Exhibit 10.3

AMENDMENT

                    AMENDMENT, dated as of December 9, 2011 (this “Amendment”),
to the Credit Agreement, dated as of March 25, 2011 (as amended, modified,
restated and supplemented from time to time, the “Credit Agreement”), among XL
GROUP PLC, an Irish public limited company (“XL Group”), XLIT LTD., an exempted
company incorporated in the Cayman Islands with limited liability (“XLIT”), X.L.
AMERICA, INC., a Delaware corporation (“XL America”), XL INSURANCE (BERMUDA)
LTD, a Bermuda limited liability company (“XL Insurance (Bermuda)”), XL RE LTD,
a Bermuda limited liability company (“XL Re”), XL RE EUROPE LIMITED, an Irish
limited liability company (“XL Re Europe”), XL INSURANCE COMPANY LIMITED, a
limited company domiciled in the United Kingdom (“XL Insurance”), XL INSURANCE
SWITZERLAND LTD, a company limited by shares organized under the laws of
Switzerland (“XL Switzerland”), and XL LIFE LTD, a Bermuda company (“XL Life”
and together with XL Group, XLIT, XL America, XL Insurance (Bermuda), XL Re, XL
Re Europe, XL Insurance and XL Switzerland, each an “Account Party” 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 several lenders from time to time parties thereto
(the “Lenders”), the several agents party thereto, JPMORGAN CHASE BANK, N.A., as
administrative agent (the “Administrative Agent”), and THE BANK OF NEW YORK
MELLON, as collateral agent.

W I T N E S S E T H:

                    WHEREAS, pursuant to the Credit Agreement, the Lenders
agreed to make certain extensions of credit to the Account Parties;

                    WHEREAS, the Account Parties have requested that certain
provisions of the Credit Agreement be amended as set forth herein; and

                    WHEREAS, the Lenders holding more than 66 2/3% of the
aggregate amount of Commitments (such Lenders, the “First Amendment Required
Lenders”) are willing to agree to such amendments on the terms set forth herein;

                    NOW, THEREFORE, the parties hereto hereby agree as follows:

                    SECTION 1. Defined Terms. Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.

                    SECTION 2. Amendments.

                    2.1 References Generally. References in the Credit Agreement
(including references to the Credit Agreement as amended hereby) to “this
Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and
“hereof”) shall be deemed to be references to the Credit Agreement as amended
hereby.

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                    2.2 Amended Language. The Credit Agreement is hereby amended
with the stricken text deleted (indicated textually in the same manner as the
following example: stricken text) and with the double-underlined text added
(indicated textually in the same manner as the following example:
double-underlined text) as set forth in the pages of the Credit Agreement
attached as Exhibit A hereto.

                    2.3 Amendment to Schedules. Schedule VI attached hereto as
Exhibit B is hereby added to the Credit Agreement as Schedule VI thereto.

                    SECTION 3. Effective Date. This Amendment shall become
effective on the date (the “First Amendment Effective Date”) on which the
Administrative Agent shall have received a counterpart of this Amendment, in
each case executed and delivered by a duly authorized officer of each of the
Obligors and the First Amendment Required Lenders.

                    SECTION 4. Expenses. The Obligors agree to pay or reimburse
the Administrative Agent for all of its reasonable out-of-pocket costs and
expenses incurred in connection with this Amendment, any other documents
prepared in connection herewith and the transaction contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.

                    SECTION 5. Representations and Warranties. The Obligors
hereby represent and warrant that (a) each of the representations and warranties
made in Section 4 of the Credit Agreement shall be, after giving effect to this
Amendment, true and correct in all material respects as if made on and as of the
First Amendment Effective Date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date), (b) after giving effect to this Amendment, no Default or Event of Default
shall have occurred and be continuing and (c) this Amendment has been duly
executed and delivered by each Obligor and constitutes a legal, valid and
binding obligation of such Obligors, enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by
(x) bankruptcy, insolvency, reorganization, moratorium, examination or similar
laws of general applicability affecting the enforcement of creditors’ rights and
(y) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

                    SECTION 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. 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 AMENDMENT 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

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AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

                    SECTION 7. Amendments; Execution in Counterparts. (a) This
Amendment shall not constitute an amendment of any other provision of the Credit
Agreement not referred to herein and shall not be construed as a waiver or
consent to any further or future action on the part of the Obligors that would
require a waiver or consent of the Lenders or the Administrative Agent. Except
as expressly amended hereby, the provisions of the Credit Agreement are and
shall remain in full force and effect and each of the Obligors agrees, with
respect to each Credit Document to which it is a party, that all of its
obligations, liabilities and indebtedness under such Credit Document, as amended
hereby, including guarantees, shall remain in full force and effect. The term
“Credit Documents” in the Credit Agreement and the other Credit Documents shall
include this Amendment.

                    (b) This Amendment may not be amended nor may any provision
hereof be waived except pursuant to a writing signed by the Obligors, the
Administrative Agent and the First Amendment Required Lenders. This Amendment
may be executed by one or more of the parties to this Amendment on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

                    SECTION 8. Release of Claims. Each Obligor, by signing
below, hereby waives and releases each of the Administrative Agent, the Issuing
Lender, the Lenders, their respective affiliates and their and their affiliates’
respective directors, officers, employees, attorneys, advisors and consultants
from any and all claims, offsets, defenses and counterclaims of any Obligor
arising on or prior to the execution of this Amendment in connection with any
action or inaction by any such Person under or in respect of the Credit
Documents or this Amendment, such waiver and release being with full knowledge
and understanding of the circumstances and effect thereof and after having
consulted legal counsel with respect thereto.

[Remainder of page intentionally left blank.]

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                    IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
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

 

 

 

 

XLIT LTD.,

 

as an Account Party and a Guarantor

 

 

 

By

/s/ Simon Rich

 

 

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

 

 

Name: Simon Rich

 

 

Title: Attorney

 

 

 

 

X.L. AMERICA, INC.,

 

as an Account Party and a Guarantor

 

 

 

 

By

/s/ Richard G. McCarty

 

 

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

 

 

Name: Richard G. McCarty

 

 

Title: Senior Vice President,
General Counsel & Secretary

 

 

 

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

 

 

 

 

XL INSURANCE (BERMUDA) LTD,
as an Account Party and a Guarantor

 

 

 

 

By

/s/ C. Stanley Lee

 

 

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

 

 

Name: C. Stanley Lee

 

 

Title: Chief Financial Officer

 

 

 

 

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

 

 

 

 

Signed and Delivered as a Deed
for and on behalf of
XL RE EUROPE LIMITED,
as an Account Party
by its duly authorized attorney
in the presence of:

 

 

 

 

By

/s/ David Watson

 

 

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

 

 

Name: David Watson

 

 

Title: Attorney

 

 

 

 

/s/ Michele Mulready

 

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

 

Witness

 

 

Name: Michele Mulready

 

 

Title: Company Secretary

 

 

 

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

 

 

 

 

XL INSURANCE COMPANY LIMITED,
as an Account Party

 

 

 

 

