Exhibit 10.14

 

EXECUTION COPY

 

 

CREDIT AGREEMENT

 

dated as of

 

August 25, 2005

 

among

 

AXIS CAPITAL HOLDINGS LIMITED,

 

The SUBSIDIARY CREDIT PARTIES Party Hereto,

 

The LENDERS Party Hereto

 

and

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

 

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

 

$1,500,000,000

 

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

 

J.P. MORGAN SECURITIES INC.

and

BARCLAYS CAPITAL,

as Joint Lead Arrangers and Joint Bookrunners

 

BARCLAYS BANK PLC,

as Syndication Agent

 

CITIBANK, N.A., ING BANK N.V.,

WACHOVIA BANK, N.A., CALYON NEW YORK BRANCH,

HSBC BANK USA, N.A., LLOYDS TSB BANK PLC, and

THE ROYAL BANK OF SCOTLAND PLC,

as Documentation Agents

 

 

 

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

 

TABLE OF CONTENTS

 

ARTICLE I

 

 

 

DEFINITIONS

 

SECTION 1.01. Defined Terms

 

SECTION 1.02. Terms Generally

 

SECTION 1.03. Accounting Terms; GAAP and SAP; Fiscal Year

 

SECTION 1.04. Currencies; Currency Equivalents

 

 

 

ARTICLE II

 

 

 

THE CREDITS

 

SECTION 2.01. Syndicated Letters of Credit

 

SECTION 2.02. Issuance and Administration
[a05-15538_1ex10d14.htm#Section2_02_IssuanceAndAdministra_234033]

 

SECTION 2.03. Reimbursement of LC Disbursements, Etc
[a05-15538_1ex10d14.htm#Section2_03_ReimbursementOfLcDisb_234146]

 

SECTION 2.04. Participated Letters of Credit
[a05-15538_1ex10d14.htm#Section2_04_ParticipatedLettersOf_234303]

 

SECTION 2.05. Loans and Borrowings
[a05-15538_1ex10d14.htm#Section2_05_LoansAndBorrowings__234541]

 

SECTION 2.06. Requests for Borrowings
[a05-15538_1ex10d14.htm#Section2_06_RequestsForBorrowings_234557]

 

SECTION 2.07. Funding of Borrowings
[a05-15538_1ex10d14.htm#Section2_07_FundingOfBorrowings__234623]

 

SECTION 2.08. Interest Elections
[a05-15538_1ex10d14.htm#Section2_08_InterestElections__234625]

 

SECTION 2.09. Termination, Reduction and Increase of the Commitments
[a05-15538_1ex10d14.htm#Section2_09_TerminationReductionA_234705]

 

SECTION 2.10. Repayment of Loans; Evidence of Debt
[a05-15538_1ex10d14.htm#Section2_10_RepaymentOfLoansEvide_234735]

 

SECTION 2.11. Prepayment of Loans
[a05-15538_1ex10d14.htm#Section2_11_PrepaymentOfLoans__234750]

 

SECTION 2.12. Addition and Termination of Subsidiary Credit Parties
[a05-15538_1ex10d14.htm#Section2_12_AdditionAndTerminatio_234807]

 

SECTION 2.13. Fees [a05-15538_1ex10d14.htm#Section2_13_Fees__234826]

 

SECTION 2.14. Interest [a05-15538_1ex10d14.htm#Section2_14_Interest__234837]

 

SECTION 2.15. Alternate Rate of Interest
[a05-15538_1ex10d14.htm#Section2_15_AlternateRateOfIntere_234853]

 

SECTION 2.16. Increased Costs
[a05-15538_1ex10d14.htm#Section2_16_IncreasedCosts__234858]

 

SECTION 2.17. Break Funding Payments
[a05-15538_1ex10d14.htm#Section2_17_BreakFundingPayments__234913]

 

SECTION 2.18. Taxes [a05-15538_1ex10d14.htm#Section2_18_Taxes__234940]

 

SECTION 2.19. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
[a05-15538_1ex10d14.htm#Section2_19_PaymentsGenerallyProR_235008]

 

SECTION 2.20. Mitigation Obligations; Replacement of Lenders
[a05-15538_1ex10d14.htm#Section2_20_MitigationObligations_235447]

 

 

 

ARTICLE III [a05-15538_1ex10d14.htm#Articleiii_235458]

 

 

 

REPRESENTATIONS AND WARRANTIES
[a05-15538_1ex10d14.htm#RepresentationsAndWarranties_235459]

 

SECTION 3.01. Organization; Powers
[a05-15538_1ex10d14.htm#Section3_01_OrganizationPowers_Su_235503]

 

SECTION 3.02. Authorization; Enforceability
[a05-15538_1ex10d14.htm#Section3_02_AuthorizationEnforcea_235539]

 

SECTION 3.03. Governmental Approvals; No Conflicts
[a05-15538_1ex10d14.htm#Section3_03_GovernmentalApprovals_235541]

 

SECTION 3.04. Financial Condition; No Material Adverse Change
[a05-15538_1ex10d14.htm#Section3_04_FinancialConditionNoM_235545]

 

SECTION 3.05. Litigation [a05-15538_1ex10d14.htm#Section3_05_Litigation__235603]

 

SECTION 3.06. Compliance with Laws and Agreements
[a05-15538_1ex10d14.htm#Section3_06_ComplianceWithLawsAnd_235608]

 

SECTION 3.07. Investment and Holding Company Status
[a05-15538_1ex10d14.htm#Section3_07_InvestmentAndHoldingC_235617]

 

SECTION 3.08. Taxes
[a05-15538_1ex10d14.htm#Section3_08_Taxes_SuchCreditParty_235621]

 

SECTION 3.09. Pension-Related Matters
[a05-15538_1ex10d14.htm#Section3_09_PensionrelatedMatters_235624]

 

 

i

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

 

SECTION 3.10. Disclosure
[a05-15538_1ex10d14.htm#Section3_10_Disclosure_NoneOfTheR_235649]

 

SECTION 3.11. Use of Credit
[a05-15538_1ex10d14.htm#Section3_11_UseOfCredit_NeitherSu_235652]

 

SECTION 3.12 [a05-15538_1ex10d14.htm#Section3_12_Indebtedness_Schedule_235654]

 

SECTION 3.13. Subsidiaries
[a05-15538_1ex10d14.htm#Section3_13_Subsidiaries_SetForth_235656]

 

SECTION 3.14. Withholding Taxes
[a05-15538_1ex10d14.htm#Section3_14_WithholdingTaxes_Base_235659]

 

SECTION 3.15. Stamp Taxes
[a05-15538_1ex10d14.htm#Section3_15_StampTaxes_ToEnsureTh_235718]

 

SECTION 3.16. Legal Form
[a05-15538_1ex10d14.htm#Section3_16_LegalForm_EachOfTheCr_235720]

 

 

 

ARTICLE IV [a05-15538_1ex10d14.htm#Articleiv_235721]

 

 

 

CONDITIONS [a05-15538_1ex10d14.htm#Conditions_235723]

 

SECTION 4.01. Effective Date
[a05-15538_1ex10d14.htm#Section4_01_EffectiveDate_TheObli_235726]

 

SECTION 4.02. Each Credit Event
[a05-15538_1ex10d14.htm#Section4_02_EachCreditEvent_TheOb_235757]

 

 

 

ARTICLE V [a05-15538_1ex10d14.htm#Articlev_235800]

 

 

 

AFFIRMATIVE COVENANTS [a05-15538_1ex10d14.htm#AffirmativeCovenants_235801]

 

SECTION 5.01. Financial Statements and Other Information
[a05-15538_1ex10d14.htm#Section5_01_FinancialStatementsAn_235803]

 

SECTION 5.02. Notices of Material Events
[a05-15538_1ex10d14.htm#Section5_02_NoticesOfMaterialEven_235816]

 

SECTION 5.03. Existence; Conduct of Business
[a05-15538_1ex10d14.htm#Section5_03_ExistenceConductOfBus_235828]

 

SECTION 5.04. Insurance
[a05-15538_1ex10d14.htm#Section5_04_Insurance_AxisCapital_235831]

 

SECTION 5.05. Maintenance of Properties
[a05-15538_1ex10d14.htm#Section5_05_MaintenanceOfProperti_235833]

 

SECTION 5.06. Payment of Obligations
[a05-15538_1ex10d14.htm#Section5_06_PaymentOfObligations__235835]

 

SECTION 5.07. Financial Accounting Practices
[a05-15538_1ex10d14.htm#Section5_07_FinancialAccountingPr_235847]

 

SECTION 5.08. Compliance with Applicable Laws
[a05-15538_1ex10d14.htm#Section5_08_ComplianceWithApplica_235849]

 

SECTION 5.09. Use of Letters of Credit and Proceeds of Loans
[a05-15538_1ex10d14.htm#Section5_09_UseOfLettersOfCreditA_235852]

 

SECTION 5.10. Inspection Rights
[a05-15538_1ex10d14.htm#Section5_10_InspectionRights_Subj_235903]

 

SECTION 5.11. Financial Strength Rating
[a05-15538_1ex10d14.htm#Section5_11_FinancialStrengthRati_235906]

 

 

 

ARTICLE VI [a05-15538_1ex10d14.htm#Articlevi_235908]

 

 

 

NEGATIVE COVENANTS [a05-15538_1ex10d14.htm#NegativeCovenants_235911]

 

SECTION 6.01. Fundamental Changes
[a05-15538_1ex10d14.htm#Section6_01_FundamentalChanges__235914]

 

SECTION 6.02. Liens
[a05-15538_1ex10d14.htm#Section6_02_Liens_AxisCapitalWill_235947]

 

SECTION 6.03. Transactions with Affiliates
[a05-15538_1ex10d14.htm#Section6_03_TransactionsWithAffil_000016]

 

SECTION 6.04. Financial Covenants
[a05-15538_1ex10d14.htm#Section6_04_FinancialCovenants__000019]

 

SECTION 6.05. Indebtedness
[a05-15538_1ex10d14.htm#Section6_05_Indebtedness_AxisCapi_012718]

 

SECTION 6.06. Investments
[a05-15538_1ex10d14.htm#Section6_06_Investments_AxisCapit_000033]

 

SECTION 6.07. Restricted Payments
[a05-15538_1ex10d14.htm#Section6_07_RestrictedPayments_Ax_000049]

 

SECTION 6.08. Continuation of and Change in Businesses
[a05-15538_1ex10d14.htm#Section6_08_ContinuationOfAndChan_000052]

 

SECTION 6.09. Private Act
[a05-15538_1ex10d14.htm#Section6_09_PrivateAct_AxisCapita_000108]

 

 

 

ARTICLE VII [a05-15538_1ex10d14.htm#Articlevii_000111]

 

 

 

EVENTS OF DEFAULT [a05-15538_1ex10d14.htm#EventsOfDefault_000112]

 

 

 

ARTICLE VIII [a05-15538_1ex10d14.htm#Articleviii_000140]

 

 

 

THE ADMINISTRATIVE AGENT [a05-15538_1ex10d14.htm#TheAdministrativeAgent_000141]

 

ARTICLE IX GUARANTEE [a05-15538_1ex10d14.htm#Articleix_000227]

 

SECTION 9.01. The Guarantee
[a05-15538_1ex10d14.htm#Section9_01_TheGuarantee_AxisCapi_000230]

 

 

ii

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

 

SECTION 9.02. Obligations Unconditional
[a05-15538_1ex10d14.htm#Section9_02_ObligationsUnconditio_000304]

 

SECTION 9.03. Reinstatement
[a05-15538_1ex10d14.htm#Section9_03_Reinstatement_TheObli_000316]

 

SECTION 9.04. Subrogation
[a05-15538_1ex10d14.htm#Section9_04_Subrogation_AxisCapit_000318]

 

SECTION 9.05. Remedies
[a05-15538_1ex10d14.htm#Section9_05_Remedies_AxisCapitalA_000320]

 

SECTION 9.06. Instrument for the Payment of Money
[a05-15538_1ex10d14.htm#Section9_06_InstrumentForThePayme_000323]

 

SECTION 9.06. Continuing Guarantee
[a05-15538_1ex10d14.htm#Section9_06_ContinuingGuarantee_T_000325]

 

 

 

ARTICLE X [a05-15538_1ex10d14.htm#Articlex_000327]

 

 

 

MISCELLANEOUS [a05-15538_1ex10d14.htm#Miscellaneous_000328]

 

SECTION 10.01. Notices
[a05-15538_1ex10d14.htm#Section10_01_Notices_aexceptInThe_000331]

 

SECTION 10.02. Waivers; Amendments
[a05-15538_1ex10d14.htm#Section10_02_WaiversAmendments__000419]

 

SECTION 10.03. Expenses; Indemnity; Damage Waiver
[a05-15538_1ex10d14.htm#Section10_03_ExpensesIndemnityDam_000746]

 

SECTION 10.04. Successors and Assigns
[a05-15538_1ex10d14.htm#Section10_04_SuccessorsAndAssigns_000824]

 

SECTION 10.05. Survival
[a05-15538_1ex10d14.htm#Section10_05_Survival_AllCovenant_000943]

 

SECTION 10.06. Counterparts; Integration; Effectiveness
[a05-15538_1ex10d14.htm#Section10_06_CounterpartsIntegrat_000950]

 

SECTION 10.07. Severability
[a05-15538_1ex10d14.htm#Section10_07_Severability_AnyProv_000953]

 

SECTION 10.08. Right of Setoff
[a05-15538_1ex10d14.htm#Section10_08_RightOfSetoff_IfAnEv_000954]

 

SECTION 10.09. Governing Law; Jurisdiction; Etc
[a05-15538_1ex10d14.htm#Section10_09_GoverningLawJurisdic_001022]

 

SECTION 10.10. WAIVER OF JURY TRIAL
[a05-15538_1ex10d14.htm#Section10_10_WaiverOfJuryTrial_Ea_001044]

 

SECTION 10.11. Headings
[a05-15538_1ex10d14.htm#Section10_11_Headings_ArticleandS_001046]

 

SECTION 10.12. Treatment of Certain Information; Confidentiality
[a05-15538_1ex10d14.htm#Section10_12_TreatmentOfCertainIn_001050]

 

SECTION 10.13. Judgment Currency
[a05-15538_1ex10d14.htm#Section10_13_JudgmentCurrency_Thi_001103]

 

SECTION 10.14. USA Patriot Act
[a05-15538_1ex10d14.htm#Section10_14_UsaPatriotAct_EachLe_001116]

 

 

iii

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

 

SCHEDULE 1.01 [a05-15538_1ex10d14.htm#Schedule1_01_002720]

- [a05-15538_1ex10d14.htm#Schedule1_01_002720]

Commitments [a05-15538_1ex10d14.htm#Schedule1_01_002720]

 

SCHEDULE 3.05(a) [a05-15538_1ex10d14.htm#Schedule3_05a_002856]

- [a05-15538_1ex10d14.htm#Schedule3_05a_002856]

Litigation [a05-15538_1ex10d14.htm#Schedule3_05a_002856]

 

SCHEDULE 3.13 [a05-15538_1ex10d14.htm#Schedule3_13_013037]

- [a05-15538_1ex10d14.htm#Schedule3_13_013037]

Subsidiaries [a05-15538_1ex10d14.htm#Schedule3_13_013037]

 

SCHEDULE 6.05 [a05-15538_1ex10d14.htm#Schedule6_05_003119]

- [a05-15538_1ex10d14.htm#Schedule6_05_003119]

Indebtedness [a05-15538_1ex10d14.htm#Schedule6_05_003119]

 

 

 

 

 

EXHIBIT A [a05-15538_1ex10d14.htm#Exhibita_003137]

- [a05-15538_1ex10d14.htm#Exhibita_003137]

Form of Assignment and Assumption [a05-15538_1ex10d14.htm#Exhibita_003137]

 

EXHIBIT B [a05-15538_1ex10d14.htm#Exhibitb_004929]

- [a05-15538_1ex10d14.htm#Exhibitb_004929]

Form of Subsidiary Joinder Agreement [a05-15538_1ex10d14.htm#Exhibitb_004929]

 

EXHIBIT C [a05-15538_1ex10d14.htm#Exhibitc_005818]

- [a05-15538_1ex10d14.htm#Exhibitc_005818]

Form of Process Agent Acceptance Letter [a05-15538_1ex10d14.htm#Exhibitc_005818]

 

EXHIBIT D [a05-15538_1ex10d14.htm#Exhibitd_010011]

- [a05-15538_1ex10d14.htm#Exhibitd_010011]

Form of Subsidiary Credit Party Termination Notice
[a05-15538_1ex10d14.htm#Exhibitd_010011]

 

EXHIBIT E-1 [a05-15538_1ex10d14.htm#Exhibite1_010212]

- [a05-15538_1ex10d14.htm#Exhibite1_010212]

Form of Opinion of Conyers Dill & Pearman, Bermuda Counsel to AXIS Capital and
AXIS Specialty [a05-15538_1ex10d14.htm#Exhibite1_010212]

 

EXHIBIT E-2 [a05-15538_1ex10d14.htm#Exhibite2_010655]

- [a05-15538_1ex10d14.htm#Exhibite2_010655]

Form of Opinion of New York counsel to the Credit Parties
[a05-15538_1ex10d14.htm#Exhibite2_010655]

 

EXHIBIT E-3 [a05-15538_1ex10d14.htm#Exhibite3_010713]

- [a05-15538_1ex10d14.htm#Exhibite3_010713]

Form of Opinion of Irish Counsel to AXIS Re and AXIS Specialty Europe
[a05-15538_1ex10d14.htm#Exhibite3_010713]

 

EXHIBIT F [a05-15538_1ex10d14.htm#Exhibitf_011226]

- [a05-15538_1ex10d14.htm#Exhibitf_011226]

Form of Opinion of Special New York Counsel to JPMCB
[a05-15538_1ex10d14.htm#Exhibitf_011226]

 

EXHIBIT G [a05-15538_1ex10d14.htm#Exhibitg_011314]

- [a05-15538_1ex10d14.htm#Exhibitg_011314]

Form of Confirming Lender Agreement [a05-15538_1ex10d14.htm#Exhibitg_011314]

 

 

iv

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

 

CREDIT AGREEMENT dated as of August 25, 2005, among AXIS CAPITAL HOLDINGS
LIMITED, a Bermuda limited liability corporation, the SUBSIDIARY CREDIT PARTIES
party hereto (or that shall become party hereto from time to time pursuant to
Section 2.12), the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as
Administrative Agent.

 

AXIS Capital (as hereinafter defined) has requested that the Lenders (as so
defined) make loans and extend credit to it and certain of its Subsidiaries in
an aggregate principal or face amount not exceeding $1,500,000,000 at any one
time outstanding, and the Lenders are prepared to extend such credit 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 Party” means any of AXIS Capital and the Subsidiary Account Parties, as
the context may require, and “Account Parties” means all of the foregoing.

 

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

 

“Additional Margin” means, with respect to any Eurodollar Loan, the rate per
annum specified under the caption “Additional Margin” in the table contained in
the definition of “Applicable Rate” in this Section or otherwise determined in
accordance with such definition.

 

“Adjusted LIBO Rate” means, for the Interest Period for any Eurodollar
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 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.

 

Credit Agreement

 

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

 

“Administrative Agent’s Account” means, for each Currency, an account in respect
of such Currency designated by the Administrative Agent in a written notice to
AXIS Capital and the Lenders.

 

“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.

 

“Agreed Foreign Currency” means, at any time, (a) Pounds Sterling, (b) Euro,
(c) Australian Dollars, (d) Canadian Dollars, (e) Japanese Yen and (f) (i) with
respect to the denomination of Syndicated Letters of Credit hereunder, any other
Foreign Currency agreed to by the Administrative Agent and each Lender or
(ii) with respect to the denomination of any Participated Letter of Credit, any
other Foreign Currency agreed to by the Administrative Agent and the Issuing
Lender of such Participated Letter of Credit, so long as, in respect of any such
specified Currency or other Foreign Currency, at such time (A) such Currency is
dealt with in the London interbank deposit market, (B) such Currency is freely
transferable and convertible into U.S. Dollars in the London foreign exchange
market and (C) no central bank or other governmental authorization in the
country of issue of such Currency (including, in the case of the Euro, any
authorization by the European Central Bank) is required to permit use of such
Currency (I) with respect to any Syndicated Letter of Credit, by any Issuing
Lender thereof for issuing such Syndicated Letter of Credit and/or to permit the
relevant Account Party to reimburse any Lender for any such disbursement or pay
the interest thereon or (II) with respect to any Participated Letter of Credit,
by the applicable Issuing Lender thereof for issuing or making any disbursement
with respect to such Participated Letter of Credit hereunder and/or to permit
the relevant Account Party to reimburse such Issuing Lender for any such
disbursement or pay the interest thereon or to permit any Lender to acquire a
participation interest in such Participated Letter of Credit or make any payment
to such Issuing Lender in consideration therefor, unless in each case such
authorization has been obtained and is in full force and effect.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate for such day plus 1/2 of 1%.  Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, as the case may be.

 

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

 

“Applicable Margin” means, with respect to any Eurodollar Loan, the rate per
annum specified under the caption “Applicable Margin” in the table contained in
the definition of “Applicable Rate” in this Section or otherwise determined in
accordance with such definition.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment.  If the Commitments
have

 

2

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

 

terminated or expired, the Applicable Percentages shall be determined based upon
the total Credit Exposures or, if no Letters of Credit or Loans are outstanding,
the Commitments most recently in effect, giving effect to any assignments.

 

“Applicable Rate” means, for any day, with respect to the commitment fees
payable hereunder, the letter of credit fees payable hereunder or the interest
margins applicable to Eurodollar Loans, as the case may be, the applicable rate
per annum set forth below under the caption “Commitment Fee”, “Letter of Credit
Fee” or, with respect to such interest margins, “Applicable Margin” and/or
“Additional Margin”, respectively, based upon the ratings by Moody’s and S&P,
respectively, applicable on such date to the Index Debt:

 

 

 

Index Debt Ratings
(Moody’s/S&P)

 

Commitment
Fee

 

Letter of
Credit Fee

 

Applicable
Margin
(for Eurodollar
Loans only)

 

Additional
Margin
(for Eurodollar
Loans only)

 

Category 1

 

> A3/A-

 

0.07

%

0.325

%

0.325

%

0.10

%

Category 2

 

Baa1/BBB+

 

0.08

%

0.375

%

0.375

%

0.10

%

Category 3

 

Baa2/BBB

 

0.10

%

0.50

%

0.50

%

0.10

%

Category 4

 

< Baa3/BBB-

 

0.15

%

0.75

%

0.75

%

0.10

%

 

For purposes of the foregoing, (a) if the ratings established or deemed to have
been established by Moody’s and S&P for the Index Debt shall fall within
different Categories that are one Category apart, the Applicable Rate shall be
determined by reference to the Category of the higher of the two ratings; (b) if
the ratings established or deemed to have been established by Moody’s and S&P
for the Index Debt shall fall within different Categories that are more than one
Category apart, the Applicable Rate shall be determined by reference to the
Category next above that of the lower of the two ratings; (c) if only one of
Moody’s and S&P shall have in effect a rating for the Index Debt, the Applicable
Rate shall be determined by reference to the Category of such rating; (d) if
neither Moody’s nor S&P shall have in effect a rating for the Index Debt (other
than by reason of the circumstances referred to in the last sentence of this
definition), then the applicable rating shall be determined by reference to
Category 4; and (e) if the ratings established or deemed to have been
established by Moody’s and S&P for the Index Debt shall be changed (other than
as a result of a change in the rating system of Moody’s or S&P), such change
shall be effective as of the date on which it is first announced by the
applicable rating agency.  Each change in the Applicable Rate shall apply during
the period commencing on such effective date of such change and ending on the
date immediately preceding the effective date of the next such change.  If the
rating system of Moody’s or S&P shall change, or if either such rating agency
shall cease to be in the business of rating corporate debt obligations, AXIS
Capital and the Lenders shall negotiate in good faith to amend this definition
to reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Rate shall be determined by reference to the rating of Moody’s and/or
S&P, as the case may be, applicable to Index Debt most recently in effect prior
to such change or cessation.

