Exhibit 10.1

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SECURED CREDIT AGREEMENT

dated as of

December 9, 2011

between

XL GROUP PLC,
XLIT LTD., X.L. AMERICA, INC., XL INSURANCE
(BERMUDA) LTD, XL RE LTD, XL RE EUROPE LIMITED, XL INSURANCE COMPANY
LIMITED, XL INSURANCE SWITZERLAND LTD AND XL LIFE LTD,
as Account Parties,

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

The LENDERS Party Hereto,

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

and

THE BANK OF NEW YORK MELLON,

as Collateral Agent

 

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$650,000,000

 

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J.P. MORGAN SECURITIES LLC,
CITIGROUP GLOBAL MARKETS INC.,

and

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

 

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CITIBANK, N.A. and RBS SECURITIES INC.,
as Syndication Agents

 

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

as Documentation Agents

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TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

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ARTICLE I

 

2

 

 

 

DEFINITIONS

 

2

SECTION 1.01.

 

Defined Terms

 

2

SECTION 1.02.

 

Terms Generally

 

52

SECTION 1.03.

 

Accounting Terms; GAAP, Local GAAP, SAP and SFR

 

53

SECTION 1.04.

 

Exchange Rates; Currency Equivalents

 

54

 

 

 

 

 

ARTICLE II

 

55

 

 

 

 

 

THE CREDITS

 

55

SECTION 2.01.

 

Syndicated Letters of Credit

 

55

SECTION 2.02.

 

Issuance and Administration

 

61

SECTION 2.03.

 

Reimbursement of LC Disbursements, Etc.

 

62

SECTION 2.04.

 

Non-Syndicated Letters of Credit

 

68

SECTION 2.05.

 

Participated Letters of Credit

 

85

SECTION 2.06.

 

Alternative Currency Letters of Credit

 

97

SECTION 2.07.

 

Termination, Reduction and Increase of the Commitments

 

100

SECTION 2.08.

 

Fees

 

105

SECTION 2.09.

 

Interest

 

108

SECTION 2.10.

 

Increased Costs

 

109

SECTION 2.11.

 

Taxes

 

41

SECTION 2.12.

 

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

 

121

SECTION 2.13.

 

Mitigation Obligations; Replacement of Lenders

 

127

SECTION 2.14.

 

Defaulting Lenders

 

129

SECTION 2.15.

 

Absence of Rating

 

133

 

 

 

 

 

ARTICLE III

 

133

 

 

 

 

 

GUARANTEE

 

133

SECTION 3.01.

 

The Guarantee

 

133

SECTION 3.02.

 

Obligations Unconditional

 

135

SECTION 3.03.

 

Reinstatement

 

137

SECTION 3.04.

 

Subrogation

 

138

SECTION 3.05.

 

Remedies

 

138

SECTION 3.06.

 

Continuing Guarantee

 

139

SECTION 3.07.

 

Rights of Contribution

 

139

SECTION 3.08.

 

General Limitation on Guarantee Obligations

 

141

 

 

 

 

 

ARTICLE IV

 

143

 

 

 

 

 

REPRESENTATIONS AND WARRANTIES

 

143

SECTION 4.01.

 

Organization; Powers

 

143

SECTION 4.02.

 

Authorization; Enforceability

 

143

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SECTION 4.03.

 

Governmental Approvals; No Conflicts

 

144

SECTION 4.04.

 

Financial Condition; No Material Adverse Change

 

145

SECTION 4.05.

 

Properties

 

146

SECTION 4.06.

 

Litigation and Environmental Matters

 

147

SECTION 4.07.

 

Compliance with Laws and Agreements

 

148

SECTION 4.08.

 

Investment Company Status

 

149

SECTION 4.09.

 

Taxes

 

149

SECTION 4.10.

 

ERISA

 

149

SECTION 4.11.

 

Disclosure

 

150

SECTION 4.12.

 

Use of Credit

 

151

SECTION 4.13.

 

Subsidiaries

 

152

SECTION 4.14.

 

Withholding Taxes

 

152

SECTION 4.15.

 

Stamp Taxes

 

153

SECTION 4.16.

 

Legal Form

 

153

 

 

 

 

 

ARTICLE V

 

154

 

 

 

 

 

CONDITIONS

 

154

SECTION 5.01.

 

Effective Date

 

154

SECTION 5.02.

 

Each Credit Event

 

158

 

 

 

 

 

ARTICLE VI

 

160

 

 

 

 

 

AFFIRMATIVE COVENANTS

 

160

SECTION 6.01.

 

Financial Statements and Other Information

 

160

SECTION 6.02.

 

Notices of Material Events

 

169

SECTION 6.03.

 

Preservation of Existence and Franchises

 

170

SECTION 6.04.

 

Insurance

 

170

SECTION 6.05.

 

Maintenance of Properties

 

170

SECTION 6.06.

 

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

 

171

SECTION 6.07.

 

Financial Accounting Practices

 

173

SECTION 6.08.

 

Compliance with Applicable Laws

 

173

SECTION 6.09.

 

Use of Letters of Credit

 

174

SECTION 6.10.

 

Continuation of and Change in Businesses

 

175

SECTION 6.11.

 

Visitation

 

175

 

 

 

 

 

ARTICLE VII

 

175

 

 

 

 

 

NEGATIVE COVENANTS

 

175

SECTION 7.01.

 

Mergers

 

176

SECTION 7.02.

 

Dispositions

 

177

SECTION 7.03.

 

Liens

 

179

SECTION 7.04.

 

Transactions with Affiliates

 

186

SECTION 7.05.

 

Ratio of Total Funded Debt to Total Capitalization

 

187

SECTION 7.06.

 

Consolidated Net Worth

 

187

SECTION 7.07.

 

Indebtedness

 

187

SECTION 7.08.

 

Financial Strength Ratings

 

189

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SECTION 7.09.

 

Private Act

 

189

SECTION 7.10.

 

Collateral Accounts

 

189

 

 

 

 

 

ARTICLE VIII

 

190

 

 

 

 

 

EVENTS OF DEFAULT

 

190

 

 

 

ARTICLE IX

 

198

 

 

 

 

 

THE ADMINISTRATIVE AGENT

 

198

 

 

 

 

 

ARTICLE X

 

216

 

 

 

 

 

MISCELLANEOUS

 

216

SECTION 10.01.

 

Notices

 

216

SECTION 10.02.

 

Waivers; Amendments

 

218

SECTION 10.03.

 

Expenses; Indemnity; Damage Waiver

 

223

SECTION 10.04.

 

Successors and Assigns

 

228

SECTION 10.05.

 

Survival

 

240

SECTION 10.06.

 

Counterparts; Integration; Effectiveness

 

241

SECTION 10.07.

 

Severability

 

242

SECTION 10.08.

 

Right of Setoff

 

242

SECTION 10.09.

 

Governing Law; Jurisdiction; Etc.

 

243

SECTION 10.10.

 

WAIVER OF JURY TRIAL

 

245

SECTION 10.11.

 

Headings

 

247

SECTION 10.12.

 

Treatment of Certain Information; Confidentiality

 

247

SECTION 10.13.

 

Judgment Currency

 

250

SECTION 10.14.

 

USA PATRIOT Act

 

252

SECTION 10.15.

 

RELEASE OF LIENS

 

252

SECTION 10.16.

 

NO FIDUCIARY DUTY

 

254

SECTION 10.17

 

ILLEGAILITY

 

93

iii

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SCHEDULE I

-

Commitments

SCHEDULE II

-

Indebtedness and Liens

SCHEDULE III

-

Litigation

SCHEDULE IV

-

Environmental Matters

SCHEDULE V

-

Subsidiaries

SCHEDULE VI

-

Existing Letters of Credit

 

 

 

EXHIBIT A

-

Form of Assignment and Assumption

EXHIBIT B

-

Form of Confirming Lender Agreement

iv

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

                    The Account Parties have requested that the Lenders issue
letters of credit for their account in an aggregate face amount not exceeding
$650,000,000 at any one time outstanding, and the Lenders are prepared to issue
such letters of 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:

                    “Account” shall have the meaning assigned to such term in
the Pledge Agreement.

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

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

                    “Adjusted LIBO Rate” means an interest rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the one
month LIBO Rate multiplied by (b) the one month Statutory Reserve Rate.

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

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

                    “Advance Rate” means for any category of cash or obligation
or investment specified below in the column entitled “Cash and Eligible Assets”
(other than cash, the “Eligible Assets”), the percentage set forth opposite such
category of cash or Eligible Assets below in the column entitled “Advance Rate”
and, in each case, subject to the original term to maturity criteria set forth
therein:

 

 

 

 

Cash and Eligible Assets

 

Advance Rate

 

 

 

 

 

Cash and Cash Equivalents Denominated in Dollars, EU Cash and GB Cash 100%

 

 

 

 

 

 

 

U.S. Commercial Paper (Rating A1/P1 or better, Non-convertible) 98%

 

 

 

 

 

 

 

U.S. Government Bills, Notes, U.S. Government Guaranteed or Sponsored Agency
Securities and US-TIPS

 

 

 

 

 

 

 

Maturity less than 2 years

 

98

%

Maturity 2 years to less than 5 years

 

95

%

Maturity 5 years to up to 10 years

 

95

%

Maturity over 10 years

 

93

%

 

 

 

 

U.S. Corporate Bonds (Rating AAA/Aaa or better, Non-convertible)

 

 

 

 

 

 

 

Maturity less than 5

 

95

%

Maturity 5 years to up to 10 years

 

90

%

Maturity over 10 years

 

85

%

 

 

 

 

U.S. Corporate Bonds (Rating AA-/Aa3 or better, Non-convertible)

 

 

 

 

 

 

 

Maturity less than 5 years

 

90

%

Maturity 5 years to up to 10 years

 

85

%

Maturity over 10 years

 

80

%

 

 

 

 

U.S. Corporate Bonds (Rating A-/A3 or better, Non-convertible)

 

 

 

 

 

 

 

Maturity less than 11 years

 

80

%

 

 

 

 

U.S. Municipal Bonds (Rating AA-/Aa3 or better, Non-convertible)

 

 

 

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- 3 -

 

 

 

 

Maturity less than 5 years

 

95

%

Maturity 5 years or longer

 

90

%

 

 

 

 

Supranational Securities (Rating AAA/Aaa or better, Non-convertible)

 

 

 

 

 

 

 

Maturity less than 2 years

 

95

%

Maturity 2 years to up to 10 years

 

90

%

Maturity over 10 years

 

85

%

 

 

 

 

US-GNMAMBS, US-FNMAMBS and US-FHLMCMBS

 

 

 

 

 

 

 

Maturity less than 5 years

 

98

%

Maturity 5 years to up to 10 years

 

95

%

Maturity over 10 years

 

93

%

 

 

 

 

DE-NOTE2, DE NOTE5.5 DE-BOND, GB-GILT, FR-BTF, FR-BTAN and FR-OAT

 

 

 

(Rating AA-/Aa3 or better)

 

 

 

 

 

 

 

Maturity less than 5 years

 

95

%

Maturity 5 years to up to 10 years

 

93

%

Maturity over 10 years and less than 30 years

 

90

%

For purposes of this definition of “Advance Rate”, if any Eligible Asset is
provided a rating by more than one Rating Agency, then the lower of all such
ratings shall be used. As used in this Agreement, “EU Cash” shall mean the
lawful currency of the member states of the European Union that adopt the single
currency in accordance with the EC Treaty, “GB Cash” shall mean the lawful
currency of the United Kingdom, “GB-GILT” shall mean fixed coupon, sterling
denominated negotiable debt obligations issued by either the Bank of England
(prior to April 1, 1998) or Her Majesty’s Treasury (after April 1, 1998) backed
by the credit of the United Kingdom of Great Britain and Northern Ireland with
initial maturity of greater than 365 days when issued, “DE-NOTE2” shall mean
negotiable debt obligations issued pursuant to Artikel 115 Grundgesetz and
backed by Federal Republic of Germany, having an original maturity at issuance
of 2 years, “DE-NOTE5.5” shall mean negotiable debt obligations issued pursuant
to Artikel 115 Grundgesetz and backed by Federal Republic of Germany, having a
maturity at issuance of 5.5 years, “DE-BOND” shall mean negotiable debt
obligations issued pursuant to Artikel 115 Grundgesetz and backed by Federal
Republic of Germany, having a maturity at issuance of 10 to 30 years, “FR-BTF”
shall mean discount debt securities issued by the French Treasury having an
initial maturity at issuance of 13, 26 or 52 weeks, “FR-BTAN” shall mean fixed
interest debt securities issued by the French Treasury having an initial
maturity at issuance of 2 or 5 years, “FR-OAT” shall mean fixed or floating
interest debt securities issued by the French Treasury having an initial
maturity at issuance of between 4 and 30 years, provided that any floating rate
OATs (i.e. OATs that are indexed to the Consumer Price Index (OATi’s)) and OATs
that are linked to the TEC10 index (TEC OATs) are excluded, “Supranational
Securities” shall mean securities issued or backed by the International Bank for
Reconstruction & Development, European Bank for Reconstruction & Development,
Inter American Development

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- 4 -

Bank, International Monetary Fund, European Investment Bank, Asian Development
Bank, African Development Bank and Nordic Development Bank, “US-GNMAMBS” shall
mean single-class fully modified pass-through certificates (GNMA Certificates)
in book-entry form backed by single-family residential mortgage loans, the
timely payment of principal and interest of which certificates is guaranteed by
the Government National Mortgage Association (excluding Real Estate Mortgage
Investment Conduit (REMIC) or other multi-class pass-through certificates,
collateralized mortgage obligations, pass-through certificates backed by
adjustable rate mortgages, securities paying interest or principal only and
derivatives and similar derivatives securities), “US-FNMAMBS” shall mean
single-class pass-through certificates (FNMA Certificates) in book-entry form
backed by single-family residential mortgage loans, the timely payment of
principal and interest of which certificates is guaranteed by the Federal
National Mortgage Association (excluding Real Estate Mortgage Investment Conduit
(REMIC) or other multi-class pass-through certificates, collateralized mortgage
obligations, pass-through certificates backed by adjustable rate mortgages,
securities paying interest or principal only and derivatives and similar
derivatives securities), “US-FHLMCMBS” shall mean single-class participation
certificates (FHLMC Certificates) in book-entry form backed by single-family
residential mortgage loans, the timely payment of principal and interest of
which certificates is guaranteed by the Federal Home Loan Mortgage Corporation
(excluding Real Estate Mortgage Investment Conduit (REMIC) or other multi-class
pass-through certificates, collateralized mortgage obligations, pass-through
certificates backed by adjustable rate mortgages, securities paying interest or
principal only and derivatives and similar derivatives securities) and “US-TIPS”
shall mean securities issued by the Department of the Treasury backed by the
credit of the United States of America where the principal is changed based on
changes of the consumer price index.

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

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

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

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

                    “Alternative Currency” means any currency other than Dollars
(a) that is freely transferable and convertible into Dollars in the London
foreign exchange market and (b) for which no central bank or other governmental
authorization in the country of issue of such

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currency is required to permit use of such currency by any Lender for issuing,
renewing, extending or amending letter of credits or funding or making drawings
thereunder and/or to permit any Account Party to pay the reimbursement
obligations and interest thereon, each as contemplated hereunder, unless such
authorization has been obtained and is in full force and effect.

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

                    “Alternative Currency LC Exposure” means, at any time, the
sum of (a) the Dollar Equivalent of the aggregate undrawn amount of all
outstanding Alternative Currency Letters of Credit at such time plus (b) the
Dollar Equivalent of the aggregate amount of all LC Disbursements under
Alternative Currency Letters of Credit that have not been reimbursed by or on
behalf of the Account Parties at such time. The Alternative Currency LC Exposure
of any Lender shall at any time be such Lender’s share of the total Alternative
Currency LC Exposure at such time.

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

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

                    “Applicable Percentage” means with respect to any Lender in
relation to its obligations to issue or participate in Letters of Credit (or
related matters), the percentage of the Commitments of all the Lenders
represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments.

                    “Assignment and Assumption” means an assignment and
assumption entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 10.04), and accepted by the
Administrative Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.

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

                    “Bankruptcy Event” means with respect to any Person, such
Person becomes the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee, administrator, custodian, assignee for the
benefit of creditors or similar Person charged with the reorganization or
liquidation of its business appointed for it, or indicating its consent to,
approval of, or acquiescence in, any such proceeding or appointment, provided
that a Bankruptcy Event shall not result solely by virtue of any ownership
interest, or the acquisition of any ownership

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- 6 -

interest, in such Person by a Governmental Authority or instrumentality thereof,
provided, further, that such ownership interest does not result in or provide
such Person with immunity from the jurisdiction of courts within the United
States or from the enforcement in the United States of judgments or writs of
attachment on its assets or permit such Person (or such Governmental Authority
or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or
agreements made by such Person.

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

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

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

                    “Borrowing Base” means at any time, and in respect of each
Account Party, the aggregate amount of cash and the aggregate Market Value (as
defined in the Collateral Account Control Agreement) of Eligible Assets held in
the Accounts applicable to such Account Party (including any cash or Eligible
Securities deposited on behalf of such Account Party by a Guarantor) under the
applicable Collateral Account Control Agreement at such time multiplied in each
case by the respective Advance Rates for cash and such Eligible Assets, in each
case as of the close of business on the immediately preceding Business Day or,
if such amount is not determinable as of the close of business on such
immediately preceding Business Day, as of the close of business on the most
recent Business Day on which such amount is determinable; provided that no
Collateral (including without limitation cash) shall be included in the
calculation of Borrowing Base unless (i) the Collateral Agent has a first
priority perfected lien on and security interest in such Collateral pursuant to
the Security Documents and (ii) there shall exist no other Liens on such
Collateral; provided further that (1) no Eligible Asset shall be included in the
calculation of Borrowing Base unless it is listed on a national securities
exchange or freely tradeable at readily established prices in over-the-counter
transactions, (2) no single issuer of U.S. Commercial Paper (Rating A1/P1 or
better), U.S. Corporate Bonds, U.S. Municipal Securities, German debt
obligations, French debt obligations or U.K. debt obligations shall comprise at
any time more than 7.5% of the aggregate Borrowing Base for all Account Parties
at such time, (3) all maturities are calculated from the relevant date of
determination of the aggregate Borrowing Base and (4) all Collateral must be
performing; provided, further, that (i) the Borrowing Base in respect of any
Account Party at any time shall be the amount thereof as set forth in the
Borrowing Base Report (as defined in the Collateral Account Control Agreement)
then most recently delivered by the Service Provider (as defined in the
Collateral Account Control Agreement) to the Administrative Agent pursuant to
Section 4(H) of the Collateral Account Control Agreement and (ii) for the
avoidance of doubt, each Account Party will take all such actions as shall be
necessary to cause the Borrowing Base of such Account Party at all times to be
at least 100% of the aggregate face amount of all Letters of Credit issued on
behalf of such Account Party in accordance with Section 5 of the Collateral
Account Control Agreement.

