Document:

Exhibit 4.1 - Second Amendment

    EXHIBIT
      4.1

     

    SECOND
      AMENDMENT

    TO
      THE

    AMARIN
      CORPORATION PLC

    2002
      STOCK OPTION PLAN

     

    WHEREAS,
      Amarin
      Corporation plc, an English company (the “Company”), has established and
      maintains the Amarin Corporation plc 2002 Stock Option Plan, effective as of
      January 1, 2002 (as amended by Amendment No. 1 in November 2003, the
“Plan”), which authorizes the grant of stock options to certain employees and
      non-employees of the Company; and

     

    WHEREAS,
      the
      Company has previously reserved 4,000,000 Ordinary Shares, par value 5 pence
      each (“Shares”), for issuance under the Plan;

     

    WHEREAS,
      Section
      7 of the Plan reserves to the Board of Directors of the Company (the “Board”)
      the right to amend the Plan at any time;

     

    WHEREAS,
      the Plan
      has stated as one of its purposes the ability to award “incentive stock options”
that meet the requirements of Section 422 of the Internal Revenue Code of 1986,
      as amended (the “Code”), and Section 422 of the Code requires such an increase
      in Shares available for issuance to be approved by the Company’s
      shareholders;

     

    WHEREAS,
      the
      Board and the Company’s shareholders (by majority vote on July 25, 2003)
      approved an increase in the number of Shares available for grant under the
      Plan
      by 2,000,000 Shares up to an aggregate of 4,000,000 Shares; and

     

    WHEREAS,
      the
      Board and the Company’s shareholders (by majority vote on July 25, 2005)
      approved a further increase in the number of Shares available for grant under
      the Plan by an additional 4,000,000 Shares for an aggregate of 8,000,000
      Shares.

     

    NOW,
      THEREFORE, BE IT RESOLVED, that
      the
      first sentence of Section 4.1(a) of the Plan is hereby amended, effective as
      of
      July 25, 2005, to read as follows:

     

    “Subject
      to adjustment as provided in Section 4(c) of the Plan, the Plan may issue up
      to
      8 million Shares under all Awards (the “Plan Limit”).”

     

    *  * 
*

     

    IN
      WITNESS HEREOF, the
      Company has caused this instrument to be executed by its duly authorized officer
      effective as of July 25, 2005.

     

    AMARIN
      CORPORATION PLC

     

    By: /s/
      Jonathan S. Lamb

     

    Name: /s/
      Jonathan S. Lamb

     

    Its: General
      Counsel and Company SecretaryExhibit 10.1 - Letter of Credit Facility and Reimbursement Agreement

    

      EXHIBIT
        10.1

       

      14
        MARCH 2006

       

      

       

      

       

      XL
        CAPITAL LTD

      as
        Account
        Party

       

      THE
        GUARANTORS

      (as
        defined herein)

       

      THE
        LENDERS PARTY HERETO

      (as
        defined herein)

       

      CITIBANK
        INTERNATIONAL PLC

      as
        Agent
        and Security Trustee

       

      CITIGROUP
        GLOBAL MARKETS LIMITED and BARCLAYS CAPITAL

       

      as
        Arrangers

       

        
          

        

      

       

      LETTER
        OF CREDIT FACILITY AND
REIMBURSEMENT AGREEMENT 

       

      
        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      CONTENTS

       

      
        	
                CLAUSE

                 

              	 	
                PAGE

                 

              
	
                 

                1.

              	
                 

                DEFINITIONS

              	
                 

                1

              
	
                 

                2.

              	
                 

                THE
                  FACILITY

              	
                 

                15

              
	
                 

                3.

              	
                 

                UTILISATION
                  OF THE FACILITY

              	
                 

                17

              
	
                 

                4.

              	
                 

                TERMINATION
                  OF LETTERS OF CREDIT

              	
                 

                18

              
	
                 

                5.

              	
                 

                PAYMENT
                  OF DEMANDS

              	
                 

                22

              
	
                 

                6.

              	
                 

                THE
                  ACCOUNT PARTY’S LIABILITIES IN RELATION TO LETTERS OF
                  CREDIT

              	
                 

                23

              
	
                 

                7.

              	
                 

                DEFAULT
                  INTEREST

              	
                 

                24

              
	
                 

                8.

