Exhibit
10.4


PLEDGE AGREEMENT


          THIS PLEDGE
AGREEMENT (as amended or otherwise modified from time to time, this “Agreement”)
dated as of December 9, 2011 is 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 “Pledgor” and collectively, the “Pledgors”) and The Bank of
New York Mellon, not in its individual capacity but solely as Collateral Agent
(in such capacity, the “Collateral Agent”), for the benefit of the
Secured Parties (as defined below). 


W I T N E S S E T H:


          WHEREAS,
the Pledgors, various financial institutions, the Collateral Agent and JPMorgan
Chase Bank, N.A., as Administrative Agent, have entered into a Secured Credit
Agreement dated as of December 9, 2011 (as amended or otherwise modified from
time to time, the “Credit Agreement”); and


          WHEREAS,
under the Credit Agreement, each of the Pledgors has agreed to grant to the
Collateral Agent security interests in each of their respective Accounts (as
defined below), and each of the Pledgors has agreed to deliver cash and
Eligible Assets to its Accounts from time to time in order to secure its
obligations under the Credit Agreement.


          NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:


          1. Definitions.
In addition to terms defined in the preamble and recitals, (a) capitalized
terms used but not defined herein have the respective meanings set forth in the
Credit Agreement, and (b) the following terms have the following meanings (such
definitions to be applicable to both the singular and plural forms of such
terms):


          “Account”
means, with respect to any Pledgor, the segregated securities account (and
includes any sub-accounts thereof and deposit accounts related thereto)
established and maintained in accordance with the Control Agreement and bearing
the account number specified on Schedule II thereto with respect to such
Pledgor (as the same may be redesignated, renumbered or otherwise modified from
time to time, and including any account opened in replacement of or in
substitution for such account).


          “Cash
Collateral Account” has the meaning given to it in Section 6(f).





          “Collateral”
has the meaning given to it in Section 2.


          “Control
Agreement” means the Collateral Account Control Agreement, dated as of
December 9, 2011, among the Pledgors, the Collateral Agent, as pledgee, the
Custodian, the Administrative Agent and The Bank of New York Mellon, as service
provider.


          “Custodian”
means The Bank of New York Mellon (or any successor thereto permitted under the
Control Agreement).


          “Enforcement
Event” means the occurrence and continuation of any Event of Default under
the Credit Agreement, which has not been waived by the Administrative Agent; provided
that no Enforcement Event shall be deemed to have occurred with respect to XL
Insurance Switzerland Ltd., XL Re Europe Limited or XL Insurance Company
Limited (collectively, the “European Entities”), unless such European
Entity is the defaulting party.


          “Enforcement
Event Notice” means a notice delivered from the Administrative Agent to the
Collateral Agent (with a copy to XL Group) stating (i) that an Enforcement
Event has occurred and is continuing and (ii) which Pledgors are subject to
such Enforcement Event.


          “Investment
Property” shall have the meaning provided in Article 8 or Article 9, as
applicable, of the UCC. 


          “Liabilities”
means, with respect to any Pledgor and to the extent owing to one or more
Secured Parties, (i) all Obligations of such Pledgor, (ii) all obligations of
such Pledgor under this Agreement and the Control Agreement, and (iii) all
other obligations of such Pledgor directly related to any Letter of Credit issued
for the account of such Pledgor, in each case, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due.


          “Notice
of Exclusive Control” has the meaning given to it in Section 6(d).


          “Obligations”
means, with respect to any Pledgor, the LC Disbursements (and interest thereon)
made by the Lenders to such Pledgor and all other amounts from time to time
owing by such Pledgor to the Lenders, the Collateral Agent or the
Administrative Agent by such Account Parties under any of the Credit Documents.


          “Proceeds”
means all “proceeds” as such term is defined in Section 9-102(a)(64) of the
UCC.


          “Secured
Parties” means the Lenders, the Issuing Lenders, the Administrative Agent
and the Collateral Agent.