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- 7 -

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

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

                    “Cash Equivalents” means at any time:

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

                    (b) investments in money market funds that invest solely in
Cash Equivalents described in clause (a) and are rated AAA by S&P.

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

                    “Change in Law” means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.10(b), by any lending office of such

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Lender or by such Lender’s holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

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

                    “Collateral” has the meaning assigned to such term in the
Pledge Agreement.

                    “Collateral Account Control Agreement” means the Collateral
Account Control Agreement, among each Account Party, The Bank of New York
Mellon, in its capacities as Custodian and as Collateral Agent, and the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent.

                    “Collateral Agent” means The Bank of New York Mellon, in its
capacity as collateral agent for the Secured Parties hereunder.

                    “Commitment” means, with respect to any Lender, the
commitment of such Lender to issue Syndicated Letters of Credit and
Non-Syndicated Letters of Credit and acquire participations in Participated
Letters of Credit, as such commitment may be (i) reduced from time to time
pursuant to Section 2.07 and (ii) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender’s Commitment is set forth on Schedule I or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders’
Commitments is $650,000,000.

                    “Commitment Termination Date” means December 9, 2015.

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

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

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

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

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

                    “Custodian” has the meaning assigned to such term in the
Pledge Agreement.

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

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

                    “Dollar Equivalent” means, as used in each Alternative
Currency Letter of Credit Report and in respect of any Alternative Currency
Letter of Credit, the amount of Dollars obtained by converting the Alternative
Currency LC Exposure with respect to such Alternative Currency Letter of Credit,
on the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of Dollars with such Alternative Currency.

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

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- 10 -

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

                    “Eligible Assets” has the meaning assigned to such term in
the definition of the term Advance Rate.

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

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

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

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

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

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

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- 11 -

Plan; (e) the receipt by any Account Party or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by any Account Party or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by any Account Party or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from any Account Party or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

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

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

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

                    “Excluded Taxes” means, with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or on
account of any obligation of any Obligor hereunder, or under any Credit
Document, (a) income or franchise Taxes imposed on (or measured by) its net
income, net profits or overall gross receipts (including, without limitation,
branch profits or similar taxes) by the United States of America, or by any
jurisdiction under the laws of which such recipient is organized or resident, in
which such recipient’s principal office is located or with which such recipient
has any other connection (other than a connection that arises solely by reason
of an Account Party having executed, delivered or performed its obligations or a
Lender or the Administrative Agent having received a payment under this
Agreement or any Credit Document), (b) any Tax imposed pursuant to a law in
effect at the time such recipient first becomes a party to this Agreement or
designates a new lending office (or at the time such recipient acquires an
additional interest, but only with respect to Taxes attributable to such
additional interest) except to the extent that such recipient (or such
recipient’s assignor, if any) was entitled at the time of the designation of a
new lending office (or assignment) to receive additional amounts from the
Account Parties with respect to such Tax under Section 2.11(a) or 2.11(c), (c)
any Tax that is attributable to a recipient’s failure to comply with Section
2.11(f), and (d) any Tax imposed pursuant to FATCA.

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

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recourse to XL Group or any of its Subsidiaries (other than in respect of
liabilities and guarantees of the type referred to in clause (a) or (b) of the
definition of Indebtedness).

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

                    “Existing Unsecured Credit Agreement” means the 5-Year
Credit Agreement dated as of June 21, 2007 among XLIT Ltd. (formerly XL Group
Ltd. and XL Capital Ltd), XL America, XL Insurance (Bermuda), and XL Re, the
lenders party thereto and JPMCB, as administrative agent, as amended, restated,
supplemented or otherwise modified from time to time, including any renewals,
extensions or replacements thereof.

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

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

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

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

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

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

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

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

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

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

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

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

                    “Indebtedness” means, for any Person, without duplication:
(i) all indebtedness or liability for or on account of money borrowed by, or for
or on account of deposits with or advances to (but not including accrued pension
costs, deferred income taxes or accounts payable of) such Person; (ii) all
obligations (including contingent liabilities) of such Person evidenced by
bonds, debentures, notes, banker’s acceptances or similar instruments; (iii) all
indebtedness or liability for or on account of property or services purchased or
acquired by such Person; (iv) any indebtedness or liability secured by a Lien on
property owned by such Person (whether or not assumed) and Capital Lease
Obligations of such Person (without regard to any limitation of the rights and
remedies of the holder of such Lien or the lessor under such capital lease to
repossession or sale of such property); (v) the maximum available amount of all
standby letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed); and (vi)
all Guarantees of such Person; provided that the

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following shall be excluded from Indebtedness of XL Group and any of its
Subsidiaries for purposes of this Agreement: (a) all payment liabilities of any
such Person under insurance and reinsurance policies from time to time issued by
such Person, including guarantees of any such payment liabilities; (b) all other
liabilities (or guarantees thereof) arising in the ordinary course of any such
Person’s business as an insurance or reinsurance company (including GICs and
Stable Value Instruments and any Specified Transaction Agreement relating
thereto), or as a corporate member of The Council of Lloyd’s, or as a provider
of financial or investment services or contracts (including GICs and Stable
Value Instruments and any Specified Transaction Agreement relating thereto); and
(c) any Exempt Indebtedness.

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

                    “Insurance Subsidiary” means any Subsidiary (other than XL
Life Insurance and Annuity Company) which is subject to the regulation of, and
is required to file statutory financial statements with, any governmental body,
agency or official in any State or territory of the United States or the
District of Columbia which regulates insurance companies or the doing of an
insurance business therein.

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

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

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

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

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

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

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                    “Lenders” means the Persons listed on Schedule I and any
other Person that shall have become a party hereto pursuant to an Assignment and
Assumption or an agreement pursuant to the terms of Section 2.07(c), other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption (it being understood and agreed that each Lender may, at its option,
issue any Letter of Credit to any Account Party by causing any foreign or
domestic branch or Affiliate of such Lender to issue such Letter of Credit;
provided that any exercise of such option shall not affect the obligations of
such Account Party in respect of such Letter of Credit in accordance with the
terms hereunder).

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

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

                    “LIBO Rate” means the rate appearing on Reuters Page LIBOR01
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, as the rate for the offering of Dollar
deposits with a maturity equal to one month. In the event that such rate is not
available at such time for any reason, then the LIBO Rate shall be the rate at
which Dollar deposits of $5,000,000 and for a maturity equal to one month 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.

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

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

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

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

                    “Material Adverse Effect” means a material adverse effect
on: (a) the assets, business, financial condition or operations of an Account
Party and its Subsidiaries taken as a

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whole; or (b) the ability of an Account Party to perform any of its payment or
other material obligations under this Agreement.

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

                    “NAIC” means the National Association of Insurance
Commissioners.

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

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

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

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

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

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

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

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

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

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

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

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                    “Pledge Agreement” means the Pledge Agreement, dated as of
December 9, 2011, among each Account Party, the Collateral Agent and the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent.

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

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

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

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

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

                    “Rating Agency” means (a) Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc., (b) Moody’s Investors
Service, Inc. and (c) Fitch, Inc.

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

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

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

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

                    “Revaluation Date” means each of the following: (i) each
date of issuance, renewal or amendment of a Letter of Credit denominated in an
Alternative Currency, (ii) each date of an amendment of any such Letter of
Credit having the effect of increasing the amount

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

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

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

                    “Security Documents” means the Pledge Agreement and the
Collateral Account Control Agreement.

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

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

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

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

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

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

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

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

                    “Statutory Reserve Rate” means, for any day, a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject on such day with respect to the Adjusted LIBO
Rate, 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. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

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

                    “Supplemental Commitment Date” has the meaning assigned to
such term in Section 2.07(c).

                    “Supplemental Lender” has the meaning assigned to such term
in Section 2.07(c).

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

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

                    “Total Funded Debt” means, at any time, all Indebtedness of
XL Group and its Subsidiaries and any other Person which would at such time be
classified in whole or in part as a liability on the consolidated balance sheet
of XL Group and its consolidated Subsidiaries in accordance with GAAP (it being
understood for avoidance of doubt that any liability or

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obligation excluded from the definition of Indebtedness shall not constitute
Indebtedness for purposes of this definition).

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

                    “Unsecured Credit Agreement” means the 4-Year Credit
Agreement dated as of December 9, 2011 among the Account Parties, the lenders
party thereto and JPMCB, as administrative agent, as amended, restated,
supplemented or otherwise modified from time to time, including any renewals,
extensions or replacements thereof that increase the principal amount thereof as
of the Effective Date; provided, however, that to the extent such principal
amount exceeds $1,350,000,000 at any time, such excess amount shall not be
deemed to be incurred under the Unsecured Credit Agreement for purposes of
Section 7.07.

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

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

                    SECTION 1.02. Terms Generally. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument statute, law, rule,
regulation or other document herein shall be construed as referring to such
agreement, instrument statute, law, rule, regulation or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

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

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Agent notifies the Account Parties that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP, Local GAAP, SAP or
SFR, as the case may be, or in the application thereof, then such provision
shall be interpreted on the basis of GAAP, Local GAAP, SAP or SFR, as the case
may be, as in effect and applied immediately before such change shall have
become effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.

                    SECTION 1.04. Exchange Rates; Currency Equivalents

(a) The Administrative Agent or the Issuing Lender, as applicable, shall
determine the Spot Rates as of each Revaluation Date to be used for calculating
Dollar Equivalent amounts of Letters of Credit denominated in Alternative
Currencies. Such Spot Rates shall become effective as of such Revaluation Date
and shall be the Spot Rates employed in converting any amounts between the
applicable currencies until the next Revaluation Date to occur. Except for
purposes of financial statements delivered by Obligors hereunder or calculating
financial covenants hereunder or except as otherwise provided herein, the
applicable amount of any currency (other than Dollars) for purposes of the
Credit Documents shall be such Dollar Equivalent amount as so determined by the
Administrative Agent or the Issuing Lender, as applicable.

(b) Wherever in this Agreement in connection with the issuance, amendment or
extension of a Letter of Credit, an amount, such as a required minimum or
multiple amount, is expressed in Dollars, but such Letter of Credit is
denominated in an Alternative Currency, such amount shall be the relevant
Alternative Currency Equivalent of such Dollar amount, as determined by the
Administrative Agent or the Issuing Lender, as the case may be.

ARTICLE II

THE CREDITS

                    SECTION 2.01. Syndicated Letters of Credit.

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

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Syndicated Letter of Credit shall be issued by all of the Lenders, acting
through the Administrative Agent, at the time of issuance as a single multi-bank
letter of credit, but the obligation of each Lender thereunder shall be several
and not joint, based upon its Applicable Percentage of the aggregate undrawn
amount of such Syndicated Letter of Credit.

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

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

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

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

                    (f) Adjustment of Applicable Percentages. Upon (i) each
increase of the Commitments pursuant to Section 2.07(c) or (ii) the assignment
by a Lender of all or a portion of its Commitment and its interests in the
Syndicated Letters of Credit pursuant to an Assignment and Assumption, the
Administrative Agent shall promptly notify each beneficiary under an outstanding
Syndicated Letter of Credit of the Lenders that are parties to such Syndicated
Letter of Credit and their respective Applicable Percentages as of the effective
date of, and after giving effect to, such increase or assignment, as the case
may be.

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

                    SECTION 2.02. Issuance and Administration. Each Syndicated
Letter of Credit shall be executed and delivered by the Administrative Agent in
the name and on behalf of, and as attorney-in-fact for, each Lender party to
such Syndicated Letter of Credit, and the Administrative Agent shall act under
each Syndicated Letter of Credit, and each Syndicated Letter of Credit shall
expressly provide that the Administrative Agent shall act, as the agent of each
Lender to (a) receive drafts, other demands for payment and other documents
presented by the beneficiary under such Syndicated Letter of Credit, (b)
determine whether such drafts, demands and documents are in compliance with the
terms and conditions of such Syndicated Letter of Credit and (c) notify such
Lender and the Account Parties that a valid drawing has been made and the date
that the related LC Disbursement is to be made; provided that the Administrative
Agent shall have no obligation or liability for any LC Disbursement under such
Syndicated Letter of Credit, and each Syndicated Letter of Credit shall
expressly so provide. Each Lender hereby irrevocably appoints and designates the
Administrative Agent as its attorney-in-fact, acting through any duly authorized
officer of JPMCB, to execute and deliver in the name and on behalf of such
Lender each Syndicated Letter of Credit to be issued by such Lender hereunder.
Promptly upon the request of the Administrative Agent, each Lender will furnish
to the Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Syndicated Letter of Credit may reasonably request in order
to demonstrate that the

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Administrative Agent has the power to act as attorney-in-fact for such Lender to
execute and deliver such Syndicated Letter of Credit. Notwithstanding anything
in this Agreement to the contrary, the Administrative Agent has no
responsibility hereunder with respect to the issuance, renewal, extension,
amendment or other administration of any Alternative Currency Letter of Credit,
except as expressly set forth in Section 2.06.

                    SECTION 2.03. Reimbursement of LC Disbursements, Etc.

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

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

                    Neither the Administrative Agent, nor any Lender nor any of
their respective Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Syndicated
Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Syndicated Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of

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technical terms or any consequence arising from causes beyond their control;
provided that the foregoing shall not be construed to excuse the Administrative
Agent or a Lender from liability to the Account Parties to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Account Parties to the extent permitted by applicable
law) suffered by the Account Parties that are caused by the gross negligence or
willful misconduct of the Administrative Agent or a Lender. The parties hereto
expressly agree that:

 

 

 

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

 

 

 

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

 

 

 

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

                    (c) Disbursement Procedures. The Administrative Agent shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under any Syndicated Letter of
Credit. The Administrative Agent shall promptly after such examination
(i) notify each of the Lenders and the Specified Account Party with respect to
such Letter of Credit by telephone (confirmed by telecopy or email) of such
demand for payment and (ii) deliver to each Lender a copy of each document
purporting to represent a demand for payment under such Syndicated Letter of
Credit. With respect to any drawing properly made under a Syndicated Letter of
Credit, each Lender will make an LC Disbursement in respect of such Syndicated
Letter of Credit in accordance with its liability under such Syndicated Letter
of Credit and this Agreement, such LC Disbursement to be made to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make any such LC
Disbursement available to the beneficiary of such Syndicated Letter of Credit by
promptly crediting the amounts so received, in like funds, to the account
identified by such beneficiary in connection with such demand for payment.
Promptly following any LC Disbursement by any Lender in respect of any
Syndicated Letter of Credit, the Administrative Agent will notify the Account
Parties of such LC Disbursement; provided that any failure to give or delay in
giving such notice shall not relieve such Specified Account Party of its
obligation to reimburse the Lenders with respect to any such LC Disbursement.

                    (d) Interim Interest. If any LC Disbursement with respect to
a Syndicated Letter of Credit is made, then, unless such LC Disbursement is
reimbursed in full on the date such LC

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Disbursement is made, the unpaid amount thereof shall bear interest, subject to
Section 2.09(a), for each day from and including the date such LC Disbursement
is made to but excluding the date that such LC Disbursement is reimbursed, at
the rate per annum equal to 1% plus the Alternate Base Rate.

                    SECTION 2.04. Non-Syndicated Letters of Credit.

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

                    (b) Notice of Issuance, Amendment, Renewal or Extension. To
request the issuance of Non-Syndicated Letters of Credit (or the amendment,
renewal or extension of outstanding Non-Syndicated Letters of Credit), an
Account Party shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the
Administrative Agent) to the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of Non-Syndicated Letters of Credit, or identifying the
Non-Syndicated Letters of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension, as the case
may be (which shall be a Business Day), the date on which such Non-Syndicated
Letters of Credit are to expire (which shall comply with paragraph (e) of this
Section), the aggregate amount of all Non-Syndicated Letters of Credit to be
issued in connection with such request, the name and address of the beneficiary
thereof and the terms and conditions of (and such other information as shall be
necessary to prepare, amend, renew or extend, as the case may be) such
Non-Syndicated Letters of Credit. If Non-Syndicated Letters of Credit issued in
connection with the same request shall provide for the automatic extension of
the expiry date thereof unless the Issuing Lender thereof or the Administrative
Agent gives notice that such expiry date shall not be extended, then the
Administrative Agent (acting on behalf of the relevant Issuing Lenders)

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will give such notice for all such Non-Syndicated Letters of Credit if requested
to do so by the Required Lenders in a notice given to the Administrative Agent
not more than 60 days, but not less than 45 days, prior to the current expiry
date of such Non-Syndicated Letter of Credit. If requested by the Administrative
Agent, such Account Party also shall submit a letter of credit application on
JPMCB’s standard form in connection with any request for a Non-Syndicated Letter
of Credit. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by such Account Party to, or entered
into by such Account Party with, the Administrative Agent (acting on behalf of
the relevant Issuing Lenders) relating to a Non-Syndicated Letter of Credit, the
terms and conditions of this Agreement shall control.

