and other evidence listed in part 1 of schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent. The Facility Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

Subject to clause 5.1 (Initial Conditions Precedent), the Lenders will only be obliged to comply with clause 6.4 (Each Lender’s Participation in Letters of Credit) if, on the date of the Utilisation Request and on the proposed Utilisation Date:

The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request no later than five Business Days before the proposed Utilisation Date (or such shorter period as the Facility Agent may agree).

Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

22

If, notwithstanding the provisions of clause 4.2 (Application of Funds at Lloyd’s), any sum is paid under a Letter of Credit (an “Applied Letter of Credit” ) which is greater than any sum which would have been paid had Subordinated Funds at Lloyd’s been applied prior to the Funds at Lloyd’s provided pursuant to this Facility in accordance with clause 4.2 (Application of Funds at Lloyd’s) (the difference between the sum paid under the Applied Letter of Credit and the sum which should have been paid being the “Overpayment” ), the Borrower shall, to any extent necessary to facilitate the indemnification of the Lenders under clause 10.1 (Borrower’s Indemnity to the Lenders), use all reasonable endeavours to procure the release by Lloyd’s of the Subordinated Funds at Lloyd’s and, upon the Lenders being indemnified in full thereunder (but subject to the Lenders receiving confirmation in writing from the Borrower that no Default is continuing):

23

The Facility Agent is authorised to arrange for the issue or amendment of any Letter of Credit pursuant to clause 6.2 (Completion of a Utilisation Request) or clause 6.5 (Applied Letters of Credit) by:

24

The Finance Parties agree that each Letter of Credit will continue in effect until such time as a notice is given in accordance with the terms of clause 8.2 (Notice of Termination) and that accordingly such Letter of Credit will expire on the later of the date specified in the notice and:

and upon such expiry, the maximum actual and contingent liabilities of the Finance Parties thereunder are reduced to zero).

25

Not less than one Business Day before the first day of a Letter of Credit, the Facility Agent shall notify each Lender of:

of that Letter of Credit allocated to that Lender pursuant to this agreement.

If a demand is made under a Letter of Credit, the Facility Agent shall promptly make demand upon the Borrower in accordance with this agreement and notify the Lenders.

The Borrower shall irrevocably and unconditionally as a primary obligation indemnify each Finance Party, within 3 Business Days of a written demand by the Facility Agent, against:

The obligations of the Borrower under this clause 10 will not be affected by any act, omission, matter or thing which, but for this clause, would reduce, release or prejudice any of its obligations under this clause including (without limitation and whether or not known to it or any other person):

26

Any settlement or discharge between the Borrower and the Facility Agent or any Lender shall be conditional upon no security or payment to the Facility Agent or any Lender by the Borrower, or any other person on behalf of the Borrower, being avoided or reduced by virtue of any laws relating to bankruptcy, insolvency, liquidation or similar laws of general application and, if any such security or payment is so avoided or reduced, the Facility Agent shall be entitled to recover the value or amount of such security or payment from the Borrower subsequently as if such settlement or discharge had not occurred.

27

If:

then:

If, by 30 November 2017, the Lenders and the Borrower have not:

28

the Borrower shall procure that, no later than the date falling three Business Days after 31 December 2017, the aggregate liability of the Lenders under each Letter of Credit is reduced to zero or otherwise secured by providing Cash Collateral, in an amount equal to the aggregate Outstandings.

If:

the Borrower may, whilst such circumstance giving rise to the requirement or indemnification continues or (as the context requires) whilst the relevant Lender is a Defaulting Lender, give the Facility Agent at least five Business Days’ notice (which notice shall be irrevocable) of its intention to procure that the liabilities of that Lender under each Letter of Credit are reduced to zero and/or provide Cash Collateral in an amount equal to such Lender’s Proportion of each Letters of Credit.

Upon receipt by the Facility Agent of such notice, the Commitment of the relevant Lender shall immediately be reduced to zero and, on the last day of each Term which ends after the Borrower has given any such notice (or, if earlier, the date specified by the Borrower in that notice) the Borrower shall procure either that that Lender’s Proportion of each Letter of Credit be reduced to zero (by reduction of the amount of that Letter of Credit in an amount equal to that Lender’s Proportion) or that it is otherwise secured by providing Cash Collateral to the Facility Agent in an amount equal to that Lender’s Outstandings.

