Exhibit 10.2

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

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

UNSECURED CREDIT AGREEMENT

 

dated as of

 

December 9, 2011

 

between

 

XL GROUP PLC,

XLIT LTD., X.L. AMERICA, INC., XL INSURANCE

(BERMUDA) LTD, XL RE LTD, XL RE EUROPE LIMITED, XL INSURANCE COMPANY

LIMITED, XL INSURANCE SWITZERLAND LTD AND XL LIFE LTD,

as Account Parties,

 

XL GROUP PLC,

XLIT LTD., X.L. AMERICA, INC., XL INSURANCE (BERMUDA) LTD, XL RE LTD AND
XL LIFE LTD,

as Guarantors,

 

and

 

The LENDERS Party Hereto,

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

 

 

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

 

 

$1,350,000,000

 

 

 

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

 

 

J.P. MORGAN SECURITIES LLC,

 

CITIGROUP GLOBAL MARKETS INC.,

 

and

 

RBS SECURITIES INC., as Joint Lead Arrangers and Joint Bookrunners

 

 

 

 

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

 

CITIBANK, N.A. and RBS SECURITIES INC.,

 

as Syndication Agents

 

 

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

 

 

BARCLAYS BANK PLC, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
DEUTSCHE BANK SECURITIES INC, GOLDMAN SACHS BANK USA, THE BANK OF
TOKYO-MITSUBISHI UFJ, LTD. AND WELLS FARGO BANK, NATIONAL
ASSOCIATION

 

as Documentation Agents

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

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

i

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

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

 

 

 

 

 

ARTICLE I

 

1

 

 

 

 

 

 

DEFINITIONS

 

1

 

 

SECTION 1.01. Defined Terms

 

1

 

 

SECTION 1.02. Terms Generally

 

19

 

 

SECTION 1.03. Accounting Terms; GAAP, Local GAAP, SAP and SFR

 

20

 

 

SECTION 1.04. Exchange Rates; Currency Equivalents

 

20

 

 

 

 

 

ARTICLE II

 

21

 

 

 

 

 

 

THE CREDITS

 

21

 

 

SECTION 2.01. Syndicated Letters of Credit

 

21

 

 

SECTION 2.02. Issuance and Administration

 

22

 

 

SECTION 2.03. Reimbursement of LC Disbursements, Etc.

 

23

 

 

SECTION 2.04. Non-Syndicated Letters of Credit

 

25

 

 

SECTION 2.05. Participated Letters of Credit

 

31

 

 

SECTION 2.06. Alternative Currency Letters of Credit

 

35

 

 

SECTION 2.07. Loans and Borrowings

 

36

 

 

SECTION 2.08. Requests for Borrowings

 

37

 

 

SECTION 2.09. Funding of Borrowings

 

38

 

 

SECTION 2.10. Interest Elections

 

39

 

 

SECTION 2.11. Termination, Reduction and Increase of the Commitments

 

40

 

 

SECTION 2.12. Repayment of Loans; Evidence of Debt

 

41

 

 

SECTION 2.13. Prepayment of Loans

 

42

 

 

SECTION 2.14. Fees

 

43

 

 

SECTION 2.15. Interest

 

44

 

 

SECTION 2.16. Alternate Rate of Interest

 

44

 

 

SECTION 2.17. Increased Costs

 

45

 

 

SECTION 2.18. Break Funding Payments

 

46

 

 

SECTION 2.19. Taxes

 

47

 

 

SECTION 2.20. Payments Generally; Pro Rata Treatment; Sharing of Set-offs

 

50

 

 

SECTION 2.21. Mitigation Obligations; Replacement of Lenders

 

52

 

 

SECTION 2.22. Defaulting Lenders

 

53

 

 

SECTION 2.23. Absence of Rating

 

54

 

 

 

 

 

ARTICLE III

 

54

 

 

 

 

 

 

GUARANTEE

 

54

 

 

SECTION 3.01. The Guarantee

 

55

 

 

SECTION 3.02. Obligations Unconditional

 

55

 

 

SECTION 3.03. Reinstatement

 

55

 

 

SECTION 3.04. Subrogation

 

56

 

 

SECTION 3.05. Remedies

 

56

 

 

SECTION 3.06. Continuing Guarantee

 

56

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

ii

 

 

 

 

 

 

 

SECTION 3.07. Rights of Contribution

 

56

 

 

SECTION 3.08. General Limitation on Guarantee Obligations

 

57

 

 

 

 

 

ARTICLE IV

 

57

 

 

 

 

REPRESENTATIONS AND WARRANTIES

 

57

 

 

SECTION 4.01. Organization; Powers

 

57

 

 

SECTION 4.02. Authorization; Enforceability

 

57

 

 

SECTION 4.03. Governmental Approvals; No Conflicts

 

58

 

 

SECTION 4.04. Financial Condition; No Material Adverse Change

 

58

 

 

SECTION 4.05. Properties

 

58

 

 

SECTION 4.06. Litigation and Environmental Matters

 

59

 

 

SECTION 4.07. Compliance with Laws and Agreements

 

59

 

 

SECTION 4.08. Investment Company Status

 

59

 

 

SECTION 4.09. Taxes

 

59

 

 

SECTION 4.10. ERISA

 

59

 

 

SECTION 4.11. Disclosure

 

60

 

 

SECTION 4.12. Use of Credit

 

60

 

 

SECTION 4.13. Subsidiaries

 

60

 

 

SECTION 4.14. Withholding Taxes

 

61

 

 

SECTION 4.15. Stamp Taxes

 

61

 

 

SECTION 4.16. Legal Form

 

61

 

 

 

 

 

ARTICLE V

 

61

 

 

 

 

CONDITIONS

 

61

 

 

SECTION 5.01. Effective Date

 

61

 

 

SECTION 5.02. Each Credit Event

 

63

 

 

 

 

 

ARTICLE VI

 

63

 

 

 

 

 

 

AFFIRMATIVE COVENANTS

 

63

 

 

SECTION 6.01. Financial Statements and Other Information

 

63

 

 

SECTION 6.02. Notices of Material Events

 

66

 

 

SECTION 6.03. Preservation of Existence and Franchises

 

66

 

 

SECTION 6.04. Insurance

 

66

 

 

SECTION 6.05. Maintenance of Properties

 

67

 

 

SECTION 6.06. Payment of Taxes and Other Potential Charges and Priority Claims;
Payment of Other Current Liabilities

 

67

 

 

SECTION 6.07. Financial Accounting Practices

 

67

 

 

SECTION 6.08. Compliance with Applicable Laws

 

68

 

 

SECTION 6.09. Use of Letters of Credit and Proceeds

 

68

 

 

SECTION 6.10. Continuation of and Change in Businesses

 

68

 

 

SECTION 6.11. Visitation

 

68

 

 

 

 

 

ARTICLE VII

 

68

 

 

 

 

 

NEGATIVE COVENANTS

 

68

 

 

SECTION 7.01. Mergers

 

68

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

iii

 

 

 

 

 

 

 

SECTION 7.02. Dispositions

 

69

 

 

SECTION 7.03. Liens

 

70

 

 

SECTION 7.04. Transactions with Affiliates

 

72

 

 

SECTION 7.05. Ratio of Total Funded Debt to Total Capitalization

 

72

 

 

SECTION 7.06. Consolidated Net Worth

 

72

 

 

SECTION 7.07. Indebtedness

 

72

 

 

SECTION 7.08. Financial Strength Ratings

 

73

 

 

SECTION 7.09. Private Act

 

73

 

 

 

 

 

ARTICLE VIII

 

73

 

 

 

 

EVENTS OF DEFAULT

 

73

 

 

 

 

 

ARTICLE IX

 

77

 

 

 

 

THE ADMINISTRATIVE AGENT

 

77

 

 

 

 

 

ARTICLE X

 

79

 

 

 

 

MISCELLANEOUS

 

79

 

 

SECTION 10.01. Notices

 

79

 

 

SECTION 10.02. Waivers; Amendments

 

80

 

 

SECTION 10.03. Expenses; Indemnity; Damage Waiver

 

81

 

 

SECTION 10.04. Successors and Assigns

 

83

 

 

SECTION 10.05. Survival

 

87

 

 

SECTION 10.06. Counterparts; Integration; Effectiveness

 

87

 

 

SECTION 10.07. Severability

 

87

 

 

SECTION 10.08. Right of Setoff

 

88

 

 

SECTION 10.09. Governing Law; Jurisdiction; Etc.

 

88

 

 

SECTION 10.10. WAIVER OF JURY TRIAL

 

89

 

 

SECTION 10.11. Headings

 

89

 

 

SECTION 10.12. Treatment of Certain Information; Confidentiality

 

89

 

 

SECTION 10.13. Judgment Currency

 

90

 

 

SECTION 10.14. USA PATRIOT Act

 

91

 

 

SECTION 10.15. NO FIDUCIARY DUTY

 

91

 

 

SECTION 10.16. ILLEGALITY

 

91

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

iv

 

 

 

SCHEDULE I

-

Commitments

SCHEDULE II

-

Indebtedness and Liens

SCHEDULE III

-

Litigation

SCHEDULE IV

-

Environmental Matters

SCHEDULE V

-

Subsidiaries

SCHEDULE VI

-

Existing Letters of Credit

 

 

 

EXHIBIT A

-

Form of Assignment and Assumption

EXHIBIT B

-

Form of Confirming Lender Agreement

EXHIBIT C

 

Form of Borrowing Request

EXHIBIT D

 

Form of Interest Election Request

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

                    UNSECURED CREDIT AGREEMENT dated as of December 9, 2011 (as
amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), among XL GROUP PLC, an Irish public limited company (“XL Group”),
XLIT LTD., an exempted company incorporated in the Cayman Islands with limited
liability (“XLIT”), X.L. AMERICA, INC., a Delaware corporation (“XL America”),
XL INSURANCE (BERMUDA) LTD, a Bermuda limited liability company (“XL Insurance
(Bermuda)”), XL RE LTD, a Bermuda limited liability company (“XL Re”), XL RE
EUROPE LIMITED, an Irish limited liability company (“XL Re Europe”), XL
INSURANCE COMPANY LIMITED, a limited company domiciled in the United Kingdom
(“XL Insurance”), XL INSURANCE SWITZERLAND LTD, a company limited by shares
organized under the laws of Switzerland (“XL Switzerland”), and XL LIFE LTD, a
Bermuda company (“XL Life” and together with XL Group, XLIT, XL America, XL
Insurance (Bermuda), XL Re, XL Re Europe, XL Insurance and XL Switzerland, each
an “Account Party” and collectively, the “Account Parties”; XL Group, XLIT, XL
America, XL Insurance (Bermuda), XL Re and XL Life, each a “Guarantor” and
collectively the “Guarantors”; the Account Parties and the Guarantors being
collectively referred to as the “Obligors”), the LENDERS party hereto, and
JPMORGAN CHASE BANK, N.A., as Administrative Agent.

                    The Account Parties have requested that the Lenders issue
letters of credit for their account and make loans to them in an aggregate face
or principal amount not exceeding $1,350,000,000 at any one time outstanding
(subject to the Loan Sublimit (as defined below)), and the Lenders are prepared
to issue such letters of credit and make such loans upon the terms and
conditions hereof. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

                    SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:

                    “ABR”, when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans constituting such Borrowing, are
bearing interest at a rate determined by reference to the Alternate Base Rate.

                    “Account Parties” shall have the meaning assigned to such
term in the introductory paragraph of this Agreement.

                    “Account Party Jurisdiction” means (a) Bermuda, (b) the
Cayman Islands, (c) Ireland, (d) Switzerland, (e) the United Kingdom, (f) the
United States and (g) any other country (i) where any Account Party is licensed
or qualified to do business or (ii) from or through which payments hereunder are
made by any Account Party.

                    “Adjusted LIBO Rate” means, for the Interest Period for any
Eurodollar Borrowing, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%)

1

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

equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate for such Interest Period.

                    “Administrative Agent” means JPMCB, in its capacity as
administrative agent for the Lenders hereunder.

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

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

                    “Aggregate Credit Exposure” means the aggregate amount of
the Credit Exposures of each of the Lenders.

                    “Aggregate LC Exposure” means the aggregate amount of the LC
Exposures of each of the Lenders.

                    “Agreement” shall have the meaning assigned to such term in
the introductory paragraph of this Agreement.

                    “Alternate Base Rate” means, for any day, a rate per annum
equal to the highest of (a) the Prime Rate in effect on such day, (b) the
Federal Funds Effective Rate for such day plus 1/2 of 1% and (c) the Adjusted
LIBO Rate for an Interest Period of one month that would be calculated as of
such day (or, if such day is not a Business Day, as of the next preceding
Business Day) plus 1.0%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate
shall be effective from and including the date of such change in the Prime Rate,
the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be.

                    “Alternative Currency” means any currency other than Dollars
(a) that is freely transferable and convertible into Dollars in the London
foreign exchange market and (b) for which no central bank or other governmental
authorization in the country of issue of such currency is required to permit use
of such currency by any Lender for issuing, renewing, extending or amending
letter of credits or funding or making drawings thereunder and/or to permit any
Account Party to pay the reimbursement obligations and interest thereon, each as
contemplated hereunder, unless such authorization has been obtained and is in
full force and effect.

                    “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 or
the Issuing Lender, 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 LC Exposure” means, at any time, the
sum of (a) the Dollar Equivalent of the aggregate undrawn amount of all
outstanding Alternative Currency Letters of Credit at such time plus (b) the
Dollar Equivalent of the aggregate amount of all LC

2

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

Disbursements under Alternative Currency Letters of Credit that have not been
reimbursed by or on behalf of the Account Parties at such time. The Alternative
Currency LC Exposure of any Lender shall at any time be such Lender’s share of
the total Alternative Currency LC Exposure at such time.

                    “Alternative Currency Letter of Credit” means a letter of
credit issued by a Lender in an Alternative Currency pursuant to Section 2.06.

                    “Alternative Currency Letter of Credit Report” has the
meaning set forth in Section 2.06(b).

                    “Applicable Margin” means (i) 0.0%, in the case of ABR Loans
and (ii) a rate per annum equal to the Credit Default Swap Spread at the
applicable date of determination in the case of Eurodollar Loans; provided that
to the extent the Applicable Margin for Eurodollar Loans is greater than 1.0%,
the Applicable Margin for ABR Loans shall be increased such that the difference
between the Applicable Margin for ABR Loans is equal to the Applicable Margin
for Eurodollar Loans less 1.0%. The Credit Default Swap Spread will be
determined, as to each Eurodollar Loan, on the second Business Day prior to the
borrowing of such Eurodollar Loan, and thereafter, in the case of any Eurodollar
Loan having an Interest Period of greater than three months, at the end of each
successive three-month period during such Interest Period. The Credit Default
Swap Spread will be determined as to ABR Loans initially on the Effective Date
and thereafter on the first Business Day of each succeeding calendar quarter. If
at any time the Credit Default Swap Spread cannot be determined, the Account
Parties and the Administrative Agent shall negotiate in good faith (for a period
of up to thirty days after the Credit Default Swap Spread becomes unavailable
(such thirty-day period, the “Negotiation Period”)) to agree on an alternative
method for establishing the Applicable Margin for Eurodollar Loans and ABR
Loans. The Applicable Margin for Eurodollar Loans and ABR Loans for any
determination date which falls during the Negotiation Period shall be based upon
the then most recently available Credit Default Swap Spread (such rate, the
“Prior Rate”). If no such alternative method is agreed upon during the
Negotiation Period, the Applicable Margin for Eurodollar Loans and ABR Loans for
any determination date subsequent to the end of the Negotiation Period shall be
a rate per annum equal to the Prior Rate and increased by (A) 0.25% on the first
Business Day following the expiration of the Negotiation Period (the “Initial
Rate Increase Date”) and (B) an additional 0.25% on each succeeding 90-day
anniversary of the Initial Rate Increase Date (or if any such 90th day is not a
Business Day, on the immediately succeeding Business Day), in each case, so long
as the Credit Default Swap Spread remains unavailable or is not provided by
Markit and an alternative method for establishing the Credit Default Swap Spread
has not been agreed upon by the Account Parties and the Administrative Agent
(provided that the Credit Default Swap Spread shall in no event be less than the
Minimum Applicable Margin or greater than the Maximum Applicable Margin).
Notwithstanding anything herein to the contrary, the Applicable Margin for
Eurodollar Loans and ABR Loans in effect at any time shall not be less than the
applicable “CDS Floor” (the “Minimum Applicable Margin”), and shall not exceed
the applicable “CDS Cap” (the “Maximum Applicable Margin”) corresponding to the
debt rating of XLIT in effect on such date of determination and the type of Loan
as set forth under the definition of Pricing Grid.

                    “Applicable Percentage” means with respect to any Lender,
the percentage of the Commitments of all the Lenders represented by such
Lender’s Commitment; provided that with

3

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

respect to any Lender in relation to its obligation to make Loans (or related
matters), the percentage represented by the amount that such Lender’s Applicable
Percentage (as determined above) of the Loan Sublimit bears to the Loan
Sublimit. If the Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.

                    “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 10.04), and accepted by the
Administrative Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.

                    “Availability Period” means the period from and including
the Effective Date to and including the Commitment Termination Date.

                    “Bankruptcy Event” means with respect to any Person, such
Person becomes the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee, administrator, custodian, assignee for the
benefit of creditors or similar Person charged with the reorganization or
liquidation of its business appointed for it, or indicating its consent to,
approval of, or acquiescence in, any such proceeding or appointment, provided
that a Bankruptcy Event shall not result solely by virtue of any ownership
interest, or the acquisition of any ownership interest, in such Person by a
Governmental Authority or instrumentality thereof, provided, further, that such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement in
the United States of judgments or writs of attachment on its assets or permit
such Person (or such Governmental Authority or instrumentality) to reject,
repudiate, disavow or disaffirm any contracts or agreements made by such Person.

                    “Bermuda Companies Law” means the Companies Act 1981 of
Bermuda, as amended, and the regulations promulgated thereunder.

                    “Bermuda Insurance Law” means the Insurance Act 1978 of
Bermuda, as amended, and the regulations promulgated thereunder.

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

                    “Borrowing” means, with respect to any Account Party, (a)
all ABR Loans of such Account Party made, converted or continued on the same
date or (b) all Eurodollar Loans of such Account Party that have the same
Interest Period.

                    “Borrowing Request” means a request by an Account Party for
a Borrowing in accordance with Section 2.08 substantially in the form of Exhibit
C hereto.

                    “Business Day” means any day (a) that is not a Saturday,
Sunday or other day on which commercial banks in New York City, London, Ireland
or in the case of any Specified Account Party, the jurisdiction of organization
of such Account Party, requesting the issuance of a Letter of Credit are
authorized or required by law to remain closed and (b) if such day relates to

4

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

a borrowing of, a payment or prepayment of principal of or interest on, a
continuation or conversion of or into, or the Interest Period for, a Eurodollar
Loan, or to a notice by an Account Party with respect to any such borrowing,
payment, prepayment, continuation, conversion, or Interest Period, that is also
a day on which dealings in Dollar deposits are carried out in the London
interbank market.

                    “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.

                    “Change in Control” means the occurrence of any of the
following events or conditions: (a) any Person, including any syndicate or group
deemed to be a Person under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, acquires beneficial ownership, directly or indirectly, through
a purchase, merger or other acquisition transaction or series of transactions,
of shares of capital stock of XL Group entitling such Person to exercise 40% or
more of the total voting power of all shares of capital stock of XL Group that
is entitled to vote generally in elections of directors, other than an
acquisition by XL Group, any of its Subsidiaries or any employee benefit plans
of XL Group; or (b) XL Group merges or consolidates with or into any other
Person (other than a Subsidiary), another Person (other than a Subsidiary)
merges into XL Group or XL Group conveys, sells, transfers or leases all or
substantially all of its assets to another Person (other than a Subsidiary),
other than any transaction: (i) that does not result in a reclassification,
conversion, exchange or cancellation of the outstanding shares of capital stock
of XL Group (other than the cancellation of any outstanding shares of capital
stock of XL Group held by the Person with whom it merges or consolidates) or
(ii) which is effected solely to change the jurisdiction of incorporation of XL
Group and results in a reclassification, conversion or exchange of outstanding
shares of capital stock of XL Group solely into shares of capital stock of the
surviving entity; or (c) a majority of the members of XL Group’s board of
directors are persons who are then serving on the board of directors without
having been elected by the board of directors or having been nominated for
election by its shareholders.

                    “Change in Law” means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.17(b), by any lending office of such Lender or by such
Lender’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.

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

                    “Commitment” means, with respect to any Lender, the
commitment of such Lender to make Loans, to issue Syndicated Letters of Credit
and Non-Syndicated Letters of Credit and to acquire participations in
Participated Letters of Credit, as any such commitment

5

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

may be (i) reduced from time to time pursuant to Section 2.11 and (ii) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender’s Commitment
(including such Lender’s allocable portion of the Loan Sublimit that may be
borrowed under Section 2.07(a)) is set forth on Schedule I or in the Assignment
and Assumption pursuant to which such Lender shall have assumed its Commitment,
as applicable. The initial aggregate amount of the Lenders’ Commitments is
$1,350,000,000.

                    “Commitment Termination Date” means December 9, 2015.

                    “Confirming Lender” means, with respect to any Lender, any
other Person which is listed on the NAIC Approved Bank List that has agreed, by
delivery of an agreement between such Lender and such other Person in
substantially the form of Exhibit B or any other form satisfactory to the
Administrative Agent, to honor the obligations of such Lender in respect of a
draft complying with the terms of a Syndicated Letter of Credit or a
Non-Syndicated Letter of Credit, as the case may be, as if, and to the extent,
such other Person were the “issuing lender” (in place of such Lender) named in
such Syndicated Letter of Credit or Non-Syndicated Letter of Credit, as the case
may be.

                    “Consolidated Net Worth” means, at any time, the
consolidated stockholders’ equity of XL Group and its Subsidiaries, provided
that the calculation of such consolidated stockholders’ equity shall exclude (a)
the effect thereon of any adjustments required under Statement of Financial
Accounting Standards No. 115 (“Accounting for Certain Investments in Debt and
Equity Securities”) and (b) any Exempt Indebtedness (and the assets relating
thereto) in the event such Exempt Indebtedness is consolidated on the
consolidated balance sheet of XL Group and its consolidated Subsidiaries in
accordance with GAAP.

                    “Consolidated Total Assets” means, on any date, total assets
of XL Group and its Subsidiaries on a consolidated basis determined in
accordance with GAAP as of the last day of the fiscal quarter immediately
preceding the date of determination.

                    “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.

                    “Credit Default Swap Spread” means at any determination
date, the credit default swap spread applicable to senior unsecured debt of XLIT
interpolated for a period to the Commitment Termination Date (or if the
Commitment Termination Date is less than one year from such determination date,
the credit default swap spread applicable to senior unsecured debt of XLIT for a
period of one year) in each case determined as of the close of business on the
Business Day immediately preceding such determination date, as interpolated and
reported by Markit Group Ltd. or any successor thereto (“Markit”).

                    “Credit Documents” means, collectively, this Agreement and
the Letter of Credit Documents.

6

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

                    “Credit Exposure” means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender’s Loans and its
LC Exposure at such time.

                    “Default” means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

                    “Defaulting Lender” means any Lender that (a) has failed,
within three Business Days of the date required to be funded or paid, to (i)
fund any portion of its participations in Letters of Credit or (ii) pay over to
any Obligor any other amount required to be paid by it hereunder, in either
case, unless such Lender notifies the Administrative Agent in writing that such
failure is the result of such Lender’s determination that one or more conditions
precedent to funding (which conditions precedent, together with the applicable
default, if any, shall be specifically identified in writing) has not been
satisfied, (b) has notified any Obligor in writing, or has made a public
statement to the effect, that it does not intend or expect to comply with any of
its funding obligations under this Agreement (unless such writing or public
statement states that such position is based on such Lender’s determination that
one or more conditions precedent to funding (which conditions precedent,
together with the applicable default, if any, shall be specifically identified
in such writing or public statement) cannot be satisfied), (c) has failed,
within three Business Days after request by the Administrative Agent, acting in
good faith, to provide a certification in writing from an authorized officer of
such Lender that it will comply with its obligations to fund participations in
then outstanding Letters of Credit, provided that such Lender shall cease to be
a Defaulting Lender pursuant to this clause (c) upon such receipt of such
certification in form and substance reasonably satisfactory to the
Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

                    “Dollar Equivalent” means, as used in each Alternative
Currency Letter of Credit Report and in respect of any Alternative Currency
Letter of Credit, the amount of Dollars obtained by converting the Alternative
Currency LC Exposure with respect to such Alternative Currency Letter of Credit,
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.

                    “Dollars” or “$” refers to lawful money of the United States
of America.

                    “Effective Date” means the date on which the conditions
specified in Section 5.01 are satisfied (or waived in accordance with
Section 10.02).

                    “Environmental Laws” means any Law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or protection of the
environment, including natural resources, (b) exposure of Persons, including but
not limited to employees, to Hazardous Materials, (c) protection of the public
health or welfare from the effects of products, by-products, wastes, emissions,
discharges or releases of Hazardous Materials or (d) regulation of the
manufacture, use or introduction into commerce of Hazardous Materials, including
their manufacture, formulation, packaging, labeling, distribution,
transportation, handling, storage or disposal.

7

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

                    “Environmental Liability” means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of an Account Party or any
Subsidiary 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 or agreement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.

                    “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, or partnership or other
ownership interests of any type in, such Person.

                    “ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time.

                    “ERISA Affiliate” means any trade or business (whether or
not incorporated) that, together with any Account Party, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

                    “ERISA Event” means (a) any “reportable event”, as defined
in Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Account Party or any of such
Account Party’s ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by any Account Party 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 any Account Party or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by any Account Party or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
any Account Party 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.

                    “Eurodollar”, when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loan(s) constituting such
Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

                    “Event of Default” has the meaning assigned to such term in
Article VIII.

8

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

                    “Excess Funding Guarantor” has the meaning assigned to such
term in Section 3.07.

                    “Excess Payment” has the meaning assigned to such term in
Section 3.07.

                    “Excluded Taxes” means, with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or on
account of any obligation of any Obligor hereunder, or under any Credit
Document, (a) income or franchise Taxes imposed on (or measured by) its net
income, net profits or overall gross receipts (including, without limitation,
branch profits or similar taxes) by the United States of America, or by any
jurisdiction under the laws of which such recipient is organized or resident, in
which such recipient’s principal office is located or with which such recipient
has any other connection (other than a connection that arises solely by reason
of an Account Party having executed, delivered or performed its obligations or a
Lender or the Administrative Agent having received a payment under this
Agreement or any Credit Document), (b) any Tax imposed pursuant to a law in
effect at the time such recipient first becomes a party to this Agreement or
designates a new lending office (or at the time such recipient acquires an
additional interest, but only with respect to Taxes attributable to such
additional interest) except to the extent that such recipient (or such
recipient’s assignor, if any) was entitled at the time of the designation of a
new lending office (or assignment) to receive additional amounts from the
Account Parties with respect to such Tax under Section 2.19(a) or 2.19(c), (c)
any Tax that is attributable to a recipient’s failure to comply with Section
2.19(f), and (d) any Tax imposed pursuant to FATCA.

                    “Exempt Indebtedness” means any Indebtedness of any Person
(other than XL Group or any of its Affiliates) that is consolidated on the
balance sheet of XL Group and its consolidated Subsidiaries in accordance with
GAAP (whether or not required to be so consolidated); provided that (a) at the
time of the incurrence of such Indebtedness by such Person, the cash flows from
the assets of such Person shall reasonably be expected by such Person to
liquidate such Indebtedness and all other liabilities (contingent or otherwise)
of such Person and (b) no portion of such Indebtedness of such Person shall be
Guaranteed (other than guarantees of the type referred to in clause (a) or (b)
of the definition of Indebtedness) by, or shall be secured by a Lien on any
assets owned by, XL Group or any of its Subsidiaries and neither such Person nor
any of the holders of such Indebtedness shall have any direct or indirect
recourse to XL Group or any of its Subsidiaries (other than in respect of
liabilities and guarantees of the type referred to in clause (a) or (b) of the
definition of Indebtedness).

                    “Existing Secured Credit Agreement” means the 3-Year Credit
Agreement dated as of March 25, 2011 among the Account Parties, the lenders
party thereto, JPMCB, as administrative agent and The Bank of New York Mellon,
as collateral agent, as amended, restated, supplemented or otherwise modified
from time to time, including any renewals, extensions or replacements thereof
that increase the principal amount thereof as of the Effective Date; provided,
however, that to the extent such principal amount exceeds $1,000,000,000 at any
time, such excess amount shall not be deemed to be incurred under the Existing
Secured Credit Agreement for purposes of Section 7.03 and Section 7.07.

                    “Existing Unsecured Credit Agreement” means the 5-Year
Credit Agreement dated as of June 21, 2007 among XLIT Ltd. (formerly XL Group
Ltd. and XL Capital Ltd), XL

9

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

America, XL Insurance (Bermuda), and XL Re, the lenders party thereto and JPMCB,
as administrative agent, as amended, restated, supplemented or otherwise
modified from time to time, including any renewals, extensions or replacements
thereof.

                    “FATCA” means Sections 1471 through 1474 of the Code as of
the date of this Agreement (including any amended or successor provisions
thereto, to the extent substantially comparable thereto), and any regulations or
official interpretations thereof.

                    “Federal Funds Effective Rate” means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.

                    “Financial Officer” means, with respect to any Obligor, a
principal financial officer of such Obligor.

                    “GAAP” means generally accepted accounting principles in the
United States of America.

                    “GIC” means a guaranteed investment contract or funding
agreement or other similar agreement issued by an Account Party or any of its
Subsidiaries that guarantees to a counterparty a rate of return on the invested
capital over the life of such contract or agreement.

