Exhibit 10.1

 

 

 

Published CUSIP Number: G0700VAE74

G0700VAF4

$250,000,000

CREDIT AGREEMENT

Dated as of March 26, 2013

among

AXIS CAPITAL HOLDINGS LIMITED,

and

CERTAIN SUBSIDIARIES,

as the Borrowers,

BANK OF MONTREAL, CHICAGO BRANCH,

CITIBANK, N.A.,

HSBC BANK USA, NATIONAL ASSOCIATION,

LLOYDS SECURITIES, INC.

and

THE BANK OF NEW YORK MELLON,

as Co-Documentation Agents,

the Other Lenders Party Hereto,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

Fronting Bank and L/C Administrator

WELLS FARGO SECURITIES, LLC,

as Sole Lead Arranger and Sole Book Manager

 

 

 

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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

     1   

1.01   Defined Terms

     1   

1.02   Other Interpretive Provisions

     30   

1.03   Accounting Terms

     31   

1.04   Rounding

     31   

1.05   Exchange Rates; Currency Equivalents

     32   

1.06   Additional Alternative Currencies

     32   

1.07   Change of Currency

     33   

1.08   Times of Day

     34   

1.09   Letter of Credit Amounts

     34   

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

     34   

2.01   Loans

     34   

2.02   Borrowings, Conversions and Continuations of Loans

     34   

2.03   Letters of Credit

     37   

2.04   Prepayments

     49   

2.05   Termination or Reduction of Commitments

     50   

2.06   Repayment of Loans

     51   

2.07   Interest

     51   

2.08   Fees

     52   

2.09   Computation of Interest and Fees

     52   

2.10   Evidence of Debt

     52   

2.11   Payments Generally; Administrative Agent’s Clawback

     53   

2.12   Sharing of Payments by Lenders

     55   

2.13   Designated Borrowers

     56   

2.14   Increase in Commitments

     57   

2.15   Cash Collateral

     59   

2.16   Defaulting Lenders

     60   

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

     62   

3.01   Taxes

     62   

3.02   Illegality

     66   

3.03   Inability to Determine Rates

     67   

3.04   Increased Costs; Reserves on Eurocurrency Rate Loans

     67   

3.05   Compensation for Losses

     69   

3.06   Mitigation Obligations; Replacement of Lenders

     70   

3.07   Survival

     70   

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     70   

4.01   Conditions of Initial Credit Extension

     70   

4.02   Conditions to all Credit Extensions

     73   

ARTICLE V. REPRESENTATIONS AND WARRANTIES

     74   

5.01   Organization; Powers

     74   

5.02   Authorization; Enforceability

     75   

5.03   Governmental Approvals; No Conflicts

     75   

 

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5.04   Financial Condition; No Material Adverse Change

     75   

5.05   Litigation

     76   

5.06   Compliance with Laws and Agreements

     76   

5.07   Investment Company Status

     76   

5.08   Taxes

     76   

5.09   Pension-Related Matters

     76   

5.10   Disclosure

     77   

5.11   Use of Credit

     77   

5.12   Subsidiaries

     77   

5.13   Stamp Taxes

     77   

5.14   Taxpayer Identification Number

     78   

5.15   Representations as to Foreign Jurisdiction Matters

     78   

5.16   First Priority Interest

     78   

5.17   OFAC

     79   

ARTICLE VI. AFFIRMATIVE COVENANTS

     79   

6.01   Financial Statements and Other Information

     79   

6.02   Notices of Material Events

     82   

6.03   Existence; Conduct of Business

     82   

6.04   Insurance

     82   

6.05   Maintenance of Properties

     82   

6.06   Payment of Obligations

     83   

6.07   Financial Accounting Practices

     83   

6.08   Compliance with Applicable Laws

     83   

6.09   Use of Letters of Credit and Proceeds of Loans

     83   

6.10   Inspection Rights

     84   

6.11   Financial Strength Rating

     84   

6.12   Further Assurances

     84   

6.13   Collateral Requirements

     84   

6.14   OFAC; PATRIOT Act Compliance

     85   

ARTICLE VII. NEGATIVE COVENANTS

     85   

7.01   Fundamental Changes

     85   

7.02   Liens

     87   

7.03   Transactions with Affiliates

     88   

7.04   Financial Covenants

     88   

7.05   Indebtedness

     89   

7.06   Investments

     90   

7.07   Restricted Payments

     90   

7.08   Continuation of and Change in Businesses

     91   

7.09   Private Act

     91   

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

     91   

8.01   Events of Default

     91   

8.02   Remedies Upon Event of Default

     93   

8.03   Application of Funds

     94   

 

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ARTICLE IX. ADMINISTRATIVE AGENT

     95   

9.01     Appointment and Authority

     95   

9.02     Rights as a Lender

     96   

9.03     Exculpatory Provisions

     96   

9.04     Reliance by Administrative Agent

     97   

9.05     Delegation of Duties

     97   

9.06     Resignation of Administrative Agent

     97   

9.07     Non-Reliance on Administrative Agent and Other Lenders

     99   

9.08     No Other Duties, Etc

     99   

9.09     Administrative Agent May File Proofs of Claim

     99   

9.10     Collateral and Guaranty Matters

     100   

ARTICLE X. MISCELLANEOUS

     101   

10.01   Amendments, Etc

     101   

10.02   Notices; Effectiveness; Electronic Communication

     102   

10.03   No Waiver; Cumulative Remedies; Enforcement

     105   

10.04   Expenses; Indemnity; Damage Waiver

     106   

10.05   Payments Set Aside

     108   

10.06   Successors and Assigns

     108   

10.07   Treatment of Certain Information; Confidentiality

     113   

10.08   Right of Setoff

     114   

10.09   Interest Rate Limitation

     115   

10.10   Counterparts; Integration; Effectiveness

     115   

10.11   Survival of Representations and Warranties

     115   

10.12   Severability

     115   

10.13   Replacement of Lenders

     116   

10.14   Governing Law; Jurisdiction; Etc

     116   

10.15   Waiver of Jury Trial

     118   

10.16   No Advisory or Fiduciary Responsibility

     118   

10.17   Electronic Execution of Assignments and Certain Other Documents

     118   

10.18   USA PATRIOT Act

     119   

10.19   Time of the Essence

     119   

10.20   Judgment Currency

     119   

10.21   Injunctive Relief

     119   

10.22   Performance of Duties

     120   

10.23   All Powers Coupled with Interest

     120   

10.24   Survival

     120   

10.25   ENTIRE AGREEMENT

     120   

 

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SCHEDULES

 

1.01

  Borrowing Base Calculation; Concentration Limits

1.03

  Mandatory Costs

2.01

  Commitments and Applicable Percentages

5.05

  Litigation

5.12

  Subsidiaries

7.02

  Existing Liens

7.05

  Existing Indebtedness

10.02

  Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

 

  Form of

A

  Loan Notice

B

  Note

C

  Compliance Certificate

D

  Assignment and Assumption

E

  Several Letter of Credit

F

  Designated Borrower Request and Assumption Agreement

G

  Designated Borrower Notice

H

  Guaranty

I

  Borrowing Base Certificate

J

  Security Agreement

K

  U.S. Tax Compliance Certificates

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of March 26, 2013 among
AXIS CAPITAL HOLDINGS LIMITED, a Bermuda company (“AXIS Capital”), and certain
Subsidiaries of AXIS Capital party hereto pursuant to Section 2.13 (each a
“Designated Borrower” and, together with AXIS Capital, the “Borrowers” and, each
a “Borrower”), each lender from time to time party hereto (collectively, the
“Lenders” and individually, a “Lender”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent, L/C Administrator and Fronting Bank.

AXIS Capital has requested that the Lenders provide a revolving credit facility,
and the Lenders are willing to do so on the terms and conditions set forth
herein.

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

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

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

“Account Bank” means any “bank” within the meaning of Section 9-102(a)(8) of the
UCC at which any deposit account constituting a Collateral Account is held,
which shall be (a) located in the United States and (b) reasonably acceptable to
the Administrative Agent.

“Acquisition” means, as to any Person, any transaction or series of related
transactions pursuant to which such Person acquires (i) a majority of the voting
shares of another Person, (ii) all or any substantial part of the assets or
business of another Person, or (iii) any assets that constitute a division or
operating unit of another Person (whether by way of purchase of assets or stock,
including any tender for outstanding shares of stock, by merger or
consolidation, or otherwise).

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

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

“Administrative Agent’s Office” means, with respect to any currency, the
Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 10.02 with respect to such currency, or such other address or account
with respect to such currency as the Administrative Agent may from time to time
notify to AXIS Capital and the Lenders.

“Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.

 

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

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

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

“Agreement Currency” has the meaning specified in Section 10.20.

“Alternative Currency” means each of Canadian Dollars, Euro, Sterling, Yen,
Australian Dollars, New Zealand Dollars, Singapore Dollars, Swiss Francs and
each other currency (other than Dollars) that is approved in accordance with
Section 1.06.

“Alternative Currency Equivalent” means, at any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent, the L/C
Administrator or the Fronting Banks, as the case may be, at such time on the
basis of the Spot Rate (determined in respect of the most recent Revaluation
Date) for the purchase of such Alternative Currency with Dollars.

“Alternative Currency Sublimit” means an amount equal to the lesser of the
Aggregate Commitments and $150,000,000. The Alternative Currency Sublimit is
part of, and not in addition to, the Aggregate Commitments.

“Annual Statement” means, as to any Person, the annual financial statement of
such Person as required to be filed with the applicable Governmental Authority
of such Person’s domicile, together with all exhibits or schedules filed
therewith, prepared in conformity with SAP.

“Applicable Insurance Regulatory Authority” means, with respect to any Insurance
Company, the insurance department or similar administrative authority or agency
of the jurisdiction in which such Insurance Company is domiciled.

“Applicable Issuing Party” means (a) in the case of Fronted Letters of Credit,
the Fronting Bank who issued such Fronted Letter of Credit and (b) in the case
of Several Letters of Credit, the L/C Administrator.

“Applicable Law” means, with respect to any Person, all Laws applicable to such
Person.

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time, subject to adjustment as
provided in Section 2.14. If the commitment of each Lender to make Loans and
issue Several Letters of Credit and the obligation of the Fronting Banks to
issue Fronted Letters of Credit have been terminated pursuant to Section 8.02 or
if the Aggregate Commitments have expired, then the Applicable Percentage of
each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent assignments. The
initial Applicable

 

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Percentage of each Lender is set forth opposite the name of such Lender on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable. The Applicable Percentage “of” a
particular amount may also refer to the value obtained by multiplying the
Applicable Percentage times such amount.

“Applicable Rate” means, from time to time, the following percentages per annum,
based upon the Debt Rating as set forth below:

 

          Commitment
Fee     Applicable
Margin for
Eurodollar Loans     Applicable
Margin  for
Base Rate Loans     Letter of  Credit
Fee  

Pricing

Level

   AXIS
Capital Debt
Rating                      Secured
Letters of
Credit     Unsecured
Letters of
Credit  

1

   ³ A/A2      0.125 %      1.125 %      0.125 %      0.450 %      1.125 % 

2

   A-/A3      0.150 %      1.250 %      0.250 %      0.450 %      1.250 % 

3

   BBB+/Baa1      0.200 %      1.500 %      0.500 %      0.450 %      1.500 % 

4

   BBB/Baa2      0.250 %      1.750 %      0.750 %      0.450 %      1.750 % 

5

   £BBB-/Baa3      0.300 %      2.000 %      1.000 %      0.450 %      2.000 % 

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of AXIS Capital’s
non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the
respective Debt Ratings issued by the foregoing rating agencies differ by one
level, then the Pricing Level for the higher of such Debt Ratings shall apply
(with the Debt Rating for Pricing Level 1 being the highest and the Debt Rating
for Pricing Level 5 being the lowest); (b) if there is a split in Debt Ratings
of more than one level, then the Pricing Level that is one level lower than the
Pricing Level of the higher Debt Rating shall apply; (c) if AXIS Capital has
only one Debt Rating, then the Pricing Level for such Debt Rating shall apply;
and (d) if AXIS Capital does not have any Debt Rating, Pricing Level 5 shall
apply.

Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(a)(viii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the date
immediately preceding the effective date of the next such change.

“Applicable Time” means, with respect to any Borrowings and payments in any
Alternative Currency, the local time in the place of settlement for such
Alternative Currency as may be determined by the Administrative Agent or the
Fronting Banks, as the case may be, to be necessary for timely settlement on the
relevant date in accordance with normal banking procedures in the place of
payment.

“Applicant Borrower” has the meaning specified in Section 2.13.

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

 

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“Arranger” means Wells Fargo Securities, LLC in its capacity as sole lead
arranger and sole book manager.

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

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.06(b)), and accepted by the Administrative Agent, in substantially
the form of Exhibit D or any other form approved by the Administrative Agent.

“Audited Financial Statements” means the audited consolidated balance sheet of
AXIS Capital and its Subsidiaries for the fiscal year ended December 31, 2012,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of AXIS Capital and its Subsidiaries,
including the notes thereto.

“Australian Dollars” means the lawful currency of the Commonwealth of Australia.

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.05, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuers to make L/C Credit Extensions pursuant to Section 8.02.

“AXIS Capital” has the meaning specified in the introductory paragraph hereto.

“AXIS Finance” means AXIS Specialty Finance LLC, a Delaware limited liability
company.

“AXIS Group Services” means AXIS Group Services, Inc., a Delaware corporation.

“AXIS Insurance” means AXIS Insurance Company, an Illinois company.

“AXIS Re” means AXIS Re SE, an Irish public limited liability company.

“AXIS Reinsurance” means AXIS Reinsurance Company, a New York corporation.

“AXIS Specialty” means AXIS Specialty Limited, a Bermuda limited liability
corporation.

“AXIS Specialty Europe” means AXIS Specialty Europe SE, an Irish public limited
liability company.

“AXIS Specialty Global” means AXIS Specialty Global Holdings Limited, an Irish
limited liability company.

“AXIS Specialty Holdings” means AXIS Specialty Holdings Bermuda Limited, a
Bermuda limited liability corporation.

 

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“AXIS Specialty Holdings Ireland” means AXIS Specialty Holdings Ireland Limited,
an Irish limited liability company.

“AXIS Specialty US” means AXIS Specialty U.S. Holdings, Inc., a Delaware
corporation.

“AXIS Surplus” means AXIS Surplus Insurance Company, an Illinois corporation.

“AXIS US Services” means AXIS Specialty U.S. Services, Inc., a Delaware
corporation.

“Base Rate” means, at any time, the highest of (a) the Prime Rate, (b) the
Federal Funds Rate plus 0.50% and (c) except during any period of time during
which a notice delivered to AXIS Capital under Section 3.02 or 3.03 shall remain
in effect, the Eurocurrency Rate for Dollars for an Interest Period of one month
plus 1.0%; each change in the Base Rate shall take effect simultaneously with
the corresponding change or changes in the Prime Rate, the Federal Funds Rate or
the Eurocurrency Rate for Dollars.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate. All
Base Rate Loans shall be denominated in Dollars.

“Benefit Plan” means (a) any Plan or (b) any plan, fund (including any
superannuation fund) or other similar program established or maintained outside
the United States by AXIS Capital or any of its Subsidiaries, with respect to
which AXIS Capital or such Subsidiary has an obligation to contribute, for the
benefit of employees of AXIS Capital or such Subsidiary, which plan, fund or
other similar program provides, or results in, the type of benefits described in
Section 3(2) of ERISA and is not subject to ERISA or the Code.

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

“Borrower L/C Collateral Account” has the meaning specified in Section 2.13(b).

“Borrower Materials” has the meaning specified in Section 6.01.

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurocurrency Rate Loans, having the same Interest Period
made by each of the Lenders pursuant to Section 2.01.

“Borrowing Base” means with respect to any Borrower on any date of
determination, an amount equal to the sum of the Adjusted Fair Market Value of
all Eligible Collateral of such Borrower.

“Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit I with such changes therein as the Administrative Agent may reasonably
request from time to time.

 

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“Business Day” means any day other than a Saturday, Sunday or legal holiday on
which banks in London, England, Charlotte, North Carolina and New York, New
York, are open for the conduct of their commercial banking business and:

(a) if such day relates to any interest rate settings as to a Eurocurrency Rate
Loan denominated in Dollars, any fundings, disbursements, settlements and
payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other
dealings in Dollars to be carried out pursuant to this Agreement in respect of
any such Eurocurrency Rate Loan, any such day that is also a day for trading by
and between banks in Dollar deposits in the London interbank market;

(b) if such day relates to any interest rate settings as to a Eurocurrency Rate
Loan denominated in Euro, any fundings, disbursements, settlements and payments
in Euro in respect of any such Eurocurrency Rate Loan or a Letter of Credit
denominated in Euros, or any other dealings in Euro to be carried out pursuant
to this Agreement in respect of any such Eurocurrency Rate Loan, a TARGET Day;
and

(c) if such day relates to any fundings, disbursements, settlements and payments
in a currency other than Dollars or Euro in respect of a Letter of Credit
denominated in a currency other than Dollars or Euro, or any other dealings in
any currency other than Dollars or Euro to be carried out pursuant to this
Agreement in respect of any such Letter of Credit (other than any interest rate
settings), any such day on which banks are open for foreign exchange business in
the principal financial center of the country of such currency.

“Canadian Dollar” and “C$” means lawful money of Canada.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash” means (a) Dollars held in a Collateral Account and (b) any overnight or
other investment money market funds of the Financial Institution (or an
Affiliate of such Financial Institution) at which a Collateral Account is held.

“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent, the Fronting
Banks and the Lenders, as collateral for L/C Obligations or obligations of the
Fronting Banks or Lenders to fund or fund participations in respect of Letters
of Credit, cash or deposit account balances or, if the Administrative Agent and
the Fronting Banks shall agree in their sole discretion, other credit support,
in each case pursuant to documentation in form and substance satisfactory to
(a) the Administrative Agent and (b) the Fronting Banks. “Cash Collateral” shall
have a meaning correlative to the foregoing and shall include the proceeds of
such cash collateral and other credit support.

 

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“Cash Equivalents” means at any time:

(a) time deposits, certificates of deposit or money market deposits, maturing
not more than two years after the date of determination, which are issued by a
financial institution which is rated at least AA- by S&P or Aa3 by Moody’s
(whether or not a Lender); and

(b) investments in money market funds that invest solely in Cash Equivalents
described in clauses (a).

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (ii) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued (even if implemented prior to the absolute date such
implementation is required by such Change in Law).

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

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

(b) a majority of the members of the board of directors or other equivalent
governing body of AXIS Capital cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the Closing Date,
(ii) whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by

 

7

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individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors); or

(c) AXIS Capital fails to own, directly or indirectly, free and clear of all
Liens, 100% of the Equity Interests of AXIS Specialty or 100% of the Equity
Interests of each Designated Borrower.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means, with respect to any Borrower, all property and assets with
respect to which a Lien is purported to be granted in favor of the
Administrative Agent pursuant to a Security Agreement executed by such Borrower.

“Collateral Account” means, with respect to any Borrower, any account at a
Financial Institution as to which such Financial Institution, such Borrower and
the Administrative Agent have entered into a Control Agreement.

“Commercial Paper” means commercial paper, maturing not more than one year from
the date of issue, which is issued by an entity (except an Affiliate of the
Borrowers) rated at least A-1 by S&P or P-1 by Moody’s or the equivalent rating
from another nationally recognized agency.

“Commitment” means, as to each Lender, its obligation to (a) make Loans to the
Borrowers pursuant to Section 2.01 and (b) to issue Several Letters of Credit
and purchase participations in L/C Obligations arising under Fronted Letters of
Credit, in an aggregate principal amount at any one time outstanding not to
exceed the Dollar amount set forth opposite such Lender’s name on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

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

“Concentration Limits” means the limitations on issuers and other investment
parameters set forth on Schedule 1.01.

“Consolidated Net Income” means, for any period, for AXIS Capital and its
Subsidiaries on a consolidated basis, the net income of AXIS Capital and its
Subsidiaries (excluding extraordinary gains and extraordinary losses) for that
period.

 

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“Consolidated Net Worth” means, at any time, the consolidated stockholders’
equity of AXIS Capital and its Subsidiaries at such time. For purposes of
determining Consolidated Net Worth, (a) Hybrid Securities shall be included,
provided that Hybrid Securities shall be valued at 100% of the outstanding
principal amount thereof and the aggregate amount included as equity shall not
exceed 15% of the sum of Total Funded Debt plus Consolidated Net Worth at the
time of determination and (b) the amount of unrealized appreciation
(depreciation) on available for sale investments shown on AXIS Capital’s
statement of changes in shareholder’s equity under the caption “Accumulated
other comprehensive income (loss)” will be excluded.

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

“Control Agreement” means, with respect to any Borrower, an agreement between
such Borrower, the applicable Financial Institution and the Administrative Agent
with respect to any deposit or securities account of such Borrower in which a
Lien is purported to be granted to the Administrative Agent pursuant to a
Security Agreement in form and substance reasonably acceptable to the
Administrative Agent.

“Convertible Securities” means Indebtedness issued by AXIS Capital, which can be
paid in cash or by the issuance of Equity Interests of AXIS Capital or any
combination thereof. Convertible Securities shall not include mandatory
convertible securities.

“Convertible Securities Transactions” means the issuance of Convertible
Securities by AXIS Capital and any call options entered into or warrants issued
in connection with such Convertible Securities.

“Corporate/Municipal Securities” means publicly traded debt securities (other
than preferred stock or debt securities constituting Margin Stock) issued by a
corporation organized in the United States or by any state or municipality
located in the United States.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Credit Parties” means, collectively, the Borrowers (including any Designated
Borrower) and any Guarantor which is not a Borrower.

“Debt Rating” has the meaning specified in the definition of “Applicable Rate.”

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

 

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

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurocurrency Rate Loan, the Default
Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate and any Mandatory Cost) otherwise applicable to such Loan plus
2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate
equal to the Applicable Rate plus 2% per annum.

“Defaulting Lender” means, subject to Section 2.16 (b), any Lender that, (a) has
failed to perform any of its funding obligations hereunder, including in respect
of its Loans or participations in respect of Letters of Credit, within two
Business Days of the date required to be funded by it hereunder, (b) has
notified AXIS Capital, the Administrative Agent, a Fronting Bank or the L/C
Administrator in writing that it does not intend to comply with its funding
obligations hereunder or has made a public statement to that effect (unless such
writing or public statement relates to such Lender’s obligation to fund a Loan
hereunder and states that such position is based on such Lender’s determination
that a condition precedent to funding (which condition precedent, together with
any applicable default, shall be specifically identified in such writing or
public statement) cannot be satisfied), (c) has failed, within three Business
Days after written request by the Administrative Agent or AXIS Capital, to
confirm in writing to the Administrative Agent and AXIS Capital that it will
comply with its prospective funding obligations hereunder (provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and the
Borrower), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under clauses (a) through (d) above shall be conclusive and
binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender (subject to Section 2.16(b)) upon delivery of written notice
of such determination to the Borrower, the Fronting Banks, the L/C Administrator
and each Lender.

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

“Designated Borrower Notice” has the meaning specified in Section 2.13.

 

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“Designated Borrower Request and Assumption Agreement” has the meaning specified
in Section 2.13.

“Disposition” or “Dispose” means the sale, assignment, transfer, abandonment,
lease or other disposition (including any sale and leaseback transaction) by any
Person, voluntarily or involuntarily, in one transaction or a series of
transactions, of all or substantially all of its assets, or all or substantially
all of the stock of any of its Subsidiaries, whether now owned or hereafter
acquired.

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

“Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent or the Fronting Bank issuing
such Letter of Credit, as the case may be, at such time on the basis of the Spot
Rate (determined in respect of the most recent Revaluation Date) for the
purchase of Dollars with such Alternative Currency.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii) and (v) (subject to such consents, if any,
as may be required under Section 10.06(b)(iii)).

“Eligible Collateral” means Cash, Cash Equivalents, Commercial Paper, MBS
Investments, Money Market Funds, Corporate/Municipal Securities, Government
Debt, OECD Securities, Supranational Debt Securities and G7 Debt Securities
which (a) have the required ratings and maturities as set forth on Schedule
1.01, (b) are capable of being marked to market on a daily basis and cleared and
settled on national/regional exchanges within the United States except in the
case of foreign securities cleared or traded outside the United States which is
held by a Financial Institution or a subcustodian thereof which is acceptable to
the Administrative Agent, (c) are not subject to a securities lending
arrangement or repurchase agreement and (d) are held in a Collateral Account.

“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

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

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

 

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“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest; provided, however that Convertible Securities are not Equity
Interests.

“Equity Rights” means, with respect to any Person, any subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including
any shareholders’ or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of capital stock of any class of, or partnership or other ownership interests of
any type in, such Person.

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

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

“ERISA Event” means (a) any Reportable Event; (b) a failure of any Plan to
satisfy the minimum funding standards under Section 412 of the Code or
Section 302 of ERISA; (c) the filing of an application for a waiver of the
minimum funding standard under Section 412 of the Code or Section 302 of ERISA
with respect to any Plan; (d) the incurrence by AXIS Capital or any ERISA
Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by AXIS Capital or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by AXIS Capital or any ERISA Affiliate of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; (g) the receipt by AXIS Capital or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from AXIS Capital or any ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization (within the meaning of Title IV of ERISA) or in “endangered”
or “critical” status (within the meaning of Section 432 of the Code or
Section 305 of ERISA); or (h) the determination that any Plan is considered an
“at-risk” plan (within the meaning of Section 430 of the Code or Section 303 of
ERISA).

“Euro” and “EUR” mean the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.

 

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“Eurocurrency Rate” means:

(a) for any Interest Period with respect to a Eurocurrency Rate Loan, the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published on Bloomberg Page BBAM1 (or on any successor or substitute page of
such service or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by the Administrative Agent from time to time) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, for deposits in the relevant currency (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the
“Eurocurrency Rate” for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in the
relevant currency for delivery on the first day of such Interest Period in Same
Day Funds in the approximate amount of the Eurocurrency Rate Loan being made,
continued or converted by Wells Fargo and with a term equivalent to such
Interest Period would be offered by Wells Fargo’s London Branch (or other Wells
Fargo branch or Affiliate) to major banks in the London or other offshore
interbank market for such currency at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest
Period; and

(b) for any interest calculation with respect to a Base Rate Loan on any date,
the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London
time determined two London Banking Days prior to such date for Dollar deposits
being delivered in the London interbank market for a term of one month
commencing that day or (ii) if such published rate is not available at such time
for any reason, the rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the date of determination
in same day funds in the approximate amount of the Base Rate Loan being made or
maintained and with a term equal to one month would be offered by Wells Fargo’s
London Branch to major banks in the London interbank Eurodollar market at their
request at the date and time of determination.

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the
Eurocurrency Rate. Eurocurrency Rate Loans may be denominated in Dollars,
Sterling or in Euros. All Loans denominated in Euros must be Eurocurrency Rate
Loans.

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

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Foreign Lender,
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan, Letter of Credit or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan, Letter of Credit or Commitment (other than
pursuant to an assignment request by AXIS Capital under Section 10.13)) or
(ii) such Lender changes its lending office, except in each case to the extent
that, pursuant to Section 3.01, amounts with respect to such Taxes were payable
either to such Lender’s assignor immediately before such Lender became a party
hereto or to such Lender immediately before it changed its lending office,
(c) Taxes attributable to such Recipient’s failure to comply with
Section 3.01(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

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“Existing Credit Agreement” means the Credit Agreement dated as of August 24,
2010 among AXIS Capital, certain subsidiaries, various financial institutions
and Bank of America, N.A., as administrative agent, as in effect immediately
prior to the Closing Date.

“Fair Market Value” means (a) with respect to any publicly traded security
(other than those set forth in clause (b)) the closing price for such security
on the largest exchange on which such security is traded (or if not traded on an
exchange, then the average of the closing bid and ask prices quoted
over-the-counter) on the date of the determination (as such prices are reported
in The Wall Street Journal (Midwest Edition) or if not so reported, in any
nationally recognized financial journal or newspaper), (b) with respect to Cash,
Cash Equivalents and Commercial Paper, the amounts thereof, and (c) with respect
to any Eligible Collateral (other than those set forth in clauses (a), and (b)),
the price for such Eligible Collateral on the date of calculation obtained from
a generally recognized source approved by the Administrative Agent or the most
recent bid quotation from such approved source (or, if no generally recognized
source exists as to a particular Investment, any other source specified by AXIS
Capital to which the Administrative Agent does not reasonably object). With
respect to any Eligible Collateral denominated in a currency other than Dollars,
the Dollar equivalent thereof (using a method agreed upon by AXIS Capital and
the Administrative Agent) shall be used for purposes of determining the Fair
Market Value of such Investment.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any intergovernmental agreement
entered into in connection with the implementation of such Sections and any
agreements entered into pursuant to Section 1471(b)(1) of the Code.

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

“Fee Letter” means the separate fee letter agreement dated March 4, 2013 among
AXIS Capital, the Administrative Agent and the Arranger.

 

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“Financial Institution” means the Securities Intermediary or Account Bank, as
applicable, with respect to any Collateral Account.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of AXIS Capital or, with respect to Borrowing
Base Certificates, such officer or any similar authorized person of a Designated
Borrower. Any document delivered hereunder that is signed by a Financial Officer
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of AXIS Capital or such
Designated Borrower, as the case may be, and such Financial Officer shall be
conclusively presumed to have acted on behalf of AXIS Capital or such Designated
Borrower.

“Financial Strength Rating” means with respect to any Insurance Company, the
financial strength rating of such Insurance company as determined by A.M. Best
Company, Inc.

“Fitch” means Fitch Ratings Inc. and any successor thereof.

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

“Foreign Obligor” means each Credit Party that is not organized under the laws
of the United States or a state thereof.

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

“Fronted Letter of Credit” means a Letter of Credit issued by a Fronting Bank in
which the Lenders purchase a risk participation pursuant to Section 2.03.

“Fronting Bank” means (a) in the case of Fronted Letters of Credit, each of
Wells Fargo and any other Lender who has agreed to issue Letters of Credit or
any successor fronting bank and (b) in the case of Several Letters of Credit,
the Person described in clause (a) who has agreed to act as fronting bank on
behalf of any Participating Bank.

“Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to each Fronting Bank, (i) such Defaulting Lender’s Applicable
Percentage of the outstanding L/C Obligations with respect to Fronted Letters of
Credit of such Fronting Bank other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof and (ii) if
such Defaulting Lender is a Participating Bank, such Defaulting Lender’s
Applicable Percentage of the outstanding L/C Obligations with respect to Several
Letters of Credit as to which such Fronting Bank has fronted for such Defaulting
Lender as a Participating Bank.

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

 

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“G7 Debt Securities” means any evidence of Indebtedness denominated in US
Dollars or an Alternative Currency issued or guaranteed by any country or an
agency thereof which is a member of the G7 and listed on Schedule 1.01.

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

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

“Government Debt” means evidence of Indebtedness issued or guaranteed by the
United States Government or any agency thereof.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party or applicant in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.

“Guarantor” means AXIS Capital, AXIS Finance, AXIS Specialty Holdings and any
other Person who shall execute a Guaranty after the date hereof.

“Guaranty” means a Guaranty in favor of the Administrative Agent and the
Lenders, substantially in the form of Exhibit I.

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

 

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“Hybrid Securities” means any trust preferred security, deferrable interest
subordinated debt security, mandatory convertible debt or other hybrid security
issued by AXIS Capital or any of its Subsidiaries that (i) is accorded equity
treatment by S&P at the time such security is issued and (ii) by its terms (or
by the terms of any security into which it is convertible for or which it is
exchangeable) or upon the happening of any event or otherwise, does not mature
or is not mandatorily redeemable or subject to any mandatory repurchase
requirement at any time on or prior to the date which is six months after the
Maturity Date.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to property acquired by such
Person, (d) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable incurred in
the ordinary course of business), (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
(f) all Guarantees by such Person of Indebtedness of others, (g) all Capital
Lease Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an account party or applicant in respect of letters of credit
and letters of guaranty, (i) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances and (j) obligations in respect of
Hybrid Securities. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor; provided that Indebtedness shall not include (x) trade payables
(including payables under insurance contracts and reinsurance payables) and
accrued expenses, in each case arising in the ordinary course of business,
(y) obligations with respect to Policies and (z) (except to the extent included
as Indebtedness under clause (j) above) Preferred Securities.

“Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any
Borrower under Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Insurance Code” means, with respect to any Insurance Company, the applicable
insurance code or Law (including regulations) of such Insurance Company’s
domicile which governs the licensing of companies who engage in the insurance or
reinsurance business and the issuance of insurance or reinsurance.