By

/s/ Graham Lambourne

 

 

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

 

 

Name: Graham J. Lambourne

 

 

Title: Director

 

 

 

 

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

 

 

 

 

XL LIFE LTD,
as an Account Party and a Guarantor

 

 

 

 

By

/s/ Simon Rich

 

 

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

 

 

Name: Simon Rich

 

 

Title: Director

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

 

 

 

 

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

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

 

 

 

 

THE BANK OF NOVA SCOTIA,

 

 

 

 

By:

  /s/ David Schwartzbard

 

 

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

 

Name: David Schwartzbard
Title: Director

 

 

 

 

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/ Oscar D. Cortez

 

 

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

 

Name: Oscar D. Cortez
Title: Vice President

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

 

 

 

 

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/ Ashwin Ramakrishna

 

 

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

 

Name: Ashwin Ramakrishna
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

 

 

 

 

   BNP PARIBAS,

 

 

 

 

By:

  /s/ Joseph Malley

 

 

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

 

Name: Joseph Malley
Title: Managing Director

 

 

 

 

By:

  /s/ Nair P. Raghu

 

 

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

 

Name: Nair P. Raghu
Title: Vice President

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

 

 

 

 

  COMERICA BANK,

 

 

 

 

By:

  /s/ Chatphet Saipetch

 

 

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

 

Name: Chatphet Saipetch
Title: V.P.

 

 

 

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

EXHIBIT A
EXECUTION VERSIONCONFORMED TO REFLECT AMENDMENT NO. 1

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

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

 

CREDIT AGREEMENT

 

dated as of

 

March 25, 2011

 

between

 

XL GROUP PLC,

XL GROUP 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,

XL GROUP 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

 

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

$1,000,000,000

 

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

 

J.P. MORGAN SECURITIES LLC

 

and

 

DEUTSCHE BANK SECURITIES INC., as Joint Lead Arrangers and Joint Bookrunners

 

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

DEUTSCHE BANK SECURITIES INC.,

as Syndication Agent

 

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

 

CITIBANK, N.A., THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. and WELLS FARGO
BANK, NATIONAL ASSOCIATION

as Documentation Agents

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TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

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

ARTICLE I

 

1

 

 

 

 

 

DEFINITIONS

 

1

 

 

SECTION 1.01. Defined Terms

 

1

 

 

SECTION 1.02. Terms Generally

 

1921

 

 

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

 

2021

 

 

SECTION 1.04. Exchange Rates; Currency Equivalents

 

2022

 

 

 

 

 

ARTICLE II

 

2122

 

 

 

 

 

 

THE CREDITS

 

2122

 

 

SECTION 2.01. Syndicated Letters of Credit

 

2122

 

 

SECTION 2.02. Issuance and Administration

 

2224

 

 

SECTION 2.03. Reimbursement of LC Disbursements, Etc.

 

2325

 

 

SECTION 2.04. Non-Syndicated Letters of Credit

 

2527

 

 

SECTION 2.05. Participated Letters of Credit

 

3133

 

 

SECTION 2.06. Alternative Currency Letters of Credit

 

3537

 

 

SECTION 2.07. Termination, Reduction and Increase of the Commitments

 

3638

 

 

SECTION 2.08. Fees

 

3740

 

 

SECTION 2.09. Interest

 

3941

 

 

SECTION 2.10. Increased Costs

 

3942

 

 

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

 

4346

 

 

SECTION 2.13. Mitigation Obligations; Replacement of Lenders

 

4548

 

 

SECTION 2.14. Defaulting Lenders

 

4649

 

 

SECTION 2.15. Absence of Rating

 

4750

 

 

 

 

 

ARTICLE III

 

4751

 

 

 

 

 

 

GUARANTEE

 

4751

 

 

SECTION 3.01. The Guarantee

 

4751

 

 

SECTION 3.02. Obligations Unconditional

 

4851

 

 

SECTION 3.03. Reinstatement

 

4852

 

 

SECTION 3.04. Subrogation

 

4952

 

 

SECTION 3.05. Remedies

 

4952

 

 

SECTION 3.06. Continuing Guarantee

 

4952

 

 

SECTION 3.07. Rights of Contribution

 

4953

 

 

SECTION 3.08. General Limitation on Guarantee Obligations

 

5053

 

 

 

 

 

ARTICLE IV

 

5154

 

 

 

 

 

 

REPRESENTATIONS AND WARRANTIES

 

5154

 

 

SECTION 4.01. Organization; Powers

 

5154

 

 

SECTION 4.02. Authorization; Enforceability

 

5154

 

 

SECTION 4.03. Governmental Approvals; No Conflicts

 

5154

i

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SECTION 4.04. Financial Condition; No Material Adverse Change

 

5154

 

 

SECTION 4.05. Properties

 

5255

 

 

SECTION 4.06. Litigation and Environmental Matters

 

5255

 

 

SECTION 4.07. Compliance with Laws and Agreements

 

5356

 

 

SECTION 4.08. Investment Company Status

 

5356

 

 

SECTION 4.09. Taxes

 

5356

 

 

SECTION 4.10. ERISA

 

5356

 

 

SECTION 4.11. Disclosure

 

5356

 

 

SECTION 4.12. Use of Credit

 

5457

 

 

SECTION 4.13. Subsidiaries

 

5457

 

 

SECTION 4.14. Withholding Taxes

 

5457

 

 

SECTION 4.15. Stamp Taxes

 

5457

 

 

SECTION 4.16. Legal Form

 

5457

 

 

 

 

 

ARTICLE V

 

5558

 

 

 

 

 

 

CONDITIONS

 

5558

 

 

SECTION 5.01. Effective Date

 

5558

 

 

SECTION 5.02. Each Credit Event

 

5659

 

 

 

 

 

ARTICLE VI

 

5760

 

 

 

 

 

 

AFFIRMATIVE COVENANTS

 

5760

 

 

SECTION 6.01. Financial Statements and Other Information

 

5760

 

 

SECTION 6.02. Notices of Material Events

 

6063

 

 

SECTION 6.03. Preservation of Existence and Franchises

 

6063

 

 

SECTION 6.04. Insurance

 

6063

 

 

SECTION 6.05. Maintenance of Properties

 

6063

 

 

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

 

6164

 

 

SECTION 6.07. Financial Accounting Practices

 

6164

 

 

SECTION 6.08. Compliance with Applicable Laws

 

6164

 

 

SECTION 6.09. Use of Letters of Credit

 

6265

 

 

SECTION 6.10. Continuation of and Change in Businesses

 

6265

 

 

SECTION 6.11. Visitation

 

6265

 

 

 

 

 

ARTICLE VII

 

6265

 

 

 

 

 

 

NEGATIVE COVENANTS

 

6265

 

 

SECTION 7.01. Mergers

 

6265

 

 

SECTION 7.02. Dispositions

 

6366

 

 

SECTION 7.03. Liens

 

6367

 

 

SECTION 7.04. Transactions with Affiliates

 

6669

 

 

SECTION 7.05. Ratio of Total Funded Debt to Total Capitalization

 