                    (c) Issuance and Administration. Each Non-Syndicated Letter
of Credit shall be executed and delivered by the Administrative Agent (which
term, for purposes of this Section 2.04 and any other provisions of this
Agreement, including Article IX and Section 10.03, relating to Non-Syndicated
Letters of Credit, shall be deemed to refer to, unless the context otherwise
requires, JPMCB acting in its capacity as the Administrative Agent or in its
individual capacity, in either case as attorney-in-fact for the respective
Issuing Lender), acting through any duly authorized officer of JPMCB, in the
name and on behalf of, and as attorney-in-fact for, the Issuing Lender party to
such Non-Syndicated Letter of Credit. With respect to each Non-Syndicated Letter
of Credit, the Administrative Agent shall act in the name and on behalf of, and
as attorney-in-fact for, the Lender issuing such Non-Syndicated Letter of Credit
and in that capacity shall, and each Lender hereby irrevocably appoints and
designates the Administrative Agent, acting through any duly authorized officer
of JPMCB, to so act in the name and on behalf of, and as attorney-in-fact for,
each Lender with respect to each Non-Syndicated Letter of Credit to be issued by
such Lender hereunder and, without limiting any other provision of this
Agreement, to, (i) execute and deliver in the name and on behalf of such Lender
each Non-Syndicated Letter of Credit to be issued by such Lender hereunder, (ii)
receive drafts, other demands for payment and/or other documents presented by
the beneficiary thereunder, (iii) determine whether such drafts, demands and/or
documents are in compliance with the terms and conditions thereof, (iv) notify
the beneficiary of any such Non-Syndicated Letter of Credit of the expiration or
non-renewal thereof in accordance with the terms thereof, (v) advise such
beneficiary of any change in the office for presentation of drafts under any
such Non-Syndicated Letter of Credit, (vi) enter into with the Specified Account
Party any such letter of credit application or similar agreement with respect to
any such Non-Syndicated Letter of Credit as the Administrative Agent shall
require, (vii) remit to the beneficiary of any such Non-Syndicated Letter of
Credit any payment made by such Lender and received by the Administrative Agent
in connection with a drawing thereunder, (viii) perform any and all other acts
which in the sole opinion of the Administrative Agent may be necessary or
incidental to the performance of the powers herein granted with respect to such
Non-Syndicated Letter of Credit, (ix) notify such Lender and the Specified
Account Party that a valid drawing has been made and the date that the related
LC Disbursement is to be made; provided that the Administrative Agent shall have
no obligation or liability for any LC Disbursement under such Non-Syndicated
Letter of Credit and (x) delegate to any agent of JPMCB and such agent’s Related
Parties, or any of them, the performance of any of such powers. Each Lender
hereby ratifies and confirms (and undertakes to ratify and confirm from time to
time upon the request of the Administrative Agent)

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whatsoever the Administrative Agent (or any Related Party thereof) shall do or
purport to do by virtue of the power herein granted. Promptly upon the request
of the Administrative Agent, each Lender will furnish to the Administrative
Agent such powers of attorney or other evidence as any beneficiary of any
Non-Syndicated Letter of Credit may reasonably request in order to demonstrate
that the Administrative Agent has the power to act as attorney-in-fact for such
Lender with respect to such Non-Syndicated Letter of Credit (together with such
evidence of the due authorization, execution, delivery and validity of such
power of attorney as the Administrative Agent may reasonably request). Without
limiting any provision of Article IX, the Administrative Agent may perform any
and all of its duties and exercise any and all of its rights and powers under
this Section through its Related Parties.

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

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

                    (f) Participations. By the issuance of a Non-Syndicated
Letter of Credit (or an amendment to a Non-Syndicated Letter of Credit
increasing the amount thereof) by the respective Issuing Lender, and without any
further action on the part of such Issuing Lender or the Lenders, such Issuing
Lender hereby grants to each Lender (other than the Issuing Lender itself), and
each such Lender hereby acquires from such Issuing Lender, a participation in
such Non-Syndicated Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such
Non-Syndicated Letter of Credit. The obligation of each Lender under a
Non-Syndicated Letter of Credit shall be several and not joint. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Non-Syndicated Letter of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Non-Syndicated Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for account of the respective Issuing Lender, such
Lender’s Applicable Percentage of each LC Disbursement made by an Issuing Lender
in respect of any Non-Syndicated Letter of Credit promptly upon the request of
the Administrative Agent at any time from the time such LC Disbursement is made
until such LC Disbursement is reimbursed by the Specified Account Party or at
any time after any reimbursement payment is required to be

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refunded to the Specified Account Party for any reason. Such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
Promptly following receipt by the Administrative Agent of any payment from the
Specified Account Party pursuant to the next following paragraph, the
Administrative Agent shall distribute such payment to the respective Issuing
Lender or, to the extent that the Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Lender, then to such Lenders and such
Issuing Lender as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse an Issuing Lender for any
LC Disbursement shall not relieve the Specified Account Party of its obligation
to reimburse such LC Disbursement.

                    (g) Reimbursement. If any Issuing Lender shall make any LC
Disbursement in respect of any Non-Syndicated Letter of Credit, the Specified
Account Party with respect thereto agrees to reimburse such Issuing Lender in
respect of such LC Disbursement by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than noon, New York City time, on
(i) the Business Day that the Account Parties receive notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Account
Parties receive such notice, if such notice is not received prior to such time.

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

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

                    Neither the Administrative Agent, the Lenders nor any
Issuing Lender, nor any of their respective Related Parties, shall have any
liability or responsibility by reason of or in

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connection with the payment or failure to make any payment under a
Non-Syndicated Letter of Credit (irrespective of any of the circumstances
referred to in the preceding sentence) as a result of determining whether drafts
or other documents presented under a Non-Syndicated Letter of Credit comply with
the terms thereof, or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Non-Syndicated Letter of Credit (including any document required
to make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of an Issuing Lender;
provided that the foregoing shall not be construed to excuse the Administrative
Agent or a Lender from liability to the Account Parties to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Account Parties to the extent permitted by applicable
law) suffered by the Account Parties that are caused by the gross negligence or
willful misconduct of the Administrative Agent or a Lender when determining
whether drafts and other documents presented under a Non Syndicated Letter of
Credit comply with the terms hereof. The parties hereto expressly agree that:

 

 

 

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

 

 

 

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

 

 

 

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

                    (i) Disbursement Procedures. The Administrative Agent shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under any Non-Syndicated Letter of
Credit. The Administrative Agent shall promptly after such examination
(i) notify each of the Lenders and the Specified Account Party with respect to
such Letter of Credit by telephone (confirmed by telecopy or email) of such
demand for payment and (ii) deliver to each Lender (including the Issuing
Lender) a copy of each document purporting to represent a demand for payment
under such Non-Syndicated Letter of Credit. With respect to any drawing properly
made under a Non-Syndicated Letter of Credit, the Issuing Lender thereof will
make an LC Disbursement in respect of such Non-Syndicated Letter of Credit in
accordance with its liability under such Non-Syndicated Letter of Credit and
this Agreement, such LC Disbursement to be made to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative

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Agent will make any such LC Disbursement available to the beneficiary of such
Non-Syndicated Letter of Credit by promptly crediting the amounts so received,
in like funds, to the account identified by such beneficiary in connection with
such demand for payment. Promptly following any LC Disbursement by any Issuing
Lender in respect of any Non-Syndicated Letter of Credit, the Administrative
Agent will notify the Account Parties of such LC Disbursement; provided that any
failure to give or delay in giving such notice shall not relieve the Specified
Account Party of its obligation to reimburse such Issuing Lender with respect to
any such LC Disbursement.

                    (j) Interim Interest. If any LC Disbursement with respect to
a Non-Syndicated Letter of Credit is made, then, unless such LC Disbursement is
reimbursed in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, subject to Section 2.09(a), for each day from and
including the date such LC Disbursement is made to but excluding the date that
such LC Disbursement is reimbursed, at the rate per annum equal to 1% plus the
Alternate Base Rate.

                    (k) Adjustments to Non-Syndicated Letters of Credit. Upon
each increase of the Commitments pursuant to Section 2.07(c), (i) each
Non-Syndicated Letter of Credit then outstanding hereunder shall, as of the
effective date of such increase, be amended by the respective Issuing Lenders
thereof (through the Administrative Agent) to reflect the Lenders having
Commitments after giving effect to such increase and having, with respect to
each such Non-Syndicated Letter of Credit issued by an existing Lender, a face
amount based upon such Lender’s Applicable Percentage of such Commitments and/or
(ii) as applicable, new Non-Syndicated Letters of Credit shall be issued
hereunder as of such effective date by each Supplemental Lender which has
undertaken a new or incremental Commitment in connection with such increase in a
face amount based upon such Supplemental Lender’s Applicable Percentage of such
Commitments. Upon the assignment by a Lender of all or a portion of its
Commitment and its interests in the Non-Syndicated Letters of Credit pursuant to
an Assignment and Assumption, (i) XL Group shall, at the reasonable request of
the Administrative Agent, execute such documents as may be necessary in
connection with amendments to each Non-Syndicated Letter of Credit issued by
such assigning Lender then outstanding hereunder (or to replace each such
Non-Syndicated Letter of Credit with a new Non-Syndicated Letter of Credit of
such assigning Lender) to reflect such assigning Lender’s Commitment and with a
face amount based upon such Lender’s Applicable Percentage after giving effect
to such assignment and/or (ii) as applicable, a new Non-Syndicated Letter of
Credit shall be issued hereunder as of the effective date of such assignment by
the assignee Lender which has undertaken a new or incremental Commitment in
connection with such assignment in a face amount based upon such assignee
Lender’s Applicable Percentage of the Commitments after giving effect to such
assignment.

                    (l) Continuation of Existing Non-Syndicated Letters of
Credit. Subject to the terms and conditions hereof, each Non-Syndicated Letter
of Credit under (and as defined in) the Existing Unsecured Credit Agreement
which is outstanding on the Effective Date and listed on Schedule VI as a
“Non-Syndicated Letter of Credit” shall, effective as of the Effective Date, be
deemed continued hereunder and shall be amended by the respective Issuing Lender
(through the

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Administrative Agent) to reflect (i) the Lenders having Commitments as of the
Effective Date and (ii) with respect to each such Non-Syndicated Letter of
Credit issued by a Lender that is party to the Existing Unsecured Credit
Agreement, a face amount based upon the respective Lender’s Applicable
Percentage as in effect on the Effective Date, and each such Non-Syndicated
Letter of Credit, as so amended, shall be deemed continued hereunder as a
Non-Syndicated Letter of Credit issued by such Lender for all purposes of this
Agreement as of the Effective Date.

                    SECTION 2.05. Participated Letters of Credit.

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

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

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

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

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

                    (f) Reimbursement. If any Lender shall make any LC
Disbursement in respect of any Participated Letter of Credit, the Specified
Account Party with respect thereto agrees to

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reimburse such Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
noon, New York City time, on (i) the Business Day that the Account Parties
receive notice of such LC Disbursement, if such notice is received prior to
10:00 a.m., New York City time, or (ii) the Business Day immediately following
the day that the Account Parties receive such notice, if such notice is not
received prior to such time.

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

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

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

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

 

 

 

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

 

 

 

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

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

                    (i) Interim Interest. If any LC Disbursement is made with
respect to a Participated Letter of Credit, then, unless such LC Disbursement is
reimbursed in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, subject to Section 2.09(a), for each day from and
including the date such LC Disbursement is made to but excluding the date that
such LC Disbursement is reimbursed, at the rate per annum equal to 1% plus the
Alternate Base Rate. Interest accrued pursuant to this paragraph shall be for
account of the Issuing Lender, except that interest accrued on and after the
date of payment by any Lender pursuant to paragraph (f) of this Section to
reimburse the Issuing Lender shall be for account of such Lender to the extent
of such payment.

                    (j) Replacement of the Issuing Lender. The Issuing Lender
may be replaced at any time by written agreement between XL Group, the
Administrative Agent, the replaced Issuing Lender and the successor Issuing
Lender. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall become
effective, XL Group shall pay all unpaid fees accrued for account of the
replaced Issuing Lender pursuant to Section 2.08(c). From and after the
effective date of any such replacement, (i) the successor Issuing Lender shall
have all the rights and obligations of the replaced Issuing Lender under this
Agreement with respect to Participated Letters of Credit to be issued thereafter
and (ii) references herein to the term “Issuing Lender” shall be deemed to refer
to such successor or to any previous Issuing Lender, or to such successor and
all previous Issuing Lenders, as the

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context shall require. After the replacement of an Issuing Lender hereunder, the
replaced Issuing Lender shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Lender under this Agreement with
respect to Participated Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Participated Letters
of Credit.

                    (k) Adjustment of Applicable Percentages. Notwithstanding
anything herein to the contrary, upon (i) each increase of the Commitments
pursuant to Section 2.07(c), each Lender’s participation in each Participated
Letter of Credit then outstanding shall automatically be adjusted to reflect its
Applicable Percentage after giving effect to such increase and (ii) the
assignment by a Lender of all or a portion of its Commitment and its interests
in the Participated Letters of Credit pursuant to an Assignment and Assumption,
the respective assigning Lender’s participation in each Participated Letter of
Credit then outstanding shall automatically be adjusted to reflect, and the
respective assignee Lender shall be deemed to acquire a participation in each
such Participated Letter of Credit in an amount equal to, its Applicable
Percentage after giving effect to such assignment.

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

                    SECTION 2.06. Alternative Currency Letters of Credit.

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

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                    (b) Reports to Administrative Agent. XL Group shall deliver
to the Administrative Agent and each of the Lenders a report in respect of each
Alternative Currency Letter of Credit (an “Alternative Currency Letter of Credit
Report”) on and as of the date (i) on which such Alternative Currency Letter of
Credit is issued, (ii) of the issuance, renewal, extension or amendment of a
Syndicated Letter of Credit or a Non-Syndicated Letter of Credit, if any
Alternative Currency Letter of Credit is then outstanding and (iii) on which the
Commitments are to be reduced pursuant to Section 2.07, specifying for each such
Alternative Currency Letter of Credit (after giving effect to issuance thereof,
as applicable):

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

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

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

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

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

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

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

                    SECTION 2.07. Termination, Reduction and Increase of the
Commitments.

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

                    (b) Voluntary Termination or Reduction. The Account Parties
may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that
is $25,000,000 or a larger multiple of $5,000,000 and (ii) the Account Parties
shall not terminate or reduce the Commitments if the Aggregate LC Exposure would
exceed the Commitments. XL Group shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under this paragraph (b) at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by XL Group pursuant to
this paragraph (b) shall be irrevocable; provided that a notice of termination
of the Commitments delivered by XL Group

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may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by XL Group (by notice to
the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Subject to the proviso in the immediately preceding
sentence, any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

                    (c) Increases to Commitments. XL Group shall have the right,
at any time by notice to the Administrative Agent, to increase the Commitments
hereunder (i) by including as a Lender hereunder with a new Commitment, any
Person which is a NAIC Approved Bank (or any other Person whose obligations in
respect of Letters of Credit issued under the Agreement shall be confirmed by a
NAIC Approved Bank) that is not an existing Lender or (ii) by having an existing
Lender increase its Commitment then in effect (with the consent of such Lender
in its sole discretion) (each new or increasing Lender, a “Supplemental Lender”)
in each case with the approval (not to be unreasonably withheld) of the
Administrative Agent, which notice shall specify the name of each Supplemental
Lender, the aggregate amount of such increase and the portion thereof being
assumed by each such Supplemental Lender, and the date on which such increase is
to become effective (each a “Supplemental Commitment Date”) (which shall be a
Business Day at least three Business Days after the delivery of such notice and
30 days prior to the Commitment Termination Date); provided that (w) the
aggregate amount of increases of the Commitments under this paragraph and
pursuant to Section 2.11(c) (or any successor provision) of the Unsecured Credit
Agreement shall not exceed $500,000,000, (x) no existing Lender shall have any
obligation to participate in such increase of aggregate Commitments (y) the
Commitment of any Supplemental Lender that is not an existing Lender shall be in
an amount of at least $25,000,000 and (z) the aggregate amount of the increase
of the Commitments effected on any day shall be in an aggregate amount of at
least $25,000,000 and larger multiples of $1,000,000. Each such Supplemental
Lender shall enter into an agreement in form and substance satisfactory to XL
Group and the Administrative Agent pursuant to which such Supplemental Lender
shall, as of the applicable Supplemental Commitment Date, undertake a Commitment
(or, if any such Supplemental Lender is an existing Lender, pursuant to which
such Supplemental Lender’s Commitment shall be increased in the agreed amount on
such date) and such Supplemental Lender shall thereupon become (or, if it is
already a Lender, continue to be) a “Lender” for all purposes hereof; provided
that, in the case of any Supplemental Lender that is not a Lender immediately
prior to such Supplemental Commitment Date and is not listed on the NAIC
Approved Bank List, such Supplemental Lender and its Confirming Lender shall
have entered into an agreement of the type contemplated in the definition of
“Confirming Lender” in Section 1.01.

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

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

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          (ii) the representations and warranties of the Obligors set forth in
this Agreement (other than in Section 4.04(b)) shall be true and correct in all
material respects on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such
specific date) except where such representations and warranties are conditioned
by materiality and then such representations and warranties shall be true and
correct in all respects.

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

                    SECTION 2.08. Fees.

                    (a) Commitment Fee. XL Group agrees to pay to the
Administrative Agent for account of each Lender a commitment fee which shall
accrue at a rate per annum equal to 0.125% on the average daily unused amount of
such Lender’s Commitment during the period from and including the Effective Date
to but excluding the date of termination of the Commitments. Commitment fees
accrued through and including each Quarterly Date shall be payable on the third
Business Day following such Quarterly Date, commencing on the first such date to
occur after the Effective Date; provided that all such fees shall be payable on
the date on which the Commitments terminate.

                    (b) Commission. XL Group agrees to pay to the Administrative
Agent for account of each Lender a commission which shall accrue at a rate per
annum equal to 0.50% on the face amount of all outstanding Letters of Credit.
Such commission shall be shared ratably among the Lenders participating in such
Letters of Credit. Commissions accrued through and including each Quarterly Date
shall be payable on the third Business Day following such Quarterly Date,
commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand.

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

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

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

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

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

                    SECTION 2.09. Interest.

                    (a) Default Interest. If any amount of reimbursement
obligation, interest, fees, and other amounts payable by the Account Parties
hereunder is not paid when due, 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
Reimbursement Obligations, 3.0% plus the Alternate Base Rate and (ii) in the
case of any amounts other than Reimbursement Obligations, 2.0% plus the
Alternate Base Rate.

                    (b) Payment of Interest. Interest accrued pursuant to
paragraph (a) of this Section shall be payable on demand.

                    (c) 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 2.10. Increased Costs.

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

 

 

 

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

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                    (ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or any Letter of Credit (or any
participation therein); or

 

 

 

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

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

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

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

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

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

                    SECTION 2.11. Taxes.

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

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

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

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own behalf, the Collateral Agent on its own behalf or on behalf of a Lender,
shall be conclusive as between such Lender or the Administrative Agent, as the
case may be, and the Account Parties absent manifest error.