 

3

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

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

“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.

 

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

 

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Commitment Termination Date and the date of
termination of the Commitments.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Borrower” means each of AXIS Capital and the Subsidiary Borrowers, as the
context may require, and “Borrowers” means all of the foregoing.

 

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

 

“Borrowing Request” means a request by a Borrower for a Borrowing consisting of
Loans in accordance with Section 2.06.

 

4

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

 

“Business Day” means any day (a) that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Bermuda are authorized or required by
law to remain closed, (b) if such day relates to 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 Borrowing, or to a notice by a
Borrower with respect to any such borrowing, payment, prepayment, continuation,
conversion, or Interest Period, that is also a day on which dealings in U.S.
Dollar deposits are carried out in the London interbank market, (c) if such day
relates to the issuance or payment under any Letter of Credit denominated in any
Foreign Currency (other than Euro) (or any notice with respect thereto), that is
also a day on which commercial banks and the foreign exchange market settle
payments in the Principal Financial Center for such Foreign Currency and/or
(d) if such day relates to the issuance or payment under any Letter of Credit
denominated in Euro (or any notice with respect thereto), that is also a TARGET
Day.

 

“Canadian Dollar” means the lawful currency of Canada.

 

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

 

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934, as amended, and the rules of the
SEC thereunder as in effect on the date hereof), of shares representing more
than 50% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of AXIS Capital; (b) occupation of a majority of the
seats (other than vacant seats) on the board of directors of AXIS Capital by
Persons who were neither (i) nominated by the board of directors of AXIS Capital
nor (ii) appointed by directors so nominated; or (c) the acquisition of direct
or indirect Control of AXIS Capital by any Person or group.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date hereof, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date hereof or (c) compliance by any Lender (or, for purposes of
Section 2.16(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 hereof.

 

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

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to (a) issue Syndicated Letters of Credit and/or acquire participations in
Participated Letters of Credit and/or (b) to make Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender’s Credit
Exposure hereunder.  The initial amount of each Lender’s Commitment is set forth
on Schedule 1.01, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Commitment, as applicable, but in each

 

5

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

 

case as such Commitment may be (a) reduced from time to time pursuant to
Section 2.09, (b) reduced or increased from time to time pursuant to assignments
by or to such Lender pursuant to Section 10.04 and (c) increased from time to
time pursuant to Section 2.09(c).  The initial aggregate amount of the Lenders’
Commitments is $1,500,000,000.

 

“Commitment Termination Date” means August 25, 2010.

 

“Commitment Utilization Day” means any day on which the aggregate outstanding
principal amount of Loans shall equal or exceed 50% of the Revolving Credit
Sublimit (whether or not the Commitments shall have terminated on or prior to
such day).

 

“Confirming Lender” means, with respect to any Lender, any other bank listed on
the NAIC Lender List that has agreed, by delivery of an agreement between such
Lender and such other bank in substantially the form of Exhibit G or such other
agreement in form and substance satisfactory to the Administrative Agent, that
such other bank will itself honor the obligations of such Lender in respect of a
draft complying with the terms of a Letter of Credit, as if, and to the extent,
such other bank were an “issuing lender” (in place of such Lender) named in such
Letter of Credit.

 

“Consolidated Net Worth” means, at any time, the consolidated stockholders’
equity of AXIS Capital and its Subsidiaries at such time.

 

“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 Documents” means, collectively, (a) this Agreement, (b) the Letter of
Credit Documents and (c) any Subsidiary Joinder Agreements.

 

“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.

 

“Credit Party” means an Account Party or a Borrower.

 

“Credit Party Jurisdiction” means, with respect to any Credit Party, any of
(a) the jurisdictions of its organization and (b) any other country or countries
(i) where such Credit Party is licensed or qualified to do business or (ii) from
or through which payments hereunder are made by such Credit Party.

 

“Currency” means the lawful currency of any country.

 

“Currency Valuation Date” means the first Business Day of each calendar month.

 

“Currency Valuation Notice” has the meaning set forth in Section 2.11(b).

 

“Currency Valuation Period” means the period commencing from each Currency
Valuation Date to but not including the next succeeding Currency Valuation Date.

 

6

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

 

“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.

 

“Designation Date” has the meaning assigned to such term in Section 2.12(a).

 

“Disposition” has the meaning assigned to such term in Section 6.01(c).

 

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).

 

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

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with AXIS Capital, 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 AXIS Capital or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by AXIS Capital or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by AXIS
Capital or any ERISA Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
AXIS Capital or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from AXIS Capital or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Euro” means the single currency of Participating Member States of the European
Union.

 

“Eurodollar”, 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 Adjusted LIBO Rate.

 

7

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

 

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

 

“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 Credit Party hereunder, (a) income or franchise Taxes imposed on (or
measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits Taxes imposed by
the United States of America or any similar Tax imposed by any other
jurisdiction in which any Credit Party is located or (c) with respect to any
Lender (other than an assignee pursuant to a request by AXIS Capital pursuant to
Section 2.20(b)) any withholding Tax that (i) is in effect and would apply to
amounts payable to such Lender at the time such Lender becomes a party to this
Agreement (or designates a new lending office), other than any withholding Tax
imposed on any payment to any Lender to the extent such Lender (or its assignee,
as the case may be) was entitled, at the time of designation of a new lending
office (or assignment, as the case may be) to receive additional amounts from
any Credit Party with respect to such withholding Tax pursuant to
Section 2.18(a) or (ii) is attributable to such Lender’s failure or inability to
comply with Section 2.18(e).

 

“Existing Credit Agreement” means the $750,000,000 Credit Agreement dated as of
March 25, 2004 among AXIS Capital, certain of its Subsidiaries, the lenders
party thereto and JPMCB (formerly known as JPMorgan Chase Bank), as
administrative agent.

 

“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 the chief financial officer, principal accounting
officer, treasurer or controller of AXIS Capital.

 

“Foreign Currency” means at any time any Currency other than U.S. Dollars.

 

“Foreign Currency Sublimit” means $300,000,000.

 

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

 

“Governmental Authority” means the government of the United States of America,
Bermuda or any other nation, or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity (including any federal or other association of or
with which any such nation may be a

 

8

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

 

member or associated) exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.

 

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

 

“Guaranteed Obligations” has the meaning assigned to such term in Section 9.01.

 

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

 

“Indemnified Taxes” means Taxes (including Other Taxes) imposed on the
Administrative Agent or any Lender on or with respect to any payment hereunder
or the execution, delivery or enforcement of, or otherwise with respect to this
Agreement other than Excluded Taxes.

 

9

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

 

“Index Debt” means senior, unsecured, long-term indebtedness for borrowed money
evidenced by bonds, debentures, notes or similar instruments of AXIS Capital
that is not guaranteed by any other Person or subject to any other credit
enhancement.

 

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

 

“Interest Election Request” means a request by a Borrower to convert or continue
a Borrowing in accordance with Section 2.08.

 

“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 (a) 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 (b) 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.

 

“Investment” means, for any Person:  (a) the acquisition (whether for cash,
property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any “short
sale” or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding 90 days arising in connection with the sale of inventory or supplies
or other trade credit by such Person in the ordinary course of business; (c) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person (excluding any Guarantee
or other contingent obligation arising in the ordinary course of such Person’s
business as a reinsurance company)

 

10

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

 

and (without duplication) any amount committed to be advanced, lent or extended
to such Person; or (d) the entering into of any Swap Agreement.

 

“Investment Guidelines” means, with respect to any Credit Party or any
Subsidiary, the “Statement of Investment Policy and Objectives” of such Credit
Party or Subsidiary (a) as in effect on, and delivered to the Adminstrative
Agent on or prior to, the Effective Date or (b) delivered to the Administrative
Agent pursuant to Section 2.12(a), as applicable, in each case as may be changed
from time to time by a resolution duly adopted by the board of directors of such
Credit Party or Subsidiary (or any committee thereof).

 

“Issuing Lender” means (a) with respect to any Syndicated Letter of Credit, each
Lender, in its capacity as an issuer under such Syndicated Letter of Credit, and
(b) with respect to any Participated Letter of Credit, JPMCB and each other
Lender designated by AXIS Capital as an “Issuing Lender” hereunder that has
agreed to such designation and is reasonably acceptable to the Administrative
Agent, in each case, in its capacity as the issuer of such Participated Letter
of Credit hereunder, and its respective successors in such capacity as provided
in Section 2.04(k).

 

“Japanese Yen” means the lawful currency of Japan.

 

“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, a
payment made by an Issuing Lender pursuant thereto and (b) with respect to any
Syndicated Letter of Credit, a payment made by a Lender pursuant thereto.

 

“LC Exposure” means, at any time, the sum of the U.S. Dollar Amount 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 its Applicable
Percentage of the total LC Exposure at such time.

 

“Lenders” means the Persons listed on Schedule 1.01 and any other Person that
shall have become a Lender party hereto pursuant to an Assignment and Assumption
or an agreement under Section 2.09(c), other than any such Person that ceases to
be a Lender party hereto pursuant to an Assignment and Assumption.

 

“Letter of Credit” means each of the Syndicated Letters of Credit and the
Participated Letters of Credit.

 

“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 (a) the rights and
obligations of the parties concerned or at risk with respect to

 

11

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

 

such Letter of Credit or (b) any collateral security for any of such
obligations, each as the same may be modified and supplemented and in effect
from time to time.

 

“LIBO Rate” means, for the Interest Period for any Eurodollar Borrowing, the
rate appearing on Page 3750 of the Telerate Service (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 Person serving as the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. 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 U.S.
Dollar deposits with a maturity comparable to 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 U.S. Dollar deposits of
$5,000,000 and for a maturity comparable to 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, (a) any mortgage, deed of trust,
pledge, lien, hypothecation, security interest, charge or other encumbrance or
security arrangement of any nature whatsoever in, on or of such asset, and
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset.

 

“Loans” means the loans made by the Lenders to the Borrowers pursuant to
Section 2.05.

 

“Local Time” means, (a) with respect to any Letter of Credit denominated in or
any payment to be made in U.S. Dollars, New York City time, (b) with respect to
any Letter of Credit denominated in or any payment to be made in any Foreign
Currency (other than Euro), the local time in the Principal Financial Center for
the Foreign Currency in which such Letter of Credit is denominated or such
payment is to be made and (c) with respect to any Letter of Credit denominated
in or any payment to be made in Euro, the local time in London, England.

 

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

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, property or condition (financial or otherwise) of AXIS Capital and
its Subsidiaries taken as a whole, (b) the ability of any Credit Party to
perform any of its obligations under this Agreement or any of the other Credit
Documents or (c) the validity of this Agreement or any of the other Credit
Documents or the rights of or benefits available to the Administrative Agent
and/or the Lenders hereunder or thereunder.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of AXIS Capital and its Subsidiaries in an aggregate principal amount
exceeding $75,000,000.  For

 

12

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

 

purposes of determining Material Indebtedness, the “principal amount” of the
obligations of any Person in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that such
Person would be required to pay if such Swap Agreement were terminated at such
time.

 

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

 

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

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made under, or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Credit Document.

 

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

 

“Participated Letter of Credit Sublimit” means $300,000,000.

 

“Participated Letters of Credit” means letters of credit issued under
Section 2.04.

 

“Participating Member State” means any member state of the European Community
that adopts or has adopted the Euro as its lawful currency in accordance with
the legislation of the European Union relating to the European Monetary Union.

 

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

 

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

 

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

 

“Plan” means any employee pension benefit plan (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 AXIS Capital or any ERISA
Affiliate is (or, if such plan were

 

13

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

 

terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.

 

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

 

“Pounds Sterling” means the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.

 

“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.

 

“Principal Financial Center” means, in the case of any Currency, the principal
financial center in the country of issue of such Currency, as determined by the
Administrative Agent.

 

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

 

“Quarterly Dates” 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.

 

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

 

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

 

“Required Lenders” means, at any time, Lenders having Credit Exposures and
unused Commitments representing more than 50% of the sum of the total Credit
Exposures and unused Commitments at such time.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of capital
stock of AXIS Capital or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of AXIS Capital
or any option, warrant or other right to acquire any such shares of capital
stock of AXIS Capital.

 

“Revolving Credit Sublimit” means $500,000,000.

 

14

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

 

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

 

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

 

“S&P” means Standard & Poor’s Ratings Services.

 

“Statutory Reserve Rate” means, 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 arithmetic
mean, taken over each day in such Interest Period, of 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 Person serving as the Administrative Agent is subject for eurocurrency
funding (currently referred to as “Eurocurrency liabilities” in Regulation D of
the Board).  Such reserve percentages shall include those imposed pursuant to
such Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation.  The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

 

“Statutory Statement” means, for any Insurance Company, for any fiscal year of
such Insurance Company, the most recent annual statement filed with the
Applicable Insurance Regulatory Authority, which annual statements shall be
prepared in accordance with SAP.

 

“Subordinated Indebtedness” means unsecured Indebtedness (i) for which AXIS
Capital is directly and primarily liable, (ii) in respect of which none of its
Subsidiaries is contingently or otherwise obligated (other than obligations
pursuant to subordinated guarantees) and (iii) that is subordinated to the
obligations of AXIS Capital to pay principal of and interest on the Loans and
its reimbursement obligations in respect of LC Disbursements hereunder.

 

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

 

15

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

 

“Subsidiary Account Party” means each Subsidiary that is listed under the
caption “Subsidiary Credit Parties” on the signature pages hereof and each other
Subsidiary that shall become a Subsidiary Account Party pursuant to
Section 2.12, in each case so long as such Subsidiary shall remain a Subsidiary
Account Party hereunder.

 

“Subsidiary Borrower” means each Subsidiary that is listed under the caption
“Subsidiary Credit Parties” on the signature pages hereof and each other
Subsidiary that shall become a Subsidiary Borrower pursuant to Section 2.12, in
each case so long as such Subsidiary shall remain a Subsidiary Borrower
hereunder.

 

“Subsidiary Credit Party” means a Subsidiary Account Party or a Subsidiary
Borrower.

 

“Subsidiary Joinder Agreement” means a Subsidiary Joinder Agreement entered into
by AXIS Capital and a Subsidiary pursuant to Section 2.12, substantially in the
form of Exhibit B or any other form approved by the Administrative Agent.

 

“Supplemental Commitment Date” has the meaning assigned to such term in
Section 2.09(c).

 

“Supplemental Lender” has the meaning assigned to such term in Section 2.09(c).

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of AXIS Capital or its
Subsidiaries shall be a Swap Agreement.

 

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

 

“TARGET Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer payment system (or any successor settlement system
as determined by the Administrative Agent) is open for the settlement of
payments in Euro.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Total Funded Debt” means, at any time, all Indebtedness of AXIS Capital and its
Subsidiaries which would at such time be classified in whole or in part as a
liability on the consolidated balance sheet of AXIS Capital in accordance with
GAAP.

 

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

 

16

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

 

“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.

 

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

 

“U.S. Dollar Amount” means, at any time, (a) with respect to any Letter of
Credit, (i) if such Letter of Credit is denominated in U.S. Dollars, the undrawn
amount thereof at such time and (ii) if such Letter of Credit is made in a
Foreign Currency, the U.S. Dollar Equivalent of the undrawn amount thereof at
such time and (b) with respect to any LC Disbursement, (i) if such LC
Disbursement is made in U.S. Dollars, the amount of such LC Disbursement at such
time and (ii) if such LC Disbursement is made in a Foreign Currency, the U.S.
Dollar Equivalent of the amount of such LC Disbursement at such time.

 

“U.S. Dollar Equivalent” means:

 

(a)  for the purposes of calculating the LC Exposure, with respect to any Letter
of Credit denominated in any Foreign Currency, (i) in the case of any
determination made on any Currency Valuation Date under Section 2.11(b), the
amount of U.S. Dollars that would be required to purchase an amount of such
Foreign Currency equal to the undrawn amount of such Letter of Credit if such
purchase were made on such Currency Valuation Date, (ii) in the case of any
determination made upon receipt by the Administrative Agent of any Currency
Valuation Notice under Section 2.11(b), (A) if such Currency Valuation Notice is
received by the Administrative Agent prior to 11:00 a.m., New York City time, on
a Business Day, the amount of U.S. Dollars that would be required to purchase an
amount of such Foreign Currency equal to the undrawn amount of such Letter of
Credit if such purchase were made on such Business Day or (B) if such Currency
Valuation Notice is otherwise received, the amount of U.S. Dollars that would be
required to purchase an amount of such Foreign Currency equal to the undrawn
amount of such Letter of Credit if such purchase were made on the first Business
Day after such Currency Valuation Notice is received, (iii) in the case of any
determination for purposes of Section 2.01(c), 2.04(c) and 2.05(a), the amount
of U.S. Dollars that would be required to purchase an amount of such Foreign
Currency equal to the undrawn amount of such Letter of Credit if such purchase
were made on the immediately preceding Currency Valuation Date, (iv) in the case
of any determination for purposes of Section 2.13, the amount of U.S. Dollars
that would be required to purchase an amount of such Foreign Currency equal to
the average daily undrawn amount of such Letter of Credit outstanding during
each Currency Valuation Period during the relevant payment period if such
purchase were made on the Currency Valuation Date in each applicable Currency
Valuation Period or (v) in any other case, on the date one Business Day prior to
the date of determination of (or, if later, on the date of any Issuing Lender’s
LC Disbursement with respect to) such Letter of Credit; and

 

(b)  with respect to any LC Disbursement made in any Foreign Currency, the
amount of U.S. Dollars that would be required to purchase an amount of such
Foreign Currency equal to the amount of such LC Disbursement if such purchase
were made (i) in

 

17

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

 

the case of any determination of the amount which any Lender is obligated to pay
to an Issuing Lender pursuant to Section 2.04(e) in respect of any such LC
Disbursement, on the date of the request by such Issuing Lender for such payment
or, if earlier, on the date of any redenomination under the last sentence of
Section 2.19(a) or (ii) in any other case, on the date of such LC Disbursement;

 

in each case based upon the spot selling rate at which the Person serving as the
Administrative Agent offers to sell such Foreign Currency for U.S. Dollars in
the London foreign exchange market at approximately 11:00 a.m., London, England
time on the immediately preceding Business Day or at such other time and/or rate
as agreed to by AXIS Capital and the Administrative Agent.

 

“U.S. Dollars” and “$” refers to lawful money of the United States of America.

 

“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.

 

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
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(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 and SAP; Fiscal Year.  Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP or SAP, as the context requires, each as in
effect from time to time; provided that, if AXIS Capital notifies the
Administrative Agent that AXIS Capital requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or SAP, as the case may be, or in the application thereof on the operation
of such provision (or if the Administrative Agent notifies AXIS Capital that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or SAP, as the case may be, or in the application thereof, then such
provision shall be interpreted on the basis of GAAP or SAP, as the case may be,
as in effect and applied immediately before such change shall have

 

18

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

 

become effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.  To enable the ready and consistent
determination of compliance with the covenants set forth in Article VI, AXIS
Capital will not change the last day of its fiscal year from December 31, or the
last days of the first three fiscal quarters in each of its fiscal years from
March 31, June 30 and September 30, respectively.

 

SECTION 1.04.  Currencies; Currency Equivalents.  (a)  At any time, any
reference in the definition of the term “Agreed Foreign Currency” or in any
other provision of this Agreement to the Currency of any particular country
means the lawful currency of such country at such time whether or not the name
of such Currency is the same as it was on the date hereof.

 

(b)  Each obligation hereunder of any party hereto that is denominated in a
Currency of a country that is not a Participating Member State on the date
hereof shall, effective from the date on which such country becomes a
Participating Member State, be redenominated in Euro in accordance with the
legislation of the European Union applicable to the European Monetary Union;
provided that, if and to the extent that any such legislation provides that any
such obligation of any such party payable within such Participating Member State
by crediting an account of the creditor can be paid by the debtor either in Euro
or such Currency, such party shall be entitled to pay or repay such amount
either in Euro or in such Currency.  If the basis of accrual of interest or fees
expressed in this Agreement with respect to an Agreed Foreign Currency of any
country that becomes a Participating Member State after the date on which such
currency becomes an Agreed Foreign Currency shall be inconsistent with any
convention or practice in the interbank market for the basis of accrual of
interest or fees in respect of the Euro, such convention or practice shall
replace such expressed basis effective as of and from the date on which such
country becomes a Participating Member State.  Without prejudice to the
respective liabilities of the Borrowers and the Subsidiary Account Parties to
the Lenders and of the Lenders to the Borrowers and the Subsidiary Account
Parties under or pursuant to this Agreement, each provision of this Agreement
shall be subject to such reasonable changes of construction as the
Administrative Agent may from time to time reasonably specify to be necessary or
appropriate to reflect the introduction or changeover to the Euro in any country
that becomes a Participating Member State after the date hereof.

 

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 an Account Party each Lender agrees at any time and from time to time
during the Availability Period to issue Syndicated Letters of Credit denominated
in U.S. Dollars or in any Agreed Foreign Currency for account of such Account
Party in an aggregate amount that will not result in (i) such Lender’s Credit
Exposure exceeding such Lender’s Commitment or (ii) the total Credit Exposures
exceeding the total Commitments or (iii) the aggregate LC Exposure in respect of
Letters of Credit denominated in the Agreed Foreign Currencies exceeding the
Foreign

 

19

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

 

Currency Sublimit.  Each Syndicated Letter of Credit shall be in such form as
such Account Party shall request and which (x) the Administrative Agent shall
determine in good faith and on a commercially reasonable basis does not contain
any obligations, or diminish any rights, of any Lender with respect thereto that
are inconsistent with the terms hereof or (y) the Required Lenders shall
approve; 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
Section 2.01(e).  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 as provided in Section 2.01(e).

 

(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 (if by hand delivery or telecopy, not later than
11:00 a.m., New York City time, one Business Day prior to 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 and Currency 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 in
accordance with the terms of such Syndicated Letter of Credit 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; provided that,
unless all of the Lenders shall otherwise agree, if any Syndicated Letter of
Credit is outstanding on the Commitment Termination Date, the Administrative
Agent shall thereafter give such notice of non-extension in accordance with the
terms of such Syndicated Letter of Credit.  If requested by the Administrative
Agent, an 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 an Account Party to, or entered into
by an Account Party with, the Administrative Agent relating to any Syndicated
Letter of Credit, the terms and conditions of 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 the applicable Account Party
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension, (A) the aggregate Credit Exposure of
the Lenders shall not exceed the aggregate amount of the Commitments, (B) the
Credit Exposure of each Lender at the time outstanding

 

20

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

 

shall not exceed the Commitment of such Lender and (C) the aggregate LC Exposure
in respect of Letters of Credit denominated in the Agreed Foreign Currencies
shall not exceed the Foreign Currency Sublimit.

 

(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 each such renewal or extension); provided that in no
event shall any Syndicated Letter of Credit have an expiry date after 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) the addition of a Person as
Lender hereunder or the increase of the Commitment of a Lender, in each case
pursuant to Section 2.09(c) or (ii) the assignment of all or a portion of the
Commitment and interests in outstanding Loans and Syndicated Letters of Credit
of a Lender pursuant to Section 2.20(b) or 10.04(b), the Administrative Agent
shall promptly notify each beneficiary under an outstanding Syndicated Letter of
Credit as to the Lenders that are parties to such Syndicated Letter of Credit,
after giving effect to such assignment, and their respective Applicable
Percentages as of the effective date of such assignment.