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


          2. Grant
of Security Interest. As security for the payment of all of its Liabilities
(and not the Liabilities of any other Pledgor), each Pledgor hereby assigns to
the Collateral Agent, and grants to the Collateral Agent a continuing security
interest in, as agent for the benefit of the Secured Parties, all right, title
and interest of such Pledgor in the following property of such





Pledgor, whether now or hereafter existing or acquired, regardless of
where located (the “Collateral”):


                    (a)
its Account and all cash, Eligible Assets and all other property held therein
or credited thereto from time to time;


                    (b)
to the extent related to any property described in this Section 2, all books,
correspondence, credit files, records and other papers; and


                    (c)
all Proceeds of any of the foregoing.


          3. Warranties.
Each Pledgor warrants that: 


          (a) such
Pledgor is the sole entitlement holder of its Account and no other Person
(other than the Collateral Agent pursuant to this Agreement and the Custodian
pursuant to the Control Agreement) has control or possession of, or any other
interest in, such Account or any cash, Eligible Assets or other property held
in or credited to such Account and, without limiting the foregoing, no control
agreements exist with respect to its Collateral other than the Control
Agreement;


          (b) such
Pledgor is and will be the lawful owner of all of its Collateral, free of all
Liens, other than the security interest created hereunder and Liens in favor of
the Custodian, as securities intermediary, with respect to its Account; and


          (c) under
the laws of the State of New York, (i) this Agreement creates a security
interest that is enforceable against the Collateral in which such Pledgor has
rights as of the date hereof and will create a security interest that is
enforceable against the Collateral in which such Pledgor hereafter acquires
rights at the time such Pledgor acquires any such rights and (ii) the
Collateral Agent has a perfected and first priority security interest in the
Collateral in which such Pledgor has rights as of the date hereof, and will
have a perfected and first priority security interest in the Collateral in
which such Pledgor hereafter acquires rights at the time such Pledgor acquires
any such rights, in each case securing the payment and performance of the
Liabilities of such Pledgor.


          4. Agreements
of the Pledgors; Control; Withdrawals. 


          (a)
Each Pledgor will, at the Administrative Agent’s reasonable request, at any
time and from time to time, promptly execute and deliver to the Collateral
Agent such financing statements, amendments and other documents (including
recording a charge or filing (i) in the case of a Pledgor organized under the
laws of a state of the United States, in such state, (ii) in the case of a Pledgor
not incorporated or organized under the laws of a state of the United States,
in the District of Columbia and, if applicable, in the state of the United
States in which such Pledgor maintains its chief executive office as such
office is identified to the Collateral Agent by such Pledgor), and do such
other related acts as the Collateral Agent (acting at the written direction of
the Administrative Agent) may reasonably request, in order to establish and
maintain valid, attached and perfected first-priority security interests under
the laws of the State of New York in the Collateral in favor of the Collateral
Agent, free and clear of all Liens except Liens in favor of the Custodian. 









          (b)
Each Pledgor irrevocably authorizes the Collateral Agent (at the request of the
Administrative Agent) at any time, and from time to time, to file and/or record
in any United States jurisdiction any initial financing statement and/or charge
and amendments thereto that (i) indicate the Collateral and (ii) contain
any other information required by Section 5 of Article 9 of the UCC of the
jurisdiction wherein such financing statement or amendment is filed regarding
the sufficiency or filing office acceptance of any financing statement or
amendment, the applicable laws of the jurisdiction of organization of such
Pledgor with respect to recording a security interest. Each Pledgor
acknowledges that pursuant to the Control Agreement, the Collateral Agent has
“control” (as that term is used in Section 9-106 of the UCC) of any securities
account comprising such Pledgor’s Account pursuant to Sections 9-106(a),
9-106(c) and 8-106(d)(1) of the UCC and also “control” (as that term is used in
Section 9-104 of the UCC) of any deposit account comprising such Pledgor’s
Account pursuant to Section 9-104 of the UCC. 