“Insurance Company” means any Subsidiary which is subject to the regulation of,
and is required to file statements with, any governmental body, agency or
official in any jurisdiction which regulates insurance and/ or reinsurance
companies or the doing of an insurance and/ or reinsurance business therein.

 

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

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

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

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

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

“Investment” means, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any “short
sale” or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding 90 days arising in connection with the sale of inventory or supplies
or other trade credit by such Person in the ordinary course of business; (c) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person (excluding any Guarantee
or other contingent obligation arising in the ordinary course of such Person’s
business as a reinsurance company) and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or (d) the entering
into of any Swap Contract.

 

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“Investment Guidelines” means, with respect to any Credit Party or any
Subsidiary, the “Statement of Investment Policy and Objectives” of such Credit
Party or Subsidiary (a) as in effect on, and delivered to the Administrative
Agent on or prior to, the Closing Date or (b) delivered to the Administrative
Agent pursuant to Section 6.01(h), as applicable, in each case as may be changed
from time to time by a resolution duly adopted by the board of directors of such
Credit Party or Subsidiary (or any committee thereof).

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the Applicable Issuing Party and the applicable L/C Borrower in respect
of such Letter of Credit.

“L/C Administrator” means Wells Fargo’s Letter of Credit Operations located at
401 Linden Street, First Floor, Winston-Salem, North Carolina, 27101, Attention
International Operations, Standby Letters of Credit, NC 6034 (or any other
office which may be designated by the Administrative Agent by written notice),
as letter of credit administrator for the Lenders, together with any replacement
L/C Administrator arising under Section 10.06.

“L/C Borrower” means each of AXIS Capital, AXIS Insurance, AXIS Re, AXIS
Reinsurance, AXIS Specialty, AXIS Specialty Europe, AXIS Surplus and each
Insurance Company which becomes a Designated Borrower after the Closing Date.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or which
has been refinanced as a Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

“L/C Issuer” means (a) with respect to any Fronted Letter of Credit, the
Fronting Bank who has issued such Letter of Credit and (b) with respect to a
Several Letter of Credit, each Lender other than a Participating Bank.

“L/C Obligations” means, at any time, the sum, without duplication, of (a) the
Dollar Equivalent of the aggregate amount available to be drawn under all
outstanding Letters of Credit, plus (b) the aggregate unpaid amount of all
Unreimbursed Amounts, including L/C Borrowings, after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursements by a Borrower of Unreimbursed Amounts. For purposes of computing
the amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.09. For all
purposes of this Agreement, if on

 

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any date of determination (i) a Letter of Credit that is subject to the rules of
the ISP has expired by its terms, (ii) the Applicable Issuing Party shall be
closed for the reasons set forth in Rule 3.14 of the ISP, and (iii) any amount
may still be drawn under such Letter of Credit, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn for
the period set forth in, and subject to the terms of, Rule 3.14 of the ISP as in
effect from time to time. For purposes of determining the L/C Obligations held
by any Lender, a Lender shall be deemed to hold an amount equal to the sum of
(a) the aggregate amount of each Lender’s direct obligation, in all outstanding
Several Letters of Credit (or, if a Participating Bank, its risk participation
in Several Letters of Credit), (b) its risk participation in all outstanding
Fronted Letters of Credit, and (c) its L/C Borrowings. The L/C Obligation of any
Borrower shall be the aggregate amount available to be drawn under all
outstanding Letters of Credit issued for the account of such Borrower plus the
aggregate of all Unreimbursed Amounts owed by such Borrower.

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

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

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

“Letter of Credit” means any standby letter of credit issued hereunder. Letters
of Credit may be issued in Dollars or in an Alternative Currency.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the Applicable Issuing Party.

“Letter of Credit Expiration Date” means the date which is one year after the
Maturity Date (or, if such day is not a Business Day, the next preceding
Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust,
pledge, lien, hypothecation, security interest, charge or other encumbrance or
security arrangement of any nature whatsoever in, on or of such asset, and
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset.

 

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“Loan” has the meaning specified in Section 2.01.

“Loan Documents” means this Agreement, each Designated Borrower Request and
Assumption Agreement, each Note, each Issuer Document, any agreement creating or
perfecting rights in Cash Collateral pursuant to the provisions of Section 2.15
of this Agreement, the Fee Letter, each Guaranty, each Control Agreement and
each Security Agreement.

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

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank Eurocurrency market.

“Mandatory Cost” means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.03.

“Margin Stock” means “margin stock” within the meaning of Regulations T, U and X
of the FRB.

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, property or condition (financial or otherwise) of AXIS Capital and
its Subsidiaries taken as a whole; (b) the ability of any Credit Party to
perform its obligations under any Loan Document to which it is a party; or
(c) the legality, validity, binding effect or enforceability against any Credit
Party of any Loan Document to which it is a party or the rights of or benefits
available to the Administrative Agent and/or the Lenders.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Contracts, of any one or
more of AXIS Capital and its Subsidiaries in an aggregate principal amount in
excess of the Threshold Amount. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of any Person in respect
of any Swap Contract shall be the Swap Termination Value at such time.

“Maturity Date” means March 26, 2017; provided, however, that if such date is
not a Business Day, the Maturity Date shall be the next preceding Business Day.

“MBS (Agency CMOs)” means collateralized mortgage obligations or real estate
mortgage investment conduit pass through securities, in any case issued by the
Federal National Mortgage Association, the Government National Mortgage
Association or the Federal Home Loan Mortgage Corporation.

“MBS (Agency Pass-Throughs)” means any instrument, issued by the Federal
National Mortgage Association, the Government National Mortgage Association or
the Federal Home Loan Mortgage Corporation, that entitles the holder of, or
beneficial owner under, the instrument to the whole or any part of the rights or
entitlements of a mortgagee and any other rights or entitlements in respect of a
pool of mortgages or any money payable by mortgagors under those mortgages in
relation to real estate mortgages, and the money payable to the holder of, or
beneficiary owner under, the instrument is based on actual or scheduled payments
on the underlying mortgages.

 

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“MBS Investments” means (a) MBS (Agency CMOs) which constitute TACs, PACs and
Sequentials (as such terms are defined by Bloomberg Inc.) and shall not include
Support Tranches (as such term is defined by Bloomberg Inc.) and (b) MBS (Agency
Pass-Throughs). The weighted average duration of such MBS Investments shall be
less than or equal to seven years. The maximum weighted average life of any
single MBS Investment shall not exceed 12 years.

“Money Market Funds” means:(a) Money market funds domiciled/regulated in the US
denominated in US Dollars and rated at least AAA by S&P, Moody’s or Fitch; and

(b) Money market funds domiciled offshore and regulated by a regulator in the
applicable jurisdiction denominated in US Dollars and Alternative Currencies and
rated at least AAA by S&P, Moody’s or Fitch.

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

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA, to which AXIS Capital or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

“Multiple Employer Plan” means a Plan within the meaning of Section 4064 of
ERISA which has two or more contributing sponsors (at least one of which one is
AXIS Capital or any ERISA Affiliate) and at least two of whom are not under
common control.

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

“NAIC Approved Bank” means any bank listed on the most current list of banks
approved by the Securities Valuation Office of the NAIC and acting through the
branch so listed.

“New Zealand Dollars” means the lawful currency of New Zealand.

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

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

 

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“OECD Securities” means any evidence of Indebtedness issued or guaranteed by the
Government of Austria, Belgium, Finland, the Netherlands, Norway or Switzerland
or an agency thereof denominated in US Dollars or an Alternative Currency.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control, and any successor thereto.

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

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a Lien under,
engaged in any other transaction pursuant to or enforced any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court, documentary, excise,
property, intangible, recording, filing or similar Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, from the receipt or perfection of a Lien under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 10.13).

“Outstanding Amount” means (i) with respect to Loans on any date, the Dollar
Equivalent of the aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments or repayments of Loans, occurring on
such date; and (ii) with respect to any L/C Obligations on any date, the amount
of such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements by any Borrower of Unreimbursed Amounts.

“Overnight Rate” means, for any day, (a) with respect to any amount denominated
in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate
determined by the Administrative Agent or the applicable Fronting Bank, as the
case may be, in accordance with banking industry rules on interbank
compensation, and (b) with respect to any amount denominated in an Alternative
Currency, the rate of interest per annum at which overnight deposits in the
applicable Alternative Currency, in an amount approximately equal to the amount
with respect to which such rate is being determined, would be offered for such
day by a branch or Affiliate of Wells Fargo in the applicable offshore interbank
market for such currency to major banks in such interbank market.

 

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“Participant” has the meaning specified in Section 10.06(d).

“Participating Bank” means, from time to time, with respect to any Several
Letter of Credit, a Lender that is unable to issue such Letter of Credit because
(a) it is unable due to regulatory restrictions or other legal impediments based
on its relationship to the beneficiary, (b) it is not, or has lost its status
as, an NAIC Approved Bank (if such Letter of Credit must be issued by NAIC
Approved Banks), or (c) it does not engage in transactions in the requested
Alternative Currency.

“Participating Member State” means each state so described in any EMU
Legislation.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Permitted Investments” means, with respect to any Credit Party or any
Subsidiary, investments made consistent with, and subject to, the Investment
Guidelines of such Credit Party or such Subsidiary; provided that the aggregate
amount of Permitted Investments with respect to any Credit Party or any
Subsidiary in non-fixed income investments shall not exceed 30% of the aggregate
amount of all Permitted Investments with respect to such Credit Party or such
Subsidiary at any time.

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

“Plan” means any employee pension benefit plan (within the meaning of
Section 3(2) of ERISA) that is either covered by Title IV of ERISA or is subject
to the minimum funding standards under Section 412 of the Code (including a
Multiple Employer Plan but excluding any Multiemployer Plan), maintained for
employees of AXIS Capital or any ERISA Affiliate or any such Plan to which AXIS
Capital or any ERISA Affiliate is required to contribute on behalf of any of its
employees.

“Platform” has the meaning specified in Section 6.02.

“Policies” means all insurance and reinsurance policies, annuity contracts,
guaranteed interest contracts and funding agreements (including riders to any
such policies or contracts, certificates issued with respect to group life
insurance or annuity contracts and any contracts issued in connection with
retirement plans or arrangements) and assumption certificates issued or to be
issued (or filed pending current review by applicable Governmental Authorities)
by any Insurance Company and any coinsurance agreements entered into or to be
entered into by an Insurance Company.

“Preferred Securities” means any preferred Equity Interest of AXIS Capital or
any of its Subsidiaries that has preferential rights with respect to dividends
or redemptions or upon liquidation or dissolution of AXIS Capital or such
Subsidiary (as applicable) over shares of common Equity Interests of AXIS
Capital or such Subsidiary (as applicable).

 

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“Prime Rate” means, at any time, the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in such prime rate occurs. The parties hereto acknowledge that
the rate announced publicly by the Administrative Agent as its prime rate is an
index or base rate and shall not necessarily be its lowest or best rate charged
to its customers or other banks.

“Private Act” means separate legislation enacted in Bermuda with the intention
that such legislation apply specifically to AXIS Capital, in whole or in part.

“Process Agent” has the meaning specified in Section 10.14(d).

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

“Quarterly Statement” means, as to any Person, the financial statement of such
Person with respect to any fiscal quarter as required to be filed with the
applicable Governmental Authority in such Person’s domicile, together with all
exhibits or schedules filed therewith, prepared in conformity with SAP.

“Recipient” means (a) the Administrative Agent, (b) any Lender, (c) any Fronting
Bank, (d) any L/C Issuer and (e) the L/C Administrator, as applicable.

“Register” has the meaning specified in Section 10.06(c).

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

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

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Loans, a Loan Notice and (b) with respect to an L/C Credit
Extension, a Letter of Credit Application.

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and to issue Several Letters of Credit and the obligations of the
Fronting Banks to issue Fronted Letters of Credit have been terminated pursuant
to Section 8.02, Lenders holding in the aggregate more than 50% of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations being deemed “held” by such Lender for
purposes of this definition); provided that the Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

 

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“Responsible Officer” means any director, the chief executive officer,
president, chief financial officer, treasurer, assistant treasurer or controller
of a Credit Party, provided that, solely for purposes of the delivery of
incumbency certificates pursuant to Section 4.01, the secretary or any assistant
secretary of a Credit Party and, solely for purposes of notices given pursuant
to Article II, any other officer or employee of the applicable Credit Party so
designated by any of the foregoing officers in a notice to the Administrative
Agent. Any document delivered hereunder that is signed by a Responsible Officer
of a Credit Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Credit
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Credit Party.

“Restricted Payment” means any dividend or other distribution or return of
Capital (whether in cash, securities or other property) with respect to any
Equity Interests of AXIS Capital or any of its Subsidiaries, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests.

“Revaluation Date” means (a) with respect to any Loan, each of the following:
(i) each date of a Borrowing of a Eurocurrency Rate Loan denominated in an
Alternative Currency, (ii) each date of a continuation of a Eurocurrency Rate
Loan denominated in an Alternative Currency pursuant to Section 2.02, and
(iii) such additional dates as the Administrative Agent shall determine or the
Required Lenders shall require; and (b) with respect to any Letter of Credit,
each of the following: (i) each date of issuance of a Letter of Credit
denominated in an Alternative Currency, (ii) each date of an amendment of any
such Letter of Credit having the effect of increasing or decreasing the amount
thereof, (iii) each date of any payment by the Applicable Issuing Party under
any Letter of Credit denominated in an Alternative Currency, and (iv) such
additional dates as the Administrative Agent, the L/C Administrator or a
Fronting Bank shall determine or the Required Lenders shall require.

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

“Same Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Administrative Agent or the Applicable Issuing Party, as the
case may be, to be customary in the place of disbursement or payment for the
settlement of international banking transactions in the relevant Alternative
Currency.

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/sanctions, or as otherwise
published from time to time.

 

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“Sanctioned Person” means (i) a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn, or as otherwise published
from time to time, or (ii) (A) an agency of the government of a Sanctioned
Country, (B) an organization controlled by a Sanctioned Country, or (C) a Person
resident in a Sanctioned Country, to the extent subject to a sanctions program
administered by OFAC.

“SAP” means, as to each Insurance Company, the statutory accounting practices
prescribed or permitted by the Applicable Insurance Regulatory Authority for the
preparation of its financial statements and other reports by insurance
corporations of the same type as such Insurance Company in effect on the date
such statements or reports are to be prepared, except if otherwise notified by
AXIS Capital pursuant to Section 1.03.

“SEC” means the United States Securities and Exchange Commission or any
successor entity.

“Secured L/C Obligations” means, with respect to any Borrower, such Borrower’s
L/C Obligations with respect to Secured Letters of Credit.

“Secured Letter of Credit” means a Letter of Credit issued at the request of a
Borrower which has been designated as a “Secured Letter of Credit” in the
applicable Letter of Credit Application. A Letter of Credit which has been
issued as a Secured Letter of Credit must remain a Secured Letter of Credit so
long as it is outstanding.

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

“Security Agreement” means a Security Agreement substantially in the form of
Exhibit J with such changes therein as may be agreed to by the Administrative
Agent and any Borrower which may be entered into from time to time between the
Administrative Agent and such Borrower.

“Several Letter of Credit” means a Letter of Credit issued severally by or on
behalf of the Lenders pursuant to which the Lenders are severally liable to the
beneficiary which shall be substantially in the form of Exhibit E or in such
other form as may be agreed by the applicable L/C Borrower and the L/C
Administrator.

“Singapore Dollars” means the lawful currency of the Republic of Singapore.

“Spot Rate” for a currency means the rate determined by the Administrative Agent
or with respect to all Letters of Credit, the L/C Administrator, to be the rate
quoted by the Person acting in such capacity as the spot rate for the purchase
by such Person of such currency with another currency through its principal
foreign exchange trading office at approximately 11:00 a.m. on the date two
Business Days prior to the date as of which the foreign exchange computation is
made; provided that the Administrative Agent or the L/C Administrator may obtain
such spot rate from another financial institution designated by the
Administrative Agent or the L/C Administrator if the Person acting in such
capacity does not have as of the date of

 

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determination a spot buying rate for any such currency; and provided further the
L/C Administrator may use such spot rate quoted on the date as of which the
foreign exchange computation is made in the case of any Letter of Credit
denominated in an Alternative Currency.

“Statutory Statement” means, for any Insurance Company, for any fiscal year of
such Insurance Company, the most recent Annual Statement or Quarterly Statement
(if any) filed with the Applicable Insurance Regulatory Authority, which
Statutory Statements shall be prepared in accordance with SAP.

“Sterling” and “£” mean the lawful currency of the United Kingdom.

“Subsidiary” means, with respect to AXIS Capital, at any date, any corporation,
limited liability company, partnership, association or other entity the accounts
of which would be consolidated with those of AXIS Capital in AXIS Capital’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity of which securities
or other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held by AXIS Capital or one or more subsidiaries of AXIS Capital
or by AXIS Capital and one or more subsidiaries of AXIS Capital.

“Supranational Debt Securities” means any evidence of Indebtedness denominated
in US Dollars or an Alternative Currency issued or guaranteed issued by The
International Bank for Reconstruction and Development (the World Bank), The
European Investment Bank, The European Bank for Reconstruction and Development,
The Inter-American Development Bank, Asian Development Bank or Nordic Investment
Bank.

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

 

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

“Swiss Francs” means the lawful currency of the Swiss Confederation.

“TARGET Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by the
Administrative Agent to be a suitable replacement) is open for the settlement of
payments in Euro.

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

“TCA 1997” means the Taxes Consolidation Act 1997 of Ireland.

“Threshold Amount” means $75,000,000.

“Total Funded Debt” means, at any time, all Indebtedness of AXIS Capital and its
Subsidiaries which would at such time be classified in whole or in part as a
liability on the consolidated balance sheet of AXIS Capital in accordance with
GAAP; provided that, for purposes of determining Total Funded Debt, only the
aggregate amount of Hybrid Securities that exceed 15% of the sum of Total Funded
Debt plus Consolidated Net Worth at the time of determination shall be included
as Indebtedness.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

“Transactions” means the execution, delivery and performance by the Credit
Parties of this Agreement and the other Loan Documents, the borrowing of Loans,
the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

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

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

“UCP” means the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce at
the time of issuance of a Letter of Credit or, in the case of Letters of Credit
issued to back Reinsurance Agreements, such earlier version thereof as may be
required by the applicable Governmental Authority regulating the beneficiary.

 

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

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 3.01(f).

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association, and its successors.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

“Withholding Agent” means each Borrower and the Administrative Agent.

“Wholly Owned” means, with respect to any Subsidiary of any Person, that 100% of
the outstanding Equity Interests of such Subsidiary is owned, directly or
indirectly, by such Person.

“Yen” and “¥” mean the lawful currency of Japan.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

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

 

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specified, refer to such law or regulation as amended, modified or supplemented
from time to time, and (vi) the words “asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

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

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

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein. Notwithstanding the foregoing, for
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, Indebtedness of AXIS Capital and
its Subsidiaries shall be deemed to be carried at 100% of the outstanding
principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on
financial liabilities shall be disregarded.

(b) Changes in GAAP or SAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP or SAP, as the context requires, each as in effect from time to time;
provided that, if AXIS Capital notifies the Administrative Agent that AXIS
Capital requests an amendment to any provision hereof to eliminate the effect of
any change occurring after the date hereof in GAAP or SAP, as the case may be,
or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies AXIS Capital that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or SAP, as the case may
be, or in the application thereof, then such provision shall be interpreted on
the basis of GAAP or SAP, as the case may be, as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith. To
enable the ready and consistent determination of compliance with the covenants
set forth in Article VI, AXIS Capital will not change the last day of its fiscal
year from December 31, or the last days of the first three fiscal quarters in
each of its fiscal years from March 31, June 30 and September 30, respectively.

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

 

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1.05 Exchange Rates; Currency Equivalents.

(a) The Administrative Agent, the L/C Administrator or the issuing Fronting
Bank, as applicable, shall determine the Spot Rates as of each Revaluation Date
to be used for calculating Dollar Equivalent amounts of Credit Extensions and
Outstanding Amounts denominated in Alternative Currencies; provided that with
respect to Several Letters of Credit issued in Alternative Currencies, the Spot
Rate shall be determined by the L/C Administrator and with respect to Fronted
Letters of Credit, the Spot Rate shall be determined by the issuing Fronting
Bank. Such Spot Rates shall become effective as of such Revaluation Date and
shall be the Spot Rates employed in converting any amounts between the
applicable currencies until the next Revaluation Date to occur. Except for
purposes of financial statements delivered by Credit Parties hereunder or
calculating financial covenants hereunder or except as otherwise provided
herein, the applicable amount of any currency (other than Dollars) for purposes
of the Loan Documents shall be such Dollar Equivalent amount as so determined by
the Administrative Agent, the L/C Administrator or the issuing Fronting Bank, as
applicable.

(b) Wherever in this Agreement in connection with a Borrowing, conversion,
continuation or prepayment of a Eurocurrency Rate Loan or the issuance,
amendment or extension of a Letter of Credit, an amount, such as a required
minimum or multiple amount, is expressed in Dollars, but such Borrowing,
Eurocurrency Rate Loan or Letter of Credit is denominated in an Alternative
Currency, such amount shall be the relevant Alternative Currency Equivalent of
such Dollar amount (rounded to the nearest unit of such Alternative Currency,
with 0.5 of a unit being rounded upward), as determined by the Administrative
Agent or the issuing Fronting Bank, as the case may be.

1.06 Additional Alternative Currencies.

(a) The Borrowers may from time to time request that Eurocurrency Rate Loans be
made and/or Letters of Credit be issued in a currency other than those
specifically listed in the definition of “Alternative Currency;” provided that
such requested currency is a lawful currency (other than Dollars) that is
readily available and freely transferable and convertible into Dollars. In the
case of any such request with respect to the making of Eurocurrency Rate Loans,
such request shall be subject to the approval of the Administrative Agent and
the Lenders; and in the case of any such request with respect to the issuance of
Letters of Credit, such request shall be subject to the approval of the
Administrative Agent and the Fronting Banks.

(b) Any such request shall be made to the Administrative Agent not later than
11:00 a.m., 15 Business Days prior to the date of the desired Credit Extension
(or in the case of Fronted Letters of Credit, such earlier time or date as may
be agreed to by the issuing Fronting Bank, in its or their sole discretion). In
the case of any such request pertaining to Eurocurrency Rate Loans or Several
Letters of Credit, the Administrative Agent shall promptly notify each Lender
and the L/C Administrator thereof; and in the case of any such request
pertaining to

 

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Fronted Letters of Credit, the Administrative Agent shall promptly notify the
Fronting Banks thereof. Each Lender (in the case of any such request pertaining
to Eurocurrency Rate Loans or Several Letters of Credit) or the Fronting Banks
(in the case of a request pertaining to Fronted Letters of Credit) shall notify
the Administrative Agent, not later than 11:00 a.m., ten Business Days after
receipt of such request whether it consents, in its sole discretion, to the
making of Eurocurrency Rate Loans or the issuance of Letters of Credit, as the
case may be, in such requested currency.

(c) Any failure by a Lender or a Fronting Bank, as the case may be, to respond
to such request within the time period specified in the preceding sentence shall
be deemed to be a refusal by such Lender or such Fronting Bank, as the case may
be, to permit Eurocurrency Rate Loans to be made or Letters of Credit to be
issued in such requested currency. If the Administrative Agent and all the
Lenders consent to making Eurocurrency Rate Loans or issuing Several Letters of
Credit in such requested currency, the Administrative Agent shall so notify AXIS
Capital and such currency shall thereupon be deemed for all purposes to be an
Alternative Currency hereunder for purposes of any Borrowings of Eurocurrency
Rate Loans and issuances of Letters of Credit; and if the Administrative Agent
and a Fronting Bank consent to the issuance of Fronted Letters of Credit in such
requested currency, the Administrative Agent shall so notify AXIS Capital and
such currency shall thereupon be deemed for all purposes to be an Alternative
Currency hereunder for purposes of any Fronted Letter of Credit issuances. If
the Administrative Agent shall fail to obtain consent to any request for an
additional currency under this Section 1.06, the Administrative Agent shall
promptly so notify AXIS Capital.

1.07 Change of Currency.

(a) Each obligation of a Borrower to make a payment denominated in the national
currency unit of any member state of the European Union that adopts the Euro as
its lawful currency after the date hereof shall be redenominated into Euro at
the time of such adoption (in accordance with the EMU Legislation). If, in
relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London interbank market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency; provided that if
any Borrowing in the currency of such member state is outstanding immediately
prior to such date, such replacement shall take effect, with respect to such
Borrowing, at the end of the then current Interest Period.

(b) Each provision of this Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time specify to be
appropriate to reflect the adoption of the Euro by any member state of the
European Union and any relevant market conventions or practices relating to the
Euro. In the event that any member state of the European Union withdraws its
adoption of the Euro and adopts another currency, the adopted currency shall not
be an Alternative Currency unless it is either an existing Alternative Currency
or is approved in accordance with Section 1.06.

 

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(c) Each provision of this Agreement also shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect a change in currency of any other country
and any relevant market conventions or practices relating to the change in
currency.

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

1.09 Letter of Credit Amounts. Unless otherwise specified herein, the amount of
a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of
the stated amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms or the
terms of any Issuer Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit
shall be deemed to be the Dollar Equivalent of the maximum stated amount of such
Letter of Credit after giving effect to all such increases, whether or not such
maximum stated amount is in effect at such time.

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Loans. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a “Loan”) in Dollars, Euros and
Sterling to AXIS Capital, each Person who is a Designated Borrower on the
Closing Date and, upon receipt of all required consents under Section 2.13, each
other Designated Borrower, from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender’s Commitment; provided, however, that
after giving effect to any Borrowing, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Loans of any Lender, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations shall not exceed such Lender’s
Commitment and (iii) the aggregate Outstanding Amount of all Loans denominated
in Alternative Currencies plus the stated amount of all outstanding Letters of
Credit denominated in Alternative Currencies shall not exceed the Alternative
Currency Sublimit. Within the limits of each Lender’s Commitment, and subject to
the other terms and conditions hereof, each Borrower may borrow under this
Section 2.01, prepay under Section 2.04, and reborrow under this Section 2.01.
Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided
herein.

2.02 Borrowings, Conversions and Continuations of Loans.

(a) Each Borrowing, each conversion of Loans from one Type to the other, and
each continuation of Eurocurrency Rate Loans shall be made upon the applicable
Borrower’s irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurocurrency Rate Loans
denominated in Dollars or of any conversion of Eurocurrency Rate Loans
denominated in Dollars to Base Rate Loans, (ii) four Business Days prior to the
requested date of any Borrowing or continuation of Eurocurrency Rate Loans
denominated in

 

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Euros or Sterling and (iii) on the requested date of any Borrowing of Base Rate
Loans; provided, however, that if the applicable Borrower wishes to request
Eurocurrency Rate Loans having an Interest Period other than one week, two weeks
or one, two, three or six months in duration as provided in the definition of
“Interest Period,” the applicable notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) four Business Days prior to the requested
date of such Borrowing, conversion or continuation of Eurocurrency Rate Loans
denominated in Dollars, or (ii) five Business Days prior to the requested date
of such Borrowing, conversion or continuation of Eurocurrency Rate Loans
denominated in Euros or Sterling whereupon the Administrative Agent shall give
prompt notice to the Lenders of such request and determine whether the requested
Interest Period is acceptable to all of them. Not later than 11:00 a.m.,
(i) three Business Days before the requested date of such Borrowing, conversion
or continuation of Eurocurrency Rate Loans denominated in Dollars, or (ii) four
Business Days prior to the requested date of such Borrowing, conversion or
continuation of Eurocurrency Rate Loans denominated in Euros or Sterling the
Administrative Agent shall notify the applicable Borrower (which notice may be
by telephone) whether or not the requested Interest Period has been consented to
by all the Lenders. Each telephonic notice by a Borrower pursuant to this
Section 2.02(a) must be confirmed promptly by delivery to the Administrative
Agent of a written Loan Notice, appropriately completed and signed by a
Responsible Officer of the applicable Borrower. Each Borrowing of, conversion to
or continuation of Eurocurrency Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as
provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to
Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written)
shall specify (i) whether such Borrower is requesting a Borrowing, a conversion
of Loans from one Type to the other, or a continuation of Eurocurrency Rate
Loans, (ii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal amount of
Loans to be borrowed, converted or continued, (iv) the Type of Loans to be
borrowed or to which existing Loans are to be converted, (v) if applicable, the
duration of the Interest Period with respect thereto, (vi) the currency of the
Loans to be borrowed, and (vii) if applicable, the Designated Borrower. If a
Borrower fails to specify a currency in a Loan Notice requesting a Borrowing,
then the Loans so requested shall be made in Dollars. If a Borrower fails to
specify a Type of Loan in a Loan Notice or fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans; provided, however, that in the case of a
failure to timely request a continuation of Loans denominated in an Alternative
Currency, such Loans shall be continued as Eurocurrency Rate Loans in their
original currency with an Interest Period of one month. Any automatic conversion
to Base Rate Loans shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable Eurocurrency Rate Loans. If a
Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency
Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it
will be deemed to have specified an Interest Period of one month. No Loan may be
converted into or continued as a Loan denominated in a different currency, but
instead must be prepaid in the original currency of such Loan and reborrowed in
the other currency.

 

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(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount (and currency) of its Applicable Percentage of
the applicable Loans, and if no timely notice of a conversion or continuation is
provided by the applicable Borrower, the Administrative Agent shall notify each
Lender of the details of any automatic conversion to Base Rate Loans or
continuation of Loans denominated in a currency other than Dollars, in each case
as described in the preceding subsection. In the case of a Borrowing, each
Lender shall make the amount of its Loan available to the Administrative Agent
in Same Day Funds at the Administrative Agent’s Office for the applicable
currency not later than 1:00 p.m., in the case of any Loan denominated in
Dollars, and not later than the Applicable Time specified by the Administrative
Agent in the case of any Loan in an Alternative Currency, in each case on the
Business Day specified in the applicable Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the applicable Borrower in like funds as received
by the Administrative Agent either by (i) crediting the account of such Borrower
on the books of Wells Fargo with the amount of such funds or (ii) wire transfer
of such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by such Borrower; provided,
however, that if, on the date the Loan Notice with respect to such Borrowing
denominated in Dollars is given by a Borrower, there are L/C Borrowings of such
Borrower outstanding, then the proceeds of such Borrowing, first, shall be
applied to the payment in full of any such L/C Borrowings, and, second, shall be
made available to such Borrower as provided above. Each Lender may, at its
option, make any Loan available to any Borrower that is a Foreign Obligor by
causing any foreign or domestic branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of such Borrower to repay such Loan in accordance with the terms of this
Agreement and such branch or Affiliate shall not have any voting rights
hereunder which rights shall remain with such Lender.

(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurocurrency Rate Loans (whether in
Dollars or any Alternative Currency) without the consent of the Required
Lenders, and the Required Lenders may demand that any or all of the then
outstanding Eurocurrency Rate Loans denominated in an Alternative Currency be
prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent
thereof, on the last day of the then current Interest Period with respect
thereto.

(d) The Administrative Agent shall promptly notify AXIS Capital and the Lenders
of the interest rate applicable to any Interest Period for Eurocurrency Rate
Loans upon determination of such interest rate. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify AXIS Capital and the
Lenders of any change in the Prime Rate promptly following the public
announcement of such change.