A Lender whose total aggregate liabilities under each Letter of Credit have been reduced to zero or Cash Collateralised pursuant to clause 11.4 (Notice of Removal of a Lender) or have been Cash Collateralised pursuant to clause 11.2 (Voluntary Cash Collateralisation of Letters of Credit) shall not be obliged to participate in any Letter of Credit issued on or after the date upon which the Facility Agent receives the Borrower’s notice of its intention to procure the repayment of or provide Cash Collateral in respect of such Lender’s share of the Outstandings, and such Lender’s Available Commitment shall be reduced to zero.

The Available Facility may be cancelled, and the liabilities of each Lender under any Letter of Credit may be reduced to zero, only at the times and in the manner expressly provided for herein.

For the purposes of this clause 11 and all other purposes of this agreement, each Lender’s liability under any Letter of Credit shall be deemed to be reduced to zero upon the determination by Lloyd’s (or other trustee for the time being) of the trusts created by the Corporate Member’s Deed in respect of that Letter of Credit and the return to each Lender of that Letter of Credit for cancellation.

29

The Borrower shall, in respect of each Letter of Credit requested by it, pay to the Facility Agent for the account of each Lender (for distribution in proportion to each Lender’s Proportion of such Letter of Credit) a letter of credit commission in Sterling at the relevant L/C Commission Rate on the Outstandings under the relevant Letter of Credit. Such letter of credit commission shall be paid in arrears in respect of each successive period of three Months (or such shorter period as shall end on the relevant Expiry Date) which begins during the Term of the relevant Letter of Credit, the first such payment to be made on the date falling three Months after the Utilisation Date for such Letter of Credit and thereafter on the last day of each successive three Month period.

The Borrower shall pay to the Facility Agent (for the account of each Original Lender) a participation fee in the amount and at the time agreed in a Fee Letter.

The Borrower shall pay to the Facility Agent and the Security Agent an agency fee in the amount and at the times agreed in a Fee Letter.

“Protected Party” means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document;

“Qualifying Lender” means:

30

“Tax Confirmation” means a confirmation by a Lender that the person beneficially entitles to interest payable to that Lender in respect of an advance under a Finance Document is either:

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document other than a FATCA Deduction;

“Tax Payment” means either the increase in a payment made by an Obligor to a Finance Party under clause 13.2 (Tax Gross-Up) or a payment under clause 13.3 (Tax Indemnity);

“Treaty Lender” means a Lender which:

“Treaty State” means a jurisdiction having a double taxation agreement (a “Treaty” ) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest; and

31

“UK Non-Bank Lender” means where a Lender becomes a Party after the date on which this agreement is entered into, a Lender which gives a Tax Confirmation in the Assignment Agreement or Transfer Certificate which it executes on becoming a Party.

32

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

33

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

Each Lender which becomes a Party to this agreement after the date of this agreement shall indicate, in the Transfer Certificate, Assignment Agreement or Accession Letter which it executes on becoming a Party, and for the benefit of the Facility Agent and without liability to any Obligor, which of the following categories it falls in:

If a New Lender fails to indicate its status in accordance with this clause 13.5 then such New Lender shall be treated for the purposes of this agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Facility Agent which category applies (and the Facility Agent, upon receipt of such notification, shall inform the Borrower). For the avoidance of doubt, a Transfer Certificate or Assignment Agreement shall not be invalidated by any failure of a Lender to comply - with this clause 13.5.

The Borrower shall pay and, within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

34

35

36

provided, however, that for purposes of this agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all regulations, rules, requests, guidelines and directives in connection therewith shall be deemed to be a change in law or regulation regardless of the date enacted, adopted or issued.

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

37

that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

The Borrower shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

The Borrower shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

38

The provisions of this clause 16 shall take effect subject to clause 17.1 (Mitigation). If, at any time, it is or becomes unlawful in any applicable jurisdiction or prohibited pursuant to any request from or requirement of any central bank or other fiscal, monetary or other authority (being a request or requirement with which banks are accustomed to comply) for a Lender to make, fund, issue, participate in or allow to remain outstanding all or part of the Letters of Credit, or to perform any of its obligations as contemplated by this agreement, or it becomes unlawful for any Affiliate of a Lender of that Lender to do so, then:

39

The Borrower shall, promptly on demand pay the Facility Agent, the Arrangers and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution, syndication and perfection of:

If (a) an Obligor or the Parent requests an amendment, waiver or consent or (b) an amendment is required pursuant to clause 33.9 (Change of Currency), the Borrower shall, within three Business Days of demand, reimburse the Facility Agent, the Security Agent and any Receiver for the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in responding to, evaluating, negotiating or complying with that request or requirement.