6669

 

 

SECTION 7.06. Consolidated Net Worth

 

6669

 

 

SECTION 7.07. Indebtedness

 

6669

 

 

SECTION 7.08. Financial Strength Ratings

 

6770

 

 

SECTION 7.09. Private Act

 

6770

ii

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SECTION 7.10. Collateral Accounts

 

6770

 

 

 

 

 

ARTICLE VIII

 

6771

 

 

 

 

 

 

EVENTS OF DEFAULT

 

6771

 

 

 

 

 

ARTICLE IX

 

7074

 

 

 

 

 

 

THE ADMINISTRATIVE AGENT

 

7074

 

 

 

ARTICLE X

 

7780

 

 

 

 

 

 

MISCELLANEOUS

 

7780

 

 

SECTION 10.01. Notices

 

7780

 

 

SECTION 10.02. Waivers; Amendments

 

7881

 

 

SECTION 10.03. Expenses; Indemnity; Damage Waiver

 

7983

 

 

SECTION 10.04. Successors and Assigns

 

8185

 

 

SECTION 10.05. Survival

 

8589

 

 

SECTION 10.06. Counterparts; Integration; Effectiveness

 

8589

 

 

SECTION 10.07. Severability

 

8689

 

 

SECTION 10.08. Right of Setoff

 

8690

 

 

SECTION 10.09. Governing Law; Jurisdiction; Etc.

 

8690

 

 

SECTION 10.10. WAIVER OF JURY TRIAL

 

8791

 

 

SECTION 10.11. Headings

 

8791

 

 

SECTION 10.12. Treatment of Certain Information; Confidentiality

 

8791

 

 

SECTION 10.13. Judgment Currency

 

8892

 

 

SECTION 10.14. USA PATRIOT Act

 

8993

 

 

SECTION 10.15. RELEASE OF LIENS

 

8993

 

 

SECTION 10.16. NO FIDUCIARY DUTY

 

9094

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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                    CREDIT AGREEMENT dated as of March 25, 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”),
XL GROUP LTD., an exempted company incorporated in the Cayman Islands with
limited liability (“XL Group Ltd”), 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, XL Group Ltd, 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, XL
Group Ltd, 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
$1,000,000,000 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% of Market

 

 

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

98% of Market

 

 

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

 

 

 

Maturity less than 2 years

98% of Market

Maturity 2 years to less than 5 years

95% of Market

Maturity 5 years to up to 10 years

95% of Market

Maturity over 10 years

93%of Market

 

 

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

 

 

 

Maturity less than 5

95% of Market

Maturity 5 years to up to 10 years

90% of Market

Maturity over 10 years

85% of Market

 

 

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

 

 

 

Maturity less than 5 years

90% of Market

Maturity 5 years to up to 10 years

85% of Market

Maturity over 10 years

80% of Market

 

 

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)

 

 

 

Maturity less than 5 years

95% of Market

Maturity 5 years or longer

90% of Market

 

 

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

 

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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% of Market

Maturity 5 years to up to 10 years

95% of Market

Maturity over 10 years

93% of Market

 

 

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% of Market

Maturity 5 years to up to 10 years

93% of Market

Maturity over 10 years and less than 30 years

90% of Market

 

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, and“Supranational
Securities” shall mean securities issued or backed by the International Bank for
Reconstruction & Development, European Bank for Reconstruction & Development,
Inter American Development 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 full and 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

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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 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.

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                    “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.

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

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

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

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

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

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                    “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.

                    “Business Day” means any day that is not a Saturday, Sunday
or other day on which commercial banks in New York City, London, Ireland andor
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:

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                    (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 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

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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 $1,000,000,000.

                    “Commitment Termination Date” means March 25, 2014.

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

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

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

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

                    “Credit 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,

8

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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, or
generally under other agreements in which it commits to extend credit), (c) has
failed, within three Business Days after request by the Administrative Agent,
acting in good faith, to provide a certification in writing from an authorized
officer of such Lender that it will comply with its obligations to fund
participations in then outstanding Letters of Credit, provided that such Lender
shall cease to be a Defaulting Lender pursuant to this clause (c) upon such
receipt of such certification in form and substance reasonably satisfactory to
the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

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

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

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

                    “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.

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

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

                    “ERISA Event” means (a) any “reportable event”, as defined
in Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Account Party or any of such
Account Party’s ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by any Account Party or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by any Account Party or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by any Account Party or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
any Account Party or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.

                    “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.

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

                    “Existing Credit Agreement” means the 5-Year Credit
Agreement dated as of June 21, 2007 among XL Group Ltd. (formerly 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 that increase the principal amount thereof as of the
Effective Date; provided, however, that to the extent such principal amount
exceeds $3,000,000,000 at any time, such excess amount shall not be deemed to be
incurred under the Existing Credit Agreement.

                    “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.

                 “First Amendment Effective Date” means December 9, 2011.

                    “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,

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central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

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

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

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

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

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

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

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

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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.

                    “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

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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 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.

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                    “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 Registry” has the meaning assigned to such term
in Section 10.06(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.

                    “Pledge Agreement” means the Pledge Agreement, dated as of
March 25, 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

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

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

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

                 “Secured Credit Agreement” means the 4-Year Credit Agreement
dated as of December 9, 2011 among the Account Parties, the lenders party
thereto, JPMCB, as

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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 First Amendment Effective Date; provided,
however, that to the extent such principal amount exceeds $650,000,000 at any
time, such excess amount shall not be deemed to be incurred under the Secured
Credit Agreement for purposes of Section 7.03 and Section 7.07.

                    “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 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).

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                    “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 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 First
Amendment 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.

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                    “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 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

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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 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 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.

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                    (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.

                    (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 Credit Agreement which is outstanding on
the First Amendment 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 First Amendment 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 First Amendment Effective Date. The Administrative
Agent shall, on the First Amendment 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
First Amendment 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 First Amendment 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,

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

                    SECTION 2.03. Reimbursement of LC Disbursements, Etc.

                    (a) Reimbursement. If any Lender shall make any LC
Disbursement in respect of any Syndicated Letter of Credit or Alternative
Currency Letter of Credit, the Specified Account Party with respect thereto
agrees to reimburse such Lender in respect of such LC Disbursement under (x) a
Syndicated Letter of Credit by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than 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

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

 

 

 

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

 

 

 

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

 

 

 

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

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

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                    (d) Interim Interest. If any LC Disbursement with respect to
a Syndicated Letter of Credit is made, then, unless such LC Disbursement is
reimbursed in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, subject to Section 2.09(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 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) 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

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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) 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

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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 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

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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 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

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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 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

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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 Credit Agreement which is
outstanding on First Amendment Effective Date and listed on Schedule VI as a
“Non-Syndicated Letter of Credit” shall, effective as of the First Amendment
Effective Date, be deemed continued hereunder and shall be amended by the
respective Issuing Lender (through the Administrative Agent) to reflect (i) the
Lenders having Commitments as of the First Amendment Effective Date and (ii)
with respect to each such Non-Syndicated Letter of Credit issued by a Lender
that is party to the Existing Credit Agreement, a face amount based upon the
respective Lender’s Applicable Percentage as in effect on the First Amendment
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 First Amendment
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

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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.