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

 

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2.03 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) each Fronting Bank
agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the Availability
Period, to issue Fronted Letters of Credit denominated in Dollars or one or more
Alternative Currencies for the account of each L/C Borrower, and to amend or
extend Fronted Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Fronted Letters of
Credit; and the Lenders severally agree to participate in Fronted Letters of
Credit issued for the account of such Borrower and any drawings thereunder;
(B) each Lender severally agrees, (1) from time to time on any Business Day
during the Availability Period, to issue, extend and renew in such Lender’s
Applicable Percentage, Several Letters of Credit denominated in Dollars or one
or more Alternative Currencies at the request of and for the account of each L/C
Borrower, in accordance with subsection (b) below (except such Letters of Credit
as to which it has advised that it is a Participating Bank), and (2) to honor
its Applicable Percentage of drawings under the Several Letters of Credit and
each Fronting Bank who has agreed to front for a Participating Bank under
Several Letters of Credit hereby agrees that it shall be severally (and not
jointly) liable for an amount equal to its Applicable Percentage plus such
Participating Bank’s Applicable Percentage under each Several Letter of Credit
and each Participating Bank hereby agrees to purchase a risk participation in
the obligations of the relevant Fronting Bank under any such Several Letter of
Credit in an amount equal to such Participating Bank’s Applicable Percentage;
provided that after giving effect to any L/C Credit Extension with respect to
any Letter of Credit, (w) the Total Outstandings shall not exceed the Aggregate
Commitments, (x) the aggregate Outstanding Amount of the Loans of any Lender,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations shall not exceed such Lender’s Commitment, (y) the Secured L/C
Obligations of an L/C Borrower shall not exceed such Borrower’s Borrowing Base,
and (z) the stated amount of all Letters of Credit denominated in an Alternative
Currency plus the aggregate outstanding principal amount of Loans denominated in
Alternative Currencies shall not exceed the Alternative Currency Sublimit. Each
request by an L/C Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by such Borrower that the L/C Credit
Extension so requested complies with the conditions set forth in the proviso to
the preceding sentence. Within the foregoing limits, and subject to the terms
and conditions hereof, the L/C Borrowers’ ability to obtain Letters of Credit
shall be fully revolving, and accordingly the L/C Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

(ii) The Applicable Issuing Party shall not issue any Letter of Credit, if:

(A) subject to Section 2.03(b)(iii), the expiry date of the requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, (or, (1) in the case of Letters of Credit denominated in Canadian
Dollars, thirteen months and (2) in the case of Letters of Credit denominated in
Australian Dollars or New Zealand Dollars, twenty-four months, in each case
solely if necessary for regulatory purposes) unless the Required Lenders have
approved such expiry date; or

 

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(B) the expiry date of the requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date; or

(C) the Borrower requesting such Letter of Credit is an Irish company, unless
the beneficiary of such Letter of Credit is neither habitually resident in
Ireland nor has a place of establishment in Ireland.

(iii) An L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such L/C Issuer from issuing
the Letter of Credit, or any Law applicable to such L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such L/C Issuer shall prohibit, or request that
such L/C Issuer refrain from, the issuance of letters of credit generally or the
Letter of Credit in particular or shall impose upon such L/C Issuer with respect
to the Letter of Credit any restriction, reserve or capital requirement (for
which such L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which such L/C
Issuer in good faith deems material to it;

(B) the issuance of the Letter of Credit would violate one or more policies of
such L/C Issuer applicable to letters of credit generally (it being acknowledged
by the L/C Issuer that issuance of Letters of Credit for purposes of supporting
reinsurance and insurance obligations or to meet insurance regulatory
requirements would not violate any policy);

(C) except as otherwise agreed by the Administrative Agent and the Applicable
Issuing Party, the Letter of Credit is in an initial stated amount less than
$100,000;

(D) such Letter of Credit is to be denominated in a currency other than Dollars
or an Alternative Currency or, after giving effect to such issuance the Dollar
Equivalent of the stated amount of all Letters of Credit denominated in an
Alternative Currency plus the aggregate principal amount of all Loans
denominated in Alternative Currencies would exceed the Alternative Currency
Sublimit;

 

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(E) in the case of a Several Letter of Credit, (1) such Letter of Credit is not
substantially in the form of Exhibit E (provided that the Applicable Issuing
Party can and will agree to reasonable changes to such form, not adverse to
interests of the Lenders, necessary to satisfy any then applicable requirements
of the Applicable Insurance Regulatory Authority) and (2) any Lender has advised
the L/C Administrator that it must be a Participating Bank with respect to such
Several Letter of Credit unless such Lender has entered into an agreement with a
Fronting Bank to front for such Lender under such Several Letter of Credit;

(F) any Lender is at that time a Defaulting Lender, unless, in the case of a
Fronted Letter of Credit or a Several Letter of Credit as to which such
Defaulting Bank is a Participating Bank, the applicable Fronting Bank (x) has
entered into arrangements, including the delivery of Cash Collateral,
satisfactory to such Fronting Bank (in its sole discretion) with such Lender or
(y) has received Cash Collateral from (or entered into other arrangements
satisfactory to the Fronting Bank in its sole discretion with) AXIS Capital to
eliminate such Fronting Bank’s actual or potential Fronting Exposure (after
giving effect to Section 2.16 (a)(iv)) with respect to the Defaulting Lender
arising from either the Letter of Credit then proposed to be issued or that
Fronted Letter of Credit and all other L/C Obligations (including as Fronting
Bank for a Participating Bank) as to which such Fronting Bank has actual or
potential Fronting Exposure, as it may elect in its sole discretion; or

(G) the Letter of Credit contains any provisions for automatic reinstatement of
the stated amount after any drawing thereunder.

(iv) The Applicable Issuing Party shall not amend any Letter of Credit if
(A) the Applicable Issuing Party would not be permitted at such time to issue
the Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of the Letter of Credit does not accept the proposed amendment to
the Letter of Credit.

(v) The L/C Administrator is hereby authorized to execute and deliver each
Several Letter of Credit and each amendment to a Several Letter of Credit on
behalf of each Lender (unless such Lender has advised the L/C Administrator that
it is a Participating Bank and the Person who has agreed to be its Fronting Bank
under Several Letters of Credit). The L/C Administrator shall use the Applicable
Percentage of an L/C Issuer under each Several Letter of Credit provided that
the applicable Fronting Bank for such Participating Bank shall be severally (and
not jointly) liable for an amount equal to its Applicable Percentage plus the
Applicable Percentage of such Participating Bank. The L/C Administrator shall
not amend any Several Letter of Credit to change the “Commitment shares” of a
Lender or add or delete a Lender liable thereunder unless such amendment is done
in connection with an assignment in accordance with Section 10.06, a change in
the Lenders and/or the Applicable Percentages as a result of any increase in the
Aggregate Commitments pursuant to Section 2.14 or any other addition or
replacement of a Lender in accordance with the terms of this Agreement or a
change in status of a Lender as a Participating Bank. Fees owed by any
Participating Bank to the applicable Fronting Bank pursuant to Section 2.03(i)
shall accrue for the account of such Participating Bank only during such period

 

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as such Lender is a Participating Bank with respect to any such Several Letter
of Credit. Each Lender hereby irrevocably constitutes and appoints the L/C
Administrator its true and lawful attorney-in-fact for and on behalf of such
Lender with full power of substitution and revocation in its own name or in the
name of the L/C Administrator to issue, execute and deliver, as the case may be,
each Several Letter of Credit and each amendment to a Several Letter of Credit
and to carry out the purposes of this Agreement with respect to Several Letters
of Credit. Upon request, each Lender shall execute such powers of attorney or
other documents as any beneficiary of any Several Letter of Credit may
reasonably request to evidence the authority of the L/C Administrator to execute
and deliver such Several Letter of Credit and any amendment or other
modification thereto on behalf of the Lenders. Each Lender shall promptly notify
the L/C Administrator if it ceases to be a NAIC Approved Bank and whether
another Lender has agreed to act as its Fronting Bank.

(vi) The Applicable Issuing Party shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith, and the Applicable Issuing Party shall have all of the benefits and
immunities (A) provided to the Administrative Agent in Article IX with respect
to any acts taken or omissions suffered by the Applicable Issuing Party in
connection with Letters of Credit issued by it or proposed to be issued by it
and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article IX included the Fronting Banks
and the L/C Administrator with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the Fronting Banks and the L/C
Administrator.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the applicable L/C Borrower delivered to (x) a Fronting Bank, in
the case of Fronted Letters of Credit and (y) the L/C Administrator, in the case
of Several Letters of Credit (with a copy in each case to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed
and signed by a Responsible Officer of the applicable L/C Borrower. Such Letter
of Credit Application must be received by the Applicable Issuing Party and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the Administrative Agent and the Applicable Issuing
Party may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Applicable
Issuing Party: (A) the name of the account party, which shall be the applicable
L/C Borrower, (B) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (C) the amount and currency thereof; (D) the
expiry date thereof (which shall be the earlier of the date which is twelve
months from the date of issuance (or, (1) in the case of Letters of Credit
denominated in Canadian Dollars, thirteen months and (2) in the case of Letters
of Credit denominated

 

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in Australian Dollars or New Zealand Dollars, twenty-four months, in each case
solely if necessary for regulatory purposes) or the Letter of Credit Expiration
Date); (E) the name and address of the beneficiary thereof and, if such L/C
Borrower is an Irish company, the necessary information regarding the
beneficiary to establish that such beneficiary is neither habitually resident
in, nor has a place of establishment in, Ireland; (F) the documents to be
presented by such beneficiary in case of any drawing thereunder; (G) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; (H) the purpose and nature of the requested Letter of
Credit; (I) whether such Letter of Credit shall be an Auto-Extension Letter of
Credit; (J) whether such Letter of Credit is to be a Fronted Letter of Credit or
a Several Letter of Credit; and, in the case of Several Letters of Credit, in
the event a Lender advises the L/C Administrator that such Lender is a
Participating Bank, such Participating Bank’s Applicable Percentage of such
Several Letter of Credit will be issued by the applicable Fronting Bank);
(K) whether such Letter of Credit will be a Secured Letter of Credit;
(L) whether such Letter of Credit shall be issued under the rules of the ISP or
the UCP; and (M) such other matters as the Applicable Issuing Party may require.
In the case of a request for an amendment of any outstanding Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory
to the Applicable Issuing Party (1) the Letter of Credit to be amended; (2) the
proposed date of amendment thereof (which shall be a Business Day); (3) the
nature of the proposed amendment; and (4) such other matters as the Applicable
Issuing Party may require. Additionally, the applicable L/C Borrower shall
furnish to the Applicable Issuing Party and the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit issuance
or amendment, as the Applicable Issuing Party or the Administrative Agent may
reasonably require.

(ii) Promptly after receipt of any Letter of Credit Application, the Applicable
Issuing Party will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the applicable L/C Borrower and, if not, the Applicable
Issuing Party will provide the Administrative Agent with a copy thereof. Unless
the Applicable Issuing Party has received written notice from any Lender, the
Administrative Agent or the applicable L/C Borrower, at least one Business Day
prior to the requested date of issuance or amendment of the applicable Letter of
Credit, that one or more applicable conditions contained in Article IV shall not
then be satisfied, then, subject to the terms and conditions hereof, the
Applicable Issuing Party shall, on the requested date, issue a Letter of Credit
for the account of the applicable L/C Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the Applicable
Issuing Party’s usual and customary business practices. Immediately upon the
issuance of each Fronted Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the issuing
Fronting Bank a risk participation in such Fronted Letter of Credit in an amount
equal to the product of such Lender’s Applicable Percentage times the amount of
such Letter of Credit and immediately upon the issuance of a Several Letter of
Credit in which a Fronting Bank has “fronted” for a Participating Bank, each
Participating Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, without recourse or warranty, purchase from the
issuing Fronting Bank a risk participation in such Several Letter of Credit in
an amount equal to the product of such Lender’s Applicable Percentage times the
amount of such Several Letter of Credit.

 

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(iii) If the applicable L/C Borrower so requests in any applicable Letter of
Credit Application, the Applicable Issuing Party may, in its sole discretion,
agree to issue a Letter of Credit that has automatic extension provisions (each,
an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the Applicable Issuing Party to prevent any such
extension at least once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the beneficiary
thereof not later than a day (the “Non-Extension Notice Date”) in each such
twelve-month period to be agreed upon at the time such Letter of Credit is
issued. Unless otherwise directed by the Applicable Issuing Party, the
applicable L/C Borrower shall not be required to make a specific request to the
Applicable Issuing Party for any such extension. Once an Auto-Extension Letter
of Credit has been issued, the Lenders shall be deemed to have authorized (but
may not require) the Applicable Issuing Party to permit the extension of such
Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the Applicable Issuing Party
shall not permit any such extension if (A) the Applicable Issuing Party has
determined that it would not be permitted, or would have no obligation, at such
time to issue such Letter of Credit in its revised form (as extended) under the
terms hereof (by reason of the provisions of clause (ii) or (iii) of
Section 2.03(a) or otherwise), or (B) it has received notice (which may be by
telephone or in writing) on or before the day that is seven Business Days before
the Non-Extension Notice Date (1) from the Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or the applicable L/C Borrower that one or more
of the applicable conditions specified in Section 4.02 is not then satisfied,
and in each such case directing the Applicable Issuing Party not to permit such
extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the Applicable Issuing Party will also deliver to the applicable L/C
Borrower and the Administrative Agent a true and complete copy of such Letter of
Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit (a “Drawing Request”), the Applicable
Issuing Party shall notify the applicable L/C Borrower and the Administrative
Agent of the receipt of such Drawing Request and of the date the Applicable
Issuing Party will honor such request (each such date, an “Honor Date”). Not
later than 10:00 a.m. on such Honor Date in the case of Letters of Credit to be
reimbursed in Dollars or the Applicable Time on the Honor Date with respect to
Letters of Credit to be reimbursed in an Alternative Currency, the applicable
L/C Borrower shall reimburse the respective L/C Issuers through the
Administrative Agent in Same Day Funds the amount of the

 

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Drawing Request. In the case of a Fronted Letter of Credit denominated in an
Alternative Currency, the applicable L/C Borrower shall reimburse the applicable
Fronting Bank through the Administrative Agent in such Alternative Currency,
unless (A) the applicable Fronting Bank (at its option) shall have specified in
such notice that it will require reimbursement in Dollars, or (B) in the absence
of any such requirement for reimbursement in Dollars, such Borrower shall have
notified the applicable Fronting Bank promptly following receipt of notice of
drawing that such Borrower will reimburse the applicable Fronting Bank in
Dollars. In the case of a Several Letter of Credit denominated in an Alternative
Currency, the applicable L/C Borrower shall reimburse the respective L/C Issuers
issuing such Several Letter of Credit through the Administrative Agent in
Dollars. In the case of any such reimbursement in Dollars of a drawing under a
Letter of Credit denominated in an Alternative Currency, the Administrative
Agent shall notify the applicable L/C Borrower of the Dollar Equivalent of the
amount of the drawing promptly following the determination thereof. To the
extent that Same Day Funds are received by the Administrative Agent from the
applicable L/C Borrower prior to 10:00 a.m. (or the Applicable Time in the case
of any Letter of Credit to be reimbursed in an Alternative Currency) on the
Honor Date, the Administrative Agent shall remit the funds so received to the
Applicable Issuing Party. Any notice given by the Applicable Issuing Party or
the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

(ii) With respect to any Drawing Request, if Same Day Funds are not received by
the Administrative Agent from the applicable L/C Borrower prior to 11:00 a.m.
(or the Applicable Time in the case of any Letter of Credit to be reimbursed in
an Alternative Currency) on the Honor Date in the amount of such Drawing
Request, the Administrative Agent shall promptly notify each Lender of such
Drawing Request, the amount of the unreimbursed drawing (the “Unreimbursed
Amount”) and such Lender’s Applicable Percentage of such Unreimbursed Amount. If
such Unreimbursed Amount relates to a Letter of Credit issued in an Alternative
Currency, such Unreimbursed Amount shall be the Dollar Equivalent (as calculated
by the Administrative Agent using the Spot Rate) of the Drawing Request. Each
Lender shall make funds available in Dollars to the Administrative Agent for the
account of the Applicable Issuing Party at the Administrative Agent’s Office in
an amount equal to its Applicable Percentage of the Unreimbursed Amount not
later than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent (the “L/C Advance Date”). The Administrative Agent shall
remit the funds so received to the Applicable Issuing Party. To the extent that
Same Day Funds are received by the Administrative Agent from the Lenders (or the
Fronting Bank on behalf of a Participating Bank) with respect to a Several
Letter of Credit prior to 2:00 p.m. on the L/C Advance Date, the Administrative
Agent shall notify the L/C Administrator and the L/C Administrator shall
promptly make such funds available to the beneficiary of such Several Letter of
Credit on such date. To the extent that the L/C Administrator has not delivered
funds to any beneficiary of a Several Letter of Credit on behalf of a Lender on
the L/C Advance Date, if Same Day Funds are received by the Administrative Agent
from such Lender:

 

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(i) after 2:00 p.m. on the L/C Advance Date, the L/C Administrator shall make
such funds available to such beneficiary on the next Business Day; (ii) prior to
2:00 p.m. on any Business Day after the L/C Advance Date, the L/C Administrator
shall make those funds available to such beneficiary on such Business Day; and
(iii) after 2:00 p.m. on any Business Day after the L/C Advance Date, the L/C
Administrator shall make those funds available to such beneficiary on the next
Business Day following such Business Day.

(iii) Unless the Administrative Agent or L/C Administrator receives notice from
a Lender prior to any L/C Advance Date with respect to a Several Letter of
Credit that such Lender will not make available as and when required hereunder
to the Administrative Agent the amount of such Lender’s L/C Advance on such L/C
Advance Date, the Administrative Agent and the L/C Administrator may assume that
such Lender has made such amount available to the Administrative Agent in Same
Day Funds on the L/C Advance Date and the L/C Administrator may (but shall not
be required), in reliance upon such assumption, make available to the
beneficiary of the related Several Letter of Credit on such date such Lender’s
L/C Advance.

(iv) With respect to any Unreimbursed Amount, the applicable L/C Borrower shall
be deemed to have incurred an L/C Advance in the Dollar Equivalent of the
Unreimbursed Amount from (x) in the case of Fronted Letters of Credit, the
issuing Fronting Bank and (y) in the case of Several Letters of Credit, from the
Lenders to the extent that they have provided funds with respect to such Several
Letter of Credit pursuant to Section 2.03(c)(ii), from the Fronting Bank to the
extent it has made funds available on behalf of a Participating Bank or from the
L/C Administrator to the extent it has made funds available on behalf of a
Lender pursuant to Section 2.03(c)(iii). L/C Advances shall be due and payable
on demand (together with interest) and shall bear interest at the Default Rate.
Each Lender’s or Participating Bank’s payment to the Administrative Agent for
the account of a Fronting Bank pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Advance and shall constitute
an L/C Advance from such Lender in satisfaction of its participation obligation
under this Section 2.03. Any payment by a Borrower in respect of such L/C
Advance shall be made to the Administrative Agent and upon receipt applied by
the Administrative Agent in accordance with Section 2.03(d).

(v) Until each Lender funds its L/C Advance pursuant to this Section 2.03(c) to
reimburse a Fronting Bank (or the L/C Administrator pursuant to
Section 2.03(c)(iii)) for any amount drawn under any Letter of Credit, interest
in respect of such Lender’s Applicable Percentage of such Unreimbursed Amount
shall be solely for the account of the relevant Fronting Bank or the L/C
Administrator, as applicable.

(vi) Each Lender’s obligation to make L/C Advances to reimburse the relevant
issuing Fronting Bank (or the L/C Administrator pursuant to
Section 2.03(c)(iii)) for amounts drawn under Letters of Credit, as contemplated
by this Section 2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other

 

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right which such Lender may have against the Administrative Agent, any Fronting
Bank, the L/C Administrator, any Lender, any Borrower, any beneficiary named in
any Letter of Credit, any transferee of any Letter of Credit (or any Persons for
whom any such transferring may be acting) or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, (C) any lack of
validity or enforceability of such Letter of Credit, this Agreement or any other
Loan Document, (D) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, (E) the surrender or impairment of any security for the performance or
observance of any of the terms of the Loan Documents, (F) any matter or event
set forth in Section 2.03(b)(i), or (G) any other occurrence, event or
condition, whether or not similar to any of the foregoing. No such making of an
L/C Advance shall relieve or otherwise impair the obligation of the applicable
L/C Borrower to reimburse the respective L/C Issuers for the amount of any
payment made by the respective L/C Issuers under any Letter of Credit, together
with interest as provided herein.

(vii) If any Lender fails to make available to the Administrative Agent for the
account of a Fronting Bank or the L/C Administrator any amount required to be
paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c)
by the time specified in Section 2.03(c)(ii), such Fronting Bank or the L/C
Administrator, as the case may be, shall be entitled to recover from such Lender
(acting through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to such Fronting Bank or the L/C
Administrator, as the case may be, at a rate per annum equal to the Federal
Funds Rate, plus any administrative, processing or similar fees customarily
charged by such Fronting Bank or the L/C Administrator in connection with the
foregoing. A certificate of such Fronting Bank or the L/C Administrator, as the
case may be, submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (vii) shall be conclusive absent
manifest error.

(d) Repayment of Participations.

(i) At any time after the Applicable Issuing Party has made a payment under any
Letter of Credit and has received from any Lender such Lender’s L/C Advance in
respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from a Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its Applicable
Percentage thereof in the same funds as those received by the Administrative
Agent.

 

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(ii) If any payment received by the Administrative Agent pursuant to
Section 2.03(c)(i) is required to be returned under any of the circumstances
described in Section 10.05 (including pursuant to any settlement entered into by
the applicable Fronting Bank or the L/C Administrator in its discretion), each
Lender shall pay to the Administrative Agent for the account of such Fronting
Bank or L/C Administrator its Applicable Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

(e) Obligations Absolute. The obligation of a Borrower to reimburse the
respective L/C Issuers for each drawing under each Letter of Credit as to each
Letter of Credit issued for its account and to repay each related L/C Borrowing
shall be absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that AXIS Capital or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Applicable Issuing Party
or any L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

(iv) any adverse change in the relevant exchange rates or in the availability of
the relevant Alternative Currency to any Borrower or in the relevant currency
markets generally;

(v) any payment by the Applicable Issuing Party under such Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit; or any payment made by the Applicable
Issuing Party under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law; or

(vi) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, AXIS Capital or any
Subsidiary.

 

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The applicable L/C Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with the applicable L/C Borrower’s instructions or
other irregularity, the applicable L/C Borrower will immediately notify the
Applicable Issuing Party. The applicable L/C Borrower shall be conclusively
deemed to have waived any such claim against the Applicable Issuing Party and
its correspondents unless such notice is given as aforesaid.

(f) Role of Applicable Issuing Party. Each Lender and each Borrower agree that,
in paying any drawing under a Letter of Credit, the Applicable Issuing Party
shall not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document. None of
the Applicable Issuing Parties, the Lenders, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of an Applicable Issuing Party shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct as determined
by a court of competent jurisdiction by final nonappealable judgment; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Issuer Document. Each
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude such Borrower
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the Applicable Issuing
Parties, the Lenders, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of an Applicable Issuing
Party shall be liable or responsible for any of the matters described in clauses
(i) through (iv) of Section 2.03(e); provided, however, that anything in such
clauses to the contrary notwithstanding, the applicable L/C Borrower may have a
claim against the Applicable Issuing Party and/or the Lenders, and the
Applicable Issuing Party and/or the Lenders may be liable to the applicable L/C
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the applicable L/C Borrower
which the applicable L/C Borrower proves in a final court of competent
jurisdiction were caused by the Applicable Issuing Party’s and/or a Lender’s
willful misconduct or gross negligence or the Applicable Issuing Party’s and/or
a Lender’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the Applicable Issuing Party
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and neither the Applicable Issuing Party nor any
Lender shall be responsible for 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.

 

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(g) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
Applicable Issuing Party and the applicable L/C Borrower when a Letter of Credit
is issued, the rules of the ISP (unless, for regulatory purposes, the rules of
the UCP are required) and, to the extent not inconsistent therewith, the laws of
the State of New York shall apply.

(h) Letter of Credit Fees. The applicable L/C Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage in Dollars, a Letter of Credit fee (the “Letter of Credit
Fee”) for each Letter of Credit equal to the Applicable Rate times the Dollar
Equivalent of the daily amount available to be drawn under such Letter of
Credit; provided, however, any Letter of Credit Fees otherwise payable for the
account of a Defaulting Lender with respect to any Letter of Credit as to which
such Defaulting Lender has not provided Cash Collateral satisfactory to each
Fronting Bank pursuant to this Section 2.03 shall be payable, to the maximum
extent permitted by Applicable Law, to the other Lenders in accordance with the
upward adjustments in their respective Applicable Percentages allocable to such
Letter of Credit pursuant to Section 2.16(a)(iv), with the balance of such fee,
if any, payable to the issuing Fronting Bank for its own account. For purposes
of computing the daily amount available to be drawn under any Letter of Credit,
the amount of such Letter of Credit shall be determined in accordance with
Section 1.08. Letter of Credit Fees shall be (i) due and payable on the tenth
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand and
(ii) computed on a quarterly basis in arrears. If there is any change in the
Applicable Rate during any quarter, the daily amount available to be drawn under
each Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter
of Credit Fees shall accrue at the Default Rate.

(i) Fronting Fee and Documentary and Processing Charges Payable to Fronting
Banks.

(i) Each L/C Borrower shall pay directly to each Fronting Bank for its own
account in Dollars a fronting fee with respect to each Fronted Letter of Credit
issued for the account of such Borrower by such Fronting Bank, at the rate per
annum agreed to between AXIS Capital and such Fronting Bank, computed on the
Dollar Equivalent of the daily amount available to be drawn under such Letter of
Credit shall be (i) due and payable on the tenth Business Day after the end of
each March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand and (ii) computed on a quarterly basis
in arrears, it being understood that each Fronting Bank will invoice each L/C
Borrower directly for amounts due under this Section 2.03(i). For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.09. In addition, each L/C Borrower shall pay directly to the
Applicable Issuing Party for its own account, in Dollars, the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the Fronting Banks relating to letters of credit as from
time to time in effect. Such fees are due and payable on demand and are
nonrefundable.

 

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(ii) Each Participating Bank with respect to a Several Letter of Credit shall
pay to the applicable Fronting Bank a fronting fee (the “Several L/C Fronting
Fee”) computed on the risk participation purchased by such Participating Bank
from such Fronting Bank with respect to such Several Letter of Credit at the
rate per annum specified under subclause (i) above. Unless otherwise agreed
between such Participating Bank, the Fronting Banks and the Administrative
Agent, the Several L/C Fronting Fee shall be paid quarterly in arrears and each
Fronting Bank will invoice the Participating Banks for any Several L/C Fronting
Fees owed to it.

(j) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

2.04 Prepayments.

(a) Each Borrower may, upon notice to the Administrative Agent, at any time or
from time to time voluntarily prepay Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the Administrative
Agent not later than 11:00 a.m. (A) three Business Days prior to any date of
prepayment of Eurocurrency Rate Loans denominated in Dollars, (B) four Business
Days prior to any date of prepayment of Eurocurrency Rate Loans denominated in
Alternative Currencies, and (C) on the date of prepayment of Base Rate Loans;
(ii) any prepayment of Eurocurrency Rate Loans denominated in Dollars shall be
in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; (iii) any prepayment of Eurocurrency Rate Loans denominated in
Alternative Currencies shall be in a minimum principal amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof; and (iv) any prepayment of Base
Rate Loans shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid and, if
Eurocurrency Rate Loans are to be prepaid, the Interest Period(s) of such Loans.
The Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender’s Applicable Percentage of such
prepayment. If such notice is given by a Borrower, such Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurocurrency Rate
Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05. Each
such prepayment shall be applied to the Loans of the Lenders in accordance with
their respective Applicable Percentages.

(b) If for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, AXIS Capital shall immediately (or shall cause one
or more Designated Borrowers to) prepay Loans and/or Cash Collateralize the L/C
Obligations in an aggregate amount equal to such excess; provided, however, that
AXIS Capital shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.04(b) unless after the prepayment in full of the
Loans the Total Outstandings exceed the Aggregate Commitments then in effect.

 

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(c) If the Administrative Agent notifies AXIS Capital at any time that the
Outstanding Amount of all Credit Extensions denominated in Alternative
Currencies at such time exceeds an amount equal to 105% of the Alternative
Currency Sublimit then in effect, then, within two Business Days after receipt
of such notice, AXIS Capital shall (or shall cause one or more Designated
Borrowers to) prepay Loans denominated in Alternative Currencies in an aggregate
amount sufficient to reduce such Outstanding Amount as of such date of payment
to an amount not to exceed 100% of the Alternative Currency Sublimit then in
effect or Cash Collateralize the L/C Obligations in an amount equal to such
excess.

(d) Upon the request of AXIS Capital made within two Business Days following any
Revaluation Date, the Administrative Agent will, so long as no Default then
exists, release Cash Collateral to AXIS Capital or the applicable Designated
Borrower, as the case may be, to the extent that such Cash Collateral is no
longer required pursuant to Section 2.04(b), (c) or (d), as applicable.

(e) The Administrative Agent or the Applicable Issuing Party may, at any time
and from time to time after the initial deposit of Cash Collateral pursuant to
Section 2.04(b), (c) or (d), request additional Cash Collateral to the extent
the amount of Cash Collateral provided pursuant thereto is no longer sufficient
due to exchange rate fluctuations.

(f) On the Letter of Credit Expiration Date or, if earlier, the date the
Obligations are accelerated pursuant to Section 8.02, and until the final
expiration date of any Letter of Credit which was not issued as a Secured Letter
of Credit (each, an “Unsecured Letter of Credit”) and thereafter so long as any
L/C Obligations with respect to such Unsecured Letters of Credit are
outstanding, AXIS Capital shall (or shall cause the applicable Designated
Borrowers to), Cash Collateralize with Cash and Cash Equivalents the L/C
Obligations in respect of Unsecured Letters of Credit of such Borrower in an
amount equal to the Dollar Equivalent of 105% of the outstanding L/C Obligations
with respect to such Unsecured Letters of Credit.

2.05 Termination or Reduction of Commitments. AXIS Capital may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments, or from time to
time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) AXIS Capital shall not terminate
or reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Alternative Currency Sublimit exceeds the amount of
the Aggregate Commitments, the Alternative Currency Sublimit shall be
automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. The amount of any such Aggregate Commitment

 

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reduction shall not be applied to the Alternative Currency Sublimit unless
otherwise specified by AXIS Capital. Any reduction of the Aggregate Commitments
shall be applied to the Commitment of each Lender according to its Applicable
Percentage. All fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.

2.06 Repayment of Loans. Each Borrower shall repay to the Lenders on the
Maturity Date the aggregate principal amount of its Loans outstanding on such
date.

2.07 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurocurrency
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurocurrency Rate for such
Interest Period plus the Applicable Rate plus (in the case of a Eurocurrency
Rate Loan of any Lender which is lent from a Lending Office in the United
Kingdom or a Participating Member State) the Mandatory Cost; and (ii) each Base
Rate Loan shall bear interest on the outstanding principal amount thereof from
the applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Rate.

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

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

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

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

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

 

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2.08 Fees. In addition to certain fees described in subsections (h) and (i) of
Section 2.03:

(a) Commitment Fee. AXIS Capital shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a
commitment fee in Dollars equal to the Applicable Rate times the actual daily
amount by which the Aggregate Commitments exceed the sum of (i) the Outstanding
Amount of Loans and (ii) the Outstanding Amount of L/C Obligations, subject to
adjustment as provided in Section 2.16. The commitment fee shall accrue at all
times during the Availability Period, including at any time during which one or
more of the conditions in Article IV is not met, and shall be due and payable
quarterly in arrears on the tenth Business Day after the end of each March,
June, September and December, commencing with the first such date to occur after
the Closing Date, and on the last day of the Availability Period. The commitment
fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.

(b) Other Fees. (i) AXIS Capital shall pay to the Arranger, the Fronting Banks
and the Administrative Agent for their own respective accounts fees, in Dollars,
in the amounts and at the times specified in the Fee Letter. Such fees shall be
fully earned when paid and shall not be refundable for any reason whatsoever.

(ii) AXIS Capital shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

2.09 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by the Prime Rate shall be made on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed. All other computations of fees and interest shall be made on the basis
of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year), or, in the case of interest in respect of Loans denominated in
Alternative Currencies as to which market practice differs from the foregoing,
in accordance with such market practice. Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid; provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.11(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder (including the
determination of the Base Rate or the Eurocurrency Rate) shall be conclusive and
binding for all purposes, absent manifest error.

2.10 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrowers and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the

 

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obligation of the Borrowers hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, each Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender’s Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit. In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts and
records of any Lender in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error.

2.11 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein and except with respect to
principal of and interest on Loans denominated in an Alternative Currency, all
payments by the Borrowers hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
applicable Administrative Agent’s Office in Dollars and in Same Day Funds not
later than 2:00 p.m. on the date specified herein. Except as otherwise expressly
provided herein, all payments by the Borrowers hereunder (i) in the case of
principal and interest on Loans denominated in an Alternative Currency shall be
made to the Administrative Agent, for the account of the respective Lenders to
which such payment is owed, (ii) in the case of Fronted Letters of Credit, to
the Administrative Agent, for the account of the issuing Fronting Bank, at the
applicable Administrative Agent’s Office in such Alternative Currency and in
Same Day Funds not later than the Applicable Time specified by the
Administrative Agent on the dates specified herein and (iii) in the case of
Several Letters of Credit, to the Administrative Agent, for the account of the
Lenders who have issued such Letter of Credit in each case at the applicable
Administrative Agent’s Office in such Alternative Currency and in Same Day Funds
not later than the Applicable Time specified by the Administrative Agent on the
dates specified herein. Without limiting the generality of the foregoing, the
Administrative Agent may require that any payments due under this Agreement be
made in the United States. If, for any reason, any Borrower is prohibited by
Applicable Law from making any required payment hereunder in an Alternative
Currency, such Borrower shall make such payment in Dollars in the Dollar
Equivalent of the Alternative Currency payment amount. The Administrative Agent
will promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office. All payments received by the
Administrative Agent (i) after 2:00 p.m., in the case of payments in Dollars, or
(ii) after the Applicable Time

 

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specified by the Administrative Agent in the case of payments in an Alternative
Currency, shall in each case be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. If any payment
to be made by any Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.