 

(g)  Continuation of Existing Syndicated Letters of Credit.  Subject to the
terms and conditions hereof, each outstanding Syndicated Letter of Credit under
(and as defined in) the Existing Credit Agreement that was issued for the
account of any of the Account Parties hereunder shall be deemed to be continued
as a Syndicated Letter of Credit hereunder by all of the Lenders having
Commitments on the Effective Date, and the obligation of each such Lender under
such Syndicated Letter of Credit as so continued shall be several and not joint,
based upon its Applicable Percentage and the aggregate undrawn amount of such
Syndicated Letter of Credit, and such Syndicated Letter of Credit shall be
deemed a Syndicated Letter of Credit for all purposes of this Agreement and the
other Credit Documents as of the Effective Date.  The Administrative Agent
shall, on the Effective Date or promptly thereafter, notify each beneficiary of
each such Syndicated Letter of Credit that is continued hereunder as to the
names of the Lenders that, as of the Effective Date, will be the issuing lenders
under, and party to, such Syndicated Letter of Credit and the Lenders’
respective Applicable Percentages thereunder as of such 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 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,

 

21

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

 

demands and documents are in compliance with the terms and conditions of such
Syndicated Letter of Credit and (c) notify such Lender and the applicable
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 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 the
Person serving as the Administrative Agent, 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.  Upon the request of any Lender following the
issuance of any Syndicated Letter of Credit, the Administrative Agent will
furnish to such Lender a copy of such Syndicated Letter of Credit.

 

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 denominated in U.S. Dollars, the applicable
Account Party agrees that it shall reimburse such Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount in U.S. Dollars
equal to the amount of such LC Disbursement not later than noon, New York City
time, on (i) the Business Day that such Account Party 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 such Account
Party receives such notice, if such notice is not received prior to such time.

 

If any Lender shall make any LC Disbursement in respect of any Syndicated Letter
of Credit denominated in an Agreed Foreign Currency, the applicable Account
Party agrees that it shall reimburse such Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount in U.S. Dollars
equal to the U.S. Dollar Amount of such LC Disbursement not later than noon,
Local Time, (i) two Business Days following the day that such Account Party
receives notice of such LC Disbursement, if such notice is received prior to
10:00 a.m., Local Time, or (ii) three Business Days following the day that such
Account Party receives such notice, if such notice is not received prior to
10:00 a.m., Local Time.

 

Without limiting any other obligations of any of the Account Parties hereunder,
the applicable Account Party hereby agrees (severally and not jointly) to
indemnify each Lender in respect of any Syndicated Letter of Credit denominated
in a Foreign Currency for any and all costs, expenses and losses incurred by it
as a result of receiving payment or reimbursement for any LC Disbursement
thereunder from any Person in a Currency other than U.S. Dollars.  Any such
amount payable to any Lender shall be payable within 10 days after demand by the
Administrative Agent.

 

(b)  Reimbursement Obligations Absolute.  Each of the applicable Account
Parties’ obligations to reimburse LC Disbursements as provided in
paragraph (a) of this Section shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance

 

22

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

 

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 not complying strictly with
the terms of such Syndicated Letter of Credit, (iv) at any time or from time to
time, without notice to any Account Party, the time for any performance of or
compliance with any of such reimbursement obligations of any other Account Party
shall be waived, extended or renewed, (v) any of such reimbursement obligations
of any other Account Party being amended or otherwise modified in any respect,
or any guarantee of any of such reimbursement obligations or any security
therefor being released, substituted or exchanged in whole or in part or
otherwise dealt with, (vi) any lien or security interest granted to, or in favor
of, the Administrative Agent or any of the Lenders as security for any of such
reimbursement obligations failing to be perfected, (vii) the occurrence of any
Default, (viii) the existence of any proceeding of the type described in clause
(h) or (i) of Article VII with respect to any other Account Party, AXIS Capital
(if it is not an Account Party) or any other guarantor of any of such
reimbursement obligations, (ix) any lack of validity or enforceability of any of
such reimbursement obligations against any other Account Party, AXIS Capital (if
it is not an Account Party) or any other guarantor of any of such reimbursement
obligations or (x) 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 an
Account Party hereunder.

 

Neither the Administrative Agent nor any Lender nor any of their 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 an Account Party to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by each Account Party to the extent permitted by applicable law)
suffered by such Account Party 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 Syndicated Letter of Credit
comply with the terms thereof.  The parties hereto expressly agree that:

 

(A)  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;

 

23

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

 

(B)  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

 

(C)  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 applicable Account Party by telephone (confirmed by
telecopy) 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; provided that any failure to give or delay in giving such
notice or delivering such documents shall not relieve any Account Party of its
obligation to reimburse the Lenders with respect to any such LC Disbursement. 
With respect to any drawing determined by the Administrative Agent to be
properly made under a Syndicated Letter of Credit, each Lender will make an LC
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 applicable Account Party of such LC Disbursement; provided that any
failure to give or delay in giving such notice shall not relieve such Account
Party of its obligation to reimburse the Lenders with respect to any such LC
Disbursement or (if such Account Party is a Subsidiary Account Party) AXIS
Capital of its guarantee of such obligation.

 

(d)  Interim Interest.  If any LC Disbursement with respect to a Syndicated
Letter of Credit is made, then, unless the applicable Account Party shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
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 that such
Account Party reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Loans; provided that if such Account Party fails to reimburse
such LC Disbursement when due pursuant to paragraph (a) of this Section, then
Section 2.14(c) shall apply.

 

(e)  Cash Collateralization.  If either (i) an Event of Default shall occur and
be continuing and AXIS Capital 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 or (ii) AXIS Capital
shall be required to provide cover for LC

 

24

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

 

Exposure pursuant to Section 2.11, AXIS Capital shall immediately deposit into
an account 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 UCC), in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash in U.S. Dollars equal to
(x) in the case of clause (i) above, the total LC Exposure as of such date plus
any accrued and unpaid interest thereon and (y) in the case of cover pursuant to
Section 2.11, the amount required under Section 2.11; 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 described
in clause (h) or (i) of Article VII.  Such deposit shall be held by the
Administrative Agent as collateral for the LC Exposure under this Agreement, and
for this purpose AXIS Capital hereby grants a security interest to the
Administrative Agent for the benefit of the Lenders in such collateral account
and in any financial assets (as defined in the Uniform Commercial Code) or other
property held therein.

 

SECTION 2.04.  Participated Letters of Credit.

 

(a)  General.  Subject to the terms and conditions set forth herein, any Account
Party may request an Issuing Lender to issue, at any time and from time to time
during the Availability Period, Participated Letters of Credit denominated in
U.S. Dollars or in any Agreed Foreign Currency for its own account.  Each
Participated Letter of Credit shall be in such form as such Account Party shall
request and, if applicable, 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 AXIS Capital, provided that no Participated Letter of Credit may be
requested hereunder for any jurisdiction unless AXIS Capital provides evidence
reasonably satisfactory to the Administrative Agent that Syndicated Letters of
Credit do not comply with the laws of such jurisdiction.  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 applicable Issuing Lender)
to the applicable 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,
as the case may be (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 and Currency 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 requested by such Issuing Lender, such
Account Party also shall submit a letter of credit application on such 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 such

 

25

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

 

Account Party to, or entered into by any Account Party with, such Issuing Lender
relating to any 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 each Account Party shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the aggregate LC Exposure of the Issuing
Lenders with respect to Participated Letters of Credit (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 Participated
Letter of Credit Sublimit, (ii) the aggregate Credit Exposure of the Lenders
shall not exceed the aggregate amount of the Commitments and (iii) the aggregate
LC Exposure in respect of Letters of Credit denominated in the Agreed Foreign
Currencies shall not exceed the Foreign Currency Sublimit.

 

(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 each such renewal or extension); provided that in no
event shall any Participated Letter of Credit have an expiry date after 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
an 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, and
each Lender hereby acquires from such 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.  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 applicable Issuing
Lender, (i) in the case of each Participated Letter of Credit denominated in
U.S. Dollars, Pounds Sterling, Euro, Australian Dollars, Canadian Dollars or
Japanese Yen, an amount in the relevant Currency equal to such Lender’s
Applicable Percentage of each LC Disbursement made by such Issuing Lender in
respect of such Participated Letter of Credit and (ii) in the case of each
Participated Letter of Credit denominated in any other Currency (other than U.S.
Dollars, Pounds Sterling, Euro, Australian Dollars, Canadian Dollars, Japanese
Yen), an amount in U.S. Dollars equal to such Lender’s Applicable Percentage of
the U.S. Dollar Amount of each LC Disbursement made by such Issuing Lender in
respect of such Participated Letter of Credit, in each case promptly upon the
request of such Issuing Lender at any time from the time such LC Disbursement is
made until such LC Disbursement is reimbursed by the Account Parties or at any
time after any reimbursement payment is required to be refunded to the Account
Parties 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 Account Parties pursuant to the
following paragraph, the Administrative Agent shall distribute such

 

26

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

 

payment to such 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 such Issuing Lender for
any LC Disbursement shall not relieve the Account Parties of their obligation to
reimburse such LC Disbursement.  Notwithstanding anything herein to the
contrary, effective upon the increase of the Commitments pursuant to
Section 2.09(c), each Lender’s participation in any Participated Letter of
Credit outstanding on such date shall be adjusted to reflect its Applicable
Percentage after giving effect to such increase.

 

(f)  Reimbursement.  If any Lender shall make any LC Disbursement in respect of
any Participated Letter of Credit denominated in U.S. Dollars, the applicable
Account Party agrees that it shall reimburse such Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount in U.S. Dollars
equal to the amount of such LC Disbursement not later than noon, New York City
time, on (i) the Business Day that such Account Party 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 such Account
Party receives such notice, if such notice is not received prior to such time.

 

If any Lender shall make any LC Disbursement in respect of any Participated
Letter of Credit denominated in an Agreed Foreign Currency, the applicable
Account Party agrees that it shall reimburse such Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount in U.S. Dollars
equal to the U.S. Dollar Amount of such LC Disbursement not later than noon,
Local Time, on (i) two Business Days following the day that such Account Party
receives notice of such LC Disbursement, if such notice is received prior to
10:00 a.m., Local Time, or (ii) three Business Days following the day that such
Account Party receives such notice, if such notice is not received prior to
10:00 a.m., Local Time.

 

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

 

Without limiting any other obligations of any of the Account Parties hereunder,
the applicable Account Party hereby agrees (severally and not jointly) to
indemnify the applicable Issuing Lender in respect of any Participated Letter of
Credit denominated in a Foreign Currency for any and all costs, expenses and
losses incurred by it as a result of receiving payment or reimbursement for any
LC Disbursement thereunder from any Person in a Currency other than U.S.
Dollars.  Any such amount payable to such Issuing Lender shall be payable within
10 days after demand by such Issuing Lender.

 

(g)  Obligations Absolute.  Each of the applicable Account Parties’ obligations
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

 

27

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

 

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 an 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, (iv) at any time
or from time to time, without notice to any Account Party, the time for any
performance of or compliance with any of such reimbursement obligations of any
other Account Party shall be waived, extended or renewed, (v) any of such
reimbursement obligations of any other Account Party being amended or otherwise
modified in any respect, or any guarantee of any of such reimbursement
obligations or any security therefor being released, substituted or exchanged in
whole or in part or otherwise dealt with, (vi) any lien or security interest
granted to, or in favor of, the Administrative Agent or any of the Lenders as
security for any of such reimbursement obligations failing to be perfected,
(vii) the occurrence of any Default, (viii) the existence of any proceedings of
the type described in clause (h) or (i) of Article VII with respect to any other
Account Party, AXIS Capital, (if it is not an Account Party) or any guarantor of
any of such reimbursement obligations, (ix) any lack of validity or
enforceability of any of such reimbursement obligations against any other
Account Party, AXIS Capital (if it is not an Account Party) or any guarantor of
any of such reimbursement obligations, or (x) 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 any Account Party hereunder.

 

Neither the Administrative Agent, the Lenders nor any Issuing Lender, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Participated Letter of
Credit or any 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), 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 applicable Issuing Lender;
provided that the foregoing shall not be construed to excuse such 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 such Issuing Lender’s gross negligence or
willful misconduct when determining whether drafts and other documents presented
under a Participated Letter of Credit comply with the terms thereof.  The
parties hereto expressly agree that:

 

(i)  each 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)  each 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

 

28

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

 

(iii)  this sentence shall establish the standard of care to be exercised by
each 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 applicable 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.  Such
Issuing Lender shall promptly after such examination notify the Administrative
Agent and the applicable Account Party by telephone (confirmed by telecopy) of
such demand for payment and whether such Issuing Lender has made or will make a
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve such Account Party of its obligation to reimburse
such 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 the applicable Account Party shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
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 that such
Account Party reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Loans; provided that if such Account Party fails to reimburse
such LC Disbursement when due pursuant to paragraph (f) of this Section, then
Section 2.14(c) shall apply.

 

(j)  Cash Collateralization.  If either (i) an Event of Default shall occur and
be continuing and AXIS Capital 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 or (ii) AXIS Capital
shall be required to provide cover for LC Exposure pursuant to Section 2.11,
AXIS Capital shall immediately deposit into an account 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 UCC,
in the name of the Administrative Agent and for the benefit of the Lenders, an
amount in cash in U.S. Dollars equal to (x) in the case of clause (i) above, the
total LC Exposure as of such date plus any accrued and unpaid interest thereon
and (y) in the case of cover pursuant to Section 2.11, the amount required under
Section 2.11; 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 described in clause (h) or (i) of Article VII.  Such deposit
shall be held by the Administrative Agent as collateral for the LC Exposure
under this Agreement, and for this purpose AXIS Capital hereby grants a security
interest to the Administrative Agent for the benefit of the Lenders in such
collateral account and in any financial assets (as defined in the Uniform
Commercial Code) or other property held therein.

 

(k)  Additional Issuing Lenders; Termination of Issuing Lenders.  An Issuing
Lender may be added, or an existing Issuing Lender may be terminated, under this
Agreement at

 

29

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

 

any time by written agreement between AXIS Capital, the Administrative Agent and
the relevant Issuing Lender.  The Administrative Agent shall notify the Lenders
of any such addition or termination.  At the time any such termination shall
become effective, the Account Parties shall pay all unpaid fees accrued for
account of the Issuing Lender being terminated pursuant to Section 2.13(c). 
From and after the effective date of any such addition, (i) the new Issuing
Lender shall have all the rights and obligations of an Issuing Lender under this
Agreement with respect to Participated Letters of Credit to be issued
thereafter.  After the termination of an Issuing Lender hereunder, the
terminated 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
termination, but shall not be required to issue additional Participated Letters
of Credit.

 

(l)  Continuation of Existing Participated Letters of Credit.  Subject to the
terms and conditions hereof, each outstanding Participated Letter of Credit
under (and as defined in) the Existing Credit Agreement that was issued for the
account of any of the Account Parties hereunder shall be deemed to be continued
as a Participated Letter of Credit hereunder by the Issuing Lender of such
Participated Letter of Credit, and as of the Effective Date, the Lenders shall
acquire a participation interest 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 and
the other Credit Documents as of the Effective Date.

 

SECTION 2.05.  Loans and Borrowings.

 

(a)  General.  Subject to the terms and conditions set forth herein, in addition
to the Syndicated Letters of Credit provided for in Section 2.01 and the
Participated Letters of Credit provided for in Section 2.04, any Borrower may
request each Lender, and each Lender hereby agrees, to make Loans in U.S.
Dollars to such Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (i) such Lender’s Credit
Exposure exceeding such Lender’s Commitment, (ii) the total Credit Exposures
exceeding the total Commitments or (iii) the aggregate principal amount of all
outstanding Loans exceeding the Revolving Credit Sublimit.  Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers
may borrow, prepay and reborrow Loans.

 

(b)  Obligations of Lenders.  Each Loan shall be made as part of a Borrowing of
a Borrower consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Commitments.  The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders 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 the applicable
Borrower may request in accordance herewith.  Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any

 

30

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

 

exercise of such option shall not affect the obligation of the applicable
Borrower 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 $5,000,000 or a larger multiple of
$1,000,000.  Each ABR Borrowing shall be in an aggregate amount equal to
$5,000,000 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
total Commitments or that is required to finance the reimbursement of an
LC Disbursement as contemplated by Section 2.03(a).  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 for all Borrowers
outstanding.

 

(e)  Limitations on Interest Periods.  Notwithstanding any other provision of
this Agreement, none of the Borrowers 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.

 

SECTION 2.06.  Requests for Borrowings.

 

(a)  Notice by the Borrowers.  To request a Borrowing, a Borrower 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, one Business
Day before 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 in a form
approved by the Administrative Agent and signed by such Borrower.

 

(b)  Content of Borrowing Requests.  Each telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.05:

 

(i)  the aggregate amount of the requested Borrowing;

 

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

 

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

 

(iv)  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 2.05(e); and

 

(v)  the location and number of the applicable Borrower’s account to which funds
are to be disbursed.

 

31

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

 

(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 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 in the applicable Borrowing Request, then the requested Borrowing
shall be an ABR Borrowing.  If no Interest Period is specified in the applicable
Borrowing Request with respect to any requested Eurodollar Borrowing, then the
requested Borrowing shall be made instead as an ABR Borrowing.

 

SECTION 2.07.  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, 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 applicable
Borrower by promptly crediting the amounts so received, in like funds, to an
account of such Borrower (if any) maintained with the Administrative Agent in
New York City and designated by such Borrower (or such other account of such
Borrower designated by it) in the applicable Borrowing Request; provided that
ABR Borrowings made to finance the reimbursement of an LC Disbursement as
provided in Section 2.03(a) shall be remitted by the Administrative Agent to the
Lenders in accordance with Section 2.19.

 

(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 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 applicable Borrower a corresponding amount.  In such event, if
a Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then such Lender and such Borrower severally agree to
pay, without duplication, 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 Borrower 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 Borrower, the 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 2.08.  Interest Elections.

 

(a)  Elections by the Borrowers.  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 applicable Borrower 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.

 

32

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

 

A Borrower 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, the
applicable Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.06 if such Borrower 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 in a form approved by the Administrative Agent and
signed by such Borrower.

 

(c)  Content of Interest Election Requests.  Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.05:

 

(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 2.05(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 the applicable Borrower fails to
deliver a timely and complete Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the 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 AXIS Capital, 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

 

33

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

 

Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period therefor.

 

SECTION 2.09.  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.  AXIS Capital may at any time, without
premium or penalty, terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that
is $10,000,000 or a larger multiple of $5,000,000, (ii) AXIS Capital shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.11, the total Credit
Exposures would exceed the total Commitments and (iii) each reduction of the
Commitments shall result in a proportionate reduction in the Revolving Credit
Sublimit.  AXIS Capital shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by AXIS Capital pursuant
to this paragraph shall be irrevocable.  Any termination or reduction of the
Commitments 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.  AXIS Capital shall have the right at any time
prior to the date that is 30 days prior to the Commitment Termination Date to
increase the aggregate Commitments hereunder up to an aggregate amount not
exceeding $2,000,000,000 by adding to this Agreement one or more other NAIC
Approved Lenders (which may include any existing Lender, with the consent of
such Lender in its sole discretion) (each such bank, a “Supplemental Lender”))
with the approval of the Administrative Agent (which approval shall not be
unreasonably withheld), provided that (i) each Supplemental Lender shall have
entered into an agreement pursuant to which such Supplemental Lender shall
undertake a Commitment (or, if such Supplemental Lender is an existing Lender,
pursuant to which its Commitment shall be increased), (ii) such Commitment of
any Supplemental Lender that is not an existing Lender shall be in an amount of
at least $25,000,000 and (iii) such Commitment (together with the increased
Commitment(s) of all other Supplemental Lenders being provided at such time)
shall be in an aggregate amount of at least $25,000,000.  Each such Supplemental
Lender shall enter into an agreement in form and substance satisfactory to AXIS
Capital and the Administrative Agent pursuant to which such Supplemental Lender
shall, as of the effective date of such increase in the Commitments (which shall
be a Business Day and, unless the Administrative Agent otherwise agrees, on
which no issuance, amendment, renewal or extension of any Letter of Credit is
scheduled to occur or no Borrowing is scheduled to be made, each a “Supplemental
Commitment Date”), undertake a Commitment (or, if any such Supplemental Lender
is an existing Lender, its Commitment shall be in addition to such Lender’s
Commitment hereunder on such date) and such Supplemental Lender shall thereupon
become (or continue to be) a “Lender” for all purposes hereof.  Notwithstanding
the foregoing, no increase in the aggregate Commitments hereunder pursuant to
this Section shall be effective unless:

 

34

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

 

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

 

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

 

(iii)  each of the representations and warranties of the Credit Parties
contained in this Agreement and the other Credit Documents shall be true in all
material respects on and as of the applicable Supplemental Commitment Date with
the same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).

 

Each notice under clause (i) above shall be deemed to constitute a
representation and warranty by AXIS Capital and the other Credit Parties as to
the matters specified in clauses (ii) and (iii) above.

 

On each Supplemental Commitment Date, each Borrower shall (A) prepay the then
outstanding Loans (if any) to such Borrower in full held by the Lenders
immediately prior to giving effect to such increase in the Commitments, (B) if
it shall so request, borrow new Loans from all Lenders (including any
Supplemental Lender) in an aggregate amount at least equal to such prepayment,
so that, after giving effect thereto, the Loans are held ratably by the Lenders
in accordance with their respective Commitments (after giving effect to such
increase) and (C) pay to the Lenders the amounts, if any, payable under
Section 2.17.

 

SECTION 2.10.  Repayment of Loans; Evidence of Debt.

 

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

 

(b)  Manner of Payment.  Prior to any repayment of any Borrowings hereunder, the
applicable Borrower shall select the Borrowing or Borrowings of such Borrower to
be paid and shall notify the Administrative Agent by telephone (confirmed by
telecopy) of such selection not later than 11:00 a.m., New York City time, three
Business Days before the scheduled date of such repayment; provided that each
repayment of Borrowings shall be applied to repay any outstanding ABR Borrowings
before any other Borrowings.  If the applicable Borrower fails to make a timely
selection of the Borrowing or Borrowings to be repaid (in accordance with the
immediately preceding sentence) or prepaid (in accordance with Section 2.11(b)),
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.

 

(c)  Maintenance of Records by Lenders.  Each Lender shall maintain in
accordance with its usual practice records evidencing the indebtedness of the
Borrowers to such

 

35

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

 

Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

 

(d)  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 hereunder, the Borrower to which such Loan was made, 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 a Borrower 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.

 

(e)  Effect of Entries.  The entries made in the records maintained pursuant to
paragraph (c) or (d) 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 Borrowers
to repay the Loans in accordance with the terms of this Agreement.

 

(f)  Promissory Notes.  Any Lender may request that Loans made by it to any
Borrower be evidenced by a promissory note of such Borrower.  In such event,
such Borrower 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 and
the applicable Borrower.  Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 10.04) be represented by one or more promissory notes in
such form payable to the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).

 

SECTION 2.11.  Prepayment of Loans.

 

(a)  Right to Prepay Borrowings.  Each Borrower shall have the right at any time
and from time to time to prepay any Borrowing of such Borrower in whole or in
part, subject to the requirements of paragraph (c) of this Section.

 

(b)  Mandatory Prepayments in respect of Currency Fluctuations.

 

(i)  Determination of Amount Outstanding.  On each Currency Valuation Date and
promptly upon the receipt by the Administrative Agent of a Currency Valuation
Notice, the Administrative Agent shall determine (A) the sum of the total Credit
Exposures and (B) the aggregate LC Exposure in respect of Letters of Credit
denominated in Agreed Foreign Currencies.  Upon making such determination, the
Administrative Agent shall promptly notify the Lenders and AXIS Capital thereof.

 

(ii)  Prepayment.  If, on the date of such determination, (A) the sum of the
total Credit Exposures (minus the amount of cash collateral deposited by AXIS
Capital and then held by the Administrative Agent pursuant to Sections
2.03(e) and/or 2.04(j)) exceeds 105% of the total Commitments as then in effect
or (B) the aggregate LC Exposure in respect of Letters of Credit denominated in
Agreed Foreign Currencies (minus the amount of cash collateral deposited by AXIS
Capital and then held by the Administrative Agent pursuant to Sections
2.03(e) and/or

 

36

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

 

2.04(j)) exceeds the Foreign Currency Sublimit, AXIS Capital shall, within three
Business Days of receipt of notice thereof from the Administrative Agent, prepay
the Loans and/or provide cover for LC Exposure by depositing cash collateral
pursuant to the terms of this Agreement in such amounts as shall be necessary so
that after giving effect thereto (x) the sum of the total Credit Exposures does
not exceed the Commitments and (y) the aggregate LC Exposure in respect of
Letters of Credit denominated in Agreed Foreign Currencies does not exceed the
Foreign Currency Sublimit.