                    “Governmental Authority” means the government of the United
States of America, or of any other nation (including the European Union), or 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.

                    “Granting Lender” has the meaning assigned to such term in
Section 10.04.

                    “Guarantee” means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including any obligation, whether or
not contingent, (i) to purchase any such Indebtedness or any property
constituting security therefor for the purpose of assuring the holder of such
Indebtedness, (ii) to advance or provide funds or other support for the payment
or purchase of any such Indebtedness or to maintain working capital, solvency or
other balance sheet condition of such other Person (including keepwell
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guarantee hereunder shall (subject to any

10

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

limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount of the Indebtedness in respect of which such
Guarantee is made. The terms “Guarantee” and “Guaranteed” used as a verb shall
have a correlative meaning.

                    “Guaranteed Obligations” has the meaning assigned to such
term in Section 3.01.

                    “Guarantors” shall have the meaning assigned to such term in
the introductory paragraph of this Agreement.

                    “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.

                    “Hedging Agreement” means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.

                    “Indebtedness” means, for any Person, without duplication:
(i) all indebtedness or liability for or on account of money borrowed by, or for
or on account of deposits with or advances to (but not including accrued pension
costs, deferred income taxes or accounts payable of) such Person; (ii) all
obligations (including contingent liabilities) of such Person evidenced by
bonds, debentures, notes, banker’s acceptances or similar instruments; (iii) all
indebtedness or liability for or on account of property or services purchased or
acquired by such Person; (iv) any indebtedness or liability secured by a Lien on
property owned by such Person (whether or not assumed) and Capital Lease
Obligations of such Person (without regard to any limitation of the rights and
remedies of the holder of such Lien or the lessor under such capital lease to
repossession or sale of such property); (v) the maximum available amount of all
standby letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed); and (vi)
all Guarantees of such Person; provided that the following shall be excluded
from Indebtedness of XL Group and any of its Subsidiaries for purposes of this
Agreement: (a) all payment liabilities of any such Person under insurance and
reinsurance policies from time to time issued by such Person, including
guarantees of any such payment liabilities; (b) all other liabilities (or
guarantees thereof) arising in the ordinary course of any such Person’s business
as an insurance or reinsurance company (including GICs and Stable Value
Instruments and any Specified Transaction Agreement relating thereto), or as a
corporate member of The Council of Lloyd’s, or as a provider of financial or
investment services or contracts (including GICs and Stable Value Instruments
and any Specified Transaction Agreement relating thereto); and (c) any Exempt
Indebtedness.

                    “Indemnified Taxes” means (a) Taxes imposed on the
Administrative Agent or any Lender on or with respect to any payment hereunder
or under any Credit Document, other than Excluded Taxes and (b) Other Taxes.

                    “Insurance Subsidiary” means any Subsidiary (other than XL
Life Insurance and Annuity Company) which is subject to the regulation of, and
is required to file statutory financial

11

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

statements with, any governmental body, agency or official in any State or
territory of the United States or the District of Columbia which regulates
insurance companies or the doing of an insurance business therein.

                    “Interest Election Request” means a request by an Account
Party to convert or continue a Borrowing in accordance with Section 2.10
substantially in the form of Exhibit D hereto.

                    “Interest Payment Date” means (a) with respect to any ABR
Loan, each Quarterly Date and (b) with respect to any Eurodollar Loan, the last
day of each Interest Period therefor and, in the case of any Interest Period of
more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at three-month intervals after the first day of such
Interest Period.

                    “Interest Period” means, for any Eurodollar Loan or
Borrowing, the period commencing on the date of such Loan or Borrowing and
ending on the numerically corresponding day in the calendar month that is one,
two, three or six months thereafter, as specified in the applicable Borrowing
Request or Interest Election Request; provided that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (ii) any Interest
Period that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Loan initially
shall be the date on which such Loan is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Loan, and
the date of a Borrowing comprising Loans that have been converted or continued
shall be the effective date of the most recent conversion or continuation of
such Loans.

                    “ISDA” has the meaning assigned to such term in Section
7.03(e).

                    “Issuing Lender” means (a) with respect to any Participated
Letter of Credit, JPMCB, in its capacity as the issuer of such Participated
Letter of Credit hereunder, and its successors in such capacity as provided in
Section 2.05(j), (b) with respect to any Syndicated Letter of Credit, each
Lender, in its capacity as the issuer of such Syndicated Letter of Credit and
(c) with respect to any Non-Syndicated Letter of Credit, the Lender named
therein as the issuer thereof.

                    “JPMCB” means JPMorgan Chase Bank, N.A.

                    “Law” means any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Governmental Authority.

                    “LC Disbursement” means (a) with respect to any Participated
Letter of Credit or Non-Syndicated Letter of Credit, a payment made by the
Issuing Lender thereof pursuant thereto

12

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

and (b) with respect to any Syndicated Letter of Credit or Alternative Currency
Letter of Credit, a payment made by a Lender pursuant thereto.

                    “LC Exposure” means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements under Letters of Credit that
have not yet been reimbursed by or on behalf of the Account Parties at such
time. The LC Exposure of any Lender at any time shall be the sum of (i) its
Applicable Percentage of the total LC Exposure (excluding any Alternative
Currency LC Exposure) plus (ii) the Alternative Currency LC Exposure (if any) of
such Lender at such time.

                    “Lenders” means the Persons listed on Schedule I and any
other Person that shall have become a party hereto pursuant to an Assignment and
Assumption or an agreement pursuant to the terms of Section 2.11(c), other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption (it being understood and agreed that each Lender may, at its option,
issue any Letter of Credit to any Account Party by causing any foreign or
domestic branch or Affiliate of such Lender to issue such Letter of Credit;
provided that any exercise of such option shall not affect the obligations of
such Account Party in respect of such Letter of Credit in accordance with the
terms hereunder).

                    “Letter of Credit Documents” means, with respect to any
Letter of Credit, collectively, any application therefor and any other
agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing
for the rights and obligations of the parties concerned or at risk with respect
to such Letter of Credit.

                    “Letters of Credit” means each of the Syndicated Letters of
Credit, the Non-Syndicated Letters of Credit, the Participated Letters of Credit
and the Alternative Currency Letters of Credit.

                    “LIBO Rate” means, for the Interest Period for any
Eurodollar Borrowing, the rate appearing on Reuters Page LIBOR01 (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 for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for the offering of Dollar deposits with a maturity
equal to the duration of such Interest Period. In the event that such rate is
not available at such time for any reason, then the LIBO Rate for such Interest
Period shall be the rate at which Dollar deposits of $5,000,000 and for a
maturity equal to the duration of such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.

                    “Lien” means, with respect to any asset, any mortgage, deed
of trust, pledge, lien, security interest, charge or other encumbrance or
security arrangement of any nature whatsoever, including but not limited to any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.

13

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

                    “Life Operations” has the meaning assigned to such term in
Section 7.02(e).

                    “Loans” means the loans made by the Lenders to the Account
Parties pursuant to Section 2.07.

                    “Loan Sublimit” means $1,000,000,000 as such amount shall be
ratably reduced by the amount of any reduction of the Loan Sublimit pursuant to
Section 2.11.

                    “Local GAAP” means generally accepted accounting principles
in the jurisdiction of any Account Party.

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

                    “Markit” has the meaning set forth in the definition of
Credit Default Swap Spread.

                    “Material Adverse Effect” means a material adverse effect
on: (a) the assets, business, financial condition or operations of an Account
Party and its Subsidiaries taken as a whole; or (b) the ability of an Account
Party to perform any of its payment or other material obligations under this
Agreement.

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

                    “Multiemployer Plan” means a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.

                    “NAIC” means the National Association of Insurance
Commissioners.

                    “NAIC Approved Bank” means (a) any Person that is a bank
listed on the most current “Bank List” of banks approved by the NAIC (the “NAIC
Approved Bank List”) or (b) any Lender as to which its Confirming Lender is a
bank listed on the NAIC Approved Bank List.

                    “NAIC Approved Bank List” has the meaning assigned to such
term in the definition of “NAIC Approved Bank” in this Section.

                    “Non-Syndicated Letters of Credit” means letters of credit
issued under Section 2.04.

                    “Non-U.S. Benefit Plan” means any plan, fund (including any
superannuation fund) or other similar program established or maintained outside
the United States by any Account Party or any of their Subsidiaries, with
respect to which such Account Party or such Subsidiary has an obligation to
contribute, for the benefit of employees of such Account Party or such
Subsidiary, which plan, fund or other similar program provides, or results in,
the type of benefits described in Section 3(1) or 3(2) of ERISA, and which plan
is not subject to ERISA or the Code.

14

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

                    “Obligors” shall have the meaning assigned to such term in
the introductory paragraph of this Agreement.

                    “Other Taxes” means any and all present or future stamp or
documentary taxes or any other similar excise or property Taxes, arising from
any payment made hereunder or from the execution, delivery or enforcement of
this Agreement or any other Credit Document, including any interest, additions
to tax or penalties applicable thereto.

                    “Participant” has the meaning assigned to such term in
Section 10.04.

                    “Participant LC Exposure” means the LC Exposure with respect
to Non-Syndicated Letters of Credit and Participated Letters of Credit.

                    “Participant Register” has the meaning assigned to such term
in Section 10.04(c)(iii).

                    “Participated Letters of Credit” means letters of credit
issued under Section 2.05.

                    “PBGC” means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar
functions.

                    “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 (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which any
Account Party or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

15

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

                    “Pricing Grid” means the table set forth below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S&P/ Moody’s
Rating of
XLIT
Senior
Unsecured
Long-Term
Debt

 

CDS
Floor
(for
Eurodollar
Loans)

 

CDS
Floor
(for
ABR
Loans)

 

CDS Cap
(for
Eurodollar
Loans)

 

CDS
Cap
(for
ABR
Loans)

 

Commitment
Fee Rate

 

Letter of Credit
Commission

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Category 1
> A / A2

 

0.75%

 

0.00%

 

2.50%

 

1.50%

 

0.150%

 

1.125%

 

 

Category 2
A- / A3

 

0.875%

 

0.00%

 

2.75%

 

1.75%

 

0.175%

 

1.25%

 

 

Category 3
BBB+ / Baa1

 

1.00%

 

0.00%

 

3.00%

 

2.00%

 

0.200%

 

1.50%

 

 

Category 4
BBB / Baa2

 

1.25%

 

0.25%

 

3.50%

 

2.50%

 

0.250%

 

1.75%

 

 

Category 5
< BBB / Baa2
or unrated

 

1.50%

 

0.50%

 

4.00%

 

3.00%

 

0.300%

 

2.00%

 

          For the purposes of the this definition, if XLIT holds split ratings
that are one level apart then the higher of such ratings shall apply. If XLIT
holds split ratings that are more than one level apart then the rating one level
below the highest of such ratings shall apply.

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

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

                    “Pro Rata Share” has the meaning assigned to such term in
Section 3.07.

                    “Quarterly Date” means the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date hereof.

16

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

                    “Register” has the meaning assigned to such term in
Section 10.04.

                    “Reimbursement Obligation” means the obligation hereunder of
the Specified Account Party to reimburse (i) with respect to any Participated
Letter of Credit or Non-Syndicated Letter of Credit, the Issuing Lender thereof
and (ii) with respect to any Syndicated Letter of Credit or Alternative Currency
Letter of Credit, the Lenders thereof, in each case, for amounts drawn under
such Letter of Credit.

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

                    “Required Lenders” means, at any time, Lenders having
Commitments representing more than 50% of the aggregate amount of the
Commitments at such time; provided that, if the Commitments have expired or been
terminated, “Required Lenders” means Lenders having more than 50% of the
Aggregate Credit Exposure at such time.

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

                    “Revaluation Date” means each of the following: (i) each
date of issuance, renewal or amendment 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 the amount thereof (solely with respect
to the increased amount), (iii) each date of any payment by the Specified
Account Party under any Letter of Credit denominated in an Alternative Currency
and (iv) such additional dates as the Administrative Agent or the Issuing Lender
shall determine or the Required Lenders shall require; provided that not more
than four requests in the aggregate may be made in any calendar year pursuant to
this clause (iv).

                    “SAP” means, as to each Account Party and each Subsidiary
that offers insurance products, the statutory accounting practices prescribed or
permitted by the relevant Governmental Authority for such Account Party’s or
such Subsidiary’s domicile for the preparation of its financial statements and
other reports by insurance corporations of the same type as such Account Party
or such Subsidiary in effect on the date such statements or reports are to be
prepared, except if otherwise notified by XL Group as provided in Section 1.03.

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

                    “Secured Credit Agreement” means the 4-Year Credit Agreement
dated as of December 9, 2011 among the Account Parties, the lenders party
thereto, JPMCB, as administrative agent, and The Bank of New York Mellon, as
collateral agent, as amended, restated, supplemented or otherwise modified from
time to time, including any renewals, extensions or replacements thereof that
increase the principal amount thereof as of the Effective Date; provided,
however, that to the extent such principal amount exceeds $650,000,000 at any
time, such excess amount shall not be deemed to be incurred under the Secured
Credit Agreement for purposes of Section 7.07.

                    “SFR” means the Statutory Financial Return of XL Life Ltd.

17

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

                    “Significant Subsidiary” means, at any time, each Subsidiary
of XL Group that, as of such time, meets the definition of a “significant
subsidiary” under Regulation S-X of the SEC.

                    “Specified Account Party” means the Account Party on behalf
of which any specific Letter of Credit was issued to support the obligations of
such Account Party.

                    “Specified Transaction Agreement” means any agreement,
contract or documentation with respect to the following types of transactions:
cash pooling arrangements, rate swap transaction, swap option, basis swap, asset
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, current swap transaction, cross-currency rate swap transaction,
currency option, credit protection transaction, credit swap, credit default
swap, credit default option, total return swap, credit spread transaction,
repurchase transaction, reverse repurchase transaction, buy/sell-back
transaction, securities lending or borrowing transaction, weather index
transaction or forward purchase or sale of a security, commodity or other
financial instrument or interest, and transactions on any commodity futures or
other exchanges, markets and their associated clearing houses (including any
option with respect to any of these transactions).

                    “Spot Rate” for a currency means the rate determined by the
Administrative Agent or with respect to any Letters of Credit, the Issuing
Lender, to be its spot rate for the purchase 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 Issuing Lender may obtain such spot rate from another financial institution
designated by the Administrative Agent or the Issuing Lender if it does not have
as of the date of determination a spot buying rate for any such currency;
and provided further the Issuing Lender 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.

                    “SPV” has the meaning assigned to such term in
Section 10.04.

                    “Stable Value Instrument” means any insurance, derivative or
similar financial contract or instrument designed to mitigate the volatility of
returns during a given period on a specified portfolio of securities held by one
party (the “customer”) through the commitment of the other party (the “SVI
provider”) to provide the customer with a credited rate of return on the
portfolio, typically determined through an interest-crediting mechanism (and in
exchange for which the SVI provider typically receives a fee).

                    “Statutory Reserve Rate” means, for any day (or for the
Interest Period for any Eurodollar Borrowing), a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject on such day (or, with respect to an Interest Period, the denominator of
which is the number one minus the arithmetic mean of such aggregates for the
days in such Interest Period) with respect to the Adjusted LIBO Rate, for
eurocurrency funding (currently referred to as

18

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

“Eurocurrency liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

                    “Subsidiary” means, with respect to any Person (the
“parent”), at any date, any corporation (or similar entity) of which a majority
of the shares of outstanding capital stock normally entitled to vote for the
election of directors (regardless of any contingency which does or may suspend
or dilute the voting rights of such capital stock) is at such time owned
directly or indirectly by the parent or one or more subsidiaries of the parent.
Unless otherwise specified, “Subsidiary” means a Subsidiary of an Account Party.

                    “Supplemental Commitment Date” has the meaning assigned to
such term in Section 2.11(c).

                    “Supplemental Lender” has the meaning assigned to such term
in Section 2.11(c).

                    “Syndicated Letters of Credit” means letters of credit
issued under Section 2.01.

                    “Taxes” means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

                    “Total Funded Debt” means, at any time, all Indebtedness of
XL Group and its Subsidiaries and any other Person which would at such time be
classified in whole or in part as a liability on the consolidated balance sheet
of XL Group and its consolidated Subsidiaries in accordance with GAAP (it being
understood for avoidance of doubt that any liability or obligation excluded from
the definition of Indebtedness shall not constitute Indebtedness for purposes of
this definition).

                    “Transactions” means the execution, delivery and performance
by the Obligors of this Agreement and the other Credit Documents to which any
Account Party is intended to be a party, the issuance of Letters of Credit and
the borrowing of Loans.

                    “Type”, when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans
constituting such Borrowing, is determined by reference to the Adjusted LIBO
Rate or the Alternate Base Rate.

                    “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 Part I of Subtitle E of Title IV of ERISA.

                    “Withholding Agent” means any Obligor and the Administrative
Agent.

                    SECTION 1.02. Terms Generally. 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

19

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

“shall”. Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument, statute, law, rule, regulation or other
document herein shall be construed as referring to such agreement, instrument,
statute, law, rule, regulation 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), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) 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.

                    SECTION 1.03. Accounting Terms; GAAP, Local GAAP, SAP and
SFR. Except as otherwise expressly provided herein, all terms of an accounting
or financial nature shall be construed in accordance with GAAP, Local GAAP, SAP
or SFR, as the context requires, each as in effect from time to time; provided
that, if XL Group notifies the Administrative Agent that the Account Parties
request an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP, Local GAAP, SAP or SFR, as the
case may be, or in the application thereof on the operation of such provision
(or if the Administrative Agent notifies the Account Parties 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, Local GAAP, SAP or SFR, as the case may be, or in the application thereof,
then such provision shall be interpreted on the basis of GAAP, Local GAAP, SAP
or SFR, 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.

                    SECTION 1.04. Exchange Rates; Currency Equivalents

(a) The Administrative Agent or the Issuing Lender, as applicable, shall
determine the Spot Rates as of each Revaluation Date to be used for calculating
Dollar Equivalent amounts of Letters of Credit denominated in Alternative
Currencies. 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 Obligors 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
Credit Documents shall be such Dollar Equivalent amount as so determined by the
Administrative Agent or the Issuing Lender, as applicable.

(b) Wherever in this Agreement in connection with 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 Letter of Credit is
denominated in an Alternative Currency, such amount shall be the relevant
Alternative Currency Equivalent of such Dollar amount, as determined by the
Administrative Agent or the Issuing Lender, as the case may be.

20

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

ARTICLE II

THE CREDITS

                    SECTION 2.01. Syndicated Letters of Credit.

                    (a) General. Subject to the terms and conditions set forth
herein, at the request of any Account Party the Lenders agree at any time and
from time to time during the Availability Period to issue Syndicated Letters of
Credit for the account of such Account Party in an aggregate amount that will
not result in the Aggregate Credit Exposure exceeding the Commitments (it being
understood that Syndicated Letters of Credit may be issued, or be outstanding,
for the account of more than one of the Account Parties at any time). Each
Syndicated Letter of Credit shall be in such form as is consistent with the
requirements of the applicable regulatory authorities as reasonably required by
the Administrative Agent (in consultation with XL Group) or as otherwise agreed
to by the Administrative Agent and XL Group; provided that, without the prior
consent of each Lender, no Syndicated Letter of Credit may be issued that would
vary the several and not joint nature of the obligations of the Lenders
thereunder as provided in the next succeeding sentence. Each Syndicated Letter
of Credit shall be issued by all of the Lenders, acting through the
Administrative Agent, at the time of issuance as a single multi-bank letter of
credit, but the obligation of each Lender thereunder shall be several and not
joint, based upon its Applicable Percentage of the aggregate undrawn amount of
such Syndicated Letter of Credit.

                    (b) Notice of Issuance, Amendment, Renewal or Extension. To
request the issuance of a Syndicated Letter of Credit (or the amendment, renewal
or extension of an outstanding Syndicated Letter of Credit), an Account Party
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Administrative Agent) to the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a
Syndicated Letter of Credit, or identifying the Syndicated Letter of Credit to
be amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension, as the case may be (which shall be a Business Day), the
date on which such Syndicated Letter of Credit is to expire (which shall comply
with paragraph (d) of this Section), the amount of such Syndicated Letter of
Credit, the name and address of the beneficiary thereof and the terms and
conditions of (and such other information as shall be necessary to prepare,
amend, renew or extend, as the case may be) such Syndicated Letter of Credit. If
any Syndicated Letter of Credit shall provide for the automatic extension of the
expiry date thereof unless the Administrative Agent gives notice that such
expiry date shall not be extended, then the Administrative Agent will give such
notice if requested to do so by the Required Lenders in a notice given to the
Administrative Agent not more than 60 days, but not less than 45 days, prior to
the current expiry date of such Syndicated Letter of Credit. If requested by the
Administrative Agent, such Account Party also shall submit a letter of credit
application on JPMCB’s standard form in connection with any request for a
Syndicated Letter of Credit. In the event of any inconsistency between the terms
and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by such Account Party
to, or entered into by such Account Party with, the Administrative Agent
relating to a Syndicated Letter of Credit, the terms and conditions of

21

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

this Agreement shall control.

                    (c) Limitations on Amounts. A Syndicated Letter of Credit
shall be issued, amended, renewed or extended only if (and upon such issuance,
amendment, renewal or extension of each Syndicated Letter of Credit XL Group
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension, (i) the Aggregate Credit Exposure of
the Lenders shall not exceed the aggregate amount of the Commitments and
(ii) the Credit Exposure (excluding any Alternative Currency LC Exposure) of
each Lender shall not exceed the Commitment of such Lender.

                    (d) Expiry Date. Each Syndicated Letter of Credit shall
expire at or prior to the close of business on the date one year after the date
of the issuance of such Syndicated Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension);
provided that in no event shall any Syndicated Letter of Credit have an expiry
date later than the first anniversary of the Commitment Termination Date.

                    (e) Obligation of Lenders. The obligation of any Lender
under any Syndicated Letter of Credit shall be several and not joint and shall
at any time be in an amount equal to such Lender’s Applicable Percentage of the
aggregate undrawn amount of such Syndicated Letter of Credit, and each
Syndicated Letter of Credit shall expressly so provide.

                    (f) Adjustment of Applicable Percentages. Upon (i) each
increase of the Commitments pursuant to Section 2.11(c) or (ii) the assignment
by a Lender of all or a portion of its Commitment and its interests in the
Syndicated Letters of Credit pursuant to an Assignment and Assumption, the
Administrative Agent shall promptly notify each beneficiary under an outstanding
Syndicated Letter of Credit of the Lenders that are parties to such Syndicated
Letter of Credit and their respective Applicable Percentages as of the effective
date of, and after giving effect to, such increase or assignment, as the case
may be.

                    (g) Continuation of Existing Syndicated Letters of Credit.
Subject to the terms and conditions hereof, each Syndicated Letter of Credit
under (and as defined in) the Existing Unsecured Credit Agreement which is
outstanding on the Effective Date and listed on Schedule VI as a “Syndicated
Letter of Credit” shall automatically be deemed continued hereunder by all of
the Lenders having Commitments on the Effective Date. The obligation of each
such Lender in respect of each such continued Syndicated Letter of Credit shall
be several and not joint, based upon its Applicable Percentage and the aggregate
undrawn amount thereof, and each such Syndicated Letter of Credit shall be
deemed a Syndicated Letter of Credit for all purposes of this Agreement as of
the Effective Date. The Administrative Agent shall, on the Effective Date or as
promptly as practicable thereafter, notify the beneficiary of each such
Syndicated Letter of Credit that is being continued hereunder as to the names of
the Lenders that, as of the Effective Date, will be issuing lenders under, and
party to, such Syndicated Letter of Credit and the Lenders’ respective
Applicable Percentages thereunder as of the Effective Date.

                    SECTION 2.02. Issuance and Administration. Each Syndicated
Letter of Credit shall be executed and delivered by the Administrative Agent in
the name and on behalf of, and as attorney-in-fact for, each Lender party to
such Syndicated Letter of Credit, and the

22

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

Administrative Agent shall act under each Syndicated Letter of Credit, and each
Syndicated Letter of Credit shall expressly provide that the Administrative
Agent shall act, as the agent of each Lender to (a) receive drafts, other
demands for payment and other documents presented by the beneficiary under such
Syndicated Letter of Credit, (b) determine whether such drafts, demands and
documents are in compliance with the terms and conditions of such Syndicated
Letter of Credit and (c) notify such Lender and the Account Parties that a valid
drawing has been made and the date that the related LC Disbursement is to be
made; provided that the Administrative Agent shall have no obligation or
liability for any LC Disbursement under such Syndicated Letter of Credit, and
each Syndicated Letter of Credit shall expressly so provide. Each Lender hereby
irrevocably appoints and designates the Administrative Agent as its
attorney-in-fact, acting through any duly authorized officer of JPMCB, to
execute and deliver in the name and on behalf of such Lender each Syndicated
Letter of Credit to be issued by such Lender hereunder. Promptly upon the
request of the Administrative Agent, each Lender will furnish to the
Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Syndicated Letter of Credit may reasonably request in order
to demonstrate that the Administrative Agent has the power to act as
attorney-in-fact for such Lender to execute and deliver such Syndicated Letter
of Credit. Notwithstanding anything in this Agreement to the contrary, the
Administrative Agent has no responsibility hereunder with respect to the
issuance, renewal, extension, amendment or other administration of any
Alternative Currency Letter of Credit, except as expressly set forth in Section
2.06.

                    SECTION 2.03. Reimbursement of LC Disbursements, Etc.

                    (a) Reimbursement. If any Lender shall make any LC
Disbursement in respect of any Syndicated Letter of Credit or Alternative
Currency Letter of Credit, the Specified Account Party with respect thereto
agrees to reimburse such Lender in respect of such LC Disbursement under (x) a
Syndicated Letter of Credit by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than 2:00 p.m., New York City time, on
(i) the Business Day that the Account Parties receive notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Account
Parties receive such notice, if such notice is not received prior to such time
and (y) an Alternative Currency Letter of Credit, by paying such Lender on the
date, in the currency and amount thereof, together with interest thereon (if
any), and in the manner (including the place of payment) as such Lender and such
Specified Account Party shall have separately agreed pursuant to Section 2.06.
It is understood that the Account Parties may elect to use the proceeds of a
borrowing pursuant to Section 2.08 to finance its Reimbursement Obligations
pursuant to this Section 2.03(a).

                    (b) Obligations Absolute. The several obligations of the
Specified Account Party with respect to any Letter of Credit to reimburse LC
Disbursements in respect thereof as provided in paragraph (a) of this Section
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Syndicated Letter of Credit or any term or provision
therein, (ii) any draft or other document presented under a Syndicated Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment under
a Syndicated Letter of Credit against presentation of a draft or other document
that does not

23

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

comply strictly with the terms of such Syndicated Letter of Credit (provided
that such Specified Account Party shall not be obligated to reimburse such LC
Disbursements unless payment is made against presentation of a draft or other
document that at least substantially complies with the terms of such Syndicated
Letter of Credit), (iv) the occurrence of any Default or (v) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of the obligations of such Specified Account Party hereunder.

                    Neither the Administrative Agent, nor any Lender nor any of
their respective Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Syndicated
Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Syndicated Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond their control; provided that the foregoing shall not
be construed to excuse the Administrative Agent or a Lender from liability to
the Account Parties to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Account Parties to the extent permitted by applicable law) suffered by the
Account Parties that are caused by the gross negligence or willful misconduct of
the Administrative Agent or a Lender. The parties hereto expressly agree that:

 

 

 

 

          (i) the Administrative Agent may accept documents that appear on their
face to be in substantial compliance with the terms of a Syndicated Letter of
Credit without responsibility for further investigation, regardless of any
notice or information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with the
terms of such Syndicated Letter of Credit;

 

 

 

 

          (ii) the Administrative Agent shall have the right, in its sole
discretion, to decline to accept such documents and to make such payment if such
documents are not in strict compliance with the terms of such Syndicated Letter
of Credit; and

 

 

 

 

          (iii) this sentence shall establish the standard of care to be
exercised by the Administrative Agent when determining whether drafts and other
documents presented under a Syndicated Letter of Credit comply with the terms
thereof (and the parties hereto hereby waive, to the extent permitted by
applicable law, any standard of care inconsistent with the foregoing).

                    (c) Disbursement Procedures. The Administrative Agent shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under any Syndicated Letter of
Credit. The Administrative Agent shall promptly after such examination
(i) notify each of the Lenders and the Specified Account Party with respect to
such Letter of Credit by telephone (confirmed by telecopy or email) of such
demand for payment and (ii) deliver to each Lender a copy of each document
purporting to represent a demand for payment under such Syndicated Letter of
Credit. With respect to any drawing properly made under a Syndicated Letter of
Credit, each Lender will make an LC

24

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

Disbursement in respect of such Syndicated Letter of Credit in accordance with
its liability under such Syndicated Letter of Credit and this Agreement, such LC
Disbursement to be made to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders. The Administrative
Agent will make any such LC Disbursement available to the beneficiary of such
Syndicated Letter of Credit by promptly crediting the amounts so received, in
like funds, to the account identified by such beneficiary in connection with
such demand for payment. Promptly following any LC Disbursement by any Lender in
respect of any Syndicated Letter of Credit, the Administrative Agent will notify
the Account Parties of such LC Disbursement; provided that any failure to give
or delay in giving such notice shall not relieve such Specified Account Party of
its obligation to reimburse the Lenders with respect to any such LC
Disbursement.

                    (d) Interim Interest. If any LC Disbursement with respect to
a Syndicated Letter of Credit is made, then, unless such LC Disbursement is
reimbursed in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, subject to Section 2.15(c), for each day from and
including the date such LC Disbursement is made to but excluding the date that
such LC Disbursement is reimbursed, at the rate per annum equal to 1% plus the
Alternate Base Rate.