(b)     (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case of
any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Section 2.02) and may, in reliance upon such assumption, make available to
the applicable Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the applicable Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in Same Day Funds with interest thereon, for each day from
and including the date such amount is made available to such Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the Overnight Rate, plus any
administrative, processing or similar fees customarily charged by the
Administrative Agent in connection with the foregoing, and (B) in the case of a
payment to be made by such Borrower, the interest rate applicable to Base Rate
Loans. If such Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to such Borrower the amount of such interest paid by
such Borrower for such period. If such Lender pays its share of the applicable
Borrowing to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Loan included in such Borrowing. Any payment by such Borrower
shall be without prejudice to any claim such Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

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

 

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A notice of the Administrative Agent to any Lender or any Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the applicable Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in Article IV are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans, to fund Several Letters of Credit, to purchase participations in
Letters of Credit and to make payments pursuant to Section 10.04(c) are several
and not joint. The failure of any Lender to make any Loan, to fund any Several
Letter of Credit, to purchase a participation in any Fronted Letter of Credit or
to make any payment under Section 10.04(c) on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Loan, to fund a Several Letter of Credit, to purchase its
participation in a Fronted Letter of Credit or make its payment under
Section 10.04(c).

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

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

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

 

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(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by or on behalf of a Borrower pursuant to and in accordance with
the express terms of this Agreement (including the application of funds arising
from the existence of a Defaulting Lender), (y) the application of Cash
Collateral provided for in Section 2.15, or (z) any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its
Loans or subparticipations in L/C Obligations to any assignee or participant,
other than an assignment to AXIS Capital or any Subsidiary thereof (as to which
the provisions of this Section shall apply).

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

2.13 Designated Borrowers.

(a) Effective as of the date hereof each of AXIS Finance, AXIS Specialty, AXIS
Specialty Europe, AXIS Re, AXIS Insurance, AXIS Reinsurance, AXIS Surplus, AXIS
Specialty Holdings, AXIS Specialty Holdings Ireland, AXIS Specialty Global, AXIS
Specialty US, AXIS US Services and AXIS Group Services shall be a “Designated
Borrower” hereunder and may receive Loans and, if such Person is an L/C
Borrower, have Letters of Credit issued for its account on the terms and
conditions set forth in this Agreement.

(b) AXIS Capital may at any time, upon not less than 10 Business Days’ notice
from AXIS Capital to the Administrative Agent, designate any additional
Subsidiary of AXIS Capital (an “Applicant Borrower”) as a Designated Borrower to
receive Loans hereunder and, if such Applicant Borrower is an Insurance Company,
request Letters of Credit by delivering to the Administrative Agent (which shall
promptly deliver counterparts thereof to each Lender) a duly executed notice and
agreement in substantially the form of Exhibit F (a “Designated Borrower Request
and Assumption Agreement”). The parties hereto acknowledge and agree that prior
to any Applicant Borrower becoming entitled to utilize the credit facilities
provided for herein the Administrative Agent and the Lenders shall have received
such supporting resolutions, incumbency certificates, opinions of counsel and
other documents or information, in form, content and scope reasonably
satisfactory to the Administrative Agent, as may be required by the
Administrative Agent or the Required Lenders in their sole discretion, and Notes
signed by such new Borrowers to the extent any Lenders so require. If the
Administrative Agent and the Lenders (or, in the case of Applicant Borrowers
organized under the Laws of the United States or a state thereof or Bermuda, the
Required Lenders) agree that an Applicant Borrower shall be entitled to Letters
of Credit and receive Loans hereunder (including, if payments by such Applicant
Borrower to any Foreign Lender would be subject to withholding Taxes that are
Excluded Taxes, an agreement from such Foreign Lender(s) that such withholding
Taxes will be included in the definition of Excluded Taxes unless the Applicant
Borrower has agreed that such withholding Taxes will not be Excluded Taxes),
then promptly following receipt of all such requested resolutions, incumbency
certificates, opinions of counsel and other documents or information, the
Administrative Agent shall send a notice in

 

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substantially the form of Exhibit G (a “Designated Borrower Notice”) to AXIS
Capital and the Lenders specifying the effective date upon which the Applicant
Borrower shall constitute a Designated Borrower for purposes hereof, whereupon
each of the Lenders agrees to permit such Designated Borrower to request Letters
of Credit and receive Loans hereunder, on the terms and conditions set forth
herein, and each of the parties agrees that such Designated Borrower otherwise
shall be a Borrower for all purposes of this Agreement; provided that no Loan
Notice or Letter of Credit Application may be submitted by or on behalf of such
Designated Borrower until the date five Business Days after such effective date.

(c) The Obligations of AXIS Capital (except as otherwise provided herein or in
another Loan Document) and the Obligations of each Designated Borrower shall be
several in nature and no Designated Borrower will be liable for the Obligations
of another Borrower.

(d) Each Subsidiary of AXIS Capital that is or becomes a “Designated Borrower”
pursuant to this Section 2.13 hereby irrevocably appoints AXIS Capital as its
agent for all purposes relevant to this Agreement and each of the other Loan
Documents, including (i) the giving and receipt of notices, (ii) the execution
and delivery of all documents, instruments and certificates contemplated herein
and all modifications hereto, and (iii) the receipt of the proceeds of any Loans
made by the Lenders to any such Designated Borrower hereunder. Any
acknowledgment, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by all Borrowers, or by
each Borrower acting singly, shall be valid and effective if given or taken only
by AXIS Capital, whether or not any such other Borrower joins therein. Any
notice, demand, consent, acknowledgement, direction, certification or other
communication delivered to AXIS Capital in accordance with the terms of this
Agreement shall be deemed to have been delivered to each Designated Borrower.

(e) AXIS Capital may from time to time, upon not less than 5 Business Days’
notice from AXIS Capital to the Administrative Agent (or such shorter period as
may be agreed by the Administrative Agent in its sole discretion), terminate a
Designated Borrower’s status as such, provided that there are no Letters of
Credit issued for the account of such Designated Borrower, and there are no
outstanding Loans payable by such Designated Borrower, or other amounts payable
by such Designated Borrower on account of any Loans made to it, as of the
effective date of such termination. The Administrative Agent will promptly
notify the Lenders of any such termination of a Designated Borrower’s status.

2.14 Increase in Commitments.

(a) Request for Increases to Commitments. AXIS Capital shall have the right at
any time prior to the date that is 30 days prior to the Maturity Date to
increase the aggregate Commitments hereunder by an amount (for all such
requests) not exceeding $150,000,000 by adding to this Agreement one or more
other Eligible Assignees (which may include any existing Lender, with the
consent of such Lender in its sole discretion) (each such bank, a “Supplemental
Lender”) with the approval of (x) the Administrative Agent (which approval shall
not be unreasonably withheld or delayed); provided that no consent of the
Administrative Agent will be required in the case of any such Eligible Assignee
that is a Lender, an Affiliate of a Lender or an Approved Fund with respect to a
Lender and (y) each Fronting Bank (which

 

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approval shall not be unreasonably withheld or delayed), provided that (i) each
Supplemental Lender shall have entered into an agreement pursuant to which such
Supplemental Lender shall undertake a Commitment (or, if such Supplemental
Lender is an existing Lender, pursuant to which its Commitment shall be
increased), (ii) such Commitment of any Supplemental Lender that is not an
existing Lender shall be in an amount of at least $25,000,000 or, if higher, a
multiple of $1,000,000, (iii) such Commitment (together with the increased
Commitment(s) of all other Supplemental Lenders being provided at such time)
shall be in an aggregate amount of at least $25,000,000 or, if higher, a
multiple of $1,000,000, and (iv) if such Supplemental Lender will need to be a
Participating Bank, a Fronting Bank shall have agreed to front for such
Supplemental Lender under Several Letters of Credit on terms satisfactory to
such Fronting Bank.

(b) Required Supplemental Lender Documentation. Each such Supplemental Lender
shall enter into an agreement in form and substance satisfactory to AXIS Capital
and the Administrative Agent and its counsel pursuant to which such Supplemental
Lender shall, as of the effective date of such increase in the Commitments
(which shall be a Business Day and, unless the Administrative Agent otherwise
agrees, on which no issuance, amendment, renewal or extension of any Letter of
Credit is scheduled to occur or no Borrowing is scheduled to be made, each a
“Supplemental Commitment Date”), undertake a Commitment (or, if any such
Supplemental Lender is an existing Lender, its Commitment shall be in addition
to such Lender’s Commitment hereunder on such date) and such Supplemental Lender
shall thereupon become (or continue to be) a “Lender” for all purposes hereof.

(c) Conditions to Effectiveness of Increase. Notwithstanding the foregoing, no
increase in the aggregate Commitments hereunder pursuant to this Section shall
be effective unless:

(i) AXIS Capital shall have given the Administrative Agent notice of any such
increase at least three Business Days prior to the applicable Supplemental
Commitment Date;

(ii) no Default shall have occurred and be continuing on the applicable
Supplemental Commitment Date;

(iii) AXIS Capital shall deliver to the Administrative Agent a certificate of
each Credit Party dated as of the Supplemental Commitment Date signed by a
Responsible Officer of such Credit Party (x) certifying and attaching the
resolutions adopted by such Credit Party approving or consenting to such
increase, and (y) in the case of AXIS Capital, certifying that, before and after
giving effect to such increase, (A) the representations and warranties contained
in Article V and the other Loan Documents each of the representations and
warranties of the Credit Parties contained in this Agreement and the other Loan
Documents shall be true in all material respects on and as of the applicable
Supplemental Commitment Date with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date); and (B) no
Default exists; and

 

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(iv) on each Supplemental Commitment Date, the Administrative Agent shall
reallocate any outstanding Loans so that, after giving effect thereto, the Loans
are held ratably by the Lenders in accordance with their respective Commitments
(after giving effect to such increase) and each Borrower shall (A) prepay the
interest due on such Loans prior to such Supplemental Commitment Date and
(B) pay to the Lenders the amounts, if any, payable under Section 3.05 as if
such Loans had been prepaid.

(d) Revised Percentages and Letter of Credit Amendments. The Administrative
Agent shall promptly notify the Lenders of the new Applicable Percentages after
giving effect to the Supplemental Commitment. Promptly after the Supplemental
Commitment Date, the L/C Administrator shall amend the outstanding Several
Letters of Credit to reflect the new “Commitment share” of each Lender
(including the Supplemental Lenders) and prior to the date a Several Letter of
Credit has been amended to give effect to such new “Commitment share”, each
Supplemental Lender shall be deemed to irrevocably and unconditionally purchase
from each Lender who has issued such Several Letter of Credit, a risk
participation in such Several Letter of Credit in an amount such that after
giving effect to such purchase, each Lender (including the Supplemental Lender)
has its Applicable Percentage of such Several Letter of Credit.

(e) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.12 or 10.01 to the contrary.

2.15 Cash Collateral.

(a) Certain Credit Support Events. At any time that there shall exist a
Defaulting Lender, immediately upon the request of the Administrative Agent or a
Fronting Bank, AXIS Capital shall deliver (or shall cause the Designated
Borrowers to deliver) to the Administrative Agent Cash Collateral in an amount
sufficient to cover 105% of all Fronting Exposure of such Fronting Bank (after
giving effect to Section 2.16(a)(iv) and any Cash Collateral provided by the
Defaulting Lender).

(b) Grant of Security Interest. All Cash Collateral (other than credit support
not constituting funds subject to deposit) shall be maintained (x) in the case
of funds deposited by a Borrower, in a blocked deposit or securities account at
the Administrative Agent or such other financial institution as is acceptable to
the Administrative Agent (each, a “Borrower L/C Collateral Account”) which shall
be invested in Eligible Collateral and (y) in the case of Cash Collateral
provided by a Defaulting Lender, in blocked, non-interest bearing deposit
accounts at the Administrative Agent. Each Borrower, and to the extent provided
by any Lender, such Lender, hereby grants to (and subjects to the control of)
the Administrative Agent, for the benefit of the Administrative Agent, the
Fronting Banks and the Lenders, and agrees to maintain, a first priority
security interest in all such cash, deposit accounts and all balances in its
Borrower L/C Collateral Account, and all other property so provided as
collateral pursuant hereto, and in all proceeds of the foregoing, all as
security for the obligations to which such Cash Collateral may be applied
pursuant to

Section 2.15(c) and shall execute such additional documents as the
Administrative Agent may reasonably request to ensure that the Administrative
Agent has a first priority security interest in such Cash Collateral. If at any

 

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time the Administrative Agent determines that Cash Collateral is subject to any
right or claim of any Person other than the Administrative Agent as herein
provided, or that the total amount of such Cash Collateral is less than the
applicable Fronting Exposure and other obligations secured thereby, the
applicable Borrower or the relevant Defaulting Lender will, promptly upon demand
by the Administrative Agent, pay or provide to the Administrative Agent
additional Cash Collateral in an amount sufficient to eliminate such deficiency.

(c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under any of this Section 2.15 or Sections
2.03, 2.04, 2.16 or 8.02 in respect of Letters of Credit shall be held and
applied to the satisfaction of the specific L/C Obligations, obligations to fund
participations therein (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may be provided for herein.

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or other obligations shall be released promptly
following (i) the elimination of the applicable Fronting Exposure or other
obligations giving rise thereto (including by the termination of Defaulting
Lender status of the applicable Lender (or, as appropriate, its assignee
following compliance with Section 10.06(b)(vi))) or (ii) the Administrative
Agent’s good faith determination that there exists excess Cash Collateral;
provided, however, (x) that Cash Collateral furnished by or on behalf of a
Credit Party shall not be released during the continuance of a Default (and
following application as provided in this Section 2.15 may be otherwise applied
in accordance with Section 8.03), and (y) the Person providing Cash Collateral
and the Fronting Banks may agree that Cash Collateral shall not be released but
instead held to support future anticipated Fronting Exposure or other
obligations.

2.16 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
Applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 10.01.

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of that Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or
otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 10.08), shall be applied at such
time or times as may be determined by the Administrative Agent as follows:
first, to the payment of any amounts owing by that Defaulting Lender to the
Administrative Agent hereunder; second, to the payment on a pro rata basis of
any amounts owing by that Defaulting Lender (including amounts owed in its
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the Fronting Banks hereunder; third, if so determined by the Administrative
Agent or requested by a Fronting Bank, to be held as Cash Collateral for future
funding obligations of that Defaulting Lender of any participation in any
Fronted Letter of Credit or Several Letter of Credit as to which it is a
Participating Bank; fourth, as AXIS Capital may request (so long as no Default
exists), to the funding of any Loan or Cash Collateralization of any Several
Letter of Credit in respect of which that Defaulting Lender has failed to fund
its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
AXIS Capital, to be held in a non-interest bearing deposit account and released
in order to satisfy obligations of that Defaulting Lender to fund Loans or
Several Letters of Credit under this Agreement; sixth, to the payment of any
amounts owing to the Lenders or the Fronting Banks as a result of any judgment
of a court of competent jurisdiction obtained by any Lender or any Fronting Bank
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no Default exists, to
the payment of any amounts owing to applicable Borrower as a result of any
judgment of a court of competent jurisdiction obtained by such Borrower against
that Defaulting Lender as a result of that Defaulting Lender’s breach of its
obligations under this Agreement; and eighth, to that Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Loans or L/C
Borrowings in respect of which that Defaulting Lender has not fully funded its
appropriate share and (y) such Loans or L/C Borrowings were made at a time when
the conditions set forth in Section 4.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and L/C Borrowings owed to, all
non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or L/C Borrowings owed to, that Defaulting Lender. Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to and
redirected by that Defaulting Lender, and each Lender irrevocably consents
hereto.

(iii) Certain Fees. That Defaulting Lender (x) shall not be entitled to receive
a commitment fee pursuant to Section 2.08(a) and (y) shall be limited in its
right to receive Letter of Credit Fees as provided in Section 2.03(h).

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. During
any period in which there is a Defaulting Lender, for purposes of computing the
amount of the obligation of each non-Defaulting Lender to acquire, refinance or
fund participations in Fronted Letters of Credit pursuant to Sections 2.03, the
“Applicable Percentage” of each non-Defaulting Lender shall be computed without
giving effect to the Commitment of that Defaulting Lender; provided, that,
(i) each such reallocation shall be given effect only if, at the date the
applicable Lender becomes a Defaulting Lender, no Default exists; and
(ii) reallocation only to the extent that the aggregate obligation of each
non-Defaulting Lender to issue, acquire, refinance or fund participations in
Letters of Credit shall not exceed the positive difference, if any, of (1) the
Commitment of that non-Defaulting Lender minus (2) the aggregate Outstanding
Amount of that Lender.

 

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(b) Defaulting Lender Cure. If AXIS Capital, the Administrative Agent and the
Fronting Banks agree in writing in their sole discretion that a Defaulting
Lender should no longer be deemed to be a Defaulting Lender, the Administrative
Agent will so notify the parties hereto, whereupon as of the effective date
specified in such notice and subject to any conditions set forth therein (which
may include arrangements with respect to any Cash Collateral), that Lender will,
to the extent applicable, purchase that portion of outstanding Loans of the
other Lenders or take such other actions as the Administrative Agent may
determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit to be held on a pro rata basis by the
Lenders in accordance with their Applicable Percentages (without giving effect
to Section 2.16(a)(iv)), whereupon that Lender will cease to be a Defaulting
Lender; provided that no adjustments will be made retroactively with respect to
fees accrued or payments made by or on behalf of a Borrower while that Lender
was a Defaulting Lender; and provided, further, that except to the extent
otherwise expressly agreed by the affected parties, no change hereunder from
Defaulting Lender to Lender will constitute a waiver or release of any claim of
any party hereunder arising from that Lender’s having been a Defaulting Lender.

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Issuing Bank. For purposes of this Section 3.01, the term “Lender” includes
any L/C Issuer and any Fronting Bank.

(b) Payments Free of Taxes. Any and all payments by or on account of any
obligation of a Borrower under any Loan Document shall be made without deduction
or withholding for any Taxes, except as required by Applicable Law. If any
Applicable Law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Borrower shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(c) Payment of Other Taxes by Borrowers. Each Borrower shall timely pay to the
relevant Governmental Authority in accordance with Applicable Law, or at the
option of the Administrative Agent timely reimburse it for the payment of, any
Other Taxes.

 

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(d) Indemnification by Borrowers. The Borrowers shall jointly and severally
indemnify each Recipient, within 10 days after demand therefor, for the full
amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Section) payable or paid by
such Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to a Borrower by a Lender (with a copy to
the Administrative Agent), or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.

(e) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Borrower to a Governmental Authority, such
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to AXIS
Capital and the Administrative Agent, at the time or times reasonably requested
by AXIS Capital or the Administrative Agent, such properly completed and
executed documentation reasonably requested by AXIS Capital or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by AXIS Capital or the Administrative Agent, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested by AXIS
Capital or the Administrative Agent as will enable AXIS Capital or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Sections 3.01(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing, in the event that a
Borrower is a U.S. Person (and, in the case of (A) below, regardless of whether
the Borrower is a U.S. Person),

(A) any Lender that is a U.S. Person shall deliver to AXIS Capital and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of AXIS Capital or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

 

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(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to AXIS Capital and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of AXIS Capital or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit K-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the applicable Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit K-2 or
Exhibit K-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit K-4 on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to AXIS Capital and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of AXIS Capital or the Administrative
Agent), executed originals of any other form prescribed by Applicable Law as a

 

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basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by Applicable Law to permit AXIS Capital or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to AXIS Capital and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by AXIS Capital
or the Administrative Agent such documentation prescribed by Applicable Law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by AXIS Capital or the
Administrative Agent as may be necessary for the applicable Borrower and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify AXIS Capital and the Administrative
Agent in writing of its legal inability to do so.

(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 3.01 (including by
the payment of additional amounts pursuant to this Section 3.01), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this subsection (g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this subsection (g), in no event will the indemnified party be required to
pay any amount to an indemnifying party pursuant to this subsection (g) the
payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the Tax
subject to indemnification had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts giving rise to such
refund had never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

 

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(h) Indemnification of the Administrative Agent and the Borrowers. Each Lender
shall severally indemnify the Administrative Agent (and, in the case of clause
(ii), the applicable Borrower) within ten (10) days after demand therefor, for
(i) any Indemnified Taxes attributable to such Lender (but only to the extent
that any Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrowers to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 10.06(f) relating to the maintenance of a Participant
Register, such Lender’s failure to comply with Section 3.01(f) or the
inaccuracy, inadequacy or deficiency of any documentation required to be
delivered by such Lender pursuant to Section 3.01(f) and (iii) any Excluded
Taxes attributable to such Lender, in each case, that are payable or paid by the
Administrative Agent or such Borrower in connection with any Loan Document, and
any reasonable expenses arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent or the applicable
Borrower shall be conclusive absent manifest error. Each Lender hereby
authorizes the Administrative Agent to set off and apply any and all amounts at
any time owing to such Lender under any Loan Document (or otherwise payable by
the Administrative Agent to the Lender from any other source) against any amount
due to the Administrative Agent or the applicable Borrower under this subsection
(h). The agreements in subsection (h) shall survive the resignation and/or
replacement of the Administrative Agent.

(i) Survival. Each party’s obligations under this Section 3.01 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

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

 

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

3.04 Increased Costs; Reserves on Eurocurrency Rate Loans

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

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except (A) any reserve requirement contemplated by Section 3.04(e) and (B) the
requirements of the Bank of England and the Financial Services Authority or the
European Central Bank reflected in the Mandatory Cost, other than as set forth
below) or any Fronting Bank;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes and
(B) Excluded Taxes) on its loans, loan principal, letters of credit,
commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto, or;

(iii) result in the failure of the Mandatory Cost, as calculated hereunder, to
represent the cost to any Lender of complying with the requirements of the Bank
of England and/or the Financial Services Authority or the European Central Bank
in relation to its making, funding or maintaining Eurocurrency Rate Loans; or

(iv) impose on any Lender or any Fronting Bank or the London interbank market
any other condition, cost or expense affecting this Agreement or Eurocurrency
Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

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and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Eurocurrency Rate Loan (or of maintaining its obligation to make
any such Loan), or to increase the cost to such Lender or such other Recipient
of participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender, such
Fronting Bank or such other Recipient hereunder (whether of principal, interest
or any other amount) then, upon request of such Lender, such Fronting Bank or
such other Recipient, AXIS Capital will promptly pay (or cause the applicable
Designated Borrower to pay) to such Lender, such Fronting Bank or such other
Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender, such Fronting Bank or such other Recipient, as the case
may be, for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or any Fronting Bank determines that any
Change in Law affecting such Lender or such Fronting Bank or any Lending Office
of such Lender or such Lender’s or such Fronting Bank’s holding company, if any,
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or such Fronting Bank’s capital or
on the capital of such Lender’s or such Fronting Bank’s holding company, if any,
as a consequence of this Agreement, the Commitments of such Lender or the Loans
made by, or participations in Letters of Credit held by, such Lender, or the
Letters of Credit issued by such Fronting Bank, to a level below that which such
Lender or such Fronting Bank or such Lender’s or such Fronting Bank’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or such Fronting Bank’s policies and the policies of
such Lender’s or such Fronting Bank’s holding company with respect to capital
adequacy), then from time to time upon written request of such Lender or such
Fronting Bank, AXIS Capital will pay (or cause the applicable Designated
Borrower to pay) to such Lender or such Fronting Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Fronting
Bank or such Lender’s or such Fronting Bank’s holding company for any such
reduction suffered.

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

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

 

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(e) Additional Reserve Requirements. AXIS Capital shall pay (or cause the
applicable Designated Borrower to pay) to each Lender, (i) as long as such
Lender shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurocurrency Rate Loan equal to the actual costs of
such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), and (ii) as long
as such Lender shall be required to comply with any reserve ratio requirement or
analogous requirement of any other central banking or financial regulatory
authority imposed in respect of the maintenance of the Commitments or the
funding of the Eurocurrency Rate Loans, such additional costs (expressed as a
percentage per annum and rounded upwards, if necessary, to the nearest five
decimal places) equal to the actual costs allocated to such Commitment or Loan
by such Lender (as determined by such Lender in good faith, which determination
shall be conclusive), which in each case shall be due and payable on each date
on which interest is payable on such Loan, provided AXIS Capital shall have
received at least 10 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest or costs from such Lender. If a Lender fails
to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest or costs shall be due and payable 10 days from receipt of
such notice.

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

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

(b) any failure by any Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by AXIS Capital or
the applicable Designated Borrower;

(c) any failure by a Borrower to make payment of any Loan or drawing under any
Letter of Credit (or interest due thereon) denominated in an Alternative
Currency on its scheduled due date or any payment thereof in a different
currency; or

(d) any assignment of a Eurocurrency Rate Loan on a day other than the last day
of the Interest Period therefor as a result of a request by a Borrower pursuant
to Section 10.13;

including any foreign exchange losses and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan, from
fees payable to terminate the deposits from which such funds were obtained or
from the performance of any foreign exchange contract. AXIS Capital shall also
pay (or cause the applicable Designated Borrower to pay) any customary
administrative fees charged by such Lender in connection with the foregoing.

 

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

3.06 Mitigation Obligations; Replacement of Lenders.

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

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if AXIS Capital is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, AXIS Capital may replace such Lender in accordance with
Section 10.13.

3.07 Survival. All of the Borrowers’ obligations under this Article III shall
survive termination of the Aggregate Commitments, repayment of all other
Obligations hereunder, and resignation of the Administrative Agent.

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension. The obligation of each Fronting
Bank and each Lender to make its initial Credit Extension hereunder is subject
to satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles or sent by electronic mail (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Credit

 

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Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement;

(ii) executed counterparts of each Guaranty;

(iii) a Note executed by each Borrower in favor of each Lender requesting a
Note;

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

(v) such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Credit Party is duly organized or formed, and that
each Credit Party is validly existing, in good standing and qualified to engage
in business in each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

(vi) a favorable opinion, each addressed to the Administrative Agent and the
Lenders and dated the Closing Date, of (i) Conyers Dill & Pearman, Bermuda
counsel to AXIS Capital, AXIS Specialty and AXIS Specialty Holdings,
(ii) Simpson Thacher & Bartlett LLP, New York counsel to the Credit Parties and
special counsel to AXIS Specialty US, AXIS Specialty US Services, AXIS Group
Services and AXIS Finance, (iii) William Fry, Irish counsel to AXIS Re, AXIS
Specialty Europe, AXIS Specialty Holdings Ireland and AXIS Specialty Global and
(iv) Much Shelist, P.C., Illinois counsel to AXIS Insurance and AXIS Surplus
addressed to the Administrative Agent and each Lender;

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

(viii) a certificate signed by a Responsible Officer of AXIS Capital certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, (B) that there has been no event or circumstance since the date of
the Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect; and
(C) the current Debt Ratings;

 

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(ix) A certificate of a Financial Officer, dated the Closing Date, calculating
the financial covenants in Sections 7.04(a) and (b) after giving effect to the
initial Credit Extensions to be made on the Closing Date;

(x) evidence that the Existing Credit Agreement has been (or concurrently with
the Closing Date is being) terminated and amounts due thereunder have been paid
in full and confirmation that there are no Letters of Credit outstanding
thereunder;

(xi) the Financial Strength Rating of each of AXIS Specialty, AXIS Reinsurance,
AXIS Surplus, AXIS Re, AXIS Insurance and AXIS Specialty Europe shall be A- or
better;

(xii) a letter from the Process Agent agreeing to the terms of Section 10.14(d);

(xiii) evidence that each Lender is an NAIC Approved Bank or a Lender has agreed
to be a Fronting Bank with respect to such Lender in connection with the
issuance of Several Letters of Credit;

(xiv) all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the PATRIOT Act; and

(xv) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent reasonably may require.

(b) No action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any Governmental Authority to
enjoin, restrain, or prohibit, or to obtain substantial damages in respect of,
or which is related to or arises out of this Agreement or the other Loan
Documents or the consummation of the transactions contemplated hereby or
thereby.

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

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

Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

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4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Loan Notice requesting only a
conversion of Loans to the other Type, or a continuation of Eurocurrency Rate
Loans) is subject to the following conditions precedent:

(a) The representations and warranties of AXIS Capital and each other Credit
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they shall
be true and correct as of such earlier date.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

(c) If a Secured Letter of Credit is being requested, (i) such Borrower shall
have executed a Security Agreement and Control Agreement and the Administrative
Agent shall have received such resolutions, certificates and opinions with
respect thereto as the Administrative Agent may reasonably request, (ii) all
filings and recordations as the Administrative Agent may deem necessary or
advisable in connection with the grant of the security interest shall have been
(or with the consent of the Administrative Agent will be) made and (iii) the
Administrative Agent shall have received a Borrowing Base Certificate calculated
as of the most recent Business Day in accordance with the requirements hereof
and demonstrating compliance with Section 6.13 with respect to such Borrower.

(d) In the case of a Credit Extension to be denominated in an Alternative
Currency, there shall not have occurred any change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which in the reasonable opinion of the Administrative Agent,
the Required Lenders or the Applicable Issuing Party would make it impracticable
for such Credit Extension to be denominated in the relevant Alternative
Currency.

(e) In addition to satisfaction of the conditions in clauses (a) through (d),
the obligation of each Lender to make its initial Credit Extension to a
Designated Borrower (other than a Subsidiary who is a Designated Borrower on the
Closing Date) is subject to the satisfaction of the conditions that the
Administrative Agent shall have received the following:

(i) a Designated Borrower Request and Assumption Agreement executed by such
Designated Borrower and AXIS Capital;

 

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(ii) all documents as shall reasonably demonstrate the existence of such
Designated Borrower, the corporate power and authority of such Designated
Borrower to enter into, and the validity with respect to such Designated
Borrower of, this Agreement and the other Loan Documents to which it is a party
and the incumbency of officers executing the Loan Documents (including an
opinion of counsel to such Designated Borrower and, if such counsel is not
licensed to practice in New York, an opinion of New York counsel), in form and
substance reasonably satisfactory to the Administrative Agent;

(iii) a certificate of a Responsible Officer of AXIS Capital or such Designated
Borrower either (A) attaching copies of all consents, licenses and approvals
from a Governmental Authority required in connection with the execution,
delivery and performance by such Designated Borrower and the validity against
such Designated Borrower of the Loan Documents to which it is a party and
confirming that such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

(iv) such corporate documents and other information as the Administrative Agent
(or any Lender through the Administrative Agent) shall reasonably request for
purposes of the Patriot Act and/or such Lender’s “Know Your Client”
requirements;

(v) if such Designated Borrower is a Foreign Obligor, no Lender shall be subject
to any legal or regulatory requirement to be licensed to do business in the
jurisdiction in which such Designated Borrower is organized in order to make
Credit Extensions to such Designated Borrower or shall be otherwise prohibited
from extending credit to such Designated Borrower; and

(vi) a Note for each Lender requesting the same.

Each Request for Credit Extension (other than a Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurocurrency Rate
Loans) submitted by a Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V. REPRESENTATIONS AND WARRANTIES

Each of AXIS Capital and (except with respect to Sections 5.04 and 5.12) the
other Credit Parties severally represents and warrants to the Lenders that:

5.01 Organization; Powers. Such Credit Party and each of its Subsidiaries is
duly organized, validly existing and (in the case of any Credit Party organized
under the laws of the United States of America or any State thereof, or any
other jurisdiction where the concept of “good standing” of a corporation or
company is applicable) in good standing under the laws of the jurisdiction of
its organization, has all requisite power and authority to carry on its business
as now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and (in the case of any Credit Party
organized under the laws of the United States of America or any State thereof,
or any other jurisdiction where the concept of “good standing” of a corporation
or company is applicable) is in good standing in, every jurisdiction where such
qualification is required.