              	
                 

                TERMINATION
                  AND REDUCTION OF THE COMMITMENTS

              	
                 

                24

              
	
                 

                9.

              	
                 

                FEES

              	
                 

                25

              
	
                 

                10.

              	
                 

                TAXES

              	
                 

                27

              
	
                 

                11.

              	
                 

                TAX
                  RECEIPTS

              	
                 

                28

              
	
                 

                12.

              	
                 

                INCREASED
                  COSTS

              	
                 

                29

              
	
                 

                13.

              	
                 

                ILLEGALITY

              	
                 

                30

              
	
                 

                14.

              	
                 

                MITIGATION
                  OBLIGATIONS; REPLACEMENT OF LENDERS.

              	
                 

                31

              
	
                 

                15.

              	
                 

                PAYMENTS
                  GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.

              	
                 

                31

              
	
                 

                16.

              	
                 

                GUARANTEE
                  AND INDEMNITY

              	
                 

                34

              
	
                 

                17.

              	
                 

                REPRESENTATIONS
                  AND WARRANTIES

              	
                 

                37

              
	
                 

                18.

              	
                 

                AFFIRMATIVE
                  COVENANTS

              	
                 

                41

              
	
                 

                19.

              	
                 

                NEGATIVE
                  COVENANTS

              	
                 

                46

              
	
                 

                20.

              	
                 

                EVENTS
                  OF DEFAULT

              	
                 

                50

              
	
                 

                21.

              	
                 

                THE
                  AGENT, THE ARRANGERS AND THE LENDERS

              	
                 

                53

              
	
                 

                22.

              	
                 

                NOTICES

              	
                 

                60

              
	
                 

                23.

              	
                 

                WAIVERS
                  AND AMENDMENTS

              	
                 

                60

              
	
                 

                24.

              	
                 

                COSTS
                  AND EXPENSES

              	
                 

                61

              
	
                 

                25.

              	
                 

                INDEMNITIES

              	
                 

                62

              
	
                 

                26.

              	
                 

                ALTERATION
                  TO THE PARTIES

              	
                 

                63

              
	
                 

                27.

              	
                 

                SET
                  OFF

              	
                 

                68

              
	
                 

                28.

              	
                 

                MISCELLANEOUS
                  PROVISIONS

              	
                 

                69

              
	
                 

                29.

              	
                 

                GOVERNING
                  LAW AND JURISDICTION

              	
                 

                70

              
	
                 

                30.

              	
                 

                TREATMENT
                  OF CERTAIN INFORMATION; CONFIDENTIALITY

              	
                 

                71

              
	
                 

                31.

              	
                 

                THIRD
                  PARTY RIGHTS

              	
                 

                72

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 

                SCHEDULE 1
                  COMMITMENTS

              	
                 

                73

              
	
                 

                SCHEDULE 2
                  INDEBTEDNESS AND LIENS

              	
                 

                74

              
	
                 

                         
                  Part A Indebtedness

              	
                 

                74

              
	
                 

                         
                  Part B Liens

              	
                 

                76

              
	
                 

                SCHEDULE 3
                  SUBSIDIARIES

              	
                 

                78

              
	
                 

                SCHEDULE 4
                  MANDATORY COSTS RATE

              	
                 

                82

              
	
                 

                SCHEDULE 5
                  CONDITIONS PRECEDENT

              	
                 

                85

              
	
                 

                SCHEDULE 6
                  UTILISATION REQUEST

              	
                 

                86

              
	
                 

                SCHEDULE 7
                  FORM OF LETTER OF CREDIT

              	
                 

                87

              
	
                 

                SCHEDULE 8
                  FORM OF TRANSFER CERTIFICATE

              	
                 

                92

              
	
                 

                SCHEDULE 9
                  FORM OF CHARGE AGREEMENT

              	
                 

                94

              

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      LETTER
        OF CREDIT FACILITY AND REIMBURSEMENT AGREEMENT
        dated 14
        March 2006

       

      Between:

       

      
        	
                (1)

              	
                XL
                  CAPITAL LTD, a
                  company incorporated under the laws of the Cayman Islands (the Account
                  Party);

              

      

       

      
        	
                (2)

              	
                The
                  GUARANTORS
                  as
                  defined below;

              

      

       

      
        	
                (3)

              	
                The
                  LENDERS
                  as
                  defined below; 

              

      

       

      
        	
                (4)

              	
                CITIBANK
                  INTERNATIONAL PLC,
                  as agent and trustee for the Lenders (and when acting in such capacities
                  the Agent
                  and Security
                  Trustee respectively);
                  and

              

      

       

      
        	
                (5)

              	
                BARCLAYS
                  CAPITAL and
                  CITIGROUP GLOBAL MARKETS LIMITED as
                  mandated lead arrangers (the
                  Arrangers).