                    (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

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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 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

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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:

 

 

 

          (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,

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(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
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 Credit Agreement which is outstanding on
the First Amendment Effective Date and listed on Schedule VI as a “Participated
Letter of Credit” shall automatically be deemed continued hereunder on the First
Amendment Effective Date by the Issuing Lender of such Participated Letter of
Credit, and as of the First Amendment 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 First
Amendment 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 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.

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

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

 

 

 

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

 

 

 

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

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

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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.

                    (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).

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                    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);

 

 

 

                    (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 or, 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.

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                    (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),
then from time to time XL Group (and in the case of any specific Letter of
Credit, the Specified Account Party on behalf of which such Letter of Credit was
issued) will pay to such Lender such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction
suffered.

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

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

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

                    SECTION 2.11. 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.

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                    (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 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

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“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
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

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Non-U.S. Lender is legally entitled to complete, execute and deliver such
documentation and in its reasonable judgment such completion, execution or
submission would not materially prejudice its legal or commercial position.

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

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                    (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 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.

                    (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

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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), (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.

                    (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

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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

 

 

 

                    (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

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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.

                    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

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for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;

 

 

 

 

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

 

 

 

 

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

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

The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent, 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 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

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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 (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.

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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 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 Section 6.01(a)(i) with
respect to the fiscal year ended December 31, 2010. 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.

                    (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

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prior to the Effective Date with the SEC pursuant to the Securities Exchange Act
of 1934, as amended.

                    SECTION 4.05. Properties.

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

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

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“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

                    SECTION 4.09. Taxes. Each Account Party and each of its
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which such Person has set aside on its books
adequate reserves or (b) to the extent that the failure to file any such Tax
return or pay any such Taxes could not reasonably be expected to result in a
Material Adverse Effect.

                    SECTION 4.10. ERISA. No ERISA Event has occurred or is
reasonably 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 December
31, 2010, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding

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ownership interests in such Subsidiary and (iii) the percentage of ownership of
such Subsidiary represented by such ownership interests. Except as disclosed in
Schedule V, as of the date hereof, (x) each of XL Group and its Subsidiaries
owns, free and clear of Liens, and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held 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
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 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.

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          (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 Credit Agreement. Evidence reasonably satisfactory to the
Administrative Agent that the Commitments under (and as defined in) the Existing
Credit Agreements have reduced in an amount equal to the aggregate Commitments
hereunder.

 

 

 

          (g) 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(g)).

 

 

 

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

                    The obligation of any Lender to make its initial 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.

                    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 March 25, 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

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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:

                    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 XL
Group Ltd and its consolidated Subsidiaries as of the end of and for the
immediately

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preceding fiscal year, setting forth in each case in comparative form the
figures for (or, in the case of the balance sheet, as of the end of) the
previous fiscal year (if such figures were already produced for such
corresponding period), certified by a Financial Officer of XL Group Ltd as
presenting fairly in all material respects the financial condition and results
of operations of XL Group Ltd and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

 

 

 

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

 

 

 

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

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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 XL Group Ltd, XL
America, XL Insurance (Bermuda), XL Re, XL Re Europe, XL Insurance, XL
Switzerland and XL Life (in each case, in the event consolidated financial
statements are prepared in the ordinary course of business, prepared in a manner
that consolidates the applicable consolidated Subsidiaries) as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for (or, in the case of the
balance sheet, as of the end of) the corresponding period or periods of the
previous fiscal year (if such figures were already produced for such
corresponding period or periods), all certified by a Financial Officer of the
respective Account Party as presenting fairly in all material respects the
financial condition and results of operations of such Account Party (or, if
applicable, of such Account Party and its consolidated Subsidiaries on a
consolidated basis) in accordance with GAAP, Local GAAP, SAP or SFR, as the case
may be, consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;

 

 

 

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

 

 

 

          (e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by such
Account Party or any of its respective Subsidiaries with the SEC, or any
Governmental Authority succeeding to any or all of the functions of 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;

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          (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, 2010), a
statement of a Financial Officer of XL Group listing, as of the end of the
immediately preceding fiscal quarter of XL Group, the amount of cash and the
securities of the Account Parties and their Subsidiaries that have been posted
as collateral under Section 7.03(e); and

 

 

 

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

 

 

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

 

 

 

          (a) the occurrence of any Default; and

 

 

 

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

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

                    SECTION 6.03. Preservation of Existence and Franchises. Each
Account Party will, and will cause each of its Significant Subsidiaries to,
maintain its corporate existence and its material rights and franchises in full
force and effect in its jurisdiction of incorporation; provided that the
foregoing shall not prohibit (x) any merger or consolidation permitted under
Section 7.01.7.01 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.

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

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

 

 

 

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

 

 

 

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

 

 

 

          (c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any such property (other
than Liens not forbidden by Section 7.03) or which, if unpaid, might give rise
to a claim entitled to priority over general creditors of such Account Party or
such Subsidiary in any proceeding under the Bermuda Companies Law, or Bermuda
Insurance Law, or any insolvency proceeding, liquidation, receivership,
rehabilitation, dissolution or winding-up involving such Account Party or such
Subsidiary;

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

                    SECTION 6.07. Financial Accounting Practices. Each Account
Party will, and will cause each of its consolidated Subsidiaries to, make and
keep books, records and accounts which, in reasonable detail, accurately and
fairly reflect its transactions and dispositions of its assets and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that transactions are recorded as necessary to permit preparation of
financial 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

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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 of such Account Party, to discuss its affairs with its financial
management, and provide such other information relating to the business and
financial condition of such Account Party at such times as such Lender may
reasonably request. Each Account Party hereby authorizes its financial
management to discuss with any Lender the affairs of such Account Party.

ARTICLE VII

NEGATIVE COVENANTS

                    Until the Commitments have expired or terminated, 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

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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 satisfactory to the Administrative Agent.

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

          (e) the Disposition of XL Lifeall 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 prior, 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 XL
Lifesuch 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..

                    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);

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

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

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

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such Exempt Indebtedness is consolidated on the consolidated balance sheet of XL
Group and its consolidated Subsidiaries in accordance with GAAP or (iii) any
other assets subject to any trust or other account arising out of or as a result
of contractual, regulatory or any other requirements; provided that in no case
shall any such Lien secure Indebtedness and any Lien which secures Indebtedness
shall not be permitted under this clause (g);

 

 

 

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

 

 

 

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

 

 

 

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

 

 

 

          (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

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(including purchase or lease property or services to, loan or advance to or
enter into, suffer to remain in existence or amend any contract, agreement or
arrangement with) any Affiliate of such Account Party, or directly or indirectly
agree to do any of the foregoing, except (i) transactions involving guarantees
or co-obligors with respect to any Indebtedness described in Part A of Schedule
II, (ii) transactions among the Account Parties and their wholly-owned
Subsidiaries, (iii) transactions with Affiliates in good faith in the ordinary
course of such Account Party’s business consistent with past practice and on
terms no less favorable to such Account Party or any Subsidiary than those that
could have been obtained in a comparable transaction on an arm’s length basis
from an unrelated Person and (iv) transactions permitted by Sections 7.01 and
7.07.