 

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5.02 Authorization; Enforceability. The Transactions are within such Credit
Party’s corporate powers and have been duly authorized by all necessary
corporate and, if required, by all necessary shareholder action. This Agreement
has been duly executed and delivered by such Credit Party and constitutes, and
each of the other Loan Documents to which any Credit Party is to be a party,
when executed and delivered by such Credit Party will constitute, a legal, valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its terms, except as such enforceability may be limited
by (a) bankruptcy, insolvency, reorganization, moratorium, examination or
similar laws of general applicability affecting the enforcement of creditors’
rights and (b) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

5.03 Governmental Approvals; No Conflicts. The Transactions (a) do not require
any consent or approval of (including any exchange control approval),
registration or filing with, or any other action by, any Governmental Authority
(including any Applicable Insurance Regulatory Authority), except such as have
been obtained or made and are in full force and effect, (b) will not violate any
Applicable Law (including the regulations of any Applicable Insurance Regulatory
Authority) or the Organizational Documents of such Credit Party or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon such Credit Party or any of its Subsidiaries or assets, or give rise to a
right thereunder to require any payment to be made by any such Person, and
(d) will not result in the creation or imposition of any Lien on any asset of
such Credit Party or any of its Subsidiaries (other than any Liens created by
the Loan Documents), except to the extent that, in the case of each of the
immediately preceding clauses (c) and (d), such violation, default, right or
Lien would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

5.04 Financial Condition; No Material Adverse Change.

(a) Financial Condition. AXIS Capital has heretofore furnished to the Lenders
the consolidated balance sheet and statements of income, shareholders’ equity
and cash flows of AXIS Capital and its Subsidiaries as of and for the fiscal
year ended December 31, 2012, audited by Deloitte & Touche LLP, independent
public accountants and certified by a Financial Officer. Such financial
statements present fairly, in all material respects, the financial condition and
results of operations and cash flows of AXIS Capital and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP. None
of AXIS Capital and its Subsidiaries has on the date of this Agreement any
material contingent liabilities, liabilities for taxes, unusual forward or long
term commitments or unrealized or anticipated losses from any unfavorable
commitments, except (i) as referred to or reflected or provided for in such
balance sheet as of December 31, 2012, (ii) for insurance payment liabilities or
liabilities arising in the ordinary course of AXIS Capital’s or any of its
Subsidiary’s business as an insurance or reinsurance company and (iii) as
disclosed pursuant to this Agreement and the other Loan Documents.

 

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(b) No Material Adverse Change. Since December 31, 2012, there has been no
event, development or circumstance that has had or would reasonably be expected
to result, either individually or in the aggregate, in a material adverse effect
on the business, operations, property or condition (financial or otherwise) of
AXIS Capital and its Subsidiaries taken as a whole.

5.05 Litigation.

(a) Actions, Suits and Proceedings. Except as disclosed in Schedule 5.05 or as
routinely encountered in claims activity, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of such Credit Party, threatened in writing against
or affecting such Credit Party or any of its Subsidiaries (i) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve this Agreement or the
Transactions.

(b) Disclosed Matters. Since the date hereof, there has been no change in the
status of the matters disclosed in Schedule 5.05 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.

5.06 Compliance with Laws and Agreements. Such Credit Party and each of its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.

5.07 Investment Company Status. Neither such Credit Party nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940. None of AXIS Capital, AXIS Specialty
Holdings or AXIS Specialty (i) is carrying on investment business in or from
Bermuda for the purposes of the Investment Business Act 2003 of Bermuda or
(ii) has received any direction or other notification by the Bermuda Monetary
Authority pursuant to Section 32 of Insurance Act 1978 of Bermuda.

5.08 Taxes. Such Credit Party and each of its Subsidiaries has timely filed or
caused to be filed (taking into account any applicable extension within which to
file) all Tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
such Person has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

5.09 Pension-Related Matters. Except as could not reasonably be expected to
result in a Material Adverse Effect, (i) all contributions required to be made
by such Credit Party or any of its Subsidiaries with respect to a Benefit Plan
have been timely made, (ii) each Benefit Plan has been maintained in compliance
with its terms and with the requirements of any and all Applicable Laws and has
been maintained, where required, in good standing with the applicable
Governmental Authority and (iii) neither such Credit Party nor any of its
Subsidiaries has incurred any obligation in connection with the termination of
or withdrawal from any Benefit Plan.

 

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5.10 Disclosure. None of the reports, financial statements, certificates or
other written information furnished by or on behalf of AXIS Capital or any other
Credit Party to the Lenders in connection with the negotiation of this Agreement
and the other Loan Documents or delivered hereunder or thereunder as modified or
supplemented by other information so furnished (taken as a whole with all such
written information theretofore or contemporaneously furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, AXIS Capital represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from such projected results.

5.11 Use of Credit. Neither such Credit Party nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock, and no part of the proceeds of any extension of
credit hereunder will be used to buy or carry any Margin Stock.

5.12 Subsidiaries. Set forth in Schedule 5.12 is a complete and correct list of
all of the Subsidiaries of AXIS Capital as of the date of this Agreement,
together with, for each such Subsidiary, the jurisdiction of organization of
such Subsidiary. Except as disclosed in Schedule 5.12, (i) each such Subsidiary
is a directly or indirectly Wholly Owned Subsidiary, (ii) each of AXIS Capital
and its Subsidiaries owns, free and clear of Liens, and has the unencumbered
right to vote, all outstanding ownership interests in each Person shown to be
held by it in Schedule 5.12, (iii) all of the issued and outstanding capital
stock of each such Person organized as a corporation is validly issued, fully
paid and nonassessable and (iv) there are no outstanding Equity Rights with
respect to such Person.

5.13 Stamp Taxes. To ensure the legality, validity, enforceability or
admissibility in evidence of this Agreement, it is not necessary that this
Agreement or any other document be filed or recorded with any Governmental
Authority or that any stamp or similar tax be paid on or in respect of this
Agreement, or any other document other than (i) such filings and recordations
that have already been made and (ii) such stamp or similar taxes that have
already been paid.

 

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5.14 Taxpayer Identification Number. Each Borrower’s true and correct U.S.
taxpayer identification number (if such Borrower has one) and/or non-U.S.
taxpayer identification number (if such Borrower has one) is set forth on
Schedule 10.02 or in the Designated Borrower Request and Assumption Agreement by
which such Borrower became a Designated Borrower.

5.15 Representations as to Foreign Jurisdiction Matters. Each Foreign Obligor
represents and warrants (solely as to itself) to the Administrative Agent and
the Lenders that:

(a) Such Foreign Obligor is subject to civil and commercial Laws with respect to
its obligations under this Agreement and the other Loan Documents to which it is
a party (collectively as to such Foreign Obligor, the “Applicable Foreign
Obligor Documents”), and the execution, delivery and performance by such Foreign
Obligor of the Applicable Foreign Obligor Documents constitute and will
constitute private and commercial acts and not public or governmental acts.
Neither such Foreign Obligor nor any of its property has any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) under the laws of the jurisdiction in which such Foreign Obligor
is organized and existing in respect of its obligations under the Applicable
Foreign Obligor Documents.

(b) The Applicable Foreign Obligor Documents are in proper legal form under the
Laws of the jurisdiction in which such Foreign Obligor is organized and existing
for the enforcement thereof against such Foreign Obligor under the Laws of such
jurisdiction, and to ensure the legality, validity, enforceability or
admissibility in evidence of the Applicable Foreign Obligor Documents. It is not
necessary to ensure the legality, validity, enforceability, priority or
admissibility in evidence of the Applicable Foreign Obligor Documents that the
Applicable Foreign Obligor Documents be filed, registered or recorded with, or
executed or notarized before, any court or other authority in the jurisdiction
in which such Foreign Obligor is organized and existing except filings and fees
required in connection with execution of a Security Agreement or that any
registration charge or stamp or similar tax be paid on or in respect of the
Applicable Foreign Obligor Documents or any other document, except for (i) any
such filing, registration, recording, execution or notarization that has been
made and is in full force and effect, or is not required to be made until such
Applicable Foreign Obligor Documents are sought to be enforced and (ii) any
charge or tax that has been timely paid by or on behalf of such Foreign Obligor.

(c) The execution, delivery and performance of the Applicable Foreign Obligor
Documents executed by such Foreign Obligor are, under applicable foreign
exchange control regulations of the jurisdiction in which such Foreign Obligor
is incorporated or organized and existing, not subject to any notification or
authorization except (i) such as have been made or obtained or (ii) such as
cannot be made or obtained until a later date (provided that any notification or
authorization described in clause (ii) shall be made or obtained as soon as is
reasonably practicable).

5.16 First Priority Interest. The Administrative Agent, for the benefit of
itself, the Fronting Banks, the L/C Issuers, the L/C Administrator and the
Lenders, has a first priority perfected security interest in the Collateral, if
any, pledged by each Borrower pursuant to its respective Security Agreement.

 

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5.17 OFAC. No Credit Party nor any of its Subsidiaries (i) is an “enemy” or an
“ally of the enemy” within the meaning of Section 2 of the Trading with the
Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), as amended,
(ii) is in violation of (A) the Trading with the Enemy Act, as amended, (B) any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto or (C) the PATRIOT Act, (iii) is
a Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned
Countries, or (iii) derives more than 10% of its operating income from
investments in, or transactions with Sanctioned Persons or Sanctioned Countries.
No part of the proceeds of any Extension of Credit hereunder will be used
directly or indirectly to fund any operations in, finance any investments or
activities in or make any payments to, a Sanctioned Person or a Sanctioned
Country.

ARTICLE VI. AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation (other than contingent indemnification obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
AXIS Capital shall, and shall to the extent required pursuant to the applicable
provisions of this Article VI, cause each of its respective Subsidiaries to:

6.01 Financial Statements and Other Information. Furnish to the Administrative
Agent and each Lender:

(a) commencing with the fiscal year ending December 31, 2012, within 90 days
after the end of each fiscal year of AXIS Capital, the audited consolidated
balance sheet and related consolidated statements of operations, stockholders’
equity and cash flows of AXIS Capital and its Subsidiaries as of the end of and
for such year, setting forth in each case in comparative form the figures for
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year (if such figures were already produced for such corresponding period or
periods), all reported on by Deloitte & Touche LLP or other independent public
accountants of recognized national standing (without a “going concern” or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of AXIS Capital and its Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;

(b) commencing with the fiscal quarter ending March 31, 2013, within 45 days
after the end of each of the first three fiscal quarters of each fiscal year of
AXIS Capital, the consolidated balance sheet and related consolidated statements
of operations, stockholders’ equity and cash flows of AXIS Capital and its
Subsidiaries as of the end of and for such fiscal quarter and the then elapsed
portion of such fiscal year, setting forth in each case in comparative form the
figures for (or, in the case of the balance sheet, as of the end of) the

 

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corresponding period or periods of the previous fiscal year (if such figures
were already produced for such corresponding period or periods), all certified
by a Financial Officer as presenting fairly in all material respects the
financial condition and results of operations of AXIS Capital and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year end audit adjustments and the
absence of footnotes;

(c) Concurrently with the delivery to the Administrative Agent of the GAAP
financial statements under Sections 6.01(a) and 6.01(b), a duly completed
Compliance Certificate, signed by a Financial Officer;

(d) as soon as available, but in any event within 30 days after the end of each
calendar month of each fiscal year with respect to each Borrower who has Secured
L/C Obligations, (i) a report listing each Borrower’s Eligible Collateral and
(ii) a Borrowing Base Certificate executed by a Financial Officer. For purposes
of such report and of completing the Borrowing Base Certificate required under
this Section 6.01(d), Eligible Collateral shall be valued based on its Fair
Market Value as at the last Business Day of the calendar month for which such
report or Borrowing Base Certificate is being delivered;

(e) promptly, at the request of the Administrative Agent, a Borrowing Base
Certificate for any given Business Day executed by a Financial Officer of each
Borrower who has Secured L/C Obligations;

(f) within (x) 30 days after the filing of (i) annual audited GAAP financial
statements of AXIS Specialty with the relevant Governmental Authority, a copy of
such GAAP financial statements for the relevant fiscal year, (ii) annual audited
GAAP financial statements of AXIS Re, AXIS Specialty Europe and any each other
Insurance Subsidiary formed outside the United States with the relevant
Governmental Authority, a copy of such GAAP financial statements for the
relevant fiscal year; (iii) Statutory Statements by any other Insurance Company,
a copy of such Statutory Statements of such Insurance Company for the relevant
fiscal year and (y) 30 days after issuance thereof, any annual audited financial
statements produced by a Designated Borrower or Guarantor not provided pursuant
to clause (x) above ;

(g) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by AXIS Capital or
any of its Subsidiaries with the SEC, or any Governmental Authority succeeding
to any or all of the functions of said Commission, or with any U.S., Bermuda,
Irish or other securities exchange, or distributed by AXIS Capital to its
shareholders generally, as the case may be, provided that any such materials
shall be deemed delivered to the extent that the same are publicly available on
the SEC’s “EDGAR” filing system;

(h) promptly after any material amendment or modification of the Investment
Guidelines of any Credit Party by the board of directors of such Credit Party,
but in any case not more than once per calendar quarter, a copy of such
Investment Guidelines as so amended or modified; and

 

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(i) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of AXIS Capital or any
of its Subsidiaries, or compliance with the terms of this Agreement or any other
Loan Document, as the Administrative Agent may reasonably request.

Documents required to be delivered pursuant to this Section 6.01 or Section 6.02
may be delivered electronically and if so delivered, shall be deemed to have
been delivered (i) in the case of documents required under Section 6.01(a),
(b) or (g) (to the extent any such documents are included in materials otherwise
filed with the SEC), on the date on which AXIS Capital posts such documents and
provides a link thereto on AXIS Capital’s website on the Internet at the website
address listed on Schedule 10.02 and provides an “email alert” of such posting
to the Administrative Agent; or (ii) such documents are posted on AXIS Capital’s
behalf on an Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: AXIS Capital
shall deliver paper copies or electronic mail electronic versions (i.e., soft
copies) of such documents to the Administrative Agent or any Lender upon its
request to AXIS Capital to deliver such paper or soft copies until a written
request to cease delivering paper or soft copies is given by the Administrative
Agent or such Lender. The Administrative Agent shall have no obligation to
request the delivery of or to maintain paper or soft copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by AXIS Capital with any such request by a Lender for delivery, and
each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.

AXIS Capital hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders and the Fronting Banks materials
and/or information provided by or on behalf of AXIS Capital hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
SyndTrak Online or another similar electronic system (the “Platform”) and
(b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do
not wish to receive material non-public information with respect to any of AXIS
Capital or its Affiliates, or the respective securities of any of the foregoing)
(each, a “Public Lender”). AXIS Capital hereby agrees that (w) all Borrower
Materials that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Borrower Materials “PUBLIC,” AXIS Capital shall be deemed to have authorized the
Administrative Agent, the Arranger, the Fronting Banks and the Lenders to treat
the Borrower Materials as not containing any material non-public information
with respect to AXIS Capital or its Affiliates or their respective securities
for purposes of United States Federal and state securities Laws (provided,
however, that to the extent the Borrower Materials constitute Information, they
shall be treated as set forth in Section 10.07); (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Side Information;” and (z) the Administrative Agent
and the Arranger shall be entitled to treat the Borrower Materials that are not
marked “PUBLIC” as being suitable only for posting on a portion of the Platform
not designated “Public Side Information.”

 

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6.02 Notices of Material Events. Furnish to the Administrative Agent and each
Lender prompt written notice of the following:

(a) the occurrence of any Default;

(b) the occurrence of any ERISA Event that results in, or could reasonably be
expected to result in, liability in excess of the Threshold Amount;

(c) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting AXIS Capital or
any of its Subsidiaries that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;

(d) promptly upon the announcement thereof, any downgrade in the Debt Rating of
AXIS Capital or in the Financial Strength Rating of AXIS Specialty, AXIS
Reinsurance, AXIS Surplus, AXIS Re, AXIS Insurance, AXIS Specialty Europe and
any other Designated Borrower which is an Insurance Company;

(e) notice of any actual material changes in the Insurance Code governing the
investment or dividend practices of any Designated Borrower that could
reasonably be expected to adversely affect such Person in any material respect;
and

(f) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under Section 6.02(a) or (e) shall be accompanied by a
statement of a Financial Officer or other executive officer of AXIS Capital
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken by AXIS Capital with respect thereto.

6.03 Existence; Conduct of Business. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or Disposition permitted under
Section 7.01. AXIS Capital will, and will cause each of its Subsidiaries to,
qualify and remain qualified to do business in each jurisdiction in which
failure to receive or retain such qualification could reasonably be expected to
result in a Material Adverse Effect.

6.04 Insurance. Maintain with financially sound and reputable insurers insurance
with respect to its directors, officers and physical plant in such amounts and
against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.

6.05 Maintenance of Properties. Keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted, except where the failure to maintain the same would not
reasonably be expected to have a Material Adverse Effect.

 

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6.06 Payment of Obligations. Pay or discharge:

(a) on or prior to the date on which penalties attach thereto, all taxes,
assessments and other governmental charges or levies imposed upon it or any of
its properties or income;

(b) on or prior to the date when due, all lawful claims of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons which, if
unpaid, might result in the creation of a Lien upon any such property;

(c) on or prior to the date when due, all other lawful claims which, if unpaid,
might result in the creation of a Lien upon any such property (other than Liens
not prohibited by Section 7.02) or which, if unpaid, might give rise to a claim
entitled to priority over general creditors of AXIS Capital or such Subsidiary
in any proceeding under the Bermuda Companies Law or Bermuda Insurance Law or
the Applicable Laws of such Subsidiary’s jurisdiction of organization, or any
insolvency proceeding, liquidation, receivership, rehabilitation, dissolution or
winding-up involving AXIS Capital or such Subsidiary; and

(d) on or prior to the date when the same shall become delinquent or be in
default, all other obligations that, if not paid, could reasonably be expected
to result in a Material Adverse Effect;

provided that, unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, neither AXIS Capital nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge, levy or claim so long as (i) the validity thereof is contested in good
faith and by appropriate proceedings diligently conducted, (ii) such reserves or
other appropriate provisions as may be required by GAAP or SAP, as the case may
be, shall have been made therefor and (iii) such failure to pay or discharge
(individually in the aggregate) could not reasonably be expected to result in a
Material Adverse Effect.

6.07 Financial Accounting Practices. Make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect its transactions and
dispositions of its assets and maintain a system of internal accounting controls
sufficient to provide reasonable assurances that transactions are recorded as
necessary to permit preparation of financial statements required under
Section 6.01 in conformity with GAAP and SAP, as applicable, and to maintain
accountability for assets.

6.08 Compliance with Applicable Laws. Comply with all Applicable Laws (including
but not limited to the Bermuda Companies Law, Bermuda Insurance Laws and
Environmental Laws) in all respects, except where failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

6.09 Use of Letters of Credit and Proceeds of Loans. The proceeds of the Loans
will be used only for general corporate purposes of AXIS Capital and its
Subsidiaries and the Letters of Credit will be issued only in the ordinary
course of business of AXIS Capital and its Subsidiaries and primarily to support
insurance or reinsurance liabilities of AXIS Capital and its Subsidiaries. No
part of the proceeds of any Loan and no Letter of Credit will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the FRB, including Regulations T, U and X.

 

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6.10 Inspection Rights. Subject to Section 10.07, permit such Persons as the
Administrative Agent or any Lender may designate, at such Lender’s expense prior
to the occurrence and continuance of an Event of Default and at the expense of
AXIS Capital after the occurrence and during the continuance of an Event of
Default, upon reasonable prior notice, to visit and inspect any of its
properties, to examine and make extracts from its books and records, to discuss
its affairs, finances and condition with its officers and independent
accountants, and provide such other information relating to its business,
financial condition and prospects at such times as the Administrative Agent or
such Lender, as the case may be, may reasonably request.

6.11 Financial Strength Rating. Cause each of AXIS Specialty, AXIS Reinsurance,
AXIS Surplus, AXIS Re, AXIS Insurance, AXIS Specialty Europe and any other
Designated Borrower which is an Insurance Company to maintain a Financial
Strength Rating of at least “B++” at all times.

6.12 Further Assurances. Promptly upon the reasonable request of the
Administrative Agent, each Borrower who has Secured L/C Obligations shall
execute, acknowledge, deliver and record and do any and all such further acts
and deeds as the Administrative Agent may reasonably request from time to time
in order to ensure that the Secured L/C Obligations of such Borrower are secured
by a first priority perfected interest in the assets of such Borrower stated to
be pledged pursuant to its Security Agreement and to perfect and maintain the
validity, effectiveness and priority of its Security Agreement and the Liens
intended to be created thereby. Notwithstanding any provision of a Control
Agreement to the contrary, without the prior written consent of the
Administrative Agent, no Borrower shall give directions or entitlement orders,
as applicable, to the Financial Institution party to any applicable Control
Agreement to make a delivery to such Borrower or any other Person of assets or
properties (other than dividends and interest on the Eligible Collateral) from
such Borrower’s Collateral Account except in connection with the sale,
investment or reinvestment of Eligible Collateral the proceeds of which will be
deposited into such Borrower’s Collateral Account. The Administrative Agent, on
behalf of the Lenders, agrees that provided (i) no Event of Default exists and
is continuing and (ii) after giving effect to the proposed delivery, the
Borrowing Base of such Borrower is equal to or in excess of the Secured L/C
Obligations of such Borrower, the Administrative Agent shall consent to any such
delivery within one Business Day after such request.

6.13 Collateral Requirements. (a) Each Borrower who has Secured L/C Obligations
shall maintain a Borrowing Base at all times to be equal to or greater than such
Borrower’s Secured L/C Obligations. If at any time a Borrower’s Borrowing Base
is less than its Secured L/C Obligations, such Borrower shall as promptly as
possible (and in any event within two Business Days) deposit into its Collateral
Account Eligible Collateral or reduce its Secured L/C Obligations, or a
combination of the foregoing, in an amount sufficient to eliminate such excess.

 

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(b) The minimum weighted average credit quality rating of the Eligible
Collateral in each Collateral Account shall be at least AA/Aa2 or the equivalent
and the Eligible Collateral in each Collateral Account shall not exceed the
Concentration Limits; provided, however, that a Borrower shall not be in
violation of this Section 6.13(b) if such violation occurs as a result of a
change in the Fair Market Value or ratings of such Eligible Collateral (as
opposed to a change in the makeup of such Eligible Collateral) unless such
deficiency exists for 30 days.

6.14 OFAC; PATRIOT Act Compliance. In each case only if and to the extent that
it is subject to OFAC (i) refrain from doing business in a Sanctioned Country or
with a Sanctioned Person in violation of the economic sanctions of the United
States administered by OFAC, and (ii) provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested
by the Administrative Agent or any Lender in order to assist the Administrative
Agent and the Lenders in maintaining compliance with the PATRIOT Act.

ARTICLE VII. NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation (other than contingent indemnification obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
AXIS Capital shall not, and shall not to the extent required pursuant to the
applicable provisions of this Article VII, permit its Subsidiaries to, directly
or indirectly:

7.01 Fundamental Changes.

(a) Mergers, Consolidations, Etc. Enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution).

(b) Acquisitions. Acquire directly or indirectly through a merger any business
or property from, or capital stock of, or be a party to any acquisition of, any
Person except (i) purchases of property to be sold or used in the ordinary
course of business, (ii) Investments permitted by Section 7.06 and
(iii) Acquisitions; provided that (A) immediately prior and after giving effect
to each such Acquisition, no Default shall have occurred and be continuing and,
in the case of any Acquisition above the Threshold Amount, AXIS Capital shall
have delivered to the Administrative Agent a certificate of a Financial Officer
to such effect; (B) in the case of an Acquisition of a Person, such Acquisition
has been approved by the board of directors or analogous body of such Person
prior to the commencement of any tender offer, proxy contest or the like in
respect thereof; (C) before and after giving effect to such Acquisition AXIS
Capital and its Subsidiaries shall be in compliance with Section 7.08 and
(D) (y) the purchase price for any single Acquisition does not exceed 50% of
Consolidated Net Worth as of the date of such Acquisition minus all amounts
which in accordance with GAAP would be characterized as intangible assets
(including goodwill) as of the date of such Acquisition (calculated on a pro
forma basis giving effect to such acquisition or purchase) and (z) the aggregate
purchase price of all Acquisitions after December 31, 2012 does not exceed 100%
of Consolidated Net Worth as of the date of such purchase or acquisition minus
all amounts which in accordance with GAAP would be characterized as intangible
assets (including goodwill).

 

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(c) Dispositions. Make any Disposition.

(d) Permitted Mergers, Acquisitions, Dispositions, Etc. Notwithstanding the
foregoing provisions of this Section:

(i) any Subsidiary of AXIS Capital (other than AXIS Specialty or AXIS Specialty
Holdings) may be merged, amalgamated or consolidated with or into any other such
Subsidiary; provided that (i) if any such transaction shall be between a
Subsidiary and a Wholly Owned Subsidiary, the Wholly Owned Subsidiary shall be
the continuing or surviving corporation and (ii) if a Credit Party is a party
thereto, (A) a Credit Party is the surviving entity (or, if an amalgamation, the
amalgamated entity shall be liable for such Credit Party’s obligations), and
(B) the Administrative Agent shall have received such documents and certificates
(and, in the case of an amalgamation with or into a non-U.S. Person, opinions)
in connection with such merger, amalgamation or consolidation affirming the
effectiveness of this Agreement and the other Loan Documents and the liability
of the Credit Parties (including, in the case of an amalgamation, the
amalgamated entity) for the Obligations as it shall have reasonably requested;

(ii) any Subsidiary of AXIS Capital (other than AXIS Specialty or AXIS Specialty
Holdings) may make a Disposition of any or all of its property to AXIS Capital
or any Wholly Owned Subsidiary of AXIS Capital; provided that if it is a
Disposition of all or substantially all of the assets of a Credit Party, (A) the
Person receiving such assets shall be liable for such Credit Party’s
obligations, and (B) the Administrative Agent shall have received such documents
and certificates in connection with such disposition affirming the effectiveness
of this Agreement and the other Loan Documents and the liability of the
receiving Person for the Obligations of such Credit Party as it shall have
reasonably requested;

(iii) a Disposition of the capital stock of any Subsidiary of AXIS Capital
(other than AXIS Specialty or AXIS Specialty Holdings) may be made to AXIS
Capital or any Wholly Owned Subsidiary of AXIS Capital;

(iv) AXIS Capital or any of its Subsidiaries may make a Disposition in the
ordinary course of business and on ordinary business terms;

(v) Any non-operating Subsidiary may liquidate, wind up or dissolve itself;

(vi) AXIS Capital and its Subsidiaries may make any Permitted Investments; and

(vii) AXIS Capital and any of its Subsidiaries (other than AXIS Specialty or
AXIS Specialty Holdings) may merge with or into or consolidate with any other
Person; provided that (a) immediately prior and after giving effect to such
merger or consolidation, no Default shall have occurred and be continuing and
(b) after giving effect thereto AXIS Capital or such Subsidiary shall be the
continuing or surviving corporation.

 

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7.02 Liens. Create, incur, assume or permit to exist any Lien on any property or
assets, tangible or intangible, now owned or hereafter acquired by it, except:

(a) Liens listed on Schedule 7.02 existing on the date hereof (and extension,
renewal and replacement Liens upon the same property); provided that (i) no such
Lien shall extend to any other property or asset of AXIS Capital or any of its
Subsidiaries and (ii) any such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;

(b) Liens arising from taxes, assessments, charges, levies or claims described
in Section 6.06 that are not yet due or that remain payable without penalty or
to the extent permitted to remain unpaid under Section 6.06;

(c) Liens on fixed or capital assets acquired, constructed or improved by AXIS
Capital or any Subsidiary; provided that (i) in the case of a Subsidiary, such
Liens secure Indebtedness permitted by Section 7.05(h), (ii) such Liens and the
Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such Liens shall
not apply to any other property or assets of AXIS Capital or any Subsidiary;

(d) zoning restrictions, easements, minor restrictions on the use of real
property, minor irregularities in title thereto and other minor Liens that do
not in the aggregate materially detract from the value of a property or asset
to, or materially impair its use in the business of, AXIS Capital or any such
Subsidiary;

(e) statutory and common law Liens of materialmen, mechanics, carriers,
warehousemen and landlords and other similar Liens arising in the ordinary
course of business;

(f) Liens on assets held in trust in respect of, or deposited or segregated to
secure, liabilities under any Policies or contracts in the ordinary course of
business or securing Indebtedness permitted under Section 7.05(c);

(g) Liens arising in the ordinary course of business on operating accounts
(including any related securities accounts) maintained by AXIS Capital or any of
its Subsidiaries in the ordinary course of business;

(h) Liens arising pursuant to any of the Loan Documents;

(i) attachments, judgment and other similar liens resulting from events not
constituting an Event of Default under Section 8.01(j);

(j) Liens securing repurchase agreements constituting a borrowing of funds by
AXIS Capital or any Subsidiary in the ordinary course of business for liquidity
purposes and in no event for a period exceeding 90 days in each case; provided
that such Liens are limited to the securities that are the subject of such
repurchase agreements;

 

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(k) Liens on any assets of any Person existing at the time such Person is merged
or consolidated with or into or acquired by AXIS Capital or any of its
Subsidiaries and not created in contemplation of such event;

(l) Liens securing obligations owed by AXIS Capital to any of its Subsidiaries
or owed by any Subsidiary to AXIS Capital or any Subsidiary, in each case solely
to the extent that such Liens are required by an Applicable Insurance Regulatory
Authority for such Person to maintain such obligations;

(m) Liens securing Swap Contracts permitted under Section 7.06(e) provided the
aggregate Swap Termination Value does not exceed $500,000,000.

(n) Liens arising in connection with securities lending arrangements with
financial institutions in the ordinary course of business; and

(o) Any interest or title of a lessor under leases entered into by AXIS Capital
or any of its Subsidiaries;

(p) Liens not otherwise permitted by the foregoing clauses of this Section 7.02
securing Indebtedness in an aggregate principal amount outstanding at any time
that does not exceed $100,000,000;

provided, however, that no Lien shall be permitted to exist on the Collateral.

7.03 Transactions with Affiliates. Enter into or carry out any transaction with
(including, without limitation, sell, lease or otherwise transfer any property
or assets or services to, purchase, lease or otherwise acquire any property or
assets or services from, loan or advance to or enter into, suffer to remain in
existence or amend any contract, agreement or arrangement with) any Affiliate of
AXIS Capital, or directly or indirectly agree to do any of the foregoing with
any such Affiliate, except (i) transactions between or among AXIS Capital and
its Wholly Owned Subsidiaries not involving any other Affiliate,
(ii) transactions with Affiliates in good faith in the ordinary course of AXIS
Capital’s business and at prices and on terms and conditions no less favorable
to AXIS Capital or such Subsidiary than those that could have been obtained in a
comparable transaction on an arm’s length basis from an unrelated Person and
(iii) any Restricted Payment permitted by Section 7.07.

7.04 Financial Covenants.

(a) Ratio of Total Funded Debt to Total Capitalization. AXIS Capital will not
permit the ratio of (a) Total Funded Debt to (b) the sum of Total Funded Debt
plus Consolidated Net Worth to be greater than 0.35:1.00 at any time.

(b) Consolidated Net Worth. AXIS Capital will not permit its Consolidated Net
Worth to be less than at any time the sum of (i) $3,802,000,000 plus (ii) 25% of
Consolidated Net Income (if positive) of AXIS Capital for each semi-annual
fiscal period ending on or after June 30, 2013 plus (iii) an amount equal to 25%
of the net cash proceeds received by AXIS Capital, other than in connection with
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(without increasing, or shortening the maturity of, the principal amount
thereof),from the issuance of its capital stock including upon any conversion of
debt securities (including Convertible Securities) into and the exercise of any
warrants with respect to Equity Interests of AXIS Capital (but, in the case of
any Hybrid Securities, only to the extent such Hybrid Securities are included,
at the time of issuance thereof, in Consolidated Net Worth pursuant to the
definition thereof) during each such semi-annual fiscal period.

7.05 Indebtedness. Permit any Subsidiary of AXIS Capital (other than AXIS
Finance or any other Subsidiary that has guaranteed the Obligations) at any time
to create, incur, assume or permit to exist any Indebtedness, except:

(a) Indebtedness created hereunder;

(b) Indebtedness existing on the date hereof and described in Schedule 7.05 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;

(c) Indebtedness for standby letters of credit issued to secure liabilities
under Policies entered into in the ordinary course of business;

(d) Indebtedness incurred in transactions described in Section 7.02(k) and
Section 7.02(p);

(e) Indebtedness of any Subsidiary to AXIS Capital or any other Subsidiary;

(f) Guarantees by any Subsidiary of Indebtedness of AXIS Capital or any other
Subsidiary; provided that if such Subsidiary guarantees Indebtedness of AXIS
Capital or another Credit Party, such Subsidiary shall also guarantee the
Obligations of such Credit Party;

(g) Indebtedness in connection with securities lending arrangements with
financial institutions in the ordinary course of business; and

(h) Indebtedness of AXIS Capital or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations, and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (h) shall not exceed $100,000,000 at any time outstanding;

(i) other unsecured Indebtedness not exceeding $250,000,000; provided that
(i) such Indebtedness does not contain any measures of financial performance
(however expressed and whether stated as a covenant, as a ratio, as a fixed
threshold, as an event of default, as a mandatory prepayment provision, or
otherwise) which, taken as a whole, are materially more restrictive on AXIS
Capital or its Subsidiaries than those measures of financial performance
contained in this Agreement, as determined in good faith by senior management of
AXIS Capital and (ii) upon the incurrence thereof no Default would occur or
exist.