 

For purposes hereof, “Currency Valuation Notice” means a notice given by the
Required Lenders or by any Issuing Lender to the Administrative Agent stating
that such notice is a “Currency Valuation Notice” and requesting that the
Administrative Agent determine (A) the sum of the total Credit Exposures and
(B) the aggregate LC Exposure in respect of Letters of Credit denominated in
Agreed Foreign Currencies.  Unless an Event of Default shall have occurred and
be continuing, the Administrative Agent shall not be required to make more than
one valuation determination pursuant to Currency Valuation Notices within any
three month period (excluding the required monthly valuation determination
pursuant to each Currency Valuation Date).

 

(c)  Notices, Etc.  The applicable Borrower 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.  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.  Promptly following receipt of
any such notice relating to a Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof.  Each partial prepayment of any Borrowing
under paragraph (a) of this Section 2.11 shall be in an amount that would be
permitted in the case of a Borrowing of the same Type as provided in
Section 2.05(d).  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 2.14 and shall be made in the
manner specified in Section 2.10(b).

 

SECTION 2.12.  Addition and Termination of Subsidiary Credit Parties.

 

(a)  Addition of Subsidiary Credit Party.  AXIS Capital may from time to time
after the Effective Date designate one or more direct or indirect, wholly-owned
Subsidiaries as a party to this Agreement as an Account Party and/or a Borrower
if, on or prior to the date of designation, each such Subsidiary shall have
delivered to the Administrative Agent a Subsidiary Joinder Agreement executed by
such Subsidiary and AXIS Capital (together with a copy of the Investment
Guidelines of such Subsidiary as in effect on the date of such Subsidiary
Joinder Agreement (the “Designation Date”), a process agent acceptance letter in
respect of such Subsidiary substantially in the form of Exhibit C and such other
documents (including legal opinions) as the Administrative Agent shall
reasonably request, which may include other documents that are consistent with
conditions set forth in Section 4.01, each in form and substance reasonably
satisfactory to the Administrative Agent and (x) the Administrative Agent shall
promptly notify the Lenders thereof and (y) such Subsidiary shall become a party
to this

 

37

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

 

Agreement, effective as of such Designation Date, as an Account Party and/or a
Borrower, as applicable.

 

(b)  Termination of Subsidiary Credit Party.  AXIS Capital may at any time at
which (i) any Subsidiary party hereto as an Account Party shall not be an
Account Party with respect to any outstanding Letter of Credit and shall not
have any unpaid LC Disbursements terminate such Subsidiary as an Account Party
hereunder or (ii) any Subsidiary party hereto as a Borrower shall not have any
unpaid Loans or unpaid interest thereon terminate such Subsidiary as a Borrower
hereunder, in each case by delivering an executed notice thereof, substantially
in the form of Exhibit D hereto, to the Administrative Agent (which shall
promptly notify the Lenders).  Immediately upon the receipt by the
Administrative Agent of such notice, (in the case of a termination of a
Subsidiary Account Party) all Commitments of the Lenders to issue Syndicated
Letters of Credit, or to participate in Participated Letters of Credit issued,
for account of such Subsidiary Account Party and (in the case of a termination
of a Subsidiary Borrower) to make Loans to such Subsidiary Borrower, and all
related rights of such Subsidiary hereunder, shall terminate and, as applicable,
such Subsidiary Account Party shall immediately cease to be an Account Party
and/or such Subsidiary Borrower shall immediately cease to be a Borrower
hereunder; provided that all obligations of such Subsidiary as an Account Party
and/or a Borrower, as applicable, hereunder arising in respect of any period in
which such Subsidiary was, or on account of any action or inaction by such
Subsidiary as, an Account Party and/or a Borrower hereunder, as applicable,
shall survive such termination.

 

SECTION 2.13.  Fees.

 

(a)  Commitment Fee.  AXIS Capital agrees to pay to the Administrative Agent for
account of each Lender a commitment fee, which shall accrue at the Applicable
Rate on the average daily unused amount of the Commitment of such Lender during
the period from and including the Effective Date to but excluding the earlier of
the date such Commitment terminates and the Commitment Termination Date. 
Accrued commitment fees shall be payable in U.S. Dollars on the third Business
Day following each Quarterly Date and on the earlier of the date the Commitments
terminate and the Commitment Termination Date, commencing on the first such date
to occur after the date hereof.  All commitment fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

 

(b)  Letter of Credit Fee.  AXIS Capital agrees to pay to the Administrative
Agent for account of each Lender a letter of credit fee, which shall accrue at
the Applicable Rate on the average daily aggregate undrawn amount of such
Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender’s Commitment terminates and
the date on which such Lender ceases to have any LC Exposure.  Accrued letter of
credit fees shall be payable in U.S. Dollars on the third Business Day following
each Quarterly Date and on the earlier of the date the Commitments terminate and
the Commitment Termination Date, commencing on the first such date to occur
after the date hereof; provided that after the termination of the Commitments,
letter of credit fees shall be payable on demand.  Letter of credit fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).

 

38

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

 

(c)  Participated Letter of Credit Fees.  AXIS Capital agrees to pay to the
applicable Issuing Lender with respect to Participated Letters of Credit a
fronting fee at a rate per annum agreed between AXIS Capital and such Issuing
Lender and in U.S. Dollars on the average daily amount of the LC Exposure in
respect of Participated Letters of Credit (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any such
LC Exposure.  Fronting fees accrued through and including each Quarterly Date
shall be payable in U.S. Dollars on the third Business Day following such
Quarterly Date and on the earlier of the date the Commitments terminate and the
Commitment Termination Date, commencing on the first such date to occur after
the Effective Date; provided that after the termination of the Commitments,
fronting fees shall be payable on demand.  Fronting fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

 

(d)  Letter of Credit Commissions, Etc.  AXIS Capital agrees to pay, on demand,
to the Administrative Agent for its own account or the account of the applicable
Issuing Lender with respect to Participated Letters of Credit, as applicable,
all commissions, charges, costs and expenses with respect to the issuance,
amendment, renewal and extension of each Letter of Credit and drawings and other
transactions relating thereto in amounts customarily charged from time to time
in like circumstances by the Person serving as the Administrative Agent and/or
such Issuing Lender, as applicable, and notified to AXIS Capital in writing by
the Administrative Agent and/or such Issuing Lender, in each case in U.S.
Dollars.

 

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

 

(f)  Payment of Fees.  All fees payable hereunder shall be paid on the dates
due, in U.S. Dollars and immediately available funds, to the Administrative
Agent for distribution, in the case of the commitment fees, letter of credit
fees and fronting fees referred to in paragraphs (a), (b) and (c), respectively,
of this Section, to the Lenders entitled thereto.  Fees paid shall not be
refundable under any circumstances.

 

SECTION 2.14.  Interest.

 

(a)  ABR Loans.  The Loans constituting each ABR Borrowing shall bear interest
at a rate per annum equal to the Alternate Base Rate.

 

(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 plus, for any
Commitment Utilization Day, the Additional Margin.

 

(c)  Default Interest.  Notwithstanding the foregoing, if any reimbursement of
an LC Disbursement or any principal of or interest on any Loan or any fee or
other amount payable by a Credit Party hereunder is not paid when due, whether
at stated maturity, upon acceleration

 

39

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

 

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 any overdue
reimbursement of an LC Disbursement or overdue principal of any Loan, 2% plus
the rate otherwise applicable to such LC Disbursement or 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 in
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments prior to the Commitment Termination Date; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) 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 (iii) 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 (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 such
determination shall be conclusive absent manifest error.

 

SECTION 2.15.  Alternate Rate of Interest.  If prior to the commencement of the
Interest Period for any Eurodollar Borrowing:

 

(a)  the Administrative Agent determines (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 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 AXIS Capital and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies AXIS Capital 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.

 

40

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

 

SECTION 2.16.  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 account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or

 

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

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender of
issuing, maintaining or participating in any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether of
principal, interest or otherwise), then, upon written demand to the respective
Account Party by such Lender (with a copy to the Administrative Agent), AXIS
Capital will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.

 

(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 Loans made by, or
Letters of Credit issued, or participated in, 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),
then from time to time AXIS Capital 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 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 AXIS Capital and shall be conclusive absent manifest error.  AXIS
Capital shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof by AXIS Capital.

 

(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 AXIS Capital shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than six months prior to the date that such
Lender notifies AXIS Capital 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 six-month period referred
to above shall be extended to include the period of retroactive effect thereof.

 

SECTION 2.17.  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

 

41

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

 

(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 or (d) the assignment as a
result of a request by AXIS Capital pursuant to Section 2.20(b) of any
Eurodollar Loan other than on the last day of an Interest Period therefor, then,
in any such event, AXIS Capital shall compensate each Lender for the loss, cost
and expense attributable to such event.  In the case of a Eurodollar Loan, the
loss to any Lender attributable to any such event shall be deemed to include 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 U.S. Dollar deposits from other banks in the eurodollar market
at the commencement of such period.  A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to AXIS Capital and shall be conclusive absent
manifest error.  AXIS Capital shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

 

SECTION 2.18.  Taxes.

 

(a)  Payments Free of Taxes.  Any and all payments by or on account of any
obligation of a Credit Party hereunder or under any other Credit Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if a Credit Party shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
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 deductions been made, (ii) such
Credit Party shall make such deductions and (iii) such Credit Party shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

 

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

 

(c)  Indemnification by the Credit Parties.  Each Credit Party shall indemnify
the Administrative Agent and each Lender, within 10 days after written demand to
such Credit Party therefor, for the full amount of any Indemnified Taxes or
Other Taxes in respect of such Credit Party (including Indemnified Taxes or
Other 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 were
correctly or legally

 

42

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

 

imposed or asserted by the relevant Governmental Authority.  A certificate as to
the amount of such payment or liability delivered to a Credit Party by a Lender,
or by the Administrative Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.

 

(d)  Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Credit Party to a Governmental Authority,
such Credit 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.

 

(e)  Exemptions.  Each Lender and the Administrative Agent shall, at the written
request of a Credit Party, provide to such Credit Party such form, certification
or similar documentation, if any (each duly completed, accurate and signed) as
is currently required by any Credit Party Jurisdiction or any other
jurisdiction, or comply with such other requirements, if any, as is currently
applicable in any Credit Party Jurisdiction or any other jurisdiction, in order
to obtain an exemption from, or reduced rate of, deduction, payment or
withholding of Indemnified Taxes or Other Taxes to which such Lender or the
Administrative Agent is entitled pursuant to an applicable tax treaty or the law
of any Credit Party Jurisdiction or any other jurisdiction; provided that such
Credit Party shall have furnished to such Lender or the Administrative Agent in
a reasonably timely manner copies of such documentation and notice of such
requirements together with applicable instructions.  No Credit Party shall be
required to indemnify any Lender or the Administrative Agent under clauses
(a) or (c) of this Section for any Indemnified Taxes or Other Taxes to the
extent such Indemnified Taxes or Other Taxes would not be imposed but for the
failure by such Lender or the Administrative Agent, as the case may be, to
comply with the provisions of the preceding sentence.  Upon the written request
of a Credit Party, each Lender and the Administrative Agent will provide to such
Credit Party such form, certification or similar documentation (each duly
completed, accurate and signed) as may in the future be required by any Credit
Party Jurisdiction or any other jurisdiction, or comply with such other
requirements, if any, as may be applicable in any Credit Party Jurisdiction or
any other jurisdiction in order to obtain an exemption from, or reduced rate of,
deduction, payment or withholding of Indemnified Taxes or Other Taxes to which
such Lender or the Administrative Agent is entitled pursuant to an applicable
tax treaty or the law of the relevant jurisdiction; provided that neither such
Lender nor the Administrative Agent shall have any obligation to provide such
form, certification or similar document if it would be unduly burdensome, would
require such Lender or the Administrative Agent to disclose any confidential
information or would otherwise be materially disadvantageous to such Lender or
the Administrative Agent; and provided further that such Credit Party shall have
furnished to such Lender or the Administrative Agent in a reasonably timely
manner copies of such documentation and notice of such requirements together
with applicable instructions.

 

SECTION 2.19.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a)  Payments by the Credit Parties.  Each Credit Party shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or under Sections 2.16, 2.17 or 2.18, or
otherwise) or under any other Credit Document (except to the extent otherwise
provided therein) prior to 12:00 noon, Local Time, on the date when due, in
immediately available funds, without set-off or counterclaim.  Any

 

43

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

 

amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received either on such date or on
the next succeeding Business Day for purposes of calculating interest thereon. 
All such payments shall be made to the Administrative Agent to the
Administrative Agent’s Account, except payments pursuant to Sections 2.16, 2.17,
2.18 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 or
under any other Credit Document shall be made in U.S. 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 shall be made to the Lenders, each
Borrowing shall be made from the Lenders, each payment of fees under
Section 2.13 shall be made for account of the Lenders, and each termination or
reduction of the amount of the Commitments under Section 2.09 shall be applied
to the respective Commitments of the Lenders, pro rata according to the amounts
of their respective Commitments (or, in the case of any such reimbursement or
payment after the termination of the Commitments, pro rata according to the
respective Credit Exposures of the Lenders); (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 a Borrower shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of the Loans held by them; and
(iv) each payment of interest on Loans by a Borrower shall be made for account
of the Lenders pro rata in accordance with the amounts of interest on such Loans
then due and payable to the respective Lenders.

 

(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 any LC Disbursements resulting
in such Lender receiving payment of a greater proportion of the aggregate amount
of its Loans and LC Disbursements and accrued interest thereon then due than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and LC Disbursements of 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 LC Disbursements; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise

 

44

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

 

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 a Credit 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 a Credit Party or any Subsidiary
or Affiliate thereof (as to which the provisions of this paragraph shall
apply).  Each Credit Party consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Credit Party rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Credit
Party in the amount of such participation.

 

(e)  Presumptions of Payment.  Unless the Administrative Agent shall have
received notice from a Credit Party prior to the date on which any payment is
due from such Credit Party to the Administrative Agent for account of the
Lenders hereunder that such Credit Party will not make such payment, the
Administrative Agent may assume that such Credit Party has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due.  In such event, if such Credit 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 Section 2.07(b) or
2.19(e), 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.

 

(g)  Payments in Foreign Currencies.  With respect to the payment by the
Administrative Agent of any amount denominated in any Foreign Currency, the
Administrative Agent shall not be liable to any Account Party, any Lender or any
Issuing Lender in any way whatsoever for any delay, or the consequences of any
delay, in the crediting to any account of any amount required by this Agreement
to be paid by the Administrative Agent if the Administrative Agent shall have
taken all relevant steps to achieve, on the date required by this Agreement, the
payment of such amount in immediately available, freely transferable, cleared
funds (in such Foreign Currency) to the account of any Lender or any Issuing
Lender in the Principal Financial Center with respect to such Foreign Currency
which the relevant Account Party, such Lender or such Issuing Lender, as the
case may be, shall have specified for such purpose.  For the purposes of this
paragraph, “all relevant steps” means all such steps as may be prescribed from
time to time by the regulations or operating procedures of such clearing or
settlement system as the Administrative Agent may from time to time determine
for the purpose of clearing or settling payments in such Foreign Currency.

 

45

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

 

SECTION 2.20.  Mitigation Obligations; Replacement of Lenders.

 

(a)  Designation of a Different Lending Office.  If any Lender requests
compensation under Section 2.16, or if a Credit Party is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.18, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans and
Letters of Credit hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or Affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.16 or 2.18, 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.  AXIS Capital hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

 

(b)  Replacement of Lenders.  If any Lender requests compensation under
Section 2.16, or if a Credit Party is required to pay any additional amount to
any Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.18 or if any Lender ceases to be an NAIC Approved Lender, then AXIS
Capital may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) AXIS Capital
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 the
amount of its LC Disbursements, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the applicable Credit
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 2.16 or
payments required to be made pursuant to Section 2.18, 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 AXIS
Capital to require such assignment and delegation cease to apply.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Each of AXIS Capital and (except with respect to Section 3.04, 3.12 and 3.13)
the other Credit Parties severally represents and warrants to the Lenders that:

 

SECTION 3.01.  Organization; Powers.  Such Credit Party and each of its
Subsidiaries is duly organized, validly existing and (in the case of any Credit
Party organized under the laws of the United States of America or any State
thereof, or any other jurisdiction where the concept of “good standing” of a
corporation or company is applicable) in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse

 

46

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

 

Effect, is qualified to do business in, and (in the case of any Credit Party
organized under the laws of the United States of America or any State thereof,
or any other jurisdiction where the concept of “good standing” of a corporation
or company is applicable) is in good standing in, every jurisdiction where such
qualification is required.

 

SECTION 3.02.  Authorization; Enforceability.  The Transactions are within such
Credit Party’s corporate powers and have been duly authorized by all necessary
corporate and, if required, by all necessary shareholder action.  This Agreement
has been duly executed and delivered by such Credit Party and constitutes, and
each of the other Credit Documents to which any Credit Party is to be a party,
when executed and delivered by such Credit Party will constitute, a legal, valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its terms, except as such enforceability may be limited
by (a) bankruptcy, insolvency, reorganization, moratorium, examination or
similar laws of general applicability affecting the enforcement of creditors’
rights and (b) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) do
not require any consent or approval of (including any exchange control
approval), registration or filing with, or any other action by, any Governmental
Authority (including the Bermuda Monetary 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 (including regulations of the Bermuda Monetary
Authority) or the charter, by-laws or other organizational documents of such
Credit Party or any of its Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon such Credit Party or any of its
Subsidiaries or assets, or give rise to a right thereunder to require any
payment to be made by any such Person, and (d) will not result in the creation
or imposition of any Lien on any asset of such Credit Party or any of its
Subsidiaries, except to the extent that, in the case of each of the immediately
preceding clauses (c) and (d), such violation, default, right or Lien would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

SECTION 3.04.  Financial Condition; No Material Adverse Change.

 

(a)  Financial Condition.  AXIS Capital has heretofore furnished to the Lenders
the consolidated balance sheet and statements of income, shareholders’ equity
and cash flows of AXIS Capital and its Subsidiaries (i) as of and for the fiscal
year ended December 31, 2004, audited by Deloitte & Touche LLP, independent
public accountants, and (ii) as of and for the fiscal quarter ended June 30,
2005, certified by a Financial Officer.  Such financial statements present
fairly, in all material respects, the financial condition and results of
operations and cash flows of AXIS Capital and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, subject to normal
year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clause (ii) of the first sentence of this paragraph. 
None of AXIS Capital and its Subsidiaries has on the date of this Agreement any
material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except (i) as referred to or reflected or provided for in such
balance sheet as of December 31, 2004, (ii) for insurance

 

47

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

 

payment liabilities or liabilities arising in the ordinary course of AXIS
Capital’s or any of its Subsidiary’s business as an insurance or reinsurance
company and (iii) as disclosed pursuant to this Agreement and the other Credit
Documents.

 

(b)  No Material Adverse Change.  Since December 31, 2004, there has been no
event, development or circumstance that has had or would reasonably be expected
to result, either individually or in the aggregate, in a material adverse effect
on the business, operations, property or condition (financial or otherwise) of
AXIS Capital and its Subsidiaries taken as a whole.

 

SECTION 3.05.  Litigation.

 

(a)  Actions, Suits and Proceedings.  Except as disclosed in Schedule 3.05(a) or
as routinely encountered in claims activity, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of such Credit Party, threatened in writing against
or affecting such Credit Party or any of its Subsidiaries (i) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve this Agreement or the
Transactions.

 

(b)  Disclosed Matters.  Since the date hereof, there has been no change in the
status of the matters disclosed in Schedule 3.05(a) that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.

 

SECTION 3.06.  Compliance with Laws and Agreements.  Such Credit Party and each
of its Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.  No Default has occurred and is
continuing.

 

SECTION 3.07.  Investment and Holding Company Status.  Neither such Credit Party
nor any of its Subsidiaries is (a) an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
“holding company” as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.

 

SECTION 3.08.  Taxes.  Such Credit Party and each of its Subsidiaries has timely
filed or caused to be filed (taking into account any applicable extension within
which to file) all Tax returns and reports required to have been filed and has
paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which such Person has set aside on its books adequate reserves or (b) to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

 

SECTION 3.09.  Pension-Related Matters.  Except as could not reasonably be
expected to result in a Material Adverse Effect, (i) all contributions required
to be made by such Credit Party or any of its Subsidiaries with respect to a
Benefit Plan have been timely made, (ii) each Benefit Plan has been maintained
in compliance with its terms and with the requirements of

 

48

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

 

any and all applicable laws and has been maintained, where required, in good
standing with the applicable Governmental Authority and (iii) neither such
Credit Party nor any of its Subsidiaries has incurred any obligation in
connection with the termination or withdrawal from any Benefit Plan.

 

SECTION 3.10.  Disclosure.  None of the reports, financial statements,
certificates or other written information furnished by or on behalf of AXIS
Capital or any other Credit Party to the Lenders in connection with the
negotiation of this Agreement and the other Credit Documents or delivered
hereunder or thereunder as modified or supplemented by other information so
furnished (taken as a whole with all such written information theretofore or
contemporaneously furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that, with respect to projected financial information, AXIS Capital represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time, it being recognized by the Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from such projected results.

 

SECTION 3.11.  Use of Credit.  Neither such Credit Party nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.

 

SECTION 3.12.  Indebtedness.  Schedule 6.05 is a complete and correct list of
each credit agreement, loan agreement, indenture, purchase agreement, guarantee,
letter of credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or guarantee by, AXIS Capital or any of its Subsidiaries outstanding
on the Effective Date (other than Indebtedness of AXIS Capital to any Subsidiary
and of any Subsidiary to AXIS Capital or any other Subsidiary), and the
aggregate principal or face amount outstanding or that may become outstanding
under each such arrangement is correctly described in Schedule 6.05.

 

SECTION 3.13.  Subsidiaries.  Set forth in Schedule 3.13 is a complete and
correct list of all of the Subsidiaries of AXIS Capital as of the date of this
Agreement, together with, for each such Subsidiary, the jurisdiction of
organization of such Subsidiary.  Except as disclosed in Schedule 3.13, (i) each
such Subsidiary is a directly or indirectly wholly-owned Subsidiary, (ii) each
of AXIS Capital and its Subsidiaries owns, free and clear of Liens, and has the
unencumbered right to vote, all outstanding ownership interests in each Person
shown to be held by it in Schedule 3.13, (iii) all of the issued and outstanding
capital stock of each such Person organized as a corporation is validly issued,
fully paid and nonassessable and (iv) there are no outstanding Equity Rights
with respect to such Person.

 

SECTION 3.14.  Withholding Taxes.  Based upon information with respect to each
Lender provided by each Lender to the Administrative Agent, as of the Effective
Date, the payment of the Loans and LC Disbursements and interest thereon, the
fees under Section 2.13

 

49

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

 

and all other amounts payable hereunder will not be subject, by withholding or
deduction, to any Taxes imposed by any Credit Party Jurisdiction.

 

SECTION 3.15.  Stamp Taxes.  To ensure the legality, validity, enforceability or
admissibility in evidence of this Agreement, it is not necessary that this
Agreement or any other document be filed or recorded with any Governmental
Authority or that any stamp or similar tax be paid on or in respect of this
Agreement, or any other document other than (i) such filings and recordations
that have already been made, (ii) such stamp or similar taxes that have already
been paid and (iii) nominal stamp taxes on any promissory note of any Subsidiary
Borrower organized under the laws of Ireland payable prior to the execution
thereof.

 

SECTION 3.16.  Legal Form.  Each of the Credit Documents is in proper legal form
under the law of the jurisdiction of organization of each Credit Party for the
enforcement thereof against each Credit Party under such law, and if each of the
Credit Documents were stated to be governed by such law, they would constitute
legal, valid and binding obligations of each Credit Party under such law,
enforceable in accordance with their respective terms.  All formalities required
in the jurisdiction of organization of each Credit Party for the validity and
enforceability of each of the Credit Documents (including any necessary
registration, recording or filing with any court or other authority in such
jurisdiction) have been accomplished, and no Indemnified Taxes or Other Taxes
are required to be paid to such jurisdiction, or any political subdivision
thereof or therein, and no notarization is required, for the validity and
enforceability thereof (except as provided in Section 3.15).