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

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

                    (f) Exemptions. (1) Each recipient of payments under this
Agreement or any Credit Document (or a Transferee, including any Participant, in
which case such Participant’s obligations to a Specified Account Party and the
Administrative Agent described in this Section 2.11(f) shall also extend to the
Lender from which the related participation shall have been purchased) (i) that
is a “United States Person” as defined in Section 7701(a)(30) of the Code (a
“U.S. Lender”) shall deliver to the Specified Account Party and the
Administrative Agent two properly completed and duly signed copies of U.S.
Internal Revenue Service (“IRS”) Form W-9 (or any successor form) certifying
that such U.S. Lender is exempt from U.S. federal withholding tax or (ii) that
is not a “United States Person” as defined in Section 7701(a)(30) of the Code (a
“Non-U.S. Lender”) shall deliver to the Specified Account Party and the
Administrative Agent (I) two copies of IRS Form W-8BEN, Form W-8ECI or Form
W-8IMY(or any successor form) (together with any applicable underlying IRS
forms), (II) in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest”, a certification to the effect that such
Non-U.S. Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, (b) a “10 percent shareholder” of the Specified Account party
within the meaning of Section 881(c)(3)(B) of the Code, (c) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code or (d)
conducting a trade or business in the United States with which the relevant
interest payments are effectively connected; and the applicable IRS Form W-8 (or
any successor form) properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from U.S. federal withholding tax on payments under
this Agreement and the other Credit Documents, or (III) any other form
prescribed by applicable requirements of U.S. federal income tax law as a basis
for claiming exemption from or a reduction in U.S. federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable requirements of law to permit the Specified Account Party and the
Administrative Agent to determine the withholding or deduction required to be
made. Such forms shall be delivered by each U.S. Lender and each Non-U.S. Lender
on or before the date it

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

                    (2) If a payment made to any recipient under any Credit
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
such recipient were to fail to comply with the applicable reporting requirements
of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code,
as applicable), such recipient shall deliver to each Account Party and the
Administrative Agent at the time or times prescribed by law and at such time or
times reasonably requested by any Account Party or the Administrative Agent such
documentation prescribed by applicable law (including as prescribed by Section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by any Account Party or the Administrative Agent as may be necessary
for the Account Parties and the Administrative Agent to comply with their
obligations under FATCA and to determine whether such recipient has complied
with such recipient’s obligations under FATCA or to determine the amount to
deduct and withhold from such payment. Solely for purposes of this Section
2.11(f)(2), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement. Each recipient agrees that if any form or certification it
previously delivered under this clause expires or becomes obsolete or inaccurate
in any respect, it shall update such form or certification or promptly notify
the Account Parties and the Administrative Agent in writing of its legal
inability to do so.

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

                    (g) If the Administrative Agent or a Lender determines, in
its reasonable discretion, that it has received a refund from the relevant
Governmental Authority of any Taxes or Other Taxes as to which it has been
indemnified by an Account Party or with respect to which

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

                    SECTION 2.12. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs.

                    (a) Payments by the Account Parties. Each Account Party
shall make each payment required to be made by it hereunder (whether of fees,
reimbursement of LC Disbursements or interest thereon, under Section 2.10 or
2.11, or otherwise) or under any other Credit Document (except to the extent
otherwise provided therein) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim;
provided that any payments in respect of Alternative Currency Letters of Credit
shall be made in the manner (including the time and place of payment) as shall
have been separately agreed between the relevant Account Party and Lender
pursuant to Section 2.06. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its
offices at 1111 Fannin Street, Houston, Texas except payments pursuant to
Sections 2.10, 2.11 and 10.03, which shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.

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

                    (c) Pro Rata Treatment. Except to the extent otherwise
provided herein: each reimbursement of LC Disbursements (other than in respect
of Alternative Currency Letters of

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Credit) shall be made to the relevant Lenders, each payment of fees under
Section 2.08 shall be made for account of the relevant Lenders, each termination
or reduction of the amount of the Commitments under Section 2.07 and any
interest paid in respect of any Reimbursement Obligation shall be applied to the
respective Commitments of the Lenders, in each case 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 Aggregate LC Exposure).

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

                    (e) Presumptions of Payment. Unless the Administrative Agent
shall have received notice from an Account Party prior to the date on which any
payment is due to the Administrative Agent for account of the relevant Lenders
hereunder that such Account Party will not make such payment, the Administrative
Agent may assume that such Account Party has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
relevant Lenders the amount due. In such event, if the relevant Account Party
has not in fact made such payment, then each of the Lenders severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Federal Funds Effective Rate.

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

                    SECTION 2.13. Mitigation Obligations; Replacement of
Lenders.

                    (a) Designation of a Different Lending Office. If any Lender
requests compensation under Section 2.10, or if any Account Party is required to
pay any additional amount or indemnification payment to any Lender or any
Governmental Authority for account of any Lender pursuant to Section 2.11, then
such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Letters of Credit hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or Affiliates, if,
in the reasonable judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.10 or 2.11,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. XL Group hereby agrees to pay all reasonable costs and expenses incurred
by any Lender in connection with any such designation or assignment. Nothing in
this Section 2.13(a) shall affect or postpone any of the obligations of the
Account Parties or the rights of any Lender pursuant to Sections 2.10 or 2.11.

                    (b) Replacement of Lenders. If any Lender (i) requests
compensation under Section 2.10, or if any Account Party is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.11, (ii) becomes a Defaulting Lender, (iii) has
refused to consent to any waiver or amendment with respect to any Credit
Document that requires the consent of all the Lenders or of such Lender as a
Lender directly and adversely affected by such waiver or amendment and has been
consented to by the Required Lenders or (iv) if any Lender ceases to be a NAIC
Approved Bank, then XL Group may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
this Agreement to an assignee selected by XL Group that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) XL Group shall have received the prior written
consent of the Administrative Agent, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to its
outstanding LC Disbursements, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding LC Disbursements and accrued interest and fees) or the relevant
Account Party (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.10 or
payments required to be made pursuant to Section 2.11, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
relevant Account Party to require such assignment and delegation cease to apply.

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

                    SECTION 2.14. Defaulting Lenders. Notwithstanding any
provision of this Agreement to the contrary, if any Lender becomes a Defaulting
Lender, then the following provisions shall apply for so long as such Lender is
a Defaulting Lender:

                    (a) fees shall cease to accrue on the unfunded portion of
the Commitment of such Defaulting Lender pursuant to Section 2.08;

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

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

 

 

 

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

 

 

 

                    (ii) if the reallocation described in clause (i) above
cannot, or can only partially, be effected, the applicable Specified Account
Party shall within one Business Day following notice by the Administrative Agent
ensure that the Borrowing Base includes an amount of cash equal to or greater
than the Defaulting Lender’s LC Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) for so long as such LC Exposure are
outstanding;

 

 

 

                    (iii) if the applicable Account Party cash collateralizes
any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii)
above, no Specified Account Party shall be required to pay any fees to such
Defaulting Lender pursuant to Section 2.08 with respect to such Defaulting
Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is
cash collateralized;

 

 

 

                    (iv) if the LC Exposure of the non-Defaulting Lenders is
reallocated pursuant to clause (i) above, then the fees payable to the Lenders
pursuant to Section 2.08 shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; and

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                    (v) if all or any portion of such Defaulting Lender’s LC
Exposure is neither reallocated nor cash collateralized pursuant to clause (i)
or (ii) above, then, without prejudice to any rights or remedies of the Issuing
Lender or any other Lender hereunder, all fees payable under Section 2.08 with
respect to such Defaulting Lender’s LC Exposure shall be payable to the
Administrative Agent until and to the extent that such LC Exposure is
reallocated and/or cash collateralized; and

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

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

                    SECTION 2.15. Absence of Rating. In the event that XL
Insurance (Bermuda), XL Re or XL Re Europe ceases to receive a financial
strength rating from A.M. Best & Co. (or its successor), such Account Party
shall no longer be entitled to request the issuance of further Letters of Credit
hereunder.

ARTICLE III

GUARANTEE

                    SECTION 3.01. The Guarantee. Each Guarantor hereby jointly
and severally irrevocably guarantees to each Lender, the Collateral Agent and
the Administrative Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Reimbursement Obligations (and interest thereon) and LC
Disbursements (and interest thereon) made by the Lenders to each of the Account
Parties (other than such Guarantor in its capacity as an Account Party
hereunder) and all other amounts from time to time owing to the Lenders, the
Collateral Agent or the Administrative Agent by such Account Parties under this
Agreement, in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the “Guaranteed Obligations”). Each
Guarantor hereby further jointly and severally agrees that if any Account Party
(other than such Guarantor in its capacity as an Account Party hereunder) shall
fail to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, such Guarantor will promptly pay
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

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

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

                    SECTION 3.03. Reinstatement. The obligations of the
Guarantors under this Article shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of any Account Party in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Guarantors
jointly and severally agree that they will indemnify the Administrative Agent,
the Collateral Agent and each

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Lender on demand for all reasonable costs and expenses (including reasonable
fees of counsel) incurred by the Administrative Agent, the Collateral Agent or
such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.

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

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

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

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

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

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(expressed as a percentage) of (x) the amount by which the aggregate present
fair saleable value of all properties of such Guarantor (excluding any shares of
stock of any other Guarantor) exceeds the amount of all the debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder and any obligations of any other Guarantor that have been Guaranteed
by such Guarantor) to (y) the amount by which the aggregate fair saleable value
of all properties of all of the Guarantors (other than XL Group) exceeds the
amount of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of the
Guarantors under this Article III) of all of the Guarantors (other than XL
Group), determined (A) with respect to any Guarantor that is a party hereto on
the date hereof, as of the date hereof, and (B) with respect to any other
Guarantor, as of the date such Guarantor becomes a Guarantor hereunder.

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

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

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

                    SECTION 4.01. Organization; Powers. Each Account Party and
each of its Significant Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.

                    SECTION 4.02. Authorization; Enforceability. The
Transactions are within each Account Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, by all necessary
shareholder action. Each of this Agreement, the Pledge Agreement and the
Collateral Account Control Agreement has been duly executed and delivered by
each Account Party and constitutes a legal, valid and binding obligation of such
Account Party, enforceable against such Account Party in accordance with its
terms, except as such

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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 4.03. Governmental Approvals; No Conflicts. The
Transactions and the entry into each of this Agreement, the Pledge Agreement and
the Collateral Account Control Agreement (a) do not require any consent or
approval of (including any exchange control approval), registration or filing
with, or any other action by, any Governmental Authority, except such as have
been obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of each Account Party or any of its Significant Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any material indenture, agreement or other instrument binding upon each
Account Party or any of its Significant Subsidiaries or assets, or give rise to
a right thereunder to require any payment to be made by any such Person, and
(d) will not result in the creation or imposition of any Lien on any asset of
each Account Party or any of its Significant Subsidiaries.

                    SECTION 4.04. Financial Condition; No Material Adverse
Change.

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

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

                    SECTION 4.05. Properties.

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

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                    (b) Intellectual Property. Each Account Party and each of
its Significant Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by such Account Party and its Subsidiaries does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

                    SECTION 4.06. Litigation and Environmental Matters.

                    (a) Actions, Suits and Proceedings. Except as disclosed in
Schedule III or as routinely encountered in claims activity, there are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority now pending against or, to the knowledge of each Account Party,
threatened against or affecting such Account Party or any of its Subsidiaries
(i) as to which an adverse determination that would, individually or in the
aggregate, result in a Material Adverse Effect is likely or (ii) that involve
this Agreement or the Transactions.

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

                    Schedules III and IV referred to in this Section 4.06 shall
be deemed automatically updated from time to time to include disclosures
included in filings made by XL Group or XLIT with the SEC pursuant to the
Securities Exchange Act of 1934, as amended, after the Effective Date, it being
understood, however, that any such updates shall not affect or limit in any
manner any of the obligations of the Account Parties under this Agreement in
effect immediately prior to such disclosure and shall not be taken into account
for purposes of the last paragraph of Section 2.07(c), Section 5.02 and clause
(c) of Article VIII.

                    SECTION 4.07. Compliance with Laws and Agreements. Each
Account Party and each of its Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.

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

                    SECTION 4.09. Taxes. Each Account Party and each of its
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are

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being contested in good faith by appropriate proceedings and for which such
Person has set aside on its books adequate reserves or (b) to the extent that
the failure to file any such Tax return or pay any such Taxes could not
reasonably be expected to result in a Material Adverse Effect.

                    SECTION 4.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of such Plan by an amount that could
reasonably be expected to result in a Material Adverse Effect.

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

                    SECTION 4.11. Disclosure. The reports, financial statements,
certificates or other information furnished by each Account Party to the Lenders
in connection with the negotiation of this Agreement or delivered hereunder
(taken as a whole) do not contain any material misstatement of fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, such Account Party represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

                    SECTION 4.12. Use of Credit. No Account Party nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no Letter of Credit will be
used in connection with buying or carrying any Margin Stock (except for
repurchases of the capital stock of XL Group and purchases of Margin Stock in
accordance with XL Group’s Statement of Investment Policy Objectives and
Guidelines as in effect on the date hereof or as it may be changed from time to
time by a resolution duly adopted by the board of directors of XL Group (or any
committee thereof)). Not more than 25 percent of the value of the assets of any
Account Party will be Margin Stock.

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

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represented by such ownership interests. Except as disclosed in Schedule V, as
of the date hereof, (x) each of XL Group and its Subsidiaries owns, free and
clear of Liens, and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule V, (y) all
of the issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) except as
disclosed in filings of XL Group with the SEC prior to the date hereof, there
are no outstanding Equity Rights with respect to any Account Party.

                    SECTION 4.14. Withholding Taxes. Based upon information with
respect to each Lender provided by each Lender to the Administrative Agent, as
of the date hereof, the payment of the LC Disbursements and interest thereon,
the fees under Section 2.08 and all other amounts payable hereunder will not be
subject, by withholding or deduction, to any Indemnified Taxes imposed by
Bermuda, the Cayman Islands, Switzerland, the United Kingdom or Ireland.

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

                    SECTION 4.16. Legal Form. This Agreement is in proper legal
form under the laws of any Account Party Jurisdiction for the admissibility
thereof in the courts of such Account Party Jurisdiction.

ARTICLE V

CONDITIONS

                    SECTION 5.01. Effective Date. The obligations of the Lenders
(or the Issuing Lender, as the case may be) to issue Letters of Credit 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. (i) From each party hereto either (x) a
counterpart of this Agreement signed on behalf of such party or (y) written
evidence satisfactory to the Administrative Agent (which may include telecopy or
email transmission of a signed signature page to this Agreement) that such party
has signed a counterpart of this Agreement and (ii) each Security Document,
executed and delivered by each party thereto.

 

 

 

          (b) Opinions of Counsel to the Obligors. Opinions, each dated the
Effective Date, of Cleary Gottlieb Steen & Hamilton LLP, special U.S. counsel
for the Obligors

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and opinions provided by counsel to the applicable Obligors in the jurisdictions
of Ireland, the Cayman Islands, Bermuda, the United Kingdom and Switzerland, in
each case, reasonably satisfactory to the Administrative Agent and its counsel.

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

                    The obligation of any Lender to make its initial issuance of
a Letter of Credit hereunder is also subject to (i) the payment by XL Group of
such fees as XL Group shall have agreed to pay to any Lender or the
Administrative Agent in connection herewith, including the reasonable fees and
expenses of Simpson Thacher & Bartlett LLP, special New York counsel to JPMCB,
in connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Credit Documents and the extensions of credit hereunder
(to the extent that reasonably detailed statements for such fees and expenses
have been delivered to XL Group) and (ii) all necessary actions (including
obtaining lien searches) to establish that the Collateral Agent will have a
perfected first priority security interest (subject to permitted Liens) in the
Collateral under this Agreement and the Security Documents.

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

                    SECTION 5.02. Each Credit Event. The obligation of each
Lender to issue, continue, 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 Obligors set forth in
this Agreement, the Pledge Agreement and the Collateral Account Control
Agreement (other than, at any time after the Effective Date, in Section 4.04(b))
shall be true and correct on and as of the date of issuance, continuation,
amendment, renewal or extension of such Letter of Credit (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date);

 

 

 

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

 

 

 

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

 

 

 

          (d) at the time of and immediately after giving effect to the
issuance, amendment, renewal or extension of such Letter of Credit, the
Borrowing Base of the Specified Account Party requesting issuance continuation,
amendment, renewal or extension of any Letter Credit shall not be less than the
aggregate face amount of all the Letters of Credit issued on behalf of such
Specified Account Party.