 

 

 

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

                    SECTION 7.06. Consolidated Net Worth. XL Group will not
permit at any time its Consolidated Net Worth to be less than the sum of (a)
$6,494,000,000 plus (b) 25% of consolidated net income (if positive) of XL Group
and its Subsidiaries for each fiscal quarter ending on or after September 30,
2010.

                    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 ExistingSecured 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 at any time outstanding 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

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rate such company.

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

                    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 (2010 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 (2010 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 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;

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          (l) XL Group shall cease to own, beneficially and of record, directly
or indirectly, all of the outstanding voting shares of capital stock of XL Group
Ltd, 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 othersuch 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 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

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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.

                    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

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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
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

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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 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

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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.

                    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

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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.

                    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.

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                    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.

                    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 Agent 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 at XL House, 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;

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          (b) if to the Administrative Agent, JPMorgan Chase Bank, N.A., 1111
Fannin Street, 10th Floor, Houston, Texas 77002-6925, Attention of Wanda G Grace
(Telecopy No. (713) 750-2223; Telephone No. (713) 374-4472); email address,
wanda.g.grace@jpmchase.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);

 

 

 

          (c) if to the Collateral Agent, to 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) set
forth in its Administrative Questionnaire.

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

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Administrative Agent, the Collateral Agent or any Lender may have had notice or
knowledge of such Default at the time.

                    (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 pursuant to an agreement or
agreements in writing entered into 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
agreement 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 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;

and provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, an Issuing Lender or
the Collateral Agent hereunder without

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the prior written consent of the Administrative Agent, an 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.

                    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, 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 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

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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.

                    (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.

                    (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, an Approved Fund 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

 

 

 

                    (B) the Administrative Agent; and

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                    (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, an
Approved Fund 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 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 (iii) the Account Parties
may bring any proceeding against either or both the Granting Lender or the

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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 disclose, on a confidential basis,
confidential information with respect to any Account Party and its Subsidiaries
to any rating agency, commercial paper dealer or provider of a surety, guarantee
or credit liquidity enhancement to such SPV. Notwithstanding anything to the
contrary in this Agreement, no SPV shall be entitled to any greater rights under
Section 2.10 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, 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

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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, an Approved Fund or a
Federal Reserve Bank shall be made only with the consent (which in each case
shall not be unreasonably withheld) of XL Group and the Administrative Agent,
unless a Default has occurred and is continuing, in which case the consent of XL
Group shall not be required, (B) such Lender’s obligations under this Agreement
and the other Credit Documents shall remain unchanged, (C) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (D) the Account Parties, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
the other Credit Documents. Any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and the other Credit Documents and to
approve any amendment, modification or waiver of any provision of this Agreement
or the other Credit Documents; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 10.02(b) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, the Account Parties agree that each Participant shall be entitled
to the benefits and subject to the limitations of Sections 2.10 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

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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 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 shall be effective as delivery of a manually executed counterpart of
this Agreement.

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

                    SECTION 10.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender 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

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

                    SECTION 10.09. Governing Law; Jurisdiction; Etc.

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

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

                    (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

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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. Such authorization shall survive
the expiration or termination of the Letters of Credit, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.

                    (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
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (ii) to the extent requested by any regulatory
authority (including self-regulating organizations) having jurisdiction over the
Administrative Agent, 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

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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 or (c) any credit
insurance provider (or its advisors), (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; provided that, in the case of information received from an Account Party
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. 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 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

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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 allthere are no Letters of Credit shall
have expired or been terminatedoutstanding 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 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 or otherwise 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

83

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

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.

84

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

EXHIBIT B

SCHEDULE VI

Existing Letters of Credit

Syndicated Letters of Credit

 

 

 

 

 

 

 

 

 

BOOKING PARTY NAME

 

REF NUMBER

 

EXPIRY /
MATURITY
DATE

 

LC AVAILABLE
AMOUNT

 

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

 

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

 

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

 

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

 

XL Insurance (Bermuda) LTD

 

TUTS-577410

 

09/30/12

 

$

106,000,000.00

 

XL Insurance (Bermuda) LTD

 

U-810888

 

12/31/12

 

$

16,000,000.00

 

XL Insurance (Bermuda) LTD

 

U-810880

 

12/31/12

 

$

3,200,000.00

 

XL Insurance (Bermuda) LTD

 

U-810881

 

12/31/12

 

$

237,000,000.00

 

XL Insurance (Bermuda) LTD

 

U-810882

 

12/31/12

 

$

102,000,000.00

 

XL Insurance (Bermuda) LTD

 

U-810884

 

12/31/12

 

$

26,426,000.00

 

XL Insurance (Bermuda) LTD

 

U-810885

 

12/31/12

 

$

7,157,000.00

 

XL Insurance (Bermuda) LTD

 

U-810886

 

12/31/12

 

$

3,579,000.00

 

 XL Insurance (Bermuda) LTD Subtotal

 

 

 

 

 

$

501,362,000.00

 

XL Capital Ltd

 

U-206911

 

12/31/11

 

$

6,865.45

 

XL Capital Ltd

 

U-206910

 

12/31/11

 

$

1,851.12

 

XL Capital Ltd

 

U-206877

 

12/31/11

 

$

36,223.00

 

XL Capital Ltd

 

U-206876

 

12/31/11

 

$

1,357,351.10

 

XL Capital Ltd

 

U-206875

 

12/31/11

 

$

1,828,223.00

 

XL Capital Ltd

 

U-205301

 

12/31/12

 

$

115,566.00

 

XL Capital Ltd

 

U-205300

 

12/31/11

 

$

1,350,396.53

 

XL Capital Ltd

 

U-205299

 

12/31/11

 

$

20,635.41

 

XL Capital Ltd

 

TUTS-539012

 

12/31/11

 

$

1,547,438.00

 

XL Capital Ltd

 

TUTS-538712

 

12/31/11

 

$

8,542,188.97

 

XL Capital Ltd Subtotal

 

 

 

 

 

$

14,806,738.58

 

XL CAPITAL LTD

 

TUTS-538387

 

12/31/12

 

$

70,906.50

 

XL CAPITAL LTD

 

TUTS-538386

 

12/31/12

 

$

37,799.46

 

XL CAPITAL LTD

 

CUCS-523536

 

12/31/12

 

$

1,158.68

 

 XL CAPITAL LTD Subtotal

 

 

 

 

 

$

109,864.64

 

XL RE Ltd

 

TUTS-578188

 

12/31/12

 

$

265,482.37

 

XL RE Ltd

 

TUTS-677759

 

12/31/11

 

$

7,223.00

 

XL RE Ltd

 

TUTS-677757

 

12/31/11

 

$

84,977.30

 

XL RE Ltd

 