          (c)
Subject to the terms of the Control Agreement, the parties agree that unless
and until such time as the Collateral Agent (acting at the written direction of
the Administrative Agent) shall deliver a Notice of Exclusive Control to the
Custodian in respect of the Account of a Pledgor (and at any time after the
written rescission by the Collateral Agent (acting at the written direction of
the Administrative Agent) of such Notice of Exclusive Control), and upon three
(3) Business Days notice to the Administrative Agent and the Collateral Agent,
each Pledgor shall have the right to instruct the Custodian to:


	
  

 	
  

 
	
  

 	
           (i)
 substitute any cash or Eligible Assets held in the Account of such Pledgor
 with other cash or Eligible Assets, provided that, (i) immediately after
 giving effect to such substitution, the Borrowing Base of such Pledgor is at
 least equal to the aggregate face value (or its Dollar Equivalent) of all
 Letters of Credit issued on behalf of such Pledgor and (ii) such substitution
 shall precede the related release; and

 
	
  

 	
  

 
	
  

 	
           (ii) to the
 extent that the Borrowing Base of such Pledgor exceeds the aggregate face
 value (or its Dollar Equivalent) of all Letters of Credit issued on behalf of
 such Pledgor, transfer cash or Eligible Assets from such Account to any
 account specified by such Pledgor in an amount equal to such excess, in each
 case, in accordance with the terms of the Credit Agreement.

 



For the
avoidance of doubt, any substituted (in the case of the foregoing clause (i))
or withdrawn (in the case of the foregoing clause (ii)) cash or Eligible Assets
shall cease to secure the Liabilities and shall be released without further
action from the Liens granted to the Secured Parties hereunder.


          (d)
Each Pledgor agrees that, immediately upon the delivery of a Notice of
Exclusive Control with respect to its Account (but only for so long as such
Notice of Exclusive Control has not been rescinded), (i) it will not have the
right to make or request any withdrawal from such Account (including any
sub-account or related account thereof) or otherwise to direct the Custodian’s
disposition of any Collateral of such Pledgor, and (ii) the Collateral Agent
has the exclusive right (acting at the written direction of the Administrative
Agent) to direct the Custodian’s disposition of the Collateral of such Pledgor
without further consent of or notice to





such Pledgor.
No Pledgor shall give any consent or waiver, authorize any assumption, make any
modification or supplement, or take any other action with respect to any
Collateral in any manner inconsistent with the manner in which such Pledgor
acts with respect to investments of the same type held by such Pledgor for its
own account.


          5.
Voting Rights; Rights to Income.


          (a)
Each Pledgor agrees, immediately upon the delivery of a Notice of Exclusive
Control with respect to its Account (but for so long as such Notice of
Exclusive Control has not been rescinded), (a) that the Collateral Agent
(acting at the written direction of the Administrative Agent) may exercise (to
the exclusion of such Pledgor) the voting power and all other incidental rights
of ownership with respect to any Investment Property constituting such
Pledgor’s Collateral, and such Pledgor hereby grants the Collateral Agent an
irrevocable proxy, exercisable under such circumstances, to vote such
Investment Property, and (b) to promptly deliver to the Collateral Agent such
additional proxies and other documents as may be necessary to allow the Collateral
Agent (acting at the written direction of the Administrative Agent) to exercise
such voting power. The Collateral Agent agrees that unless and until a Notice
of Exclusive Control with respect to the Account of a Pledgor shall have been
delivered by the Administrative Agent to the Collateral Agent (and at any time
after the rescission of such Notice of Exclusive Control), such Pledgor will
have the exclusive voting power with respect to any Investment Property
constituting Collateral of such Pledgor and the Collateral Agent will, upon the
written request of such Pledgor and upon the written direction of the
Administrative Agent, promptly deliver such proxies and other documents, if
any, as shall be reasonably requested by such Pledgor and completed and
provided for execution to the Collateral Agent which are necessary to allow
such Pledgor to exercise that voting power.