40

The Borrower shall, within three Business Days of demand, pay to the Arrangers and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Security or enforcing these rights.

If any sum due and payable by an Obligor under a Finance Document is not paid on its due date or if any sum due and payable by the Obligor under any judgement of any court in connection with any Finance Document is not paid on the date of such judgement, the period beginning on such due date or, as the case may be, the date of such judgement and ending on the date upon which the obligation of such Obligor to pay such sum is discharged shall be divided into successive periods, each of which (other than the first) shall start on the last day of the preceding such period and the duration of each of which shall (except as otherwise provided in this clause 19) be selected by the Facility Agent.

An Unpaid Sum shall bear interest during each Term in respect thereof at the rate per annum which is the sum from time to time of 1.0 per cent per annum above LIBOR (on the Quotation Day therefor) plus:

Any interest which has accrued under clause 19.2 (Default Interest) in respect of an Unpaid Sum shall be due and payable and shall be paid by the Obligor owing such Unpaid Sum on the last day of each Interest Period in respect thereof or on such other dates as the Facility Agent may specify by notice to such Obligor or the Parent (as the case may be).

41

If any Lender or the Facility Agent on its behalf receives or recovers all or any part of an Unpaid Sum otherwise than on the last day of a Term in respect thereof, the Borrower shall pay to the Facility Agent on demand for the account of that Lender an amount equal to the amount (if any) by which (a) the additional interest which would have been payable on the amount so received or recovered had it been received or recovered on the last day of such Term exceeds (b) the amount of interest which in the opinion of the Facility Agent would have been payable to the Facility Agent on the last day of that Term in respect of a sterling deposit equal to the amount so received or recovered placed by it with a prime bank in the Relevant Interbank Market for a period starting on the first Business Day following the date of such receipt or recovery and ending on the last day of that Term.

The Agent shall promptly notify the Borrower of each Funding Rate relating to an Unpaid Sum.

If no Screen Rate is available for LIBOR for the Interest Period of any Unpaid Sum, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Unpaid Sum.

If no Screen Rate is available for LIBOR for:

the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time for the currency of that Unpaid Sum and for a period equal in length to the Interest Period of that Unpaid Sum.

If paragraph (b) above applies but no Reference Bank Rate is available for the relevant currency or Interest Period there shall be no LIBOR for that Unpaid Sum and clause 20.4 (Costs of Funds) shall apply to that Unpaid Sum for that Interest Period.

42

If before close of business in London on the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in an Unpaid Sum exceed 35 per cent of that Unpaid Sum) that the cost to it of funding its participation in that Unpaid Sum from whatever source it may reasonably select would be in excess of LIBOR then clause 20.4 (Cost of funds) shall apply to that Unpaid Sum for the relevant Interest Period.

Each Guarantor irrevocably and unconditionally jointly and severally:

43

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Group Obligor under the Guaranteed Documents, regardless of any intermediate payment or discharge in whole or in part.

If any discharge, release or arrangement (whether in respect of the obligations of any Group Obligor or any security for those obligations or otherwise) is made by a Guaranteed Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this clause 21 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

The obligations of each Guarantor under this clause 21 will not be affected by an act, omission, matter or thing which, but for this clause, would reduce, release or prejudice any of its obligations under this clause 21 (without limitation and whether or not known to it or any Guaranteed Finance Party) including:

Without prejudice to the generality of clause 21.4 (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Guaranteed Documents and/or any facility or amount made available under any of the Guaranteed Documents for the purposes of or in connection with any of the following: acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other

44

indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

Each Guarantor waives any right it may have of first requiring any Guaranteed Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this clause 21. This waiver applies irrespective of any law or any provision of a Guaranteed Document to the contrary.

Until all amounts which may be or become payable by the Group Obligors under or in connection with the Guaranteed Documents have been irrevocably paid in full, each Guaranteed Finance Party (or any trustee or agent on its behalf) may:

Until all amounts which may be or become payable by the Group Obligors under or in connection with the Guaranteed Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Guaranteed Documents or by reason of any amount being payable, or liability arising under this clause 21:

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Guaranteed Finance Parties by the

45

Group Obligors under or in connection with the Guaranteed Documents to be repaid in full on trust for the Guaranteed Finance Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with clause 33 (Payment Mechanics).