                    SECTION 2.04. Non-Syndicated Letters of Credit.

                    (a) General. Subject to the terms and conditions set forth
herein, at the request of any Account Party the Lenders agree at any time and
from time to time during the Availability Period to issue Non-Syndicated Letters
of Credit for the account of such Account Party in an aggregate amount that will
not result in the Aggregate Credit Exposure exceeding the Commitments (it being
understood that Non-Syndicated Letters of Credit may be issued, or be
outstanding, for the account of more than one of the Account Parties at any
time). Each Non-Syndicated Letter of Credit shall be in such form as is
consistent with the requirements of the applicable regulatory authorities in the
jurisdiction of issue as reasonably determined by the Administrative Agent or as
otherwise agreed to by the Administrative Agent and XL Group. Each
Non-Syndicated Letter of Credit shall be issued by the respective Issuing Lender
thereof, through the Administrative Agent as provided in Section 2.04(c), in the
amount of such Issuing Lender’s Applicable Percentage of the aggregate amount of
Non-Syndicated Letters of Credit being requested by such Account Party at such
time, and (notwithstanding anything herein or in any other Letter of Credit
Document to the contrary) such Non-Syndicated Letter of Credit shall be the sole
responsibility of such Issuing Lender (and of no other Person, including any
other Lender or the Administrative Agent). Notwithstanding anything to the
contrary in this Agreement, no Non-Syndicated Letter of Credit may be requested
hereunder for any jurisdiction unless XL Group provides evidence reasonably
satisfactory to the Administrative Agent that Syndicated Letters of Credit do
not comply with the insurance laws of such jurisdiction.

                    (b) Notice of Issuance, Amendment, Renewal or Extension. To
request the issuance of Non-Syndicated Letters of Credit (or the amendment,
renewal or extension of outstanding Non-Syndicated Letters of Credit), an
Account Party shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the
Administrative Agent) to the Administrative Agent (reasonably in advance of the
requested

25

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

date of issuance, amendment, renewal or extension) a notice requesting the
issuance of Non-Syndicated Letters of Credit, or identifying the Non-Syndicated
Letters of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension, as the case may be (which shall be a
Business Day), the date on which such Non-Syndicated Letters of Credit are to
expire (which shall comply with paragraph (e) of this Section), the aggregate
amount of all Non-Syndicated Letters of Credit to be issued in connection with
such request, the name and address of the beneficiary thereof and the terms and
conditions of (and such other information as shall be necessary to prepare,
amend, renew or extend, as the case may be) such Non-Syndicated Letters of
Credit. If Non-Syndicated Letters of Credit issued in connection with the same
request shall provide for the automatic extension of the expiry date thereof
unless the Issuing Lender thereof or the Administrative Agent gives notice that
such expiry date shall not be extended, then the Administrative Agent (acting on
behalf of the relevant Issuing Lenders) will give such notice for all such
Non-Syndicated Letters of Credit if requested to do so by the Required Lenders
in a notice given to the Administrative Agent not more than 60 days, but not
less than 45 days, prior to the current expiry date of such Non-Syndicated
Letter of Credit. If requested by the Administrative Agent, such Account Party
also shall submit a letter of credit application on JPMCB’s standard form in
connection with any request for a Non-Syndicated Letter of Credit. In the event
of any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by such Account Party to, or entered into by such Account
Party with, the Administrative Agent (acting on behalf of the relevant Issuing
Lenders) relating to a Non-Syndicated Letter of Credit, the terms and conditions
of this Agreement shall control.

                    (c) Issuance and Administration. Each Non-Syndicated Letter
of Credit shall be executed and delivered by the Administrative Agent (which
term, for purposes of this Section 2.04 and any other provisions of this
Agreement, including Article IX and Section 10.03, relating to Non-Syndicated
Letters of Credit, shall be deemed to refer to, unless the context otherwise
requires, JPMCB acting in its capacity as the Administrative Agent or in its
individual capacity, in either case as attorney-in-fact for the respective
Issuing Lender), acting through any duly authorized officer of JPMCB, in the
name and on behalf of, and as attorney-in-fact for, the Issuing Lender party to
such Non-Syndicated Letter of Credit. With respect to each Non-Syndicated Letter
of Credit, the Administrative Agent shall act in the name and on behalf of, and
as attorney-in-fact for, the Lender issuing such Non-Syndicated Letter of Credit
and in that capacity shall, and each Lender hereby irrevocably appoints and
designates the Administrative Agent, acting through any duly authorized officer
of JPMCB, to so act in the name and on behalf of, and as attorney-in-fact for,
each Lender with respect to each Non-Syndicated Letter of Credit to be issued by
such Lender hereunder and, without limiting any other provision of this
Agreement, to, (i) execute and deliver in the name and on behalf of such Lender
each Non-Syndicated Letter of Credit to be issued by such Lender hereunder, (ii)
receive drafts, other demands for payment and/or other documents presented by
the beneficiary thereunder, (iii) determine whether such drafts, demands and/or
documents are in compliance with the terms and conditions thereof, (iv) notify
the beneficiary of any such Non-Syndicated Letter of Credit of the expiration or
non-renewal thereof in accordance with the terms thereof, (v) advise such
beneficiary of any change in the office for presentation of drafts under any
such Non-Syndicated Letter of Credit, (vi) enter into with the Specified Account
Party any such letter of credit application or similar agreement with respect to
any such Non-Syndicated Letter of Credit as the Administrative Agent shall
require, (vii) remit to the beneficiary of any such Non-Syndicated

26

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

Letter of Credit any payment made by such Lender and received by the
Administrative Agent in connection with a drawing thereunder, (viii) perform any
and all other acts which in the sole opinion of the Administrative Agent may be
necessary or incidental to the performance of the powers herein granted with
respect to such Non-Syndicated Letter of Credit, (ix) notify such Lender and the
Specified Account Party that a valid drawing has been made and the date that the
related LC Disbursement is to be made; provided that the Administrative Agent
shall have no obligation or liability for any LC Disbursement under such
Non-Syndicated Letter of Credit and (x) delegate to any agent of JPMCB and such
agent’s Related Parties, or any of them, the performance of any of such powers.
Each Lender hereby ratifies and confirms (and undertakes to ratify and confirm
from time to time upon the request of the Administrative Agent) whatsoever the
Administrative Agent (or any Related Party thereof) shall do or purport to do by
virtue of the power herein granted. Promptly upon the request of the
Administrative Agent, each Lender will furnish to the Administrative Agent such
powers of attorney or other evidence as any beneficiary of any Non-Syndicated
Letter of Credit may reasonably request in order to demonstrate that the
Administrative Agent has the power to act as attorney-in-fact for such Lender
with respect to such Non-Syndicated Letter of Credit (together with such
evidence of the due authorization, execution, delivery and validity of such
power of attorney as the Administrative Agent may reasonably request). Without
limiting any provision of Article IX, the Administrative Agent may perform any
and all of its duties and exercise any and all of its rights and powers under
this Section through its Related Parties.

                    (d) Limitations on Amounts. Non-Syndicated Letters of Credit
shall be issued, amended, renewed or extended only if (and upon such issuance,
amendment, renewal or extension of each Non-Syndicated Letter of Credit XL Group
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension, (i) the Aggregate Credit Exposure of
the Lenders shall not exceed the aggregate amount of the Commitments and
(ii) the Credit Exposure (excluding any Alternative Currency LC Exposure) of
each Lender shall not exceed the Commitment of such Lender.

                    (e) Expiry Date. Each Non-Syndicated Letter of Credit shall
expire at or prior to the close of business on the date one year after the date
of the issuance of such Non-Syndicated Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension);
provided that in no event shall any Non-Syndicated Letter of Credit have an
expiry date later than the first anniversary of the Commitment Termination Date.

                    (f) Participations. By the issuance of a Non-Syndicated
Letter of Credit (or an amendment to a Non-Syndicated Letter of Credit
increasing the amount thereof) by the respective Issuing Lender, and without any
further action on the part of such Issuing Lender or the Lenders, such Issuing
Lender hereby grants to each Lender (other than the Issuing Lender itself), and
each such Lender hereby acquires from such Issuing Lender, a participation in
such Non-Syndicated Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such
Non-Syndicated Letter of Credit. The obligation of each Lender under a
Non-Syndicated Letter of Credit shall be several and not joint. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Non-Syndicated Letter of Credit is absolute and
unconditional and shall not be

27

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

affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Non-Syndicated Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for account of
the respective Issuing Lender, such Lender’s Applicable Percentage of each LC
Disbursement made by an Issuing Lender in respect of any Non-Syndicated Letter
of Credit promptly upon the request of the Administrative Agent at any time from
the time such LC Disbursement is made until such LC Disbursement is reimbursed
by the Specified Account Party or at any time after any reimbursement payment is
required to be refunded to the Specified Account Party for any reason. Such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Promptly following receipt by the Administrative Agent of any
payment from the Specified Account Party pursuant to the next following
paragraph, the Administrative Agent shall distribute such payment to the
respective Issuing Lender or, to the extent that the Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Lender, then to such
Lenders and such Issuing Lender as their interests may appear. Any payment made
by a Lender pursuant to this paragraph to reimburse an Issuing Lender for any
LC Disbursement shall not relieve the Specified Account Party of its obligation
to reimburse such LC Disbursement.

                    (g) Reimbursement. If any Issuing Lender shall make any LC
Disbursement in respect of any Non-Syndicated Letter of Credit, the Specified
Account Party with respect thereto agrees to reimburse such Issuing Lender in
respect of such LC Disbursement by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than 2:00 p.m., New York City time, on
(i) the Business Day that the Account Parties receive notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Account
Parties receive such notice, if such notice is not received prior to such time.
It is understood that the Account Parties may elect to use the proceeds of a
borrowing pursuant to Section 2.08 to finance its Reimbursement Obligations
pursuant to this Section 2.04(g).

                    If the Specified Account Party fails to make such payment
when due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Specified Account Party in respect
thereof and such Lender’s Applicable Percentage thereof.

                    (h) Obligations Absolute. The several obligations of the
Specified Account Party with respect to any Letter of Credit to reimburse LC
Disbursements in respect of any Non-Syndicated Letter of Credit as provided in
paragraph (g) of this Section shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of (i) any lack of
validity or enforceability of any Non-Syndicated Letter of Credit, or any term
or provision therein, (ii) any draft or other document presented under a
Non-Syndicated Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect,
(iii) payment by the Issuing Lender under a Non-Syndicated Letter of Credit
against presentation of a draft or other document that does not comply strictly
with the terms of such Non-Syndicated Letter of Credit (provided that such
Specified Account Party shall not be obligated to reimburse such LC
Disbursements unless payment is made against

28

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

presentation of a draft or other document that at least substantially complies
with the terms of such Non-Syndicated Letter of Credit), (iv) the occurrence of
any Default or (v) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of the obligations of such
Specified Account Party hereunder.

                    Neither the Administrative Agent, the Lenders nor any
Issuing Lender, nor any of their respective Related Parties, shall have any
liability or responsibility by reason of or in connection with the payment or
failure to make any payment under a Non-Syndicated Letter of Credit
(irrespective of any of the circumstances referred to in the preceding sentence)
as a result of determining whether drafts or other documents presented under a
Non-Syndicated Letter of Credit comply with the terms thereof, or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Non-Syndicated Letter of
Credit (including any document required to make a drawing thereunder), any error
in interpretation of technical terms or any consequence arising from causes
beyond the control of an Issuing Lender; provided that the foregoing shall not
be construed to excuse the Administrative Agent or a Lender from liability to
the Account Parties to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Account Parties to the extent permitted by applicable law) suffered by the
Account Parties that are caused by the gross negligence or willful misconduct of
the Administrative Agent or a Lender when determining whether drafts and other
documents presented under a Non Syndicated Letter of Credit comply with the
terms hereof. The parties hereto expressly agree that:

 

 

 

 

          (i) the Administrative Agent may accept documents that appear on their
face to be in substantial compliance with the terms of a Non-Syndicated Letter
of Credit without responsibility for further investigation, regardless of any
notice or information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with the
terms of such Non-Syndicated Letter of Credit;

 

 

          (ii) the Administrative Agent shall have the right, in its sole
discretion, to decline to accept such documents and to make such payment if such
documents are not in strict compliance with the terms of such Non-Syndicated
Letter of Credit; and

 

 

          (iii) this sentence shall establish the standard of care to be
exercised by the Administrative Agent when determining whether drafts and other
documents presented under a Non-Syndicated Letter of Credit comply with the
terms thereof (and the parties hereto hereby waive, to the extent permitted by
applicable law, any standard of care inconsistent with the foregoing).

                    (i) Disbursement Procedures. The Administrative Agent shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under any Non-Syndicated Letter of
Credit. The Administrative Agent shall promptly after such examination
(i) notify each of the Lenders and the Specified Account Party with respect to
such Letter of Credit by telephone (confirmed by telecopy or email) of such
demand for payment and (ii) deliver to each Lender (including the Issuing
Lender) a copy of

29

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

each document purporting to represent a demand for payment under such
Non-Syndicated Letter of Credit. With respect to any drawing properly made under
a Non-Syndicated Letter of Credit, the Issuing Lender thereof will make an LC
Disbursement in respect of such Non-Syndicated Letter of Credit in accordance
with its liability under such Non-Syndicated Letter of Credit and this
Agreement, such LC Disbursement to be made to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make any such LC Disbursement available to the
beneficiary of such Non-Syndicated Letter of Credit by promptly crediting the
amounts so received, in like funds, to the account identified by such
beneficiary in connection with such demand for payment. Promptly following any
LC Disbursement by any Issuing Lender in respect of any Non-Syndicated Letter of
Credit, the Administrative Agent will notify the Account Parties of such LC
Disbursement; provided that any failure to give or delay in giving such notice
shall not relieve the Specified Account Party of its obligation to reimburse
such Issuing Lender with respect to any such LC Disbursement.

                    (j) Interim Interest. If any LC Disbursement with respect to
a Non-Syndicated Letter of Credit is made, then, unless such LC Disbursement is
reimbursed in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, subject to Section 2.15(c), for each day from and
including the date such LC Disbursement is made to but excluding the date that
such LC Disbursement is reimbursed, at the rate per annum equal to 1% plus the
Alternate Base Rate.

                     (k) Adjustments to Non-Syndicated Letters of Credit. Upon
each increase of the Commitments pursuant to Section 2.11(c), (i) each
Non-Syndicated Letter of Credit then outstanding hereunder shall, as of the
effective date of such increase, be amended by the respective Issuing Lenders
thereof (through the Administrative Agent) to reflect the Lenders having
Commitments after giving effect to such increase and having, with respect to
each such Non-Syndicated Letter of Credit issued by an existing Lender, a face
amount based upon such Lender’s Applicable Percentage of such Commitments and/or
(ii) as applicable, new Non-Syndicated Letters of Credit shall be issued
hereunder as of such effective date by each Supplemental Lender which has
undertaken a new or incremental Commitment in connection with such increase in a
face amount based upon such Supplemental Lender’s Applicable Percentage of such
Commitments. Upon the assignment by a Lender of all or a portion of its
Commitment and its interests in the Non-Syndicated Letters of Credit pursuant to
an Assignment and Assumption, (i) XL Group shall, at the reasonable request of
the Administrative Agent, execute such documents as may be necessary in
connection with amendments to each Non-Syndicated Letter of Credit issued by
such assigning Lender then outstanding hereunder (or to replace each such
Non-Syndicated Letter of Credit with a new Non-Syndicated Letter of Credit of
such assigning Lender) to reflect such assigning Lender’s Commitment and with a
face amount based upon such Lender’s Applicable Percentage after giving effect
to such assignment and/or (ii) as applicable, a new Non-Syndicated Letter of
Credit shall be issued hereunder as of the effective date of such assignment by
the assignee Lender which has undertaken a new or incremental Commitment in
connection with such assignment in a face amount based upon such assignee
Lender’s Applicable Percentage of the Commitments after giving effect to such
assignment.

30

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

                    (l) Continuation of Existing Non-Syndicated Letters of
Credit. Subject to the terms and conditions hereof, each Non-Syndicated Letter
of Credit under (and as defined in) the Existing Unsecured Credit Agreement
which is outstanding on the Effective Date and listed on Schedule VI as a
“Non-Syndicated Letter of Credit” shall, effective as of the Effective Date, be
deemed continued hereunder and shall be amended by the respective Issuing Lender
(through the Administrative Agent) to reflect (i) the Lenders having Commitments
as of the Effective Date and (ii) with respect to each such Non-Syndicated
Letter of Credit issued by a Lender that is party to the Existing Unsecured
Credit Agreement, a face amount based upon the respective Lender’s Applicable
Percentage as in effect on the Effective Date, and each such Non-Syndicated
Letter of Credit, as so amended, shall be deemed continued hereunder as a
Non-Syndicated Letter of Credit issued by such Lender for all purposes of this
Agreement as of the Effective Date.

                    SECTION 2.05. Participated Letters of Credit.

                    (a) General. Subject to the terms and conditions set forth
herein, any Account Party may request the Issuing Lender to issue, at any time
and from time to time during the Availability Period, Participated Letters of
Credit for its own account. Each Participated Letter of Credit shall be in such
form as is consistent with the requirements of the applicable regulatory
authorities reasonably required by the Administrative Agent (in consultation
with XL Group) or as otherwise agreed to by the Administrative Agent and XL
Group. Participated Letters of Credit issued hereunder shall constitute
utilization of the Commitments.

                    (b) Notice of Issuance, Amendment, Renewal or Extension. To
request the issuance of a Participated Letter of Credit (or the amendment,
renewal or extension of an outstanding Participated Letter of Credit), an
Account Party shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Participated Letter of Credit, or
identifying the Participated Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Participated Letter of
Credit is to expire (which shall comply with paragraph (d) of this Section), the
amount of such Participated Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Participated Letter of Credit. If Participated
Letters of Credit issued in connection with the same request shall provide for
the automatic extension of the expiry date thereof unless the Issuing Lender
thereof or the Administrative Agent gives notice that such expiry date shall not
be extended, then the Administrative Agent (acting on behalf of the relevant
Issuing Lender) will give such notice for all such Participated Letters of
Credit if requested to do so by the Issuing Lender in a notice given to the
Administrative Agent not more than 60 days, but not less than 45 days, prior to
the current expiry date of such Participated Letter of Credit. If requested by
the Issuing Lender, such Account Party also shall submit a letter of credit
application on the Issuing Lender’s standard form in connection with any request
for a Participated Letter of Credit. In the event of any inconsistency between
the terms and conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted by the Account
Party to,

31

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

or entered into by such Account Party with, the Issuing Lender relating to a
Participated Letter of Credit, the terms and conditions of this Agreement shall
control.

                    (c) Limitations on Amounts. A Participated Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Participated Letter of Credit XL Group
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the Aggregate Credit Exposure of
the Lenders shall not exceed the aggregate amount of the Commitments and (ii)
the Credit Exposure (excluding any Alternative Currency LC Exposure) of the
Issuing Lender (determined for these purposes without giving effect to the
participations therein of the Lenders pursuant to paragraph (e) of this Section)
shall not exceed the Commitment of such Issuing Lender.

                    (d) Expiry Date. Each Participated Letter of Credit shall
expire at or prior to the close of business on the date one year after the date
of the issuance of such Participated Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension);
provided that in no event shall any Participated Letter of Credit have an expiry
date later than the first anniversary of the Commitment Termination Date.

                    (e) Participations. By the issuance of a Participated Letter
of Credit (or an amendment to a Participated Letter of Credit increasing the
amount thereof) by the Issuing Lender, and without any further action on the
part of the Issuing Lender or the Lenders, the Issuing Lender hereby grants to
each Lender, and each Lender hereby acquires from the Issuing Lender, a
participation in such Participated Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Participated Letter of Credit. The obligation of each Lender under a
Participated Letter of Credit shall be several and not joint. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Participated Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Participated Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for account of the Issuing Lender, such Lender’s
Applicable Percentage of each LC Disbursement made by the Issuing Lender in
respect of any Participated Letter of Credit promptly upon the request of the
Issuing Lender at any time from the time such LC Disbursement is made until such
LC Disbursement is reimbursed by the Specified Account Party or at any time
after any reimbursement payment is required to be refunded to the Specified
Account Party for any reason. Such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Promptly following receipt by
the Administrative Agent of any payment from the Specified Account Party
pursuant to the next following paragraph, the Administrative Agent shall
distribute such payment to the Issuing Lender or, to the extent that the Lenders
have made payments pursuant to this paragraph to reimburse the Issuing Lender,
then to such Lenders and the Issuing Lender as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to reimburse the Issuing
Lender for any LC Disbursement shall not relieve the Specified Account Party of
its obligation to reimburse such LC Disbursement.

32

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

                    (f) Reimbursement. If any Lender shall make any LC
Disbursement in respect of any Participated Letter of Credit, the Specified
Account Party with respect thereto agrees to reimburse such Lender in respect of
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 2:00 p.m., New York City time, on (i) the
Business Day that the Account Parties receive notice of such LC Disbursement, if
such notice is received prior to 10:00 a.m., New York City time, or (ii) the
Business Day immediately following the day that the Account Parties receive such
notice, if such notice is not received prior to such time. It is understood that
the Account Parties may elect to use the proceeds of a borrowing pursuant to
Section 2.08 to finance its Reimbursement Obligations pursuant to this Section
2.05(f).

                    If the Specified Account Party fails to make such payment
when due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Specified Account Party in respect
thereof and such Lender’s Applicable Percentage thereof.

                    (g) Obligations Absolute. The several obligations of the
Specified Account Party with respect to any Letter of Credit to reimburse LC
Disbursements in respect of any Participated Letter of Credit as provided in
paragraph (f) of this Section shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of (i) any lack of
validity or enforceability of any Participated Letter of Credit, or any term or
provision therein, (ii) any draft or other document presented under a
Participated Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect,
(iii) payment by the Issuing Lender under a Participated Letter of Credit
against presentation of a draft or other document that does not comply strictly
with the terms of such Participated Letter of Credit (provided that such
Specified Account Party shall not be obligated to reimburse such LC
Disbursements unless payment is made against presentation of a draft or other
document that at least substantially complies with the terms of such
Participated Letter of Credit), (iv) the occurrence of any Default or (v) any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the obligations of such Specified Account Party
hereunder.

                    Neither the Administrative Agent, the Lenders nor the
Issuing Lender, nor any of their respective Related Parties, shall have any
liability or responsibility by reason of or in connection with the payment or
failure to make any payment under a Participated Letter of Credit (irrespective
of any of the circumstances referred to in the preceding sentence) as a result
of determining whether drafts or other documents presented under a Participated
Letter of Credit comply with the terms thereof, or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Participated Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Lender; provided that the foregoing shall not be
construed to excuse the Issuing Lender from liability to the Account Parties to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Account Parties to the extent
permitted by applicable law) suffered by the Account Parties that are caused by
the Issuing Lender’s gross negligence or willful misconduct when determining
whether drafts and

33

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

other documents presented under a Participated Letter of Credit comply with the
terms hereof. The parties hereto expressly agree that:

 

 

 

          (i) the Issuing Lender may accept documents that appear on their face
to be in substantial compliance with the terms of a Participated Letter of
Credit without responsibility for further investigation, regardless of any
notice or information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with the
terms of such Participated Letter of Credit;

 

 

 

          (ii) the Issuing Lender shall have the right, in its sole discretion,
to decline to accept such documents and to make such payment if such documents
are not in strict compliance with the terms of such Participated Letter of
Credit; and

 

 

 

          (iii) this sentence shall establish the standard of care to be
exercised by the Issuing Lender when determining whether drafts and other
documents presented under a Participated Letter of Credit comply with the terms
thereof (and the parties hereto hereby waive, to the extent permitted by
applicable law, any standard of care inconsistent with the foregoing).

                    (h) Disbursement Procedures. The Issuing Lender shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Participated Letter of
Credit. The Issuing Lender shall promptly after such examination notify the
Administrative Agent and the Specified Account Party with respect to such Letter
of Credit by telephone (confirmed by telecopy or email) of such demand for
payment and whether the Issuing Lender has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Specified Account Party of its obligation to reimburse the
Issuing Lender and the Lenders with respect to any such LC Disbursement.

                    (i) Interim Interest. If any LC Disbursement is made with
respect to a Participated Letter of Credit, then, unless such LC Disbursement is
reimbursed in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, subject to Section 2.15(c), for each day from and
including the date such LC Disbursement is made to but excluding the date that
such LC Disbursement is reimbursed, at the rate per annum equal to 1% plus the
Alternate Base Rate. Interest accrued pursuant to this paragraph shall be for
account of the Issuing Lender, except that interest accrued on and after the
date of payment by any Lender pursuant to paragraph (f) of this Section to
reimburse the Issuing Lender shall be for account of such Lender to the extent
of such payment.

                    (j) Replacement of the Issuing Lender. The Issuing Lender
may be replaced at any time by written agreement between XL Group, the
Administrative Agent, the replaced Issuing Lender and the successor Issuing
Lender. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall become
effective, XL Group shall pay all unpaid fees accrued for account of the
replaced Issuing Lender pursuant to Section 2.14(c). From and after the
effective date of any such replacement, (i) the successor Issuing Lender shall
have all the rights and obligations of the replaced Issuing Lender under this
Agreement with respect to Participated Letters of Credit to be issued thereafter

34

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

and (ii) references herein to the term “Issuing Lender” shall be deemed to refer
to such successor or to any previous Issuing Lender, or to such successor and
all previous Issuing Lenders, as the context shall require. After the
replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Lender under this Agreement with respect to Participated Letters
of Credit issued by it prior to such replacement, but shall not be required to
issue additional Participated Letters of Credit.

                    (k) Adjustment of Applicable Percentages. Notwithstanding
anything herein to the contrary, upon (i) each increase of the Commitments
pursuant to Section 2.11(c), each Lender’s participation in each Participated
Letter of Credit then outstanding shall automatically be adjusted to reflect its
Applicable Percentage after giving effect to such increase and (ii) the
assignment by a Lender of all or a portion of its Commitment and its interests
in the Participated Letters of Credit pursuant to an Assignment and Assumption,
the respective assigning Lender’s participation in each Participated Letter of
Credit then outstanding shall automatically be adjusted to reflect, and the
respective assignee Lender shall be deemed to acquire a participation in each
such Participated Letter of Credit in an amount equal to, its Applicable
Percentage after giving effect to such assignment.

                    (l) Continuation of Existing Participated Letters of Credit.
Subject to the terms and conditions hereof, each Participated Letter of Credit
under (and as defined in) the Existing Unsecured Credit Agreement which is
outstanding on the Effective Date and listed on Schedule VI as a “Participated
Letter of Credit” shall automatically be deemed continued hereunder on the
Effective Date by the Issuing Lender of such Participated Letter of Credit, and
as of the Effective Date the Lenders shall acquire a participation therein as if
such Participated Letter of Credit were issued hereunder, and each such
Participated Letter of Credit shall be deemed a Participated Letter of Credit
for all purposes of this Agreement as of the Effective Date.

                    SECTION 2.06. Alternative Currency Letters of Credit.

                    (a) Requests for Offers. From time to time during the
Availability Period, a Specified Account Party may request any or all of the
Lenders to make offers to issue an Alternative Currency Letter of Credit for
account of such Specified Account Party. Each Lender may, but shall have no
obligation to, make such offers on terms and conditions that are satisfactory to
such Lender, and such Specified Account Party may, but shall have no obligation
to, accept any such offers. An Alternative Currency Letter of Credit shall be
issued, amended, renewed or extended only if (and upon such issuance, amendment,
renewal or extension of each Alternative Currency Letter of Credit XL Group
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension, the Aggregate Credit Exposure shall
not exceed the aggregate amount of the Commitments. Each such Alternative
Currency Letter of Credit shall be issued, and subsequently, renewed, extended,
amended and confirmed, on such terms as XL Group, the Specified Account Party
and such Lender shall agree, including expiry, drawing conditions,
reimbursement, interest, fees and provision of cover; provided that the expiry
of any Alternative Currency Letter of Credit shall not be later than the
one-year anniversary from the date of issuance thereof (or, in the case of any
renewal or extension thereof, one-year after such renewal or extension).

35

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

                    (b) Reports to Administrative Agent. XL Group shall deliver
to the Administrative Agent and each of the Lenders a report in respect of each
Alternative Currency Letter of Credit (an “Alternative Currency Letter of Credit
Report”) on and as of the date (i) on which such Alternative Currency Letter of
Credit is issued, (ii) of the issuance, renewal, extension or amendment of a
Syndicated Letter of Credit or a Non-Syndicated Letter of Credit, if any
Alternative Currency Letter of Credit is then outstanding and (iii) on which the
Commitments are to be reduced pursuant to Section 2.11, specifying for each such
Alternative Currency Letter of Credit (after giving effect to issuance thereof,
as applicable):

 

 

 

          (A) the date on which such Alternative Currency Letter of Credit was
or is being issued;

 

 

 

          (B) the Alternative Currency of such Alternative Currency Letter of
Credit;

 

 

 

          (C) the aggregate undrawn amount of such Alternative Currency Letter
of Credit (in such Alternative Currency);

 

 

 

          (D) the aggregate unpaid amount of LC Disbursements under such
Alternative Currency Letter of Credit (in such Alternative Currency);

 

 

 

          (E) the Alternative Currency LC Exposure (in Dollars) in respect of
such Alternative Currency Letter of Credit; and

 

 

 

          (F) the aggregate amount of Alternative Currency LC Exposures (in
Dollars).

                    Each Alternative Currency Letter of Credit Report shall be
delivered to the Administrative Agent and each of the Lenders by 10:00 a.m. (New
York City time) on the date on which it is required to be delivered.

                    SECTION 2.07. Loans and Borrowings.