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

ARTICLE VI

AFFIRMATIVE COVENANTS

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

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

 

 

 

          (a) by April 10 of each year, (i) the audited balance sheet and
related statements of operations, stockholders’ equity and cash flows of XL
Group and its consolidated Subsidiaries as of the end of and for the immediately
preceding fiscal year, setting forth in comparative form the figures for (or, in
the case of the balance sheet, as of the end of) the previous fiscal year (if
such figures were already produced for such corresponding period), reported on
by independent public accountants of recognized national standing (without a
“going concern” or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such financial
statements present fairly in all material respects the financial condition and
results of operations of XL Group and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied (it being
understood that delivery to the Lenders of XL Group’s Report on Form 10-K filed
with the SEC shall satisfy the financial statement delivery requirements under
this clause (i) so long as the financial information required to be contained in
such report is substantially the same as the financial information required
under this clause (i)); and (ii) the unaudited consolidated balance sheet and
related statements of operations, stockholders’ equity and cash flows of XLIT
and its consolidated Subsidiaries as of the end of and for the immediately
preceding fiscal year, setting forth in each case in comparative form the
figures for (or, in the case of the balance sheet, as of the end of) the
previous fiscal year (if such figures were already produced for such
corresponding period), certified by a Financial Officer of XLIT as presenting
fairly in all material respects the financial condition and results of
operations of XLIT and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;

 

 

 

          (b) (i) by May 15 of each year, the balance sheet and related
statements of operations and stockholders’ equity of each of XL Insurance
(Bermuda), XL Re, XL Re Europe, XL Insurance, XL Switzerland and XL Life (in
each case, in the event consolidated financial statements are prepared in the
ordinary course of business, prepared in a manner that consolidates the
applicable consolidated Subsidiaries) as of the end of and for the immediately
preceding year, setting forth in each case in comparative form the figures for
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year (if such figures were already produced for such corresponding period), in
each case audited and reported on by independent public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) in accordance with GAAP, Local GAAP, SAP or SFR, as the case may be,
consistently applied; (ii) by June 15 of each year, the unaudited consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows of XL America and its consolidated Subsidiaries as of the end of and
for the immediately preceding fiscal year, setting forth in each case in
comparative form the figures for (or, in the case of the balance sheet, as of
the end of) the previous fiscal year (if such figures were already produced for
such corresponding

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period), certified by a Financial Officer of XL America as presenting fairly in
all material respects the financial condition and results of operations of XL
America and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes; and (iii) by June 15 of each year, audited statutory
financial statements for each Insurance Subsidiary of XL America as of the end
of and for the immediately preceding fiscal year, in each case reported on by
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such audited
financial statements present fairly in all material respects the financial
condition and results of operations of such Insurance Subsidiary in accordance
with SAP consistently applied;

 

 

 

          (c) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of XL Group, (i) the unaudited consolidated balance
sheet and related statements of operations, stockholders’ equity and cash flows
of XL Group and its consolidated Subsidiaries as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for (or, in the case of the balance
sheet, as of the end of) the corresponding period or periods of the previous
fiscal year (if such figures were already produced for such corresponding period
or periods), all certified by a Financial Officer of XL Group as presenting
fairly in all material respects the financial condition and results of
operations of XL Group and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes (it being understood that delivery to
the Lenders of XL Group’s Report on Form 10-Q filed with the SEC shall satisfy
the financial statement delivery requirements under this clause (i) so long as
the financial information required to be contained in such report is
substantially the same as the financial information required under this clause
(i)); and (ii) an unaudited balance sheet and related statements of operations
and stockholders’ equity of each of XLIT, XL America, XL Insurance (Bermuda), XL
Re, XL Re Europe, XL Insurance, XL Switzerland and XL Life (in each case, in the
event consolidated financial statements are prepared in the ordinary course of
business, prepared in a manner that consolidates the applicable consolidated
Subsidiaries) as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for (or, in the case of the balance sheet, as of the end of) the
corresponding period or periods of the previous fiscal year (if such figures
were already produced for such corresponding period or periods), all certified
by a Financial Officer of the respective Account Party as presenting fairly in
all material respects the financial condition and results of operations of such
Account Party (or, if applicable, of such Account Party and its consolidated
Subsidiaries on a consolidated basis) in accordance with GAAP, Local GAAP, SAP
or SFR, as the case may be, consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;

 

 

 

          (d) concurrently with any delivery of financial statements under
paragraph (a), (b) or (c) of this Section, a certificate signed on behalf of
each Account Party by a

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

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

 

 

 

          (a) the occurrence of any Default; and

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

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

                    SECTION 6.03. Preservation of Existence and Franchises. Each
Account Party will, and will cause each of its Significant Subsidiaries to,
maintain its corporate existence and its material rights and franchises in full
force and effect in its jurisdiction of incorporation; provided that the
foregoing shall not prohibit (x) any merger or consolidation permitted under
Section 7.01 or (y) any Disposition permitted under Section 7.02(e). Each
Account Party will, and will cause each of its Subsidiaries to, qualify and
remain qualified as a foreign corporation in each jurisdiction in which failure
to receive or retain such qualification would have a Material Adverse Effect.
                    SECTION 6.04. Insurance. Each Account Party will, and will
cause each of its Significant Subsidiaries to, maintain with financially sound
and reputable insurers, insurance with respect to its properties in such amounts
as is customary in the case of corporations engaged in the same or similar
businesses having similar properties similarly situated.
                    SECTION 6.05. Maintenance of Properties. Each Account Party
will, and will cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition the properties now or
hereafter owned, leased or otherwise possessed by and used or useful in its
business and will make or cause to be made all needful and proper repairs,
renewals, replacements and improvements thereto so that the business carried on
in connection therewith may be properly conducted at all times except if the
failure to do so would not have a Material Adverse Effect, provided, however,
that the foregoing shall not impose on such Account Party or any Subsidiary of
such Account Party any obligation in respect of any property leased by such
Account Party or such Subsidiary in addition to such Account Party’s obligations
under the applicable document creating such Account Party’s or such Subsidiary’s
lease or tenancy.
                    SECTION 6.06. Payment of Taxes and Other Potential Charges
and Priority Claims; Payment of Other Current Liabilities. Each Account Party
will, and will cause each of its Subsidiaries to, pay or discharge:

 

 

 

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

 

 

 

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

 

 

 

          (c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any such property (other
than Liens not forbidden by Section 7.03) or which, if unpaid, might give rise
to a claim entitled to

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priority over general creditors of such Account Party or such Subsidiary in any
proceeding under the Bermuda Companies Law, or Bermuda Insurance Law, or any
insolvency proceeding, liquidation, receivership, rehabilitation, dissolution or
winding-up involving such Account Party or such Subsidiary;

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

                    SECTION 6.07. Financial Accounting Practices. Each Account
Party will, and will cause each of its consolidated Subsidiaries to, make and
keep books, records and accounts which, in reasonable detail, accurately and
fairly reflect its transactions and dispositions of its assets and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that transactions are recorded as necessary to permit preparation of
financial statements required under Section 6.01 in conformity with GAAP, Local
GAAP, SAP and SFR, as applicable, and to maintain accountability for assets.
                    SECTION 6.08. Compliance with Applicable Laws. Each Account
Party will, and will cause each of its Subsidiaries to, comply with all
applicable Laws (including but not limited to the Bermuda Companies Law or
Bermuda Insurance Law) in all respects; provided that such Account Party or any
Subsidiary of such Account Party will not be deemed to be in violation of this
Section as a result of any failure to comply with any such Law which would not
(i) result in fines, penalties, injunctive relief or other civil or criminal
liabilities which, in the aggregate, would have a Material Adverse Effect or
(ii) otherwise impair the ability of such Account Party to perform its
obligations under this Agreement.
                    SECTION 6.09. Use of Letters of Credit. No Letter of Credit
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the regulations of the Board, including Regulations U and X.
Each Account Party will use the Letters of Credit issued for its account
hereunder in the ordinary course of business of such Account Party and its
Affiliates. For the avoidance of doubt, the parties agree that any Account Party
may apply for a Letter of Credit hereunder to support the obligations of any
Affiliate of XL Group, it being understood that such Account Party shall
nonetheless remain the account party and as such be liable with respect to such
Letter of Credit.
                    SECTION 6.10. Continuation of and Change in Businesses. The
Account Parties and their respective Significant Subsidiaries, taken as a whole,
will continue to engage in substantially the same business or businesses they
engaged in (or propose to engage in) on the date of this Agreement and
businesses related or incidental thereto; provided that the foregoing shall not
prohibit any Disposition permitted under Section 7.02(e).
                    SECTION 6.11. Visitation. Each Account Party will permit
such Persons as any Lender may reasonably designate to visit and inspect any of
the properties (including books and records) of such Account Party, to discuss
its affairs with its financial management, and provide such other information
relating to the business and financial condition of such Account Party at

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such times as such Lender may reasonably request. Each Account Party hereby
authorizes its financial management to discuss with any Lender the affairs of
such Account Party.

ARTICLE VII

NEGATIVE COVENANTS

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

                    SECTION 7.01. Mergers. No Account Party will merge with or
into or consolidate with any other Person, except that if no Default shall occur
and be continuing or shall exist at the time of such merger or consolidation or
immediately thereafter and after giving effect thereto (a) any Account Party may
merge or consolidate with any other corporation, including a Subsidiary, if such
Account Party shall be the surviving corporation, (b) XL Group may merge with or
into or consolidate with any other Person in a transaction that does not result
in a reclassification, conversion, exchange or cancellation of the outstanding
shares of capital stock of XL Group (other than the cancellation of any
outstanding shares of capital stock of XL Group held by the Person with whom it
merges or consolidates), (c) any Account Party may enter into a merger or
consolidation which is effected solely to change the jurisdiction of
incorporation of such Account Party and results in a reclassification,
conversion or exchange of outstanding shares of capital stock of such Account
Party solely into shares of capital stock of the surviving entity and (d) any
Account Party may merge or consolidate with any other Account Party or any
Subsidiary if the obligations hereunder of the non-surviving Account Party with
respect to any outstanding Letters of Credit issued for its account have been
(i) assumed by another Account Party, (ii) terminated or expired or (iii) dealt
with in any other manner reasonably satisfactory to the Administrative Agent
(after consultation with the Lenders).

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

 

 

 

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

 

 

 

          (b) sales, conveyances, assignments or other transfers or dispositions
in immediate exchange for cash or tangible assets, provided that any such sales,
conveyances or transfers shall not individually, or in the aggregate for the
Account

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Parties and their respective Subsidiaries (taken together with any other
Dispositions previously made pursuant to this Section 7.02(b)), exceed 5% of
Consolidated Total Assets at the time of the making of such Disposition;

 

 

 

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

 

 

 

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

 

 

 

          (e) the Disposition of all or any portion of the life reinsurance
operations (the “Life Operations”) conducted directly or indirectly by any
Account Party (including through the Disposition of a Subsidiary that conducts
Life Operations); provided that, if, after giving effect to such Disposition,
such Account Party would no longer exist or have any operations, such
Disposition shall only be permitted if the obligations hereunder of such Account
Party with respect to any outstanding Letters of Credit issued for its account
have been (i) assumed by another Account Party, (ii) terminated or expired or
(iii) dealt with in any other manner reasonably satisfactory to the
Administrative Agent (after consultation with the Lenders).

                    SECTION 7.03. Liens. No Account Party will, nor will it
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Lien on any property or assets, tangible or intangible, now owned or hereafter
acquired by it, except:

 

 

 

          (a) Liens securing Indebtedness incurred under this Agreement or
otherwise granted under the Security Documents (including extensions, renewals
and replacements thereof);

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

          (e) Liens on cash and securities of an Account Party or any of its
Subsidiaries incurred as part of treasury management or the management of its
investment portfolio including, but not limited to, (i) any custody, investment
management or other service provider arrangements or (ii) pursuant to any
International Swaps and Derivatives Association, Inc. (“ISDA”) documentation or
any Specified Transaction Agreement in

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accordance with XL Group’s Statement of Investment Policy Objectives and
Guidelines as in effect as of the date of entry into the ISDA or Specified
Transaction Agreement or as it may be changed from time to time by a resolution
duly adopted by the board of directors of XL Group (or any committee thereof);

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

          (i) Liens on property securing all or part of the purchase price
thereof to such Account Party and Liens (whether or not assumed) existing on
property at the time of

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

                    SECTION 7.04. Transactions with Affiliates. No Account Party
will, nor will it permit any of its Significant Subsidiaries to, enter into or
carry out any transaction with (including purchase or lease property or services
to, loan or advance to or enter into, suffer to remain in existence or amend any
contract, agreement or arrangement with) any Affiliate of such Account Party, or
directly or indirectly agree to do any of the foregoing, except (i) transactions
involving guarantees or co-obligors with respect to any Indebtedness described
in Part A of Schedule II, (ii) transactions among the Account Parties and their
wholly-owned Subsidiaries, (iii) transactions with Affiliates in good faith in
the ordinary course of such Account Party’s business consistent with past
practice and on terms no less favorable to such Account Party or

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any Subsidiary than those that could have been obtained in a comparable
transaction on an arm’s length basis from an unrelated Person and (iv)
transactions permitted by Sections 7.01 and 7.07.

                    SECTION 7.05. Ratio of Total Funded Debt to Total
Capitalization. XL Group will not permit at any time its ratio of (a) Total
Funded Debt to (b) the sum of Total Funded Debt plus Consolidated Net Worth to
be greater than 0.35:1.00.

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

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

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

                    SECTION 7.09. Private Act. No Account Party will become
subject to a Private

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Act other than the X.L. Insurance Company, Ltd. Act, 1989 and the XL Life Ltd
Amendment and Consolidation Act 2001.

                    SECTION 7.10. Collateral Accounts. If, on any date, the
aggregate face amount (or its Dollar Equivalent) of all Letters of Credit issued
on behalf any Account Party exceeds the Borrowing Base of such Account Party on
such date and either (i) the Administrative Agent has delivered written notice
thereof to such Account Party, (ii) any Account Party has actual knowledge (or
should reasonably know) of such excess or (iii) any Account Party shall have
received a Borrowing Base Report showing such excess, then such Account Party
(or XL Group) shall within three Business Days pay or deliver to the Custodian,
to be held in accordance with the Pledge Agreement and applicable Collateral
Account Control Agreement, an amount of cash and/or Eligible Assets sufficient
to cause the Borrowing Base of such Account Party to be at least equal to the
aggregate face amount of all Letters of Credit issued on behalf of such Account
Party.

ARTICLE VIII

EVENTS OF DEFAULT

 

 

 

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

 

 

 

          (a) any Account Party shall fail to pay any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;

 

 

 

          (b) any Account Party shall fail to pay any interest on any LC
Disbursement or any fee payable under this Agreement or any other amount (other
than an amount referred to in clause (a) of this Article) payable under this
Agreement, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of 5 or more days;

 

 

 

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

 

 

 

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

 

 

 

          (e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Article or the reporting requirement pursuant
to Section 6.01(f)), the Pledge Agreement or the Collateral Account Control
Agreement and such failure shall continue unremedied for a period of 30 or more
days after notice thereof from the Administrative Agent (given at the request of
any Lender) to such Obligor;

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          (f) any Account Party or any of its Subsidiaries shall default (i) in
any payment of principal of or interest on any other obligation for borrowed
money in principal amount of $50,000,000 or more, or any payment of any
principal amount of $50,000,000 or more under Hedging Agreements, in each case
beyond any period of grace provided with respect thereto, or (ii) in the
performance of any other agreement, term or condition contained in any such
agreement (other than Hedging Agreements) under which any such obligation in
principal amount of $50,000,000 or more is created, if the effect of such
default is to cause or permit the holder or holders of such obligation (or
trustee on behalf of such holder or holders) to cause such obligation to become
due prior to its stated maturity or to terminate its commitment under such
agreement, provided that this clause (f) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;

 

 

 

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

 

 

 

          (h) any Account Party shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under the Bermuda Companies Law or the Companies Law (2011 Revision) of the
Cayman Islands or any other similar applicable Law, or shall consent to the
filing of any such petition, or shall consent to the appointment of an examiner,
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it
or a substantial part of its property, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or corporate or other action shall be taken by
such Account Party in furtherance of any of the aforesaid purposes;

 

 

 

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

 

 

 

          (j) an ERISA Event (or similar event with respect to any Non-U.S.
Benefit Plan) shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events and such similar events that
have occurred, could reasonably

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be expected to result in liability of the Account Parties and their Subsidiaries
in an aggregate amount exceeding $100,000,000;

 

 

 

          (k) a Change in Control shall occur;

 

 

 

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

 

 

 

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

 

 

 

          (n) any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Account Party shall so assert, or any Lien
created by any of the Security Documents shall cease to be enforceable and of
the same effect and priority purported to be created thereby;

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

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

          (ii) declare all amounts owing or payable hereunder or under any
Credit Document to be immediately due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
the Account Parties;

          (iii) require that the Eligible Assets in any Collateral Account
consist solely of cash or such other Eligible Assets as the Administrative Agent
may require; and

          (iv) exercise on behalf of itself, the Collateral Agent, the Lenders
and the Issuing Lenders all rights and remedies available to it, the Collateral
Agent, the Lenders and the Issuing Lenders under the Credit Documents;

provided, however, that upon the occurrence of an event with respect to any
Account Party described in clause (g) or (h) of this Article, the obligation of
the Administrative Agent and each Issuing Lender to issue, amend, extend or
otherwise modify any Letter of Credit shall automatically terminate, all amounts
owing or payable hereunder or under any Credit Document shall automatically
become due and payable, in each case without presentment, demand, protest

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or other notice of any kind, all of which are hereby waived by the Account
Parties, and such amounts shall become due and payable without further act of
the Administrative Agent, the Collateral Agent or any Lender.

ARTICLE IX

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

                    Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof and under the other Credit
Documents (including, but not limited to, providing instructions to the
Collateral Agent and the Custodian as provided therein), together with such
actions and powers as are reasonably incidental thereto.

                    The Person serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and such Person and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with any Account Party or any
Subsidiary or other Affiliate thereof as if it were not the Administrative Agent
hereunder.

                    The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to any Account Party or any of their Subsidiaries that
is communicated to or obtained by the bank serving as Administrative Agent or
any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by an Account Party or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

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                    The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for any Account Party), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

                    The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

                    The Administrative Agent may resign at any time by notifying
the Lenders and the Account Parties. Upon any such resignation, the Required
Lenders shall have the right, in consultation with XL Group, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent’s resignation shall nonetheless become effective and
(1) the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and (2) the Required Lenders shall perform the duties of
the Administrative Agent (and all payments and communications provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender directly) until such time as the Required Lenders appoint a
successor agent as provided for above in this paragraph. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by XL Group to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between XL Group and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 10.03 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

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information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.

                    Each of the Lenders hereby irrevocably appoints The Bank of
New York Mellon to serve initially as Collateral Agent hereunder and authorizes
the Collateral Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Collateral Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto. The Bank of
New York Mellon and any person succeeding it as Collateral 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 Collateral Agent, and The
Bank of New York Mellon or such Person and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with any
Account Party or any Subsidiary or other Affiliate thereof as if it were not the
Collateral Agent hereunder.

                    The Collateral Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Credit
Documents to which it is a party, including but not limited to the Pledge
Agreement and the Control Agreement, and the Collateral Agent is hereby
authorized and directed in such capacity to enter, execute, deliver and perform
under such agreements and any amendments thereto from time to time. Without
limiting the generality of the foregoing, (a) the Collateral Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Collateral Agent shall not have
any duty to take any discretionary action or exercise any discretionary powers,
except rights and powers expressly contemplated hereby, and (c) except as
expressly set forth herein, the Collateral Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Account Party or any of their Subsidiaries that is communicated
to or obtained by the bank serving as Collateral Agent or any of its Affiliates
in any capacity. The Collateral Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct. The Collateral
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Collateral Agent by an Account Party or a
Lender, and the Collateral Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection herewith,
(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth herein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article V or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Collateral Agent. The Collateral 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 Collateral Agent is authorized to follow and rely upon all
notices, requests, directions and instructions given by officers named in
incumbency certificates furnished to the Collateral Agent from time to time by
the parties hereto, and the Collateral Agent shall not incur any liability in
executing

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any request, direction and instruction from any officer of a party named in an
incumbency certificate delivered hereunder prior to receipt by it of a more
current certificate. The Collateral 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 Collateral Agent may
consult with legal counsel (who may be counsel for any Account Party),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

                    The Collateral 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 Collateral Agent. The Collateral 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
Collateral Agent and any such sub-agent.