              

      

       

      1. Definitions

       

      Defined
        Terms

       

      1.1 As
        used
        in this Agreement, the following terms have the meanings specified
        below:

       

      Acceleration
        Event means
        the
        provision by the Agent to the Account Party of an Acceleration Notice and/or
        the
        occurrence of any event with respect to any Obligor described in Clause 20(e)
        or
        20(f);

       

      Acceleration
        Notice has
        the
        meaning assigned to such term in Clause 20;

       

      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;

       

      AMB Cash
        Collateral has
        the
        meaning assigned to such term in Clause 19.8;

       

      AMB
        Rating Undertaking has
        the
        meaning assigned to such term in Clause 19.8;

       

      Applicable
        Percentage
        means,
        with respect to any Lender, the percentage of the Total Commitments represented
        by such Lender’s Commitment. If the Total Commitments or Commitment of a Lender
        have terminated or expired, the Applicable Percentage shall be determined
        based
        upon the Total Commitments or Commitment of such Lender (as the case may
        be)
        most recently in effect, giving effect to any permitted assignments or
        transfers;

       

      Applicant
        means
        each of Mid Ocean, Stonebridge Underwriting, NAC Reinsurance, Dornoch, County
        Down, XL London Market and XL Re and any other Affiliate of the Account Party
        as
        may be agreed by the Agent and the Account Party from time to time;

       

      Approved
        Credit Institution
        means a
        credit institution within the meaning of the First Council Directive on the
        co-ordination of laws, regulations and administrative provisions relating
        to the
        taking up and pursuit of the business of credit institutions
        (No 77/780/EEC) which has been approved by Lloyd’s for the purpose of
        providing guarantees and issuing or confirming letters of credit comprising
        a
        member’s Funds at Lloyd’s;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Authorised
        Signatory
        means,
        in relation to an Obligor, any person who is duly authorised (in such manner
        as
        may be reasonably acceptable to the Agent) and in respect of whom the Agent
        has
        received a certificate signed by a director or another Authorised Signatory
        of
        such Obligor setting out the name and signature of such person and confirming
        such person’s authority to act;

       

      Available
        Commitment means
        in
        relation to a Lender at any time and save as otherwise provided herein its
        Commitment less the amount of its participation in the LC Exposures at such
        time
PROVIDED
        THAT such
        amount shall not be less than zero;

       

      Available
        Facility means,
        at
        any time, the aggregate of the Available Commitments adjusted, in the case
        of a
        proposed utilisation pursuant to a Utilisation Request, so as to take into
        account:

       

      
        	
                (a)

              	
                any
                  reduction in the Commitment of a Lender pursuant to the terms hereof;
                  and

              

      

       

      
        	
                (b)

              	
                any
                  Letter of Credit which pursuant to any other Utilisation Request
                  is to be
                  issued; 

              

      

       

      on
        or
        before the proposed Utilisation Date relating to such utilisation;

      

      Availability
        Period
        means
        the period from (and including) the Closing Date to (and including) the
        Commitment Termination Date;

       

      Bilateral
        Letter of Credit has
        the
        meaning given to it in Clause 4.5(b);

       

      BIS
        Qualifying Assets
        means
        fixed income securities issued or guaranteed by US Government Agencies or
        by the
        Central Governments of any OECD country having a financial strength rating
        of at
        least “A+” from Standard & Poor’s Rating Services (or its successor);

       

      Board
        means
        the Board of Governors of the Federal Reserve System of the United States
        of
        America;

       

      Business
        Day
        means
        any day that is not a Saturday, Sunday or other day on which commercial banks
        in
        New York City, London or Bermuda are authorised 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 capitalised amount
        thereof determined in accordance with GAAP;

       

      Central
        Government
        means,
        without limitation, government departments, ministries and central
        banks;

       