 

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7.06 Investments. Make or permit to remain outstanding any Investments except:

(a) Investments outstanding on the date hereof;

(b) operating accounts (including any related securities accounts) maintained by
AXIS Capital or any of its Subsidiaries in the ordinary course of business;

(c) Permitted Investments of any Credit Party and any Subsidiary;

(d) Investments by AXIS Capital and its Subsidiaries in Subsidiaries;

(e) Swap Contracts entered into in the ordinary course of AXIS Capital’s or any
Subsidiary’s financial planning and not for speculative purposes;

(f) Investments consisting of security deposits with utilities and other like
Persons made in the ordinary course of business;

(g) Guarantees by AXIS Capital of obligations of any of its Subsidiaries with
respect to operating leases of office space not exceeding $50,000,000 in the
aggregate;

(h) Investments permitted under Section 7.01(b);

(i) Investments received by AXIS Capital or any Subsidiary in connection with
the bankruptcy or reorganization of, or settlement of, delinquent accounts and
disputes with any Person in the ordinary course of business;

(j) Investments by AXIS Capital and Subsidiaries consisting of Guarantees of
Indebtedness permitted under Section 7.05; and

(k) usual and customary loans and advances to any employees, officers and
directors of the Credit Parties and Subsidiaries in an aggregate principal
amount not to exceed $10,000,000 at any one time outstanding; provided that such
loans and advances are approved by the board of directors or a committee thereof
of the relevant Credit Party or Subsidiary.

7.07 Restricted Payments. Declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except that:

(a) AXIS Capital may make any Restricted Payment if, at the time of and after
giving effect to such Restricted Payment, no Default shall have occurred and be
continuing.

(b) AXIS Capital may declare and pay dividends with respect to its capital stock
consisting solely of additional shares of its common stock;

 

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(c) AXIS Capital may make Restricted Payments pursuant to and in accordance with
stock option plans or other benefit plans for management or employees of AXIS
Capital and its Subsidiaries;

(d) AXIS Capital and any of its Subsidiaries may declare and pay cash dividends
or distributions with respect to (i) any trust preferred security, deferrable
interest subordinated debt security, mandatory convertible debt or other Hybrid
Security that, at the time of issuance thereof or at any time prior to the
initial dividend or distribution thereunder, was accorded equity treatment by
S&P and/or (ii) any Preferred Security, in each case issued by AXIS Capital or
any of its Subsidiaries, if, at the time of and after giving effect to such
dividend or distribution, no Event of Default under clause (a), (b), (f), (h) or
(i) of Article VIII shall have occurred and be continuing; and

(e) AXIS Capital may enter into Convertible Securities Transactions; for the
avoidance of doubt, any Restricted Payment required in connection therewith can
only be made as permitted by this Section 7.07 at the time such Restricted
Payment is made.

Nothing herein shall be deemed to prohibit the payment of Restricted Payments by
any Subsidiary of AXIS Capital to AXIS Capital or to any other Subsidiary of
AXIS Capital.

7.08 Continuation of and Change in Businesses. Engage to any material extent in
any business or businesses other than the business or businesses engaged in (or
which AXIS Capital or any of its Subsidiaries, as the case may be, proposes to
engage in) on the date hereof and businesses related or incidental thereto.

7.09 Private Act. AXIS Capital will not become subject to a Private Act.

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

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

(a) any Credit Party shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any L/C Borrowing when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) any Credit Party shall fail to pay any interest on any Loan or L/C Borrowing
or any fee payable under this Agreement or any other amount (other than an
amount referred to in clause (a) of this Article) payable under this Agreement
or under any other Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three or
more days;

(c) any representation or warranty made or deemed made by any Credit Party in or
in connection with this Agreement or any other Loan Document or any amendment or
modification hereof or thereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with the
provisions hereof or any other Loan Document or any amendment or modification
hereof or thereof, shall prove to have been incorrect in any material respect as
of the time made (or deemed made) or furnished;

 

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(d) AXIS Capital shall fail to observe or perform any covenant, condition or
agreement contained in Section 6.02(a), 6.03 (with respect to any Credit Party’s
existence), 6.09, 6.11, 6.12, 6.13 or in Article VII;

(e) any Credit Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b) or (d) of this Article) or any other Loan Document and such failure shall
continue unremedied for a period of 30 or more days after notice thereof from
the Administrative Agent (given at the request of any Lender) to AXIS Capital;

(f) AXIS Capital or any of its Subsidiaries shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable (after
taking account of any applicable grace period);

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness; and provided, further, that if a holder of
Convertible Securities elects to convert its Convertible Securities prior to the
maturity thereof, and AXIS Capital has the right to make the payment in cash or
Equity Interests or a combination thereof, such conversion shall not be deemed
to be an event covered by clause (g);

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Credit Party or its debts, or of a substantial part of its
assets, under the Bermuda Companies Law or any other Debtor Relief Law or
(ii) the appointment of a receiver, examiner, trustee, custodian, sequestrator,
conservator or similar official for any Credit Party or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall continue
undismissed for a period of 60 or more days or an order or decree approving or
ordering any of the foregoing shall be entered;

(i) any Credit Party shall institute proceedings to be adjudicated bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization under the Bermuda
Companies Law or any other Debtor Relief Law, or shall consent to the filing of
any such petition, or shall consent to the appointment of an examiner, receiver
or liquidator or trustee or assignee in bankruptcy or insolvency of it or a
substantial part of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or corporate or other action shall be taken by any Credit Party
in furtherance of any of the aforesaid purposes;

 

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(j) one or more judgments for the payment of money in an aggregate amount in
excess of the Threshold Amount shall be rendered against AXIS Capital or any of
its Subsidiaries or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of AXIS Capital or any of its
Subsidiaries to enforce any such judgment;

(k) an ERISA Event (or any event similar to an ERISA Event with respect to any
non-U.S. Benefit Plan) shall have occurred that either (i) has resulted in
liability to AXIS Capital and its Subsidiaries in excess of the Threshold Amount
or (ii) in the opinion of the Required Lenders, when taken together with all
other such similar events that have occurred, could reasonably be expected to
result in liability to AXIS Capital and its Subsidiaries in excess of the
Threshold Amount;

(l) Any Loan Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder or satisfaction
in full of all the Obligations, shall for whatever reason be terminated or cease
to be in full force and effect, any Credit Party contests in any manner the
validity or enforceability of any Loan Document; or any Credit Party denies in
writing that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or

(m) a Change of Control shall occur.

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

(a) declare the commitment of each Lender to make Loans and any obligation of
the Fronting Banks or the L/C Issuers to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;

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

(c) require that each Borrower Cash Collateralize its L/C Obligations with
respect to Unsecured Letters of Credit with Cash and Cash Equivalents in an
amount equal to 105% of such outstanding L/C Obligations;

(d) require that the Eligible Collateral in any Collateral Account consist
solely of Cash and Cash Equivalents or such other Eligible Collateral as the
Administrative Agent may require; and

 

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(e) exercise on behalf of itself, the Lenders, the L/C Issuers and the Fronting
Banks all rights and remedies available to it, the Lenders and the Fronting
Banks under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under Debtor Relief Laws, the
obligation of each Lender to make Loans, the obligation of each L/C Issuer to
make L/C Credit Extensions and any obligation of each Fronting Bank to make L/C
Credit Extensions shall automatically terminate, the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of AXIS Capital to Cash
Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent or any
Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall, subject to the provisions of
Sections 2.15 and 2.16, be applied by the Administrative Agent in the following
order (provided, however, that notwithstanding anything contained herein to the
contrary, the Administrative Agent (i) shall only apply funds received from a
Borrower or any of such Borrower’s Collateral to the Obligations of such
Borrower):

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

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

Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the Fronting Banks in proportion to
the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the
Fronting Banks in proportion to the respective amounts described in this clause
Fourth held by them;

Fifth, to the Administrative Agent for the account of (x) the Fronting Banks, in
the case of Fronted Letters of Credit and (y) the Lenders, in the case of
Several Letters of Credit, to Cash Collateralize that portion of L/C Obligations
comprised of the aggregate undrawn amount of Letters of Credit; and

 

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Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the applicable Borrower or as otherwise required by Law.

Subject to Sections 2.03(c) and 2.16, amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.

ARTICLE IX. ADMINISTRATIVE AGENT

9.01 Appointment and Authority.

(a) Each of the Lenders, the L/C Administrator, each L/C Issuer and each
Fronting Bank hereby irrevocably appoints Wells Fargo to act on its behalf as
the Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Administrative Agent, the Lenders and the Fronting Banks, and neither AXIS
Capital nor any other Credit Party shall have rights as a third party
beneficiary of any of such provisions. It is understood and agreed that the use
of the term “agent” herein or in any other Loan Documents (or any other similar
term) with reference to the Administrative Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any Applicable Law. Instead such term is used as a matter of market
custom, and is intended to create or reflect only an administrative relationship
between contracting parties.

(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders and each Fronting Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as the agent
of such Lender and such Fronting Bank for purposes of acquiring, holding and
enforcing any and all Liens on Collateral granted by any Credit Party, together
with such powers and discretion as are reasonably incidental thereto (including,
without limitation, to enter into additional Loan Documents or supplements to
existing Loan Documents on behalf of the Lenders, the L/C Administrator and the
Fronting Banks). In this connection, the Administrative Agent, as “collateral
agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the
Administrative Agent pursuant to this Article IX for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under each
Security Agreement, or for exercising any rights and remedies thereunder at the
direction of the Administrative Agent), shall be entitled to the benefits of all
provisions of this Articles IX and Article X (including Section 10.04, as though
such co-agents, sub-agents and attorneys-in-fact were the “collateral agent”
under the Loan Documents) as if set forth in full herein with respect thereto.

 

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

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

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

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or Applicable Law, including for the avoidance of
doubt any action that may be in violation of the automatic stay under any Debtor
Relief Law or that may effect a forfeiture, modification or termination of
property of a Defaulting Lender in violation of any Debtor Relief Law; and

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

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction by final nonappealable judgment. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by AXIS Capital, a
Lender or a Fronting Bank.

 

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

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

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent. The Administrative
Agent shall not be responsible for the negligence or misconduct of any
sub-agents except to the extent that a court of competent jurisdiction
determines in a final and non appealable judgment that the Administrative Agent
acted with gross negligence or willful misconduct in the selection of such
sub-agents.

9.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to
the Lenders, Fronting Banks, the L/C Administrator and AXIS Capital. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with AXIS Capital, to appoint a successor, which shall be
a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have

 

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been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation (the “Resignation Effective Date”), then the retiring
Administrative Agent may (but shall not be obligated to) on behalf of the
Lenders, the L/C Administrator and the Fronting Banks, appoint a successor
Administrative Agent meeting the qualifications set forth above. Whether or not
a successor has been appointed, such resignation shall become effective in
accordance with such notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender
pursuant to clause (d) of the definition thereof, the Required Lenders may, to
the extent permitted by Applicable Law, by notice in writing to AXIS Capital and
such Person, remove such Person as Administrative Agent and, in consultation
with AXIS Capital, appoint a successor. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days (or such earlier day as shall be agreed by the Required Lenders)
(the “Removal Effective Date”), then such removal shall nonetheless become
effective in accordance with such notice on the Removal Effective Date. In the
event that the Administrative Agent, a Fronting Bank or the L/C Administrator is
a Defaulting Lender, then AXIS Capital shall have the right to require such
Defaulting Lender to resign as Administrative Agent, Fronting Bank and/or L/C
Administrator, as applicable, and a replacement Administrative Agent, Fronting
Bank and/or LC Administrator shall be appointed pursuant to the provisions of
this Section 9.06.

(c) With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable), (1) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the Fronting Banks under any of
the Loan Documents, the retiring or removed Administrative Agent shall continue
to hold such collateral security until such time as a successor Administrative
Agent is appointed) and (2) except for any indemnity payments owed to the
retiring or removed Administrative Agent, all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender, the L/C Administrator and each
Fronting Bank directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above. Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring or removed Administrative Agent (other than any rights to
indemnity payments owed to the retiring or removed Administrative Agent), and
the retiring or removed Administrative Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents. The fees
payable by AXIS Capital to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between AXIS Capital
and such successor. After the retiring Administrative Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.04 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.

 

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(d) Any resignation by Wells Fargo as Administrative Agent pursuant to this
Section shall also constitute its resignation as a Fronting Bank and L/C
Administrator. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (i) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Fronting Bank and L/C Administrator, (ii) the retiring Fronting Bank and L/C
Administrator shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (iii) the successor
Fronting Bank and L/C Administrator shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession (unless such substitution would require the consent of the
beneficiary and such consent cannot be obtained) or make other arrangements
satisfactory to the retiring Fronting Bank and L/C Administrator to effectively
assume the obligations of the retiring Fronting Bank and L/C Administrator with
respect to such Letters of Credit.

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

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the syndication agents, documentation agents, co-agents, book managers, lead
managers, arrangers, lead arrangers or co-arrangers listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or
any of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, a Lender, the L/C Administrator or a Fronting Bank
hereunder.

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

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the Fronting
Banks, the L/C Administrator and the Administrative Agent (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Lenders, the Fronting Banks, the L/C

 

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Administrator and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, the Fronting Banks, the L/C
Administrator and the Administrative Agent under Sections 2.04(i) and (j), 2.10
and 10.04) allowed in such judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and each Fronting Bank to make such payments to the Administrative
Agent and, in the event that the Administrative Agent shall consent to the
making of such payments directly to the Lenders and the Fronting Banks, to pay
to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections
2.10 and 10.04.

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

9.10 Collateral and Guaranty Matters. The Lenders and the Fronting Banks
irrevocably authorize the Administrative Agent, at its option and in its
discretion:

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii) as
otherwise permitted by the terms of this Agreement or any other Loan Document,
or (iii) subject to Section 10.01, if approved, authorized or ratified in
writing by the Required Lenders; and

(b) to release any Guaranty upon termination of the Aggregate Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit; and

(c) to release any Designated Borrower from its obligations under this Credit
Agreement and any other Loan Document and release any Collateral provided by
such Designated Borrower if such Person ceases to be a Designated Borrower.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release Collateral,
release a Designated Borrower from its Obligations or release any Guarantor from
its obligations under the Guaranty pursuant to this Section 9.10. In each case
as specified in this Section 9.10, the Administrative Agent will, at AXIS
Capital’s expense, execute and deliver to the applicable Credit Party such
documents as

 

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such Credit Party may reasonably request to evidence the release of such item of
Collateral from the assignment and Lien granted under the Security Agreements or
to subordinate its interest in such item, or to release such Guarantor from its
obligations under the Guaranty, in each case in accordance with the terms of the
Loan Documents and this Section 9.10. In the case of any such sale, transfer or
disposal of any property constituting Collateral in a transaction constituting a
Disposition permitted pursuant to Section 7.01, the Liens created by any of the
Loan Documents on such property shall be automatically released without need for
further action by any person.

The Administrative Agent shall not be responsible for or have a duty to
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral, the existence, priority or
perfection of the Administrative Agent’s Lien thereon, or any certificate
prepared by any Credit Party in connection therewith, nor shall the
Administrative Agent be responsible or liable to the Lenders for any failure to
monitor or maintain any portion of the Collateral.

ARTICLE X. MISCELLANEOUS

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by AXIS Capital or
any other Credit Party therefrom, shall be effective unless in writing signed by
the Required Lenders (or by the Administrative Agent at the request of the
Required Lenders) and, in the case of an amendment, AXIS Capital or the
applicable Credit Party, as the case may be, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:

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

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

(c) waive, extend or postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly and adversely affected thereby;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under
any other Loan Document without the written consent of each Lender directly and
adversely affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to (i) amend the definition of “Default
Rate” or any provision relating to Defaulting Lenders (including the definition
thereof) or (ii) waive any obligation of a Borrower to pay interest or Letter of
Credit Fees at the Default Rate;

 

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(e) change Section 8.03 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender directly
and adversely affected thereby;

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

(g) release AXIS Capital, AXIS Finance, AXIS Specialty Holdings or any other
Guarantor from its Guaranty without the written consent of each Lender or
release any Collateral, except to the extent the release is permitted pursuant
to Section 9.10 (in which case such release may be made by the Administrative
Agent acting alone);

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Fronting Banks and/or the L/C Administrator in
addition to the Lenders required above, affect the rights or duties of the
Fronting Banks and/or the L/C Administrator under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto; and
(iv) the Administrative Agent and AXIS Capital shall be permitted to amend any
provision of the Loan Documents (and such amendment shall become effective
without any further action or consent of any other party to any Loan Document)
if the Administrative Agent and AXIS Capital shall have jointly identified an
obvious error or any error or omission of a technical or immaterial nature in
any such provision. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder (and any amendment, waiver or consent which by its
terms requires the consent of all Lenders or each affected Lender may be
effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender.

10.02 Notices; Effectiveness; Electronic Communication.

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

 

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(i) if to the Borrowers, the Administrative Agent, the L/C Administrator or a
Fronting Bank, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by
a Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information relating to the
Borrowers).

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

(b) Electronic Communications. Notices and other communications to the Lenders,
the L/C Administrator and the Fronting Banks hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or the Applicable
Issuing Party pursuant to Article II if such Lender or the Applicable Issuing
Party, as applicable, has notified the Administrative Agent that it is incapable
of receiving notices under such Article by electronic communication. The
Administrative Agent or AXIS Capital may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications. Unless the
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii) above, if such notice, email or other communication is not sent
during the normal business hours of the recipient, such notice, email or other
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient.

(c) Platform.

(i) Each Credit Party agrees that the Administrative Agent may, but shall not be
obligated to, make the Communications (as defined below) available to the
Fronting Banks and the other Lenders by posting the Communications on Debt
Domain, Intralinks, Syndtrak or a substantially similar electronic transmission
system (the “Platform”).

 

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(ii) The Platform is provided “as is” and “as available.” The Agent Parties (as
defined below) do not warrant the adequacy of the Platform and expressly
disclaim liability for errors or omissions in the Communications. No warranty of
any kind, express, implied or statutory, including, without limitation, any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third-party rights or freedom from viruses or other code defects, is made by
any Agent Party in connection with the Communications or the Platform. In no
event shall the Administrative Agent or any of its Related Parties
(collectively, the “Agent Parties”) have any liability to any Borrower, any
Lender, the L/C Administrator, any Fronting Bank or any other Person for losses,
claims, damages, liabilities or expenses of any kind (whether in tort, contract
or otherwise) arising out of any Borrower’s or the Administrative Agent’s
transmission of Borrower Materials through the Internet, except to the extent
that such losses, claims, damages, liabilities or expenses are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party;
provided, however, that in no event shall any Agent Party have any liability to
any Borrower, any Lender, the L/C Administrator, any Fronting Bank or any other
Person or entity for damages of any kind, including, without limitation, direct
or indirect, special, incidental or consequential damages, losses or expenses
(whether in tort, contract or otherwise) arising out of any Credit Party’s or
the Administrative Agent’s transmission of communications through the Platform.
“Communications” means, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of any Credit
Party pursuant to any Loan Document or the transactions contemplated therein
which is distributed to the Administrative Agent, the L/C Administrator, any
Fronting Bank or any Lender by means of electronic communications pursuant to
this Section, including through the Platform.

(d) Change of Address, Etc. Each of AXIS Capital, the Administrative Agent, the
L/C Administrator, and any Fronting Bank may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to the
other parties hereto. Each other Lender may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to
AXIS Capital, the Administrative Agent, the L/C Administrator and the Fronting
Banks. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, facsimile number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(e) Private Side Designation. Each Public Lender agrees to cause at least one
individual at or on behalf of such Public Lender to at all times have selected
the “Private Side Information” or similar designation on the content declaration
screen of the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and Applicable Law,
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securities Applicable Laws, to make reference to Borrower Materials that are not
made available through the “Public Side Information” portion of the Platform and
that may contain material non-public information with respect to any Borrower or
its securities for purposes of United States Federal or state securities
Applicable Laws.

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

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

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Credit Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders, the L/C Administrator and the Fronting Banks; provided, however, that
the foregoing shall not prohibit (a) the Administrative Agent from exercising on
its own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Loan Documents,
(b) either Applicable Issuing Party from exercising the rights and remedies that
inure to its benefit (solely in its capacity as an Applicable Issuing Party)
hereunder and under the other Loan Documents, (c) any Lender from exercising
setoff rights in accordance with Section 10.08 (subject to the terms of
Section 2.12), or (d) any Lender from filing proofs of claim or appearing and
filing pleadings on its own behalf during the pendency of a proceeding relative
to any Credit Party under any Debtor Relief Law; and provided, further, that if
at any time there is no Person acting as Administrative Agent hereunder and
under the other Loan Documents, then (i) the Required Lenders shall have the
rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02
and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the
preceding proviso and subject to Section 2.12, any Lender may, with the consent
of the Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.

 

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10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. AXIS Capital shall pay (i) all reasonable documented
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable documented out-of-pocket expenses incurred by
the Applicable Issuing Party in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all reasonable documented out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the Applicable Issuing Party (including the
fees, charges and disbursements of any counsel for the Administrative Agent, any
Lender or the Applicable Issuing Party), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit; provided, however,
that this Section 10.04(a) shall not apply with respect to any Taxes other than
Taxes that represent losses or damages arising from any non-Tax claim.

(b) Indemnification by AXIS Capital. AXIS Capital shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender, the L/C
Administrator and each Fronting Bank, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, and shall pay or reimburse any such
Indemnitee for, any and all losses, claims (including, without limitation, any
Environmental Claims), damages, liabilities and related expenses (including the
fees, charges and disbursements of any counsel for any Indemnitee), incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by AXIS
Capital or any other Credit Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby,
or, in the case of the Administrative Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other Loan
Documents (including in respect of any matters addressed in Section 3.01),
(ii) any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the Applicable Issuing Party to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by AXIS Capital or any of
its Subsidiaries, or any Environmental Liability related in any way

 

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to AXIS Capital or any of its Subsidiaries, (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by AXIS Capital or any other Credit Party, and regardless of whether
any Indemnitee is a party thereto, or (v) any claim, investigation, litigation
or other proceeding (whether or not the Administrative Agent or any Lender is a
party thereto) and the prosecution and defense thereof, arising out of or in any
way connected with the Loans, this Agreement, any other Loan Document, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby, including without limitation, reasonable
attorneys and consultant’s fees; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee, (y) result from a claim
brought by AXIS Capital or any other Credit Party or any Subsidiary against an
Indemnitee for a material breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if AXIS Capital or such other Credit
Party or such Subsidiary has obtained a final and nonappealable judgment in its
favor on such claim as determined by a court of competent jurisdiction or
(z) are Taxes other than Taxes that represent losses or damages arising from any
non-Tax claim.

(c) Reimbursement by Lenders. To the extent that AXIS Capital for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the L/C Administrator, the Fronting Banks or any Related Party of any
of the foregoing, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent), the L/C Administrator, the Fronting Banks or such
Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount (including any such unpaid amount in
respect of a claim asserted by such Lender), provided that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as the
case may be, was incurred by or asserted against the Administrative Agent (or
any such sub-agent) or the Applicable Issuing Party in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent) or the Applicable Issuing Party in connection with
such capacity. The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.11(d).

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

 

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

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the L/C Administrator, any Fronting Bank, the
replacement of any Lender, the termination of the Aggregate Commitments and the
repayment, satisfaction or discharge of all the other Obligations.

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

10.06 Successors and Assigns.

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

 

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

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or contemporaneous
assignments to related Approved Funds that equal at least the amount specified
in subsection (b)(i)(B) of this Section in the aggregate or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, AXIS Capital
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that AXIS Capital shall be deemed to have given its
consent ten (10) Business Days after the date written notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by AXIS Capital prior to such tenth (10th) Business
Day.

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

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

(A) the consent of AXIS Capital (such consent not to be unreasonably withheld)
shall be required unless (1) an Event of Default pursuant to Section 8.01(a),
(b), (h) or (i) has occurred and is continuing at the time of such assignment,
(2) any other Event of Default has occurred and been continuing for 30
consecutive days at the time of such assignment or (3) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund; provided that AXIS Capital
shall be deemed to have given its consent ten (10) Business Days after the date
written notice thereof has been delivered by the assigning Lender (through the
Administrative Agent) unless such consent is expressly refused by AXIS Capital
prior to such tenth (10th) Business Day;

 

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(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required if such assignment is to a Person that is
not a Lender, an Affiliate of such Lender or an Approved Fund with respect to
such Lender; provided that AXIS Capital shall be deemed to have consented to any
such assignment unless it shall object thereto by written notice to the
Administrative Agent within ten (10) Business Days after having received notice
thereof; and

(C) the consent of each Fronting Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment and, if such Assignee
could not be an L/C Issuer of a Several Letter of Credit and such Fronting Bank
must have agreed (in its sole discretion) to front for such Assignee under
Several Letters of Credit.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that (A) only one such fee will be payable in connection with simultaneous
assignments to two or more Approved Funds by a Lender and (B) the Administrative
Agent may, in its sole discretion, elect to waive such processing and
recordation fee in the case of any assignment. The assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and, unless otherwise agreed between the assigning Lender and such
Assignee, if any Several Letters of Credit are outstanding, all such Outstanding
Several Letters of Credit are either amended or replaced to give effect to such
assignment.

(v) No Assignment to Certain Persons. No such assignment shall be made (A) to
AXIS Capital or any of AXIS Capital’s Subsidiaries, or (B) to any Defaulting
Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender
hereunder, would constitute any of the foregoing Persons described in this
clause (B), or (C) to a natural person.

(vi) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of AXIS Capital and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in

 

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full all payment liabilities then owed by such Defaulting Lender to the
Administrative Agent or any Lender hereunder (and interest accrued thereon) and
(y) acquire (and fund as appropriate) its full pro rata share of all Loans,
obligations under Several Letters of Credit and participations in Fronted
Letters of Credit in accordance with its Applicable Percentage. Notwithstanding
the foregoing, in the event that any assignment of rights and obligations of any
Defaulting Lender hereunder shall become effective under Applicable Law without
compliance with the provisions of this paragraph, then the assignee of such
interest shall be deemed to be a Defaulting Lender for all purposes of this
Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided, that except to the extent otherwise expressly agreed by
the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender. Upon request, AXIS Capital (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section. Notwithstanding anything to the
contrary contained herein or an any Loan Document, a Lender may only assign
Loans or Commitments with respect to AXIS Specialty Europe or AXIS Re to a
Lender in a relevant territory as defined by s246 (1) TCA 1997 and where the
provisions of section 3(h) thereof apply to such Loan or Commitment.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of AXIS Capital (and such agency being solely for tax purposes), shall
maintain at the one of its offices in Charlotte, North Carolina a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and AXIS Capital, the Administrative Agent and the Lenders
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. In addition, the Administrative Agent
shall maintain on the Register information regarding the designation, and
revocation of designation, of any Lender as a Defaulting Lender. The Register
shall be available for inspection by AXIS Capital and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

 

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(d) Participations. Any Lender may at any time, without the consent of, or
notice to, AXIS Capital or the Administrative Agent, sell participations to any
Person (other than a natural person, a Defaulting Lender or AXIS Capital or any
of AXIS Capital’s Affiliates or Subsidiaries) (each, a “Participant”) in all or
a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations) owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) AXIS Capital, the Administrative
Agent, the Lenders, the L/C Administrator and the Fronting Banks shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. For the avoidance of doubt, each
Lender shall be responsible for the indemnity under Section 10.04(c) with
respect to any payments made by such Lender to its Participant(s).

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, AXIS Capital agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.

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

(f) Participant Register. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is
in registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

 

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

10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders, the L/C Administrator and the Fronting Banks
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and
its Affiliates’ respective partners, directors, officers, employees, agents,
trustees, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent required or requested by, or required to be disclosed to, any rating
agency, or regulatory or similar authority purporting to have jurisdiction over
such Person or its Related Parties (including any self-regulatory authority,
such as the NAIC), (c) to the extent required by Applicable Law or by any
subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement or
any Eligible Assignee invited to be a Lender pursuant to Section 2.13(c) or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to any Borrower and its obligations, (iii) to an
investor or prospective investor in an Approved Fund that also agrees that
Information shall be used solely for the purpose of evaluating an investment in
such Approved Fund, (iv) to a trustee, collateral manager, servicer, backup
servicer, noteholder or secured party in an Approved Fund in connection with the
administration, servicing and reporting on the assets serving as collateral for
an Approved Fund, or (v) to a nationally recognized rating agency that requires
access to information regarding AXIS Capital and its Subsidiaries, the Loans and
the Loan Documents in connection with ratings issued with respect to an Approved
Fund; (g) on a confidential basis to (i) any rating agency in connection with
rating any Borrower or its Subsidiaries or this credit facility or (ii) the
CUSIP Service Bureau or any similar agency in connection with the issuance and
monitoring of CUSIP numbers with respect to the Credit Facility; (h) with the
consent of AXIS Capital, (i) market data collectors, similar service providers
to the lending industry, and service providers to the Agents and the Lenders in
connection with the administration and management of this Agreement, (j) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section or (ii) becomes available to the Administrative Agent,
any Lender, the L/C Administrator, any Fronting Bank or any of their respective
Affiliates on a nonconfidential basis from a source other than a Borrower or
(k) to governmental regulatory authorities in connection with any regulatory

 

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examination of the Administrative Agent or any Lender or in accordance with the
Administrative Agent’s or any Lender’s regulatory compliance policy if the
Administrative Agent or such Lender deems necessary for the mitigation of claims
by those authorities against the Administrative Agent or such Lender or any of
its subsidiaries or affiliates. For purposes of this Agreement, “Information”
means all information received from AXIS Capital or any Subsidiary relating to
AXIS Capital or any Subsidiary or any of their respective businesses, other than
any such information that is available to the Administrative Agent, any Lender,
the L/C Administrator or any Fronting Bank on a nonconfidential basis prior to
disclosure by AXIS Capital or any Subsidiary, provided that, in the case of
information received from AXIS Capital or any Subsidiary after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

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

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Administrator, each Fronting Bank and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by Applicable Law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, the L/C Administrator, such Fronting
Bank or any such Affiliate to or for the credit or the account of AXIS Capital
or any other Credit Party against any and all of the obligations of AXIS Capital
or such Credit Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender, the L/C Administrator or such Fronting Bank,
irrespective of whether or not such Lender or such Fronting Bank shall have made
any demand under this Agreement or any other Loan Document and although such
obligations of AXIS Capital or such Credit Party may be contingent or unmatured
or are owed to a branch or office of such Lender, the L/C Administrator or such
Fronting Bank different from the branch or office holding such deposit or
obligated on such indebtedness; provided, that in the event that any Defaulting
Lender shall exercise any such right of setoff, (x) all amounts so set off shall
be paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.15 and, pending such payment, shall
be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent and the Lenders, and (y) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the Obligations owing to such Defaulting Lender
as to which it exercised such right of setoff. The rights of each Lender, each
Fronting Bank and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such
Lender, the L/C Administrator, such Fronting Bank or their respective Affiliates
may have. Each Lender, the L/C Administrator and each Fronting Bank each agrees
to notify AXIS Capital and the Administrative Agent promptly after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application. The obligations under this
Section 10.08 with respect to the Borrowers shall be several in nature.

 

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

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

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

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the

 

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illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the foregoing provisions of this
Section 10.12, if and to the extent that the enforceability of any provisions in
this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief
Laws, as determined in good faith by the Administrative Agent, the L/C
Administrator, or the Fronting Banks, as applicable, then such provisions shall
be deemed to be in effect only to the extent not so limited.