 

ARTICLE IV

 

CONDITIONS

 

SECTION 4.01.  Effective Date.  The obligations of the Lenders (or the Issuing
Lenders, as the case may be) to issue or continue Letters of Credit and to make
Loans hereunder 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 (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page to this Agreement) that such party has
signed a counterpart of this Agreement.

 

(b)  Opinions of Counsel to Credit Parties.  Opinions, each addressed to the
Administrative Agent and the Lenders and dated the Effective Date, of
(i) Conyers Dill & Pearman, Bermuda counsel to AXIS Capital and AXIS Specialty,
substantially in the form of Exhibit E-1, (ii) Skadden, Arps, Slate, Meagher &
Flom LLP, New York counsel to the Credit Parties, substantially in the form of
Exhibit E-2, and (iii) William Fry, Irish counsel to AXIS Re and AXIS Specialty
Europe, substantially in the form of Exhibit E-3.

 

50

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

 

(c)  Opinion of Special New York Counsel to JPMCB.  An opinion, dated the
Effective Date, of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel
to JPMCB, substantially in the form of Exhibit F (and JPMCB hereby instructs
such counsel to deliver such opinion to the Lenders).

 

(d)  Organizational Documents.  Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Credit Parties, the
authorization of the Transactions and any other legal matters relating to the
Credit Parties, 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 AXIS Capital,
confirming that (i) the representations and warranties of AXIS Capital set forth
in this Agreement are true and correct on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date) and (ii) no Default has occurred and is
continuing on such date.

 

(f)  Existing Credit Agreements.  Evidence that (i) AXIS Capital shall have paid
in full (or is paying from the proceeds of Borrowings on the Effective Date) all
principal of and interest accrued on the outstanding loans under the Existing
Credit Agreement and all fees, expenses and other amounts owing by it thereunder
(to the extent that reasonably detailed statements for such fees, expenses and
other amounts have been delivered to it prior to the Effective Date), (ii) the
commitments of the lenders thereunder shall have terminated and (iii) any
letters of credit issued and outstanding thereunder (x) shall have expired or
been terminated or (y) shall be continued hereunder as Letters of Credit as
contemplated by Section 2.01(g) or Section 2.04(l), as the case may be.

 

(g)  Process Agent Acceptance Letters.  A process agent acceptance letter in
respect of each Credit Party substantially in the form of Exhibit C.

 

(h)  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 hereunder
is also subject to the payment by AXIS Capital of such fees as AXIS Capital
shall have agreed to pay to any Lender or the Administrative Agent in connection
herewith, including the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy 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
AXIS Capital prior to the Effective Date).

 

The Administrative Agent shall notify AXIS Capital 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
Lenders, as the case may be) to issue or continue

 

51

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

 

Letters of Credit and make Loans hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to
Section 10.02) on or prior to 5:00 p.m., New York City time, on August 25, 2005
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).

 

SECTION 4.02.  Each Credit Event.  The obligation of each Lender (or each
Issuing Lender, as the case may be) to make any Loan or issue, amend, renew or
extend any Letter of Credit is additionally subject to the satisfaction of the
following conditions:

 

(a)  the representations and warranties of the Credit Parties set forth in this
Agreement and in the other Credit Documents shall be true and correct on and as
of the date of issuance, amendment, renewal or extension of such Letter of
Credit or the date 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); and

 

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

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by AXIS
Capital and (if different) the applicable Credit Party on the date thereof as to
the matters specified in the preceding sentence.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, AXIS Capital covenants and agrees with
the Lenders that:

 

SECTION 5.01.  Financial Statements and Other Information.  AXIS Capital will
furnish to the Administrative Agent and each Lender:

 

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

 

52

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

 

(b)  within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of AXIS Capital, the consolidated balance sheet and related
consolidated statements of operations, stockholders’ equity and cash flows of
AXIS Capital and its Subsidiaries as of the end of and for such fiscal quarter
and the then elapsed portion of such fiscal year, setting forth in each case in
comparative form the figures for (or, in the case of the balance sheet, as of
the end of) the corresponding period or periods of the previous fiscal year (if
such figures were already produced for such corresponding period or periods),
all certified by a Financial Officer as presenting fairly in all material
respects the financial condition and results of operations of AXIS Capital and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

 

(c)  concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate signed 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 6.04, 6.05, 6.06 and 6.07, (iii) stating
whether any material change in GAAP or in the application thereof has occurred
since the date of the financial statements most recently delivered pursuant to
this Section 5.01 and, if any such material change has occurred, specifying the
effect of such material change on the financial statements accompanying such
certificate and (iv) with respect to the financial statements delivered pursuant
to clause (a) of this Section 5.01, setting forth for each of its Subsidiaries
the maximum amount of dividends that such Subsidiary may make without requiring
regulatory approval or consent;

 

(d)  within 15 days after the filing of Statutory Statements by any Insurance
Company, a copy of such Statutory Statements of such Insurance Company for the
relevant fiscal year;

 

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

 

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

 

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

 

53

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

 

SECTION 5.02.  Notices of Material Events.  AXIS Capital will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

 

(a)  the occurrence of any Default;

 

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

 

(c)  any other development that results in, or could reasonably be expected to
result in, 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 AXIS Capital setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken by AXIS Capital with respect thereto.

 

SECTION 5.03.  Existence; Conduct of Business.  AXIS Capital will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or Disposition permitted under
Section 6.01.  AXIS Capital will, and will cause each of its Subsidiaries to,
qualify and remain qualified to do business in each jurisdiction in which
failure to receive or retain such qualification could reasonably be expected to
result in a Material Adverse Effect.

 

SECTION 5.04.  Insurance.  AXIS Capital will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its directors, officers and physical plant in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations.

 

SECTION 5.05.  Maintenance of Properties.  AXIS Capital will, and will cause
each of its Subsidiaries to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted, except where the failure to maintain the same would not
reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.06.  Payment of Obligations.  AXIS Capital 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;

 

54

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

 

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

 

(c)  on or prior to the date when due, all other lawful claims which, if unpaid,
might result in the creation of a Lien upon any such property (other than Liens
not prohibited by Section 6.02) or which, if unpaid, might give rise to a claim
entitled to priority over general creditors of AXIS Capital or such Subsidiary
in any proceeding under the Bermuda Companies Law or Bermuda Insurance Law or
the applicable Laws of such Subsidiary’s jurisdiction of organization, or any
insolvency proceeding, liquidation, receivership, rehabilitation, dissolution or
winding-up involving AXIS Capital or such Subsidiary; and

 

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

 

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

 

SECTION 5.07.  Financial Accounting Practices.  AXIS Capital will, and will
cause each of its 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 statements required under
Section 5.01 in conformity with GAAP and SAP, as applicable, and to maintain
accountability for assets.

 

SECTION 5.08.  Compliance with Applicable Laws.  AXIS Capital will, and will
cause each of its Subsidiaries to, comply with all applicable Laws (including
but not limited to the Bermuda Companies Law, Bermuda Insurance Laws and
environmental laws) in all respects, except where failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 5.09.  Use of Letters of Credit and Proceeds of Loans.  The proceeds of
the Loans will be used only for general corporate purposes of AXIS Capital and
its Subsidiaries and the Letters of Credit will be issued only in the ordinary
course of business of AXIS Capital and its Subsidiaries.  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 T, U and X of the Board.

 

55

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

 

SECTION 5.10.  Inspection Rights.  Subject to Section 10.12, AXIS Capital will,
and will cause each of its Subsidiaries to, permit such Persons as the
Administrative Agent or any Lender may designate, at such Lender’s expense prior
to the occurrence and continuance of an Event of Default and at the expense of
AXIS Capital after the occurrence and during the continuance of an Event of
Default, upon reasonable prior notice, to visit and inspect any of its
properties, to examine and make extracts from its books and records, to discuss
its affairs, finances and condition with its officers and independent
accountants, and provide such other information relating to its business,
financial condition and prospects at such times as the Administrative Agent or
such Lender, as the case may be, may reasonably request.

 

SECTION 5.11.  Financial Strength Rating.  AXIS Capital will cause each of the
Subsidiary Credit Parties to maintain a financial strength rating of at least
“B++” from A.M. Best & Co. (or its successor) at all times.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements have
been reimbursed, AXIS Capital covenants and agrees with the Lenders that:

 

SECTION 6.01.  Fundamental Changes.

 

(a)  Mergers, Consolidations, Etc.  AXIS Capital will not, nor will it permit
any of its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution).

 

(b)  Acquisitions.  AXIS Capital will not, nor will it permit any of its
Subsidiaries to, acquire any business or property from, or capital stock of, or
be a party to any acquisition of, any Person except for purchases of property to
be sold or used in the ordinary course of business and Investments permitted
under Section 6.06.

 

(c)  Dispositions.  AXIS Capital will not, nor will it permit any of its
Subsidiaries to, convey, sell, assign, lease, abandon, transfer or otherwise
dispose of, voluntarily or involuntarily, in one transaction or a series of
transactions, all or substantially all of its assets, or all or substantially
all of the stock of any of its Subsidiaries, whether now owned or hereafter
acquired (any of the foregoing being referred to in this Section as a
“Disposition”).

 

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

 

(i)  any Subsidiary of AXIS Capital may be merged or consolidated with or into
any other such Subsidiary; provided that if any such transaction shall be
between a

 

56

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

 

Subsidiary and a wholly owned Subsidiary, the wholly owned Subsidiary shall be
the continuing or surviving corporation;

 

(ii)  any Subsidiary of AXIS Capital may make a Disposition of any or all of its
property to AXIS Capital or any wholly owned Subsidiary of AXIS Capital;

 

(iii)  a Disposition of the capital stock of any Subsidiary of AXIS Capital may
be made to AXIS Capital or any wholly owned Subsidiary of AXIS Capital;

 

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

 

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

 

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

 

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

 

SECTION 6.02.  Liens.  AXIS Capital will not, 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 existing on the date hereof (and extension, renewal and replacement
Liens upon the same property); provided that (i) no such Lien shall extend to
any other property or asset of AXIS Capital or any of its Subsidiaries and
(ii) any such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

 

(b)  Liens arising from taxes, assessments, charges, levies or claims described
in Section 5.06 that are not yet due or that remain payable without penalty or
to the extent permitted to remain unpaid under Section 5.06;

 

(c)  Liens on fixed or capital assets acquired, constructed or improved by AXIS
Capital or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by Section 6.05(g), (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of AXIS Capital or any
Subsidiary;

 

(d)  zoning restrictions, easements, minor restrictions on the use of real
property, minor irregularities in title thereto and other minor Liens that do
not in the aggregate

 

57

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

 

materially detract from the value of a property or asset to, or materially
impair its use in the business of, AXIS Capital or any such Subsidiary;

 

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

 

(f)  Liens on cash and securities of AXIS Capital or its Subsidiaries incurred
as part of the management of an investment portfolio of a Credit Party or any
Subsidiary in accordance with the Investment Guidelines of such Credit Party or
Subsidiary;

 

(g)  Liens on (i) assets received, and on actual or imputed investment income on
such assets received, relating and identified to specific insurance payment
liabilities or to liabilities arising in the ordinary course of AXIS Capital’s
or any of its Subsidiary’s business as an insurance or reinsurance company, or
the proceeds thereof, in each case held in a segregated trust or other account
and securing such liabilities or (ii) 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 in the ordinary course of business on operating accounts
(including any related securities accounts) maintained by AXIS Capital or any of
its Subsidiaries in the ordinary course of business;

 

(i)  Liens in favor of the Administrative Agent for the benefit of the Lenders
arising pursuant to any of the Credit Documents;

 

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

 

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

 

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

 

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

 

58

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

 

(n) Liens not otherwise permitted by the foregoing clauses of this Section 6.02
securing Indebtedness in an aggregate principal amount outstanding at any time
that does not exceed $50,000,000.

 

SECTION 6.03.  Transactions with Affiliates.  AXIS Capital will not, nor will it
permit any of its Subsidiaries to, enter into or carry out any transaction with
(including, without limitation, sell, lease or otherwise transfer any property
or assets or services to, purchase, lease or otherwise acquire any property or
assets or services from, loan or advance to or enter into, suffer to remain in
existence or amend any contract, agreement or arrangement with) any Affiliate of
AXIS Capital, or directly or indirectly agree to do any of the foregoing, except
(i) transactions between or among AXIS Capital and its wholly-owned Subsidiaries
not involving any other Affiliate, (ii) transactions with Affiliates in good
faith in the ordinary course of AXIS Capital’s business and at prices and on
terms and conditions no less favorable to AXIS Capital or such Subsidiary than
those that could have been obtained in a comparable transaction on an arm’s
length basis from an unrelated Person and (iii) any Restricted Payment permitted
by Section 6.07.

 

SECTION 6.04.  Financial Covenants.

 

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

 

(b)  Consolidated Net Worth.  AXIS Capital will not permit its Consolidated Net
Worth to be less than at any time the sum of (i) $2,000,000,000 plus (ii) 25% of
consolidated net income (if positive) of AXIS Capital for each semi-annual
fiscal period ending on or after December 31, 2005 plus (iii) an amount equal to
25% of the net cash proceeds received by AXIS Capital from the issuance of its
capital stock during each such semi-annual fiscal period.

 

SECTION 6.05.  Indebtedness.  AXIS Capital will not, 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 existing on the date hereof and described in Schedule 6.05 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;

 

(c)  Indebtedness incurred by AXIS Capital or any Subsidiary pursuant to a
credit facility or facilities providing for the making of loans and/or the
issuance of letters of credit in an aggregate principal or face amount not
exceeding $250,000,000 at any time outstanding;

 

(d)  Indebtedness incurred in transactions described in Sections 6.02(f), (k)
and (n);

 

59

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

 

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

 

(f)  Guarantees by AXIS Capital of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of AXIS Capital or any other Subsidiary;

 

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

 

(h)  Subordinated Indebtedness;

 

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

 

(j)  Indebtedness of AXIS Capital or any Subsidiary in connection with
securities lending arrangements with financial institutions in the ordinary
course of business.

 

SECTION 6.06.  Investments.  AXIS Capital will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:

 

(a)  Investments outstanding on the date hereof;

 

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

 

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

 

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

 

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

 

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

 

60

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

 

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

 

(h)  AXIS Capital and its Subsidiaries may (directly, or indirectly through one
or more Subsidiaries) make Acquisitions that are not otherwise already permitted
under any other provision of this Section; provided that (i) immediately prior
and after giving effect to each such Acquisition, no Default shall have occurred
and be continuing and AXIS Capital shall have delivered to the Administrative
Agent a certificate of a Financial Officer to such effect; (ii) at the time of
each such Acquisition and after giving effect thereto, AXIS Capital or a
Subsidiary may not enter into such Acquisition if the aggregate consideration to
be paid by AXIS Capital and its Subsidiaries in connection therewith, when added
to the aggregate consideration paid by AXIS Capital and its Subsidiaries in
connection with each other Acquisition permitted by this clause (h) and
consummated prior thereto but after the Effective Date, shall exceed
$500,000,000, (iii) in the case of an Acquisition of a Person, such Acquisition
has been approved by the board of directors of such Person prior to the
commencement of any tender offer, proxy contest or the like in respect thereof
and (iv) any Person or assets acquired pursuant hereto shall be in the insurance
or reinsurance business;

 

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

 

(j)  Investments by AXIS Capital consisting of Guarantees by AXIS Capital of
Indebtedness permitted under Section 6.05; and

 

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

 

SECTION 6.07.  Restricted Payments.  AXIS Capital will not, nor will it permit
any of its Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, except that (a) AXIS Capital may declare
and pay dividends with respect to its capital stock consisting solely of
additional shares of its common stock, (b) AXIS Capital may make Restricted
Payments pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of AXIS Capital and its Subsidiaries and
(c) AXIS Capital may make Restricted Payments if at the time of and after giving
effect to such Restricted Payment, no Default shall have occurred and be
continuing.  Nothing herein shall be deemed to prohibit the payment of dividends
by any Subsidiary of AXIS Capital to AXIS Capital or to any other Subsidiary of
AXIS Capital.

 

SECTION 6.08.  Continuation of and Change in Businesses.  AXIS Capital will not,
nor will it permit any of its Subsidiaries to, engage to any material extent in
any business or

 

61

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

 

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

 

SECTION 6.09.  Private Act.  AXIS Capital will not become subject to a Private
Act.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

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

 

(a)  any Credit 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 Credit 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 or under any other Credit Document, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period of
three or more days;

 

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

 

(d)  AXIS Capital shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to any Credit Party’s
existence), 5.09, 5.11 or in Article VI;

 

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

 

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

 

62

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

 

(g)  any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

 

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

 

(i)  any Credit Party shall institute proceedings to be adjudicated 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 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 benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due, or corporate or other action
shall be taken by any Credit Party in furtherance of any of the aforesaid
purposes;

 

(j)  one or more judgments for the payment of money in an aggregate amount in
excess of $75,000,000 shall be rendered against AXIS Capital or any of its
Subsidiaries or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of AXIS Capital or any of its Subsidiaries to
enforce any such judgment;

 

(k)  an ERISA Event (or any event similar to an ERISA Event with respect to any
non-U.S. Benefit Plan) shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such similar events that have
occurred, could reasonably be expected to result in liability of AXIS Capital
and its Subsidiaries in an aggregate amount exceeding $75,000,000;

 

(l)  the Guarantee of AXIS Capital under Article IX shall for whatever reason be
terminated or cease to be in full force and effect, or the validity or
enforceability thereof shall be contested by AXIS Capital; or

 

(m)  a Change in Control shall occur;

 

63

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

 

then, and in every such event (other than an event with respect to any Credit
Party described in clause (h) or (i) 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 AXIS Capital,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding and all fees and other
obligations of the Credit Parties accrued hereunder to be due and payable in
whole (or in part, in which case any principal and any fees and other
obligations 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 such fees and other
obligations shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Credit Party; and in case of any event with respect to any Credit Party
described in clause (h) or (i) 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
Credit Parties 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 each Credit Party.

 

If an Event of Default shall occur and be continuing, the Administrative Agent
or the Required Lenders may require AXIS Capital (or, in case of any Event of
Default described in clause (h) or (i) of this Article, AXIS Capital shall
become immediately obligated) to deposit cash collateral pursuant to Sections
2.03(e) and 2.04(j).

 

ARTICLE VIII

 

THE ADMINISTRATIVE AGENT

 

Each of the Lenders hereby irrevocably appoints the Administrative Agent as its
agent hereunder and under the other Credit Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.

 

The 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 AXIS Capital 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 and in the other Credit Documents.  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 or
by the other Credit Documents that the Administrative Agent is required to
exercise in writing by the

 

64

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

 

Required Lenders, and (c) except as expressly set forth herein and in the other
Credit Documents, the Administrative Agent shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating to
AXIS Capital or any of its 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,
to the extent required by this Agreement, all of the 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 Administrative Agent by AXIS Capital 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 or any other Credit Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Credit Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein or therein, 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 AXIS Capital), 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
AXIS Capital.  Upon any such resignation, the Required Lenders shall have the
right, with the consent of AXIS Capital (which consent shall not be unreasonably
withheld), 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

 

65

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

 

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, with the consent of
AXIS Capital (which consent shall not be unreasonably withheld), 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 AXIS Capital to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between AXIS Capital and such successor.  After the Administrative
Agent’s resignation hereunder, the provisions of this Article and Section 10.03
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 other Credit Document or
any related agreement or any document furnished hereunder or thereunder.

 

Except as otherwise provided in Section 10.02(b) with respect to this Agreement,
the Administrative Agent may, with the prior consent of the Required Lenders
(but not otherwise), consent to any modification, supplement or waiver under any
of the Credit Documents.

 

Notwithstanding anything herein to the contrary, the Joint Lead Arrangers and
Joint Bookrunners, Syndication Agent and Co-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 IX

 

GUARANTEE

 

SECTION 9.01.  The Guarantee.  AXIS Capital hereby guarantees to each Lender and
the Administrative Agent and their respective successors and assigns the prompt
payment in full when due (whether by acceleration or otherwise) of all principal
of and interest on the Loans made by the Lenders to each Subsidiary Borrower
pursuant to this Agreement, all reimbursement obligations in respect of LC
Disbursements and all interest thereon payable by each Subsidiary Account Party
pursuant to this Agreement and all other amounts from time to time owing to the
Lenders or the Administrative Agent by each Subsidiary Credit Party under this
Agreement or under any of the other Credit Documents, in each case strictly in
accordance with the terms

 

66

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

 

thereof (such obligations being herein collectively called the “Guaranteed
Obligations”).  AXIS Capital hereby further agrees that if any Subsidiary Credit
Party shall fail to pay in full when due (whether by acceleration or otherwise)
any of the Guaranteed Obligations, AXIS Capital 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 by acceleration or otherwise) in
accordance with the terms of such extension or renewal.

 

SECTION 9.02.  Obligations Unconditional.  The obligations of AXIS Capital under
Section 9.01 are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of the
Subsidiary Credit Parties under this Agreement or any other agreement or
instrument referred to herein, or any substitution, release 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
Section that the obligations of AXIS Capital hereunder shall be absolute and
unconditional under any and all circumstances.  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 AXIS Capital hereunder,
which shall remain absolute and unconditional as described above:

 

(i)  at any time or from time to time, without notice to AXIS Capital, 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 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;

 

(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; or

 

(iv)  any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.

 

With respect to its obligations under this Article, AXIS Capital hereby
expressly waives 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 Subsidiary
Credit 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.

 

67

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

 

SECTION 9.03.  Reinstatement.  The obligations of AXIS Capital under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Subsidiary Credit Party in respect of
the Guaranteed Obligations is rescinded or must 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 AXIS Capital
agrees that it will indemnify the Administrative Agent and each Lender on demand
for all reasonable costs and expenses (including 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 9.04.  Subrogation.  AXIS Capital hereby agrees that until the payment
and satisfaction in full of all Guaranteed Obligations and the expiration and
termination of the Commitments of the Lenders under this Agreement it shall not
exercise any right or remedy arising by reason of any performance by it of its
guarantee in Section 9.01, whether by subrogation or otherwise, against any
Subsidiary Credit Party or any other guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations.

 

SECTION 9.05.  Remedies.  AXIS Capital agrees that, as between AXIS Capital on
the one hand and the Administrative Agent and the Lenders on the other, the
obligations of each Subsidiary Credit Party under this Agreement may be declared
to be forthwith due and payable as provided in Article VII (and shall be deemed
to have become automatically due and payable in the circumstances provided in
Article VII) for purposes of Section 9.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against such Subsidiary Credit 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 such Subsidiary Credit Party) shall forthwith become due and
payable by AXIS Capital for purposes of Section 9.01.

 

SECTION 9.06.  Instrument for the Payment of Money.  AXIS Capital hereby
acknowledges that the guarantee in this Article constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by AXIS
Capital in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.