      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 the Account Party entitling such Person
                  to
                  exercise 40% or more of the total voting power of all shares
                  

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      of
        capital stock of the Account Party that is entitled to vote generally in
        elections of directors, other than an acquisition by the Account Party, any
        of
        its subsidiaries or any employee benefit plans of the Account Party; or

       

      
        	
                (b)

              	
                the
                  Account Party merges or consolidates with or into any other Person
                  (other
                  than a Subsidiary), another person (other than a subsidiary) merges
                  into
                  the Account Party or the Account Party 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 the Account Party (other than the cancellation
                  of any outstanding shares of capital stock of the Account Party
                  held by
                  the Person with whom it merges or consolidates) or (ii) which is
                  effected
                  solely to change the jurisdiction of incorporation of the Account
                  Party
                  and results in a reclassification, conversion or exchange of outstanding
                  shares of capital stock of the Account Party solely into shares
                  of capital
                  stock of the surviving entity; or 

              

      

       

      
        	
                (c)

              	
                a
                  majority of the members of the Account Party’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
        Clause 12.1 and 13, 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;

       

      Charge
        Agreement
        means
        the charge agreement, in substantially the form set out in Schedule 9 that
        may be required to be entered into by the Account Party as chargor pursuant
        to
        the terms hereof and pursuant to which the Account Party will grant cash
        cover
        in favour of the Security Trustee;

       

      Closing
        Date
        means
        the later of 3 Business Days from the date hereof and the date on which the
        conditions set out in Schedule 5 (Conditions
        Precedent)
        have,
        in the reasonable opinion of the Agent, been satisfied;

       

      Code
        means
        the Internal Revenue Code of 1986 of the United States of America, as amended
        from time to time;

       

      Commencement
        Date
        means,
        in respect of a Letter of Credit, the date upon which a Letter of Credit
        shall
        become effective being any date from (and including) the Closing Date to
        (and
        including) the Commitment Termination Date;

       

      Commitment
        means,
        with respect to each Lender, the commitment of such Lender to participate
        in the
        issue of Letters of Credit hereunder. The initial amount of each Lender’s
        Commitment is set forth on Schedule 1, or in the Transfer Certificate
        pursuant to which such Lender shall have assumed its Commitment, as applicable,
        but in each case as such Commitment may be:

       

      
        	
                (a)

              	
                reduced
                  from time to time pursuant to Clause 8 (Termination
                  and Reduction of the Commitments)
                  or Clause 4.5(b) (Replacement
                  Letters of Credit);
                  and

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (b)

              	
                reduced
                  or increased from time to time pursuant to assignments by or to
                  such
                  Lender pursuant to Clause 26.3 (Transfers
                  by Lenders);
                  

              

      

       

      Commitment
        Letter means
        the
        letters so titled from the Arrangers to the Account Party dated 27 January
        2006;

       

      Commitment
        Termination Date
        means 30
        November 2007;

       

      Consolidated
        Net Worth means,
        at
        any time, the consolidated shareholders’ equity of the Account Party and its
        Subsidiaries, provided that the calculation of such consolidated shareholders’
equity shall exclude (a) the effect thereon of any adjustments required under
        Statement of Financial Accounting Standard 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 balance sheet of the Account Party and its consolidated
        Subsidiaries in accordance with GAAP;

       

      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;

       

      County
        Down means
        County Down Limited, a company incorporated under the laws of England and
        Wales;

       

      Default
        means
        any event or condition which constitutes an Event of Default or a Potential
        Event of Default;

       

      Default
        Period
        means
        the period from and including the date on which the Agent makes payment of
        a
        Demand Amount to but excluding the date on which the Account Party makes
        a
        corresponding reimbursement under Clause 6.1(a) and (b) (The
        Account Party’s Indemnity to Lenders);

       

      Demand
        Amount
        means a
        principal amount to be paid by the Account Party pursuant to Clause 6.1(a)
        and (b) (The
        Account Party’s Indemnity to Lenders);

       

      Dollars
        or
$
        refers
        to
        the lawful money of the United States of America from time to time;

       

      Dornoch
        means
        Dornoch Limited, a company incorporated under the laws of England and
        Wales;

       