10.13 Replacement of Lenders. If (i) any Lender requests compensation under
Section 3.04, (ii) a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, (iii) a single Lender does not consent to an amendment or waiver
which, pursuant to Section 10.01 requires the consent of all Lenders, or
(iv) any Lender is a Defaulting Lender, then AXIS Capital may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by,
Section 10.06), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

(a) AXIS Capital shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to 100% of the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or AXIS
Capital (in the case of all other amounts);

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

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

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

10.14 Governing Law; Jurisdiction; Etc.

(a) Governing Law. This Agreement and the other Loan Documents and any claim,
controversy, dispute or cause of action (whether in contract or tort or
otherwise) based upon, arising out of or relating to this Agreement or any other
Loan Document (except, as to any other Loan Document, as expressly set forth
therein) and the transactions contemplated hereby and thereby shall be governed
by, and construed in accordance with, the law of the State of New York.

 

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(b) Submission to Jurisdiction. Each Borrower and each other Credit Party
irrevocably and unconditionally agrees that it will not commence any action,
litigation or proceeding of any kind or description, whether in law or equity,
whether in contract or in tort or otherwise, against the Administrative Agent,
any Lender, any Fronting Bank, the L/C Administrator, or any Related Party of
the foregoing in any way relating to this Agreement or any other Loan Document
or the transactions relating hereto or thereto, in any forum other than the
courts of the State of New York sitting in New York County, and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, and each of the parties hereto irrevocably and
unconditionally submits to the jurisdiction of such courts and agrees that all
claims in respect of any such action, litigation or proceeding may be heard and
determined in such New York State court or, to the fullest extent permitted by
Applicable Law, in such federal court. Each of the parties hereto agrees that a
final judgment in any such action, litigation or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Agreement or in any other Loan
Document shall affect any right that the Administrative Agent, any Lender, any
Fronting Bank or the L/C Administrator may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Borrower or any other Credit Party or its properties in the courts of any
jurisdiction.

(c) Waiver of Venue. Each Borrower and each other Credit Party irrevocably and
unconditionally waives, to the fullest extent permitted by Applicable Law, any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in subsection (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
Applicable Law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

(d) Service of Process. ON OR PRIOR TO THE CLOSING DATE, AND EACH BORROWER SHALL
APPOINT C T CORPORATION SYSTEM (THE “PROCESS AGENT”), WITH AN OFFICE ON THE DATE
HEREOF AT 111 8TH AVENUE, NEW YORK, NEW YORK 10011, UNITED STATES, AS ITS AGENT
TO RECEIVE ON ITS BEHALF SERVICE OF THE SUMMONS AND COMPLAINTS AND ANY OTHER
PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING, PROVIDED THAT A
COPY OF SUCH PROCESS IS ALSO MAILED IN THE MANNER PROVIDED IN SECTION 10.02.
SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO AXIS
CAPITAL IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT’S ABOVE ADDRESS, AND
EACH BORROWER HEREBY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO RECEIVE AND
FORWARD SUCH SERVICE ON ITS BEHALF. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

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

10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
AXIS Capital and each other Credit Party acknowledges and agrees that:
(i) (A) the arranging and other services regarding this Agreement provided by
the Administrative Agent, the Lenders and the Arranger are arm’s-length
commercial transactions between AXIS Capital, each other Credit Party and its
respective Affiliates, on the one hand, and the Administrative Agent, the
Lenders and the Arranger on the other hand, (B) each of AXIS Capital and the
other Credit Parties has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) AXIS Capital and each
other Credit Party is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; (ii) (A) the Administrative Agent, the Lenders and the
Arranger the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary for AXIS Capital, any other Credit Party or any
of its respective Affiliates, or any other Person and (B) neither the
Administrative Agent, nor any Lender nor any Arranger has any obligation to AXIS
Capital, any other Credit Party or any of their respective Affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; and (iii) the
Administrative Agent, the Lenders and the Arranger and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of AXIS Capital, the other Credit Parties and
their respective Affiliates, and neither the Administrative Agent, nor any
Lender nor any Arranger has any obligation to disclose any of such interests to
AXIS Capital, any other Credit Party or any of their respective Affiliates. To
the fullest extent permitted by law, each of AXIS Capital and the other Credit
Parties hereby waives and releases any claims that it may have against the
Administrative Agent, the Lenders and the Arranger with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

10.17 Electronic Execution of Assignments and Certain Other Documents. The words
“execution,” “signed,” “signature,” and words of like import in any Assignment
and Assumption or in any amendment or other modification hereof (including
waivers and consents) shall be deemed to include electronic signatures or the
keeping of records in electronic form,

 

118

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each of which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any Applicable Law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.

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

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

10.20 Judgment Currency. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of each Borrower
in respect of any such sum due from it to the Administrative Agent or any Lender
hereunder or under the other Loan Documents shall, notwithstanding any judgment
in a currency (the “Judgment Currency”) other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
“Agreement Currency”), be discharged only to the extent that on the Business Day
following receipt by the Administrative Agent or such Lender, as the case may
be, of any sum adjudged to be so due in the Judgment Currency, the
Administrative Agent or such Lender, as the case may be, may in accordance with
normal banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Administrative Agent or any Lender from any Borrower
in the Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or such
Lender, as the case may be, against such loss. If the amount of the Agreement
Currency so purchased is greater than the sum originally due to the
Administrative Agent or any Lender in such currency, the Administrative Agent or
such Lender, as the case may be, agrees to return the amount of any excess to
such Borrower (or to any other Person who may be entitled thereto under
Applicable Law).

10.21 Injunctive Relief. The Borrowers recognize that, in the event the
Borrowers fail to perform, observe or discharge any of their obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Lenders. Therefore, the Borrowers agree that the Lenders, at the
Lenders’ option, shall be entitled to temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages.

 

119

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10.22 Performance of Duties. Each of the Credit Party’s obligations under this
Agreement and each of the other Loan Documents shall be performed by such Credit
Party at its sole cost and expense.

10.23 All Powers Coupled with Interest. All powers of attorney and other
authorizations granted to the Lenders, the Administrative Agent and any Persons
designated by the Administrative Agent or any Lender pursuant to any provisions
of this Agreement or any of the other Loan Documents shall be deemed coupled
with an interest and shall be irrevocable so long as any of the Obligations
remain unpaid or unsatisfied, any of the Commitments remain in effect or this
Agreement has not been terminated.

10.24 Survival.

(a) All representations and warranties set forth in Article V and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including, but not limited to, any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date (except those that are expressly made as of a
specific date), shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.

(b) Notwithstanding any termination of this Agreement, the indemnities to which
the Administrative Agent and the Lenders are entitled under the provisions of
this Article X and any other provision of this Agreement and the other Loan
Documents shall continue in full force and effect and shall protect the
Administrative Agent and the Lenders against events arising after such
termination as well as before.

10.25 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

120

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

 

AXIS CAPITAL HOLDINGS LIMITED By:   /s/ Jose Osset Name:   Jose Ossett Title:  
Senior Vice President and Treasurer AXIS SPECIALTY LIMITED By:   /s/ Jose Osset
Name:   Jose Osset Title:   Senior Vice President and Treasurer AXIS RE SE By:  
/s/ Tim Hennessy Name:   Tim Hennessy Title:   Director AXIS SPECIALTY EUROPE SE
By:   /s/ Tim Hennessy Name:   Tim Hennessy Title:   Director AXIS INSURANCE
COMPANY By:   /s/ Andrew M. Weissert Name:   Andrew M. Weissert Title:   SVP,
General Counsel and Secretary

 

S - 1

--------------------------------------------------------------------------------

AXIS REINSURANCE COMPANY By:   /s/ Andrew M. Weissert Name:   Andrew M. Weissert
Title:   SVP, General Counsel and Secretary AXIS SURPLUS INSURANCE COMPANY By:  
/s/ Andrew M. Weissert Name:   Andrew M. Weissert Title:   SVP, General Counsel
and Secretary AXIS SPECIALTY HOLDINGS BERMUDA LIMITED By:   /s/ Jose Osset Name:
  Jose Osset Title:   Senior Vice President and Treasurer AXIS SPECIALTY
HOLDINGS IRELAND LIMITED By:   /s/ Tim Hennessy Name:   Tim Hennessy Title:  
Director

 

S - 2

--------------------------------------------------------------------------------

AXIS SPECIALTY GLOBAL HOLDINGS LIMITED By:   /s/ Tim Hennessy Name:   Tim
Hennessy Title:   Director AXIS SPECIALTY U.S. HOLDINGS, INC. By:   /s/ Andrew
M. Weissert Name:   Andrew M. Weissert Title:   SVP, General Counsel and
Secretary AXIS SPECIALTY U.S. SERVICES, INC. By:   /s/ Andrew M. Weissert Name:
  Andrew M. Weissert Title:   SVP, General Counsel and Secretary AXIS GROUP
SERVICES, INC. By:   /s/ Andrew M. Weissert Name:   Andrew M. Weissert Title:  
SVP, General Counsel and Secretary

 

S - 3

--------------------------------------------------------------------------------

AXIS SPECIALTY FINANCE LLC By:   /s/ Andrew M. Weissert Name:   Andrew M.
Weissert Title:   President and CEO

 

S - 4

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, L/C
Administrator, Fronting Bank and a Lender By:   /s/ Karen Hanke Name:   Karen
Hanke Title:   Director

 

S - 5

--------------------------------------------------------------------------------

HSBC BANK USA, NATIONAL ASSOCIATION , as a Lender By:   /s/ Jody Feldman Name:  
Jody Feldman Title:   Director

 

S - 6

--------------------------------------------------------------------------------

BANK OF MONTREAL, CHICAGO BRANCH, as a Lender By:   /s/ Yacouba Kane Name:  
Yacouba Kane Title:   Vice President

 

S - 7

--------------------------------------------------------------------------------

THE BANK OF NEW YORK MELLON, as a Lender By:   /s/ Michael Pensari Name:  
Michael Pensari Title:   Managing Director

 

S - 8

--------------------------------------------------------------------------------

CITIBANK, N.A., as a Lender By:   /s/ Richard Rivera Name:   Richard Rivera
Title:   Vice President

 

S - 9

--------------------------------------------------------------------------------

LLOYDS TSB BANK PLC, as a Lender By:   /s/ Julia R. Franklin Name:   Julia R.
Franklin F014 Title:   Vice President By:   /s/ Stephen Giacolone Name:  
Stephen Giacolone G011 Title:   Assistant Vice President

 

S - 10

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as a Lender By:   /s/ Chris Choi Name:   Chris Choi
Title:   Director

 

S - 11

--------------------------------------------------------------------------------

SCHEDULE 1.01

BORROWING BASE CALCULATION; CONCENTRATION LIMITS

 

CATEGORY OF

INVESTMENT/SECURITY

   ELIGIBLE
PERCENTAGE  

CONCENTRATION

LIMIT

Cash (denominated in USD)

   100%   N/A Overnight or other investment money market funds of the custodian
bank (or its affiliate) at which a collateral account is held (denominated in
USD)    100%   10% of aggregate Collateral of all Borrowers

Cash Equivalents (denominated in USD):

 

(a) Time deposits, certificates of deposit or money market deposits, maturing
not more than two years after the date of determination, which are issued by a
bank which has a long term rating of AA-/ Aa3 or better; or

 

(b) Money market funds which invest solely in Cash Equivalents described in (a)
above.

  

 

 

100%

 

 

 

No single issuer shall comprise greater than 10% of aggregate Collateral of all
Borrowers

Money Market Funds

 

(a) Money market funds domiciled/regulated in the US (USD) and rated at least
AAA by S&P, Moody’s or Fitch

 

  

 

100% of Market

 

 

25% of aggregate Collateral of all Borrowers

(b) Money market funds domiciled offshore and regulated by a regulator in the
applicable jurisdiction (USD and Alternative Currencies) and rated at least AAA
by S&P, Moody’s or Fitch

   98% of Market   25% of aggregate Collateral of all Borrowers

 

Sched. 1.01

--------------------------------------------------------------------------------

CATEGORY OF

INVESTMENT/SECURITY

   ELIGIBLE
PERCENTAGE  

CONCENTRATION

LIMIT

Commercial paper denominated in USD and issued by a corporation organized in the
United States with maturities of one year or less (Rating A1, P1, or the
equivalent rating from another nationally recognized agency)    98% of Market  
No single issuer shall comprise greater than 10% of aggregate Collateral of all
Borrowers

Indebtedness issued or guaranteed by the United States Government or any agency
thereof

 

Maturity less than 5 years

 

Maturity 5 years or more

   98% of Market

 

95% of Market

  N/A MBS (Agency Pass-Throughs rated AA/Aa2 or better    90% of Market   N/A
MBS (Agency CMOs) rated AA/Aa2 or better    90% of Market   N/A

G7 (USD and Alternative Currencies) Debt Securities rated AA-/Aa3 or better
issued by Germany, United Kingdom or agencies thereof

 

Maturity 5 years or less

 

Maturity 5+ years to 12 years or less

   95% of Market

 

90% of Market

  No single issuer shall comprise more than 25% of the aggregate Collateral of
all Borrowers

G7 (USD and Alternative Currencies) Debt Securities rated AA-/Aa3 or better
issued by France, Japan or Canada or agencies thereof

 

Maturity 5 years or less

 

Maturity 5+ years to 12 years or less

   93% of Market

 

88% of Market

  No single issuer shall comprise more than 10% of the aggregate Collateral of
all Borrowers

OECD (USD and Alternative Currencies) debt securities rated AA-/ Aa3 or better
issued by the Austria, Belgium, Finland, the Netherlands, Norway or Switzerland
or agencies thereof

 

Maturity 5 years or less

 

Maturity 5+ years to 12 years or less

   92% of Market

 

87% of Market

  No single issuer shall comprise more than 10% of the aggregate Collateral of
all Borrowers

 

Sched. 1.01

--------------------------------------------------------------------------------

Supranational (USD and Alternative Currencies) Debt Securities rated AAA/Aaa or
better issued by The International Bank for Reconstruction and Development (the
World Bank),The European Investment Bank, The European Bank for Reconstruction
and Development, The Inter-American Development Bank, Asian Development Bank and
Nordic Investment Bank

 

Maturity 5 years or less

 

Maturity 5+ years to 12 years or less

   92% of Market

 

87% of Market

  

 

 

No single issuer shall comprise more than 10% of the aggregate Collateral of all
Borrowers

Publicly traded debt securities (other than preferred stock) issued by a
corporation organized in the United States or by any state or municipality
located in the United States. (Rating at least Aaa/AAA)

 

Maturity 5 years or less

 

Maturity 5+ years to 12 years or less

   94% of Market

 

89% of Market

   No single issuer shall comprise more than 10% of the aggregate Collateral of
all Borrowers

Publicly traded debt securities (other than preferred stock) issued by a
corporation organized in the United States or by any state or municipality
located in the United States. (Rating at least AA-/Aaa)

 

Maturity 5 years or less

 

Maturity 5+ years to 12 years or less

   93% of Market

 

88% of Market

   No single issuer shall comprise more than 10% of the aggregate Collateral of
all Borrowers

Publicly traded debt securities (other than preferred stock) issued by a
corporation organized in the United States or by any state or municipality
located in the United States. (Rating at least A-/A3)

 

Maturity 5 years or less

 

Maturity 5+ years to 12 years or less

   92% of Market

 

87% of Market

   No single issuer shall comprise more than 10% of the aggregate Collateral of
all Borrowers

 

Sched. 1.01

--------------------------------------------------------------------------------

SCHEDULE 1.03

MANDATORY COST FORMULAE

 

1. The Mandatory Cost (to the extent applicable) is an addition to the interest
rate to compensate Lenders for the cost of compliance with:

 

  (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of
its functions); or

 

  (b) the requirements of the European Central Bank.

 

2. On the first day of each Interest Period (or as soon as possible thereafter)
the Administrative Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”) for each Lender, in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Administrative Agent as
a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion
to the percentage participation of each Lender in the relevant Loan) and will be
expressed as a percentage rate per annum. The Administrative Agent will, at the
request of the Company or any Lender, deliver to the Company or such Lender as
the case may be, a statement setting forth the calculation of any Mandatory
Cost.

 

3. The Additional Cost Rate for any Lender lending from a Lending Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent. This percentage will be certified by such Lender in its
notice to the Administrative Agent to be its reasonable determination of the
cost (expressed as a percentage of such Lender’s participation in all Loans made
from such Lending Office) of complying with the minimum reserve requirements of
the European Central Bank in respect of Loans made from that Lending Office.

 

4. The Additional Cost Rate for any Lender lending from a Lending Office in the
United Kingdom will be calculated by the Administrative Agent as follows:

 

  (a) in relation to any Loan in Sterling:

 

   AB+C(B-D)+E                x 0.01       per cent per             annum      
      100 - (A+C)            

 

Sched. 1.03

--------------------------------------------------------------------------------

  (b) in relation to any Loan in any currency other than Sterling:

 

   E x 0.01                      per cent per             annum             300
           

Where:

 

  “A” is the percentage of Eligible Liabilities (assuming these to be in excess
of any stated minimum) which that Lender is from time to time required to
maintain as an interest free cash ratio deposit with the Bank of England to
comply with cash ratio requirements.

 

  “B” is the percentage rate of interest (excluding the Applicable Rate, the
Mandatory Cost and any interest charged on overdue amounts pursuant to the first
sentence of Section 2.08(b) and, in the case of interest (other than on overdue
amounts) charged at the Default Rate, without counting any increase in interest
rate effected by the charging of the Default Rate) payable for the relevant
Interest Period of such Loan.

 

  “C” is the percentage (if any) of Eligible Liabilities which that Lender is
required from time to time to maintain as interest bearing Special Deposits with
the Bank of England.

 

  “D” is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.

 

  “E” is designed to compensate Lenders for amounts payable under the Fees Rules
and is calculated by the Administrative Agent as being the average of the most
recent rates of charge supplied by the Lenders to the Administrative Agent
pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

 

5. For the purposes of this Schedule:

 

  (a) “Eligible Liabilities” and “Special Deposits” have the meanings given to
them from time to time under or pursuant to the Bank of England Act 1998 or (as
may be appropriate) by the Bank of England;

 

  (b) “Fees Rules” means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from time
to time in respect of the payment of fees for the acceptance of deposits;

 

  (c) “Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable
discount rate); and

 

Sched. 1.03

--------------------------------------------------------------------------------

  (d) “Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

 

6. In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5% will be included in the formula as 5 and not as
0.05). A negative result obtained by subtracting D from B shall be taken as
zero. The resulting figures shall be rounded to four decimal places.

 

7. If requested by the Administrative Agent or the Company, each Lender with a
Lending Office in the United Kingdom or a Participating Member State shall, as
soon as practicable after publication by the Financial Services Authority,
supply to the Administrative Agent and the Company, the rate of charge payable
by such Lender to the Financial Services Authority pursuant to the Fees Rules in
respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by such Lender as being the average of the Fee
Tariffs applicable to such Lender for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of such Lender.

 

8. Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:

 

  (a) the jurisdiction of the Lending Office out of which it is making available
its participation in the relevant Loan; and

 

  (b) any other information that the Administrative Agent may reasonably require
for such purpose.

Each Lender shall promptly notify the Administrative Agent in writing of any
change to the information provided by it pursuant to this paragraph.

 

9. The percentages of each Lender for the purpose of A and C above and the rates
of charge of each Lender for the purpose of E above shall be determined by the
Administrative Agent based upon the information supplied to it pursuant to
paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a lending office in the same
jurisdiction as its Lending Office.

 

10. The Administrative Agent shall have no liability to any Person if such
determination results in an Additional Cost Rate which over- or
under-compensates any Lender and shall be entitled to assume that the
information provided by any Lender pursuant to paragraphs 3, 7 and 8 above is
true and correct in all respects.

 

11. The Administrative Agent shall distribute the additional amounts received as
a result of the Mandatory Cost to the Lenders on the basis of the Additional
Cost Rate for each Lender based on the information provided by each Lender
pursuant to paragraphs 3, 7 and 8 above.

 

Sched. 1.03

--------------------------------------------------------------------------------

12. Any determination by the Administrative Agent pursuant to this Schedule in
relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable to a Lender shall, in the absence of manifest error, be conclusive and
binding on all parties hereto.

 

13. The Administrative Agent may from time to time, after consultation with the
Company and the Lenders, determine and notify to all parties any amendments
which are required to be made to this Schedule in order to comply with any
change in law, regulation or any requirements from time to time imposed by the
Bank of England, the Financial Services Authority or the European Central Bank
(or, in any case, any other authority which replaces all or any of its
functions) and any such determination shall, in the absence of manifest error,
be conclusive and binding on all parties hereto.

 

Sched. 1.03

--------------------------------------------------------------------------------

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

Lender

   Commitment      Applicable
Percentage  

Wells Fargo Bank, National Association

   $ 40,000,000         16.000000000 % 

Bank of Montreal, Chicago Branch

   $ 36,000,000         14.400000000 % 

Citibank, N.A.

   $ 36,000,000         14.400000000 % 

HSBC Bank USA, National Association

   $ 36,000,000         14.400000000 % 

Lloyds TSB Bank PLC

   $ 36,000,000         14.400000000 % 

The Bank of New York Mellon

   $ 36,000,000         14.400000000 % 

Bank of America, N.A.

   $ 30,000,000         12.000000000 % 

Total

   $ 250,000,000         100.000000000 % 

 

Sched. 2.01 pg. 1

--------------------------------------------------------------------------------

SCHEDULE 5.05

LITIGATION

None.

 

Sched. 5.05 pg. 1

--------------------------------------------------------------------------------

SCHEDULE 5.12

SUBSIDIARIES

 

Name of Subsidiary

(Jurisdiction of

Formation)

  

Insurance Company

  

Designated Borrower

  

Ownership

AXIS Specialty Holdings Bermuda Limited

(Bermuda)

   No    Yes    AXIS Capital Holdings Limited (Bermuda)

AXIS Specialty Limited

(Bermuda)

   Yes    Yes    AXIS Specialty Holdings Bermuda Limited (Bermuda)

AXIS Specialty Holdings Ireland Limited

(Ireland)

   No    Yes    AXIS Capital Holdings Limited (Bermuda)

AXIS Re SE

(Ireland)

   Yes    Yes    AXIS Specialty Holdings Ireland Limited (Ireland)

AXIS Re Limited Escritorio de Representacao No Brasil Ltda.

(Brazil)

   No    No    AXIS Re SE (Ireland)

AXIS Specialty Europe SE

(Ireland)

   Yes    Yes    AXIS Specialty Holdings Ireland Limited (Ireland)

Sirius Australia Holdings Pty Ltd

(Australia)

   No    No    AXIS Specialty Holdings Ireland Limited (Ireland)

Dexta Corporation Pty Ltd

(Australia)

   No    No    Sirius Australia Holdings Pty Ltd (Australia)

 

Sched. 5.12 pg. 1

--------------------------------------------------------------------------------

AXIS Specialty UK Holdings Limited

(United Kingdom)

   No    No    AXIS Capital Holdings Limited (Bermuda)

AXIS Specialty Global Holdings Limited

(Ireland)

   No    Yes    AXIS Capital Holdings Limited (Bermuda)

AXIS Specialty U.S. Holdings, Inc.

(U.S.A. – Delaware)

   No    Yes    AXIS Specialty Global Holdings Limited (Ireland)

AXIS Insurance Company

(U.S.A. – Illinois)

   Yes    Yes    AXIS Specialty U.S. Holdings, Inc. (U.S.A. – Delaware)

AXIS Surplus Insurance Company

(U.S.A. – Illinois)

   Yes    Yes    AXIS Insurance Company (U.S.A. – Illinois) AXIS Specialty
Insurance Company (U.S.A. – Connecticut)    Yes    No    AXIS Insurance Company
(U.S.A. – Illinois)

AXIS Reinsurance Company

(U.S.A. – New York)

   Yes    Yes    AXIS Specialty U.S. Holdings, Inc. (U.S.A. – Delaware)

AXIS Specialty U.S. Services, Inc.

(U.S.A – Delaware)

   No    Yes    AXIS Specialty U.S. Holdings, Inc. (U.S.A. – Delaware)

AXIS Specialty Canada Services, ULC

(British Columbia)

   No    No    AXIS Specialty U.S. Services, Inc. (U.S.A. – Delaware)

AXIS Specialty Finance LLC

(U.S.A. – Delaware)

   No    Yes    AXIS Specialty U.S. Holdings, Inc. (U.S.A. – Delaware)

AXIS Group Services, Inc.

(Delaware)

   No    Yes    AXIS Specialty U.S. Holdings, Inc. (U.S.A. – Delaware)

 

Sched. 5.12 pg. 2

--------------------------------------------------------------------------------

SCHEDULE 7.02

EXISTING LIENS

None.

 

Sched. 7.02 pg. 1

--------------------------------------------------------------------------------

SCHEDULE 7.05

EXISTING INDEBTEDNESS

 

1. AXIS Capital Holdings Limited Senior Unsecured Notes dated November 15, 2004
in the amount of $500 million. The Notes bear interest at 5.75%, payable
semi-annually and, unless previously redeemed, will mature on December 1, 2014.

 

2. AXIS Specialty Finance LLC Senior Unsecured Notes dated March 23, 2010 in the
amount of $500 million, fully and unconditionally guaranteed by AXIS Capital
Holdings Limited. The Notes bear interest at 5.875%, payable semi-annually and,
unless previously redeemed, will mature on June 1, 2020.

 

3. Obligations with respect to bank guarantees for the benefit of certain
European Union fiscal representatives appointed by AXIS Specialty Europe SE.

 

Sched. 7.05

--------------------------------------------------------------------------------

SCHEDULE 10.02

ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES

AXIS CAPITAL HOLDINGS LIMITED

and DESIGNATED BORROWERS:

AXIS Capital Holdings Limited

AXIS Specialty Limited

AXIS Specialty Holdings Bermuda Limited

92 Pitts Bay Road

Pembroke, Bermuda

HM 08

Attention: Jose Osset

Facsimile Number: (441) 405-2680

Telephone Number: (441) 405-2632

Electronic Mail: jose.osset@axiscapital.com

Website Address: www.axiscapital.com

AXIS Re SE

AXIS Specialty Europe SE

AXIS Specialty Holdings Ireland Limited

AXIS Specialty Global Holdings Limited

Mount Herbert Court

34 Upper Mount Street

Dublin 2

Ireland

Attention: Tim Hennessy

Facsimile No.: (011) 353-1-664-1862

Telephone No.: (011) 353-1-664-1611

Electronic Mail: tim.hennessy@axiscapital.com

AXIS Insurance Company

AXIS Reinsurance Company

AXIS Surplus Insurance Company

AXIS Specialty U.S. Holdings, Inc.

AXIS Specialty U.S. Services, Inc.

AXIS Group Services, Inc.

AXIS Specialty Finance LLC

11680 Great Oaks Way, Suite 500

Alpharetta, GA 30022

Attention: Conrad Brooks

Facsimile No.: (678) 746-9317

 

  A-1   Form of Loan Notice

--------------------------------------------------------------------------------

Telephone No.: (678) 746-9524

Electronic Mail: conrad.brooks@axiscapital.com

With a copy to:

92 Pitts Bay Road

Pembroke, Bermuda

HM 08

Attention: Jose Osset

Facsimile Number: (441) 405-2680

Telephone Number: (441) 405-2632

Electronic Mail: jose.osset@axiscapital.com

U.S. Taxpayer Identification Number(s):

AXIS Capital Holdings Limited: 98-0395986

AXIS Specialty Limited: 98-0364977

AXIS Re SE: 98-0395688

AXIS Specialty Europe SE: 98-0395686

AXIS Insurance Company: 39-1338397

AXIS Reinsurance Company: 51-0434766

AXIS Surplus Insurance Company: 63-0941128

AXIS Specialty Holdings Bermuda Limited: 98-1059470

AXIS Specialty Holdings Ireland Limited: Irish Tax Ref. No. 6372545B

AXIS Specialty Global Holdings Limited: Irish Tax Ref. No. 9666101B

AXIS Specialty U.S. Holdings, Inc.: 02-0615332

AXIS Specialty U.S. Services, Inc.: 41-2030082

AXIS Group Services, Inc.: 36-4467304

AXIS Specialty Finance LLC: 27-2107947

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Loans):

Wells Fargo Bank, National Association

Attention: Dale Johnson

Telephone: 704-590-3288

email: dale.q.johnson@wellsfargo.com

Electronic Mail: agencyservices.requests@wellsfargo.com

 

  A-2   Form of Loan Notice

--------------------------------------------------------------------------------

With a copy to:

Financial Institutions Group

Wells Fargo Corporate Banking

301 S. College Street | MAC D1053-150

Charlotte, NC 28202

Attention: Karen Hanke

Telephone: (704) 374-3061

Facsimile: (704) 715-1486

Electronic Mail: karen.hanke@wellsfargo.com

ABA# 121000248

Account No. (for USD): 01104331628807

Attn: Agency Services Clearing A/C

Ref: Axis Capital Holdings Limited,

GBP:

Royal Bank of Scotland London

Swift Code: RBOSGB2L

Sort Code: RBS SC:16-00-34

Account Name: Wells Fargo Bank N.A. London

Swift Code: ( PNBPGB2L )

Iban No: GB66RBOS16003412251333

Ref: Axis Capital Holdings Limited

EURO:

LLOYDS BANK LONDON

Swift Code: LOYDGB2LXXX

Account Name: Wells Fargo Bank N.A. London

 

 

  A-3   Form of Loan Notice

--------------------------------------------------------------------------------

Swift Code: PNBPGB2L

Iban no: GB63LOYD30963459023107

Ref: Axis Capital

CAD:

TORONTO DOMINION BANK TORONTO

Swift Code: TDOMCATTXXX

Account Name: Wells Fargo Bank N.A. London

Swift Code: PNBPGB2L

Account: 0360-01-2027713

Ref: Axis Capital

JPY:

MIZUHO CORPORATE BANK LTD TOKYO

Swift Code: MHCBJPJTXXX

Account Name: Wells Fargo Bank N.A. London

Swift Code: PNBPGB2L

Account: 0358110

Ref: Axis Capital

AUD:

WESTPAC BANKING CORP, SYDNEY

Swift Code: WPACAU2S

Account Name: Wells Fargo Bank N.A. London

Swift Code: PNBPGB2L

Account: PNB0002978

Ref: Axis Capital

NZD:

BANK OF NEW ZEALAND WELLINGTON

Swift Code: BKNZNZ22XXX

Account Name: Wells Fargo Bank N.A. London

 

 

  A-4   Form of Loan Notice

--------------------------------------------------------------------------------

Swift Code: PNBPGB2L

Account: 0999210228000

Ref: Axis Capital

SGD:

UNITED OVERSEAS BANK LTD SINGAPORE

Swift Code: UOVBSGSGXXX

Account Name: Wells Fargo Bank N.A. London

Swift Code: PNBPGB2L

Account: 101-399-086-2

Ref: Axis Capital

CHF:

UBS AG ZURICH

Swift Code: UBSWCHZH80A

Account Name: Wells Fargo Bank N.A. London

Swift Code: PNBPGB2L

Account: 0230000004007705000P

Ref: Axis Capital

Requests for Letters of Credit)

Wells Fargo Bank, National Association

Financial Institutions Group

Wells Fargo Corporate Banking

301 S. College Street | MAC D1053-150

Charlotte, NC 28202

Attention: Karen Hanke

Telephone: (704) 374-3061

Facsimile: (704) 715-1486

Electronic Mail: karen.hanke@wellsfargo.com

 

  A-5   Form of Loan Notice

--------------------------------------------------------------------------------

Other Notices as Administrative Agent)

Wells Fargo Bank, National Association

Financial Institutions Group

Wells Fargo Corporate Banking

301 S. College Street | MAC D1053-150

Charlotte, NC 28202

Attention: Karen Hanke

Telephone: (704) 374-3061

Facsimile: (704) 715-1486

Electronic Mail: karen.hanke@wellsfargo.com

 

  A-6   Form of Loan Notice

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF LOAN NOTICE

Date:             ,         

To: Wells Fargo Bank, National Association, as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of March 26, 2013
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among AXIS Capital Holdings Limited, a Bermuda company
(“AXIS Capital”), and certain Subsidiaries of AXIS Capital party thereto
pursuant to Section 2.13 of the Credit Agreement (each a “Designated Borrower”
and, together with AXIS Capital, the “Borrowers” and, each a “Borrower”), each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and Wells Fargo Bank, National Association, as
Administrative Agent, L/C Administrator and Fronting Bank.

The undersigned hereby requests (select one):

A Borrowing of Loans                      A conversion or continuation of Loans

1. On (a Business Day).

2. In the amount of $                                                     .

3. Comprised of                                                  .

                             [Type of Loan requested]

4. In the following currency:                                                  

                                                 [Dollars, Euros or Sterling]

5. For Eurocurrency Rate Loans: with an Interest Period of         months.

[6. On behalf of                      [insert name of applicable Designated
Borrower].