                    (a) Loans. Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans, in each case, to an Account Party from
time to time during the Availability Period in an aggregate principal amount
that will not result in (i) such Lender’s outstanding Loans exceeding such
Lender’s Applicable Percentage of the Loan Sublimit, (ii) such Lender’s Credit
Exposure (excluding any Alternative Currency LC Exposure) exceeding such
Lender’s respective Commitment, (iii) the Aggregate Credit Exposure exceeding
the aggregate Commitments of all Lenders or (iv) the aggregate outstanding
principal amount of the Loans exceeding the Loan Sublimit. Loans may be made, or
be outstanding, to more than one of the Account Parties at any time. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Account Parties may borrow, prepay and reborrow Loans.

                    (b) Obligations of Lenders. Except as provided herein, each
Loan shall be made as part of a Borrowing consisting of one or more Loans of the
same Type made by the Lenders ratably in accordance with their respective
Applicable Percentage of the Loan Sublimit. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other

36

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

Lender of its obligations hereunder; provided that the Commitments of the
Lenders to make Loans hereunder are several and no Lender shall be responsible
for any other Lender’s failure to make Loans as required.

                    (c) Type of Loans. Subject to Section 2.15, each Borrowing
shall be constituted entirely of ABR Loans or of Eurodollar Loans as any Account
Party may request in accordance herewith. Each Lender at its option may make any
Loan to a foreign jurisdiction by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Account Parties to repay such Loan
in accordance with the terms of this Agreement.

                    (d) Minimum Amounts; Limitation on Number of Borrowings.
Each Eurodollar Borrowing shall be in an aggregate amount of $10,000,000 or a
larger multiple of $1,000,000. Each ABR Borrowing shall be in an aggregate
amount equal to $10,000,000 or a larger multiple of $1,000,000; provided that an
ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Loan Sublimit or that is requested to finance the reimbursement
of an LC Disbursement as contemplated by Sections 2.03(a), 2.04(g) or 2.05(f).
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of ten Eurodollar
Borrowings outstanding.

                    (e) Limitations on Interest Periods. Notwithstanding any
other provision of this Agreement, no Account Party shall be entitled to request
(or to elect to convert to or continue as a Eurodollar Borrowing) any Borrowing
if the Interest Period requested therefor would end after the Commitment
Termination Date.

                    (f) Pro Rata Borrowings. Loans made as part of a Borrowing
shall be made by the Lenders ratably in accordance with their respective
Applicable Percentage of the Loan Sublimit.

                    SECTION 2.08. Requests for Borrowings.

                    (a) Notice by the Account Parties. To request a Borrowing,
XL Group shall notify the Administrative Agent of such request by telephone
(i) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed Borrowing or
(ii) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City
time, on the date of the proposed Borrowing; provided that any such notice of an
ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated
by Sections 2.03(a), 2.04(g) or 2.05(f) may be given not later than 11:00 a.m.,
New York City time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request.

                    (b) Content of Borrowing Requests. Each telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.07:

 

 

 

          (i) the relevant Account Party;

 

 

 

          (ii) the aggregate amount of the requested Borrowing;

37

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

 

 

 

          (iii) the date of such Borrowing, which shall be a Business Day;

 

 

 

          (iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

 

 

          (v) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the term
“Interest Period” and permitted under Section 2.07(e); and

 

 

 

          (vi) the location and number of such Account Party’s account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.09.

                    (c) Notice by the Administrative Agent to the Lenders.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each relevant Lender of the
details thereof and of the amount of such Lender’s Loan to be made as part of
the requested Borrowing.

                    (d) Failure to Elect. If no election as to the Type of a
Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.
If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the requested Borrowing shall be made instead as an
ABR Borrowing.

                    SECTION 2.09. Funding of Borrowings.

                    (a) Funding by Lenders. Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time (or 1:00 p.m., New
York City time with respect to ABR Loans requested by XL Group no later than
11:00 a.m. on the same day), to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the relevant Account
Party by promptly crediting the amounts so received, in like funds, to an
account of such Account Party maintained with the Administrative Agent in New
York City and designated by such Account Party in the applicable Borrowing
Request.

                    (b) Presumption by the Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing (or in the case of any ABR Borrowing, on or prior
to the proposed 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 paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the relevant Account Party 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 relevant Account Party severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to such Account Party to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or
(ii) in the case of such Account Party, the

38

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

interest rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

                    SECTION 2.10. Interest Elections.

                    (a) Elections by the Account Parties. The Loans constituting
each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have the
Interest Period specified in such Borrowing Request. Thereafter, the relevant
Account Party may elect to convert such Borrowing to a Borrowing of a different
Type or to continue such Borrowing as a Borrowing of the same Type and, in the
case of a Eurodollar Borrowing, may elect the Interest Period therefor, all as
provided in this Section. The relevant Account Party may elect different options
with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
constituting such Borrowing, and the Loans constituting each such portion shall
be considered a separate Borrowing.

                    (b) Notice of Elections. To make an election pursuant to
this Section, XL Group shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.08 if XL Group were requesting a Borrowing of the Type resulting from
such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request.

                    (c) Content of Interest Election Requests. Each telephonic
and written Interest Election Request shall specify the following information in
compliance with Section 2.07:

 

 

 

          (i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv) of
this paragraph shall be specified for each resulting Borrowing);

 

 

 

          (ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

 

 

          (iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

 

 

 

          (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period” and
permitted under Section 2.07(e).

                    (d) Notice by the Administrative Agent to the Lenders.
Promptly following receipt of an Interest Election Request, the Administrative
Agent shall advise each Lender of the details thereof and of such Lender’s
portion of each resulting Borrowing.

                    (e) Failure to Elect; Events of Default. If XL Group fails
to deliver a timely and complete Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the

39

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

Interest Period therefor, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies XL Group, then, so long as an Event
of Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period therefor.

                    SECTION 2.11. Termination, Reduction and Increase of the
Commitments.

                    (a) Scheduled Termination. Unless previously terminated, the
Commitments shall terminate at the close of business on the Commitment
Termination Date.

                    (b) Voluntary Termination or Reduction. The Account Parties
may at any time terminate, or from time to time reduce, the Commitments and/or
may reduce at any time the Loan Sublimit; provided that (i) each reduction of
the Commitments or the Loan Sublimit shall be in an amount that is $25,000,000
or a larger multiple of $5,000,000, (ii) the Account Parties shall not terminate
or reduce the Commitments if the Aggregate Credit Exposure would exceed the
Commitments, and (iii) the Account Parties shall not reduce the Loan Sublimit if
the outstanding Loans would exceed the Loan Sublimit. XL Group shall notify the
Administrative Agent of any election to terminate or reduce the Commitments or
the Loan Sublimit under this paragraph (b) at least three Business Days prior to
the effective date of such termination or reduction, specifying such election
and the effective date thereof, provided that no reduction of the Loan Sublimit
shall occur in connection with a reduction of the Commitments unless specified
in such notice, except that upon the earlier of (x) the termination of the
Commitments and (y) the Commitment Termination Date, the Loan Sublimit shall
automatically be reduced to zero. Promptly following receipt of any such notice,
the Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by XL Group pursuant to this paragraph (b) shall be
irrevocable; provided that a notice of termination of the Commitments delivered
by XL Group may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by XL Group
(by notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Subject to the proviso in the
immediately preceding sentence, any termination or reduction of the Commitments
or the Loan Sublimit shall be permanent. Each reduction of the Commitments shall
be made ratably among the Lenders in accordance with their respective
Commitments.

                    (c) Increases to Commitments. XL Group shall have the right,
at any time by notice to the Administrative Agent, to increase the Commitments
hereunder (i) by including as a Lender hereunder with a new Commitment, any
Person which is a NAIC Approved Bank (or any other Person whose obligations in
respect of Letters of Credit issued under the Agreement shall be confirmed by a
NAIC Approved Bank) that is not an existing Lender or (ii) by having an existing
Lender increase its Commitment then in effect (with the consent of such Lender
in its sole discretion) (each new or increasing Lender, a “Supplemental Lender”)
in each case with the approval (not to be unreasonably withheld) of the
Administrative Agent, which notice shall specify the name of each Supplemental
Lender, the aggregate amount of such increase and the portion thereof being
assumed by each such Supplemental Lender, and the date on which such

40

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

increase is to become effective (each a “Supplemental Commitment Date”) (which
shall be a Business Day at least three Business Days after the delivery of such
notice and 30 days prior to the Commitment Termination Date); provided that
(w) the aggregate amount of increases of the Commitments under this paragraph
and pursuant to Section 2.07(c) (or any successor provision) of the Secured
Credit Agreement shall not exceed $500,000,000, (x) no existing Lender shall
have any obligation to participate in such increase of aggregate Commitments,
(y) the Commitment of any Supplemental Lender that is not an existing Lender
shall be in an amount of at least $25,000,000 and (z) the aggregate amount of
the increase of the Commitments effected on any day shall be in an aggregate
amount of at least $25,000,000 and larger multiples of $1,000,000. Each such
Supplemental Lender shall enter into an agreement in form and substance
satisfactory to XL Group and the Administrative Agent pursuant to which such
Supplemental Lender shall, as of the applicable Supplemental Commitment Date,
undertake a Commitment (or, if any such Supplemental Lender is an existing
Lender, pursuant to which such Supplemental Lender’s Commitment shall be
increased in the agreed amount on such date) and such Supplemental Lender shall
thereupon become (or, if it is already a Lender, continue to be) a “Lender” for
all purposes hereof; provided that, in the case of any Supplemental Lender that
is not a Lender immediately prior to such Supplemental Commitment Date and is
not listed on the NAIC Approved Bank List, such Supplemental Lender and its
Confirming Lender shall have entered into an agreement of the type contemplated
in the definition of “Confirming Lender” in Section 1.01.

                    Notwithstanding the foregoing, no increase in the
Commitments hereunder pursuant to this Section shall be effective unless on the
applicable Supplemental Commitment Date:

 

 

 

          (i) no Default shall have occurred and be continuing; and

 

 

 

          (ii) the representations and warranties of the Obligors set forth in
this Agreement (other than in Section 4.04(b)) shall be true and correct in all
material respects 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) except where such representations and warranties are conditioned
by materiality and then such representations and warranties shall be true and
correct in all respects.

Each such notice shall be deemed to constitute a representation and warranty by
XL Group as to the matters specified in clauses (i) and (ii) of the immediately
preceding sentence as of such date.

                    SECTION 2.12. Repayment of Loans; Evidence of Debt.

                    (a) Repayment. Each Account Party hereby unconditionally
promises to pay to the Administrative Agent for account of the relevant Lenders
the outstanding principal amount of the Loans made to such Account Party on the
Commitment Termination Date.

                    (b) Maintenance of Records by Lenders. Each Lender shall
maintain in accordance with its usual practice records evidencing the
indebtedness of each Account Party to such Lender resulting from each Loan made
by such Lender to such Account Party, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

41

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

                    (c) Maintenance of Records by the Administrative Agent. The
Administrative Agent shall maintain records in which it shall record (i) the
amount of each Loan made to each Account Party hereunder, the Type thereof and
each Interest Period therefor, (ii) the amount of any principal or interest due
and payable or to become due and payable from such Account Party to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for account of the Lenders and each Lender’s share thereof.

                    (d) Effect of Entries. The entries made in the records
maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative Agent to maintain
such records or any error therein shall not in any manner affect the obligation
of the Account Parties to repay the Loans in accordance with the terms of this
Agreement.

                    (e) Promissory Notes. Any Lender may request that Loans made
by it to any Account Party be evidenced by a promissory note of such Account
Party. In such event, each Account Party shall prepare, execute and deliver to
such Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent.

                    SECTION 2.13. Prepayment of Loans.

                    (a) Right to Prepay Borrowings. The Account Parties shall
have the right at any time and from time to time to prepay any Borrowing in
whole or in part, without premium or penalty, subject to the requirements of
this Section.

                    (b) Notices, Etc. XL Group shall notify the Administrative
Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment; provided that each
repayment of Borrowings shall be applied to repay any outstanding ABR Borrowings
before any other Borrowings; provided further that no such notice shall be
required for a repayment on the Commitment Termination Date. If XL Group fails
to make a timely selection of the Borrowing or Borrowings to be repaid or
prepaid, such payment shall be applied, first, to pay any outstanding
ABR Borrowings and, second, to other Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be repaid first). Each payment of a Borrowing shall
be applied ratably to the Loans included in such Borrowing.

                    Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.11, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.11. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the relevant Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the
case of a Borrowing of the same Type as provided in

42

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

Section 2.07. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.15.

                    SECTION 2.14. Fees.

                    (a) Commitment Fee. XL Group agrees to pay to the
Administrative Agent for account of each Lender a commitment fee which shall
accrue at a rate per annum as set forth on the Pricing Grid on the average daily
unused amount of such Lender’s Commitment during the period from and including
the Effective Date to but excluding the date of termination of the Commitments.
Commitment fees accrued through and including each Quarterly Date shall be
payable on the third Business Day following such Quarterly Date, commencing on
the first such date to occur after the Effective Date; provided that all such
accrued and unpaid fees shall be payable on the date on which the Commitments
terminate.

                    (b) Commission. XL Group agrees to pay to the Administrative
Agent for account of each Lender a commission which shall accrue at a rate per
annum as set forth on the Pricing Grid on the face amount of each outstanding
Letter of Credit and such commission shall be shared ratably among the Lenders
participating in such Letter of Credit. Commissions accrued through and
including each Quarterly Date shall be payable on the third Business Day
following such Quarterly Date, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such accrued and unpaid fees accruing
after the date on which the Commitments terminate shall be payable on demand.

                    (c) Participated Letter of Credit Fees. XL Group agrees to
pay to the Issuing Lender of any outstanding Participated Letter of Credit a
fronting fee which shall accrue at a rate per annum as agreed in writing between
XL Group and the Issuing Lender on the face amount in respect of such
Participated Letter of Credit (excluding any portion thereof attributable to
unreimbursed LC Disbursements). Fronting fees accrued through and including each
Quarterly Date shall be payable on the third Business Day following such
Quarterly Date, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such accrued and unpaid fees accruing after the
date on which the Commitments terminate shall be payable on demand.

                    (d) LC Administrative Fees. XL Group agrees to pay to the
Administrative Agent and the Issuing Lender (to extent that such Issuing Lender
is not the same Person as the Administrative Agent), each for its own account,
within 10 Business Days after demand, the Administrative Agent’s or the Issuing
Lender’s standard administrative fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder.

                    (e) Administrative Agent Fees. XL Group agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between XL Group and the Administrative Agent.

43

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

                    (f) Payment and Computation of Fees. All fees payable
hereunder shall be paid on the dates due, in immediately available funds, to the
Administrative Agent for distribution, in the case of the fees referred to in
paragraphs (a) through (c) of this Section, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances. All fees payable
under paragraphs (a) through (c) of this Section shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days
elapsed.

                    SECTION 2.15. Interest.

                    (a) ABR Loans. The Loans constituting each ABR Borrowing
shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Margin, if any.

                    (b) Eurodollar Loans. The Loans constituting each Eurodollar
Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period for such Borrowing plus the Applicable Margin.

                    (c) Default Interest. If any principal of any Loan or if any
amount of reimbursement obligation, interest, fees and other amounts payable by
the Account Parties hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after
as well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan as provided above or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.

                    (d) Payment of Interest. Accrued interest on each Loan shall
be payable by the applicable Account Party in arrears on each Interest Payment
Date for such Loan and upon the date the Commitments terminate; provided that
(x) interest accrued pursuant to paragraph (c) of this Section shall be payable
on demand, (y) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Loan prior to the Commitment Termination Date),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (z) in the event of any conversion
of any Eurodollar Borrowing prior to the end of the Interest Period therefor,
accrued interest on such Borrowing shall be payable on the effective date of
such conversion.

                    (e) Computation. All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest computed by reference to
the Alternate Base Rate at times when the Alternate Base Rate is based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year), and in each case shall be payable for the actual number of days
elapsed in the relevant period (including the first day but excluding the last
day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent and notified to XL Group, and such
determination shall be conclusive absent manifest error.

                    SECTION 2.16. Alternate Rate of Interest. If prior to the
commencement of the Interest Period for any Eurodollar Borrowing:

44

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

 

 

 

          (a) the Administrative Agent determines in good faith (which
determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or

 

 

 

          (b) the Administrative Agent is advised by the Required Lenders
(acting in good faith) that the Adjusted LIBO Rate for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their respective Loans included in such Borrowing for such Interest
Period;

                    then the Administrative Agent shall give notice thereof to
XL Group and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies XL Group and the Lenders
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
the continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective and such Borrowing (unless prepaid) shall be continued as, or
converted to, an ABR Borrowing and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

                    SECTION 2.17. Increased Costs.

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

 

 

 

                    (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate);

 

 

 

                    (ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement, any Letter of Credit (or any
participation therein) or any Eurodollar Loan made by such Lender; or

 

 

 

                    (iii) change the basis of taxation of payments to any Lender
in respect thereof (except for Indemnified Taxes, Excluded Taxes and changes in
the rate of tax on the overall net income of such Lender);

                    and the result of any of the foregoing shall be to increase
the cost to such Lender of making or maintaining, or participating in, any
Letter of Credit (or of maintaining any participation therein) or Eurodollar
Loan (or of maintaining its obligation to make any such Loan) or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether of
principal, interest or otherwise), then XL Group (and in the case of any
specific Letter of Credit, the Specified Account Party on behalf of which such
Letter of Credit was issued) agrees that it will pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered. Notwithstanding anything herein to the
contrary, (i) all requests, rules, guidelines, requirements and directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or by United States
or foreign regulatory authorities, in each case pursuant to Basel III, and (ii)
the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements and

45

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

directives thereunder or issued in connection therewith or in implementation
thereof, shall in each case be deemed to be a Change in Law, regardless of the
date enacted, adopted or issued.

                    (b) Capital Requirements. If any Lender determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender’s capital or on the capital of such
Lender’s holding company, if any, as a consequence of this Agreement or the
Letters of Credit issued or participated in, or the Loans made, by such Lender
to a level below that which such Lender or such Lender’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy or liquidity), then from time to time XL Group (and in the
case of any specific Letter of Credit, the Specified Account Party on behalf of
which such Letter of Credit was issued) will pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender’s holding
company for any such reduction suffered.

                    (c) Certificates from Lenders. A certificate of a Lender
setting forth such Lender’s good faith determination of the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to XL
Group and shall be conclusive and binding upon all parties hereto absent
manifest error. XL Group (and in the case of any specific Letter of Credit, the
Specified Account Party on behalf of which such Letter of Credit was issued)
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof by XL Group.

                    (d) Delay in Requests. Failure or delay on the part of any
Lender to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender’s right to demand such compensation; provided that XL
Group and any Specified Account Party shall not be required to compensate a
Lender pursuant to this Section for any increased costs or reductions incurred
more than 90 days prior to the date that such Lender notifies XL Group of the
Change in Law giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 90 day period referred to above shall be extended to include the period
of retroactive effect thereof.

                    (e) Comparable Treatment. Notwithstanding any other
provision of this Section, no Lender shall demand compensation for any increased
cost or reduction pursuant to this Section if such Lender is not demanding such
compensation in similar circumstances under comparable provisions of other
credit agreements.

                    SECTION 2.18. Break Funding Payments.

                    In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period therefor
(including as a result of an Event of Default), (b) the conversion of any
Eurodollar Loan other than on the last day of an Interest Period therefor,
(c) the failure to borrow, convert, continue or prepay any Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice is permitted to be revocable under Section 2.13(b) and is revoked in
accordance herewith), or (d) the assignment as a result of

46

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

a request by XL Group pursuant to Section 2.21(b) of any Eurodollar Loan other
than on the last day of an Interest Period therefor, then, in any such event,
the Account Parties shall compensate each Lender for the loss attributable to
such event. The loss to any Lender attributable to any such event shall be
deemed to be an amount determined by such Lender to be equal to the excess, if
any, of (i) the amount of interest that such Lender would pay for a deposit
equal to the principal amount of such Loan for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the duration of the Interest Period that would have resulted from
such borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for such Interest Period, over
(ii) the amount of interest that such Lender would earn on such principal amount
for such period if such Lender were to invest such principal amount for such
period at the interest rate that would be bid by such Lender (or an affiliate of
such Lender) for Dollar deposits from other banks in the eurodollar market at
the commencement of such period. A certificate of any Lender setting forth such
Lender’s good faith determination of any amount or amounts that such Lender is
entitled to receive pursuant to this Section shall be delivered to XL Group and
shall be conclusive absent manifest error. The Account Parties shall pay such
Lender the amount shown as due on any such certificate within 10 days after
receipt thereof by XL Group.

                    SECTION 2.19. Taxes.

                    (a) Payments Free of Taxes. Any and all payments by or on
account of any Obligor hereunder, or under any Credit Document, shall be made
free and clear of and without deduction for or withholding of any amounts in
respect of Taxes, unless such withholding is required by applicable law as
determined in good faith by the applicable Withholding Agent; provided that if
any Indemnified Taxes are required to be withheld from any amounts payable to
the Administrative Agent or any Lender, then (i) the sum payable by the
applicable Obligor shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such amounts
been withheld and (ii) such amounts shall be withheld and paid to the relevant
Governmental Authority in accordance with applicable law.

                    (b) Payment of Other Taxes by the Account Parties. In
addition, each Specified Account Party shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

                    (c) Indemnification by the Account Parties. XL Group (and in
the case of any specific Letter of Credit, the Specified Account Party on behalf
of which such Letter of Credit was issued) shall indemnify the Administrative
Agent and each Lender, within 10 days after written demand to XL Group therefor,
for the full amount of any Indemnified Taxes and Other Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent or such Lender, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes, as
the case may be, were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate setting forth the Administrative Agent’s
or such Lender’s, as the case may be, good faith determination of the

47

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

amount of such payment or liability (along with a reasonably detailed
explanation and computation of such payment or liability) delivered to XL Group
by a Lender, or by the Administrative Agent on its own behalf or on behalf of a
Lender, shall be conclusive as between such Lender or the Administrative Agent,
as the case may be, and the Account Parties absent manifest error.

                    (d) Each Lender shall indemnify the Administrative Agent for
the full amount of any Taxes imposed by any Governmental Authority that are
attributable to such Lender and that are payable or paid by the Administrative
Agent, together with all interest, penalties, reasonable costs and expenses
arising therefrom or with respect thereto, as determined by the Administrative
Agent in good faith. A certificate as to the amount of such payment or liability
delivered to any Lender by the Administrative Agent shall be conclusive absent
manifest error.

                    (e) Evidence of Payments. As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by any Specified Account Party to a
Governmental Authority, XL Group on behalf of such Specified Account Party 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) Exemptions. (1) Each recipient of payments under this
Agreement or any Credit Document (or a Transferee, including any Participant, in
which case such Participant’s obligations to a Specified Account Party and the
Administrative Agent described in this Section 2.19(f) shall also extend to the
Lender from which the related participation shall have been purchased) (i) that
is a “United States Person” as defined in Section 7701(a)(30) of the Code (a
“U.S. Lender”) shall deliver to the Specified Account Party and the
Administrative Agent two properly completed and duly signed copies of U.S.
Internal Revenue Service (“IRS”) Form W-9 (or any successor form) certifying
that such U.S. Lender is exempt from U.S. federal withholding tax or (ii) that
is not a “United States Person” as defined in Section 7701(a)(30) of the Code (a
“Non-U.S. Lender”) shall deliver to the Specified Account Party and the
Administrative Agent (I) two copies of IRS Form W-8BEN, Form W-8ECI or Form
W-8IMY(or any successor form) (together with any applicable underlying IRS
forms), (II) in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest”, a certification to the effect that such
Non-U.S. Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, (b) a “10 percent shareholder” of the Specified Account party
within the meaning of Section 881(c)(3)(B) of the Code, (c) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code or (d)
conducting a trade or business in the United States with which the relevant
interest payments are effectively connected; and the applicable IRS Form W-8 (or
any successor form) properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from U.S. federal withholding tax on payments under
this Agreement and the other Credit Documents, or (III) any other form
prescribed by applicable requirements of U.S. federal income tax law as a 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 requirements of law to permit the Specified Account Party and the
Administrative Agent to determine the withholding or deduction required to be
made. Such forms shall be delivered by each U.S. Lender and each Non-U.S. Lender
on or before the date it

48

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

becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation) and from
time to time thereafter upon the request of the Specified Account Party or the
Administrative Agent. In addition, each U.S. Lender and each Non-U.S. Lender
shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by it. Each U.S. Lender and each Non-U.S. Lender shall
promptly notify the Specified Account Party and the Administrative Agent at any
time it determines that it is no longer in a position to provide any previously
delivered certificate to the Specified Account Party (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this Section, no U.S. Lender or Non-U.S.
Lender shall be required to deliver any form pursuant to this Section that such
Non-U.S. Lender is not legally able to deliver.

                    (2) If a payment made to any recipient under any Credit
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
such recipient 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 recipient shall deliver to each Account Party and the
Administrative Agent at the time or times prescribed by law and at such time or
times reasonably requested by any Account Party 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 any Account Party or the Administrative Agent as may be necessary
for the Account Parties and the Administrative Agent to comply with their
obligations under FATCA and to determine whether such recipient has complied
with such recipient’s obligations under FATCA or to determine the amount to
deduct and withhold from such payment. Solely for purposes of this Section
2.19(f)(2), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement. Each recipient agrees that if any form or certification it
previously delivered under this clause expires or becomes obsolete or inaccurate
in any respect, it shall update such form or certification or promptly notify
the Account Parties and the Administrative Agent in writing of its legal
inability to do so.

                    (3) Each U.S. Lender and each Non-U.S Lender that is
entitled to an exemption from or reduction of non-U.S. withholding tax under the
law of the jurisdiction in which the Specified Account Party is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Specified Account Party (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Specified Account Party or the Administrative Agent,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced
rate; provided that such U.S. Lender or Non-U.S. Lender is legally entitled to
complete, execute and deliver such documentation and in its reasonable judgment
such completion, execution or submission would not materially prejudice its
legal or commercial position.

                    (g) If the Administrative Agent or a Lender determines, in
its reasonable discretion, that it has received a refund from the relevant
Governmental Authority of any Taxes or Other Taxes as to which it has been
indemnified by an Account Party or with respect to which an Account Party has
paid additional amounts pursuant to this Section, it shall pay over such refund
to such Account Party (but only to the extent of indemnity payments made, or
additional

49

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

amounts paid, by such Account Party under this Section with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided that such Account Party, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
such Account Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes not expressly required to be
made available hereunder which it reasonably deems confidential) to any Account
Party or any other Person.

                    SECTION 2.20. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs.

                    (a) Payments by the Account Parties. Each Account Party
shall make each payment required to be made by it hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements or interest
thereon, under Section 2.17, 2.18 or 2.19, or otherwise) or under any other
Credit Document (except to the extent otherwise provided therein) prior to
12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim; provided that any payments in respect of
Alternative Currency Letters of Credit shall be made in the manner (including
the time and place of payment) as shall have been separately agreed between the
relevant Account Party and Lender pursuant to Section 2.06. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 1111 Fannin Street, Houston, Texas except
payments pursuant to Sections 2.17, 2.18, 2.19 and 10.03, which shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for account of any other Person to
the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in Dollars.

                    (b) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder, such funds shall be applied (i) first, to pay interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.

                    (c) Pro Rata Treatment. Except to the extent otherwise
provided herein: (i) each reimbursement of LC Disbursements (other than in
respect of Alternative Currency Letters of Credit) shall be made to the relevant
Lenders, each Borrowing shall be made from the Lenders, each payment of fees
under Section 2.14 shall be made for account of the relevant Lenders, each

50

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

termination or reduction of the amount of the Commitments under Section 2.11 and
any interest paid in respect of any Reimbursement Obligation shall be applied to
the respective Commitments (or, in the case of any Borrowing, the respective
commitment to make Loans hereunder) of the Lenders, in each case pro rata
according to the amounts of their respective Commitments (or, in the case of any
Borrowing, the respective commitment to make Loans hereunder or, in the case of
any such reimbursement or payment after the termination of the Commitments, pro
rata according to the Aggregate Credit Exposure); (ii) each Borrowing shall be
allocated pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of the making of Loans) or their respective
Loans that are to be included in such Borrowing (in the case of conversions and
continuations of Loans); (iii) each payment or prepayment of principal of Loans
by any Account Party shall be made for account of the Lenders pro rata according
to the respective unpaid principal amounts of the Loans of such Account Party
being paid or prepaid that are owed to such Lenders and (iv) each payment of
interest on Loans by an Account Party shall be made for account of the Lenders
pro rata according to the amounts of interest on such Loans then due and payable
thereunder.

                    (d) Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or LC Disbursements
(other than with respect to Alternative Currency Letters of Credit) or accrued
interest thereon resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and/or LC Disbursements (other
than with respect to Alternative Currency Letters of Credit) and accrued
interest thereon then due than the proportion received by any other relevant
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans and/or LC Disbursements (other
than with respect to Alternative Currency Letters of Credit) of such other
Lenders to the extent necessary 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 Loans and/or LC
Disbursements (other than with respect to Alternative Currency Letters of
Credit) and accrued interest thereon; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Account Party pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or LC Disbursements
to any assignee or participant, other than to any Account Party or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each Account Party consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law and to the extent that it
is a Specified Account Party, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against such Account Party rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of such Account Party in the amount of such
participation.

                    (e) Presumptions of Payment. Unless the Administrative Agent
shall have received notice from an Account Party prior to the date on which any
payment is due to the Administrative Agent for account of the relevant Lenders
hereunder that such Account Party will

51

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

not make such payment, the Administrative Agent may assume that such Account
Party has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the relevant Lenders the amount
due. In such event, if the relevant Account Party has not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender 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 Federal Funds Effective Rate.

                    (f) Certain Deductions by the Administrative Agent. If any
Lender shall fail to make any payment required to be made by it pursuant to this
Agreement, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.