      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, labelling, 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
        Obligor 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,
        pre-emptive rights or agreements of any kind (including any shareholders’ or
        voting trust agreements) for the issuance, sale, registration or voting of,
        or
        securities convertible into, any additional shares of capital stock of any
        class, or partnership or other ownership interests of any type in, such
        Person;

       

      ERISA
        means
        the Employee Retirement Income Security Act of 1974 of the United States
        of
        America, as amended from time to time; 

       

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

       

      ERISA
        Event
        means
        (a) any reportable
        event,
        as
        defined in Clause 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 Clause 412 of the Code or Clause 302 of ERISA), whether or not
        waived; (c) the filing pursuant to Clause 412(d) of the Code or Clause 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 Obligor or any of such Obligor’s
        ERISA Affiliates of any liability under Title IV of ERISA with respect to
        the
        termination of any Plan; (e) the receipt by an Obligor 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 Obligor 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 Obligor or any ERISA Affiliate
        of
        any notice, or the receipt by any Multiemployer Plan from any Obligor 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 reorganisation, within the meaning of Title IV of ERISA;

       

      Event
        of Default
        has the
        meaning assigned to such term in Clause 20;

       

      Exempt
        Indebtedness means
        any
        Indebtedness of any Person (other than the Account Party or any of its
        Affiliates) that is consolidated on the balance sheet of the Account Party
        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 by guarantees
        of the type referred to in clause (a) or (b) of the definition of the term
        Indebtedness) by, or shall be secured by a Lien on any assets owned by, the
        Account Party 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
        the
        Account Party 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
        the term Indebtedness);

       

      Facility
        means
        the letter of credit facility granted to the Account Party pursuant to this
        Agreement;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Facility
        Office
        means
        the office or offices notified by a Lender to the Agent in writing on or
        before
        the date it becomes a Lender (or, following that date, by not less than five
        Business Days’ written notice) as the office or offices through which it will
        perform its obligations under this Agreement;

       

      Fee
        Letter means
        the
        letter from the Arrangers to the Account Party dated 27 January 2006, relating
        to the payment of certain fees;

       

      Finance
        Documents
        means
        this Agreement, the Charge Agreement, the Commitment Letter, the Fee Letter,
        any
        Letter of Credit and any other document or documents as may be agreed by
        the
        Agent and the Account Party;

       

      Final
        Expiration Date means
        the
        date on which a Letter of Credit terminates in accordance with its
        terms;

       

      Finance
        Parties
        means
        the Lenders, the Agent, the Arrangers and the Security Trustee;

       

      Financial
        Officer
        means,
        with respect to any Obligor, a principal financial officer of such
        Obligor;

       

      Financial
        Strength Rating
        has the
        meaning assigned to such term in Clause 9.3.

       

      Funds
        at Lloyd’s
        has the
        meaning given to it in paragraph 4 of the Membership Bylaw (No. 17 of
        1993);

       

      Funds
        at Lloyd’s Requirements means,
        in
        respect of any member, the amount required to be maintained by that member
        as
        Funds at Lloyd’s; 

       

      Funds
        Date means
        the
        date notified by Lloyd’s each year as being the latest date in that year by
        which Funds at Lloyd’s can be placed with Lloyd’s in order to satisfy Funds at
        Lloyd’s Requirements in respect of the immediately succeeding calendar
        year;

       

      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 Obligor 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 Kingdom, or of any other nation, or any political
        subdivision thereof, whether state or local, and any agency, authority,
        instrumentality, regulatory body, court, central bank or other entity exercising
        executive, legislative, judicial, taxing, regulatory or administrative powers
        or
        functions of or pertaining to government;

       

      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 without limitation 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 without limitation 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;

       

      Guarantors
        means
        each of the Account Party, XL America, XL Bermuda, and XL Re;

       

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

       

      Insurance
        Subsidiary
        means
        any Subsidiary 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 Clause 19.3(f);

       

      Issuing
        Lender
        means
        any Lender in its capacity as an issuer of one or more Letters of Credit
        hereunder;

       

      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
        payment made by a Lender pursuant to a Letter of Credit;

       

      LC
        Exposure
        means
        the sum of (a) the aggregate undrawn amount of all outstanding Letters of
        Credit
        at such time plus (b) the aggregate amount of all Demand Amounts. The LC
        Exposure of any Lender at any time shall be the sum of its participation
        in the
        outstanding Letters of Credit at such time and the Demand Amounts owed to
        it at
        such time;