TUTS-677756

 

12/31/12

 

$

3,958,230.80

 

XL RE Ltd

 

TUTS-677752

 

12/31/11

 

$

62,582.00

 

XL RE Ltd

 

TUTS-677750

 

12/31/11

 

$

2,442,640.46

 

XL RE Ltd

 

TUTS-677384

 

12/31/11

 

$

6,799.24

 

XL RE Ltd

 

TUTS-677366

 

12/31/11

 

$

2,428,757.43

 

XL RE Ltd

 

TUTS-677363

 

12/31/11

 

$

447,914.18

 

85

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

 

 

 

 

 

 

 

 

 

XL RE Ltd

 

TUTS-652209

 

12/31/12

 

$

16,706.73

 

XL RE Ltd

 

TUTS-651689

 

12/31/11

 

$

22,703.75

 

XL RE Ltd

 

TUTS-578533

 

12/31/12

 

$

62,000,000.00

 

XL RE Ltd

 

CUCS-482208

 

12/31/12

 

$

33,554.99

 

XL RE Ltd

 

TUTS-578189

 

12/31/12

 

$

162,095.57

 

XL RE Ltd

 

TUTS-677795

 

12/31/12

 

$

47,900.00

 

XL RE Ltd

 

TUTS-578071

 

12/31/11

 

$

15,205,869.50

 

XL RE Ltd

 

TUTS-578070

 

12/31/11

 

$

24,871.73

 

XL RE Ltd

 

TUTS-577885

 

12/31/11

 

$

20,300,000.00

 

XL RE Ltd

 

TUTS-577884

 

12/31/12

 

$

130,956.79

 

XL RE Ltd

 

TUTS-577411

 

12/31/11

 

$

15,885.78

 

XL RE Ltd

 

TUTS-539542

 

12/31/12

 

$

746,370.10

 

XL RE Ltd

 

TUTS-539334

 

12/31/11

 

$

24,833.46

 

XL RE Ltd

 

TUTS-539317

 

12/31/11

 

$

7,760.46

 

XL RE Ltd

 

TUTS-578281

 

12/31/12

 

$

23,327,472.60

 

XL RE Ltd

 

U-205252

 

12/31/11

 

$

364,741.39

 

XL RE Ltd

 

U-204131

 

12/31/11

 

$

1.00

 

XL RE Ltd

 

TUTS-679048

 

12/31/12

 

$

18,700,000.00

 

XL RE Ltd

 

TUTS-678959

 

12/31/11

 

$

9,886.55

 

XL RE Ltd

 

TUTS-678822

 

12/31/11

 

$

533,718.29

 

XL RE Ltd

 

TUTS-678821

 

12/31/11

 

$

3,958.56

 

XL RE Ltd

 

TUTS-678819

 

12/31/11

 

$

63,252.90

 

XL RE Ltd

 

TUTS-678816

 

12/31/11

 

$

31,630.68

 

XL RE Ltd

 

TUTS-678717

 

12/31/11

 

$

989.46

 

XL RE Ltd

 

TUTS-678684

 

12/31/12

 

$

100,679.51

 

XL RE Ltd

 

TUTS-678550

 

12/31/12

 

$

2,000,000.16

 

XL RE Ltd

 

TUTS-677760

 

12/31/11

 

$

54,188.00

 

XL RE Ltd

 

TUTS-678545

 

12/31/11

 

$

10,884.00

 

XL RE Ltd

 

TUTS-677762

 

12/31/11

 

$

21,179.00

 

XL RE Ltd

 

TUTS-678396

 

12/31/11

 

$

14,282.14

 

XL RE Ltd

 

TUTS-678259

 

12/31/11

 

$

42,113.73

 

XL RE Ltd

 

TUTS-678079

 

12/31/12

 

$

109,572.72

 

XL RE Ltd

 

TUTS-678077

 

12/31/12

 

$

69,725.16

 

XL RE Ltd

 

TUTS-678075

 

12/31/11

 

$

97,654.43

 

XL RE Ltd

 

TUTS-677961

 

12/31/12

 

$

56,891.33

 

XL RE Ltd

 

TUTS-677889

 

12/31/12

 

$

392,483.14

 

XL RE Ltd

 

TUTS-677825

 

12/31/11

 

$

2,498.93

 

XL RE Ltd

 

TUTS-677824

 

12/31/11

 

$

4,997.87

 

XL RE Ltd

 

TUTS-677823

 

12/31/11

 

$

42,481.87

 

XL RE Ltd

 

TUTS-677796

 

12/31/11

 

$

3,160.91

 

XL RE Ltd

 

TUTS-678546

 

12/31/11

 

$

44,966.00

 

XL RE Ltd

 

CUCS-483525

 

12/31/11

 

$

21,250.00

 

XL RE Ltd

 

TUTS-539316

 

12/31/12

 

$

438,332.68

 

XL RE Ltd

 

CUCS-523740

 

12/31/12

 

$

24,768.00

 

XL RE Ltd

 

CUCS-523597

 

12/31/11

 

$

104,880.80

 

XL RE Ltd

 

CUCS-523517

 

12/31/12

 

$

22,805.00

 

XL RE Ltd

 

CUCS-523455

 

12/31/11

 

$

23,657.00

 

XL RE Ltd

 

CUCS-523411

 

12/31/11

 

$

299,758.99

 

XL RE Ltd

 

CUCS-483986

 

12/31/11

 

$

271,300.00

 

86

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

 

 

 

 

 

 

 

 

 

XL RE Ltd

 

CUCS-483583

 

12/31/11

 

$

5,000.00

 

XL RE Ltd

 

CUCS-483582

 

12/31/12

 

$

57,092.29

 

XL RE Ltd

 

CUCS-524444

 

12/31/11

 

$

2,303.14

 

XL RE Ltd

 

CUCS-483580

 

12/31/12

 

$

45,326.79

 

XL RE Ltd

 

CUCS-483524

 

12/31/11

 

$

50,733.14

 

XL RE Ltd

 

CUCS-483399

 

12/31/11

 

$

202,242.50

 

XL RE Ltd

 

CUCS-483398

 

12/31/11

 

$

17,879.94

 

XL RE Ltd

 

CUCS-483365

 

12/31/11

 

$

300,000.00

 

XL RE Ltd

 

CUCS-483364

 

12/31/11

 

$

273,625.00

 

XL RE Ltd

 

CUCS-483177

 

12/31/11

 

$

81,078.90

 

XL RE Ltd

 

CUCS-483073

 

12/31/12

 

$

94,700.76

 

XL RE Ltd

 

CUCS-483072

 

12/31/11

 

$

21,416.94

 

XL RE Ltd

 

CUCS-482908

 

12/31/12

 

$

2,420,000.00

 

XL RE Ltd

 

CUCS-482823

 

12/31/11

 

$

5,819.00

 

XL RE Ltd

 

CUCS-482822

 

12/31/11

 

$

8,582.32

 

XL RE Ltd

 

CUCS-482209

 

12/31/12

 

$

30,710.98

 

XL RE Ltd

 