                    The Collateral Agent may resign at any time by notifying the
Administrative Agent and the Account Parties. Upon any such resignation, the
Required Lenders shall have the right, in consultation with XL Group, to appoint
a successor. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Collateral Agent gives notice of its resignation, then the retiring
Collateral Agent’s resignation shall nonetheless become effective and (1) the
retiring Collateral Agent shall be discharged from its duties and obligations
hereunder and (2) the Required Lenders shall perform the duties of the
Collateral Agent (and all payments and communications provided to be made by, to
or through the Collateral Agent shall instead be made by or to each Lender
directly) until such time as the Required Lenders appoint a successor agent as
provided for above in this paragraph. Upon the acceptance of its appointment as
Collateral 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) Collateral Agent and the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder (if not already discharged
therefrom as provided above in this paragraph). The fees payable by XL Group to
a successor Collateral Agent shall be the same as those payable to its
predecessor unless otherwise agreed between XL Group and such successor. After
the Collateral 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 Collateral Agent.

                    Each Lender acknowledges that it has, independently and
without reliance upon the Collateral 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
Collateral Agent or any other Lender and based on such documents and information
as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any
related agreement or any document furnished hereunder or thereunder.

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                    The Collateral Agent shall (a) not be responsible for any
recitals contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by it under, this Agreement, or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement (other than as against the Collateral Agent), any Collateral
or any other document referred to or provided for herein or therein or for any
failure by any other Person (except the Collateral Agent) to perform any of its
obligations hereunder or thereunder or for the perfection, priority or
maintenance of any security interest created hereunder; and (b) not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other document or instrument referred to or provided for herein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct.

                    No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or otherwise incur any liability in the
performance of any of its duties hereunder.

                    The Collateral Agent shall have no obligation or
responsibility to file UCC financing or continuation statements (except as
expressly directed in writing by the Administrative Agent) or to determine
whether the filing of any such statements is at any time necessary.

                     The Collateral Agent shall be entitled to rely conclusively
upon any certification, order, judgment, opinion, notice or other written
communication (including, without limitation, any thereof by electronic means,
telecopy or facsimile) believed by it in good faith to be genuine and to have
been signed or sent by or on behalf of the proper Person or Persons (without
being required to determine the correctness of any fact stated therein) and
consult with and conclusively rely upon advice, opinions and statements of legal
counsel and other experts selected by the Collateral Agent. As to any matters
not expressly provided for by this Agreement, the Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions given by the Administrative Agent.

                     Whenever in the administration of the provisions of this
Agreement the Collateral Agent shall deem it necessary or desirable that a
matter be proved or established prior to taking, or omitting to take, or
suffering any action hereunder, or suffering to exist any state of events, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith on the part of the Collateral
Agent, be deemed to be conclusively proved and established by a certificate of
an officer of the Administrative Agent delivered to the Collateral Agent, and
such certificate, in the absence of bad faith on the part of the Collateral
Agent, shall be full warrant to the Collateral Agent for any action taken,
suffered or omitted by it under the provisions of this Agreement in reliance
thereon.

                    The Collateral Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, entitlement
order, approval or other paper or document.

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                    Any entity into which the Collateral Agent may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which the Collateral Agent shall be a
party, or any entity succeeding to all or substantially all of the corporate
trust business of the Collateral Agent shall be the successor of the Collateral
Agent hereunder without the execution or filing of any paper with any party
hereto or any further act on the part of any of the parties hereto except where
an instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding.

                    The Collateral Agent and its Affiliates may (without having
to account therefor to any other party hereto) accept deposits from, lend money
to, make investments in and generally engage in any kind of banking, trust or
other business with the any other Person interested herein as if it were not
acting as the Collateral Agent, and the Collateral Agent and its Affiliates may
accept fees and other consideration without having to account for the same,
provided that the Collateral Agent agrees that it shall not accept, receive or
permit there to be created in favor of itself and shall take no affirmative
action to permit there to be created in favor of any other Person any security
interest, lien or other encumbrance of any kind in or upon the Collateral other
than the lien created under the Credit Documents.

                     The Collateral Agent shall have the right to appoint agents
or advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith.

                    In no event shall Collateral Agent be responsible or liable
for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused directly or indirectly, by circumstances
beyond its control, including, without limitation, acts of God; earthquake;
fires; floods; wars; civil or military disturbances; terrorist acts; sabotage;
epidemics; riots; interruptions, loss or malfunctions of utilities; or acts of
civil or military authority or governmental actions; it being understood that
the Collateral Agent shall use commercial reasonable efforts to resume
performance as soon as practicable under such circumstances.

                    In no event shall the Collateral Agent or the Administrative
Agent be liable for any indirect, special, punitive or consequential loss or
damage of any kind whatsoever, including, but not limited to, lost profits, even
if such loss or damage was foreseeable or it has been advised of the likelihood
of such loss or damage and regardless of the form of action.

                    The Collateral Agent shall be entitled to seek written
directions from the Administrative Agent prior to taking any action under this
Agreement or any other Credit Document and shall be fully protected and
indemnified hereunder in respect of any action taken or not taken in accordance
with any directions received from the Administrative Agent; provided that such
protection and indemnity shall not apply to the extent that the Collateral Agent
has acted with gross negligence, bad faith or willful misconduct.

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                    The Collateral Agent shall have no responsibility for or
liability with respect to monitoring compliance of any other party to this
Agreement, any other Credit Document or any other document related hereto or
thereto.

                    The Collateral Agent may perform any and all of its duties
and exercise its rights and powers hereunder or under any other Credit Document
by or through any one or more sub-agents, delegates or attorneys-in-fact
appointed by the Collateral Agent and the Collateral Agent shall not be
responsible for the supervision, or for acts or omissions, of any such
sub-agents, delegates or attorneys-in-fact appointed by the Collateral Agent in
good faith. The Collateral Agent and any such sub-agent may perform any and all
of its duties and exercise its rights and powers by or through its respective
Affiliates.

                    The rights and protections of the Collateral Agent set forth
herein shall also be applicable to the Collateral Agent in its capacity as
pledgee or any of its other capacities (including as Collateral Agent) under the
Credit Documents.

                    The exculpatory provisions of this Article IX shall apply to
any sub-agent or Affiliate of the Collateral Agent or the Administrative Agent,
respectively.

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

ARTICLE X

MISCELLANEOUS

                    SECTION 10.01. Notices. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy or email, as follows:

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

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

                    with a copy to

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

 

 

          (c) if to the Collateral Agent, to The Bank of New York Mellon, 101
Barclay Street, Mailstop: 101-0850, New York, New York 10286, Attention:
Insurance Trust & Escrow Group, Facsimile: (732) 667-9536); and

 

 

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

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

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

                    SECTION 10.02. Waivers; Amendments.

                    (a) No Deemed Waivers; Remedies Cumulative. No failure or
delay by the Administrative Agent, the Collateral 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, the
Collateral Agent and the Lenders hereunder are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by the Account Parties
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, the Collateral Agent or any Lender may have had notice
or knowledge of such Default at the time.

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                    (b) Amendments. Neither this Agreement, nor the Pledge
Agreement nor the Collateral Account Control Agreement, nor any provision hereof
or thereof may be waived, amended or modified except in writing signed by the
Obligors and the Required Lenders or by the Obligors and the Administrative
Agent with the consent of the Required Lenders (provided that, in the case of
the Pledge Agreement or Collateral Account Control Agreement, the Administrative
Agent may, in its discretion, enter into waivers, amendments or modifications
which it reasonably deems ministerial without the consent of the Required
Lenders); provided that no such writing shall:

 

 

 

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

 

 

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

 

 

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

 

 

          (iv) change Section 2.12(c) or 2.12(d) without the consent of each
Lender directly affected thereby,

 

 

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

 

 

          (vi) release of all or substantially all of the Collateral without the
consent of each Lender,

 

 

          (vii) 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;

 

 

          (viii) change Section 7.10 without the consent of each Lender; and

 

 

          (ix) increase the advance rates set forth in the definition of Advance
Rate without the consent of the Lenders holding more than 66 2/3% of the
aggregate amount of the Commitments at such time, or if the Commitments have
expired or been terminated, the Lenders holding more than 66 2/3% of the
Aggregate LC Exposure at such time;

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

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

                    SECTION 10.03. Expenses; Indemnity; Damage Waiver.

                    (a) Costs and Expenses. The XL Group agrees to pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent and their Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent and the Collateral
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and (ii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent or any Lender, including the fees, charges and disbursements of
one legal counsel for the Administrative Agent, one legal counsel for the
Collateral Agent and one legal counsel for the Lenders and, if necessary, one
firm of local counsel in each appropriate jurisdiction outside of the United
States, in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or in
connection with the Letters of Credit issued hereunder, including in connection
with any workout, restructuring or negotiations in respect thereof.

                    (b) Indemnification by the Account Parties. XL Group, and to
the extent this Section 10.03(b) applies to any Letter of Credit issued on
behalf of, or property of, any Account Party, such Account Party, jointly and
severally with XL Group, agree to indemnify the Administrative Agent, the
Collateral Agent, each Issuing Lender and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee (but not including Excluded
Taxes), incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any

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other transactions contemplated hereby, (ii) any Letter of Credit or the use
thereof (including any refusal by any Lender to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by such Account Party or any of its Subsidiaries, or any
Environmental Liability related in any way to such Account Party or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
result from or arise out of the gross negligence or willful misconduct of such
Indemnitee, in each case, as determined in a final non-appealable judgment by a
court of competent jurisdiction.

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

                    (d) Waiver of Consequential Damages, Etc. To the extent
permitted by applicable law, no Account Party shall assert, and each Account
Party hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Letter of Credit or the use of the proceeds 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 (i) no Account
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by an Account Party without such consent shall be null
and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

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

 

 

 

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

 

 

 

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

 

 

 

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

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

 

 

 

                    (A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender’s Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Account Parties and the Administrative Agent otherwise consent, provided that no
such consent of the Account Parties shall be required if an Event of Default
under clause (a), (b), (g) or (h) of Article VIII has occurred and is
continuing;

 

 

 

                    (B) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement;

 

 

 

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

 

 

 

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

                    (iii) Subject to acceptance and recording thereof pursuant
to paragraph (b)(v) of

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this Section, from and after the effective date specified in each Assignment and
Assumption, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits and subject to
the limitations of Sections 2.10, 2.11 and 10.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this Section 10.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

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

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disclose, on a confidential basis, confidential information with respect to any
Account Party and its Subsidiaries to any rating agency, commercial paper dealer
or provider of a surety, guarantee or credit liquidity enhancement to such SPV;
provided that non-public information with respect to any Account Parties or its
Subsidiaries may be disclosed only with such Account Party’s consent which will
not be unreasonably withheld. Notwithstanding anything to the contrary in this
Agreement, no SPV shall be entitled to any greater rights under Section 2.10 or
Section 2.11 than its Granting Lender would have been entitled to absent the use
of such SPV. This paragraph may not be amended without the consent of any SPV at
the time holding LC Disbursements under this Agreement.

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

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

                    (c) Participations. (i) Any Lender may, without the consent
of the Account Parties, the Administrative Agent or any Issuing Lender, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement and
the other Credit Documents (including all or a portion of its Commitment and the
LC Disbursements owing to it); provided that (A) any such participation sold to
a Participant which is not a Lender or a Federal Reserve Bank shall be made only
with the consent (which in each case shall not be unreasonably withheld) of XL
Group and the Administrative Agent, unless a Default has occurred and is
continuing, in which case the consent of XL Group shall not be required, (B)
such Lender’s obligations under this Agreement and the other Credit Documents
shall remain unchanged, (C) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (D) the Account
Parties, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Credit Documents. Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement

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and the other Credit Documents and to approve any amendment, modification or
waiver of any provision of this Agreement or the other Credit Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Account Parties agree that each Participant shall be entitled to the benefits
and subject to the limitations of Sections 2.10 and 2.11 (subject to the
requirements of such Sections) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.12(d) as though it were a Lender.

                    (ii) A Participant shall not be entitled to receive any
greater payment under Section 2.10 or 2.11 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant or the Lender interest assigned, unless (A) the sale of the
participation to such Participant is made with the Account Parties’ prior
written consent and (B) in the case of Section 2.10 or 2.11, the entitlement to
greater payment results solely from a Change in Law formally announced after
such Participant became a Participant.

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

                    (d) Certain Pledges. Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any such pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

                    (e) No Assignments to Account Parties or Affiliates.
Anything in this Section to the contrary notwithstanding, no Lender may assign
or participate any interest in any LC

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

- 87 -

Exposure held by it hereunder to any Account Party or any of its Affiliates or
Subsidiaries without the prior consent of each Lender.

                    SECTION 10.05. Survival. All covenants, agreements,
representations and warranties made by the Account Parties herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of the issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Collateral 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 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 2.10, 2.11 and 10.03 and Article IX shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the expiration or termination of the
Letters of Credit and the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.

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

                    SECTION 10.07. Severability. To the fullest extent permitted
by law, any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

                    SECTION 10.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and their Affiliates (collectively,
solely for purposes of this paragraph, the “Lenders”) are hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or

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

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demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of any Account
Party or Guarantor against any of and all the obligations of such Account Party
or Guarantor now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

                    SECTION 10.09. Governing Law; Jurisdiction; Etc.

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

                    (b) Submission to Jurisdiction. Each party hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of the Supreme Court of the State of New York sitting in
the Borough of Manhattan in the City of New York and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Collateral Agent or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against any Obligor or its properties in the courts of any
jurisdiction.

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

                    (d) Service of Process. By the execution and delivery of
this Agreement, each Account Party and each Guarantor acknowledges that they
have by a separate written instrument, designated and appointed CT Corporation
System, 111 Eighth Avenue, 13th floor, New York, New York 10011 (or any
successor entity thereto), as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to this Agreement
that may be instituted in any federal or state court in the State of New York.
Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

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

- 89 -

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

                    SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

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

                    SECTION 10.12. Treatment of Certain Information;
Confidentiality.

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

                    (b) Confidentiality. Each of the Administrative Agent, the
Collateral Agent, the Lenders and each SPV agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (i) to its and its Affiliates’ directors, officers, employees,
partners and agents, including accountants, legal counsel and other advisors (it
being understood that the Persons to whom such disclosure is made will be
informed of the

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

- 90 -

confidential nature of such Information and instructed to keep such Information
confidential), (ii) to the extent requested by any regulatory authority
(including self-regulating organizations) having jurisdiction over the
Administrative Agent, the Collateral Agent or any Lender (or any Affiliate
thereof), (iii) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (iv) to any other party to this
Agreement, (v) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, (vi) subject to an agreement in writing containing provisions
substantially the same as those of this paragraph and for the benefit of the
Account Parties, to (a) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (b) any actual or prospective counterparty (or its advisors) to any
swap or derivative transaction relating to any Account Party and its obligations
hereunder or (c) any credit insurance provider (or its advisors) in relation to
this Agreement, (vii) with the consent of the Account Parties or (viii) to the
extent such Information (A) becomes publicly available other than as a result of
a breach of this paragraph or (B) becomes available to the Administrative Agent,
the Collateral Agent or any Lender on a nonconfidential basis from a source
other than an Account Party. For the purposes of this paragraph, “Information”
means all information received from an Account Party relating to an Account
Party or its business, other than any such information that is available to the
Administrative Agent, the Collateral Agent or any Lender on a nonconfidential
basis prior to disclosure by such Account Party. Any Person required to maintain
the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding the foregoing, each of the Administrative Agent, the Collateral
Agent and the Lenders agree that they will not trade the securities of any of
the Account Parties based upon non-public Information that is received by them.

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

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

- 91 -

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

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

                    SECTION 10.15. RELEASE OF LIENS.(a) Notwithstanding anything
to the contrary contained herein or in any other Credit Document, the Collateral
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly required by Section
10.02) to take any action requested by XL Group having the effect of releasing
any Collateral (i) to the extent permitted by the Pledge Agreement and the
Collateral Account Control Agreement or that has been consented to in accordance
with Section 10.02 or (ii) under the circumstances described in paragraph (b)
below. Upon three (3) Business Days notice to the Administrative Agent and the
Collateral Agent, each Account Party may in accordance with the Security
Documents (x) replace any cash or Eligible Assets with other cash or Eligible
Assets to the extent that (i) after giving effect thereto the Borrowing Base of
such Account Party is at least equal to the aggregate face value (or its Dollar
Equivalent) of all Letters of Credit issued on its behalf and (ii) such
replacement shall precede the related release and (y) to the extent that the
Borrowing Base of such Account Party exceeds the aggregate face value (or its
Dollar Equivalent) of all Letters of Credit issued on behalf of such Account
Party, require the release of such excess cash or Eligible Assets.

                    (b) At such time as there are no Letters of Credit
outstanding hereunder and the Commitments have been terminated, any other
Obligations (as defined in the Pledge Agreement) shall have been paid in full in
cash and no Default or Event of Default has occurred and is continuing, the
Collateral shall cease to secure the Obligations (as defined in the Pledge
Agreement), the Collateral shall be released from the Liens created by the
Pledge Agreement, and the Pledge Agreement and the Collateral Account Control
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent, the Collateral Agent and each Account
Party under the Pledge Agreement and the Collateral

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

- 92 -

Account Control Agreement shall terminate, all without delivery of any
instrument or performance of any act by any Person.