       

      LC
        Proportion means,
        in
        relation to the Lender in respect of any Letter of Credit and save as otherwise
        provided herein, the proportion (expressed as a percentage) of such Lender’s
        Available Commitment to the Available Facility immediately prior to the issue
        of
        such Letter of Credit;

       

      Lender
        Affiliate
        means
        with respect to any Lender, (a) an Affiliate of such Lender or (b) any entity
        (whether a corporation, partnership, trust or otherwise) that is engaged
        in
        making, purchasing, holding or otherwise investing in bank loans and similar
        extensions of credit in the ordinary course of its business and is administered
        or managed by a Lender or an Affiliate of such Lender;

       

      Lenders
        means
        any of the Persons listed in Schedule 1 (Commitments)
        or any
        other Person that shall have become a party hereto pursuant to Clause 26.3
        (Transfers
        by Lenders),
        and
        which has not ceased to be a party hereto in accordance with the terms
        hereof;

       

      Letters
        of Credit
        means
        Letters of Credit issued pursuant to the terms of this Agreement (including,
        for
        the avoidance of doubt, any New Letter of Credit, Reduced Letter of Credit
        or
        Bilateral Letter of Credit referred to in Clause 4.5 (Replacement
        Letters of Credit));

       

      Letter
        of Credit Fees
        means
        the fees payable by the Account Party pursuant to Clause 9.2 (Letter
        of Credit Fees)
        (as
        adjusted from time to time in accordance with the provisions of Clause 9.3)
        (Adjustment
        of Letter of Credit Fee);

       

      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;

       

      LIBOR
        means,
        in relation to any unpaid sum:

       

      
        	
                (a)

              	
                the
                  display rate per annum of the offered quotation for overnight deposits
                  in
                  the currency of the relevant unpaid sum which appears on Telerate
                  Page
                  3750 or Telerate Page 3740 (as appropriate) at or about 11.00 a.m. on
                  any relevant day; or

              

      

       

      
        	
                (b)

              	
                if
                  the display rate cannot be determined under paragraph (a) above, the
                  rate determined by the Agent to be the arithmetic mean (rounded,
                  if
                  necessary, to the nearest five decimal places with the midpoint
                  rounded
                  upwards) of the rates notified to the Agent by each of the Reference
                  Banks
                  quoting (provided that at least two Reference Banks are quoting)
                  as the
                  rate at which such Reference Bank is offering overnight deposits
                  in the
                  required currency in an amount comparable to that amount to prime
                  banks in
                  the London Interbank Market at or about 11.00 a.m. on any relevant
                  day; and

              

      

       

      for
        the
        purposes of this definition: Telerate
        Page 3750 means
        the
        display designated as Page 3750, and Telerate
        Page 3740 means
        the
        display designated as Page 3740, in each case on the Telerate Service (or
        such
        other pages as may replace Page 3750 or Page 3740 on that service or such
        other
        service as may be nominated by the British Bankers’ Association (including the

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Reuters
        Screen) as the information vendor for the purposes of displaying British
        Bankers’ Association Interest Settlement Rates for deposits in the currency
        concerned);

      

      Lloyd’s
        means
        the
        society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s;

       

      Majority
        Lenders means,
        at
        any time, Lenders having Commitments representing more than 50% of the sum
        of
        the total Commitments at such time; PROVIDED
        THAT,
        if the
        Commitments have expired or been terminated, Majority
        Lenders
        means
        Lenders having more than 50% of the aggregate LC Exposure of the
        Lenders;

       

      Mandatory
        Costs
        means,
        in relation to any unpaid sum for any period, a rate per annum calculated
        in
        accordance with Schedule 4;

       

      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 Obligor and its Subsidiaries taken as a whole; or (b) the
        ability of an Obligor to perform any of its payment or other material
        obligations under this Agreement;

       

      Mid
        Ocean means
        Mid
        Ocean Limited, a company incorporated under the laws of the Cayman
        Islands;

       

      Multiemployer
        Plan
        means a
        multiemployer plan as defined in Clause 4001(a)(3) of ERISA;

       

      NAC
        Reinsurance
        means
        NAC Reinsurance International Ltd, a company incorporated under the laws
        of
        England and Wales;

       