 

SECTION 9.06.  Continuing Guarantee.  The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01.  Notices.  (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be

 

68

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

 

delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

(i)  if to AXIS Capital, to it at 106 Pitts Bay Road, Pembroke HM 08, Bermuda,
Attention of Andrew Cook (Telecopy No. (441) 296-3140);

 

(ii)  if to a Subsidiary Credit Party listed below, to it at the address (or
telecopy number) set forth below for such Subsidiary Credit Party:

 

AXIS Specialty Limited

106 Pitts Bay Road

Pembroke, Bermuda

HM 08

Attention:  Andrew Cook

Telecopy No.:  (441) 296-3140

Telephone No.:  (441) 296-2600

 

AXIS Re Limited and AXIS Specialty Europe Limited

Mount Herbert Court

34 Upper Mount Street

Dublin 2

Ireland

Attention: Tim Hennessy

Telecopy No.:  (011) 353 1 664 1862

Telephone No.:  (011) 353 1 664 1611

 

(iii)  if to a Subsidiary Credit Party not listed in clause (ii) above, to it at
the address (or telecopy number) set forth in the Subsidiary Joinder Agreement
to which it is a party or (if such Subsidiary Credit Party is not a party to any
Subsidiary Joinder Agreement or if no such address is set forth in such
Subsidiary Joinder Agreement) to it at the address set forth in clause
(i) above;

 

(iv)  if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 1111 Fannin,
10th Floor, Houston, Texas 77002-8069, Attention of Loan and Agency Services
Group (Telecopy No. (713) 750-2782; Telephone No. (713) 750-2102), with a copy
to JPMorgan Chase Bank, N.A., 270 Park Avenue, 22nd Floor, New York, New York
10017, Attention of Heather Lindstrom (Telecopy No. (212) 270-1511; Telephone
No. (212) 270-9839); and

 

(v)  if to a Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

 

(b)  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 to
any Lender pursuant to Article II unless otherwise agreed by the Administrative
Agent and such Lender.  The Administrative Agent or any Credit Party may, in its
discretion, agree to accept notices and

 

69

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

 

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.

 

(c)  Any party hereto may change its address or telecopy number 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 AXIS Capital and the
Administrative Agent, or, in the case of any such change by the Administrative
Agent, by notice to AXIS Capital and the Lenders).  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.

 

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 a Credit Party
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 pursuant to an agreement or agreements in writing
entered into by the Credit Parties and the Required Lenders or by the Credit
Parties and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall:

 

(i)  increase the Commitment of any Lender without the written consent of such
Lender or increase the Revolving Credit Sublimit without the consent of each
Lender affected thereby,

 

(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 payable hereunder, without the
written consent of each Lender affected thereby,

 

(iii)  postpone the scheduled date for payment of the principal amount of any
Loan or 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

 

70

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

 

(other than an extension thereof pursuant to an “evergreen” provision with
respect to any Letter of Credit), without the written consent of each Lender
affected thereby,

 

(iv)  change Section 2.19(c) or 2.19(d) without the consent of each Lender
affected thereby,

 

(v)  change or terminate the obligations of AXIS Capital pursuant to Article IX
without the written consent of each Lender or

 

(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 agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent.

 

SECTION 10.03.  Expenses; Indemnity; Damage Waiver.

 

(a)  Costs and Expenses.  AXIS Capital shall 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 and the other Credit Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
expenses incurred by the Administrative Agent or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent or any
Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Credit Documents, 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 and (iii) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other Credit Document or
any other document referred to herein or therein.

 

(b)  Indemnification by AXIS Capital.  AXIS Capital shall indemnify the
Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”), against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, 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

 

71

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

 

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), or (iii) 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 are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

 

(c)  Reimbursement by Lenders.  To the extent that AXIS Capital fails to pay any
amount required to be paid by it 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 Credit Party shall assert, and each Credit 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 the use of the proceeds thereof, or any Letter of Credit or the use
thereof.

 

(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 no Credit 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 such Credit Party without such consent shall be null and void).  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby 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.  Any Lender may assign to one or more NAIC Approved
Lenders all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it) and under any Letter of Credit to which it is a party (if such Letter of
Credit permits such assignment or the beneficiary consents thereto); provided
that

 

72

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

 

(i)  except in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund, AXIS Capital must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld, it being
understood that AXIS Capital shall not be deemed to be unreasonably withholding
its consent if, as a result of any such assignment, any Credit Party would incur
an obligation to make an increased payment pursuant to Section 2.18 which it
would not otherwise have been obligated to make to the Lender prior to such
assignment),

 

(ii)  each of the Administrative Agent and each Issuing Lender with respect to
Participated Letters of Credit must give its prior written consent to such
assignment (which consent, in each case, shall not be unreasonably withheld),

 

(iii)  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 AXIS Capital and the Administrative Agent
otherwise consent,

 

(iv)  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,

 

(v)  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

 

(vi)  the assignee, if it shall not be a Lender, shall deliver an Administrative
Questionnaire to the Administrative Agent;

 

provided, however, that no Lender will assign, sell participations, syndicate
all or a portion of such Letters of Credit or Loans, and its rights and
obligations thereunder, to any Person who is (i) listed on the Specially
Designated Nationals and Blocked Persons List maintained by the U.S. Department
of Treasury Office of Foreign Assets Control (“OFAC”)  and/or on any other
similar list maintained by the OFAC pursuant to any authorizing statute,
Executive Order or regulation; or (ii) either (A) included within the term
“designated national” as defined in the Cuban Assets Control Regulations, 31
C.F.R. Part 515, or (B) designated under Sections 1(a), 1(b), 1(c) or 1(d) of
Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or
similarly designated under any related enabling legislation or any other similar
Executive Orders;

 

provided further that any consent of AXIS Capital otherwise required under this
paragraph shall not be required if an Event of Default under clause (a), (b),
(h) or (i) of Article VII has occurred and is continuing.  Upon acceptance and
recording pursuant to paragraph (d) 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

 

73

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

 

Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.16, 2.17, 2.18
and 10.03).  Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph 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 (e) of this Section.

 

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 AXIS Capital, the option to provide to
the Credit Parties all or any part of any Loan or LC Disbursement that such
Granting Lender would otherwise be obligated to make to the Credit Parties
pursuant to Section 2.05 or Section 2.01, respectively; 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 (iii) any Credit Party may bring any proceeding against the
Granting Lender or the SPV in order to enforce any rights of such Credit Party
under any of the Credit Documents.  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 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, AXIS Capital 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 AXIS Capital 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 or issue such
Letters of Credit and such SPV may disclose, on a confidential basis,
confidential information with respect to AXIS Capital and its Subsidiaries to
any rating agency, commercial paper dealer or provider of a surety, guarantee or
credit liquidity enhancement to 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.

 

(c)  Maintenance of Register by the Administrative Agent.  The Administrative
Agent, acting for this purpose as an agent of each Credit Party, 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, and 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, and the
Credit

 

74

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

 

Parties, the Administrative Agent and the Lenders may 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 AXIS Capital and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(d)  Effectiveness of Assignments.  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) of this Section and any written consent to such assignment
required by paragraph (b) 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.

 

(e)  Participations.  Any Lender may, without the consent of any Credit Party or
the Administrative Agent, 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 and the Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement and the other Credit
Documents shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Credit 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 (f) of
this Section, each Credit Party agrees that each Participant shall be entitled
to the benefits of Sections 2.16, 2.17 and 2.18 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.

 

(f)  Limitations on Rights of Participants.  A Participant shall not be entitled
to receive any greater payment under Sections 2.16, 2.17 or 2.18 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with AXIS Capital’s prior written consent.

 

(g)  Certain Pledges.  Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment 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 assignee for such Lender as a party hereto.

 

75

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

 

(h)  No Assignments to AXIS Capital 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 AXIS Capital 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 Credit 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 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 2.16, 2.17, 2.18, 10.03 and 10.13 and Article VIII
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 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 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof 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 shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

SECTION 10.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, 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 is 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 Credit Party against any of and all the obligations
of such Credit Party now or hereafter existing under this Agreement held by such

 

76

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

 

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 Credit Party hereby agrees that any suit,
action or proceeding with respect to this Agreement, the other Credit Documents
or any judgment entered by any court in respect thereof may be brought in the
United States District Court for the Southern District of New York, in the
Supreme Court of the State of New York sitting in New York County (including its
Appellate Division), or in any other appellate court in the State of New York,
as the party commencing such suit, action or proceeding may elect in its sole
discretion; and each Credit Party hereby irrevocably submits to the jurisdiction
of such courts for the purpose of any such suit, action, proceeding or
judgment.  Each Credit Party further submits, for the purpose of any such suit,
action, proceeding or judgment brought or rendered against it, to the
appropriate courts of the jurisdiction of its domicile.

 

(c)  Waiver of Venue.  Each Credit Party 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 or any other
Credit Document 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)  Appointment of Agent for Service of Process.  Each Credit Party irrevocably
designates and appoints CT Corporation System, at its office in New York City,
New York, U.S.A., as its authorized agent, to accept and acknowledge on its
behalf, service of any and all process which may be served in any suit, action
or proceeding of the nature referred to in Section 10.09(b) in any federal or
New York State court sitting in New York City.  Each Credit Party represents and
warrants that such agent has agreed in writing to accept such appointment and
that a true copy of such designation and acceptance has been delivered to the
Administrative Agent.  Said designation and appointment shall be irrevocable by
each such Credit Party until all reimbursement obligations, Loans, interest
thereon and all other amounts payable hereunder and under the other Credit
Documents shall have been paid in full in accordance with the provisions hereof
and thereof or, if earlier, in the case of any Subsidiary Credit Party, when
such Subsidiary Credit Party is terminated as an Account Party and a Borrower
hereunder pursuant to Section 2.12(b).  If such agent shall cease so to act,
each Credit Party covenants and agrees to designate irrevocably and appoint
without delay another such agent satisfactory to the Administrative Agent and to
deliver promptly to the Administrative Agent evidence in writing of such other
agent’s acceptance of such appointment.

 

77

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

 

(e)  Service of Process.  Each party to this Agreement (other than the Credit
Parties) irrevocably consents to service of process in the manner provided for
notices in Section 10.01.  Each Credit Party hereby consents to process being
served in any suit, action or proceeding of the nature referred to in
Section 10.09(b) in any federal or New York State court sitting in New York City
by service of process upon its agent appointed as provided in Section 10.09(d);
provided that, to the extent lawful and possible, notice of said service upon
such agent shall be mailed by registered or certified air mail, postage prepaid,
return receipt requested, to such Credit Party at its address for notices set
forth or referred to in clause (i) or (ii), as applicable, of
Section 10.01(a) or to any other address of which such Credit Party shall have
given written notice to the applicable Lender.  Each Credit Party irrevocably
waives, to the fullest extent permitted by law, all claim of error by reason of
any such service in such manner and agrees that such service shall be deemed in
every respect effective service of process upon such Credit Party in any such
suit, action or proceeding and shall, to the fullest extent permitted by law, be
taken and held to be valid and personal service upon and personal delivery to
such Credit Party.  Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.

 

(f)  No Immunity.  To the extent that a Credit Party may be or become entitled,
in any jurisdiction in which judicial proceedings may at any time be commenced
with respect to this Agreement or any other Credit Document, to claim for itself
or its properties or revenues any immunity from suit, court jurisdiction,
attachment prior to judgment, attachment in aid of execution of a judgment,
execution of a judgment or from any other legal process or remedy relating to
its obligations under this Agreement or any other Credit Document, and to the
extent that in any such jurisdiction there may be attributed such an immunity
(whether or not claimed), such Credit Party hereby irrevocably agrees not to
claim and hereby irrevocably waives such immunity to the fullest extent
permitted by the laws of such jurisdiction.

 

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.

 

78

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

 

SECTION 10.12.  Treatment of Certain Information; Confidentiality.

 

(a)  Treatment of Certain Information.  AXIS Capital acknowledges that from time
to time financial advisory, investment banking and other services may be offered
or provided to AXIS Capital or one or more of its Subsidiaries (in connection
with this Agreement or otherwise) by any Lender or by one or more subsidiaries
or affiliates of such Lender and AXIS Capital hereby authorizes each Lender to
share any information delivered to such Lender by AXIS Capital 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 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.  Such authorization shall survive the repayment
of the Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

(b)  Confidentiality.  Each of the Administrative Agent and the Lenders 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 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 or self-regulatory body; provided that unless specifically
prohibited by applicable law or court order, each Lender shall make reasonable
efforts to notify AXIS Capital of any request by any governmental agency or
representative thereof (other than such request in connection with any
examination of the financial condition or other routine examination of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information, (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 under any other Credit Document or any
suit, action or proceeding relating to this Agreement or any other Credit
Document or the enforcement of rights hereunder or thereunder, (vi) subject to
an agreement in writing containing provisions substantially the same as those of
this paragraph and for the benefit of AXIS Capital, 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 or (b) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
AXIS Capital and its obligations, (vii) with the consent of AXIS Capital 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 AXIS Capital.  For the purposes of this paragraph, “Information”
means all information received from AXIS Capital relating to AXIS Capital 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 AXIS Capital; provided that, in the case of information received
from AXIS Capital after the date hereof, such information is clearly identified
at the time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

SECTION 10.13.  Judgment Currency.  This is an international loan transaction in
which the specification of U.S. Dollars or any Foreign Currency, as the case may
be (the

 

79

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

 

“Specified Currency”) and payment in New York City or the country of the
Specified Currency, as the case may be (the “Specified Place”), is of the
essence, and the obligations of the Credit Party under this Agreement to make
payment to (or for account of) a Lender in the Specified Currency and in the
Specified Place 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 the Specified Place of the full amount of
the Specified Currency 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 the Specified Currency 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 Specified Currency with the judgment
currency on the Business Day next preceding the day on which such judgment is
rendered.  The obligation of the Credit Parties in respect of any such sum due
from it to the Administrative Agent or any Lender hereunder or under any other
Credit Document (in this Section called an “Entitled Person”) shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be 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 such Specified Currency to such Specified Place
with the amount of the judgment currency so adjudged to be due; and each Credit
Party 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 the Specified Currency, the amount (if any) by which the
sum originally due to such Entitled Person in the Specified Currency hereunder
exceeds the amount of the Specified Currency so purchased and transferred.

 

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

 

80

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

 

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.

 

 

 

AXIS CAPITAL HOLDINGS LIMITED

 

 

 

 

 

By

/s/ Andrew Cook

 

 

 

Name: Andrew Cook

 

 

Title: Chief Financial Officer

 

 

 

U.S. Federal Tax Identification No:  98-0395986

 

 

 

 

 

SUBSIDIARY CREDIT PARTIES

 

 

 

AXIS SPECIALTY LIMITED

 

 

 

 

 

By

/s/ Andrew Cook

 

 

 

Name: Andrew Cook

 

 

Title: Executive Vice President

 

 

 

 

U.S. Federal Tax Identification No:  98-0364977

 

 

 

 

 

AXIS RE LIMITED

 

 

 

 

 

By

/s/ Adrian Ryan

 

 

 

Name:Adrian Ryan

 

 

Title: Director

 

 

 

U.S. Federal Tax Identification No:  98-0395688

 

 

 

 

 

AXIS SPECIALTY EUROPE LIMITED

 

 

 

 

 

By

/s/ Adrian Ryan

 

 

 

Name: Adrian Ryan

 

 

Title: Director

 

 

 

U.S. Federal Tax Identification No:  98-0395686

 

81

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

 

 

LENDERS

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

individually and as Administrative Agent

 

 

 

 

 

By

/s/ Heather Lindstrom

 

 

 

Name: Heather Lindstrom

 

 

Title: Vice President

 

 

 

BARCLAYS BANK PLC

 

 

 

 

 

By

/s/ Jonathan R. Burn

 

 

 

Name: Jonathan R. Burn

 

 

Title: Director

 

 

 

CITIBANK, N.A.

 

 

 

 

 

By

/s/ Michael A. Taylor

 

 

 

Name: Michael Taylor

 

 

Title: Managing Director

 

 

 

ING BANK N.V., LONDON BRANCH

 

 

 

 

 

By

/s/ Paul Galpin

 

 

 

Name: Paul Galpin

 

 

Title: Director

 

 

 

By

/s/ Mike Sharman

 

 

 

Name: Mike Sharman

 

 

Title: Managing Director

 

 

 

WACHOVIA BANK, NATIONAL

 

ASSOCIATION

 

 

 

 

 

By

/s/ Karen Hanke

 

 

 

Name: Karen Hanke

 

 

Title: Director

 

82

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

 

 

CALYON NEW YORK BRANCH

 

 

 

 

 

By

/s/ Sebastian Rocco

 

 

 

Name: Sebastian Rocco

 

 

Title: Managing Director

 

 

 

By

/s/ Peter Rasmussen

 

 

 

Name: Peter Rasmussen

 

 

Title: Managing Director

 

 

 

HSBC BANK USA, N.A.

 

 

 

 

 

By

/s/ Lawrence Karp

 

 

 

Name: Lawrence Karp

 

 

Title: Senior Vice President

 

83

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

 

 

LLOYDS TSB BANK PLC

 

 

 

 

 

By

/s/ Jason Eperon

 

 

 

Name: Jason Eperon

 

 

Title: Assistant Vice President

 

 

 

By

/s/ Candi Obrentz

 

 

 

Name: Candi Obrentz

 

 

Title: Assistant Vice President

 

 

 

THE ROYAL BANK OF SCOTLAND PLC

 

 

 

 

 

By

/s/ John Mallett

 

 

 

Name: John Mallett

 

 

Title: Head of Insurance Financial Institutions Group

 

 

 

THE BANK OF NEW YORK

 

 

 

 

 

By

/s/ Lizanne T. Eberle

 

 

 

Name: Lizanne T. Eberle

 

 

Title: Vice President

 

 

 

DEUTSCHE BANK AG NEW YORK BRANCH

 

 

 

 

 

By

/s/ Richard Herder

 

 

 

Name: Richard Herder

 

 

Title: Managing Director

 

 

 

By

/s/ John S. McGill

 

 

 

Name: John S. McGill

 

 

Title: Director

 

84

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

 

 

MORGAN STANLEY BANK

 

 

 

 

 

By

/s/ Daniel Twenge

 

 

 

Name: Daniel Twenge

 

 

Title: Vice President

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

By

/s/ Debra Basler

 

 

 

Name: Debra Basler

 

 

Title: Senior Vice President

 

 

 

NATIONAL AUSTRALIA BANK LIMITED

 

 

 

 

 

By

/s/ Clinton M. Johnson

 

 

 

Name: Clinton M. Johnson

 

 

Title: Senior Vice President

 

 

 

COMERICA BANK

 

 

 

 

 

By

/s/ Martin G. Ellis

 

 

 

Name: Martin G. Ellis

 

 

Title: First Vice President

 

 

 

CREDIT SUISSE FIRST BOSTON, NEW YORK

 

BRANCH

 

 

 

 

 

By

/s/ Karl Studer

 

 

 

Name: Karl Studer

 

 

Title: Director

 

 

 

By

/s/ Cassandra Droogan

 

 

 

Name: Cassandra Droogan

 

 

Title: Associate

 

85

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

 

 

MERRILL LYNCH BANK USA

 

 

 

 

 

By

/s/ Derek Befus

 

 

 

Name: Derek Befus

 

 

Title: Vice President

 

86

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

 

SCHEDULE 1.01

 

Commitments

 

Name of Lender

 

Commitment ($)

 

 

 

 

 

JPMorgan Chase Bank, N.A.

 

$

142,500,000

 

Barclays Bank PLC

 

142,500,000

 

Citibank, N.A.

 

110,000,000

 

ING Bank N.V., London Branch

 

110,000,000

 

Wachovia Bank, National Association

 

110,000,000

 

Calyon New York Branch

 

110,000,000

 

HSBC Bank USA, N.A.

 

110,000,000

 

Lloyds TSB Bank plc

 

110,000,000

 

The Royal Bank of Scotland Plc

 

110,000,000

 

The Bank of New York

 

75,000,000

 

Deutsche Bank AG New York Branch

 

75,000,000

 

Morgan Stanley Bank

 

75,000,000

 

Bank of America, N.A.

 

65,000,000

 

National Australia Bank Limited

 

65,000,000

 

Comerica Bank

 

30,000,000

 

Credit Suisse First Boston, New York Branch

 

30,000,000

 

Merrill Lynch Bank USA

 

30,000,000

 

 

 

 

 

TOTAL:

 

$

1,500,000,000

 

 

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

 

SCHEDULE 3.05(a)

 

Litigation

 

In re AXIS Capital Holdings Ltd. Securities Litigation pending in the United
States District Court, Southern District of New York.  Amended, consolidated
complaint filed May 13, 2005.  Defendants include AXIS Capital Holdings Limited,
Michael Butt, John Chairman and Andrew Cook.

 

In re Insurance Brokerage Antitrust Litigation pending in the United States
District Court, District of New Jersey.  Consolidated, amended commercial class
action complaint filed August 1, 2005.  Defendants include AXIS Specialty
Insurance Company, AXIS Surplus Insurance Company and AXIS Reinsurance Company.

 

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

 

SCHEDULE 3.13

 

Subsidiaries

 

Company Name

 

Country of Domicile

 

 

 

AXIS Specialty Limited

 

Bermuda

 

 

 

AXIS Specialty U.S. Services, Inc.

 

U.S.A. (Delaware)

 

 

 

AXIS Surplus Insurance Company

 

U.S.A. (Illinois)

 

 

 

AXIS Specialty U.S. Holdings, Inc.

 

U.S.A. (Delaware)

 

 

 

AXIS Reinsurance Company

 

U.S.A. (New York)

 

 

 

AXIS Specialty Insurance Company

 

U.S.A. (Connecticut)

 

 

 

Combined Specialty Group, Inc. (dormant)

 

U.S.A. (Delaware)

 

 

 

Fireman’s Fund Insurance Company of Wisconsin

 

U.S.A. (Wisconsin)

 

 

 

AXIS Specialty Holdings Ireland Limited

 

Ireland

 

 

 

AXIS Re Limited

 

Ireland

 

 

 

AXIS Specialty Europe Limited

 

Ireland

 

 

 

AXIS Specialty UK Limited(1)

 

United Kingdom

 

 

 

AXIS Specialty UK Holdings Limited

 

United Kingdom

 

The organizational documents of AXIS Capital and certain of its Subsidiaries
require such entity to seek direction from its shareholders as to how to vote
ownership interests in each Person shown to be held by it in this Schedule.

 

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

(1) AXIS Specialty UK Limited is in the course of dissolution.

 

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

 

SCHEDULE 6.05

 

Indebtedness

 

1. AXIS Capital Holdings Limited Senior Unsecured Notes dated November 15, 2004
in the amount of $500 million. The notes bear interest at 5.75%, payable
semi-annually and, unless previously redeemed, will mature on December 1, 2014.

 

2. Guarantee by AXIS Capital of loans to employees under a Bank of Bermuda
facility not to exceed US $10 million in connection with stock purchases.

 

3.  Letter or Credit in the amount of $3.5 million issued to secure a lease for
office space in Alpharetta, Georgia.

 

4.  Obligations with respect to bank guarantees for the benefit of certain
European Union fiscal representatives appointed by AXIS Specialty Europe
Limited.

 

5.  Obligations with respect to appeal bonds issued to secure judgments against
insureds under policies issued in the ordinary course of business.

 

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

 

EXHIBIT A

 

[Form of Assignment and Assumption]

 

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 the
Assignor identified below (the “Assignor”) and the Assignee identified below
(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 (the “Standard Terms and Conditions”) 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 respective facilities
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] [Approved Fund] of [identify Lender]]

 

 

 

 

 

3.

 

Credit Parties:

 

 

 

 

 

 

 

4.

 

Administrative Agent:

 

JPMorgan Chase Bank, N.A., as the administrative agent under the Credit
Agreement

 

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

 

5.

 

Credit Agreement:

 

The Credit Agreement dated as of August 25, 2005 among AXIS Capital Holdings
Limited, the Subsidiary Credit Parties party thereto, the Lenders party thereto
and JPMorgan Chases Bank, N.A., as Administrative Agent

 

 

 

 

 

6.

 

Assigned Interest:

 

 

 

Aggregate Amount of
Commitment/Loans
for all Lenders

 

Amount of
Commitment/Loans
Assigned

 

Percentage Assigned
of
Commitment/Loans/
Letters of Credit(1)

 

$

 

 

$

 

 

 

%

$

 

 

$

 

 

 

%

$

 

 

$

 

 

 

%

 

Effective Date:                                , 200    [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:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

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

(1) Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans/Syndicated Letters of Credit of all Lenders thereunder.