If any Guarantor (a “Retiring Guarantor” ) ceases to be a Guarantor in accordance with the terms of the Guaranteed Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Guaranteed Finance Party.

Each Obligor makes the representations and warranties set out in this clause 22 to each Finance Party on the date of this agreement.

Subject to the Legal Reservations, the obligations expressed to be assumed by it in each Finance Document are legal, valid, binding and enforceable obligations.

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not conflict with:

46

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.

All Authorisations required:

have been obtained or effected and are in full force and effect.

All acts, conditions and things required to be done, fulfilled and performed (other than compliance with section 860 of the Companies Act 2006) in order (a) to enable it lawfully to enter into, exercise its rights under and perform and comply with the obligations expressed to be assumed by it in the Finance Documents and (b) to ensure that (subject to the Legal Reservations) the obligations expressed to be assumed by it in the Finance Documents are legal, valid, binding and enforceable have been done, fulfilled and performed.

Since the date as at which the most recent financial statements of the Borrower Group were stated to be prepared and save as disclosed in writing to the Facility Agent on or prior to the Effective Date, there has been no material adverse change in its business or financial condition or, as the case may be, that of the Borrower Group as a whole.

No:

has been taken or, to the knowledge of the Borrower, threatened in relation to a member of the Borrower Group and none of the circumstances described in clause 26.8 (Insolvency) applies to a member of the Borrower Group.

It is not required under the law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document.

Under the law of its jurisdiction of incorporation, it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents, save for the registration of any registrable charges created under the Security Documents and the payment of a fee in connection therewith.

47

All written information provided to a Finance Party by any member of the Borrower Group was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any material respect. No information has been given or withheld that results in the information supplied to the Finance Parties by any member of the Borrower Group being untrue or misleading in any material respect.

Its Original Financial Statements (in each case consolidated, if appropriate):

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a material adverse effect on its business or financial condition have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries or involves a Managed Syndicate in the ordinary course of its insurance business.

The Security has or (when duly registered) will have first ranking priority and is not subject to any prior ranking or pari passu ranking Encumbrances other than any Permitted Encumbrances which have prior ranking or pari passu ranking.

48

Subject to the Legal Reservations, each Security Document to which it is a party validly creates each of the Encumbrances which is expressed by that Security Document and evidences each of the Encumbrances it is expressed to evidence.

Save for Permitted Encumbrances, no Encumbrance exists over all or any of the present or future revenues or assets of any member of the Borrower Group.

The Account Party is a wholly-owned Subsidiary of the Borrower and is duly authorised to underwrite business at Lloyd’s.

The utilisation of the Facility in full by the Borrower will not result in or cause a breach of any borrowing restriction which applies to any Obligor.

No Obligor, nor any of its Subsidiaries or directors, is either:

The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on:

49

The undertakings in this clause 23 remain in force from the date of this agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

The Borrower shall supply to the Facility Agent in sufficient copies for all the Lenders:

and has been approved by the board of directors of the Borrower.

The Borrower shall, as soon as the same become available, but in any event within 90 days after the end of each year of account of each Managed Syndicate, deliver to the

50

Facility Agent in sufficient copies for all the Lenders, the annual report for that Managed Syndicate, audited by an internationally recognised firm of auditors licensed to practice in the jurisdiction of incorporation of the Managing Agent and on the list of auditors approved by the Council of Lloyd’s from time to time.

The Borrower shall, as soon as the same become available, but in any event within 60 days after the end of each quarter of each year of account of each Managed Syndicate, deliver to the Facility Agent an information pack which will include (but is not limited to) a profit and loss statement, balance sheet, cashflow statement, quarterly returns or its equivalent, settlement statistics, a statement of current forecast underwriting results and a statement on the solvency deficit position (including calculations in reasonable detail) for each Managed Syndicate.

The Borrower shall, as soon as the same becomes available, but in any event within 30 days of the date prescribed by the Council of Lloyd’s with respect to the preparation and despatch thereof, deliver to the Facility Agent the annual business plan then prepared in respect of a Managed Syndicate (including details of the capital stack and reinsurance layers) and (if separate) the Realistic Disaster Scenario relating thereto.

The Borrower shall, as soon as the same becomes available but in any event within 90 days of 1 January each year, deliver to the Facility Agent a copy of the reinsurance resume of each Managed Syndicate as delivered by the Borrower to Lloyd’s from time to time in accordance with the Lloyd’s Syndicate Accounting Rules.