          (b)
Unless and until such time as the Collateral Agent (acting at the written
direction of the Administrative Agent) shall deliver a Notice of Exclusive
Control to the Custodian in respect of the Account of a Pledgor (and at any
time after the rescission of such Notice of Exclusive Control), such Pledgor
shall be entitled to receive (by delivery of the Custodian to such Pledgor in
accordance with the Control Agreement) all cash dividend payments, interest
payments and other distributions of cash received by the Custodian in respect
of any assets of such Pledgor credited to the Account of such Pledgor free and
clear of any Lien granted under this Agreement; provided, that after receipt of
any such Notice of Exclusive Control (but only for so long as such Notice of
Exclusive Control has not been rescinded), the Collateral Agent (acting at the
written direction of the Administrative Agent) shall instruct the Custodian to
deposit and retain in the Account of such Pledgor all such cash dividend
payments, interest payments and other distributions of cash received by the
Custodian in respect of any assets of such Pledgor credited to such Account. At
all times, any distributions other than cash received by the Custodian in
respect of any Collateral of such Pledgor shall be delivered by the Custodian
to the Account related to such Collateral, and the security interest granted
under this Agreement with respect to Collateral credited to such Account shall
automatically attach to such distributions other than cash for the benefit of
the Secured Parties.


          6.
Default and Remedies upon an Enforcement Event. (a) If the Collateral
Agent has received an Enforcement Event Notice with respect to one or more
Pledgors (which notice(s) have not been rescinded), then the Collateral Agent
may (and shall if so directed by the









Administrative Agent in writing) apply all or any portion of the credit
balance of the Account of each such Pledgors to the payment of the respective
Liabilities of each such Pledgor (and not the Liabilities of any other
Pledgor).


          (b) Without
limiting the foregoing, if the Collateral Agent has received an Enforcement Event
Notice with respect to one or more Pledgors (which notice(s) have not been
rescinded), the Collateral Agent (acting at the written direction of the
Administrative Agent) may exercise all the rights of a secured party under the
UCC (whether or not in effect in the jurisdiction where such rights are
exercised) with respect to the Collateral of such Pledgors.


          (c) Without
limiting clause (a) above, each Pledgor agrees that, if the Collateral
Agent has received an Enforcement Event Notice with respect to it (which notice
has not been rescinded), then any item of its Collateral may be sold for cash
or on credit or for future delivery without assumption of any credit risk, in
any number of lots at the same or different times, at any exchange, brokers’
board or elsewhere, by public or private sale, and at such times and on such
terms, as the Collateral Agent, acting at the written direction of the
Administrative Agent, shall elect. The Collateral Agent shall give the
applicable Pledgor such notice of any private or public sales as may be
required by the UCC or other applicable law. Each Pledgor recognizes that the
Collateral Agent may be unable to make a public sale of any or all of the
Collateral of such Pledgor, by reason of prohibitions contained in applicable
securities laws or otherwise, and expressly agrees that a private sale to a
restricted group of purchasers for investment and not with a view to any
distribution thereof shall be considered a commercially reasonable sale. The
Collateral Agent shall have the right upon any such public sale, and, to the
extent permitted by law, upon any such private sale, to purchase the whole or
any part of the Collateral of such Pledgor so sold, free of any right or equity
of redemption, which right or equity of redemption the applicable Pledgor
hereby releases to the extent permitted by law.