 

2

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

 

[Consented to and](2) Accepted:

 

JPMORGAN CHASE BANK, N.A., as

Administrative Agent

 

 

By:

 

 

 

Name:

 

Title:

 

 

[NAME OF ISSUING LENDER[S]], as

Issuing Lender with respect to

Participated Letters of Credit

 

 

By:

 

 

 

Name:

 

Title:

 

Consented to:

 

AXIS CAPITAL HOLDINGS LIMITED

 

 

By:

 

 

 

Name:

 

Title:

 

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

(2) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

 

3

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

 

ANNEX 1

 

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
Credit Party, any Subsidiaries or Affiliates of any Credit Party or any other
Person obligated in respect of any Credit Document or (iv) the performance or
observance by any Credit Party, any Subsidiaries or Affiliates of any Credit
Party 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 5.01(a) or 5.01(b) 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, (v) attached 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 (vi) it is not (A) listed on the Specially Designated Nationals and Blocked
Persons List maintained by the U.S. Department of Treasury Office of Foreign
Assets Control (“OFAC”)  and/or on any other similar list maintained by the OFAC
pursuant to any authorizing statute, Executive Order or regulation; or
(B) either (x) included within the term “designated national” as defined in the
Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (y) designated under
Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg.
49079 (published September 25, 2001) or similarly designated under any related
enabling legislation or any other similar Executive Orders; and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent, the
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.

 

2

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

 

EXHIBIT B

 

[Form of Subsidiary Joinder Agreement]

 

SUBSIDIARY JOINDER AGREEMENT

 

                          , 200

 

To JPMorgan Chase Bank, N.A.,

as Administrative Agent

1111 Fannin, 10th Floor

Houston, Texas 77002-8069

 

Each of the Lenders party to the

Credit Agreement referred to below

 

Re:  Subsidiary Joinder Agreement

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement (the “Credit Agreement”) dated as of
August 25, 2005 between AXIS Capital Holdings Limited (“AXIS Capital”), the
Subsidiary Credit Parties party thereto, the Lenders party thereto and JPMorgan
Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”). 
Capitalized terms used but not defined herein shall have the respective meanings
assigned to such terms in the Credit Agreement.

 

AXIS Capital and the “Subsidiary Credit Party” (as identified on the signature
pages below) (the “Subsidiary Credit Party”) have executed and hereby deliver
this Subsidiary Joinder Agreement pursuant to Section 2.12(a) of the Credit
Agreement, in order to designate the Subsidiary Credit Party as [a Subsidiary
Account Party] [a Subsidiary Borrower] [a Subsidiary Account Party and a
Subsidiary Borrower] under the Credit Agreement.

 

Accordingly, AXIS Capital and the Subsidiary Credit Party hereby represent and
warrant and agree that as of the “Effective Date” (as defined below):

 

1.             The Subsidiary Credit Party is a wholly-owned Subsidiary of AXIS
Capital;

 

2.             The Subsidiary Credit Party is subject to and bound by each of
the obligations of [an Account Party (including a Subsidiary Account Party)] [a
Borrower (including a Subsidiary Borrower)] [an Account Party (including
Subsidiary Account Party and a Borrower (including a Subsidiary Borrower)]
contained in the Credit Agreement as if the Subsidiary Credit Party were an
original signatory to such Credit Agreement;

 

3.             Each of the representations and warranties contained in the
Credit Agreement and in the other Credit Documents (to the extent the same
relate to a

 

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

 

Subsidiary of AXIS Capital) is true and correct as to the Subsidiary Credit
Party on and as of the Effective Date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such
specific date);

 

4.             The Subsidiary Credit Party’s addresses for notices, other
communications and service of process provided for in the Credit Agreement shall
be given in the manner, and with the effect, specified in Section 10.01 of the
Credit Agreement to it at its “Address for Notices” specified on the signature
pages below or (if no such address is so specified) to it at the address set
forth in clause (i) of Section 10.01(a) of the Credit Agreement; and

 

5.             As of the Effective Date, the payment of the Loans and LC
Disbursements and interest thereon and all other amounts under the Credit
Agreement will not be subject, by withholding or deduction, to any Taxes imposed
by the Credit Party Jurisdiction(s) for the Subsidiary Credit Party.

 

In addition to the foregoing, AXIS Capital hereby represents and warrants and
agrees that as of the Effective Date:

 

1.             Each of the representations and warranties contained in the
Credit Agreement and in the other Credit Documents is true and correct in all
material respects on and as of the Effective Date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date);

 

2.             No Default has occurred and is continuing; and

 

3.             The Guarantee of AXIS Capital contained in Article IX of the
Credit Agreement applies to all of the obligations of the Subsidiary Credit
Party under the Credit Documents.

 

This Subsidiary Joinder Agreement shall become effective as of the date (the
“Effective Date”) on which the Administrative Agent accepts this Subsidiary
Joinder Agreement as provided on the signature pages below.  As of the Effective
Date, the Subsidiary Credit Party shall be entitled to the rights, and subject
to the obligations, of [an Account Party (including a Subsidiary Account Party)]
[a Borrower (including Subsidiary Borrower)] [an Account Party (including a
Subsidiary Account Party) and a Borrower (including a Subsidiary Borrower)]
contained in the Credit Agreement.  Except as expressly herein agreed with
respect to the joinder of the Subsidiary Credit Party as a party to the Credit
Agreement, the Credit Agreement shall remain unchanged and in full force and
effect.

 

This Subsidiary Joinder Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same agreement.  This
Subsidiary Joinder Agreement shall be governed by, and construed in accordance
with, the law of the State of New York.

 

2

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

 

 

AXIS CAPITAL HOLDINGS LIMITED

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

SUBSIDIARY CREDIT PARTY

 

 

 

 

,

 

a

 

 [

 

]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

U.S. Federal Tax Identification No:

[

 

]

 

 

 

 

 

Address for Notices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attn:

 

 

 

 

 

Tel:

 

 

 

Fax:

 

 

 

3

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

 

Accepted:

 

this         day of

                            , 200

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

By:

 

 

 

Name:

 

Title:

 

4

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

 

EXHIBIT C

 

[Form of Process Agent Acceptance Letter]

 

CT Corporation System

 

                     , 200   

 

To:          JPMorgan Chase Bank, N.A.,

as administrative agent under the

Credit Agreement referred to below

(the “Administrative Agent”)

 

Re:  [                 ] (the “Credit Party”)

 

Ladies and Gentlemen:

 

In respect of the Credit Agreement (the “Credit Agreement”) dated as of
August 25, 2005 among AXIS Capital Holdings Limited (“AXIS Capital”), certain
subsidiaries of AXIS Capital party thereto, the lenders party thereto and the
Administrative Agent, the undersigned hereby accepts the irrevocable designation
and appointment of it as of the date hereof as agent for the Credit Party to
accept and acknowledge service of any and all process, as contemplated by
Section 10.09(e) of the Credit Agreement and otherwise as provided thereby, such
acceptance to remain in effect until the Credit Agreement shall have been
terminated and all obligations thereunder of the Credit Party shall have been
paid in full.

 

The undersigned agrees to give the Administrative Agent or AXIS Capital, as
applicable, immediate notice by telephone, fax, telex, cable or any other means
of instant communication upon receipt of all papers served upon the undersigned
pursuant to such appointment and to forward promptly to the Administrative Agent
or AXIS Capital, as applicable, all such papers served pursuant to such
appointment by reputable overnight carrier.

 

 

Very truly yours,

 

 

 

CT CORPORATION SYSTEM

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

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

 

EXHIBIT D

 

[Form of Subsidiary Credit Party Termination Notice]

 

SUBSIDIARY CREDIT PARTY TERMINATION NOTICE

 

                           , 200    

 

To JPMorgan Chase Bank, N.A.,

as Administrative Agent

1111 Fannin, 10th Floor

Houston, Texas 77002-8069

 

Each of the Lenders party to the

Credit Agreement referred to below

 

Re:  Termination of [                 ] (the “Subsidiary Credit Party”)

 

AXIS Capital Holdings Limited (“AXIS Capital”) hereby gives notice pursuant to
Section 2.12(b) of the Credit Agreement dated as of August 25, 2005 between AXIS
Capital, the Subsidiary Account Parties party thereto, the Lenders party thereto
(the “Lenders”) and the Administrative Agent (the “Credit Agreement”) that,
effective as of the date hereof, the Subsidiary Credit Party is terminated as
[an Account Party] [ a Borrower][an Account Party and a Borrower] under the
Credit Agreement and all commitments by the Lenders [to issue Syndicated Letters
of Credit and/ or participate in Participated Letters of Credit for account of
[[and] to make Loans to] the Subsidiary Credit Party under the Credit Agreement
are hereby terminated.

 

Pursuant to Section 2.12(b) of the Credit Agreement, AXIS Capital hereby
certifies that there is no Credit Exposure outstanding with respect to [any
Letter of Credit for which the Subsidiary Credit Party is an Account Party]
[[or] any Loans made to the Subsidiary Credit Party].

 

All obligations of the Subsidiary Credit Party arising in respect of any period
in which the Subsidiary Credit Party was, or on account of any action or
inaction taken by the Subsidiary Credit Party as, [an Account Party] [[or] a
Borrower] under the Credit Agreement shall survive the termination effected by
this notice.

 

Terms used herein have the meanings assigned to them in the Credit Agreement.

 

 

AXIS CAPITAL HOLDINGS LIMITED

 

 

 

By

 

 

 

 

Authorized Officer

 

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

 

EXHIBIT E-1

 

Form of Opinion of Bermuda Counsel to AXIS Capital and AXIS Specialty

 

August 25, 2005

 

The Lenders party to the Credit Agreement referred to below and

 

DIRECT LINE:

441 299 4965

 

 

E-MAIL:

gcollis@cdp.bm

 

 

OUR REF:

GBC/dhm/376022/104526/CDs

 

 

YOUR REF:

 

 

 

 

JPMorgan Chase Bank, N.A., as administrative agent for such lenders

 

 

1111 Fannin, 10th Floor

 

 

Houston, Texas 77002-8069

 

 

 

Dear Sirs:

 

AXIS Capital Holdings Limited

 

We have acted as special legal counsel in Bermuda to AXIS Capital Holdings
Limited (“AXIS Capital”) in connection with a $1,500,000,000 credit agreement
dated as of 25 August, 2005 (the “Credit Agreement”) among AXIS Capital, the
subsidiary credit parties party thereto, the lenders party thereto and JPMorgan
Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent (the
“Administrative Agent”).

 

For the purposes of giving this opinion, we have examined facsimile copies of
the executed Credit Agreement (which term does not include any other instrument
or agreement whether or not specifically referred to therein or attached as an
exhibit or schedule thereto).

 

We have also reviewed (a) the memorandum of association and the bye-laws of AXIS
Capital, each certified by the Assistant Secretary of AXIS Capital on 25 August,
2005, (b) resolutions of the directors of AXIS Capital dated      August, 2005
certified by the Assistant Secretary of AXIS Capital on      August, 2005 (the
“AXIS Capital Resolutions”), (c) the memorandum of association and the bye-laws
of AXIS Specialty Limited (“AXIS Specialty” and, together with AXIS Capital, the
“Bermuda Credit Parties”), each certified by the Secretary of AXIS Specialty on
     August, 2005, (d) resolutions of the directors of AXIS Specialty dated     
August, 2005 certified by the Secretary of AXIS Specialty on      August, 2005
(together with the AXIS Capital Resolutions, the “Resolutions”) and (e) such
other documents and made such enquiries as to questions of law as we have deemed
necessary in order to render the opinion set forth below.

 

We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of the Lenders

 

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

 

and the Administrative Agent to enter into and perform their respective
obligations under the Credit Agreement, (d) the due execution of the Credit
Agreement by the Lenders and the Administrative Agent and the delivery thereof
by each of the parties thereto, (e) the accuracy and completeness of all factual
representations made in the Credit Agreement and other documents reviewed by us,
(f) that the Resolutions remain in full force and effect and have not been
rescinded or amended, (g) that there is no provision of the law of any
jurisdiction, other than Bermuda, which would have any implication in relation
to the opinions expressed herein, (h) the validity and binding effect under the
laws of the State of New York (the “Foreign Laws”) of the Credit Agreement which
is expressed to be governed by such Foreign Laws in accordance with their
respective terms, (i) the validity and binding effect under the Foreign Laws of
the submission by the Bermuda Credit Parties pursuant to the Credit Agreement to
the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York, in the Supreme Court of the State of New York
sitting in New York County (including its appellate division), or in any other
appellate court in the State of New York (the “Foreign Courts”), (j) that none
of the parties to the Credit Agreement has carried on or will carry on
activities, other than the performance of its obligations under the Credit
Agreement, which would constitute the carrying on of investment business in or
from Bermuda and that none of the parties to the Credit Agreement, other than
each of the Bermuda Credit Parties, will perform its obligations under the
Credit Agreement in or from Bermuda, and (k) that on the date of entering into
the Credit Agreement each of the Bermuda Credit Parties is and after entering
into the Credit Agreement will be able to pay its liabilities as they become
due.

 

The obligations of the Bermuda Credit Parties under the Credit Agreement
(a) will be subject to the laws from time to time in effect relating to
bankruptcy, insolvency, liquidation, possessory liens, rights of set off,
reorganisation, amalgamation, moratorium or any other laws or legal procedures,
whether of a similar nature or otherwise, generally affecting the rights of
creditors, (b) will be subject to statutory limitation of the time within which
proceedings may be brought, (c) will be subject to general principles of equity
and, as such, specific performance and injunctive relief, being equitable
remedies, may not be available, and (d) may not be given effect to by a Bermuda
court, whether or not it was applying the Foreign Laws, if and to the extent
they constitute the payment of an amount which is in the nature of a penalty and
not in the nature of liquidated damages. Notwithstanding any contractual
submission to the jurisdiction of specific courts, a Bermuda court has inherent
discretion to stay or allow proceedings in the Bermuda courts.

 

We have assumed that at all material times AXIS Specialty will comply with the
conditions attached to its registration as an insurer under the Insurance Act
1978 (the “Insurance Act”) and the regulations promulgated thereunder. In
addition, the ability of AXIS Specialty to fulfill its obligations pursuant to
the Credit Agreement will be subject to any directions which may be issued in
respect of AXIS Specialty by the Bermuda Monetary Authority (the “BMA”) under
section 32 of the Insurance Act (“Section 32”). Such directions may be issued if
it appears to the BMA that the business of AXIS Specialty is being conducted so
that there is a significant risk of AXIS Specialty becoming insolvent or that
AXIS Specialty is in breach of a provision of the Insurance Act or of the
regulations promulgated thereunder or any condition imposed on its registration.
In such circumstances, the BMA may direct AXIS Specialty to take or refrain from
taking any of the steps listed in Section 32, including, inter alia, that AXIS
Specialty cease or

 

2

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

 

limit its underwriting or that there be a prohibition or restriction on the
payment of dividends or other distributions by AXIS Specialty, and/or the BMA
may direct AXIS Specialty to maintain in, or transfer to and keep in the custody
of, a specified bank, assets of AXIS Specialty of such value and description as
are specified in the direction. It should be noted that the documents of public
record maintained by the Registrar of Companies do not reveal whether a
direction under Section 32 has been issued.

 

We express no opinion as to the enforceability of any provision of the Credit
Agreement which provides for the payment of a specified rate of interest on the
amount of a judgment after the date of judgment or which purports to fetter the
statutory powers of either or both of the Bermuda Credit Parties.

 

We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and the benefit of the Lenders and is not to be relied
upon by any other person, firm or entity or in respect of any other matter.

 

On the basis of and subject to the foregoing, we are of the opinion that:

 

1.                                       Each of the Bermuda Credit Parties is
duly incorporated and existing under the laws of Bermuda in good standing
(meaning solely that it has not failed to make any filing with any Bermuda
government authority or to pay any Bermuda government fee or tax which would
make it liable to be struck off the Register of Companies and thereby cease to
exist under the laws of Bermuda).

 

2.                                       Each of the Bermuda Credit Parties has
the necessary corporate power and authority to enter into and perform its
obligations under the Credit Agreement. The execution and delivery of the Credit
Agreement by each of the Bermuda Credit Parties and the performance by each of
the Bermuda Credit Parties of its obligations thereunder will not violate
(i) the memorandum of association or bye-laws of such Bermuda Credit Party or
(ii) any applicable law, regulation, order or decree in Bermuda.

 

3.                                       Each of the Bermuda Credit Parties has
taken all corporate action required to authorise its execution, delivery and
performance of the Credit Agreement. The Credit Agreement has been duly executed
and delivered by or on behalf of each of the Bermuda Credit Parties, and
constitutes the valid and binding obligations of each of the Bermuda Credit
Parties in accordance with the terms thereof.

 

4.                                       No order, consent, approval, licence,
authorisation or validation of or exemption by any government or public body or
authority of Bermuda or any sub-division thereof is required to authorise or is
required in connection with the execution, delivery, performance and enforcement
of the Credit Agreement.

 

5.                                       Based solely upon a search of the Cause
Book of the Supreme Court of Bermuda conducted at 10:05 am on      August, 2005
(which would not reveal details of

 

3

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

 

proceedings which have been filed but not actually entered in the Cause Book at
the time of our search), there are no judgments against either Bermuda Credit
Party, nor any legal or governmental proceedings pending in Bermuda to which
either Bermuda Credit Party is subject.

 

6.                                       It is not necessary or desirable to
ensure the enforceability in Bermuda of the Credit Agreement that they be
registered in any register kept by, or filed with, any governmental authority or
regulatory body in Bermuda. However, to the extent that the Credit Agreement
creates a charge over assets of either Bermuda Credit Party, it may be desirable
to ensure the priority in Bermuda of the charge that it be registered in the
Register of Charges in accordance with Section 55 of the Companies Act 1981. On
registration, to the extent that Bermuda law governs the priority of a charge,
such charge will have priority in Bermuda over any unregistered charges created
after 11 July 1984, and over any subsequently registered charges, in respect of
the assets which are the subject of the charge. A registration fee of $468 will
be payable in respect of the registration.

 

While there is no exhaustive definition of a charge under Bermuda law, a charge
normally has the following characteristics:

 

(i)                                             it is a proprietary interest
granted by way of security which entitles the chargee to resort to the charged
property only for the purposes of satisfying some liability due to the chargee
(whether from the chargor or a third party); and

 

(ii)                                          the chargor retains an equity of
redemption to have the property restored to him when the liability has been
discharged.

 

However, as the Credit Agreement is governed by the Foreign Laws, the question
of whether they would possess these particular characteristics would be
determined under the Foreign Laws.

 

7.                                       There is no income or other tax of
Bermuda imposed by withholding or otherwise on any payment to be made to or by
either Bermuda Credit Party pursuant to the Credit Agreement. The Credit
Agreement will not be subject to ad valorem stamp duty in Bermuda and no
registration, documentary, recording, transfer or other similar tax, fee or
charge is payable in Bermuda in connection with the execution, delivery, filing,
registration or performance of the Credit Agreement other than as stated in
paragraph 6 hereof.

 

8.                                       The Credit Agreement is in acceptable
legal form under the laws of Bermuda for enforcement thereof in Bermuda.

 

9.                                       The Lenders and the Administrative
Agent have standing to bring an action or proceedings before the appropriate
courts in Bermuda for the enforcement of the Credit Agreement. It is not
necessary or advisable in order for the Lenders or the Administrative

 

4

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

 

Agent to enforce their rights under the Credit Agreement, including the exercise
of remedies thereunder, that it be licensed, qualified or otherwise entitled to
carry on business in Bermuda.

 

10.                                 Neither Bermuda Credit Party is entitled to
any immunity under the laws of Bermuda, whether characterised as sovereign
immunity or otherwise, from any legal proceedings to enforce the Credit
Agreement in respect of itself or its property.

 

11.                                 The Lenders or the Administrative Agent will
not be deemed to be resident, domiciled or carrying on business in Bermuda by
reason only of the execution, performance and/or enforcement of the Credit
Agreement by the Lenders or the Administrative Agent.

 

12.                                 The choice of the Foreign Laws as the
governing law of the Credit Agreement is a valid choice of law and would be
recognised and given effect to in any action brought before a court of competent
jurisdiction in Bermuda, except for those laws (i) which such court considers to
be procedural in nature, (ii) which are revenue or penal laws or (iii) the
application of which would be inconsistent with public policy, as such term is
interpreted under the laws of Bermuda. The submission in the Credit Agreement to
the non-exclusive jurisdiction of the Foreign Courts is valid and binding upon
each of the Bermuda Credit Parties.

 

13.                                 The courts of Bermuda would recognise as a
valid judgment, a final and conclusive judgment in personam obtained in the
Foreign Courts against either of the Bermuda Credit Parties based upon the
Credit Agreement under which a sum of money is payable (other than a sum of
money payable in respect of multiple damages, taxes or other charges of a like
nature or in respect of a fine or other penalty) and would give a judgment based
thereon provided that (a) such courts had proper jurisdiction over the parties
subject to such judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained by fraud, (d) the
enforcement of the judgment would not be contrary to the public policy of
Bermuda, (e) no new admissible evidence relevant to the action is submitted
prior to the rendering of the judgment by the courts of Bermuda and (f) there is
due compliance with the correct procedures under the laws of Bermuda.

 

Yours faithfully,

 

 

CONYERS DILL & PEARMAN

 

5

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

 

EXHIBIT E-2

 

Form of Opinion of New York Counsel to Credit Parties

 

[see attached]

 

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

 

EXHIBIT E-3

 

Form of Opinion of Irish Counsel to AXIS Re and AXIS Specialty Europe

 

Our Ref

016984.0007.EH/PJC

25 August 2005

 

JP Morgan Chase Bank

as Administrative Agent

1111 Fannin

10th Floor

Houston

Texas 77002-8069

(the “Administrative Agent”)

 

- and -

 

The Parties set out in the Schedule hereto

 

AXIS Re Limited (“AXIS Re”)

AXIS Specialty Europe Limited (“AXIS Specialty”) -

Credit Agreement (as hereinafter defined)

 

Dear Sirs,

 

1.                             Capacity and Basis

 

We have acted as Irish Solicitors to AXIS Re and AXIS Specialty (together the
“Companies” and individually a “Company”) in connection with a credit agreement
dated as of 25 August 2005 between (1) AXIS Capital Holdings Limited, (2) the
Subsidiary Credit Parties party thereto (including the Companies), (3) the
Lenders and (4) the Administrative Agent whereby the Lenders agreed to make
available, through the Administrative Agent, a syndicated letter of credit and
revolving credit facility of up to US$1,500,000,000 (the “Credit Agreement”).

 

This Opinion Letter is issued for the purposes of the Credit Agreement and is
based on the assumptions and subject to the reservations and qualifications set
out below.

 

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

 

2.                             Documents

 

For the purpose of issuing this Opinion Letter we have reviewed and relied upon
each of the following documents (each a “Document” and collectively, the
“Documents”):

 

(a)                        A certificate from Timothy Hennessy a Director of
each Company dated      August 2005 as to certain matters to be relied on by us
(together the “Company Certificates” and individually a “Company Certificate”),
copies of which are annexed hereto marked “A”.

 

(b)                       A copy of the signed Credit Agreement in the form
annexed hereto marked “B”.

 

(c)                        The report of searches made against the Companies by
Rochford Brady, independent law searchers, on our behalf on      August 2005 in
the Irish Companies Registration Office and the Central Office of the High
Court, Dublin (together the “Searches”).

 

(d)                       A copy of the Memorandum and Articles of Association
of each Company annexed as Appendix I to each Company Certificate (each a 
“Memorandum and Articles of Association” and together the “Memoranda and
Articles of Association”).

 

(e)                        A copy of the resolutions passed at a meeting of each
of the Board of Directors of the Companies (each the “Board” and together the
“Boards”) held on      August 2005 and a copy of the resolutions of a committee
of the Board of Directors of each of the Companies (each a “Committee” and
together the “Committees”) dated      August 2005 each as annexed as Appendix II
to the respective Company Certificate.

 

(f)                          A copy of the forms of notification of AXIS Re
pursuant to Section 22 (inserted by Section 5 of the Insurance Act, 2000) of the
Insurance Act 1989 filed with the Department of Enterprise, Trade and Employment
(“DETE”) and with the Irish Financial Services Regulatory Authority (“IFSRA”),
copies of which are annexed hereto marked “C” (the “ AXIS Re Notification”).