CUCS-483581

 

12/31/12

 

$

27,991.38

 

XL RE Ltd

 

TUTS-538872

 

12/31/11

 

$

108,778.88

 

XL RE Ltd

 

TUTS-539106

 

12/31/11

 

$

7,939.24

 

XL RE Ltd

 

TUTS-539051

 

12/31/11

 

$

15,610.43

 

XL RE Ltd

 

TUTS-539009

 

12/31/12

 

$

5,000.00

 

XL RE Ltd

 

TUTS-539008

 

12/31/12

 

$

9,351.44

 

XL RE Ltd

 

TUTS-539005

 

12/31/12

 

$

28,980.67

 

XL RE Ltd

 

TUTS-539004

 

12/31/12

 

$

5,000.00

 

XL RE Ltd

 

TUTS-539003

 

12/31/12

 

$

5,000.00

 

XL RE Ltd

 

TUTS-539002

 

12/31/11

 

$

8,236.70

 

XL RE Ltd

 

TUTS-538993

 

12/31/11

 

$

12,405.11

 

XL RE Ltd

 

TUTS-538929

 

12/31/11

 

$

3,589,072.78

 

XL RE Ltd

 

CUCS-523967

 

12/31/11

 

$

881,285.00

 

XL RE Ltd

 

TUTS-538897

 

12/31/11

 

$

4,711,200.00

 

XL RE Ltd

 

TUTS-539244

 

12/31/12

 

$

7,400,000.00

 

XL RE Ltd

 

TUTS-538844

 

12/31/12

 

$

89,495.93

 

XL RE Ltd

 

TUTS-538722

 

12/31/12

 

$

32,667.24

 

XL RE Ltd

 

TUTS-538571

 

12/31/11

 

$

50,702.46

 

XL RE Ltd

 

TUTS-537303

 

06/30/12

 

$

24,550,614.61

 

XL RE Ltd

 

CUCS-539107

 

12/31/12

 

$

66,509.48

 

XL RE Ltd

 

CUCS-524733

 

12/31/11

 

$

105,796.80

 

XL RE Ltd

 

CUCS-524732

 

12/31/12

 

$

34,555.00

 

XL RE Ltd

 

TUTS-538901

 

12/31/11

 

$

30,180.08

 

XL RE Ltd

 

U-696420

 

12/31/11

 

$

561,047.82

 

XL RE Ltd

 

U-695928

 

12/31/11

 

$

399,729.87

 

XL RE Ltd

 

U-796890

 

12/31/12

 

$

231,872.81

 

XL RE Ltd

 

U-796888

 

12/31/11

 

$

759,402.49

 

XL RE Ltd

 

U-713153

 

12/31/11

 

$

181,151.89

 

XL RE Ltd

 

U-696939

 

12/31/12

 

$

14,679.75

 

XL RE Ltd

 

U-696639

 

12/31/12

 

$

161,201.10

 

XL RE Ltd

 

U-696638

 

12/31/12

 

$

24,726.38

 

XL RE Ltd

 

U-696612

 

12/31/12

 

$

1,425.02

 

XL RE Ltd

 

U-696533

 

12/31/11

 

$

170,982.74

 

87

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

 

 

 

 

 

 

 

 

 

XL RE Ltd

 

U-696531

 

12/31/11

 

$

98,759.69

 

XL RE Ltd

 

U-696432

 

12/31/11

 

$

180,478.40

 

XL RE Ltd

 

U-696428

 

12/31/12

 

$

1,389,946.45

 

XL RE Ltd

 

U-797012

 

12/31/11

 

$

10,000.00

 

XL RE Ltd

 

U-696416

 

12/31/12

 

$

126,668.75

 

XL RE Ltd

 

U-696415

 

12/31/11

 

$

21,452.56

 

XL RE Ltd

 

U-696388

 

12/31/12

 

$

934,167.00

 

XL RE Ltd

 

U-696384

 

12/31/12

 

$

24,018.60

 

XL RE Ltd

 

U-696383

 

12/31/12

 

$

87,610.00

 

XL RE Ltd

 

U-696277

 

12/31/11

 

$

4,543.85

 

XL RE Ltd

 

U-696269

 

12/31/11

 

$

144,147.44

 

XL RE Ltd

 

U-696222

 

12/31/12

 

$

3,650.34

 

XL RE Ltd

 

U-696221

 

12/31/12

 

$

2,288.00

 

XL RE Ltd

 

U-696220

 

12/31/12

 

$

398,259.00

 

XL RE Ltd

 

U-696103

 

12/31/12

 

$

95,402.08

 

XL RE Ltd

 

U-205253

 

12/31/11

 

$

82,803.11

 

XL RE Ltd

 

U-696429

 

12/31/12

 

$

13,591,063.30

 

XL RE Ltd

 

U-810873

 

12/31/12

 

$

17,400,000.00

 

XL RE Ltd

 

U-810910

 

12/31/11

 

$

21,035.67

 

XL RE Ltd

 

U-810908

 

12/31/11

 

$

1,125,210.99

 

XL RE Ltd

 

U-810902

 

12/31/11

 

$

7,060.00

 

XL RE Ltd

 

U-810900

 

12/31/11

 

$

259,966.47

 

XL RE Ltd

 

U-810897

 

12/31/11

 

$

307,604.18

 

XL RE Ltd

 

U-810896

 

12/31/11

 

$

399,353.10

 

XL RE Ltd

 

U-810895

 

12/31/11

 

$

20,551.10

 

XL RE Ltd

 

U-810894

 

12/31/11

 

$

149,564.02

 

XL RE Ltd

 

U-810893

 

12/31/11

 

$

4,875.45

 

XL RE Ltd

 

U-810892

 

12/31/12

 

$

1,033,502.36

 

XL RE Ltd

 

U-810875

 

12/31/12

 

$

73,535.91

 

XL RE Ltd

 

U-695926

 

12/31/11

 

$

17,106.86

 

XL RE Ltd

 

U-810867

 

12/31/11

 

$

56,538.00

 

XL RE Ltd

 

U-810864

 

12/31/11

 

$

3,249.22

 

XL RE Ltd

 

U-810861

 

12/31/11

 

$

6,141.00

 

XL RE Ltd

 

U-810856

 

12/31/11

 

$

6,124,327.00

 

XL RE Ltd

 

U-810841

 

12/31/12

 

$

4,722,139.00

 

XL RE Ltd

 

U-810840

 

12/31/11

 

$

5,456.34

 

XL RE Ltd

 

U-810839

 

12/31/11

 

$

5,858.44

 

XL RE Ltd

 

U-810838

 

12/31/11

 

$

9,148.52

 

XL RE Ltd

 

U-810835

 

12/31/11

 

$

304,859.66

 

XL RE Ltd

 

U-797613

 

12/31/11

 

$

115,508.94

 

XL RE Ltd

 

U-797610

 

12/31/11

 

$

136,914.44

 

XL RE Ltd

 

U-797206

 

12/31/11

 

$

30,665.00

 

XL RE Ltd

 

U-810878

 

12/31/11

 