          (d) Without
limiting clause (a) above, if the Collateral Agent has received an
Enforcement Event Notice with respect to one or more Pledgors (which notice(s)
have not been rescinded), the Collateral Agent (acting at the written direction
of the Administrative Agent) shall have the right to deliver to the Custodian,
in accordance with the Control Agreement, a “Notice of Exclusive Control” in
respect of the respective Account of each such Pledgor (a “Notice of
Exclusive Control”) pursuant to which the Collateral Agent shall have the
right (acting at the written direction of the Administrative Agent), so long as
the Enforcement Event Notice in respect of any particular Pledgor has not been
rescinded, to execute and deliver to the Custodian any entitlement order, to
execute and deliver other instructions directing the disposition of the
Collateral of any such particular Pledgor, to vote and to give consents,
ratifications and waivers with respect to the Collateral of any such particular
Pledgor and exercise all rights, privileges or options pertaining to the
Collateral of any such particular Pledgor, as if the Collateral Agent were the
absolute owner thereof; provided, that the Collateral Agent hereby covenants
that it will not deliver to the Custodian a Notice of Exclusive Control with
respect to the Account of any Pledgor or otherwise instruct the Custodian to
liquidate, transfer, restrict transfer of or otherwise act on the Collateral of
any Pledgor until it has received an Enforcement Event Notice in respect of
such Pledgor (which notice has not been rescinded).


          (e) For the
purpose of enabling the Collateral Agent to exercise its rights under this Section 6
or otherwise in connection with this Agreement, each Pledgor hereby constitutes
and





appoints the Collateral Agent (and any of the Collateral Agent’s
officers, employees or agents designated by the Collateral Agent) its true and
lawful attorney-in-fact, with full power and authority to (i) sign and
file any financing statements or other documents, papers or instruments which
must be executed or filed to perfect or continue perfection, maintain the
priority of or provide notice of the pledge of and security interest in the
Collateral of such Pledgor under the laws of the state of New York, in each
case at the written direction of the Administrative Agent and (ii) if the
Collateral Agent has received an Enforcement Event Notice in respect of a
Pledgor (which has not been rescinded), do any and all acts that the
Administrative Agent requests in writing (including deliver a Notice of
Exclusive Control pursuant to Section 6(f)) and things for and on behalf
of the Pledgors that are necessary or desirable to protect, collect, realize
upon and preserve the Collateral of such Pledgor, to enforce the Collateral
Agent’s rights with respect to the Collateral of such Pledgor and to accomplish
the purposes hereof. Such appointment by the Pledgors is coupled with an
interest and is irrevocable so long as all Liabilities of the Pledgors have not
been paid and performed in full. Each Pledgor ratifies, to the extent permitted
by law, all that the Collateral Agent shall lawfully and in good faith do or
cause to be done by virtue of and in compliance with this Section 6(e).


          (f) To the
extent that any of the Liabilities of a Pledgor may be contingent, unmatured or
unliquidated (including with respect to undrawn amounts under any Letter of
Credit) after such time as an Enforcement Event Notice with respect to such
Pledgor shall have been delivered to the Collateral Agent (and which has not
been rescinded), the Collateral Agent (acting at the written direction of the
Administrative Agent) (i) shall instruct the Custodian to retain the proceeds
of any sale, collection, disposition or other realization upon the Collateral
of such Pledgors (or any portion thereof) in a separate cash collateral account
related to the Account of such Pledgor (a “Cash Collateral Account”)
until such time as the Administrative Agent directs the Collateral Agent to
apply such proceeds to the Liabilities of such Pledgor (and not to the
Liabilities of any other Pledgor), and such Pledgor agrees that such retention
of such proceeds by the Collateral Agent shall not be deemed strict foreclosure
with respect thereto; (ii) may conclusively rely on any estimate made by
the Administrative Agent of the liquidated amount of any such contingent,
unmatured or unliquidated claims against or in respect of a Pledgor and apply
the proceeds of the Collateral of such Pledgor against such amount as directed
by the Administrative Agent; and (iii) otherwise may proceed in any other
manner permitted by applicable law. Each Pledgor agrees that any Cash
Collateral Account shall be a blocked account and that upon the irrevocable
deposit of funds into such account, such Pledgor shall not have any right of
withdrawal with respect to such funds and any funds deposited into a Cash
Collateral Account shall not be withdrawn. Each Pledgor hereby grants to the
Collateral Agent a continuing security interest in all right, title and
interest of such Pledgor in and to any Cash Collateral Account and the deposits
and funds held therein, and the Collateral Agent shall have all rights of a
secured creditor under the UCC with respect thereto. Each Pledgor irrevocably
waives the right to make any withdrawal from any Cash Collateral Account until
payment in full in cash of all Liabilities of such Pledgor and the termination
or expiration of each Letter of Credit issued for the account of such Pledgor
pursuant to the Credit Agreement.