                    SECTION 10.16. NO FIDUCIARY DUTY. The Administrative Agent,
each Lender and their Affiliates (collectively, solely for purposes of this
paragraph, the “Lenders”), may have economic interests that conflict with those
of the Obligors, their stockholders and/or their affiliates. Each Obligor agrees
that nothing in the Credit Documents will be deemed to create a fiduciary
relationship or fiduciary or other implied duty between any Lender, on the one
hand, and such Obligor, its stockholders or its affiliates, on the other. The
Obligors acknowledge and agree that (i) the transactions contemplated by the
Credit Documents are arm’s-length commercial transactions between the Lenders,
on the one hand, and the Obligors, on the other, and (ii) in connection
therewith and with the process leading thereto, (x) no Lender has assumed a
fiduciary responsibility in favor of any Obligor, its stockholders or its
affiliates with respect to the transactions contemplated hereby or the process
leading thereto (irrespective of whether any Lender has advised, is currently
advising or will advise any Obligor, its stockholders or its Affiliates on other
matters) or any other obligation to any Obligor except the obligations expressly
set forth in the Credit Documents and (y) each Lender is acting solely as
principal and not as the fiduciary of any Obligor, its management, stockholders,
creditors or any other Person. Each Obligor acknowledges and agrees that it has
consulted its own legal and financial advisors to the extent it deemed
appropriate and that it is responsible for making its own independent judgment
with respect to such transactions and the process leading thereto. Each Obligor
agrees that it will not claim that any Lender owes a fiduciary or similar duty
to such Obligor, in connection with such transaction or the process leading
thereto.

                    SECTION 10.17. ILLEGALITY.

                    Notwithstanding anything herein to the contrary, no Lender
shall be required to issue or fund any Letter of Credit for so long as such
action is illegal and any such Lender shall provide prompt written notice
setting forth any such illegality pursuant to this Section 10.17 to XL Group.
For the purposes of this Section 10.17, the provisions of Section 2.13(a) shall
apply in the event of any such illegality mutatis mutandis.

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

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

 

 

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL GROUP PLC,

 

as an Account Party and a Guarantor

 

by its duly authorized attorney

 

in the presence of:

 

 

 

 

By 

/s/ Simon Rich

 

 

 

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

 

 

 

Name: Simon Rich

 

 

 

Title: Attorney

 

 

 

 

 

 

/s/ Patricia Pacheco

 

 

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

 

 

Witness

 

 

 

Name: Patricia Pacheco

 

 

 

Title: Executive Assistant

 

 

 

 

 

 

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

 

 

 

XLIT LTD.,

 

 

as an Account Party and a Guarantor

 

 

 

By

/s/ Simon Rich

 

 

 

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

 

 

 

Name: Simon Rich

 

 

 

Title: Attorney

 

 

 

 

 

 

By

/s/ Robert Hawley

 

 

 

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

 

 

 

Name: Robert Hawley

 

 

 

Title: Authorized Officer

 

 

 

 

 

 

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

 

 

 

X.L. AMERICA, INC.,

 

as an Account Party and a Guarantor

 

 

 

 

By

/s/ Richard G. McCarty

 

 

 

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

 

 

 

Name: Richard G. McCarty

 

CREDIT AGREEMENT

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

 

 

 

 

 

 

 

Title:

Senior Vice President,

 

 

 

General Counsel & Secretary

 

 

 

 

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

 

 

 

XL INSURANCE (BERMUDA) LTD,

 

as an Account Party and a Guarantor

 

 

 

By 

/s/ C. Stanley Lee

 

 

 

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

 

 

 

Name: C. Stanley Lee

 

 

Title: Chief Financial Officer

 

 

 

 

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

 

 

 

XL RE LTD,

 

as an Account Party and a Guarantor

 

 

 

By

/s/ Mark Twite

 

 

 

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

 

 

 

Name: Mark Twite

 

 

Title: Senior Vice President and

 

 

          Chief Financial Officer

 

 

 

 

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

 

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL RE EUROPE LIMITED,

 

as an Account Party

 

by its duly authorized attorney

 

in the presence of:

 

 

 

By

/s/ David Watson

 

 

 

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

 

 

 

Name: David Watson

 

 

Title: Attorney

 

 

 

 

/s/ Michele Mulready

 

 

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

 

 

Witness

 

 

Name: Michele Mulready

CREDIT AGREEMENT

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

 

 

 

 

 

 

 

 

 

Title: Company Secretary

 

 

 

 

 

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

 

 

 

XL INSURANCE COMPANY LIMITED,

 

as an Account Party

 

 

 

 

By 

/s/ Graham Lambourne

 

 

 

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

 

 

 

Name: Graham J. Lambourne

 

 

Title: Director

 

 

 

 

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

 

 

 

XL INSURANCE SWITZERLAND LTD,

 

as an Account Party

 

 

 

By

/s/ Daniel Maurer

 

 

 

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

 

 

 

Name: Daniel Maurer

 

 

Title: Chairman

 

 

 

 

By

/s/ Bruno Länzlinger

 

 

 

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

 

 

 

Name: Bruno Länzlinger

 

 

Title: CEO

 

 

 

 

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

 

 

 

XL LIFE LTD,

 

as an Account Party and a Guarantor

 

 

 

By

/s/ Simon Rich

 

 

 

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

 

 

 

Name: Simon Rich

 

 

Title: Director

 

 

 

 

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

CREDIT AGREEMENT

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

 

 

 

 

 

LENDERS

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

individually and as Administrative Agent

 

 

 

By: 

/s/ Melvin D. Jackson

 

 

 

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

 

 

Name: Melvin D. Jackson

 

Title: Vice President

 

 

 

 

CITIBANK, N.A.,

 

 

 

By:

/s/ Maureen P. Maroney

 

 

 

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

 

 

Name: Maureen P. Maroney

 

Title: Vice President

 

 

 

 

THE ROYAL BANK OF SCOTLAND PLC

 

 

 

 

By:

/s/ Joseph W. Lux

 

 

 

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

 

 

Name: Joseph W. Lux

 

Title: Managing Director

CREDIT AGREEMENT

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

 

 

 

 

 

 

 

 

 

THE BANK OF NEW YORK MELLON,

 

as Collateral Agent

 

 

 

 

 

By: 

/s/ Jose Alcantora

 

 

 

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

 

 

Name: Jose Alcantora

 

Title: Vice President

CREDIT AGREEMENT

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

 

 

 

 

 

MORGAN STANLEY BANK, N.A.,

 

 

 

 

 

By: 

/s/ Michael King

 

 

 

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

 

 

Name: Michael King

 

Title: Authorized Signatory

 

 

 

 

BARCLAYS BANK PLC,

 

 

 

 

 

By:

/s/ David Barton

 

 

 

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

 

 

Name: David Barton

 

Title: Director

 

 

 

 

THE BANK OF NEW YORK MELLON,

 

 

 

By:

/s/ Michael Pensari

 

 

 

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

 

 

Name: Michael Pensari

 

Title: Managing Director

 

 

 

 

BANK OF AMERICA, N.A.,

 

 

 

 

By:

/s/ Debra Basler

 

 

 

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

 

 

Name: Debra Basler

 

Title: Managing Director

 

 

 

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

 

 

 

 

By:

/s/ Rick Adler

 

 

 

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

 

 

Name: Rick Adler

 

Title: Director

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

 

 

 

 

 

CREDIT AGRICOLE CORPORATE & INVESTMENT BANK,

 

 

 

 

By:

/s/ Charles Kornberger

 

 

 

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

 

 

Name: Charles Kornberger

 

Title: Managing Director

 

 

 

 

 

By: 

/s/ Frank Tatulli

 

 

 

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

 

 

Name: Frank Tatulli

 

Title: Managing Director

 

 

 

 

DEUTSCHE BANK AG NEW YORK BRANCH,

 

 

 

By:

/s/ John S. McGill

 

 

 

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

 

 

Name: John S. McGill

 

Title: Director

 

 

 

 

 

By:

/s/ Virginia Cosenza

 

 

 

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

 

 

Name: Virginia Cosenza

 

 

Title: Vice President

 

 

 

 

GOLDMAN SACHS BANK USA,

 

 

 

 

 

By:

/s/ Mark Walton

 

 

 

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

 

 

Name: Mark Walton

 

Title: Authorized Signatory

 

 

 

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Jody Feldman

 

 

 

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

 

 

Name: Jody Feldman

 

Title: Vice President

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

 

 

 

 

 

 

LLOYDS TSB BANK PLC,

 

 

 

By: 

/s/ Julia R Franklin

 

 

 

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

 

 

Name: Julia R Franklin

 

Title: Vice President

 

 

       F014

 

 

 

 

By:

/s/ Karen Weich

 

 

 

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

 

 

Name: Karen Weich

 

Title: Vice President

 

 

       W011

 

 

 

 

MIZUHO CORPORATE BANK, LTD.,

 

 

 

By:

/s/ David Lim

 

 

 

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

 

 

Name: David Lim

 

Title: Authorized Signatory

 

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

 

 

By:

/s/ Grainne M. Pergolini

 

 

 

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

 

 

Name: Grainne M. Pergolini

 

Title: Director

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

SCHEDULE I

Commitments

 

 

 

 

 

 

 

Name of Lender

 

 

Commitment ($)

 

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

 

 

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

 

JPMorgan Chase Bank, N.A.

 

$

55,250,000.00

 

 

 

 

 

 

Citibank, N.A.

 

$

55,250,000.00

 

 

 

 

 

 

The Royal Bank of Scotland plc

 

$

55,250,000.00

 

 

 

 

 

 

Barclays Bank PLC

 

$

46,312,500.00

 

 

 

 

 

 

Credit Agricole Corporate & Investment Bank

 

$

46,312,500.00

 

 

 

 

 

 

Deutsche Bank AG New York Branch

 

$

46,312,500.00

 

 

 

 

 

 

Goldman Sachs Bank USA

 

$

46,312,500.00

 

 

 

 

 

 

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

 

$

46,312,500.00

 

 

 

 

 

 

Wells Fargo Bank, N.A.

 

$

46,312,500.00

 

 

 

 

 

 

HSBC Bank USA, National Association

 

$

39,812,500.00

 

 

 

 

 

 

Lloyds TSB Bank plc

 

$

39,812,500.00

 

 

 

 

 

 

Mizuho Corporate Bank, Ltd.

 

$

39,812,500.00

 

 

 

 

 

 

The Bank of New York Mellon

 

$

39,812,500.00

 

 

 

 

 

 

Bank of America, N.A.

 

$

23,562,500.00

 

 

 

 

 

 

Morgan Stanley Bank, N.A.

 

$

23,562,500.00

 

 

 

 

 

 

 

 

$

650,000,000.00

 

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

SCHEDULE II

Indebtedness and Liens

Part A – Indebtedness

 

 

 

 

1.

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

 

 

 

 

2.

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

 

 

 

 

3.

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

 

 

 

 

4.

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

 

 

 

 

5.

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

 

 

 

 

6.

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

 

 

 

 

7.

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

 

 

 

 

8.

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

 

 

 

 

9.

Replacement Capital Covenant, dated March 15, 2007.

 

 

 

 

10.

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

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

 

 

 

 

11.

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

 

 

 

 

12.

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

 

 

 

 

13.

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

 

 

 

 

14.

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

 

 

 

 

15.

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

 

 

 

 

16.

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

 

 

 

 

17.

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

 

 

 

 

18.

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

 

 

 

 

19.

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

 

 

 

 

20.

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

 

 

 

 

21.

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

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

 

 

 

 

 

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

 

 

 

 

22.

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

 

 

 

 

23.

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

 

 

 

 

24.

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

 

 

 

 

25.

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

 

 

 

 

26.

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

 

 

 

 

27.

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

 

 

 

 

28.

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

 

 

 

 

29.

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

 

 

 

 

30.

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

 

 

 

 

31.

70 Gracechurch, London, EC3V 0XL Capital Lease.

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

 

 

 

 

32.

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

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

Part B - Liens

 

 

 

 

1.

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

 

 

 

 

2.

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

 

 

 

 

3.

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

 

 

 

 

4.

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

 

 

 

 

5.

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

 

 

 

 

6.

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

 

 

 

 

7.

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

 

 

 

 

8.

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

 

 

 

 

9.

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

 

 

 

 

10.

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

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

 

 

 

 

11.

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

 

 

 

 

12.

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

 

 

 

 

13.

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

 

 

 

 

14.

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

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

SCHEDULE III

Litigation

 

 

 

 

1.

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

 

 

 

 

 

 

 

2.

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

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

SCHEDULE IV

Environmental Matters

None.

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

SCHEDULE V

Subsidiaries

 

 

 

 

 

 

 

 

 

%

JURISDICTION

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

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

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

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

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

XL Group plc

 

 

 

 

Ireland

XLIT Ltd.

 

 

 

 

Cayman

XL Company Switzerland GmbH

 

 

 

 

Switzerland

XL Capital Partners Corporation

 

 

 

 

Cayman

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

 

 

 

 

Delaware

EXEL Holdings Limited

 

 

 

 

Cayman

EXEL Acquisition Ltd.

 

 

 

 

Cayman

X.L. Property Holdings Limited

 

 

 

 

Bermuda

XL Insurance (Bermuda) Ltd

 

 

 

 

Bermuda

Mid Ocean Limited

 

 

 

 

Cayman

Mid Ocean Holdings Limited

 

 

 

 

Bermuda

Ridgewood Holdings Limited

 

 

 

 

Bermuda

XL London Market Group Ltd

 

 

 

 

UK

Brockbank Holdings Ltd

 

 

 

 

UK

Baltusrol Holdings Ltd

 

 

 

 

Bermuda

County Down Limited

 

 

 

 

UK

Dornoch Limited

 

 

 

 

UK

Stonebridge Underwriting Ltd

 

 

 

 

UK

XL London Market Services Ltd- Syndicate 1209

 

 

 

 

UK

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

 

 

 

 

South Africa

 

XL London Market Ltd

 

 

 

 

UK

 

XL Re Ltd

 

 

 

 

Bermuda

XL BCM Limited

 

 

 

 

UK

XL CCM Ltd

 

 

 

 

UK

ECS Reinsurance Company Inc.

 

 

 

 

Barbados

Global Capital Underwriting Ltd.

 

 

 

 

UK

Fundamental Insurance Investments Ltd

 

 

 

 

Bermuda

FII Partners LLC

 

99

 

 

Delaware

FII Partners Ltd

 

 

 

 

Bermuda

FII Partners LLC

 

1

 

 

Delaware

XL Re Europe Limited

 

 

 

 

Ireland

XL Re Latin America Ltd

 

 

 

 

Switzerland

XL Latin America Investments Ltd

 

 

 

 

Bermuda

XL Re Brazil Holdings AG

 

 

 

 

Switzerland

XL Re Participacoes Brasil Ltda.

 

 

 

 

Brazil

XL Resseguros Brasil S.A.

 

 

 

 

Brazil

XL Re Latin America (Argentina SA)

 

80

 

 

Argentina

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

 

 

 

 

 

 

XL Re Latin Escritorio de Representacao no Brasil Ltda

 

 

 

 

Brazil

XL Re Europe Services AG

 

 

 

 

Germany

XL PP Limited

 

 

 

 

UK

XL (Brazil) Holdings Ltd

 

 

 

 

Brazil

XL Services (Bermuda) Ltd

 

 

 

 

Bermuda

XL Life Ltd

 

 

 

 

Bermuda

Reeve Court General Partner Limited

 

 

 

 

Bermuda

Reeve Court 4 Limited Partnership

 

 

 

 

Bermuda

Reeve Court 6 Limited Partnership

 

 

 

 

Bermuda

XL Gracechurch Limited

 

 

 

 

UK

XL Insurance (UK) Holdings Limited

 

 

 

 

UK

XL Capital Finance (Europe) plc

 

 

 

 

UK

XL Insurance Argentina S.A. Compañia de Seguros

 

90

 

 

Argentina

XL Services UK Limited

 

 

 

 

UK

XL Insurance Company Limited

 

 

 

 

UK

XL Insurance Argentina S.A. Compañia de Seguros

 

10

 

 

Argentina

XL Insurance (China) Company Ltd

 

49

 

 

China

XL Holdings Proprietary Limited

 

 

 

 

South Africa

XL Insurance Company Ltd (In Liquidation)

 

 

 

 

South Africa

XL Financial Holdings (Ireland) Limited

 

 

 

 

Ireland

XL Finance (Ireland) Limited

 

 

 

 

Ireland

XL Services Canada Ltd.

 

 

 

 

Canada

*X.L. America, Inc.

 

 

 

 

Delaware

XL Financial Solutions, Inc.

 

 

 

 

Delaware

XL Capital Investment Partners Inc.

 

 

 

 

Delaware

XL Group Investments Ltd

 

 

 

 

Bermuda

XLA Garrison L.P.

 

 

 

 

Delaware

NAC Re Corporation

 

 

 

 

Delaware

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

 

 

 

 

New York

XL Insurance (China) Company Ltd

 

51

 

 

China

Greenwich Insurance Company *(A-12%)

 

 

 

 

Delaware

Global Asset Protection Services, LLC

 

 

 

 

Connecticut

Global Asset Protection Services Company Limited

 

 

 

 

Japan

Global Asset Protection Services Consultancy (Beijing) Company Limited

 

 

 

 

China

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

 

 

 

 

Delaware

XL Select Insurance Company *(A-2%)

 

 

 

 

Delaware

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

 

 

 

 

New York

XL Specialty Insurance Company *(A-6%)

 

 

 

 

Delaware

Indian Harbor Insurance Company *(A-2%)

 

 

 

 

North Dakota

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

 

 

 

 

 

 

37 Lambert Road LLC

 

 

 

 

Delaware

XL Global, Inc.

 

 

 

 

Delaware

XL Insurance, Inc.

 

 

 

 

Delaware

X.L. Global Services, Inc.

 

 

 

 

Delaware

XL Investment Management (USA) LLC

 

 

 

 

Delaware

Eagleview Insurance Brokerage Services, LLC

 

 

 

 

Delaware

XL Life and Annuity Holding Company

 

 

 

 

Delaware

XL Life Insurance and Annuity Company

 

 

 

 

Illinois

XL Asset Funding Company I LLC

 

 

 

 

Delaware

ECS, Inc. (In Liquidation)

 

 

 

 

Pennsylvania

ECS Child Care Center, Inc. (In Liquidation)

 

 

 

 

Pennsylvania

XL Investments Ltd

 

 

 

 

Bermuda

XL Capital Products Ltd

 

 

 

 

Bermuda

XL SGS Holdings Inc.

 

 

 

 

Delaware

Garrison Investments Inc. (**)

 

 

 

 

Barbados

Kensington Investments Inc.

 

 

 

 

Barbados

XLB Partners Inc.