                    SECTION 2.21. Mitigation Obligations; Replacement of
Lenders.

                    (a) Designation of a Different Lending Office. If any Lender
requests compensation under Section 2.17, or if any Account Party is required to
pay any additional amount or indemnification payment to any Lender or any
Governmental Authority for account of any Lender pursuant to Section 2.19, then
such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans and/or Letters of Credit hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 2.17 or 2.19, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. XL Group hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment. Nothing in this Section 2.21(a) shall affect or
postpone any of the obligations of the Account Parties or the rights of any
Lender pursuant to Sections 2.17 or 2.19.

                    (b) Replacement of Lenders. If any Lender (i) requests
compensation under Section 2.17, or if any Account Party is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.19, (ii) becomes a Defaulting Lender, (iii) has
refused to consent to any waiver or amendment with respect to any Credit
Document that requires the consent of all the Lenders or of such Lender as a
Lender directly and adversely affected by such waiver or amendment and has been
consented to by the Required Lenders or (iv) if any Lender ceases to be a NAIC
Approved Bank, then XL Group 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 Section 10.04), all its interests, rights and obligations under
this Agreement to an assignee selected by XL Group that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) XL Group shall have received the prior written
consent of the Administrative Agent, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and/or LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the

52

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

extent of such outstanding principal, LC Disbursements and accrued interest and
fees) or the relevant Account Party (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.17 or payments required to be made pursuant to Section 2.19,
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the relevant Account Party to require such assignment
and delegation cease to apply.

                    (c) The Account Parties shall not be responsible for any
costs and expenses incurred by any Lender that arranges for its obligations
under the Letters of Credit to be confirmed by a NAIC Approved Bank or by such
confirming bank.

                    SECTION 2.22. Defaulting Lenders. Notwithstanding any
provision of this Agreement to the contrary, if any Lender becomes a Defaulting
Lender, then the following provisions shall apply for so long as such Lender is
a Defaulting Lender:

                    (a) fees shall cease to accrue on the unfunded portion of
the Commitment of such Defaulting Lender pursuant to Section 2.14;

                    (b) the Commitment and the Credit Exposure of such
Defaulting Lender shall not be included in determining whether the Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment, waiver or other modification pursuant to Section 10.02);
provided, that this clause (b) shall not apply to the vote of a Defaulting
Lender in the case of an amendment, waiver or other modification requiring the
consent of such Lender or each Lender affected thereby;

                    (c) if any Participant LC Exposure exists at the time such
Lender becomes a Defaulting Lender and no Default or Event of Default has
occurred and is continuing then:

                              (i) all or any part of the Participant LC Exposure
of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders
in accordance with their respective Applicable Percentages but only to the
extent the sum of all non-Defaulting Lenders’ aggregate Participant LC Exposure
plus the aggregate amount of all non-Defaulting Lenders’ outstanding Loans plus
such Defaulting Lender’s Participant LC Exposure does not exceed the total of
all non-Defaulting Lenders’ Commitments;

                              (ii) if the applicable Account Party cash
collateralizes any portion of such Defaulting Lender’s Participant LC Exposure
that has not been reallocated pursuant to clause (i) above, no Specified Account
Party shall be required to pay any fees to such Defaulting Lender pursuant to
Section 2.08 with respect to such Defaulting Lender’s LC Exposure during the
period such Defaulting Lender’s Participant LC Exposure is cash collateralized;

                              (iii) if the Participant LC Exposure of the
non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the
fees payable to the Lenders pursuant to

53

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

Section 2.14 shall be adjusted in accordance with such non-Defaulting Lenders’
Applicable Percentages; and

                              (iv) if all or any portion of such Defaulting
Lender’s Participant LC Exposure is neither reallocated nor cash collateralized
pursuant to clause (i) or (ii) above, then, without prejudice to any rights or
remedies of the Issuing Lender or any other Lender hereunder, all fees payable
under Section 2.14 with respect to such Defaulting Lender’s Participant LC
Exposure shall be payable to the Administrative Agent until and to the extent
that such Participant LC Exposure is reallocated and/or cash collateralized; and

                    (d) so long as such Lender is a Defaulting Lender, no
Issuing Lender shall be required to issue, amend or increase any Letter of
Credit, unless it is satisfied that the related exposure and the Defaulting
Lender’s then outstanding Participant LC Exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Obligors in accordance with clause (c) above, and participating
interests in any newly issued or increased Letter of Credit shall be allocated
among non-Defaulting Lenders in a manner consistent with clause (c)(i) above
(and such Defaulting Lender shall not participate therein).

                    In the event that the Administrative Agent, XL Group and
each Issuing Lender each agrees that a Defaulting Lender has adequately remedied
all matters that caused such Lender to be a Defaulting Lender, then the
aggregate Participant LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Commitment.

                    SECTION 2.23. Absence of Rating. In the event that XL
Insurance (Bermuda), XL Re or XL Re Europe ceases to receive a financial
strength rating from A.M. Best & Co. (or its successor), such Account Party
shall no longer be entitled to request (i) the issuance of further Letters of
Credit hereunder or (ii) the borrowing of Loans hereunder.

ARTICLE III

GUARANTEE

                    SECTION 3.01. The Guarantee. Each Guarantor hereby jointly
and severally irrevocably guarantees to each Lender and the Administrative Agent
and their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest on the Loans made by the Lenders to each of the Account Parties and
Reimbursement Obligations and interest thereon of each Specified Account Party
(other than such Guarantor in its capacity as an Account Party hereunder) and
all other amounts from time to time owing to the Lenders or the Administrative
Agent by such Account Parties under this Agreement, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the “Guaranteed Obligations”). Each Guarantor hereby further jointly and
severally agrees that if any Account Party (other than such Guarantor in its
capacity as an Account Party hereunder) shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations,

54

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

such Guarantor will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.

                    SECTION 3.02. Obligations Unconditional. The obligations of
the Guarantors under Section 3.01 are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Account Parties under this Agreement or
any other agreement or instrument referred to herein or therein, or any
substitution, release, non-perfection or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Article that the obligations of
the Guarantors hereunder shall be absolute and unconditional, joint and several,
under any and all circumstances (and any defenses arising from the foregoing are
hereby waived to the extent permitted by applicable law). Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of the Guarantors
hereunder, which shall remain absolute and unconditional as described above:

          (i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;

          (ii) any law or regulation of any jurisdiction, or the occurrence of
any other event, affecting any Guaranteed Obligation;

          (ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall be done
or omitted; or

          (iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement or any
other agreement or instrument referred to herein shall be waived or any other
guarantee of any of the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt with;

and any other defenses arising from the foregoing are hereby waived to the
extent permitted by applicable law.

The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against any
Account Party under this Agreement or any other agreement or instrument referred
to herein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations.

                    SECTION 3.03. Reinstatement. The obligations of the
Guarantors under this Article shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of any Account Party in
respect of the Guaranteed Obligations is rescinded or must

55

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

be otherwise restored by any holder of any of the Guaranteed Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, and the Guarantors jointly and severally agree that they will
indemnify the Administrative Agent and each Lender on demand for all reasonable
costs and expenses (including reasonable fees of counsel) incurred by the
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.

                    SECTION 3.04. Subrogation. The Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments
they shall not exercise any right or remedy arising by reason of any performance
by them of their guarantee in Section 3.01, whether by subrogation or otherwise,
against any Account Party or any other guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations.

                    SECTION 3.05. Remedies. The Guarantors jointly and severally
agree that, as between the Guarantors and the Lenders, the obligations of the
Account Parties under this Agreement may be declared to be forthwith due and
payable as provided in Article VIII (and shall be deemed to have become
automatically due and payable in the circumstances provided in Article VIII) for
purposes of Section 3.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against any Account Party and that, in the
event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by any Account Party) shall forthwith become due and payable by the Guarantors
for purposes of Section 3.01.

                    SECTION 3.06. Continuing Guarantee. The guarantee in this
Article is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.

                    SECTION 3.07. Rights of Contribution. The Guarantors (other
than XL Group) hereby agree, as between themselves, that if any such Guarantor
shall become an Excess Funding Guarantor (as defined below) by reason of the
payment by such Guarantor of any Guaranteed Obligations, each other Guarantor
(other than XL Group) shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Guarantor’s Pro Rata Share (as defined below and determined, for
this purpose, without reference to the properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of
such Guaranteed Obligations. The payment obligation of a Guarantor to any Excess
Funding Guarantor under this Section shall be subordinate and subject in right
of payment to the prior payment in full of the obligations of such Guarantor
under the other provisions of this Article III and such Excess Funding Guarantor
shall not exercise any right or remedy with respect to such excess until payment
and satisfaction in full of all of such obligations.

                    For purposes of this Section, (i) “Excess Funding Guarantor”
means, in respect of any Guaranteed Obligations, a Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) “Excess Payment” means, in respect of any Guaranteed

56

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

Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro
Rata Share of such Guaranteed Obligations and (iii) “Pro Rata Share” means, for
any Guarantor, the ratio (expressed as a percentage) of (x) the amount by which
the aggregate present fair saleable value of all properties of such Guarantor
(excluding any shares of stock of any other Guarantor) exceeds the amount of all
the debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder and any obligations of any other Guarantor that have been
Guaranteed by such Guarantor) to (y) the amount by which the aggregate fair
saleable value of all properties of all of the Guarantors (other than XL Group)
exceeds the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of the Guarantors under this Article III) of all of the Guarantors
(other than XL Group), determined (A) with respect to any Guarantor that is a
party hereto on the date hereof, as of the date hereof, and (B) with respect to
any other Guarantor, as of the date such Guarantor becomes a Guarantor
hereunder.

                    SECTION 3.08. General Limitation on Guarantee Obligations.
In any action or proceeding involving any corporate law, or any bankruptcy,
insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of any Guarantor under Section 3.01 would
otherwise, taking into account the provisions of Section 3.07, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under
Section 3.01, then, notwithstanding any other provision hereof to the contrary,
the amount of such liability shall, without any further action by such
Guarantor, any Lender, the Administrative Agent or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

                    XL Group, and to the extent any representation pertains
specifically to any Account Party, XL Group and, with respect to itself only,
such Account Party, represents and warrants to the Lenders that:

                    SECTION 4.01. Organization; Powers. Each Account Party and
each of its Significant Subsidiaries is duly organized, validly existing and 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 is in good standing in, every jurisdiction where such
qualification is required.

                    SECTION 4.02. Authorization; Enforceability. The
Transactions are within each Account 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 each
Account Party and constitutes a legal, valid and binding obligation of such
Account Party, enforceable against such Account Party in accordance with its
terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium,

57

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

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).

                    SECTION 4.03. Governmental Approvals; No Conflicts. The
Transactions and the entry into this Agreement (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, except such as have
been obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of each Account Party or any of its Significant Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any material indenture, agreement or other instrument binding upon each
Account Party or any of its Significant 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
each Account Party or any of its Significant Subsidiaries.

                    SECTION 4.04. Financial Condition; No Material Adverse
Change.

                    (a) Financial Condition. XL Group has heretofore furnished
to the Lenders the financial statements specified in (A) Section 6.01(a)(i) with
respect to the fiscal year ended December 31, 2010 (as provided in XL Group’s
Report on Form 10-K filed with the SEC for the fiscal year ended December 31,
2010) and (B) Section 6.01(c)(i) with respect to the fiscal quarters ended March
31, 2011, June 30, 2011 and September 30, 2011 (as provided in XL Group’s Report
on Form 10-Q filed with the SEC for the fiscal quarters ended March 31, 2011,
June 30, 2011 and September 30, 2011). Such financial statements present fairly
in all material respects the financial position and results of operations of XL
Group and its consolidated Subsidiaries as of such date and for such period on a
consolidated basis in accordance with GAAP subject, in the case of the quarterly
financial statements described in clause (a)(B) to normal year-end audit
adjustments and the absence of footnotes.

                    (b) No Material Adverse Change. Since December 31, 2010,
there has been no material adverse change in the assets, business, financial
condition or operations of each Account Party and its Subsidiaries, taken as a
whole, except as disclosed in filings made by XL Group prior to the Effective
Date with the SEC pursuant to the Securities Exchange Act of 1934, as amended.

                    SECTION 4.05. Properties.

                    (a) Property Generally. Each Account Party and each of its
Significant Subsidiaries has good title to, or valid license or leasehold
interests in, all its real and personal property material to its business,
subject only to Liens permitted by Section 7.03 and except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.

                    (b) Intellectual Property. Each Account Party and each of
its Significant Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by such Account Party and its

58

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

Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

                    SECTION 4.06. Litigation and Environmental Matters.

                    (a) Actions, Suits and Proceedings. Except as disclosed in
Schedule III 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 each Account Party,
threatened against or affecting such Account Party or any of its Subsidiaries
(i) as to which an adverse determination that would, individually or in the
aggregate, result in a Material Adverse Effect is likely or (ii) that involve
this Agreement or the Transactions.

                    (b) Environmental Matters. Except as disclosed in Schedule
IV and except with respect to any other matters that, individually or in the
aggregate, would not be likely to result in a Material Adverse Effect, no
Account Party nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required for its business under any Environmental Law, (ii) has
incurred any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.

                    Schedules III and IV referred to in this Section 4.06 shall
be deemed automatically updated from time to time to include disclosures
included in filings made by XL Group or XLIT with the SEC pursuant to the
Securities Exchange Act of 1934, as amended, after the Effective Date, it being
understood, however, that any such updates shall not affect or limit in any
manner any of the obligations of the Account Parties under this Agreement in
effect immediately prior to such disclosure and shall not be taken into account
for purposes of the last paragraph of Section 2.11(c), Section 5.02 and clause
(c) of Article VIII.

                    SECTION 4.07. Compliance with Laws and Agreements. Each
Account 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.

                    SECTION 4.08. Investment Company Status. Each Account Party
is not an “investment company” as defined in, or subject to regulation under,
the Investment Company Act of 1940.

                    SECTION 4.09. Taxes. Each Account Party and each of its
Subsidiaries has timely filed or caused to be filed 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 file any such Tax
return or pay any such Taxes could not reasonably be expected to result in a
Material Adverse Effect.

                    SECTION 4.10. ERISA. No ERISA Event has occurred or is
reasonably

59

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

expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan by an amount that could reasonably be
expected to result in a Material Adverse Effect.

                    Except as could not reasonably be expected to result in a
Material Adverse Effect, (i) all contributions required to be made by any
Account Party or any of their Subsidiaries with respect to a Non-U.S. Benefit
Plan have been timely made, (ii) each Non-U.S. 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 any Account Party nor any of
their Subsidiaries has incurred any obligation in connection with the
termination or withdrawal from any Non-U.S. Benefit Plan.

                    SECTION 4.11. Disclosure. The reports, financial statements,
certificates or other information furnished by each Account Party to the Lenders
in connection with the negotiation of this Agreement or delivered hereunder
(taken as a whole) do not contain any material misstatement of fact or omit 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, such Account Party represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

                    SECTION 4.12. Use of Credit. No Account 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, no Letter of Credit will be
used in connection with buying or carrying any Margin Stock, and no part of the
proceeds of any Loan hereunder will be used to buy or carry any Margin Stock
(except, in each case, for repurchases of the capital stock of XL Group and
purchases of Margin Stock in accordance with XL Group’s Statement of Investment
Policy Objectives and Guidelines as in effect on the date hereof or as it may be
changed from time to time by a resolution duly adopted by the board of directors
of XL Group (or any committee thereof)). The purchase of any Margin Stock with
the proceeds of any Loan will not be in violation of Regulation U or X of the
Board and, after applying the proceeds of such Loan, not more than 25 percent of
the value of the assets of XL Group and its Subsidiaries taken as a whole
consists or will consist of Margin Stock.

                    SECTION 4.13. Subsidiaries. Set forth in Schedule V is a
complete and correct list of all of the Subsidiaries of XL Group as of September
30, 2011, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary and (iii) the percentage of ownership of such Subsidiary
represented by such ownership interests. Except as disclosed in Schedule V, as
of the date hereof, (x) each of XL Group 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

60

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

by it in Schedule V, (y) all of the issued and outstanding capital stock of each
such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) except as disclosed in filings of XL Group with the SEC
prior to the date hereof, there are no outstanding Equity Rights with respect to
any Account Party.

                    SECTION 4.14. Withholding Taxes. Based upon information with
respect to each Lender provided by each Lender to the Administrative Agent, as
of the date hereof, the payment of the LC Disbursements and interest thereon,
principal of and interest on the Loans, the fees under Section 2.14 and all
other amounts payable hereunder will not be subject, by withholding or
deduction, to any Indemnified Taxes imposed by Bermuda, the Cayman Islands,
Switzerland, the United Kingdom or Ireland.

                    SECTION 4.15. Stamp Taxes. To ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or any promissory
notes evidencing Loans made (or to be made), it is not necessary, as of the date
hereof, that this Agreement or such promissory notes or any other document be
filed or recorded with any Governmental Authority in Bermuda or Ireland, or that
any stamp or similar tax be paid on or in respect of this Agreement in any such
jurisdiction, or such promissory notes or any other document other than such
filings and recordations that have already been made and such stamp or similar
taxes that have been paid.

                    SECTION 4.16. Legal Form. Each of this Agreement and any
promissory notes evidencing Loans made (or to be made) is in proper legal form
as of the date hereof under the laws of any Account Party Jurisdiction for the
admissibility thereof in the courts of such Account Party Jurisdiction.

ARTICLE V

CONDITIONS

                    SECTION 5.01. Effective Date. The obligations of the Lenders
(or the Issuing Lender, as the case may be) to issue Letters of Credit and/or to
make Loans hereunder initially are subject to the receipt by the Administrative
Agent of each of the following documents, each of which shall be satisfactory to
the Administrative Agent (and to the extent specified below, to each Lender) in
form and substance (or such condition shall have been waived in accordance with
Section 10.02):

 

 

 

          (a) Executed Counterparts. From each party hereto either (x) a
counterpart of this Agreement signed on behalf of such party or (y) written
evidence satisfactory to the Administrative Agent (which may include telecopy or
email transmission of a signed signature page to this Agreement) that such party
has signed a counterpart of this Agreement.

 

 

 

          (b) Opinions of Counsel to the Obligors. Opinions, each dated the
Effective Date, of Cleary Gottlieb Steen & Hamilton LLP, special U.S. counsel
for the Obligors and opinions provided by counsel to the applicable Obligors in
the jurisdictions of Ireland, the Cayman Islands, Bermuda, the United Kingdom
and Switzerland, in each case, reasonably satisfactory to the Administrative
Agent and its counsel.

61

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

 

 

 

          (d) Corporate Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing, if applicable, of the Obligors, the
authorization of the Transactions and any other legal matters relating to the
Obligors, this Agreement or the Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.

 

 

 

          (e) Officer’s Certificate. A certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of XL Group,
confirming compliance with the conditions set forth in clauses (a) and (b) of
the first sentence of Section 5.02.

 

 

 

          (f) Existing Unsecured Credit Agreement. Evidence reasonably
satisfactory to the Administrative Agent that (i) the Commitments under (and as
defined in) the Existing Unsecured Credit Agreement have been terminated and
(ii) all amounts due and payable under the Existing Unsecured Credit Agreement
have been paid.

 

 

 

          (g) Arrangements for Continuation. Evidence reasonably satisfactory to
the Administrative Agent of the existence of arrangements for continuation under
this Agreement, the Existing Secured Credit Agreement or the Secured Credit
Agreement of all existing letters of credit issued under the Existing Unsecured
Credit Agreement.

 

 

 

          (h) Secured Facility. Evidence reasonably satisfactory to the
Administrative Agent of the entry into the Secured Credit Agreement by the
Account Parties.

 

 

 

          (i) Financial Statements. Receipt by the Administrative Agent of the
financial statements specified in Section 6.01(a)(i) with respect to the fiscal
year ended December 31, 2010 (it being understood that delivery to the
Administrative Agent of XL Group’s Report on Form 10-K filed with the SEC shall
satisfy the financial statement delivery requirements under this Section
5.01(i)).

 

 

 

          (j) Other Documents. Such other documents as the Administrative Agent
or any Lender or special New York counsel to JPMCB may reasonably request.

                    The obligation of any Lender to make its initial extension
of credit or initial issuance of a Letter of Credit hereunder is also subject to
the payment by XL Group of such fees as XL Group shall have agreed to pay to any
Lender or the Administrative Agent in connection herewith, including the
reasonable fees and expenses of Simpson Thacher & Bartlett LLP, special New York
counsel to JPMCB, in connection with the negotiation, preparation, execution and
delivery of this Agreement and the other Credit Documents and the extensions of
credit hereunder (to the extent that reasonably detailed statements for such
fees and expenses have been delivered to XL Group).

                    The Administrative Agent shall notify the Account Parties
and the Lenders of the Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the Lenders (or the
Issuing Lender, as the case may be) to issue Letters of Credit or to make Loans
hereunder initially shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.02) at or prior to
5:00 p.m., New York City time, on December 30, 2011 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).

62

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

                    SECTION 5.02. Each Credit Event. The obligation of each
Lender to issue, continue, amend, renew or extend any Letter of Credit or to
make any Loan at any time is additionally subject to the satisfaction of the
following conditions:

 

 

 

          (a) the representations and warranties of the Obligors set forth in
this Agreement (other than, at any time after the Effective Date, in Section
4.04(b)) shall be true and correct on and as of the date of issuance,
continuation, amendment, renewal or extension of such Letter of Credit or the
date of the making of such Loan, as applicable (or, if any such representation
or warranty is expressly stated to have been made as of a specific date, as of
such specific date);

 

 

 

          (b) at the time of and immediately after giving effect to the
issuance, amendment, renewal or extension of such Letter of Credit or the making
of such Loan, as applicable, no Default shall have occurred and be continuing;
and

 

 

 

          (c) in the case of any Alternative Currency Letter of Credit, receipt
by the Administrative Agent of a request for offers as required by Section
2.06(a).

Each issuance, continuation, amendment, renewal or extension of a Letter of
Credit and each borrowing of a Loan shall be deemed to constitute a
representation and warranty by the Obligors on the date thereof as to the
matters specified in clauses (a) and (b) of the immediately preceding sentence.

ARTICLE VI

AFFIRMATIVE COVENANTS

                    Until the Commitments have expired or been terminated, the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, XL Group, and to the extent any
covenant applies specifically to any Account Party or its financial statements,
XL Group and, with respect to itself only, such Account Party, covenants and
agrees with the Lenders that:

                    SECTION 6.01. Financial Statements and Other Information.
The Administrative Agent and each Lender will receive:

 

 

 

          (a) by April 10 of each year, (i) the audited balance sheet and
related statements of operations, stockholders’ equity and cash flows of XL
Group and its consolidated Subsidiaries as of the end of and for the immediately
preceding fiscal year, setting forth 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), reported on
by 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 financial
statements present fairly in all material respects the financial condition and
results of operations of XL Group and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied (it being
understood that delivery to the

63

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

 

 

 

Lenders of XL Group’s Report on Form 10-K filed with the SEC shall satisfy the
financial statement delivery requirements under this clause (i) so long as the
financial information required to be contained in such report is substantially
the same as the financial information required under this clause (i)); and (ii)
the unaudited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows of XLIT and its consolidated Subsidiaries as
of the end of and for the immediately preceding 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 previous fiscal year (if such figures were already
produced for such corresponding period), certified by a Financial Officer of
XLIT as presenting fairly in all material respects the financial condition and
results of operations of XLIT 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;

 

 

 

          (b) (i) by May 15 of each year, the balance sheet and related
statements of operations and stockholders’ equity of each of XL Insurance
(Bermuda), XL Re, XL Re Europe, XL Insurance, XL Switzerland and XL Life (in
each case, in the event consolidated financial statements are prepared in the
ordinary course of business, prepared in a manner that consolidates the
applicable consolidated Subsidiaries) as of the end of and for the immediately
preceding 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), in
each case audited and reported on by 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) in accordance with GAAP, Local GAAP, SAP or SFR, as the case may be,
consistently applied; (ii) by June 15 of each year, the unaudited consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows of XL America and its consolidated Subsidiaries as of the end of and
for the immediately preceding 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 previous fiscal year (if such figures were already produced for
such corresponding period), certified by a Financial Officer of XL America as
presenting fairly in all material respects the financial condition and results
of operations of XL America 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; and (iii) by June 15 of each
year, audited statutory financial statements for each Insurance Subsidiary of XL
America as of the end of and for the immediately preceding fiscal year, in each
case reported on by 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 audited financial statements present fairly in all material
respects the financial condition and results of operations of such Insurance
Subsidiary in accordance with SAP consistently applied;

 

 

 

          (c) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of XL Group, (i) the unaudited consolidated balance
sheet and related statements of operations, stockholders’ equity and cash flows
of XL Group and its

64

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

 

 

 

consolidated Subsidiaries as of the end of and for such fiscal quarter and the
then elapsed portion of the 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 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 of XL Group as presenting fairly in all
material respects the financial condition and results of operations of XL Group
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 (it being understood that delivery to the Lenders of XL
Group’s Report on Form 10-Q filed with the SEC shall satisfy the financial
statement delivery requirements under this clause (i) so long as the financial
information required to be contained in such report is substantially the same as
the financial information required under this clause (i)); and (ii) an unaudited
balance sheet and related statements of operations and stockholders’ equity of
each of XLIT, XL America, XL Insurance (Bermuda), XL Re, XL Re Europe, XL
Insurance, XL Switzerland and XL Life (in each case, in the event consolidated
financial statements are prepared in the ordinary course of business, prepared
in a manner that consolidates the applicable consolidated Subsidiaries) as of
the end of and for such fiscal quarter and the then elapsed portion of the
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 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 of
the respective Account Party as presenting fairly in all material respects the
financial condition and results of operations of such Account Party (or, if
applicable, of such Account Party and its consolidated Subsidiaries on a
consolidated basis) in accordance with GAAP, Local GAAP, SAP or SFR, as the case
may be, consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;

 

 

 

          (d) concurrently with any delivery of financial statements under
paragraph (a), (b) or (c) of this Section, a certificate signed on behalf of
each Account Party by a Financial Officer (i) certifying as to whether a Default
has occurred and, if a Default has occurred, specifying the details thereof and
any action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with Sections
7.03, 7.05, 7.06 and 7.07 and (iii) stating whether any change in GAAP, Local
GAAP, SAP or SFR or in the application thereof has occurred since the date of
the financial statements referred to in Section 4.04 and, if any such change has
occurred, specifying any material effect of such change on the financial
statements accompanying such certificate;

 

 

 

          (e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by such
Account Party or any of its respective Subsidiaries with the SEC, or any
Governmental Authority succeeding to any or all of the functions of the SEC, or
with any U.S. or other securities exchange, or distributed by such Account Party
to its shareholders generally, as the case may be;

 

 

 

          (f) concurrently with any delivery of financial statements under
paragraph (a), (b) or (c) of this Section, a certificate of a Financial Officer
of XL Group, setting forth on a consolidated basis for XL Group and its
consolidated Subsidiaries as of the end of the

65

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

 

 

 

fiscal year or quarter to which such certificate relates (i) the aggregate book
value of assets which are subject to Liens permitted under Section 7.03(g) and
the aggregate book value of liabilities which are subject to Liens permitted
under Section 7.03(g)(it being understood that the reports required by
paragraphs (a), (b) and (c) of this Section shall satisfy the requirement of
this clause (i) of this paragraph (f) if such reports set forth separately, in
accordance with GAAP, line items corresponding to such aggregate book values)
and (ii) a calculation showing the portion of each of such aggregate amounts
which portion is attributable to transactions among wholly-owned Subsidiaries of
XL Group;

 

 

 

          (g) within 90 days after the end of each of the first three fiscal
quarters of each fiscal year and within 135 days after the end of each fiscal
year of XL Group (commencing with the fiscal year ending December 31, 2011), a
statement of a Financial Officer of XL Group listing, as of the end of the
immediately preceding fiscal quarter of XL Group, the amount of cash and the
securities of the Account Parties and their Subsidiaries that have been posted
as collateral under Section 7.03(e); and

 

 

 

          (h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of XL Group
or any of its Subsidiaries, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender may reasonably request.

                    SECTION 6.02. Notices of Material Events. Each Account Party
will furnish to the Administrative Agent and each Lender prompt written notice
of the following:

 

 

 

          (a) the occurrence of any Default; and

 

 

 

          (b) any event or condition constituting, or which could reasonably be
expected to have a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the relevant Account Party
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken by such Account Party with respect
thereto.

                    SECTION 6.03. Preservation of Existence and Franchises. Each
Account Party will, and will cause each of its Significant Subsidiaries to,
maintain its corporate existence and its material rights and franchises in full
force and effect in its jurisdiction of incorporation; provided that the
foregoing shall not prohibit (x) any merger or consolidation permitted under
Section 7.01 or (y) any Disposition permitted under Section7.02(e). Each Account
Party will, and will cause each of its Subsidiaries to, qualify and remain
qualified as a foreign corporation in each jurisdiction in which failure to
receive or retain such qualification would have a Material Adverse Effect.

                    SECTION 6.04. Insurance. Each Account Party will, and will
cause each of its Significant Subsidiaries to, maintain with financially sound
and reputable insurers, insurance with respect to its properties in such amounts
as is customary in the case of corporations engaged

66

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

in the same or similar businesses having similar properties similarly situated.

                    SECTION 6.05. Maintenance of Properties. Each Account Party
will, and will cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition the properties now or
hereafter owned, leased or otherwise possessed by and used or useful in its
business and will make or cause to be made all needful and proper repairs,
renewals, replacements and improvements thereto so that the business carried on
in connection therewith may be properly conducted at all times except if the
failure to do so would not have a Material Adverse Effect, provided, however,
that the foregoing shall not impose on such Account Party or any Subsidiary of
such Account Party any obligation in respect of any property leased by such
Account Party or such Subsidiary in addition to such Account Party’s obligations
under the applicable document creating such Account Party’s or such Subsidiary’s
lease or tenancy.