 

(g)                       A copy of the certificate of authorisation issued to
AXIS Specialty by the DETE on 23 May 2002 in accordance with the provisions of
the Insurance Acts and Regulations as defined in the European Communities
(Non-Life Insurance) Framework Regulations, 1994 (the “AXIS Specialty
Authorisation”), a copy of which is annexed hereto marked “D”.

 

(h)                       A copy of a letter dated      August 2005 addressed by
William Fry, Solicitors to the IFSRA on behalf of AXIS Specialty, notifying
IFSRA pursuant to Article 15 of the European Communities (Non-Life Insurance)
Framework Regulations 1994 of the terms of the Credit Agreement (the “IFSRA
Notification”), a copy of which is annexed hereto marked “E”.

 

(i)                           An opinion of Denis McDonald S.C. dated     
August 2005 addressed to William Fry, Solicitors, in relation to, inter alia,
Sections 9 and 10 (2) of the Insurance Act,

 

2

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

 

1936 (as amended) a copy of which is annexed hereto marked “F” (“Counsel’s
Opinion”).

 

3.                             Opinions

 

Based on our review of the Documents and upon the assumptions listed at Clause
4, and subject to all applicable bankruptcy, insolvency, liquidation,
examinership, re-organisation, moratorium and other laws relating to the
enforcement of creditors’ rights generally and to the reservations and
qualifications set out in Clauses 5 and 6, we express the following opinions:-

 

(a)                        The Companies are both single member private
companies limited by shares duly incorporated and validly existing as legal
entities under the laws of Ireland.

 

(b)                       The Companies have the corporate power and authority
to enter into and perform their obligations under the Credit Agreement.  All
necessary corporate action has been taken by each Company to authorise the
signature or execution of the Credit Agreement and performance by each of the
Companies of their respective obligations thereunder.  The Credit Agreement has
been duly signed by each of the Companies.

 

(c)                        The obligations of each Company under the Credit
Agreement, assuming it to be legal, valid, binding and enforceable according to
the laws of the State of New York by which it is expressed to be governed,
constitute legal, valid, binding and enforceable obligations of each Company.

 

(d)                       The execution or signature and delivery of the Credit
Agreement by each Company and the performance by it of its obligations
thereunder in accordance with its terms (i) do not violate A. any applicable law
or regulation of Ireland, or B. any provision of the Memorandum and Articles of
Association of such Company and (ii) save for the IFSRA Notification, do not
require it to obtain any authorisations, approvals, licenses, exemptions or
consents from any governmental or regulatory authorities.

 

(e)                        It is not necessary under the laws of Ireland in
order to ensure the validity, effectiveness or enforceability of the Credit
Agreement in accordance with its respective terms that it be filed, registered
or recorded in Ireland in any court or with any administrative or governmental
body, save (i) for the IFSRA Notification; (ii) that court offices may impose
fees or charges established by law in connection with the issue and conduct of
legal proceedings; and (iii) that €0.15 is payable on any promissory note issued
by any of the Companies pursuant to Section 2.09 (f) of the Credit Agreement.

 

(f)                          A judgment obtained in the courts of the State of
New York or any federal court in New York in respect of the Credit Agreement
expressed to be governed by New York law (a “New York Judgment”) would not
automatically be enforced by the courts of Ireland.  In order to enforce a New
York Judgment in Ireland, legal process must be initiated before a court of
competent jurisdiction in Ireland.  An Irish court

 

3

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

 

will normally recognise and enforce a New York Judgment without retrial or
examination of the merits of the case provided that:

 

(i)                          the New York Judgment was not obtained or alleged
to have been obtained by fraud;

 

(ii)                       the process and decision of the New York court were
not contrary to natural or constitutional justice under the laws of Ireland and
the enforcement of the New York Judgment would not be contrary to public policy
as understood by the Irish courts or constitute the enforcement of a judgment of
a penal or taxation nature;

 

(iii)                    the New York Judgment is final and conclusive and is
for a debt or a definite sum of money;

 

(iv)                   the jurisdiction of the New York court has been exercised
in circumstances which, as a matter of Irish law, an Irish court will recognise
as justifying enforcement of the New York Judgment;

 

(v)                      the procedural rules of the New York court in relation
to the obtaining of the New York Judgment have been observed; and

 

(vi)                   the New York Judgment is not inconsistent with a judgment
of an Irish court in respect of the same matter.

 

(g)                       The Companies are generally subject to suit under the
laws of Ireland and neither Company has, nor does any of their properties have,
any immunity from jurisdiction of any Irish court or from any legal process
under Irish law.

 

(h)                       Under the laws of Ireland in force at the date hereof
the claims of the Lenders against the Companies will rank at least pari passu
with the claims of all other unsecured creditors except claims which are
preferred by law and, in addition, in the case of AXIS Specialty claims provided
for pursuant to Article 9 of the European Communities (Re-organisation and
Winding-up of Insurance Undertakings) Regulations 2003 (a copy of which is
annexed hereto marked “G”).

 

(i)                           Under the laws of Ireland in force at the date
hereof none of the Companies will be required to make any deduction or
withholding for or on account of any taxes from any payment it may make under
the Credit Agreement.

 

(j)                           The Rome Convention on the Law Applicable to
Contractual Obligations 1980, as amended and extended (the “Rome Convention”),
other than Article 7(1) thereof, has force of law in Ireland by virtue of the
Contractual Obligations (Applicable Law) Act 1991.  The Credit Agreement
provides that it will be governed by and construed in accordance with the law of
New York (the “Selected Law”).  Subject to:-

 

4

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

 

(i)                          the choice of the Selected Law not being contrary
to any mandatory provision of Irish law applicable to the Credit Agreement; and

 

(ii)                       the choice of the Selected Law not being at variance
with Irish public policy in a sufficiently fundamental manner as to make an
Irish court disregard such choice (for example, where the choice of such law is
made with the intention of evading the laws of Ireland);

 

the choice of the Selected Law as the governing law of the Credit Agreement is
valid in accordance with the Rome Convention and, accordingly subject to and in
accordance with the Rome Convention, the Selected Law will, be recognised and
applied by the courts of Ireland in respect of the Credit Agreement upon it
being duly pleaded that the Credit Agreement is expressed to be governed by and
construed in accordance with the Selected Law and proof being given to such
courts of the relevant provisions of the Selected Law.  Notwithstanding the
foregoing, it should be noted that the Rome Convention does not apply to
negotiable instruments.

 

(k)                        It is not necessary under the laws of Ireland (i) in
order to enable the Lenders or the Administrative Agent to enforce their or its
respective rights under the Credit Agreement or (ii) by reason of the execution
of the Credit Agreement that the Lenders or the Administrative Agent, as the
case may be, should be licensed, qualified or otherwise entitled to carry on
business in Ireland.

 

(l)                           The Administrative Agent or the Lender will not be
deemed to be resident, domiciled or carrying on business in Ireland by reason
only of the execution, delivery and performance of the Credit Agreement by the
Lenders or the Administrative Agent.

 

4.                             Assumptions

 

For the purpose of issuing this Opinion Letter we have made the following
assumptions, without independent verification:

 

(a)                        That the copies of each Document referred to herein
as being reviewed by us are true, complete and accurate copies of the originals
thereof as in effect on the date hereof without any amendment or modification
thereto.

 

(b)                       The authenticity of all signatures and/or corporate
seals on, and the capacity of all individuals who signed, the Credit Agreement
and/or any of the Documents.

 

(c)                        That the Company Certificates fully and accurately
state the position as to the matters of fact or opinion referred to therein and
that the position as stated therein in relation to any factual matter or opinion
pertains as of the date hereof.

 

(d)                       That the copies produced to us of minutes of the
meetings of each Board and each Committee are true copies and correctly record
the proceedings at such meetings and the resolutions approved thereat; that such
meetings were quorate and duly convened

 

5

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

 

and held, that those present at such meetings acted bona fide in the interests
of the respective Companies throughout, that the provisions contained in the
Companies Acts 1963-2003 and/or the Articles of Association of each Company
relating to the declaration of the interests of the Directors and the powers of
interested Directors to vote were duly observed, that all resolutions set out in
such copies were duly passed and that no further resolutions of either Board or
any committee thereof have been passed, or corporate or other action taken,
which would or might alter the effectiveness thereof.

 

(e)                        That it is in the interests of (and will commercially
benefit) the Companies to enter into the Credit Agreement.

 

(f)                          That the Companies are not and were not, at the
date of execution or signature, or the effective date of the Credit Agreement,
and will not, as a result of the transactions contemplated by the Credit
Agreement, become insolvent or unable to pay their debts, or be deemed to be so
under any applicable statutory provision, regulation or law.

 

(g)                       That, in so far as the laws of any other jurisdiction
other than Ireland are relevant, such laws do not prohibit and are not
inconsistent with any of the rights or obligations expressed in the Credit
Agreement or the transactions contemplated by the Credit Agreement and that
there is no provision of the laws of any jurisdiction (other than Ireland) that
would have a bearing on any of the matters opined upon herein and, to the extent
that the Companies require any authorisation, consent or approval from any
public, administrative or governmental body in any jurisdiction outside of
Ireland in relation to all or any of such matters, that they have obtained each
such authorisation, consent or approval and have complied, and will continue to
comply, with any conditions attaching thereto.

 

(h)                       That the obligations expressed to be assumed by all
the parties, other than the Companies, pursuant to the Credit Agreement have
been validly assumed and are legal, valid, binding and enforceable obligations
of each of them under all applicable laws and that the Credit Agreement has been
duly authorised, executed and delivered by the parties thereto other than the
Companies.

 

(i)                           That there are no agreements or arrangements in
existence or contemplated between the parties (or any of them) to the Credit
Agreement which in any way amend, add to or vary the terms or conditions of the
Credit Agreement or the respective rights and interests of the parties thereto.

 

(j)                           That there are no contractual or similar
restrictions or other arrangements binding on either Company which could affect
the conclusions in this Opinion Letter.

 

(k)                        That neither Company was induced by fraud,
misrepresentation or by any similar circumstance to enter into the Credit
Agreement.

 

6

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

 

(l)                           That the Companies are and will remain resident in
Ireland for Irish tax purposes and for the purposes of all validly existing
double taxation agreements entered into by Ireland.

 

(m)                     That any debt incurred by the Companies under the Credit
Agreement, and payments made by the Companies under such, will be incurred and
paid in the ordinary course of a trade or business carried on by the Companies.

 

(n)                       The Lenders are and will remain corporate entities and
will be the beneficial recipients of any payments made to them or for their
benefit under the Credit Agreement.

 

(o)                       That the Lenders are and will remain resident either
in an EU member state or a country with which Ireland has entered into a double
taxation agreement.

 

(p)                       That payments received or beneficially received by the
Lenders under the Credit Agreement will not be connected with or attributable to
any branch, agency or permanent establishment in Ireland through which the
Lenders carry on business.

 

(q)                       That the Lenders and the Companies deal with each
other on an arm’s length basis and that the terms in the Credit Agreement are
not as a result of any special relationship which exists between the Lenders and
the Companies other than arm’s length terms.

 

(r)                          The Lenders will have complied with such procedural
formalities as are necessary to qualify payments made under the Credit Agreement
for exemption from withholding tax in Ireland under the terms of any applicable
double taxation agreement, or otherwise.

 

5.                             Reservations and Qualifications

 

This Opinion Letter is given subject to the following reservations and
qualifications:

 

(a)                        The opinions in this Opinion Letter are given solely
on the basis of a review of the Documents and the applicable law with regard to
the matters specified herein.  The opinions are given only in respect of the
laws of Ireland in effect as of the date of this Opinion Letter and as to the
facts and circumstances as stated herein in existence at such date and this
Opinion Letter is not to be taken as expressing any opinion with regard to any
matter governed by the laws of any jurisdiction other than Ireland.

 

(b)                       For the purpose of the opinions given in Clause 3
(a) that the Companies are duly incorporated and validly existing under the laws
of Ireland, we have relied solely upon the Searches which did not disclose that
any steps have been taken to appoint a receiver or examiner of any of the
Companies or over any of their assets or to liquidate any of them or wind any of
them up or in any other manner to terminate their legal existence.  It should be
noted that the records held by the Companies

 

7

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

 

Registration Office may not necessarily be up to date or relevant filings may
not have been made and, as a consequence, this may affect the results or
accuracy of any searches in those offices.

 

(c)                        The terms “binding” and/or “enforceable” as used in
this Opinion Letter (whether separately or in conjunction with one another) mean
that the obligations are of a type which the Irish courts generally enforce.  It
does not mean that those obligations will necessarily be enforced in all
circumstances in accordance with their terms or that any particular remedy will
be available.  In particular (without limitation):

 

(i)                          enforcement may be limited by laws from time to
time relating to bankruptcy, insolvency, liquidation, receivership,
re-organisation, moratoria, court schemes, court protection, (including, without
limitation, the provisions of the Companies Acts 1963-2003 relating to the
appointment of an examiner), preferential creditors, fraudulent preference,
limitation of action and laws of general application relating to or affecting
the rights of creditors;

 

(ii)                       claims may be or become the subject of set-off or
counterclaim;

 

(iii)                    enforcement may be limited by the doctrines of good
faith and fair dealings and by general principles of equity - for example
specific performance and other equitable remedies are discretionary and may not
be available where damages are considered by the court to be an adequate remedy;

 

(iv)                   provisions (including provisions for default interest)
imposing additional obligations in the event of breach or default or late
payment may be unenforceable to the extent that they are adjudicated to be a
penalty;

 

(v)                      where obligations are to be performed in a jurisdiction
outside Ireland, they may not be enforceable in Ireland to the extent that
performance would be illegal under the laws of that other jurisdiction;

 

(vi)                   claims may become barred under relevant statutes of
limitation if not pursued within the time limited by such statutes;

 

(vii)                enforcement may also be limited as a result of (A) the
provisions of Irish law applicable to contracts held to have become frustrated
by events happening after their execution or signature, or (B) any breach of the
terms of an agreement by the party seeking to enforce the same;

 

(viii)             any calculation, determination, certificate, acknowledgement
or opinion, and the exercise of any discretion, under or in relation to the
Credit Agreement may be the subject of judicial enquiry and review (including
enquiry into the manner in which any of the foregoing was arrived at and the
grounds on which it is based), and accordingly may not be final, conclusive,
binding or

 

8

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

 

enforceable, notwithstanding any provision in the Credit Agreement to that
effect; and

 

(ix)                     a waiver of any defences to any proceedings may not be
enforceable.

 

(d)                       Any judgment of the Irish courts for monies due under
the Credit Agreement may be expressed in a currency other than euro but the
order may issue out of the Central Office of the Irish High Court expressed in
euro by reference to the official rate of exchange prevailing on the date of
issue.  In addition, in a winding-up in Ireland of an Irish-incorporated
company, all foreign currency claims must be converted into euro for the
purposes of proof.  The rate of exchange to be used to convert foreign currency
debts into euro for the purpose of proof in a winding-up is the spot rate (in
the case of a compulsory winding-up) on the date of the winding-up order and (in
the case of a voluntary winding-up) on the date of the relevant winding-up
resolution.

 

(e)                        Any term of an agreement may be amended orally by the
parties notwithstanding any provision to the contrary in such agreement, and
documents may be impliedly amended by later agreements or a course of dealing
between the parties thereto, notwithstanding any provision to the contrary
therein contained.

 

(f)                          Any provision in the Credit Agreement providing for
severance of provisions in the event of illegality, invalidity or
unenforceability may not be effective, depending on the nature of the
illegality, invalidity or unenforceability in question.

 

(g)                       An Irish Court may refuse to give effect to any
provision of an agreement which amounts to an indemnity in respect of the costs
of unsuccessful litigation brought before an Irish court or where the court has
itself made an order for costs.

 

(h)                       Section 131 of the Stamp Duties Consolidation Act,
1999 renders void every contract, arrangement or undertaking for assuming the
liability on account of “absence or insufficiency of stamp” upon an instrument
or indemnifying a person against such liability, absence or insufficiency.

 

(i)                           The effectiveness of any provision in the Credit
Agreement purporting to exculpate a party from a liability, obligation or duty
otherwise owed is limited by Irish law.

 

(j)                           An Irish court has power to stay an action if
concurrent proceedings are being brought elsewhere.

 

(k)                        In giving this opinion we have assumed the accuracy
of and have relied upon Counsel’s Opinion.

 

(l)                           The Credit Agreement may not be valid or
enforceable under Irish law to the extent that any obligation thereunder is
unenforceable on account of illegality, misrepresentation or fraud or is
overridden by considerations of public policy.

 

9

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

 

6.                             General

 

This Opinion Letter may not be relied upon for any other purpose or furnished
to, used by or circulated to any other person other than its addressees and any
other person which becomes a Lender under the Credit Agreement without our prior
written consent in each instance.

 

Save where otherwise specified, a reference in this Opinion Letter to a Clause,
is to a Clause of this Opinion Letter.

 

This Opinion Letter speaks only as of the date hereof and we disclaim any
obligation to advise you or anyone else of changes of law or fact that occur
after the date hereof.  This Opinion Letter is given on the basis that it will
be construed in accordance with, and governed in all respects by, the laws of
Ireland which shall apply between us and all persons interested.

 

 

Yours faithfully,

 

Yours faithfully,

 

 

 

 

 

 

 

 

 

 

 

Partner

 

Partner

WILLIAM FRY

 

WILLIAM FRY

Solicitors

 

Solicitors

 

10

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

 

SCHEDULE

 

JPMorgan Chase Bank, N.A.

 

Barclays Bank PLC

 

[Other Lenders to be specified]

 

WF-265312-v5.exv:dm

 

11

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

 

EXHIBIT F

 

Form of Opinion of Special New York Counsel to JPMorgan Chase

 

August 25, 2005

 

To the Lenders party to the Credit Agreement
referred to below and JPMorgan Chase Bank, N.A.,
as Administrative Agent

 

Ladies and Gentlemen:

 

We have acted as special New York counsel to JPMorgan Chase Bank, N.A.
(“JPMorgan Chase”) in connection with the Credit Agreement (the “Credit
Agreement”) dated as of August 25, 2005 among AXIS Capital Holdings Limited
(“AXIS Capital”), the subsidiary account parties party thereto (collectively,
together with AXIS Capital, the “Credit Parties”), the lenders party thereto and
JPMorgan Chase, N.A., as Administrative Agent, providing for extensions of
credit to be made by said lenders to the Credit Parties in an original aggregate
principal or face amount not exceeding $1,500,000,000.  Terms defined in the
Credit Agreement are used herein as defined therein.  This opinion letter is
being delivered pursuant to Section 4.01(c) of the Credit Agreement.

 

In rendering the opinions expressed below, we have examined the Credit
Agreement.  In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with authentic original documents of all documents submitted to
us as copies.  When relevant facts were not independently established, we have
relied upon representations made in or pursuant to the Credit Agreement.  We
have also assumed that all authorizations, approvals or consents of (including
any exchange control approval), and all filings or registrations with, any
governmental or regulatory authority or agency of Bermuda (including of the
Bermuda Monetary Authority) or Ireland or any other jurisdiction of organization
of any Credit Party have been obtained and are in effect.

 

In rendering the opinions expressed below, we have assumed, with respect to all
of the documents referred to in this opinion letter, that:

 

(i)                                     such documents have been duly authorized
by, have been duly executed and delivered by, and (except to the extent set
forth in the opinions expressed below as to each Credit Party) constitute legal,
valid, binding and enforceable obligations of, all of the parties to such
documents;

 

(ii)                                  all signatories to such documents have
been duly authorized; and

 

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

 

(iii)                               all of the parties to such documents are
duly organized and validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.

 

Based upon and subject to the foregoing and subject also to the comments and
qualifications set forth below, and having considered such questions of law as
we have deemed necessary as a basis for the opinions expressed below, we are of
the opinion that the Credit Agreement constitutes the legal, valid and binding
obligation of each Credit Party, enforceable against each Credit Party in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or other similar
laws relating to or affecting the rights of creditors generally (including the
possible judicial application of foreign laws or governmental action affecting
the enforcement of creditors’ rights) and except as the enforceability of the
Credit Agreement is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including (a) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.

 

The foregoing opinions are subject to the following comments and qualifications:

 

(A)  The enforceability of Section 10.03 of the Credit Agreement may be limited
by (i) laws rendering unenforceable indemnification contrary to Federal or state
securities laws and the public policy underlying such laws and (ii) laws
limiting the enforceability of provisions exculpating or exempting a party, or
requiring indemnification of a party for, liability for its own action or
inaction, to the extent the action or inaction involves gross negligence,
recklessness, willful misconduct or unlawful conduct.

 

(B)  The enforceability of provisions in the Credit Agreement to the effect that
terms may not be waived or modified except in writing may be limited under
certain circumstances.

 

(C)  Paragraph (iii) of Section 9.02 of the Credit Agreement may not be
enforceable to the extent that the Guaranteed Obligations are materially
modified.

 

(D)  We express no opinion as to (i) the effect of the laws of any jurisdiction
in which any Lender is located (other than the State of New York) that limit the
interest, fees or other charges such Lender may impose, (ii) the last sentence
of Section 2.19(d), (iii) the first sentence of Section 10.09(b) of the Credit
Agreement, insofar as such sentence relates to the subject matter jurisdiction
of the United States District Court for the Southern District of New York to
adjudicate any controversy related to the Credit Agreement, (iv) the waiver of
inconvenient forum set forth in Section 10.09(c) of the Credit Agreement with
respect to proceedings in the United States District Court for the Southern
District of New York, (v) Section 10.09(e) of the Credit Agreement to the extent
it purports to be a waiver of immunity acquired after the execution and delivery
of the Credit Agreement and (vi) Section 10.13 of the Credit Agreement.

 

2

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

 

The foregoing opinions are limited to matters involving the Federal laws of the
United States of America and the law of the State of New York, and we do not
express any opinion as to the laws of any other jurisdiction.

 

At the request of our client, this opinion letter is, pursuant to
Section 4.01(c) of the Credit Agreement, provided to you by us in our capacity
as special New York counsel to JPMorgan Chase and may not be relied upon by any
Person for any purpose other than in connection with the transactions
contemplated by the Credit Agreement without, in each instance, our prior
written consent.

 

 

Very truly yours,

 

WJM/WFC

 

3

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

 

EXHIBIT G

 

[Form of Confirming Lender Agreement]

 

[Letterhead of Issuing Lender]

 

[           ]

 

[Name of Confirming Lender]

[Address]

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement dated as of August 25, 2005 (as
amended and in effect, the “Credit Agreement”), among AXIS Capital Holdings
Limited (“AXIS Capital”), certain of its Subsidiaries as Account Parties or
Borrowers party thereto (collectively, together with AXIS Capital, the “Credit
Parties”), 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 a bank listed on the most current Bank List of
banks approved by the NAIC.  Accordingly, in order to be an “NAIC Approved
Lender” 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 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 Letter of Credit issued or continued under the Credit
Agreement as if, and to the extent, you were the Issuing Lender under the
relevant Letter of Credit.  Notwithstanding the foregoing, your liability under
all 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 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 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 Letter of Credit.

 

In consideration of the foregoing, the Issuing Lender agrees that if you shall
make any LC Disbursement in respect of any Letter of Credit, regardless of the
identity of the account party of such Letter of Credit, 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) 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.

 

2

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

 

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 at
JPMorgan Chase Bank, N.A., 1111 Fannin, 10th Floor, Houston, Texas 77002-8069,
Attention of Loan and Agency Services Group (Telecopy No. (713) 750-2782;
Telephone No. (713) 750-2102), with a copy thereof to JPMorgan Chase Bank, N.A.,
270 Park Avenue, 22nd Floor, New York, New York 10017, Attention of Heather
Lindstrom (Telecopy No. (212) 270-1511; Telephone No. (212) 270-9839).

 

 

[NAME OF ISSUING LENDER]

 

 

 

 

 

By

 

 

 

Title:

 

 

 

 

AGREED AS AFORESAID:

 

 

 

[NAME OF CONFIRMING LENDER]

 

 

 

 

 

By

 

 

 

Title:

 

 

3

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