 

 

 

 

Barbados

X.L. Investments (Barbados) Inc.

 

 

 

 

Barbados

ClearWater Opportunity Fund Ltd.

 

 

 

 

Cayman

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

 

 

 

 

Luxembourg

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

 

 

 

 

Luxembourg

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

 

 

 

 

Luxembourg

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

 

 

 

 

Luxembourg

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

 

 

 

 

Luxembourg

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

 

 

 

 

Luxembourg

XL Swiss Holdings Ltd

 

 

 

 

Switzerland

XL Re Latin America (Argentina SA)

 

20

 

 

Argentina

XL Insurance Switzerland Ltd.

 

 

 

 

Switzerland

Vitodurum Reinsurance Company Ltd.

 

 

 

 

Switzerland

XL Services Switzerland AG

 

 

 

 

Switzerland

XL India Business Services Private Limited

 

 

 

 

India

XL Insurance Mexico SA de CV

 

 

 

 

Mexico

XL Europe Holdings Ltd

 

 

 

 

Bermuda

 

 

 

 

 

 

*A = Company is a member of the Reinsurance America Inc. Pooling Agreement with
individual company pooling % noted
(**) - Limited Partner of XLA Garrison L.P.

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

SCHEDULE VI

Existing Letters of Credit

Syndicated Letters of Credit

 

 

 

 

 

 

 

 

 

BOOKING PARTY NAME

 

REF NUMBER

 

EXPIRY /
MATURITY
DATE

 

LC AVAILABLE
AMOUNT

 

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

 

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

 

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

 

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

 

XL America Inc

 

U-205145

 

12/31/11

 

$

2,431,393.00

 

XL America Inc

 

TUTS-652208

 

12/31/11

 

$

2,400,000.00

 

XL America Inc

 

TUTS-652207

 

12/31/11

 

$

2,357,128.00

 

XL America Inc

 

TUTS-652205

 

04/23/12

 

$

378,756.00

 

XL America Inc

 

TUTS-539245

 

12/31/11

 

$

2,000,000.00

 

XL America Inc

 

TUTS-539047

 

12/31/11

 

$

450,000.00

 

XL America Inc Subtotal

 

 

 

 

 

$

10,017,277.00

 

XL Insurance (Bermuda) LTD

 

U-227995

 

12/31/11

 

$

600,000.00

 

XL Insurance (Bermuda) LTD

 

CUCS-524377

 

12/31/12

 

$

67,230,000.00

 

XL Insurance (Bermuda) LTD

 

TUTS-576842

 

04/30/12

 

$

116,447.00

 

XL Insurance (Bermuda) LTD

 

U-204440

 

12/31/11

 

$

5,950,000.00

 

XL Insurance (Bermuda) LTD

 

U-205175

 

12/31/11

 

$

850,000.10

 

XL Insurance (Bermuda) LTD

 

U-205305

 

12/31/11

 

$

6,664,337.00

 

XL Insurance (Bermuda) LTD

 

U-205822

 

12/31/11

 

$

47,952.00

 

XL Insurance (Bermuda) LTD

 

U-227982

 

12/31/11

 

$

1,000,000.00

 

XL Insurance (Bermuda) LTD

 

U-227983

 

12/31/11

 

$

600,000.00

 

XL Insurance (Bermuda) LTD

 

CUCS-483176

 

12/31/12

 

$

3,130,257.40

 

XL Insurance (Bermuda) LTD

 

U-227994

 

12/31/11

 

$

350,000.00

 

XL Insurance (Bermuda) LTD

 

U-227998

 

12/31/11

 

$

5,000,000.00

 

XL Insurance (Bermuda) LTD

 

U-228000

 

12/31/11

 

$

1,000,000.00

 

XL Insurance (Bermuda) LTD

 

U-249557

 

12/31/11

 

$

104,979,474.00

 

XL Insurance (Bermuda) LTD

 

U-695124

 

12/31/12

 

$

3,351,563.00

 

XL Insurance (Bermuda) LTD

 

U-227985

 

12/31/11

 

$

100,000,000.00

 

XL Insurance (Bermuda) LTD Subtotal

 

 

 

 

 

$

300,870,030.50

 

XL Capital Ltd

 

TUTS-538570

 

12/31/12

 

$

50,000,000.00

 

XL Capital Ltd Subtotal

 

 

 

 

 

$

50,000,000.00

 

XL RE Ltd

 

TUTS-539696

 

12/31/11

 

$

4,063,410.00

 

XL RE Ltd

 

TUTS-539366

 

12/31/11

 

$

1,491,880.00

 

XL RE Ltd

 

TUTS-539335

 

12/31/11

 

$

660,000.00

 

XL RE Ltd

 

TUTS-678411

 

12/31/11

 

$

45,059.04

 

XL RE Ltd

 

TUTS-539214

 

12/31/11

 

$

1,177,800.00

 

XL RE Ltd

 

TUTS-539316

 

12/31/12

 

$

438,332.68

 

XL RE Ltd

 

CUCS-523065

 

12/31/11

 

$

8,108,762.00

 

XL RE Ltd

 

CUCS-523064

 

12/31/11

 

$

881,510.18

 

XL RE Ltd

 

CUCS-524445

 

12/31/11

 

$

373,635.00

 

XL RE Ltd

 

U-205255

 

12/31/11

 

$

35,930.97

 

XL RE Ltd

 

TUTS-538843

 

12/31/11

 

$

3,100,000.00

 

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

 

 

 

 

 

 

 

 

 

XL RE Ltd

 

TUTS-538839

 

12/31/11

 

$

17,572,776.00

 

XL RE Ltd

 

TUTS-538723

 

12/31/12

 

$

1,875,000.00

 

XL RE Ltd

 

TUTS-538536

 

12/31/12

 

$

352,692.12

 

XL RE Ltd

 

TUTS-537568

 

12/31/11

 

$

51,750,000.00

 

XL RE Ltd

 

U-797011

 

12/31/11

 

$

120,000.00

 

XL RE Ltd

 

U-810891

 

12/31/11

 

$

2,445.82

 

XL RE Ltd

 

U-797010

 

12/31/11

 

$

151,000.00

 

XL RE Ltd Subtotal

 

 

 

 

 

$

92,200,233.80

 

Grand Total

 

 

 

 

 

$

453,087,541.30

 

Non-Syndicated Letters of Credit

None.

Participated Letters of Credit

 

 

 

 

 

 

 

 

 

BOOKING PARTY NAME

 

REF NUMBER

 

EXPIRY / MATURITY DATE

 

LC AVAILABLE AMOUNT

 

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

 

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

 

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

 

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

 

XL RE LTD

 

TUTS-538845

 

12/31/12

 

$

26,892,000.00

 

XL RE LTD

 

CUCS-483938

 

12/31/12

 

$

1,109,835.00

 

XL RE LTD Subtotal

 

 

 

 

 

$

28,001,835.00

 

XL RE LTD.

 

U-245829

 

11/30/12

 

$

170,000.00

 

XL RE LTD. Subtotal

 

 

 

 

 

$

170,000.00

 

XL INS (BERMUDA) LTD

 

U-810917

 

12/31/11

 

$

616,575.00

 

XL INS (BERMUDA) LTD

 

U-712850

 

07/19/12

 

$

0.00

 

XL INS (BERMUDA) LTD

 

TUTS-652234

 

12/31/11

 

$

6,050,700.00

 

XL INS (BERMUDA) LTD Subtotal

 

 

 

 

 

$

6,667,275.00

 

XL CAPITAL LIMITED

 

U-810915

 

03/31/12

 

$

226,792.92

 

XL CAPITAL LIMITED

 

CUCS-523621

 

01/15/13

 

$

881,510.18

 

XL CAPITAL LIMITED

 

CUCS-523620

 

01/15/13

 

$

58,962.00

 

XL CAPITAL LIMITED Subtotal

 

 

 

 

 

$

1,167,265.10

 

Grand Total

 

 

 

 

 

$

36,006,375.10

 

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

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

                    This Assignment and Assumption (the “Assignment and
Assumption”) is dated as of the Effective Date set forth below and is entered
into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name
of Assignee] (the “Assignee”). Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

                    For an agreed consideration, the Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard
Terms and Conditions and the Credit Agreement, as of the Effective Date inserted
by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the Credit Agreement
identified below (including any letters of credit and guarantees included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

 

 

1.

Assignor:

______________________________

 

 

 

2.

Assignee:

______________________________

 

 

[and is an Affiliate of [identify Lender]1 [and is a NAIC Approved Bank]2]

 

 

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

1

Select as applicable.

2

Insert to the extent required by Section 10.04(b) of the Credit Agreement.

Assignment and Assumption

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

- 2 -

 

 

 

3.

Account Parties:

XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re
Ltd, XL Re Europe Limited, XL Insurance Company Limited, XL Insurance
Switzerland Ltd and XL Life Ltd

 

 

 

4.

Administrative Agent:

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

 

 

 

5.

Credit Agreement:

Secured Credit Agreement dated as of December 9, 2011 (as amended and in effect
from time to time, the “Credit Agreement”), between XL Group plc, XLIT Ltd.,
X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe Limited,
XL Insurance Company Limited, XL Insurance Switzerland Ltd and XL Life Ltd, the
Lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent

Assignment and Assumption

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

- 3 -

 

 

 

6.

Assigned Interest:

 

 

 

 

 

 

Aggregate Amount of
Commitment for all
Lenders

 

Amount of
Commitment
Assigned

 

Percentage Assigned
of Commitment3

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

 

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

 

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

$

 

$

 

%

$

 

$

 

%

$

 

$

 

%

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

 

 

 

ASSIGNOR

 

 

 

 

 

[NAME OF ASSIGNOR]

 

 

 

 

 

By:

 

 

 

 

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

 

 

 

Title:

 

 

 

 

 

 

ASSIGNEE

 

 

 

 

 

 

[NAME OF ASSIGNEE]

 

 

 

 

 

 

By:

 

 

 

 

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

 

 

 

Title:

 

 

 

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

3

Set forth, to at least 9 decimals, as a percentage of the Commitment of all
Lenders thereunder.

Assignment and Assumption

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

- 4 -

 

 

 

 

Consented to and Accepted:

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

 

as Administrative Agent

 

 

 

 

 

 

By

 

 

 

 

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

 

Title:

 

 

 

 

 

 

 

[Consented to:]4

 

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL GROUP PLC,

 

as an Account Party and a Guarantor

 

by its duly authorized attorney

 

in the presence of:

 

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title: Attorney

 

 

 

 

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

 

Witness

 

Name:

 

Title:

 

 

 

 

 

 

 

XLIT LTD.,

 

as an Account Party and a Guarantor

 

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

 

 

 

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

 

4

To be added only if the consent of the Account Parties is required by the terms
of the Credit Agreement.

Assignment and Assumption

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

- 5 -

 

 

 

X.L. AMERICA, INC.,

 

as an Account Party and a Guarantor

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

 

 

 

 

 

 

XL INSURANCE (BERMUDA) LTD,

as an Account Party and a Guarantor

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

 

 

 

 

 

 

XL RE LTD,

 

as an Account Party and a Guarantor

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

 

 

 

 

 

 

Signed and Delivered as a Deed

 

for and on behalf of

 

XL RE EUROPE LIMITED,

 

as an Account Party

 

by its duly authorized attorney

 

in the presence of:

 

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title: Attorney

 

 

 

 

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

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

 

Witness

 

Name:

 

Title:

 

Assignment and Assumption

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

- 6 -

 

 

 

XL INSURANCE COMPANY LIMITED,

as an Account Party

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

 

 

 

 

 

 

XL INSURANCE SWITZERLAND LTD,

as an Account Party

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

 

 

 

 

 

 

XL LIFE LTD,

 

as an Account Party and a Guarantor

 

 

 

 

 

 

 

By

 

 

 

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

 

Name:

 

Title:

 

Assignment and Assumption

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

ANNEX 1

SECURED CREDIT AGREEMENT DATED AS OF DECEMBER 9, 2011, BETWEEN XL
GROUP PLC, CERTAIN OF ITS SUBSIDIARIES, THE LENDERS NAMED THEREIN AND
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

                    1. Representations and Warranties.

                    1.1 Assignor. The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of any Account Party, any of its Subsidiaries or Affiliates
or any other Person obligated in respect of any Credit Document or (iv) the
performance or observance by any Account Party, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Credit Document.

                    1.2. Assignee. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it satisfies the requirements, if any, specified in the Credit
Agreement that are required to be satisfied by it in order to acquire the
Assigned Interest and become a Lender, (iii) from and after the Effective Date,
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) attached to the Assignment and Assumption is any
documentation required to be delivered by it

Assignment and Assumption

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

- 2 -

pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the 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.

Assignment and Assumption

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

EXHIBIT B

[Form of Confirming Lender Agreement]

[Letterhead of Issuing Lender]

[_____]

[Name of Confirming Lender]
[Address]

Ladies and Gentlemen:

                    Reference is made to the Secured Credit Agreement dated as
of December 9, 2011 (as amended and in effect, the “Credit Agreement”), between
XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re
Ltd, XL Re Europe Limited, XL Insurance Company Limited, XL Insurance
Switzerland Ltd and XL Life Ltd, the Lenders party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent. Terms defined in the Credit Agreement are
used herein with the same meanings.

                    The undersigned (the “Issuing Lender”) is a Lender under the
Credit Agreement but is not on the date hereof listed on the most current “Bank
List” of banks approved by the NAIC. Accordingly, in order to be a “NAIC
Approved Bank” for the purposes of the Credit Agreement, the Issuing Lender
hereby requests that you be a Confirming Lender with respect to the Issuing
Lender for the purposes of the Credit Agreement and each Syndicated Letter of
Credit and Non-Syndicated Letter of Credit issued or continued thereunder.

                    By your signature below, you undertake that you will honor
the obligations of the Issuing Lender in respect of any draft drawn under and in
strict compliance with the terms of any Syndicated Letter of Credit and
Non-Syndicated Letter of Credit issued or continued under the Credit Agreement
as if, and to the extent, you were the Issuing Lender under the relevant
Syndicated Letter of Credit or Non-Syndicated Letter of Credit, as the case may
be. Notwithstanding the foregoing, your liability under all Syndicated Letters
of Credit and Non-Syndicated Letters of Credit at any one time issued or
continued under the Credit Agreement shall be limited to an amount (the
“Liability Limit”) equal to the Commitment of the Issuing Lender under the
Credit Agreement in effect on the date hereof (an amount equal to $_________),
as such Liability Limit may be increased after the date hereof with your prior
written consent by reason of an increase in the Commitment of the Issuing Lender
under the Credit Agreement. In addition, you hereby irrevocably appoint and
designate the Administrative Agent as your attorney-in-fact, acting through any
duly authorized officer of the Person serving as the Administrative Agent, to
execute and deliver, at any time prior to the Commitment Termination Date in
effect on the date of this letter agreement, in your name and on your behalf
each Syndicated Letter of Credit and Non-Syndicated Letter of Credit to be
confirmed by you in accordance herewith and with the Credit Agreement. You agree
that, promptly upon the request of the Administrative Agent, you will furnish to
the Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Syndicated Letter of Credit or Non-

Form of Confirming Lender Agreement

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

- 2 -

Syndicated Letter of Credit may reasonably request in order to demonstrate that
the Administrative Agent has the power to act as attorney-in-fact for you in
connection with the execution and delivery of such Syndicated Letter of Credit
or Non-Syndicated Letter of Credit, as the case may be.

                    In consideration of the foregoing, the Issuing Lender agrees
that if you shall make any LC Disbursement in respect of any Syndicated Letter
of Credit or Non-Syndicated Letter of Credit, regardless of the identity of the
Account Party of such Syndicated Letter of Credit or Non-Syndicated Letter of
Credit, as the case may be, the Issuing Lender shall reimburse you by paying to
you an amount equal to the amount of the LC Disbursement made by you, such
payment to be made not later than noon, New York City time, on (i) the Business
Day that the Issuing Lender receives notice of such LC Disbursement, if such
notice is received prior to 10:00 a.m., New York City time, or (ii) the Business
Day immediately following the day that the Issuing Lender receives such notice,
if such notice is not received prior to such time. The Issuing Lender’s
obligations to reimburse you as provided in the foregoing sentence shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this letter agreement under any and all
circumstances whatsoever, and irrespective of any event or circumstance of the
type described in Section 2.03(b) or 2.04(h), as applicable, of the Credit
Agreement (or of any analogous event or circumstance relating to the
undersigned).

                    If any LC Disbursement is made by you, then, unless the
Issuing Lender shall reimburse the amount of such LC Disbursement to you in full
on the date such LC Disbursement is made by you, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date of reimbursement, at the rate per annum equal to
(i) the Federal Funds Effective Rate to but excluding the date three Business
Days after such LC Disbursement and (ii) from and including the date three
Business Days after such LC Disbursement, 2% plus the Federal Funds Effective
Rate.

                    This letter agreement shall be governed by and construed in
accordance with the law of the State of New York. This letter agreement is an
“agreement” of the type referred to in the definition of “Confirming Lender” in
Section 1.01 of the Credit Agreement.

                    Please indicate your acceptance of the foregoing terms and
conditions by signing the two enclosed copies of this letter agreement and
returning (a) one such signed copy to the undersigned at the address of the
Issuing Lender indicated herein and (b) the other such signed copy to the
Administrative Agent, JPMorgan Chase Bank, N.A., 1111 Fannin Street, 10th Floor,
Houston, Texas 77002-6925, Attention of Vashni X. Whittaker (Telecopy No.
(713) 750-2223; Telephone No. (713) 483-1080); email address,
vashni.x.whittaker@jpmorgan.com; with a copy to JPMorgan Chase Bank, N.A.,
277 Park Avenue, 11th Floor, New York, New York 10172, Attention of Brij S
Grewal (Telecopy No. (917) 456-3256; email address
brijendra.s.grewal@jpmorgan.com; Telephone No. (212) 270-5305).

Form of Confirming Lender Agreement

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

- 3 -

 

 

 

 

 

[NAME OF ISSUING LENDER]

 

 

 

 

 

By

 

 

 

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

 

 

Title:

 

 

 

 

 

AGREED AS AFORESAID:

 

 

 

 

 

[NAME OF CONFIRMING LENDER]

 

 

 

By

 

 

 

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

 

 

Title:

 

 

Form of Confirming Lender Agreement

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