          (g) Except
as otherwise provided in this Agreement, EACH PLEDGOR HEREBY WAIVES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S
DISPOSITION OF ANY OF THE









COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Pledgor hereby further waives,
to the extent permitted by law: (i) all damages occasioned by such taking of
possession or any such disposition except any damages which are the direct
result of the Collateral Agent’s gross negligence, bad faith or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision), and (ii) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this Agreement
or the absolute sale of the Collateral of such Pledgor or any portion thereof,
and each Pledgor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all such laws.
To the extent permitted by applicable law, any sale of, or the grant of options
to purchase, or any other realization upon, any Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in
equity, of the relevant Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against such Pledgor and against any Persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through and under such Pledgor.


          7. Application
of Proceeds; Releases; Etc. (a) The Collateral Agent shall apply the
proceeds of any sale or other disposition or collection of any Collateral of
any Pledgor to the Liabilities of such Pledgor in the order directed by the
Administrative Agent in accordance with the terms of the Credit Agreement. 


          (b) Upon
release of the Collateral of each Pledgor pursuant to Section 10.15(b)
of the Credit Agreement, the Collateral Agent (acting at the written direction
of the Administrative Agent) shall (i) deliver or pay, or cause the Custodian
to delivery or pay in accordance with the Control Agreement, to the account
specified by each Pledgor (or its designee) any surplus Collateral held in the
Account of such Pledgor (or any proceeds thereof held by the Collateral Agent
elsewhere), and (ii) execute and deliver any financing statement amendments or
termination statements or such other documents, instruments, notices,
supplements or other agreements as may be provided to it by the Pledgors to
terminate any financing statements or evidence the termination thereof or any
other documents filed with respect to, or otherwise relating to, the
Collateral. The obligations of the Collateral Agent under this Section 7(b)
shall survive the termination of this Agreement.


          8. General.
(a) All notices and other communications provided for hereunder shall be in
accordance with Section 10.01 of the Credit Agreement.


          (b) Each
Pledgor agrees to pay all expenses, including reasonable attorney’s fees and
charges (including time charges of attorneys who are employees of the
Collateral Agent), paid or incurred by the Collateral Agent in endeavoring to
collect the Liabilities of such Pledgor, or any part thereof, and in enforcing
this Agreement against such Pledgor, and such obligations will themselves be
Liabilities.


          (c) No
delay on the part of the Collateral Agent in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
the Collateral Agent of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.





          (d) This
Agreement shall remain in full force and effect until the Commitments have
terminated, all Liabilities have been paid in full and each Letter of Credit
has terminated or expired pursuant to the Credit Agreement. At such time, the
Administrative Agent in writing will instruct the Collateral Agent to provide
the Custodian with written instructions in the form required to terminate the
Control Agreement. If at any time all or any part of any payment theretofore
applied by the Collateral Agent to any of the Liabilities is or must be
rescinded or returned by the Collateral Agent for any reason whatsoever
(including the insolvency, bankruptcy or reorganization of any Pledgor), such
Liabilities shall, for the purposes of this Agreement, to the extent that such
payment is or must be rescinded or returned, be deemed to have continued in
existence, notwithstanding such application by the Collateral Agent, and this
Agreement shall continue to be effective or be reinstated, as the case may be,
as to such Liabilities, all as though such application by the Collateral Agent
had not been made.


          (e)
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.


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


          (g) The
rights and privileges of the Collateral Agent hereunder shall inure to the
benefit of its successors and assigns. No Person other than the parties hereto
is an intended or third-party beneficiary of any of the provisions of this
Agreement.