The Borrower shall, as soon as the same become available but in any event within 90 days after the end of each year of account of each Third Party Syndicate, deliver to the Facility Agent the annual report of that Third Party Syndicate audited by an internationally recognised firm of auditors licensed to practise in the jurisdiction of incorporation of the Managing Agent and on the list of auditors approved by the Council of Lloyd’s from time to time.

51

The Borrower shall ensure that each annual report in respect of each Managed Syndicate delivered pursuant to clause 23.3 (Annual Report for each Managed Syndicate) is prepared in accordance with Lloyd’s Syndicate Accounting Rules under accounting policies consistently applied.

The Borrower shall notify the Facility Agent of any actual or (upon it becoming aware of the same) any threatened litigation or arbitration (whether as plaintiff or defendant and whether civil, criminal or administrative) and/or any actual or threatened regulatory intervention by Lloyd’s and/or the FCA and/or the PRA in respect of the Borrower Group and/or a Managed Syndicate which are likely to be adversely determined and/or made and which, if adversely determined and/or made, would have a material adverse effect on the business or financial condition of the Borrower Group and/or a Managed Syndicate (but excluding any litigation or arbitration involving a Managed Syndicate in the ordinary course of its insurance business).

If there are reasonable grounds to believe that an Event of Default has occurred and is continuing, each Obligor shall, on request of the Facility Agent and upon reasonable notice, provide the Facility Agent and/or its advisers with access, during the normal business hours to and permit inspection of its books and records.

The Borrower shall provide the Facility Agent with a description and valuation of its FAL in the Compliance Certificate to be accompanied with the quarterly financial statements delivered in accordance with clause 23.1 (Financial Statements of the Borrower Group).

The Borrower shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):

52

obliges the Facility Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Facility Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

53

The Borrower shall ensure that its financial condition is such that:

The financial covenants set out in clause 24.1 (Financial Condition) shall be complied with at all times but compliance with such financial covenants shall be verified by reference to each of the relevant financial statements and each relevant Compliance Certificate delivered pursuant to clause 23.2 (Compliance Certificates).

All accounting expressions which are not otherwise defined in this agreement shall be construed in accordance with GAAP.

The undertakings in this clause 25 remain in force from the date of this agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

Each Obligor shall promptly:

any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.

54

Each Obligor shall comply in all respects with all laws, by-laws and regulations (including, without limitation, under the Financial Services and Markets Act 2000 (and related subordinate legislation), the Lloyd’s Acts 1871 to 1982 and the Lloyd’s Sourcebook Instrument 2001 (as amended from time to time) and any conditions or requirements prescribed thereunder) to which it may be subject, if failure so to comply would reasonably be expected to have a Material Adverse Effect.

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset, other than a Permitted Encumbrance.

55

No Obligor shall (and the Borrower shall ensure that no other member of the Borrower Group will) enter into any amalgamation, demerger, merger or corporate reconstruction without the prior consent of the Majority Lenders (which consent, in the case of a merger or amalgamation between two members of the Group which are not Obligors, shall not be unreasonably withheld or delayed).

The Borrower shall procure that no substantial change is made to the general nature of the business of the Borrower, any member of the Borrower Group or any other Obligor from that carried on at the date of this agreement.

No Obligor shall (and the Borrower shall ensure that no other member of the Borrower Group will) incur or allow to remain outstanding any Financial Indebtedness, other than Permitted Financial Indebtedness.

Each Obligor shall ensure that at all times the claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

Each Obligor shall (and the Borrower shall ensure that each other member of the Borrower Group will) maintain insurance (other than and in addition to any reinsurance in respect of such members’ underwriting business) on and in relation to its business and assets against those risks and to such extent as is usual for companies carrying on the same or substantially similar business with any reputable underwriters or reputable insurance company.

Each Obligor shall take all steps reasonably requested by the Facility Agent to ensure the creation, perfection and maintenance at all times of the Security intended to be constituted by the Security Documents.

The Borrower shall ensure that the Account Party remains its wholly-owned Subsidiary.

56

The Borrower shall upon service on the Account Party by Lloyd’s (or the trustee for the time being of such Funds at Lloyd’s) of a written demand for the payment of a sum on account of its Funds at Lloyd’s immediately inform the Facility Agent of such demand.

The Borrower shall ensure that there is no material change to the investment strategy pursued by the Borrower Group as at the date of this agreement without the prior written consent of the Majority Lenders.