                    SECTION 6.06. Payment of Taxes and Other Potential Charges
and Priority Claims; Payment of Other Current Liabilities. Each Account Party
will, and will cause each of its Subsidiaries to, 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;
and

 

 

 

          (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 forbidden by Section 7.03) or which, if unpaid, might give rise
to a claim entitled to priority over general creditors of such Account Party or
such Subsidiary in any proceeding under the Bermuda Companies Law, or Bermuda
Insurance Law, or any insolvency proceeding, liquidation, receivership,
rehabilitation, dissolution or winding-up involving such Account Party or such
Subsidiary;

provided that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, such Account Party or such Subsidiary
need not pay or discharge any such tax, assessment, charge, levy or claim (i) so
long as the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted and so long as such reserves or other
appropriate provisions as may be required by GAAP, Local GAAP, SAP or SFR, as
the case may be, shall have been made therefor or (ii) so long as such failure
to pay or discharge would not have a Material Adverse Effect.

                    SECTION 6.07. Financial Accounting Practices. Each Account
Party will, and will cause each of its consolidated Subsidiaries to, 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

67

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

statements required under Section 6.01 in conformity with GAAP, Local GAAP, SAP
and SFR, as applicable, and to maintain accountability for assets.

                    SECTION 6.08. Compliance with Applicable Laws. Each Account
Party will, and will cause each of its Subsidiaries to, comply with all
applicable Laws (including but not limited to the Bermuda Companies Law or
Bermuda Insurance Law) in all respects; provided that such Account Party or any
Subsidiary of such Account Party will not be deemed to be in violation of this
Section as a result of any failure to comply with any such Law which would not
(i) result in fines, penalties, injunctive relief or other civil or criminal
liabilities which, in the aggregate, would have a Material Adverse Effect or
(ii) otherwise impair the ability of such Account Party to perform its
obligations under this Agreement.

                    SECTION 6.09. Use of Letters of Credit and Loan Proceeds. 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 Board, including Regulations U and X. Each Account Party will
use the Letters of Credit issued for its account hereunder in the ordinary
course of business of, and will use the proceeds of all Loans made to it for the
general corporate purposes of, such Account Party and its Affiliates. For the
avoidance of doubt, the parties agree that any Account Party may apply for a
Letter of Credit hereunder to support the obligations of any Affiliate of XL
Group, it being understood that such Account Party shall nonetheless remain the
account party and as such be liable with respect to such Letter of Credit.

                    SECTION 6.10. Continuation of and Change in Businesses. The
Account Parties and their respective Significant Subsidiaries, taken as a whole,
will continue to engage in substantially the same business or businesses they
engaged in (or propose to engage in) on the date of this Agreement and
businesses related or incidental thereto; provided that the foregoing shall not
prohibit any Disposition permitted under Section 7.02(e).

                    SECTION 6.11. Visitation. Each Account Party will permit
such Persons as any Lender may reasonably designate to visit and inspect any of
the properties (including books and records) of such Account Party, to discuss
its affairs with its financial management, and provide such other information
relating to the business and financial condition of such Account Party at such
times as such Lender may reasonably request. Each Account Party hereby
authorizes its financial management to discuss with any Lender the affairs of
such Account Party.

ARTICLE VII

NEGATIVE COVENANTS

                    Until the Commitments have expired or terminated, the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, all Letters of Credit have expired or terminated and all LC
Disbursements have been reimbursed, XL Group, and to the extent any covenant
applies specifically to any Account Party, such Account Party, with respect to
itself only, covenants and agrees with the Lenders that:

                    SECTION 7.01. Mergers. No Account Party will merge with or
into or

68

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

consolidate with any other Person, except that if no Default shall occur and be
continuing or shall exist at the time of such merger or consolidation or
immediately thereafter and after giving effect thereto (a) any Account Party may
merge or consolidate with any other corporation, including a Subsidiary, if such
Account Party shall be the surviving corporation, (b) XL Group may merge with or
into or consolidate with any other Person in a transaction that does not result
in a reclassification, conversion, exchange or cancellation of the outstanding
shares of capital stock of XL Group (other than the cancellation of any
outstanding shares of capital stock of XL Group held by the Person with whom it
merges or consolidates), (c) any Account Party may enter into a merger or
consolidation which is effected solely to change the jurisdiction of
incorporation of such Account Party and results in a reclassification,
conversion or exchange of outstanding shares of capital stock of such Account
Party solely into shares of capital stock of the surviving entity and (d) any
Account Party may merge or consolidate with any other Account Party or any
Subsidiary if the obligations hereunder of the non-surviving Account Party with
respect to any outstanding Letters of Credit issued for its account have been
(i) assumed by another Account Party, (ii) terminated or expired or (iii) dealt
with in any other manner reasonably satisfactory to the Administrative Agent
(after consultation with the Lenders).

                    SECTION 7.02. Dispositions. No Account Party will, nor will
it permit any of its Significant Subsidiaries to, sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily (any
of the foregoing being referred to in this Section as a “Disposition” and any
series of related Dispositions constituting but a single Disposition), any of
its properties or assets, tangible or intangible (including but not limited to
sale, assignment, discount or other disposition of accounts, contract rights,
chattel paper or general intangibles with or without recourse), except:

 

 

 

          (a) Dispositions in the ordinary course of business involving current
assets or other invested assets classified on such Account Party’s or its
respective Subsidiaries’ balance sheet as available for sale or as a trading
account;

 

 

 

          (b) sales, conveyances, assignments or other transfers or dispositions
in immediate exchange for cash or tangible assets, provided that any such sales,
conveyances or transfers shall not individually, or in the aggregate for the
Account Parties and their respective Subsidiaries (taken together with any other
Dispositions previously made pursuant to this Section 7.02(b)), exceed 5% of
Consolidated Total Assets at the time of the making of such Disposition;

 

 

 

          (c) Dispositions of equipment or other property which is obsolete or
no longer used or useful in the conduct of the business of such Account Party or
its Subsidiaries;

 

 

 

          (d) Dispositions from an Account Party or a wholly-owned Subsidiary to
any other Account Party or wholly-owned Subsidiary; or

 

 

 

          (e) the Disposition of all or any portion of the life reinsurance
operations (the “Life Operations”) conducted directly or indirectly by any
Account Party (including through the Disposition of a Subsidiary that conducts
Life Operations); provided that, if, after giving effect to such Disposition,
such Account Party would no longer exist or have any operations, such
Disposition shall only be permitted if the obligations hereunder of

69

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

 

 

 

such Account Party with respect to any outstanding Letters of Credit issued for
its account have been (i) assumed by another Account Party, (ii) terminated or
expired or (iii) dealt with in any other manner reasonably satisfactory to the
Administrative Agent (after consultation with the Lenders).

                    SECTION 7.03. Liens. No Account Party will, nor will it
permit any of its Subsidiaries to, 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 securing Indebtedness incurred under the Secured Credit
Agreement or otherwise granted under the security documents described therein
(including extensions, renewals and replacements thereof);

 

 

 

          (b) Liens securing Indebtedness incurred under the Existing Secured
Credit Agreement or otherwise granted under the security documents described
therein (including extensions, renewals and replacements thereof);

 

 

 

          (c) Liens existing on the date hereof (and extension, renewal and
replacement Liens upon the same property, provided that the principal amount
secured by each Lien constituting such an extension, renewal or replacement Lien
shall not exceed the amount secured by the Lien theretofore existing) and listed
on Part B of Schedule II;

 

 

 

          (d) Liens securing Indebtedness permitted by Section 7.07(d) covering
assets whose market value is not materially greater than the amount of the
Indebtedness secured thereby plus a commercially reasonable margin;

 

 

 

          (e) Liens on cash and securities of an Account Party or any of its
Subsidiaries incurred as part of treasury management or the management of its
investment portfolio including, but not limited to, (i) any custody, investment
management or other service provider arrangements or (ii) pursuant to any
International Swaps and Derivatives Association, Inc. (“ISDA”) documentation or
any Specified Transaction Agreement in accordance with XL Group’s Statement of
Investment Policy Objectives and Guidelines as in effect as of the date of entry
into the ISDA or Specified Transaction Agreement or as it may be changed from
time to time by a resolution duly adopted by the board of directors of XL Group
(or any committee thereof);

 

 

 

          (f) Liens on cash and securities not to exceed $1,000,000,000 in the
aggregate securing obligations of an Account Party or any of its Subsidiaries
arising under any ISDA documentation or any other Specified Transaction
Agreement (it being understood that in no event shall this clause (f) preclude
any Person (other than any Subsidiary of XL Group) in which XL Group or any of
its Subsidiaries shall invest (each an “investee”) from granting Liens on such
Person’s assets to secure hedging obligations of such Person, so long as such
obligations are non-recourse to XL Group or any of its Subsidiaries (other than
any investees)), provided that, for purposes of determining the aggregate amount
of cash and/or securities subject to such Liens under this clause (f), the
aggregate amount of cash and/or securities on which any Account Party or any
Subsidiary shall have granted Liens in favor of the counterparties of such
Account Party or such Subsidiary at any time

70

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

 

 

 

shall be netted against the aggregate amount of cash and/or securities on which
such counterparties shall have granted Liens in favor of such Account Party or
such Subsidiary, as the case may be, at such time, so long as the relevant
agreements between such Account Party or such Subsidiary, as the case may be,
provide for the netting of their respective obligations thereunder;

 

 

 

          (g) Liens on (i) assets received, and on actual or imputed investment
income on such assets received incurred as part of its business including
activities utilizing ISDA documentation or any Specified Transaction Agreement
relating and identified to specific insurance payment liabilities or to
liabilities arising in the ordinary course of any Account Parties’ or any of
their Subsidiary’s business as an insurance or reinsurance company (including
GICs and Stable Value Instruments) or corporate member of The Council of Lloyd’s
or as a provider of financial or investment services or contracts, or the
proceeds thereof (including GICs and Stable Value Instruments), in each case
held in a segregated trust, trust or other account and securing such
liabilities, (ii) assets securing Exempt Indebtedness of any Person (other than
XL Group or any of its Affiliates) in the event such Exempt Indebtedness is
consolidated on the consolidated balance sheet of XL Group and its consolidated
Subsidiaries in accordance with GAAP or (iii) any other assets subject to any
trust or other account arising out of or as a result of contractual, regulatory
or any other requirements; provided that in no case shall any such Lien secure
Indebtedness and any Lien which secures Indebtedness shall not be permitted
under this clause (g);

 

 

 

          (h) 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 the provision of
Section 6.06;

 

 

 

          (i) Liens on property securing all or part of the purchase price
thereof to such Account Party and Liens (whether or not assumed) existing on
property at the time of purchase thereof by such Account Party (and extension,
renewal and replacement Liens upon the same property); provided (i) each such
Lien is confined solely to the property so purchased, improvements thereto and
proceeds thereof, and (ii) the aggregate amount of the obligations secured by
all such Liens on any particular property at any time purchased by such Account
Party, as applicable, shall not exceed 100% of the lesser of the fair market
value of such property at such time or the actual purchase price of such
property;

 

 

 

          (j) Liens existing on property of a Person immediately prior to its
being consolidated with or merged into any Account Party or any of their
Subsidiaries or its becoming a Subsidiary, and Liens existing on any property
acquired by any Account Party or any of their Subsidiaries at the time such
property is so acquired (whether or not the Indebtedness secured thereby shall
have been assumed) (and extension, renewal and replacement Liens upon the same
property, provided that the amount secured by each Lien constituting such an
extension, renewal or replacement Lien shall not exceed the amount secured by
the Lien theretofore existing), provided that (i) no such Lien shall have been
created or assumed in contemplation of such consolidation or merger or such
Person’s becoming a Subsidiary or such acquisition of property and (ii) each
such Lien shall extend solely to the item or items of property so acquired and,
if required by terms

71

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

 

 

 

of the instrument originally creating such Lien, other property which is an
improvement to or is acquired for specific use in connection with such acquired
property;

 

 

 

          (k) 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, such Account Party or any
such Subsidiary;

 

 

 

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

 

 

 

          (m) Liens incurred in connection with the bonding of any judgment; and

 

 

 

          (n) Liens created pursuant to the second and third to last paragraphs
of Article VIII.

                    SECTION 7.04. Transactions with Affiliates. No Account Party
will, nor will it permit any of its Significant Subsidiaries to, enter into or
carry out any transaction with (including purchase or lease property or services
to, loan or advance to or enter into, suffer to remain in existence or amend any
contract, agreement or arrangement with) any Affiliate of such Account Party, or
directly or indirectly agree to do any of the foregoing, except (i) transactions
involving guarantees or co-obligors with respect to any Indebtedness described
in Part A of Schedule II, (ii) transactions among the Account Parties and their
wholly-owned Subsidiaries, (iii) transactions with Affiliates in good faith in
the ordinary course of such Account Party’s business consistent with past
practice and on terms no less favorable to such Account Party or any Subsidiary
than those that could have been obtained in a comparable transaction on an arm’s
length basis from an unrelated Person and (iv) transactions permitted by
Sections 7.01 and 7.07.

                      SECTION 7.05. Ratio of Total Funded Debt to Total
Capitalization. XL Group will not permit at any time its 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.

                      SECTION 7.06. Consolidated Net Worth. XL Group will not
permit at any time its Consolidated Net Worth to be less than the sum of (a)
$6,609,000,000 plus (b) 25% of consolidated net income (if positive) of XL Group
and its Subsidiaries for each fiscal quarter ending after September 30, 2011.

                      SECTION 7.07. Indebtedness. No Account Party will, nor
will it permit any of its Subsidiaries to, at any time create, incur, assume or
permit to exist any Indebtedness, or agree, become or remain liable (contingent
or otherwise) to do any of the foregoing, except:

 

 

 

          (a) Indebtedness created hereunder;

 

 

 

          (b) Indebtedness incurred under the Existing Secured Credit Agreement
and Indebtedness incurred under the Secured Credit Agreement;

72

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

 

 

 

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

 

 

 

          (d) other secured Indebtedness (including secured reimbursement
obligations with respect to letters of credit) of any Account Party or any
Subsidiary in an aggregate principal amount (for all Account Parties and their
respective Subsidiaries) not exceeding 15% of Consolidated Net Worth at the time
of incurrence;

 

 

 

          (e) Indebtedness incurred in transactions described in Section 7.03(e)
and (f);

 

 

 

          (f) Indebtedness consisting of accounts or claims payable and accrued
and deferred compensation (including options) incurred in the ordinary course of
business by any Account Party or any Subsidiary; and

 

 

 

          (g) other unsecured Indebtedness, so long as upon the incurrence
thereof no Default would occur or exist.

                    SECTION 7.08. Financial Strength Ratings. None of XL
Insurance (Bermuda), XL Re and XL Re Europe will permit at any time its
financial strength ratings to be less than “A-” from A.M. Best & Co. (or its
successor), except (i) as a result of a merger permitted by Section 7.01 where
the surviving corporation has a financial strength rating not less than “A-”
from A.M. Best & Co. (or its successor) or (ii) in the event that A.M. Best & Co
(or its successor) in its discretion ceases to rate such company.

                    SECTION 7.09. Private Act. No Account Party will become
subject to a Private Act other than the X.L. Insurance Company, Ltd. Act, 1989
and the XL Life Ltd Amendment and Consolidation Act 2001.

ARTICLE VIII

EVENTS OF DEFAULT

 

 

 

          If any of the following events (“Events of Default”) shall occur:

 

 

 

          (a) any Account Party shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement 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 Account Party shall fail to pay any interest on any Loan or LC
Disbursement 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, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of 5 or more days;

73

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

 

 

 

          (c) any representation or warranty made or deemed made by any Account
Party in or in connection with this Agreement or any amendment or modification
hereof, or in any certificate or financial statement furnished pursuant to the
provisions hereof, shall prove to have been false or misleading in any material
respect as of the time made (or deemed made) or furnished;

 

 

 

          (d) any Account Party shall fail to observe or perform any covenant,
condition or agreement contained in Section 6.03 (with respect to an Account
Party) or Article VII;

 

 

 

          (e) any Obligor 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 the reporting requirement pursuant
to Section 6.01(f)), 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 such Obligor;

 

 

 

          (f) any Account Party or any of its Subsidiaries shall default (i) in
any payment of principal of or interest on any other obligation for borrowed
money in principal amount of $50,000,000 or more, or any payment of any
principal amount of $50,000,000 or more under Hedging Agreements, in each case
beyond any period of grace provided with respect thereto, or (ii) in the
performance of any other agreement, term or condition contained in any such
agreement (other than Hedging Agreements) under which any such obligation in
principal amount of $50,000,000 or more is created, if the effect of such
default is to cause or permit the holder or holders of such obligation (or
trustee on behalf of such holder or holders) to cause such obligation to become
due prior to its stated maturity or to terminate its commitment under such
agreement, provided that this clause (f) 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;

 

 

 

          (g) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging any Account Party a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of such Account
Party under the Bermuda Companies Law or the Companies Law (2011 Revision) of
the Cayman Islands or any other similar applicable Law, and such decree or order
shall have continued undischarged or unstayed for a period of 60 days; or a
decree or order of a court having jurisdiction in the premises for the
appointment of an examiner, receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of such Account Party or a substantial part of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have continued undischarged and unstayed
for a period of 60 days;

 

 

 

          (h) any Account Party shall institute proceedings to be adjudicated a
voluntary 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 the Companies Law (2011 Revision) of the
Cayman Islands or any other similar applicable 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

74

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

 

 

 

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
such Account Party in furtherance of any of the aforesaid purposes;

 

 

 

          (i) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 shall be rendered against any Account Party or
any of its Subsidiaries or any combination thereof and the same shall not have
been vacated, discharged, stayed (whether by appeal or otherwise) or bonded
pending appeal within 90 days from the entry thereof;

 

 

 

          (j) an ERISA Event (or similar event with respect to any Non-U.S.
Benefit Plan) shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events and such similar events that
have occurred, could reasonably be expected to result in liability of the
Account Parties and their Subsidiaries in an aggregate amount exceeding
$100,000,000;

 

 

 

          (k) a Change in Control shall occur;

 

 

 

          (l) XL Group shall cease to own, beneficially and of record, directly
or indirectly, all of the outstanding voting shares of capital stock of XLIT, XL
Switzerland, XL Re Europe, XL Insurance (Bermuda), XL Insurance, XL Re or XL
America; or

 

 

 

          (m) the guarantee contained in Article III shall terminate or cease,
in whole or material part, to be a legally valid and binding obligation of each
Guarantor (other than as a result of a Disposition of a Guarantor under Section
7.02(e)) or any Guarantor or any Person acting for or on behalf of any of such
parties shall contest such validity or binding nature of such guarantee itself
or the Transactions, or any such Person shall assert any of the foregoing;

then, and in every such event (other than an event with respect to any Account
Party described in clause (g) or (h) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Account
Parties, take either or both of the following actions, at the same or different
times:

          (i) declare the commitment of the Administrative Agent and each
Issuing Lender to issue, amend, extend or otherwise modify any Letter of Credit
to be terminated, whereupon such commitments and obligation shall be terminated;

          (ii) declare the Loans then outstanding to be due and payable in whole
(or in part, in which case any principal not so declared to be due and payable
may thereafter be declared to be due and payable), and thereupon the principal
of the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Account Parties accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Account Parties; and in case of any event with respect to any Account Party
described in clause (g) or (h) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Account Parties

75

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

accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Account Parties.

                    If either (i) an Event of Default shall occur and be
continuing or (ii) the Commitment Termination Date has occurred, and XL Group
receives notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral for the Aggregate LC Exposure of all the Lenders
pursuant to this paragraph, each Specified Account Party shall immediately
deposit into one or more accounts (collectively, the “LC Collateral Accounts”)
established and maintained on the books and records of the Administrative Agent,
which account may be a “securities account” (within the meaning of Section 8-501
of the Uniform Commercial Code as in effect in the State of New York (the
“Uniform Commercial Code”)), in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the total LC Exposure as of
such date in respect of outstanding Letters of Credit issued for the account of
such Specified Account Party plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any Account Party described in clause (g)
or (h) of this Article. Such deposit shall be held by the Administrative Agent
as collateral for such LC Exposure under this Agreement, and for this purpose
each such Specified Account Party hereby grants a security interest to the
Administrative Agent for the benefit of the Lenders in each (if any) of its LC
Collateral Accounts and in any financial assets (as defined in the Uniform
Commercial Code) or other property held therein.

                    In addition to the provisions of this Article, each
Specified Account Party with respect to an Alternative Currency Letter of Credit
agrees that upon either (i) the occurrence and during the continuance of any
Event of Default or (ii) the occurrence of Commitment Termination Date, any
Lender which has issued any Alternative Currency Letter of Credit may, by notice
to XL Group and the Administrative Agent: (a) in the case of clause (i) above
only, declare that all fees and other obligations of such Specified Account
Party accrued in respect of Alternative Currency Letters of Credit issued by
such Lender shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
such Specified Account Party and (b) demand the deposit (without duplication of
any amounts deposited with the Administrative Agent under the preceding
paragraph) of cash collateral from such Specified Account Party in immediately
available funds in the currency of such Alternative Currency Letter of Credit
or, at the option of such Lender, in Dollars in an amount equal to the then
aggregate undrawn face amount of all such Alternative Currency Letters of Credit
and in such manner as previously agreed to by such Specified Account Party and
such Lender (any account where any such amounts are deposited, an “Alternative
Currency Collateral Account” and together with the LC Collateral Accounts, the
“Collateral Accounts”); provided that, in the case of any of the Events of
Default specified in clause (g) or (h) of this Article, without any notice to
any Account Party or any other act by the Administrative Agent or the Lenders,
all fees and other obligations of the respective Specified Account Parties
accrued in respect of all Alternative Currency Letters of Credit shall become
due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each such Specified
Account Party. If the Administrative Agent receives any notice from a Lender
pursuant to the previous sentence, then it will promptly give notice thereof to
the other

76

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

Lenders.

                    To the extent that any Letter of Credit referred to in the
preceding two paragraphs expires or otherwise terminates, and to the extent the
applicable Issuing Lender’s liability has ceased to exist under such Letter of
Credit, and funds are on deposit in the Collateral Account in respect of such
Letter of Credit, an amount equal to the undrawn amounts under such Letter of
Credit shall be promptly returned from such Collateral Account to the respective
Specified Account Party. In the case of any cash collateral provided during the
continuance of an Event of Default, if no Event of Default has occurred and is
continuing, the balance, if any, in the Collateral Accounts shall be promptly
returned to the respective Specified Account Parties. If, in accordance with
this paragraph, the balance in the Collateral Accounts has not been otherwise
returned, then after all such Letters of Credit shall have expired or been fully
drawn upon and all other obligations of the Specified Account Parties hereunder
shall have been paid in full, the balance, if any, in the Collateral Accounts
shall be promptly returned to the respective Specified Account Parties.

ARTICLE IX

THE ADMINISTRATIVE AGENT

                    Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent 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 and under the other Credit
Documents together with such actions and powers as are reasonably incidental
thereto.

                    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 such Person and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with any Account Party or any
Subsidiary or other Affiliate thereof as if it were not the Administrative Agent
hereunder.

                    The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to any Account Party or any of their Subsidiaries that
is communicated to or obtained by the bank serving as 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 with the consent or at the
request of the Required Lenders or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the

77

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

Administrative Agent by an Account Party or a Lender, and 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, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
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 believed
by it to be genuine and to have been signed or sent 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 be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for any Account Party), 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.

                    The Administrative Agent may perform any and all its duties
and exercise its rights and powers 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 its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs 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 may resign at any time by notifying
the Lenders and the Account Parties. Upon any such resignation, the Required
Lenders shall have the right, in consultation with XL Group, to appoint a
successor. If no successor shall have 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, then the retiring
Administrative Agent’s resignation shall nonetheless become effective and
(1) the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and (2) the Required Lenders shall perform the duties of
the Administrative Agent (and all payments and communications provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender directly) until such time as the Required Lenders appoint a
successor agent as provided for above in this paragraph. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by XL Group to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between XL Group and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 10.03

78

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

shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.

                    Each Lender acknowledges that 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 Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender 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 related agreement or any document furnished hereunder or thereunder.

                    Notwithstanding anything herein to the contrary, the Joint
Lead Arrangers and Joint Bookrunners, the Syndication Agents and the
Documentation Agents named on the cover page of this Agreement shall not have
any duties or liabilities under this Agreement, except in their capacity, if
any, as Lenders.

ARTICLE X

MISCELLANEOUS

                    SECTION 10.01. Notices. Except in the case of notices and
other communications expressly permitted to be given by telephone, 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 telecopy or email, as follows:

 

 

 

          (a) if to any Account Party, to XL Group, One Bermudiana Road,
Hamilton HM 08 Bermuda, Attention of Timothy Goodyer (email address
Timothy.Goodyer@xlgroup.com); with a copy to Kirstin R. Gould, Esq. at the same
address and email address Kirstin.Gould@xlgroup.com;

 

 

 

          (b) if to the Administrative Agent, JPMorgan Chase Bank, N.A., 1111
Fannin Street, 10th Floor, Houston, Texas 77002-6925, Attention of Vashni X.
Whittaker (Telecopy No. (713) 750-2223; Telephone No. (713) 483-1080); email
address, vashni.x.whittaker@jpmorgan.com;

 

 

 

          with a copy to

 

 

 

          JPMorgan Chase Bank, N.A., 277 Park Avenue, 11th Floor, New York, New
York 10172, Attention of Brij S Grewal (Telecopy No. (917) 456-3256; email
address brijendra.s.grewal@jpmorgan.com; Telephone No. (212) 270-5305); and

 

 

 

          (c) if to a Lender, to it at its address (or telecopy number or email
address) set forth in its Administrative Questionnaire (a copy of which such
Administrative Questionnaire shall be delivered to XL Group).

79

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

Any party hereto may change its address, telecopy number or email address for
notices and other communications hereunder by notice to the other parties hereto
(or, in the case of any such change by a Lender, by notice to the Account
Parties and the Administrative Agent). All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt.

                    Notices and other communications to the Lenders hereunder
may be delivered or furnished by electronic communications pursuant to
procedures approved by the Administrative Agent; provided that the foregoing
shall not apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or any
Account Party 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. Without limiting the foregoing,
the Account Parties may furnish to the Administrative Agent and the Lenders the
financial statements required to be furnished by it pursuant to Section 6.01(a),
6.01(b) or 6.01(c) by electronic communications pursuant to procedures approved
by the Administrative Agent.

                    SECTION 10.02. Waivers; Amendments.

                    (a) No Deemed Waivers; Remedies Cumulative. No failure or
delay by the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Account
Parties therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.

                    (b) Amendments. Neither this Agreement nor any provision
hereof may be waived, amended or modified except in writing signed by the
Obligors and the Required Lenders or by the Obligors and the Administrative
Agent with the consent of the Required Lenders; provided that no such writing
shall:

 

 

 

          (i) increase the Commitment of any Lender without the written consent
of such Lender,

 

 

 

          (ii) reduce the principal amount of any Loan or the amount of any
reimbursement obligation of an Account Party in respect of any LC Disbursement
or reduce the rate of interest thereon, or reduce any fees or other amounts
payable hereunder, without the written consent of each Lender directly affected
thereby,

80

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

 

 

 

          (iii) postpone the scheduled date of payment of the principal amount
of any Loan or for reimbursement of any LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any Commitment
or any Letter of Credit (other than an extension thereof pursuant to an
“evergreen” provision” to the extent permitted hereunder), without the written
consent of each Lender directly affected thereby,

 

 

 

          (iv) change Section 2.20(c) or 2.20(d) without the consent of each
Lender directly affected thereby,

 

 

 

          (v) release any of the Guarantors from any of their guarantee
obligations under Article III (other than as a result of a Disposition of a
Guarantor under Section 7.02(e)) without the written consent of each Lender, and

 

 

 

          (vi) change any of the provisions of this Section or the percentage in
the definition of the term “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender;

and provided further that no such writing shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent or an Issuing Lender
hereunder without the prior written consent of the Administrative Agent or such
Issuing Lender, as applicable.

          Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders, the
Administrative Agent and each Account Party (a) to increase the aggregate amount
of Commitments under this Agreement (it being understood, for the avoidance of
doubt, that the Commitment of any individual Lender may not be increased without
the consent of such Lender), (b) to add one or more additional credit facilities
to this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Credit Documents
with the Letters of Credit, Loans and the accrued interest and fees in respect
thereof and (c) to include appropriately the financial institutions holding such
credit facilities in any determination of the Required Lenders; provided that
this paragraph shall not apply to any increases to Commitments pursuant to
Section 2.11(c).

                    SECTION 10.03. Expenses; Indemnity; Damage Waiver.

                    (a) Costs and Expenses. XL Group agrees to pay (i) all
reasonable 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 and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the fees, charges and
disbursements of one legal counsel for the Administrative Agent

81

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

and one legal counsel for the Lenders and, if necessary, one firm of local
counsel in each appropriate jurisdiction outside of the United States, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including in connection
with any workout, restructuring or negotiations in respect thereof.

                    (b) Indemnification by the Account Parties. XL Group, and to
the extent this Section 10.03(b) applies to any Letter of Credit issued on
behalf of any Account Party or any Loan made to any Account Party, such Account
Party, jointly and severally with XL Group, agree to indemnify the
Administrative Agent, each Issuing Lender and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee (but not including
Excluded Taxes), incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or the use of the proceeds thereof or any Letter of Credit or the use thereof
(including any refusal by any Lender 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 such Account Party or any of its Subsidiaries, or any
Environmental Liability related in any way to such Account Party or any of its
Subsidiaries, or (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 and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
result from or arise out of the gross negligence or willful misconduct of such
Indemnitee, in each case, as determined in a final non-appealable judgment by a
court of competent jurisdiction.