          (h) This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.


          (i) 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 Pledgor or its properties in
the courts of any jurisdiction.


          (j) Neither
the Collateral Agent nor the Administrative Agent shall 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 reasonable control, including 









acts of God; earthquakes; fires; floods; wars; civil or military
disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions
of utilities, computers (hardware or software) or communications service;
accidents; labor disputes; acts of civil or military authority; governmental
actions; or inability to obtain labor, material, equipment or transportation.


          (k) XL
Group agrees to indemnify the Collateral Agent against and to hold the
Collateral Agent harmless from all costs, expenses, damages, liabilities or
claims, including reasonable fees of counsel, including any claim by any
Pledgor or the Administrative Agent, that are sustained by the Collateral Agent
as a result of the Collateral Agent’s action or inaction in connection with
this Agreement, except to the extent arising out of the Collateral Agent’s
gross negligence, bad faith or willful misconduct. The foregoing indemnity
shall be a continuing obligation of the Pledgors and their respective
successors and assigns, notwithstanding the termination of this Agreement.


          (l) The
Collateral Agent may conclusively rely on an Enforcement Event Notice received
from the Administrative Agent, without any further inquiry or investigation of
any kind, for so long as it has not received written notice of the rescission
of such Enforcement Event Notice by and from the Administrative Agent. Subject
to the terms of the Credit Agreement, at any such time after its initial
delivery of an Enforcement Event Notice in respect of a Pledgor to the extent
no Event of Default remains continuing with respect to such Pledgor, the
Administrative Agent shall deliver a notice of rescission to the Collateral
Agent informing it that the Enforcement Event Notice has been rescinded.


          (m) 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 (i) 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.


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


          (o) 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.


          (p) The
obligations of each Pledgor hereunder shall remain in full force and effect
without regard to, and shall not be impaired by any exercise or non-exercise,
or any waiver of, any right, remedy, power or privilege under or in respect of
this Agreement or any other Credit Document.


          (q) Any
Person that is required to execute a counterpart of this Agreement after the
date hereof pursuant to the requirements of the Credit Agreement or any other
Credit Document shall become a Pledgor hereunder by (x) executing a counterpart
hereof and delivering same to the Collateral Agent, or by executing an
assumption agreement in form and substance reasonably satisfactory to the
Collateral Agent (acting at the written direction of the Administrative Agent),
(y) delivering supplements to Schedule I and II as are necessary to cause such
schedules to be complete and accurate with respect to such additional Pledgor
on such date and complying with Section 10.14 of the Credit Agreement and (z)
taking all actions as specified in this Agreement as would have been taken by
such Pledgor had it been an original party to this Agreement, in each case with
all documents required above to be delivered to the Collateral Agent and with
all documents and actions required above to be taken to the reasonable
satisfaction of the Collateral Agent (acting at the written direction of the
Administrative Agent).


          (r) By the
execution and delivery of this Agreement, each Pledgor acknowledges that it has
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 of the Credit Agreement. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.


          (s) The
parties hereto acknowledge and agree that any Guarantor may, but is not
required to, deliver any cash or Eligible Assets to the Account of any Pledgor
for the purpose of securing the Liabilities of such Pledgor and that upon any
such cash or Eligible Assets being credited to the Account of any Pledgor, such
cash and Eligible Assets shall be deemed to be Collateral of such Pledgor.


          (t)
Notwithstanding anything herein to the contrary, each party hereto agrees that
the Administrative Agent may provide multiple directions and/or instructions to
the Collateral Agent in a single writing; provided that no such
instructions or directions shall relate to contingent events in the future.


 [Signature pages follow]










          IN
WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
first above written.