 

  A-7   Form of Loan Notice

--------------------------------------------------------------------------------

The Borrowing, if any, requested herein complies with the provisos to the first
sentence of Section 2.01 of the Agreement.

 

AXIS CAPITAL HOLDINGS LIMITED By:  

 

Name:  

 

Title:  

 

 

  A-8   Form of Loan Notice

--------------------------------------------------------------------------------

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

EXHIBIT B

FORM OF NOTE

 

   

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
            or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of
each Loan from time to time made by the Lender to the Borrower under that
certain Credit Agreement, dated as of March 26, 2013 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined)
among AXIS Capital Holdings Limited, a Bermuda company (“AXIS Capital”), and
certain Subsidiaries of AXIS Capital party thereto pursuant to Section 2.13 of
the Credit Agreement (each a “Designated Borrower” and, together with AXIS
Capital, the “Borrowers” and, each a “Borrower”), each lender from time to time
party thereto (collectively, the “Lenders” and individually, a “Lender”), and
Wells Fargo Bank, National Association, as Administrative Agent, L/C
Administrator and Fronting Bank.

The Borrower promises to pay interest on the unpaid principal amount of each
Loan from the date of such Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Agreement. All payments
of principal and interest shall be made to the Administrative Agent for the
account of the Lender in the currency in which such Loan was denominated and in
Same Day Funds at the Administrative Agent’s Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

This Note is one of the Notes referred to in the Agreement, is entitled to the
benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein. This Note is also entitled to the benefits of a
Guaranty. Upon the occurrence and continuation of one or more of the Events of
Default specified in the Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided in the Agreement. Loans made by the Lender shall be evidenced by one or
more loan accounts or records maintained by the Lender in the ordinary course of
business. The Lender may also attach schedules to this Note and endorse thereon
the date, amount and maturity of its Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.

 

  B-1   Form of Note

--------------------------------------------------------------------------------

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 10.06 OF THE CREDIT AGREEMENT.

 

  B-2   Form of Note

--------------------------------------------------------------------------------

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

[BORROWER]

By:  

 

Name:  

 

Title:  

 

 

  B-3   Form of Note

--------------------------------------------------------------------------------

LOANS AND PAYMENTS

 

Date

  

Type of
Loan Made

  

Amount of
Loan Made

  

End of Interest
Period

  

Amount of
Principal or
Interest Paid This
Date

  

Outstanding
Principal Balance
This Date

  

Notation

Made By

____________

  

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  B-4   Form of Note

--------------------------------------------------------------------------------

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:             ,        

 

To: Wells Fargo Bank, National Association,

     as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of March 26, 2013
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined) among AXIS Capital Holdings Limited, a Bermuda company
(“AXIS Capital”), and certain Subsidiaries of AXIS Capital party thereto
pursuant to Section 2.13 of the Credit Agreement (each a “Designated Borrower”
and, together with AXIS Capital, the “Borrowers” and, each a “Borrower”), each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and Wells Fargo Bank, National Association, as
Administrative Agent, L/C Administrator and Fronting Bank.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                                  of AXIS Capital, and that, as
such, he/she is authorized to execute and deliver this Certificate to the
Administrative Agent on the behalf of AXIS Capital, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. AXIS Capital has delivered the year-end audited financial statements required
by Section 6.01(a) of the Agreement for the fiscal year of AXIS Capital ended as
of the above date, together with the report and opinion of an independent
certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. AXIS Capital has delivered the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of AXIS Capital ended as
of the above date. Such financial statements fairly present in all material
respects the financial condition and results of operations of AXIS Capital and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes.

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of AXIS
Capital during the accounting period covered by such financial statements.

 

  C-1   Form of Compliance Certificate

--------------------------------------------------------------------------------

3. There has been no material change in GAAP or in the application thereof which
has occurred since the date of the last financial statements delivered pursuant
to Section 6.01 of the Credit Agreement [except [describe change and effect on
the financial statements attached to this Compliance Certificate]]

4. A review of the activities of AXIS Capital during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period AXIS Capital performed and observed all its
Obligations under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned, no event or condition exists as of
the date of this Certificate which constitutes a Default.]

—or—

[to the best knowledge of the undersigned, during such fiscal period the
following covenants or conditions have not been performed or observed and the
following is a list of each such Default and its nature and status:]

4. The financial covenant analyses and information set forth on Schedule 1
attached hereto are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                    ,             .

 

AXIS CAPITAL HOLDINGS LIMITED By:                             
                                                                    
Name:                                                                       
                     Title:                            
                                                                 

 

  C-2   Form of Compliance Certificate

--------------------------------------------------------------------------------

For the Quarter/Year ended                     (“Statement Date”)

SCHEDULE 1

to the Compliance Certificate

($ in 000’s)

 

I. Section 7.04(a) – Ratio of Total Funded Debt to Total Capitalization.   

A.     Total Funded Debt

   $            

B.     Consolidated Net Worth

   $            

C.     Item A + Item B

   $            

D.     Ratio of Item A to Item C (not to exceed 0.35:1.0)

           :1.0 II. Section 7.04(b) – Consolidated Net Worth   

A.     Consolidated Net Worth

   $            

B.     Existing sum of Consolidated Net Income as reported in Item II(D) of
Schedule 1 of the Compliance Certificate dated [            ], 20[        ]1

   $            

C.     For periods ending June 30 or December 31, enter the Consolidated Net
Income earned in the semi-annual fiscal period2 ending on [            ],
20[        ]3. Otherwise, enter $0.

   $            

D.     New sum of Consolidated Net Income is equal to Item B + (if positive)
Item C

   $            

E.     Existing sum of net cash proceeds received by AXIS Capital from the
issuance of its capital stock4 as reported in Item II(G) of Schedule 1 of the
Compliance Certificate dated [            ], 20[        ]5

   $            

 

1 

Insert the date of the previous quarterly Compliance Certificate.

2 

Semi-annual fiscal periods are January 1 to June 30 and July 1 to December 31

3 

Insert the last day of the most recently ended semi-annual fiscal period.

4 

Including upon any conversion of debt securities (including Convertible
Securities) into and the exercise of any warrants with respect to Equity
Interests of AXIS Capital (but, in the case of any Hybrid Securities issued by
AXIS Capital, only to the extent such Hybrid Securities are included, at the
time of issuance thereof, in Consolidated Net Worth pursuant to the definition
thereof)

5 

Insert the date of the previous quarterly Compliance Certificate.

 

  C-3   Form of Compliance Certificate

--------------------------------------------------------------------------------

F.      For periods ending June 30 or December 31, enter the sum of net cash
proceeds received by AXIS Capital from the issuance of its capital stock6 in the
semi-annual fiscal period ending on [            ], 20[        ]7. Otherwise,
enter $0.

   $            

G.     New sum of net cash proceeds received by AXIS Capital from the issuance
of its capital stock is equal to Item E + Item F.

   $            

H.     $3,802,000,000) + (0.25 x Item D) + (0.25 x Item G)

   $            

I.       Excess (deficient) for covenant compliance (Item A – Item H)

   $            

III.    Section 6.11-Financial Strength Rating of applicable Insurance Companies
(must be B++ or better)[List each Insurance Company and its rating if not all
the same]

  

IV.   Maximum dividends all Subsidiaries could pay as of most recent fiscal year
end

   $            

V.     Schedule 5.12 to the Credit Agreement is hereby replaced with Schedule
5.12 attached hereto.

  

VI.   Acquisitions since December 31, 2012

   $            

 

6 

Including upon any conversion of debt securities (including Convertible
Securities) into and the exercise of any warrants with respect to Equity
Interests of AXIS Capital (but, in the case of any Hybrid Securities issued by
AXIS Capital, only to the extent such Hybrid Securities are included, at the
time of issuance thereof, in Consolidated Net Worth pursuant to the definition
thereof)

7 

Insert the last day of the most recently ended semi-annual fiscal period.

 

  C-4   Form of Compliance Certificate

--------------------------------------------------------------------------------

SCHEDULE 5.12

SUBSIDIARIES

 

Name of Subsidiary
(Jurisdiction of

Formation)

  

Insurance Company

  

Designated Borrower

  

Ownership

 

  C-5   Form of Compliance Certificate

--------------------------------------------------------------------------------

EXHIBIT D-1

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]2 Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the “Credit Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the Credit Agreement identified below (including, without limitation, the
Letters of Credit included in such facilities) and (ii) to the extent permitted
to be assigned under applicable law, all claims, suits, causes of action and any
other right of [the Assignor (in its capacity as a Lender)][the respective
Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by [the][any] Assignor
to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as [the][an] “Assigned Interest”). Each such sale and
assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by [the][any] Assignor.

 

1 

For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

2 

For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.

3 

Select as appropriate.

4 

Include bracketed language if there are either multiple Assignors or multiple
Assignees.

 

  D-1-1   Form of Assignment and Assumption

--------------------------------------------------------------------------------

1. Assignor[s]:                                     

 

    

 

2. Assignee[s]:                                     

 

    

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

3. Borrower(s):                                     

 

4. Administrative Agent: Wells Fargo Bank, National Association, as the
administrative agent under the Credit Agreement

 

5. Credit Agreement: Credit Agreement, dated as of March 26, 2013 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement;” the terms defined therein being used herein as therein
defined) among AXIS Capital Holdings Limited, a Bermuda company (“AXIS
Capital”), and certain Subsidiaries of AXIS Capital party thereto pursuant to
Section 2.13 of the Credit Agreement (each a “Designated Borrower” and, together
with AXIS Capital, the “Borrowers” and, each a “Borrower”), each lender from
time to time party thereto (collectively, the “Lenders” and individually, a
“Lender”), and Wells Fargo Bank, National Association, as Administrative Agent,
L/C Administrator and Fronting Bank.

 

6. Assigned Interest[s]:

 

Assignor[s]5

   Assignee[s]6    Aggregate
Amount of
Commitment
for all
Lenders7      Amount of
Commitment
Assigned      Percentage
Assigned of
Commitment/
Loans8     CUSIP
Number       $                    $                                   %         
$                    $                                   %          $
                   $                                   %   

 

5 

List each Assignor, as appropriate.

6 

List each Assignee, as appropriate.

7 

Amounts in this column and in the column immediately to the right to be adjusted
by the counterparties to take into account any payments or prepayments made
between the Trade Date and the Effective Date.

8 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

  D-1-2   Form of Assignment and Assumption

--------------------------------------------------------------------------------

[7.

Trade Date:                         ]9

Effective Date:                     , 20         [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

     ASSIGNOR      [NAME OF ASSIGNOR]      By:                             
                                         
                                                     Title:      ASSIGNEE     
[NAME OF ASSIGNEE]      By:                             
                                         
                                                     Title: [Consented to and]10
Accepted:      WELLS FARGO BANK, NATIONAL ASSOCIATION, as      Administrative
Agent, L/C Administrator and Fronting Bank      By:                             
                                         
                                                           Title:     
[Consented to and]11      WELLS FARGO BANK, NATIONAL ASSOCIATION, as      L/C
Administrator and Fronting Bank      By:                             
                                         
                                                           Title:     
[Consented to]12     

 

9 

To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

10 

To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

11 

To be added only if the consent of Fronting Bank and L/C Administrator is
required by the terms of the Credit Agreement.

12 

To be added for each other Fronting Bank only if the consent of Fronting Bank is
required by the terms of the Credit Agreement.

 

  D-1-3   Form of Assignment and Assumption

--------------------------------------------------------------------------------

By:  

 

  Title: [Consented to:]13 By:  

 

  Title:

 

13 

To be added only if the consent of AXIS Capital is required by the terms of the
Credit Agreement.

 

  D-1-4   Form of Assignment and Assumption

--------------------------------------------------------------------------------

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

[                     ]14

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][[the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of AXIS Capital, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by AXIS Capital, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 10.06(b)(iii) and
(v) of the Credit Agreement (subject to such consents, if any, as may be
required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is
sophisticated with respect to decisions to acquire assets of the type
represented by [the][such] Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire [the][such] Assigned
Interest, is experienced in acquiring assets of such type, (v) it has received a
copy of the Credit Agreement, and has received or has been accorded the
opportunity to receive copies of the most recent financial statements delivered
pursuant to Section             thereof, as applicable, and such other documents
and information as it deems appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, (vi) it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, (vii) [it is an NAIC Approved Bank with a rating
of “A3” or better from Moody’s and/or “A” or better from Standard and Poor’s,
and/or “A-” or better from Fitch and as of the date hereof can issue Loans

 

14 

Describe Credit Agreement at option of Administrative Agent.

 

  D-1-5   Form of Assignment and Assumption

--------------------------------------------------------------------------------

and Several Letters of Credit in all of the applicable Alternative
Currencies][it will be a Participating Bank due to [insert reason] and [name of
Fronting Bank] has agreed to front for the Assignee in connection with Several
Letters of Credit; (viii) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by [the][such] Assignee; and (ix) with
respect to interest paid by AXIS Specialty Europe, AXIS Re, AXIS Specialty
Holdings Ireland and AXIS Specialty US15, as of the date hereof, such payments
to the Assignee are exempt from withholding tax, and (b) agrees that (i) it
will, independently and without reliance upon the Administrative Agent,
[the][any] Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

15 

Revise to include then current Designated Borrowers organized under the laws of
a jurisdiction other than the United States or Bermuda.

 

  D-1-16   Form of Assignment and Assumption

--------------------------------------------------------------------------------

EXHIBIT D-2

FORM OF ADMINISTRATIVE QUESTIONNAIRE

[NOTE TO DRAFTER: Obtain the appropriate form of Administrative Questionnaire
from the representative of the Arranger or the Agency Management Officer working
on the transaction and, in appropriate transactions, add a term for providing
notice delivery information to a Person designated to receive notices that may
contain material non-public information relating to AXIS Capital.]

 

  D-2-1   Form of Administrative Questionnaire

--------------------------------------------------------------------------------

EXHIBIT E

FORM OF SEVERAL LETTER OF CREDIT

Issue Date                     

Clean, Irrevocable Unconditional Letter of Credit No.:             

To Beneficiary:                                       
                                          (Name)         

(Address)                                                               
                     

Dear Sir or Madam:

The banks and financial institutions set forth in Schedule 1 to this Several
Letter of Credit (the “Lenders”) have established through Wells Fargo Bank,
National Association, acting as administrative agent (in such capacity, the
“Administrative Agent” and attorney-in-fact for the Lenders), this clean,
irrevocable, and unconditional (except as expressly otherwise stated herein)
letter of credit (this “Letter of Credit”) in your favor as beneficiary (the
“Beneficiary”) at the request and for the account of [        ] (the “Account
Party”) for drawings up to [U.S. $            ] [Alternative Currency] effective
immediately and expiring at the Administrative Agent’s address at 401 Linden
Street, First Floor, Winston-Salem, North Carolina, 27101, Attention
International Operations, Standby Letters of Credit, NC 6034 (or any other
office which may be designated by the Administrative Agent by written notice
delivered to you) no later than 5:00 p.m., Charlotte, North Carolina time, on
            (the “Expiration Date”, as such date may be extended as set forth
below).

The Lenders severally undertake to promptly honor your sight draft(s) drawn on
us, duly endorsed on the reverse side thereof by the Beneficiary expressly
specifying the Letter of Credit No.             , for all or any part of this
credit upon presentation of your draft drawn on us at the Administrative Agent’s
office specified in the first paragraph hereof on a Business Day on or prior to
the Expiration Date.

The term “Beneficiary” as used herein includes any successor by operation of law
of the named Beneficiary including, without limitation, any liquidator,
rehabilitator, receiver or conservator. The term “Business Day” means a day
which is not a Saturday, Sunday, legal holiday or any other day on which banking
institutions in Charlotte, North Carolina or the city in which the payment
office of the Administrative Agent is located are required by law to be closed.

Except as stated herein, this undertaking is not subject to any condition,
requirement or qualification. The Lenders’ several obligations under this Letter
of Credit shall be their individual obligations, and are in no way contingent
upon reimbursement with respect thereto, or upon their ability to perfect any
lien or security interest. This Letter of Credit sets forth in full all
obligations of the Lenders.

 

2

--------------------------------------------------------------------------------

Each of the Lenders agrees, for itself alone and not jointly with any other
Lender, to honor a draft drawn by you and presented to the Administrative Agent
in an amount not to exceed the aggregate amount available to be drawn hereunder
multiplied by such Lender’s percentage obligation as set forth on Schedule 1 to
this Several Letter of Credit (the “Percentage Obligations”) and in accordance
with the terms and conditions hereinafter set forth. The obligations of the
Lenders hereunder shall be several and not joint, and multiple draws shall be
available under this Letter of Credit. Upon the transfer by a Lender to the
Administrative Agent for your account of the amount specified in a draft drawn
on such Lender hereunder, such Lender shall be fully discharged of its
obligations under this Letter of Credit with respect to such draft, such Lender
shall not be obligated thereafter to make any further payments under this Letter
of Credit with respect to such draft, and the amount available to be drawn
thereafter under this Letter of Credit shall be automatically and permanently
reduced by an amount equal to the amount of such draft. The failure of any
Lender to make funds available to the Administrative Agent for payment under
this Letter of Credit shall not relieve any other Lender of its obligation
hereunder to make funds available to the Administrative Agent. Neither the
Administrative Agent nor any Lender shall be responsible for the failure of any
other Lender to honor its share of any drawings hereunder or to make funds
available to the Administrative Agent.

Except to the extent the amount of this Letter of Credit may be increased, this
Letter of Credit cannot be modified or revoked without your written consent;
provided that this Letter of Credit may be amended to delete a Lender or add a
Lender or change Percentage Obligations so long as such amendment does not
decrease the amount of this Letter of Credit, and need only be signed by the
Administrative Agent so long as any Lender added shall be approved by the
Securities Valuation Office of the National Association of Insurance
Commissioners.

Wells Fargo Bank, National Association has been appointed by the Lenders to act
as, has been granted the authority by the Lenders to act as, and has been
irrevocably granted a power of attorney by the Lenders to act as Administrative
Agent for the Lenders obligated under this Letter of Credit. As Administrative
Agent, Wells Fargo Bank, National Association has full power of attorney from
such Lenders to act on their behalf hereunder to (i) execute and deliver this
Letter of Credit, (ii) receive drafts, other demands for payment and other
documents presented by you hereunder, (iii) determine whether such drafts,
demands and documents are in compliance with the terms of this Letter of Credit,
and (iv) notify the Lenders and the Account Party that a valid drawing has been
made and the date that the related payment under this Letter of Credit is to be
made; provided, however, that the Administrative Agent shall have no obligation
or liability for any payment under this Letter of Credit (other than payment to
you of such funds as have been made available to it by the Lenders pursuant to
your draw).

This Letter of Credit expires on the Expiration Date, but will automatically
renew without amendment for one year from the Expiration Date or any future
expiration date (as applicable, the “New Expiration Date”) unless at least
[thirty/sixty] days prior to such Expiration Date or New Expiration Date, the
Administrative Agent notifies you by registered mail or courier delivery that
this Letter of Credit will not renew.

Only the Beneficiary may make drawings under the Letter of Credit, and this
Letter of Credit is not transferable.

 

3

--------------------------------------------------------------------------------

[This Letter of Credit is subject to and governed by the 2007 revision of the
Uniform Customs and Practice for Documentary Credits of the International
Chamber of Commerce (Publication[600]), and, to the extent not inconsistent, the
Laws of the State of New York. If this Letter of Credit expires during an
interruption of business as described in Article 36 of said Publication 600 the
bank hereby specifically agrees to effect payment if this Letter of Credit is
drawn against within 30 days after the resumption of business.] [This Letter of
Credit is subject to and governed by the International Standby Practices 98
(ISP98) (International Chamber of Commerce Publication No. 590) and, to the
extent not inconsistent, the Laws of the State of New York.].1

This Letter of Credit may be amended to delete a Letter of Credit Bank or add a
Letter of Credit Bank, or change Commitment Shares, provided that such amendment
does not decrease the Letter of Credit Commitment, and need only be signed by
the Letter of Credit Agent so long as any Letter of Credit Bank added shall be
approved by the Securities Valuation Office of the National Association of
Insurance Commissioners and shall have a rating of “A3” or better from Moody’s
and/or “A” or better from Standard and Poor’s, and/or “A-” or better from Fitch.

 

 

  

 

Signature    Title

Wells Fargo Bank, National Association

 

as Administrative Agent and attorney-in fact for

   the Lenders set forth in Schedule 1    to this Several Letter of Credit   

 

1 

Insert UCP 600 if required by an insurance regulator, otherwise ISP 98 should be
used.

 

4

--------------------------------------------------------------------------------

SCHEDULE 1

 

LENDER

  

PERCENTAGE OBLIGATION

 

  Exh. E-1   Form of Several Letter of Credit

--------------------------------------------------------------------------------

EXHIBIT F

FORM OF DESIGNATED BORROWER

REQUEST AND ASSUMPTION AGREEMENT

Date:             ,         

 

To: Wells Fargo Bank, National Association,

as Administrative Agent

Ladies and Gentlemen:

This Designated Borrower Request and Assumption Agreement is made and delivered
pursuant to Section 2.13 of that certain Credit Agreement, dated as of March 26,
2013 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among AXIS Capital Holdings Limited, a Bermuda
company (“AXIS Capital”), and certain Subsidiaries of AXIS Capital party thereto
pursuant to Section 2.13 of the Credit Agreement (each a “Designated Borrower”
and, together with AXIS Capital, the “Borrowers” and, each a “Borrower”), each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and Wells Fargo Bank, National Association, as
Administrative Agent, L/C Administrator and Fronting Bank.

Each of                         (the “Designated Borrower”) and AXIS Capital
hereby confirms, represents and warrants to the Administrative Agent and the
Lenders that the Designated Borrower is a Subsidiary.

The documents required to be delivered to the Administrative Agent under
Section 2.13 and Section 4.02(e) of the Credit Agreement will be furnished to
the Administrative Agent in accordance with the requirements of the Credit
Agreement.

Complete if the Designated Borrower is a US Subsidiary: The true and correct
U.S. taxpayer identification number of the Designated Borrower is             .

Complete if the Designated Borrower is a Non-US Subsidiary: The true and correct
unique identification number that has been issued to the Designated Borrower by
its jurisdiction of organization and the name of such jurisdiction are set forth
below:

 

Identification Number

  

Jurisdiction of Organization

 

  Exh. F-1  

Form of Designated Borrower

Request and Assumption Agreement

--------------------------------------------------------------------------------

The parties hereto hereby confirm that with effect from the date of delivery of
the Designated Borrower Notice (the “Effective Date”) to AXIS Capital and the
Lenders by the Administrative Agent, the Designated Borrower shall have
obligations, duties and liabilities toward each of the other parties to the
Credit Agreement identical to those which the Designated Borrower would have had
if the Designated Borrower had been an original party to the Credit Agreement as
a Borrower. Also as of the date of delivery of the Designated Borrower Notice to
AXIS Capital and the Lenders by the Administrative Agent the Designated Borrower
confirms its acceptance of, and consents to, all representations and warranties,
covenants, and other terms and provisions of the Credit Agreement.

The parties hereto hereby request that the Designated Borrower be entitled to
have Letters of Credit issued for its account and to receive Loans under the
Credit Agreement, and understand, acknowledge and agree that neither the
Designated Borrower nor AXIS Capital on its behalf shall have any right to
request any Letters of Credit or Loans for its account unless and until the date
five Business Days after the Effective Date.

Accordingly, AXIS Capital and the Designated Borrower hereby represent and
warrant and agree that as of the “Effective Date”:

1. Each of the representations and warranties contained in the Credit Agreement
and in the other Loan Documents (to the extent the same relate to a Subsidiary
of AXIS Capital) is true and correct as to the Designated Borrower on and as of
the Effective Date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date).

2. The Designated Borrower’s addresses for notices, other communications and
service of process provided for in the Credit Agreement shall be given in the
manner, and with the effect, specified in Section 10.02 of the Credit Agreement
to it at its “Address for Notices” specified on the signature pages below or (if
no such address is so specified) to it at the address set forth in clause (i) of
Section 10.02(a) of the Credit Agreement; and

3. As of the Effective Date, the payment of the Loans and L/C Borrowings and
interest thereon and all other amounts under the Credit Agreement will not be
subject, by withholding or deduction, to any Taxes imposed by the [Designated
Borrower’s jurisdiction(s)] for the Designated Borrower.

In addition to the foregoing, AXIS Capital hereby represents and warrants and
agrees that as of the Effective Date:

1. Each of the representations and warranties contained in the Credit Agreement
and in the other Loan Documents is true and correct in all material respects on
and as of the Effective Date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date);

2. No Default has occurred and is continuing; and

 

  Exh. F-2  

Form of Designated Borrower

Request and Assumption Agreement

--------------------------------------------------------------------------------

3. The Guaranty of AXIS Capital, AXIS Finance, AXIS Specialty Holdings and each
other Person, if any, who has executed a Guaranty, applies to all of the
obligations of the Designated Borrower under the Loan Documents.

This Designated Borrower Request and Assumption Agreement shall constitute a
Loan Document under the Credit Agreement.

This Designated Borrower Request and Assumption Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same agreement.

THIS DESIGNATED BORROWER REQUEST AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Designated Borrower
Request and Assumption Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first above written.

 

  [DESIGNATED BORROWER]   By:       Name:       Title:    

 

  Address for Notices               Attn:
                                                                               
  Tel:                                          
                                          Fax:
                                                                                
AXIS CAPITAL HOLDINGS LIMITED By:     Name     Title:    

Accepted this     day of         , 20    

 

  Exh. F-3  

Form of Designated Borrower

Request and Assumption Agreement

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent By:     Name    
Title:    

 

  Exh. F-4  

Form of Designated Borrower

Request and Assumption Agreement

--------------------------------------------------------------------------------

EXHIBIT G

FORM OF DESIGNATED BORROWER NOTICE

Date:             ,         

 

  To: AXIS Capital Holdings Limited and the Lenders party to the Credit
Agreement referred to below

Ladies and Gentlemen:

This Designated Borrower Notice is made and delivered pursuant to Section 2.13
of that certain Credit Agreement, dated as of March 26, 2013 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement;” the terms defined therein being used herein as therein
defined), among AXIS Capital Holdings Limited, a Bermuda company (“AXIS
Capital”), and certain Subsidiaries of AXIS Capital party thereto pursuant to
Section 2.13 of the Credit Agreement (each a “Designated Borrower” and, together
with AXIS Capital, the “Borrowers” and, each a “Borrower”), each lender from
time to time party thereto (collectively, the “Lenders” and individually, a
“Lender”), and Wells Fargo Bank, National Association, as Administrative Agent,
L/C Administrator and Fronting Bank.

The Administrative Agent hereby notifies AXIS Capital and the Lenders that
effective as of the date hereof [                    ] shall be a Designated
Borrower and may request Letters of Credit and receive Loans for its account on
the terms and conditions set forth in the Credit Agreement.

This Designated Borrower Notice shall constitute a Loan Document under the
Credit Agreement.

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent By:     Name    
Title:    

 

  Exh. G-1   Form of Designated Borrower Notice

--------------------------------------------------------------------------------

EXHIBIT H

FORM OF GUARANTY

 

  Exh. H-1   Form of Guaranty

--------------------------------------------------------------------------------

EXHIBIT I

FORM OF BORROWING BASE CERTIFICATE

 

To: Wells Fargo Bank, National Association,

as Administrative Agent

[    ]

 

  Re: [Borrower]

Ladies and Gentlemen:

Credit Agreement, dated as of March 26, 2013 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined)
among AXIS Capital Holdings Limited, a Bermuda company (“AXIS Capital”), and
certain Subsidiaries of AXIS Capital party thereto pursuant to Section 2.13 of
the Credit Agreement (each a “Designated Borrower” and, together with AXIS
Capital, the “Borrowers” and, each a “Borrower”), each lender from time to time
party thereto (collectively, the “Lenders” and individually, a “Lender”), and
Wells Fargo Bank, National Association, as Administrative Agent, L/C
Administrator and Fronting Bank. This Certificate, together with supporting
calculations attached hereto set forth in reasonable detail, is delivered to you
pursuant to the terms of the Credit Agreement. Capitalized terms used but not
otherwise defined herein shall have the same meanings herein as in the Credit
Agreement.

We hereby certify and warrant to the Administrative Agent, the L/C
Administrator, the Fronting Banks and the Lenders that at the close of business
on             ,             (the “Borrowing Base Calculation Date”), the
Borrowing Base for the undersigned was $            and the outstanding Secured
Letters of Credit was $                    

We hereby further certify and warrant to the Administrative Agent, the Fronting
Banks the L/C Administrator and the Lenders that the information and
computations contained herein are true and correct in all material respects as
of the Borrowing Base Calculation Date.

IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed and
delivered by an authorized office this     day of         ,         .

[BORROWER]

By:

Title:

 

  Exh. I-1   Form of Borrowing Base Certificate

--------------------------------------------------------------------------------

SCHEDULE I TO BORROWING BASE CERTIFICATE

DATED AS OF:                    

 

I. [BORROWER] BORROWING BASE CALCULATION

   [FORM TO BE PROVIDED BY AXIS CAPITAL]

II. CREDIT QUALITY

  

A.     Average credit rating of all

Eligible Collateral

  

 

  Exh. I-2   Form of Borrowing Base Certificate

--------------------------------------------------------------------------------

SCHEDULE II TO BORROWING BASE

CERTIFICATE DATED AS OF             ,             

[Attach list of Eligible Collateral by Category

(including Rating) and Concentration Limit]

 

  Exh. I-3   Form of Borrowing Base Certificate

--------------------------------------------------------------------------------

EXHIBIT J

FORM OF SECURITY AGREEMENT

 

  Exh. J-1   Form of Security Agreement

--------------------------------------------------------------------------------

EXHIBIT K-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement, dated as of March 26, 2013 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement;” the terms defined therein being used
herein as therein defined) among AXIS Capital Holdings Limited, a Bermuda
company (“AXIS Capital”), and certain Subsidiaries of AXIS Capital party thereto
pursuant to Section 2.13 of the Credit Agreement, each lender from time to time
party thereto, and Wells Fargo Bank, National Association, as Administrative
Agent, L/C Administrator and Fronting Bank.

Pursuant to the provisions of Section 3.01 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the applicable Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (iv) it is not a controlled foreign corporation related to such
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and AXIS Capital with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform AXIS Capital and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished AXIS Capital and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

 

[NAME OF LENDER] By:       Name:   Title:

Date:             , 20[     ]

 

Sched. 10.02

--------------------------------------------------------------------------------

EXHIBIT K-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement, dated as of March 26, 2013 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement;” the terms defined therein being used
herein as therein defined) among AXIS Capital Holdings Limited, a Bermuda
company (“AXIS Capital”), and certain Subsidiaries of AXIS Capital party thereto
pursuant to Section 2.13 of the Credit Agreement, each lender from time to time
party thereto, and Wells Fargo Bank, National Association, as Administrative
Agent, L/C Administrator and Fronting Bank.

Pursuant to the provisions of Section 3.01 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the applicable Borrower within the
meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled
foreign corporation related to such Borrower as described in
Section 881(c)(3)(C) of the Code].

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:       Name:   Title:

Date:             , 20[     ]

 

Sched. 10.02

--------------------------------------------------------------------------------

EXHIBIT K-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement, dated as of March 26, 2013 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement;” the terms defined therein being used
herein as therein defined) among AXIS Capital Holdings Limited, a Bermuda
company (“AXIS Capital”), and certain Subsidiaries of AXIS Capital party thereto
pursuant to Section 2.13 of the Credit Agreement, each lender from time to time
party thereto, and Wells Fargo Bank, National Association, as Administrative
Agent, L/C Administrator and Fronting Bank.

Pursuant to the provisions of Section 3.01 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
applicable Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(v) none of its direct or indirect partners/members is a controlled foreign
corporation related to such Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:       Name:   Title:

Date:             , 20[     ]

 

Sched. 10.02

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EXHIBIT K-4

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement, dated as of March 26, 2013 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement;” the terms defined therein being used
herein as therein defined among AXIS Capital Holdings Limited, a Bermuda company
(“AXIS Capital”), and certain Subsidiaries of AXIS Capital party thereto
pursuant to Section 2.13 of the Credit Agreement, each lender from time to time
party thereto, and Wells Fargo Bank, National Association, as Administrative
Agent, L/C Administrator and Fronting Bank.

Pursuant to the provisions of Section 3.01 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of applicable Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its
direct or indirect partners/members is a controlled foreign corporation related
to such Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and AXIS Capital with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform AXIS Capital and the Administrative Agent, and (2) the
undersigned shall have at all times furnished AXIS Capital and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF LENDER] By:       Name:   Title:

Date:             , 20[     ]

 

Sched. 10.02