$

575,305.56

 

XL RE Ltd

 

U-206571

 

12/31/11

 

$

6,797.94

 

XL RE Ltd

 

U-695930

 

12/31/12

 

$

49,416.10

 

XL RE Ltd

 

U-206776

 

12/31/11

 

$

6,795.04

 

XL RE Ltd

 

U-206752

 

12/31/11

 

$

82,008.00

 

XL RE Ltd

 

U-206734

 

12/31/11

 

$

2,439.06

 

XL RE Ltd

 

U-206733

 

12/31/11

 

$

76,588.79

 

88

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

 

 

 

 

 

 

 

 

 

XL RE Ltd

 

U-206667

 

12/31/11

 

$

539,578.33

 

XL RE Ltd

 

U-206648

 

12/31/11

 

$

662,374.00

 

XL RE Ltd

 

U-206647

 

12/31/11

 

$

118,758.00

 

XL RE Ltd

 

U-206645

 

12/31/11

 

$

1,043,281.40

 

XL RE Ltd

 

U-206598

 

12/31/11

 

$

135,545.25

 

XL RE Ltd

 

U-206597

 

12/31/11

 

$

8,442.75

 

XL RE Ltd

 

U-206780

 

12/31/11

 

$

6,311.62

 

XL RE Ltd

 

U-206572

 

12/31/11

 

$

103,413.32

 

XL RE Ltd

 

U-206785

 

12/31/11

 

$

18,727.59

 

XL RE Ltd

 

U-206563

 

12/31/11

 

$

540.57

 

XL RE Ltd

 

U-206561

 

12/31/11

 

$

697,756.00

 

XL RE Ltd

 

U-206559

 

12/31/11

 

$

275,151.60

 

XL RE Ltd

 

U-206557

 

12/31/11

 

$

5,828.00

 

XL RE Ltd

 

U-206351

 

12/31/11

 

$

210,173.91

 

XL RE Ltd

 

U-205832

 

12/31/11

 

$

22,977.55

 

XL RE Ltd

 

U-205828

 

12/31/11

 

$

547,731.00

 

XL RE Ltd

 

U-205826

 

12/31/11

 

$

25,628.44

 

XL RE Ltd

 

U-205825

 

12/31/11

 

$

11,188.53

 

XL RE Ltd

 

U-205824

 

12/31/11

 

$

542,956.02

 

XL RE Ltd

 

U-205306

 

12/31/12

 

$

20,300,000.00

 

XL RE Ltd

 

U-810913

 

12/31/11

 

$

1,111,598.90

 

XL RE Ltd

 

U-206585

 

12/31/11

 

$

156,020.00

 

XL RE Ltd

 

U-207032

 

12/31/11

 

$

10,253.32

 

XL RE Ltd

 

U-695924

 

12/31/12

 

$

2,004.80

 

XL RE Ltd

 

U-695832

 

12/31/12

 

$

11,840.30

 

XL RE Ltd

 

U-695831

 

12/31/11

 

$

661,706.00

 

XL RE Ltd

 

U-695830

 

12/31/12

 

$

5,202.00

 

XL RE Ltd

 

U-244424

 

12/31/11

 

$

5,000.00

 

XL RE Ltd

 

U-207225

 

12/31/11

 

$

7,484.85

 

XL RE Ltd

 

U-207074

 

12/31/11

 

$

12,416.73

 

XL RE Ltd

 

U-207071

 

12/31/11

 

$

100,884.50

 

XL RE Ltd

 

U-207067

 

12/31/11

 

$

3,104.18

 

XL RE Ltd

 

U-207054

 

12/31/11

 

$

6,208.37

 

XL RE Ltd

 

U-206777

 

12/31/11

 

$

1,269,820.00

 

XL RE Ltd

 

U-207033

 

12/31/11

 

$

21,784.19

 

XL RE Ltd

 

U-205254

 

12/31/11

 

$

69,277.85

 

XL RE Ltd

 

U-207031

 

12/31/11

 

$

71,863.76

 

XL RE Ltd

 

U-207019

 

12/31/11

 

$

2,497,187.00

 

XL RE Ltd

 

U-207015

 

12/31/11

 

$

98,201.14

 

XL RE Ltd

 

U-206917

 

12/31/12

 

$

530,062.13

 

XL RE Ltd

 

U-206916

 

12/31/11

 

$

25,379.14

 

XL RE Ltd

 

U-206915

 

12/31/11

 

$

5,438.54

 

XL RE Ltd

 

U-206913

 

12/31/11

 

$

6,596.27

 

XL RE Ltd

 

U-206909

 

12/31/11

 

$

11,285.40

 

XL RE Ltd

 

U-206907

 

12/31/11

 

$

220,972.70

 

XL RE Ltd

 

U-206904

 

12/31/11

 

$

405.20

 

XL RE Ltd

 

U-206903

 

12/31/11

 

$

11,577.49

 

XL RE Ltd

 

U-206896

 

12/31/11

 

$

2,203,126.14

 

XL RE Ltd

 

U-207042

 

12/31/11

 

$

2,935,689.09

 

XL RE Ltd Subtotal

 

 

 

 

 

$

291,336,917.84

 

Grand Total

 

 

 

 

 

$

807,615,521.06

 

89

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

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-662737

 

12/31/11

 

$

48,513.46

 

XL RE LTD

 

CUCS-483939

 

12/31/11

 

$

1,220,079.86

 

XL RE LTD

 

CUCS-483987

 

12/31/11

 

$

553,375.00

 

XL RE LTD

 

CUCS-484934

 

06/30/12

 

$

394,725.29

 

XL RE LTD

 

CUCS-484935

 

06/30/12

 

$

73,516.20

 

XL RE LTD

 

CUCS-523966

 

12/31/11

 

$

147,046.94

 

XL RE LTD

 

TUTS-538558

 

12/31/12

 

$

106,090.51

 

XL RE LTD

 

TUTS-652033

 

12/31/11

 

$

6,601.68

 

XL RE LTD

 

TUTS-661599

 

12/31/12

 

$

2,613.45

 

XL RE LTD

 

U-798146

 

12/31/11

 

$

1,228,110.00

 

XL RE LTD

 

TUTS-677271

 

12/31/11

 

$

2,907,398.00

 

XL RE LTD

 

TUTS-677365

 

12/31/12

 

$

962,081.19

 

XL RE LTD

 

TUTS-677754

 

12/31/12

 

$

26,480.55

 

XL RE LTD

 

TUTS-679344

 

12/31/12

 

$

248,576.80

 

XL RE LTD

 

U-221383

 

12/31/11

 

$

94,259.50

 

XL RE LTD

 

U-221384

 

12/31/11

 

$

1,682,844.94

 

XL RE LTD

 

U-696224

 

12/31/11

 

$

3,333,195.26

 

XL RE LTD

 

U-696431

 

12/31/11

 

$

482,786.25

 

XL RE LTD

 

TUTS-652035

 

12/31/11

 

$

112,654.27

 

Total

 

 

 

 

 

$

13,630,949.16

 

90

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