                    (c) Reimbursement by Lenders. To the extent that the Account
Parties fail to pay any amount required to be paid by them to the Administrative
Agent under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; 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 in its
capacity as such.

                    (d) Waiver of Consequential Damages, Etc. To the extent
permitted by applicable law, no Account Party shall assert, and each Account
Party 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 or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

82

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

                    (e) Payments. All amounts due under this Section shall be
payable promptly after written demand therefor.

                    SECTION 10.04. Successors and Assigns.

                    (a) Assignments 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 (i) no Account
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by an Account Party without such consent shall be null
and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. 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 paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

                    (b) Assignments by Lenders. (i) Subject to the conditions
set forth in paragraph (b)(ii) of this Section, any Lender may assign all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans and LC Disbursements at the time owing
to it) to one or more NAIC Approved Banks (or to any other Person whose
obligations in respect of Letters of Credit shall be confirmed by a NAIC
Approved Bank) with the prior written consent (such consent not to be
unreasonably withheld) of:

 

 

 

                    (A) the Account Parties, provided that no consent of any
Account Party shall be required for an assignment to a Lender, an Affiliate of a
Lender or, if an Event of Default under clause (a), (b), (g) or (h) of Article
VIII has occurred and is continuing, any other assignee; and provided further
that the Account Parties shall be deemed to have consented to any such
assignment unless any Account Party shall object thereto by written notice to
the Administrative Agent within 10 Business Days after having received a written
request for such consent;

 

 

 

                    (B) the Administrative Agent, provided that no consent of
the Administrative Agent shall be required for an assignment to a Lender or an
Affiliate of a Lender; and

 

 

 

                    (C) the Issuing Lender with respect to Participated Letters
of Credit.

 

 

 

          (ii) Assignments shall be subject to the following additional
conditions:

 

 

 

                    (A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender’s Commitment, the amount of the Commitment 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) shall not be less than $5,000,000 unless each of the
Account Parties and the Administrative Agent otherwise

83

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

 

 

 

consent, provided that no such consent of the Account Parties shall be required
if an Event of Default under clause (a), (b), (g) or (h) of Article VIII has
occurred and is continuing;

 

 

 

                    (B) 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;

 

 

 

                    (C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and

 

 

 

                    (D) the assignee, if it shall not be a Lender, shall deliver
an Administrative Questionnaire to the Administrative Agent (with a copy to XL
Group).

                    (iii) Subject to acceptance and recording thereof pursuant
to paragraph (b)(v) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party
hereto 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 and subject to the limitations of Sections 2.17, 2.18, 2.19 and 10.03).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 10.04 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 paragraph (c) of this Section.

                    (iv) Notwithstanding anything to the contrary contained
herein, any Lender (a “Granting Lender”) may grant to a special purpose vehicle
(an “SPV”) of such Granting Lender, identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Account Parties,
the option to provide to the Account Parties all or any part of any Loan or LC
Disbursement that such Granting Lender would otherwise be obligated to make to
the Account Parties pursuant to Section 2.01, provided that (i) nothing herein
shall constitute a commitment by any SPV to make any Loan or LC Disbursement,
(ii) if an SPV elects not to exercise such option or otherwise fails to provide
all or any part of such Loan or LC Disbursement, the Granting Lender shall be
obligated to make such Loan or LC Disbursement pursuant to the terms hereof and
shall in any case remain responsible to the other parties for the performance of
its obligations under the terms of this Agreement and shall remain the Lender
for all purposes hereunder (including, without limitation, with respect to the
rights and responsibilities to deliver all consents and waivers required or
requested under this Agreement with respect to its SPV) and (iii) the Account
Parties may bring any proceeding against either or both the Granting Lender or
the SPV in order to enforce any rights of the Account Parties hereunder. The
making of a Loan or LC Disbursement by an SPV hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan or LC

84

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

Disbursement were made by the Granting Lender. Each party hereto hereby agrees
that no SPV shall be liable for any payment under this Agreement for which a
Lender would otherwise be liable, for so long as, and to the extent, the related
Granting Lender makes such payment. In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPV, it will not institute against, or join any other person in
instituting against, such SPV any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States or any State thereof arising out of any claim against such SPV
under this Agreement. In addition, notwithstanding anything to the contrary
contained in this Section, any SPV may with notice to, but without the prior
written consent of, the Account Parties or the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loan or Letter of Credit to its Granting Lender or to any financial
institutions (consented to by the Account Parties and the Administrative Agent)
providing liquidity and/or credit support (if any) with respect to commercial
paper issued by such SPV to fund such Loans and to issue such Letters of Credit
and such SPV may disclose, on a confidential basis, confidential information
with respect to any Account Party and its Subsidiaries to any rating agency,
commercial paper dealer or provider of a surety, guarantee or credit liquidity
enhancement to such SPV. Notwithstanding anything to the contrary in this
Agreement, no SPV shall be entitled to any greater rights under Section 2.17 or
Section 2.19 than its Granting Lender would have been entitled to absent the use
of such SPV. This paragraph may not be amended without the consent of any SPV at
the time holding Loans or LC Disbursements under this Agreement.

                    (v) The Administrative Agent, acting for this purpose as an
agent of the Account Parties, shall maintain at one of its offices in New York
City a copy of each Assignment and Assumption delivered to it and a register for
the recordation of the names and addresses of the Lenders, the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, absent manifest error, and the Account
Parties, 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. The Register shall be available for inspection by any Account Party
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

                    (vi) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee’s
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b)(ii)(C) of this Section and any written consent to such assignment
required by paragraph (b)(i) of this Section, the Administrative Agent shall
accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

                    (c) Participations. (i) Any Lender may, without the consent
of the Account

85

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

Parties, the Administrative Agent or any Issuing Lender, sell participations to
one or more banks or other entities (a “Participant”) in all or a portion of
such Lender’s rights and obligations under this Agreement and the other Credit
Documents (including all or a portion of its Commitment, the Loans and the LC
Disbursements owing to it); provided that (A) any such participation sold to a
Participant which is not a Lender or a Federal Reserve Bank shall be made only
with the consent (which in each case shall not be unreasonably withheld) of XL
Group and the Administrative Agent, unless a Default has occurred and is
continuing, in which case the consent of XL Group shall not be required, (B)
such Lender’s obligations under this Agreement and the other Credit Documents
shall remain unchanged, (C) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (D) the Account
Parties, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Credit Documents. 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 the other Credit Documents and to approve any amendment, modification or
waiver of any provision of this Agreement or the other Credit Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Account Parties agree that each Participant shall be entitled to the benefits
and subject to the limitations of Sections 2.17 and 2.19 (subject to the
requirements of such Sections) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (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 2.20(d) as though it were a Lender.

                    (ii) A Participant shall not be entitled to receive any
greater payment under Section 2.17, 2.18 or 2.19 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant or the Lender interest assigned, unless (A) the sale of the
participation to such Participant is made with the Account Parties’ prior
written consent and (B) in the case of Section 2.17 or 2.19, the entitlement to
greater payment results solely from a Change in Law formally announced after
such Participant became a Participant.

                    (iii) In the event that any Lender sells participations in a
Loan or Commitment, such Lender, acting solely for this purpose as a
non-fiduciary agent of the XL Group, shall maintain a register on which it
enters the name of all participants in the Loans and Commitments held by it (the
“Participant Register”); provided that no Lender shall have any obligation to
disclose all or any portion of the Participant Register to any Person (including
the identity of any Participant or any information relating to a Participant’s
interest in any Commitments, Letters of Credit or its other obligations under
this Agreement or any Credit Document) except to the extent that such disclosure
is necessary to establish that such Commitment, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations or otherwise required by applicable law. The entries in the
Participant Register shall be conclusive in the absence of manifest error, and
the participating Lender, each Account Party and the Administrative Agent shall
treat each Person whose name is recorded in the Participant Register, pursuant
to the terms hereof, as the Participant for all purposes of this Agreement and

86

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

the other Credit Documents, notwithstanding any notice to the contrary.

                    (d) 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 to secure obligations of such Lender, including any such pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

                    (e) No Assignments to Account Parties or Affiliates.
Anything in this Section to the contrary notwithstanding, no Lender may assign
or participate any interest in any Loan or LC Exposure held by it hereunder to
any Account Party or any of its Affiliates or Subsidiaries without the prior
consent of each Lender.

                    SECTION 10.05. Survival. All covenants, agreements,
representations and warranties made by the Account Parties herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and the issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of, or any accrued interest on, any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.17, 2.18, 2.19 and 10.03 and Article IX
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.

                    SECTION 10.06. Counterparts; Integration; Effectiveness.
This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract between and 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 5.01, 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 which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page to this Agreement by telecopy or email shall be effective as
delivery of a manually executed counterpart of this Agreement.

                    SECTION 10.07. Severability. To the fullest extent permitted
by law, any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall,

87

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

as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

                    SECTION 10.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and their Affiliates (collectively,
solely for purposes of this paragraph, the “Lenders”) are hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of any Account Party or
Guarantor against any of and all the obligations of such Account Party or
Guarantor now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

                    SECTION 10.09. Governing Law; Jurisdiction; Etc.

                    (a) Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.

                    (b) Submission to Jurisdiction. Each party hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of the Supreme Court of the State of New York sitting in
the Borough of Manhattan in the City of New York and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action 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 shall
affect any right that the Administrative Agent, or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against any Obligor
or its properties in the courts of any jurisdiction.

                    (c) Waiver of Venue. Each party hereto hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
in any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

                    (d) Service of Process. By the execution and delivery of
this Agreement, each Account Party and each Guarantor acknowledges that they
have by a separate written instrument, designated and appointed CT Corporation
System, 111 Eighth Avenue, 13th floor, New York, New York 10011 (or any
successor entity thereto), as its authorized agent upon which process

88

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

may be served in any suit or proceeding arising out of or relating to this
Agreement that may be instituted in any federal or state court in the State of
New York. Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

                    (e) Waiver of Immunities. To the extent that any Account
Party has or hereafter may acquire any immunity from jurisdiction of any court
or from any legal process (whether through service of notice, attachment prior
to judgment, attachment in aid of execution or execution, on the ground of
sovereignty or otherwise) with respect to itself or its property, it hereby
irrevocably waives, to the fullest extent permitted by applicable law, such
immunity in respect of its obligations under this Agreement.

                    SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY 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 THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

                      SECTION 10.11. Headings. Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.

                    SECTION 10.12. Treatment of Certain Information;
Confidentiality.

                    (a) Treatment of Certain Information. Each of the Account
Parties acknowledge that from time to time financial advisory, investment
banking and other services may be offered or provided to any Account Party or
one or more of their Subsidiaries (in connection with this Agreement or
otherwise) by any Lender or by one or more subsidiaries or affiliates of such
Lender and each of the Account Parties hereby authorizes each Lender to share
any information delivered to such Lender by such Account Party and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such subsidiary or affiliate,
it being understood that (i) any such information shall be used only for the
purpose of advising the Account Parties or preparing presentation materials for
the benefit of the Account Parties and (ii) any such subsidiary or affiliate
receiving such information shall be bound by the provisions of paragraph (b) of
this Section as if it were a Lender hereunder. The provisions of this paragraph
and paragraph (b) of this Section shall survive until the third anniversary of
the later of (i) the expiration or termination of the Commitments hereunder and
(ii) the termination of this Agreement.

89

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

                    (b) Confidentiality. Each of the Administrative Agent, the
Lenders and each SPV agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (i) to its and its
Affiliates’ directors, officers, employees, partners and agents, including
accountants, legal counsel and other advisors (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), (ii) to the extent requested by any regulatory authority
(including self-regulating organizations) having jurisdiction over the
Administrative Agent or any Lender (or any Affiliate thereof), (iii) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (iv) to any other party to this Agreement, (v) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (vi) subject
to an agreement in writing containing provisions substantially the same as those
of this paragraph and for the benefit of the Account Parties, to (a) any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (b) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to any Account Party and its obligations hereunder or (c) any credit
insurance provider (or its advisors) in relation to this Agreement, (vii) with
the consent of the Account Parties or (viii) to the extent such Information
(A) becomes publicly available other than as a result of a breach of this
paragraph or (B) becomes available to the Administrative Agent or any Lender on
a nonconfidential basis from a source other than an Account Party. For the
purposes of this paragraph, “Information” means all information received from an
Account Party relating to an Account Party or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by such Account Party. 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. Notwithstanding the foregoing, each of the
Administrative Agent, and the Lenders agree that they will not trade the
securities of any of the Account Parties based upon non-public Information that
is received by them.

                    SECTION 10.13. Judgment Currency. This is an international
loan transaction in which the obligations of each Account Party and the
Guarantors under this Agreement to make payment hereunder shall be satisfied
only in Dollars and only if such payment shall be made in New York City, and the
obligations of each Account Party and the Guarantors under this Agreement to
make payment to (or for account of) a Lender in Dollars shall not be discharged
or satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any other currency or in another place except to the extent that
such tender or recovery results in the effective receipt by such Lender in New
York City of the full amount of Dollars payable to such Lender under this
Agreement. If for the purpose of obtaining judgment in any court it is necessary
to convert a sum due hereunder in Dollars into another currency (in this Section
called the “judgment currency”), the rate of exchange that shall be applied
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase such Dollars at the principal office of the
Administrative Agent in New York City with the judgment currency on the Business
Day next preceding the day on which such judgment is rendered. The obligation of
each Account Party and the Guarantors in respect of any such sum due from it to
the Administrative Agent or any Lender hereunder (in this Section called an
“Entitled Person”) shall, notwithstanding the rate of exchange actually applied
in rendering such judgment, be

90

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

discharged only to the extent that on the Business Day following receipt by such
Entitled Person of any sum adjudged to be due hereunder in the judgment currency
such Entitled Person may in accordance with normal banking procedures purchase
and transfer Dollars to New York City with the amount of the judgment currency
so adjudged to be due; and each Account Party and the Guarantors hereby, as a
separate obligation and notwithstanding any such judgment, agrees to indemnify
such Entitled Person against, and to pay such Entitled Person on demand, in
Dollars, the amount (if any) by which the sum originally due to such Entitled
Person in Dollars hereunder exceeds the amount of the Dollars so purchased and
transferred.

                    SECTION 10.14. USA PATRIOT Act. Each Lender and the
Administrative Agent hereby notifies the Account Parties that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)), such Lender and the Administrative Agent is required to
obtain, verify and record information that identifies the Account Parties, which
information includes the name and address of the Account Parties and other
information that will allow such Lender and the Administrative Agent to identify
each Account Party in accordance with said Act. Each Account Party and each of
its Subsidiaries shall provide 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 USA Patriot Act.

                    SECTION 10.15. NO FIDUCIARY DUTY. The Administrative Agent,
each Lender and their Affiliates (collectively, solely for purposes of this
paragraph, the “Lenders”), may have economic interests that conflict with those
of the Obligors, their stockholders and/or their affiliates. Each Obligor agrees
that nothing in the Credit Documents or otherwise pursuant to the Transactions
will be deemed to create a fiduciary relationship or fiduciary or other implied
duty between any Lender, on the one hand, and such Obligor, its stockholders or
its affiliates, on the other. The Obligors acknowledge and agree that (i) the
transactions contemplated by the Credit Documents are arm’s-length commercial
transactions between the Lenders, on the one hand, and the Obligors, on the
other, and (ii) in connection therewith and with the process leading thereto,
(x) no Lender has assumed a fiduciary responsibility in favor of any Obligor,
its stockholders or its affiliates with respect to the transactions contemplated
hereby or the process leading thereto (irrespective of whether any Lender has
advised, is currently advising or will advise any Obligor, its stockholders or
its Affiliates on other matters) or any other obligation to any Obligor except
the obligations expressly set forth in the Credit Documents and (y) each Lender
is acting solely as principal and not as the fiduciary of any Obligor, its
management, stockholders, creditors or any other Person. Each Obligor
acknowledges and agrees that it has consulted its own legal and financial
advisors to the extent it deemed appropriate and that it is responsible for
making its own independent judgment with respect to such transactions and the
process leading thereto. Each Obligor agrees that it will not claim that any
Lender owes a fiduciary or similar duty to such Obligor, in connection with such
transaction or the process leading thereto.

SECTION 10.16. ILLEGALITY.

91

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

                    Notwithstanding anything herein to the contrary, no Lender
shall be required to make any Loan or issue or fund any Letter of Credit for so
long as such action is illegal and any such Lender shall provide prompt written
notice setting forth any such illegality pursuant to this Section 10.16 to XL
Group. For the purposes of this Section 10.16, the provisions of Section 2.21(a)
shall apply in the event of any such illegality mutatis mutandis.

92

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

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

 

 

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL GROUP PLC,

 

as an Account Party and a Guarantor

 

by its duly authorized attorney

 

in the presence of:

 

 

 

 

By 

/s/ Simon Rich

 

 

 

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

 

 

 

Name: Simon Rich

 

 

 

Title: Attorney

 

 

 

 

 

 

/s/ Patricia Pacheco

 

 

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

 

 

Witness

 

 

 

Name: Patricia Pacheco

 

 

 

Title: Executive Assistant

 

 

 

 

 

 

U.S. Federal Tax Identification No.: 98-0665416

 

 

 

XLIT LTD.,

 

 

as an Account Party and a Guarantor

 

 

 

By

/s/ Simon Rich

 

 

 

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

 

 

 

Name: Simon Rich

 

 

 

Title: Attorney

 

 

 

 

 

 

By

/s/ Robert Hawley

 

 

 

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

 

 

 

Name: Robert Hawley

 

 

 

Title: Authorized Officer

 

 

 

 

 

 

U.S. Federal Tax Identification No.: 98-0191089

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

 

 

 

 

 

 

X.L. AMERICA, INC.,

 

as an Account Party and a Guarantor

 

 

 

 

By

/s/ Richard G. McCarty

 

 

 

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

 

 

 

Name: Richard G. McCarty

 

 

 

Title:

Senior Vice President,

 

 

 

General Counsel & Secretary

 

 

 

 

U.S. Federal Tax Identification No.: 06-1516268

 

 

 

XL INSURANCE (BERMUDA) LTD,

 

as an Account Party and a Guarantor

 

 

 

By

/s/ C. Stanley Lee

 

 

 

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

 

 

 

Name: C. Stanley Lee

 

 

Title: Chief Financial Officer

 

 

 

 

U.S. Federal Tax Identification No.: 98-0354869

 

 

 

XL RE LTD,

 

as an Account Party and a Guarantor

 

 

 

By

/s/ Mark Twite

 

 

 

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

 

 

 

Name: Mark Twite

 

 

Title: Senior Vice President and

 

 

          Chief Financial Officer

 

 

 

 

U.S. Federal Tax Identification No.: 98-0351953

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

 

 

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL RE EUROPE LIMITED,

 

as an Account Party

 

by its duly authorized attorney

 

in the presence of:

 

 

 

By 

/s/ David Watson

 

 

 

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

 

 

 

Name: David Watson

 

 

Title: Attorney

 

 

 

 

/s/ Michele Mulready

 

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

 

 

Witness

 

 

Name: Michele Mulready

 

 

Title: Company Secretary

 

 

 

 

 

U.S. Federal Tax Identification No.: 30-0479679

 

 

 

XL INSURANCE COMPANY LIMITED,

 

as an Account Party

 

 

 

 

By

/s/ Graham Lambourne

 

 

 

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

 

 

 

Name: Graham J. Lambourne

 

 

Title: Director

 

 

 

 

U.S. Federal Tax Identification No.: 30-0479685

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

 

 

 

 

 

 

 

XL INSURANCE SWITZERLAND LTD,

 

as an Account Party

 

 

 

By 

/s/ Daniel Maurer

 

 

 

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

 

 

 

Name: Daniel Maurer

 

 

Title: Chairman

 

 

 

 

By

/s/ Bruno Länzlinger

 

 

 

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

 

 

 

Name: Bruno Länzlinger

 

 

Title: CEO

 

 

 

 

U.S. Federal Tax Identification No.: 30-0479676

 

 

 

XL LIFE LTD,

 

as an Account Party and a Guarantor

 

 

 

By

/s/ Simon Rich

 

 

 

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

 

 

 

Name: Simon Rich

 

 

Title: Director

 

 

 

 

U.S. Federal Tax Identification No.: 98-0228561

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

 

 

 

 

 

LENDERS

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

individually and as Administrative Agent

 

 

 

By:

 /s/ Melvin D. Jackson

 

 

 

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

 

 

Name: Melvin D. Jackson

 

Title: Vice President

 

 

 

 

CITIBANK, N.A.,

 

 

 

By:

 /s/ Maureen P. Maroney

 

 

 

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

 

 

Name: Maureen P. Maroney

 

Title: Vice President

 

 

 

 

THE ROYAL BANK OF SCOTLAND PLC

 

 

 

 

By:

 /s/ Joseph W. Lux

 

 

 

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

 

 

Name: Joseph W. Lux

 

Title: Managing Director

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

 

 

 

 

 

MORGAN STANLEY BANK, N.A.,

 

 

 

 

 

By:

 /s/ Michael King

 

 

 

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

 

 

Name: Michael King

 

Title: Authorized Signatory

 

 

 

 

BARCLAYS BANK PLC,

 

 

 

 

 

By:

 /s/ David Barton

 

 

 

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

 

 

Name: David Barton

 

Title: Director

 

 

 

 

THE BANK OF NEW YORK MELLON,

 

 

 

By:

 /s/ Michael Pensari

 

 

 

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

 

 

Name: Michael Pensari

 

Title: Managing Director

 

 

 

 

BANK OF AMERICA, N.A.,

 

 

 

 

By:

 /s/ Debra Basler

 

 

 

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

 

 

Name: Debra Basler

 

Title: Managing Director

 

 

 

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

 

 

 

 

By:

 /s/ Rick Adler

 

 

 

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

 

 

Name: Rick Adler

 

Title: Director

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

 

 

 

 

 

CREDIT AGRICOLE CORPORATE & INVESTMENT BANK,

 

 

 

 

By:

 /s/ Charles Kornberger

 

 

 

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

 

 

Name: Charles Kornberger

 

Title: Managing Director

 

 

 

 

 

By:

 /s/ Frank Tatulli

 

 

 

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

 

 

Name: Frank Tatulli

 

Title: Managing Director

 

 

 

 

DEUTSCHE BANK AG NEW YORK BRANCH,

 

 

 

By:

 /s/ John S. McGill

 

 

 

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

 

 

Name: John S. McGill

 

Title: Director

 

 

 

 

 

By:

 /s/ Virginia Cosenza

 

 

 

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

 

 

Name: Virginia Cosenza

 

 

Title: Vice President

 

 

 

 

GOLDMAN SACHS BANK USA,

 

 

 

 

 

By:

 /s/ Mark Walton

 

 

 

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

 

 

Name: Mark Walton

 

Title: Authorized Signatory

 

 

 

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

 

 

 

 

By:

 /s/ Jody Feldman

 

 

 

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

 

 

Name: Jody Feldman

 

Title: Vice President

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

 

 

 

 

 

 

LLOYDS TSB BANK PLC,

 

 

 

By: 

/s/ Julia R Franklin

 

 

 

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

 

 

Name: Julia R Franklin

 

Title: Vice President

 

 

      F014

 

 

 

 

By:

/s/ Karen Weich

 

 

 

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

 

 

Name: Karen Weich

 

Title: Vice President

 

 

      W011

 

 

 

 

MIZUHO CORPORATE BANK, LTD.,

 

 

 

By:

/s/ David Lim

 

 

 

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

 

 

Name: David Lim

 

Title: Authorized Signatory

 

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

 

 

By:

/s/ Grainne M. Pergolini

 

 

 

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

 

 

Name: Grainne M. Pergolini

 

Title: Director

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

SCHEDULE I

Commitments

 

 

 

 

 

 

 

 

 

 

 

Name of Lender

 

 

Commitment ($)

 

Loan Sublimit ($)

 

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

 

 

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

 

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

 

 

JPMorgan Chase Bank, N.A.

 

$

114,750,000.00

 

$

85,000,000.00

 

 

 

 

 

 

 

 

 

Citibank, N.A.

 

$

114,750,000.00

 

$

85,000,000.00

 

 

 

 

 

 

 

 

 

The Royal Bank of Scotland plc

 

$

114,750,000.00

 

$

85,000,000.00

 

 

 

 

 

 

 

 

 

Barclays Bank PLC

 

$

96,187,500.00

 

$

71,250,000.00

 

 

 

 

 

 

 

 

 

Credit Agricole Corporate & Investment Bank

 

$

96,187,500.00

 

$

71,250,000.00

 

 

 

 

 

 

 

 

 

Deutsche Bank AG New York Branch

 

$

96,187,500.00

 

$

71,250,000.00

 

 

 

 

 

 

 

 

 

Goldman Sachs Bank USA

 

$

96,187,500.00

 

$

71,250,000.00

 

 

 

 

 

 

 

 

 

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

 

$

96,187,500.00

 

$

71,250,000.00

 

 

 

 

 

 

 

 

 

Wells Fargo Bank, N.A.

 

$

96,187,500.00

 

$

71,250,000.00

 

 

 

 

 

 

 

 

 

HSBC Bank USA, National Association

 

$

82,687,500.00

 

$

61,250,000.00

 

 

 

 

 

 

 

 

 

Lloyds TSB Bank plc

 

$

82,687,500.00

 

$

61,250,000.00

 

 

 

 

 

 

 

 

 

Mizuho Corporate Bank, Ltd.

 

$

82,687,500.00

 

$

61,250,000.00

 

 

 

 

 

 

 

 

 

The Bank of New York Mellon

 

$

82,687,500.00

 

$

61,250,000.00

 

 

 

 

 

 

 

 

 

Bank of America, N.A.

 

$

48,937,500.00

 

$

36,250,000.00

 

 

 

 

 

 

 

 

 

Morgan Stanley Bank, N.A.

 

$

48,937,500.00

 

$

36,250,000.00

 

 

 

 

 

 

 

 

 

 

 

$

1,350,000,000.00

 

$

1,000,000,000.00

 

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

SCHEDULE II

Indebtedness and Liens

Part A – Indebtedness

 

 

 

 

1.

6.50% guaranteed senior notes due January 15, 2012, issued by XL Capital Finance
(Europe) plc and guaranteed by XL Capital Ltd, under the Indenture dated January
10, 2002, by and among XL Capital Finance (Europe) plc, XL Capital Ltd and State
Street Bank and Trust Company.

 

 

 

 

2.

Indenture, dated as of June 2, 2004, between XL Capital Ltd and The Bank of New
York, as Trustee.

 

 

 

 

3.

Indenture, dated as of January 10, 2002, among XL Capital Finance (Europe) plc,
XL Capital Ltd and State Street Bank and Trust Company.

 

 

 

 

4.

Indenture, dated as of September 30, 2011, among XL Group Ltd., XL Group plc and
Wells Fargo

 

 

 

 

5.

5.25% Senior Notes due 2014, under the First Supplemental Indenture, dated as of
August 23, 2004, to the Indenture dated as of June 2, 2004 between XL Capital
Ltd and the Bank of New York, as Trustee.

 

 

 

 

6.

6.375% Senior Notes due 2024, under the Second Supplemental Indenture, dated as
of November 12, 2004, to the Indenture, dated as of June 2, 2004, between XL
Capital Ltd and The Bank of New York, as Trustee.

 

 

 

 

7.

6.25% Senior Notes due May 15, 2027, under the Fourth Supplemental Indenture,
dated May 7, 2007, to the Indenture, dated as of June 2, 2004, between XL
Capital Ltd and The Bank of New York, as trustee.

 

 

 

 

8.

5.75% Senior Notes due 2021, under the First Supplemental Indenture, dated as of
September 30, 2011, to the Indenture dated as of September 30, 2011, between XL
Group Ltd., XL Group plc, as guarantor, and Wells Fargo.

 

 

 

 

9.

Replacement Capital Covenant, dated March 15, 2007.

 

 

 

 

10.

Pledge Agreement dated as of December 18, 2001, made by XL Investments Ltd, XL
Re Ltd, XL Insurance (Bermuda) Ltd and XL Europe Ltd as grantors and in favour
of Citibank, N.A.

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

 

 

 

 

11.

Amendment No. 1 dated as of July 1, 2003, to the Pledge Agreement dated as of
December 18, 2001, made by XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda)
Ltd and XL Europe Ltd as grantors and in favour of Citibank, N.A.

 

 

 

 

12.

Insurance Letters of Credit – Master Agreement dated May 19, 1993, between XL Re
Ltd and Citibank, N.A.

 

 

 

 

13.

Service Agreement Relative to Sureties, Letters of Guarantees and International
Stand-by L/Cs dated April 25, 2003, between XL Re Europe Limited (formerly known
as Le Mans Re) and Calyon (formerly known as Credit Lyonnais).

 

 

 

 

14.

Assignment Agreement dated July 11, 2003, among XL Re Ltd, Mangrove Bay Trust
and The Bank of New York.

 

 

 

 

15.

Insurance Letter of Credit – Master Agreement, dated 11 November 2009, between
XL Insurance (Bermuda) Ltd and Citibank Europe PLC.

 

 

 

 

16.

Pledge Agreement dated as of 11 November 2009 between XL Insurance (Bermuda) Ltd
and XL Re Ltd as Pledgors and Citibank Europe PLC as Pledgee.

 

 

 

 

17.

Amendment No. 1, dated as of November 23, 2009, to Pledge Agreement dated as of
11 November 2009 between XL Insurance (Bermuda) Ltd and XL Re Ltd as Pledgors
and Citibank Europe PLC as Pledgee.

 

 

 

 

18.