The Borrower shall ensure that there is no material change to the business plan submitted in accordance with clause 23.6 (Business Plan and Realistic Disaster Scenario for each Managed Syndicate) without the prior written consent of the Majority Lenders.

The Borrower shall procure that the only member of the Borrower Group to underwrite business at Lloyd’s will be the Account Party.

The Borrower shall ensure that each other Obligor (other than the Original Guarantor) is and remains a direct or indirect Subsidiary of the Borrower.

No Obligor shall, and each Obligor will procure that none of its Subsidiaries will, do anything to change the location of its centre of main interests, for the purposes of Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings, where that change would be reasonably likely to be materially adverse to the interests of the Finance Parties.

57

Each of the events or circumstances set out in clause 26 is an Event of Default (save for clause 26.25 (Acceleration and Cancellation)).

Any Group Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

Any representation or statement made or deemed to be made by any Group Obligor in the Finance Documents or any notice or other document, certificate or statement delivered by or on behalf of any Group Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

58

The occurrence of a Change in Control.

Any member of the Group fails to comply with or pay any sum due from it in excess of $50,000,000 (to the extent not covered by an insurer having a minimum A.M. Best financial strength rating of A- that has not denied coverage) under any final judgement or any final order made or given by any court of competent jurisdiction within 45 days of any such judgement or order being made or given.

59

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of any Group Obligor or a Material Subsidiary and is not discharged within 15 Business Days.

There occurs in relation to any Group Obligor or any Material Subsidiary or any of its assets in any country or territory in which it is incorporated or carries on business or to the jurisdiction of whose courts it or any of its assets is subject any event which appears to the Facility Agent to correspond in that country or territory with any of those mentioned in clauses 26.8 (Insolvency) to 26.10 (Creditors’ Process) (inclusive).

Any Group Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document.

Any member of the Borrower Group or the Parent suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of the business which it carries on at the date of this agreement or enters into any unrelated business.

Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced against any member of the Group or its assets which, in the opinion of the Majority Lenders (acting reasonably), has, or is reasonably likely to have, a Material Adverse Effect.

The Account Party fails as a Member to maintain the members’ capital resources requirement calculated by Lloyd’s and notified to it in accordance with the General Prudential Sourcebook and INSPRU.

60

The Account Party ceases to be a wholly-owned Subsidiary of the Borrower.

which, in either such case, in the reasonable opinion of the Majority Lenders, is reasonably likely materially and adversely to affect the ability of the Borrower to perform or comply with its material obligations under the Finance Documents.

Any modification, repeal, amendment, replacement or revocation of Lloyd’s Acts 1871 to 1982, any byelaw or any deed or agreement required by Lloyd’s to be executed or entered into by any person in connection with insurance business at Lloyd’s (whether carried on by such person or otherwise) or any trust created thereby is made or proposed which, in the reasonable opinion of the Majority Lenders, is reasonably likely materially and adversely to affect the ability of the Borrower to perform or comply with its material obligations under the Finance Documents.

The making of a Lloyd’s Market Reorganisation Order provided that:

The Borrower fails duly to perform or comply with its obligations to pay Cash Collateral into the Specified Account in the amounts and at the times required under clause 11.3 (Mandatory Cash Collateralisation of Letters of Credit).

Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.

61

An ERISA Event shall have occurred that, in the opinion of the Majority Lenders, when taken together with all other ERISA Events that have occurred, would reasonably be expected to have a Material Adverse Effect.

Without limiting any of the other clauses of this clause 26:

62

in form and substance reasonably satisfactory to the Facility Agent;

Subject to this clause 27, a Lender (the “Existing Lender” ) may:

to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “ New Lender ”) provided that such bank, financial institution, trust, fund or other entity is an Approved Credit Institution.

63

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.

The New Lender shall, on the date upon which an assignment, transfer or accession takes effect, pay to the Facility Agent (for its own account) a fee of £3,000.

and any representations or warranties implied by law are excluded.

64

65

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

In addition to the other rights provided to Lenders under this clause 27, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

66

except that no such charge, assignment or Security shall:

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.

67

68

The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.

Except as specifically provided in the Finance Documents, the Arrangers has no obligations of any kind to any other Party under or in connection with any Finance Document.

69

The Facility Agent and the Arrangers may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

70

Neither the Facility Agent nor the Arrangers is responsible or liable for:

The Facility Agent shall not be bound to enquire:

71

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

on behalf of any Lender and each Lender confirms to the Facility Agent and the Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Arrangers.

72

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to clause 33.10 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).

73