	
  

 	
  

 	
  

 	
  

 	
  

 
	
 

	
PLEDGORS:


	
 

	
 


	
 

	
Signed and
Delivered as a Deed


	
 

	
for and on
behalf of


	
 

	
XL GROUP
PLC,


	
 

	
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., 


	
 

	
 

	
 

	
 


	
 

	
By 

	
/s/ Simon
Rich

	
 


	
 

	
 

	




	
 


	
 

	
 

	
Name: Simon
Rich

	
 


	
 

	
 

	
Title: Attorney 

	
 


	
 

	
 

	
 

	
 


	
 

	
By 

	
/s/ Robert
Hawley

	
 


	
 

	
 

	




	
 


	
 

	
 

	
Name: Robert
Hawley

	
 


	
 

	
 

	
  Title: Authorized Officer

	
 


	
 

	
 

	
 

	
 


	
 

	
X.L.
AMERICA, INC.,


	
 

	
 

	
 


	
 

	
By 

	
/s/ Richard
G. McCarty

	
 


	
 

	
 

	




	
 


	
 

	
 

	
Name: Richard G. McCarty

	
 


	
 

	
 

	
Title: 

	
Senior Vice
President,

	
 


	
 

	
 

	
 

	
General Counsel
& Secretary

	
 















	
  
 	
  
 	
  
 	
  
 	
  
 
	
 
	
XL INSURANCE
(BERMUDA) LTD, 

	
 
	
 

	
 
	
By 
	
/s/ C.
Stanley Lee
	
 

	
 
	
 
	


	
 

	
 
	
 
	
Name: C.
Stanley Lee
	
 

	
 
	
 
	
Title: Chief
Financial Officer 
	
 

	
 
	
 
	
 
	
 

	
 
	
XL RE LTD, 

	
 
	
 
	
 
	
 

	
 
	
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,
	
 

	
 
	
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,

	
 
	
 
	
 
	
 

	
 
	
By 
	
/s/ Graham
Lambourne
	
 

	
 
	
 
	


	
 

	
 
	
 
	
Name: Graham
J. Lambourne
	
 

	
 
	
 
	
Title: Director
	
 














	
  

 	
  

 	
  

 	
  

 	
  

 
	
 

	
XL INSURANCE
SWITZERLAND LTD,


	
 

	
 


	
 

	
By 

	
/s/ Daniel
Maurer

	
 


	
 

	
 

	




	
 


	
 

	
 

	
Name: Daniel
Maurer 

	
 


	
 

	
 

	
Title: Chairman

	
 


	
 

	
 

	
 

	
 


	
 

	
By 

	
/s/ Bruno Länzlinger

	
 


	
 

	
 

	




	
 


	
 

	
 

	
Name: Bruno
Länzlinger

	
 


	
 

	
 

	
Title: CEO

	
 


	
 

	
 

	
 

	
 


	
 

	
XL LIFE LTD,


	
 

	
 


	
 

	
By 

	
/s/ Simon
Rich

	
 


	
 

	
 

	




	
 


	
 

	
 

	
Name: Simon
Rich

	
 


	
 

	
 

	
Title: Director

	
 















	
  

 	
  

 	
  

 	
  

 	
  

 
	
 

	
COLLATERAL AGENT:


	
 

	
THE BANK OF
NEW YORK MELLON,


	
 

	
 


	
 

	
By: 

	
/s/ Jose
Alcantora


	
 

	
 

	




	
 


	
 

	
Name: Jose Alcantora


	
 

	
Title: Vice President


	
 

	
 

	
 

	
 


	
 

	
Address:

	
101 Barclay
Street, 8W


	
 

	
 

	
New York, NY
10286


	
 

	
 


	
 

	
Facsimile
Number:     732-667-9536
















	
 

	
 

	
 


	
Acknowledged
and, with respect to Section 8(l), agreed to by:


	
 


	
JPMorgan Chase Bank, N.A.,


	
as
Administrative Agent


	
 

	
 

	
 


	
By: 

	
/s/ Melvin
D. Jackson

	
 


	
 

	




	
 


	
Name: Melvin D. Jackson


	
Title: Vice President