Amendment No. 2, dated as of December 23, 2009, to Pledge Agreement dated as of
11 November 2009 between XL Insurance (Bermuda) Ltd and XL Re Ltd as Pledgors
and Citibank Europe PLC as Pledgee.

 

 

 

 

19.

Amendment No. 3, dated as of June 30, 2010, to Pledge Agreement dated as of 11
November 2009 between XL Insurance (Bermuda) Ltd and XL Re Ltd as Pledgors and
Citibank Europe PLC.

 

 

 

 

20.

The London Market Letter of Credit Scheme, dated October 21, 1996, between Mid
Ocean Reinsurance Company Limited and Citibank, N.A.

 

 

 

 

21.

Amendment No. 1, dated June 24, 2002, to Pledge Agreement, dated December 18,

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

 

 

 

 

 

2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd, XL
Europe Ltd and Citibank, N.A.

 

 

 

 

22.

Amendment No. 2, dated February 24, 2009, to Pledge Agreement, dated December
18, 2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd, XL
Insurance Company Ltd and Citibank, N.A.

 

 

 

 

23.

Amendment No. 3, dated March 20, 2009, to Pledge Agreement, dated December 18,
2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd and
Citibank, N.A.

 

 

 

 

24.

Amendment No. 4, dated December 14, 2010, to Pledge Agreement, dated December
18, 2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd and
Citibank, N.A.

 

 

 

 

25.

Guarantee Agreement, dated December 18, 2001, between XL Re Ltd, XL Insurance
(Bermuda) Ltd, XL Insurance Company Ltd and Citibank, N.A.

 

 

 

 

26.

Amendment No. 1, dated February 24, 2009, to Guarantee Agreement, dated December
18, 2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd, XL
Europe Ltd and Citibank, N.A.

 

 

 

 

27.

Sixth Supplemental Indenture, dated as of June 30, 2010, to the Indenture, dated
as of June 2, 2004, and the Fifth Supplemental Indenture, dated as of August 5,
2008, between XL Capital Ltd, XL Group plc, as guarantor and The Bank of New
York Mellon, as trustee.

 

 

 

 

28.

Supplemental Indenture, dated as of June 30, 2010, to the Indenture, dated as of
January 10, 2002, among XL Capital Finance (Europe) plc, XL Capital Ltd, XL
Company Switzerland GmbH and State Street Bank and Trust Company.

 

 

 

 

29.

Lease Guarantee, dated April 30, 2007, between XL Capital Investment Partners
Inc., X.L. America, Inc. and 1540 Broadway Owner, LLC.

 

 

 

 

30.

Lease Guarantee and Surety Agreement, dated November 30, 2010, between XL Global
Services, Inc., X.L. America, Inc., and 505 Eagleview Blvd Assoc. LP.

 

 

 

 

31.

70 Gracechurch, London, EC3V 0XL Capital Lease.

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

 

 

 

 

32.

Lease Guarantee, dated October 2011, by X.L. America, Inc. in favor of Two
Harbor Point Square LLC.

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

Part B - Liens

 

 

 

 

1.

Insurance Letters of Credit – Master Agreement dated May 19, 1993, between XL Re
Ltd and Citibank, N.A.

 

 

 

 

2.

Pledge Agreement dated as of December 18, 2001, made by XL Investments Ltd, XL
Re Ltd, XL Insurance (Bermuda) Ltd and XL Europe Ltd as grantors and in favour
of Citibank, N.A.

 

 

 

 

3.

Amendment No. 1 dated as of July 1, 2003, to the Pledge Agreement dated as of
December 18, 2001, made by XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda)
Ltd and XL Europe Ltd as grantors and in favour of Citibank, N.A.

 

 

 

 

4.

Service Agreement Relative to Sureties, Letters of Guarantees and International
Stand-by L/Cs dated April 25, 2003, between XL Re Europe Limited (formerly known
as Le Mans Re) and Calyon (formerly known as Credit Lyonnais).

 

 

 

 

5.

Assignment Agreement dated July 11, 2003, among XL Re Ltd, Mangrove Bay Trust
and The Bank of New York.

 

 

 

 

6.

Floating Charge, dated December 31, 2010, by XL Insurance (Bermuda) Ltd in
Favour of XL Insurance Company Limited.

 

 

 

 

7.

Pledge Agreement dated as of 11 November 2009 between XL Insurance (Bermuda) Ltd
and XL Re Ltd as Pledgors and Citibank Europe PLC as Pledgee.

 

 

 

 

8.

Amendment No. 1, dated as of November 23, 2009, to Pledge Agreement dated as of
11 November 2009 between XL Insurance (Bermuda) Ltd and XL Re Ltd as Pledgors
and Citibank Europe PLC as Pledgee.

 

 

 

 

9.

Amendment No. 2, dated as of December 23, 2009, to Pledge Agreement dated as of
11 November 2009 between XL Insurance (Bermuda) Ltd and XL Re Ltd as Pledgors
and Citibank Europe PLC as Pledgee.

 

 

 

 

10.

Amendment No. 3, dated as of June 30, 2010, to Pledge Agreement dated as of 11
November 2009 between XL Insurance (Bermuda) Ltd and XL Re Ltd as Pledgors and
Citibank Europe PLC.

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

 

 

 

 

11.

Amendment No. 1, dated June 24, 2002, to Pledge Agreement, dated December 18,
2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd, XL
Europe Ltd and Citibank, N.A.

 

 

 

 

12.

Amendment No. 2, dated February 24, 2009, to Pledge Agreement, dated December
18, 2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd, XL
Insurance Company Ltd and Citibank, N.A.

 

 

 

 

13.

Amendment No. 3, dated March 20, 2009, to Pledge Agreement, dated December 18,
2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd and
Citibank, N.A.

 

 

 

 

14.

Amendment No. 4, dated December 14, 2010, to Pledge Agreement, dated December
18, 2001, between XL Investments Ltd, XL Re Ltd, XL Insurance (Bermuda) Ltd and
Citibank, N.A.

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

SCHEDULE III

Litigation

 

 

 

 

1.

In Re Brokerage Antitrust Litigation, MDL No. 1663, Civil Action No. 04-5184,
and related tag along actions.

 

 

 

 

 

 

 

2.

Municipal GIC-Related Litigation (as described in XL Group plc’s Annual Report
on Form 10-K filed with the Securities and Exchange Commission on February 25,
2011).

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

SCHEDULE IV

Environmental Matters

None.

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

SCHEDULE V

Subsidiaries

 

 

 

 

 

 

 

 

 

%

 

JURISDICTION

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

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

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

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

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

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

XL Group plc

 

 

 

 

Ireland

XLIT Ltd.

 

 

 

 

Cayman

XL Company Switzerland GmbH

 

 

 

 

Switzerland

XL Capital Partners Corporation

 

 

 

 

Cayman

XL Capital Principal Partners I, L.L.C.

 

 

 

 

Delaware

EXEL Holdings Limited

 

 

 

 

Cayman

EXEL Acquisition Ltd.

 

 

 

 

Cayman

X.L. Property Holdings Limited

 

 

 

 

Bermuda

XL Insurance (Bermuda) Ltd

 

 

 

 

Bermuda

Mid Ocean Limited

 

 

 

 

Cayman

Mid Ocean Holdings Limited

 

 

 

 

Bermuda

Ridgewood Holdings Limited

 

 

 

 

Bermuda

XL London Market Group Ltd

 

 

 

 

UK

Brockbank Holdings Ltd

 

 

 

 

UK

Baltusrol Holdings Ltd

 

 

 

 

Bermuda

County Down Limited

 

 

 

 

UK

Dornoch Limited

 

 

 

 

UK

Stonebridge Underwriting Ltd

 

 

 

 

UK

XL London Market Services Ltd- Syndicate 1209

 

 

 

 

UK

Denham Tower Underwriting Agents (PTY) Limited (in liquidation)

 

 

 

 

South Africa

 

XL London Market Ltd

 

 

 

 

UK

 

XL Re Ltd

 

 

 

 

Bermuda

XL BCM Limited

 

 

 

 

UK

XL CCM Ltd

 

 

 

 

UK

ECS Reinsurance Company Inc.

 

 

 

 

Barbados

Global Capital Underwriting Ltd.

 

 

 

 

UK

Fundamental Insurance Investments Ltd

 

 

 

 

Bermuda

FII Partners LLC

 

99

 

 

Delaware

FII Partners Ltd

 

 

 

 

Bermuda

FII Partners LLC

 

1

 

 

Delaware

XL Re Europe Limited

 

 

 

 

Ireland

XL Re Latin America Ltd

 

 

 

 

Switzerland

XL Latin America Investments Ltd

 

 

 

 

Bermuda

XL Re Brazil Holdings AG

 

 

 

 

Switzerland

XL Re Participacoes Brasil Ltda.

 

 

 

 

Brazil

XL Resseguros Brasil S.A.

 

 

 

 

Brazil

XL Re Latin America (Argentina SA)

 

80

 

 

Argentina

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

 

 

 

 

 

 

XL Re Latin Escritorio de Representacao no Brasil Ltda

 

 

 

 

Brazil

XL Re Europe Services AG

 

 

 

 

Germany

XL PP Limited

 

 

 

 

UK

XL (Brazil) Holdings Ltd

 

 

 

 

Brazil

XL Services (Bermuda) Ltd

 

 

 

 

Bermuda

XL Life Ltd

 

 

 

 

Bermuda

Reeve Court General Partner Limited

 

 

 

 

Bermuda

Reeve Court 4 Limited Partnership

 

 

 

 

Bermuda

Reeve Court 6 Limited Partnership

 

 

 

 

Bermuda

XL Gracechurch Limited

 

 

 

 

UK

XL Insurance (UK) Holdings Limited

 

 

 

 

UK

XL Capital Finance (Europe) plc

 

 

 

 

UK

XL Insurance Argentina S.A. Compañia de Seguros

 

90

 

 

Argentina

XL Services UK Limited

 

 

 

 

UK

XL Insurance Company Limited

 

 

 

 

UK

XL Insurance Argentina S.A. Compañia de Seguros

 

10

 

 

Argentina

XL Insurance (China) Company Ltd

 

49

 

 

China

XL Holdings Proprietary Limited

 

 

 

 

South Africa

XL Insurance Company Ltd (In Liquidation)

 

 

 

 

South Africa

XL Financial Holdings (Ireland) Limited

 

 

 

 

Ireland

XL Finance (Ireland) Limited

 

 

 

 

Ireland

XL Services Canada Ltd.

 

 

 

 

Canada

*X.L. America, Inc.

 

 

 

 

Delaware

XL Financial Solutions, Inc.

 

 

 

 

Delaware

XL Capital Investment Partners Inc.

 

 

 

 

Delaware

XL Group Investments Ltd

 

 

 

 

Bermuda

XLA Garrison L.P.

 

 

 

 

Delaware

NAC Re Corporation

 

 

 

 

Delaware

XL Reinsurance America Inc. *(A-65%) - NY

 

 

 

 

New York

XL Insurance (China) Company Ltd

 

51

 

 

China

Greenwich Insurance Company *(A-12%)

 

 

 

 

Delaware

Global Asset Protection Services, LLC

 

 

 

 

Connecticut

Global Asset Protection Services Company Limited

 

 

 

 

Japan

Global Asset Protection Services Consultancy (Beijing) Company Limited

 

 

 

 

China

XL Insurance America, Inc. *(A-10%)

 

 

 

 

Delaware

XL Select Insurance Company *(A-2%)

 

 

 

 

Delaware

XL Insurance Company of New York, Inc. * (A-3%)

 

 

 

 

New York

XL Specialty Insurance Company *(A-6%)

 

 

 

 

Delaware

Indian Harbor Insurance Company *(A-2%)

 

 

 

 

North Dakota

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

 

 

 

 

 

 

37 Lambert Road LLC

 

 

 

 

Delaware

XL Global, Inc.

 

 

 

 

Delaware

XL Insurance, Inc.

 

 

 

 

Delaware

X.L. Global Services, Inc.

 

 

 

 

Delaware

XL Investment Management (USA) LLC

 

 

 

 

Delaware

Eagleview Insurance Brokerage Services, LLC

 

 

 

 

Delaware

XL Life and Annuity Holding Company

 

 

 

 

Delaware

XL Life Insurance and Annuity Company

 

 

 

 

Illinois

XL Asset Funding Company I LLC

 

 

 

 

Delaware

ECS, Inc. (In Liquidation)

 

 

 

 

Pennsylvania

ECS Child Care Center, Inc. (In Liquidation)

 

 

 

 

Pennsylvania

XL Investments Ltd

 

 

 

 

Bermuda

XL Capital Products Ltd

 

 

 

 

Bermuda

XL SGS Holdings Inc.

 

 

 

 

Delaware

Garrison Investments Inc. (**)

 

 

 

 

Barbados

Kensington Investments Inc.

 

 

 

 

Barbados

XLB Partners Inc.

 

 

 

 

Barbados

X.L. Investments (Barbados) Inc.

 

 

 

 

Barbados

ClearWater Opportunity Fund Ltd.

 

 

 

 

Cayman

XL (LUXEMBOURG) S.a.r.l.

 

 

 

 

Luxembourg

XL (FINANCE) S.a.r.l.

 

 

 

 

Luxembourg

XL (INTERNATIONAL) S.a.r.l.

 

 

 

 

Luxembourg

XL (SERVICES) S.a.r.l.

 

 

 

 

Luxembourg

XL (SPECIALTY) S.a.r.l.

 

 

 

 

Luxembourg

XL (WESTERN EUROPE) S.a.r.l.

 

 

 

 

Luxembourg

XL Swiss Holdings Ltd

 

 

 

 

Switzerland

XL Re Latin America (Argentina SA)

 

20

 

 

Argentina

XL Insurance Switzerland Ltd.

 

 

 

 

Switzerland

Vitodurum Reinsurance Company Ltd.

 

 

 

 

Switzerland

XL Services Switzerland AG

 

 

 

 

Switzerland

XL India Business Services Private Limited

 

 

 

 

India

XL Insurance Mexico SA de CV

 

 

 

 

Mexico

XL Europe Holdings Ltd

 

 

 

 

Bermuda

 

 

 

 

 

 

*A = Company is a member of the Reinsurance America Inc. Pooling Agreement with
individual company pooling % noted
(**) - Limited Partner of XLA Garrison L.P.

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

SCHEDULE VI

Existing Letters of Credit

Syndicated Letters of Credit

 

 

 

 

 

 

 

 

BOOKING PARTY NAME

 

REF NUMBER

 

EXPIRY /
MATURITY
DATE

 

LC AVAILABLE
AMOUNT

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

 

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

 

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

 

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

XL RE Ltd

 

U-230425

 

12/31/12

 

$

116,663,986.00

Non-Syndicated Letters of Credit

None.

Participated Letters of Credit

None.

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

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

                    This Assignment and Assumption (the “Assignment and
Assumption”) is dated as of the Effective Date set forth below and is entered
into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name
of Assignee] (the “Assignee”). Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, 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 Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, 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
rights and obligations in its capacity as a Lender 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 under the Credit Agreement
identified below (including any letters of credit and guarantees 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) 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 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 pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

 

 

1.

Assignor:

 

 

 

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

 

 

 

2.

Assignee:

 

 

 

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

 

 

[and is an Affiliate of [identify Lender]1 [and is a NAIC Approved Bank]2 ]

 

 

 

3.

Account Parties:

XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re
Ltd, XL Re Europe Limited, XL Insurance Company Limited, XL Insurance
Switzerland Ltd and XL Life Ltd

 

 

 

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

 

1 Select as applicable.

2 Insert to the extent required by Section 10.04(b) of the Credit Agreement.

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

 

 

 

4.

Administrative Agent:

JPMorgan Chase Bank, N.A., as the administrative agent under the Credit
Agreement

 

 

 

5.

Credit Agreement:

Unsecured Credit Agreement dated as of December 9, 2011 (as amended and in
effect from time to time, the “Credit Agreement”), between XL Group plc, XLIT
Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe
Limited, XL Insurance Company Limited, XL Insurance Switzerland Ltd and XL Life
Ltd, the Lenders named therein and JPMorgan Chase Bank, N.A., as Administrative
Agent

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

 

 

 

6.

Assigned Interest:

 

 

 

 

 

 

Aggregate Amount of
Commitment/Loans
for all Lenders

 

Amount of
Commitment/Loan
Assigned

 

Percentage Assigned
of
Commitment/Loans 3

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

 

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

 

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

$

 

$

 

%

$

 

$

 

%

$

 

$

 

%

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:

 

 

 

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

 

3 Set forth, to at least 9 decimals, as a percentage of the Commitment of all
Lenders thereunder.

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

 

 

 

Consented to and Accepted:

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

  as Administrative Agent

 

 

 

By

 

 

 

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

 

   Title:

 

 

 

[Consented to:]4

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL GROUP PLC,

 

as an Account Party and a Guarantor

 

by its duly authorized attorney

 

in the presence of:

 

 

 

By

 

 

 

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

 

   Name:

 

   Title: Attorney

 

 

 

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

 

Witness

 

   Name:

 

   Title:

 

 

 

XLIT LTD.,

 

as an Account Party and a Guarantor

 

 

 

By:

 

 

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

 

   Name:

 

   Title:

 

 

 

By:

 

 

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

 

   Name:

 

   Title:

 

 

 

 

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

 

4 To be added only if the consent of the Account Parties is required by the
terms of the Credit Agreement.

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

 

 

 

X.L. AMERICA, INC.,

 

as an Account Party and a Guarantor

 

 

 

By

 

 

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

 

   Name:

 

   Title:

 

 

 

XL INSURANCE (BERMUDA) LTD,

 

as an Account Party and a Guarantor

 

 

 

By

 

 

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

 

   Name:

 

   Title:

 

 

 

XL RE LTD,

 

as an Account Party and a Guarantor

 

 

 

By

 

 

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

 

   Name:

 

   Title:

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL RE EUROPE LIMITED,

 

as an Account Party

 

by its duly authorized attorney

 

in the presence of:

 

 

 

By

 

 

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

 

   Name:

 

   Title: Attorney

 

 

 

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

 

Witness

 

   Name:

 

   Title:

 

 

 

XL INSURANCE COMPANY LIMITED,

 

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

 

 

 

as an Account Party

 

 

 

By

 

 

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

 

   Name:

 

   Title:

 

 

 

XL INSURANCE SWITZERLAND LTD,

 

as an Account Party

 

 

 

By

 

 

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

 

   Name:

 

   Title:

 

 

 

By

 

 

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

 

   Name:

 

   Title:

 

 

 

XL LIFE LTD,

 

as an Account Party and a Guarantor

 

 

 

By

 

 

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

 

   Name:

 

   Title:

 

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

ANNEX 1

UNSECURED CREDIT AGREEMENT DATED AS OF DECEMBER 9, 2011, BETWEEN XL
GROUP PLC, CERTAIN OF ITS SUBSIDIARIES, THE LENDERS NAMED THEREIN AND
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

                    1. Representations and Warranties.

                    1.1 Assignor. The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
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 Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of any Account Party, any of its Subsidiaries or Affiliates
or any other Person obligated in respect of any Credit Document or (iv) the
performance or observance by any Account Party, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Credit Document.

                    1.2. Assignee. The 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 satisfies the requirements, if any, specified in the Credit
Agreement that are required to be satisfied by it in order to acquire the
Assigned Interest and become a Lender, (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 Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) 5attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee; and (b) agrees that (i)
it will, independently and without reliance on the Administrative Agent, the

 

 

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

 

5 Both U.S. Lenders and Non-U.S. Lenders have to provide forms under Section
2.19(f). Also make change in secured agreement.

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

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 Credit Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit 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 Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective Date and
to the 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.

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

EXHIBIT B

[Form of Confirming Lender Agreement]

[Letterhead of Issuing Lender]

[_____]

[Name of Confirming Lender]
[Address]

Ladies and Gentlemen:

                    Reference is made to the Unsecured Credit Agreement dated as
of December 9, 2011 (as amended and in effect, the “Credit Agreement”), between
XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re
Ltd, XL Re Europe Limited, XL Insurance Company Limited, XL Insurance
Switzerland Ltd and XL Life Ltd, the Lenders party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent. Terms defined in the Credit Agreement are
used herein with the same meanings.

                    The undersigned (the “Issuing Lender”) is a Lender under the
Credit Agreement but is not on the date hereof listed on the most current “Bank
List” of banks approved by the NAIC. Accordingly, in order to be a “NAIC
Approved Bank” for the purposes of the Credit Agreement, the Issuing Lender
hereby requests that you be a Confirming Lender with respect to the Issuing
Lender for the purposes of the Credit Agreement and each Syndicated Letter of
Credit and Non-Syndicated Letter of Credit issued or continued thereunder.

                    By your signature below, you undertake that you will honor
the obligations of the Issuing Lender in respect of any draft drawn under and in
strict compliance with the terms of any Syndicated Letter of Credit and
Non-Syndicated Letter of Credit issued or continued under the Credit Agreement
as if, and to the extent, you were the Issuing Lender under the relevant
Syndicated Letter of Credit or Non-Syndicated Letter of Credit, as the case may
be. Notwithstanding the foregoing, your liability under all Syndicated Letters
of Credit and Non-Syndicated Letters of Credit at any one time issued or
continued under the Credit Agreement shall be limited to an amount (the
“Liability Limit”) equal to the Commitment of the Issuing Lender under the
Credit Agreement in effect on the date hereof (an amount equal to $_________),
as such Liability Limit may be increased after the date hereof with your prior
written consent by reason of an increase in the Commitment of the Issuing Lender
under the Credit Agreement. In addition, you hereby irrevocably appoint and
designate the Administrative Agent as your attorney-in-fact, acting through any
duly authorized officer of the Person serving as the Administrative Agent, to
execute and deliver, at any time prior to the Commitment Termination Date in
effect on the date of this letter agreement, in your name and on your behalf
each Syndicated Letter of Credit and Non-Syndicated Letter of Credit to be
confirmed by you in accordance herewith and with the Credit Agreement. You agree
that, promptly upon the request of the Administrative Agent, you will furnish to
the Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Syndicated Letter of Credit or Non-

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

Syndicated Letter of Credit may reasonably request in order to demonstrate that
the Administrative Agent has the power to act as attorney-in-fact for you in
connection with the execution and delivery of such Syndicated Letter of Credit
or Non-Syndicated Letter of Credit, as the case may be.

                    In consideration of the foregoing, the Issuing Lender agrees
that if you shall make any LC Disbursement in respect of any Syndicated Letter
of Credit or Non-Syndicated Letter of Credit, regardless of the identity of the
Account Party of such Syndicated Letter of Credit or Non-Syndicated Letter of
Credit, as the case may be, the Issuing Lender shall reimburse you by paying to
you an amount equal to the amount of the LC Disbursement made by you, such
payment to be made not later than noon, New York City time, on (i) the Business
Day that the Issuing Lender receives notice of such LC Disbursement, if such
notice is received prior to 10:00 a.m., New York City time, or (ii) the Business
Day immediately following the day that the Issuing Lender receives such notice,
if such notice is not received prior to such time. The Issuing Lender’s
obligations to reimburse you as provided in the foregoing sentence shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this letter agreement under any and all
circumstances whatsoever, and irrespective of any event or circumstance of the
type described in Section 2.03(b) or 2.04(h), as applicable, of the Credit
Agreement (or of any analogous event or circumstance relating to the
undersigned).

                    If any LC Disbursement is made by you, then, unless the
Issuing Lender shall reimburse the amount of such LC Disbursement to you in full
on the date such LC Disbursement is made by you, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date of reimbursement, at the rate per annum equal to
(i) the Federal Funds Effective Rate to but excluding the date three Business
Days after such LC Disbursement and (ii) from and including the date three
Business Days after such LC Disbursement, 2% plus the Federal Funds Effective
Rate.

                    This letter agreement shall be governed by and construed in
accordance with the law of the State of New York. This letter agreement is an
“agreement” of the type referred to in the definition of “Confirming Lender” in
Section 1.01 of the Credit Agreement.

                    Please indicate your acceptance of the foregoing terms and
conditions by signing the two enclosed copies of this letter agreement and
returning (a) one such signed copy to the undersigned at the address of the
Issuing Lender indicated herein and (b) the other such signed copy to the
Administrative Agent, JPMorgan Chase Bank, N.A., 1111 Fannin Street, 10th Floor,
Houston, Texas 77002-6925, Attention of Vashni X. Whittaker (Telecopy No.
(713) 750-2223; Telephone No. (713) 483-1080); email address,
vashni.x.whittaker@jpmorgan.com; with a copy to JPMorgan Chase Bank, N.A.,
277 Park Avenue, 11th Floor, New York, New York 10172, Attention of Brij S
Grewal (Telecopy No. (917) 456-3256; email address
brijendra.s.grewal@jpmorgan.com; Telephone No. (212) 270-5305).

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

 

 

 

 

 

[NAME OF ISSUING LENDER]

 

 

 

 

 

By

 

 

 

 

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

 

   Title:

 

 

 

 

 

AGREED AS AFORESAID:

 

 

 

 

 

[NAME OF CONFIRMING LENDER]

 

 

 

By

 

 

 

 

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

 

   Title:

 

 

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

EXHIBIT C

FORM OF BORROWING REQUEST

[Date]

JPMorgan Chase Bank, N.A.,
as Administrative Agent
270 Park Avenue, Floor 4
New York, New York 10017
Attention: [______]

XL GROUP PLC

Ladies and Gentlemen:

          Pursuant to Section 2.08 of that certain Unsecured Credit Agreement,
dated as of December 9, 2011 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”; capitalized terms used but
not defined herein having the meanings given such terms in the Credit
Agreement), among XL Group plc, an Irish public limited company (“XL Group”),
XLIT Ltd., an exempted company incorporated in the Cayman Islands with limited
liability (“XLIT”), X.L. America, Inc., a Delaware corporation (“XL America”),
XL Insurance (Bermuda) Ltd, a Bermuda limited liability company (“XL Insurance
(Bermuda)”), XL Re Ltd, a Bermuda limited liability company (“XL Re”), XL Re
Europe Limited, an Irish limited liability company (“XL Re Europe”), XL
Insurance Company Limited, a limited company domiciled in the United Kingdom
(“XL Insurance”), XL Insurance Switzerland Ltd, a company limited by shares
organized under the laws of Switzerland (“XL Switzerland”), and XL Life Ltd, a
Bermuda company (“XL Life” and together with XL Group, XLIT, XL America, XL
Insurance (Bermuda), XL Re, XL Re Europe, XL Insurance and XL Switzerland, each
an “Account Party”), the Guarantors party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent and the lenders (the “Lenders”) party thereto, the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing:

          1.          The relevant Account Party is [               ].

          2.          The Date of Borrowing (which is a Business Day) is
[               ,       ] (the “Borrowing Date”).

          3.          The aggregate amount of the proposed Borrowing is
$[                    ].

          4.          The type of Borrowing is [an ABR Borrowing] [a Eurodollar
Borrowing].

         [5.          The initial Interest Period for each Eurodollar Borrowing
made as part of the proposed Loan is __ month[s].]

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

          [5][6]. The location and number of the Account Party’s account to
which the funds requested pursuant to this Borrowing Request are to be disbursed
is [               ].

                    The undersigned hereby represents and warrants that the
conditions specified in Section 5.02 of the Credit Agreement have been satisfied
as of the Borrowing Date.

                    The above request has been made to the Administrative Agent
by telephone at [               ].

 

 

 

 

Very truly yours,

 

 

 

 

XL GROUP PLC

 

 

 

 

By:

 

 

 

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

 

     Name:

 

      Title:

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

EXHIBIT D

FORM OF INTEREST ELECTION REQUEST

[               ], 201[    ]

                    XL Group plc, an Irish public limited company (“XL Group”),
pursuant to Section 2.10 of the Unsecured Credit Agreement dated as of December
9, 2011 (together with all amendments, restatements, supplements or other
modifications thereto, the “Credit Agreement”) among XL Group, XLIT Ltd., an
exempted company incorporated in the Cayman Islands with limited liability
(“XLIT”), X.L. America, Inc., a Delaware corporation (“XL America”), XL
Insurance (Bermuda) Ltd, a Bermuda limited liability company (“XL Insurance
(Bermuda)”), XL Re Ltd, a Bermuda limited liability company (“XL Re”), XL Re
Europe Limited, an Irish limited liability company (“XL Re Europe”), XL
Insurance Company Limited, a limited company domiciled in the United Kingdom
(“XL Insurance”), XL Insurance Switzerland Ltd, a company limited by shares
organized under the laws of Switzerland (“XL Switzerland”), and XL Life Ltd, a
Bermuda company (“XL Life” and together with XL Group, XLIT, XL America, XL
Insurance (Bermuda), XL Re, XL Re Europe, XL Insurance and XL Switzerland, each
an “Account Party”), the Guarantors party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent and the lenders (the “Lenders”) party thereto (unless
otherwise defined herein, each capitalized term used herein is defined in the
Credit Agreement), hereby makes an Interest Election Request as follows:

                    (i) The Borrowing to which this Interest Election Request
applies is [               ]6;

                    (ii) The effective date of the election made pursuant to
this Interest Election Request is [               ], 201[     ] (which shall be
a Business Day); [and]

                    (iii) The resulting Borrowing is to be [an ABR Borrowing][a
Eurodollar Borrowing][; and]

                    [(iv) [If the resulting Borrowing is a Eurodollar Borrowing]
The Interest Period applicable to the resulting Borrowing after giving effect to
such election is [               ]].

                    The above request has been made to the Administrative Agent
by telephone at [               ].

 

 

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

 

6 If different options are being elected with respect to different portions of
the Borrowing, provide the portions thereof to be allocated to each resulting
Borrowing (in which case the information specified pursuant to items (iii) and
(iv) shall be specified for each resulting Borrowing).

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

Very truly yours,

 

 

 

XL GROUP PLC

 

 

 

 

By:

 

 

 

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

 

Name:

 

 

Title:

 

 

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