      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 Obligor or any
        of its
        Subsidiaries, with respect to which such Obligor or the Subsidiary has an
        obligation to contribute, for the benefit of employees of such Obligor or
        such
        Subsidiary, which plan, fund or other similar program provides, or results
        in,
        the type of benefits described in Clause 3(1) or 3(2) of ERISA, and which
        plan
        is not subject to ERISA or the Code;

       

      Obligor
        Jurisdiction means
        (a)
        Bermuda, (b) the Cayman Islands, (c) United States, and (d) any other country
        (i) where any Obligor is licensed or qualified to do business or (ii) from
        or
        through which payments hereunder are made by any Obligor;

       

      Obligors
        means
        each of the Account Party and the Guarantors;

       

      OECD
        Country
        means
        any member of the Organisation for Economic Co-operation and
        Development;

       

      Original
        Agreement means
        the
        letter of credit and reimbursement agreement dated 17 November 2004 between,
        inter alios, the Account Party, the Agent and the lenders thereto;

       

      Original
        Letters of Credit means
        the
        letters of credit issued under the Original Agreement;

       

      Original
        Parties
        means
        the parties to the Original Agreement;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Participating
        Member State
        means
        any member state of the European Communities that adopts or has adopted the
        euro
        as its lawful currency in accordance with legislation of the European Union
        relating to European Monetary Union;

       

      Party
        means
        any party to this Agreement;

       

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

       

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

       

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

       

      Potential
        Event of Default means
        an
        event or condition which upon notice, lapse of time or both would, unless
        cured
        or waived, become an Event of Default;

       

      Private
        Act
        means
        separate legislation enacted in Bermuda with the intention that such legislation
        apply specifically to an Obligor, in whole or in part;

       

      Process
        Agent
        has the
        meaning assigned to such term in Clause 29.3.

       

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

       

      Reference
        Banks
        means,
        subject to Clause 26.6 (Reference
        Banks),
        the
        principal London offices of Citibank, N.A., ING Bank N.V., London Branch,
        Lloyds
        TSB Bank plc and Barclays Bank PLC;

       

      Register
        has the
        meaning given to it in Clause 26.11 (Maintenance
        of Register by Agent);

       

      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;

       

      Representations
        means
        each of the representations and warranties set out in Clause 17
        (Representations
        and Warranties);

       

      SAP
        means,
        as to each Obligor and each Subsidiary that offers insurance products, the
        statutory accounting practices prescribed or permitted by the relevant
        Governmental Authority for such Obligor’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 Obligor or such Subsidiary in effect
        on
        the date such statements or reports are to be prepared, except if otherwise
        notified by the Account Party as provided in Clause 1.3;

       

      SEC
        means
        the Securities and Exchange Commission of the United States of America or
        any
        successor entity;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

       

      Specified
        Transaction Agreement
        means
        any agreement, contract or documentation with respect to the following types
        of
        transactions: 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);

       

      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; in exchange, the SVI
        Provider typically receives a fee;

       

      Sterling
        or
        £
        refers
        to
        the lawful currency of the United Kingdom from time to time;

       

      Stonebridge
        Underwriting
        means
        Stonebridge Underwriting Limited, a company incorporated under the laws of
        England and Wales;

       

      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 Obligor;

       

      Substitute
        Lender has
        the
        meaning give to it in Clause 4.4(a);

       

      Taxes
        means
        any and all present or future taxes, levies, imposts, duties, deductions,
        charges or withholdings imposed by any Governmental Authority. Taxation
        and
Tax
        shall be
        construed accordingly;

       

      Total
        Commitments means,
        at
        any time, the aggregate of the Lenders’ Commitments (being on the date hereof
£500,000,000);

       

      Total
        Funded Debt means,
        at
        any time, all Indebtedness of the Account Party 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 the Account Party 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);

       

      Total
        LC Exposures
        means,
        at any time, the aggregate of the Lenders’ LC Exposures;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Transactions
        means
        the execution, delivery and performance by the Obligors of this Agreement
        and
        the other Finance Documents to which any Obligor is intended to be a party
        and
        the issuance of Letters of Credit hereunder;

       

      Transfer
        Certificate
        means a
        certificate in the form of Schedule 8 (Form
        of Transfer Certificate)
        delivered pursuant to Clause 26.4 (Transfer
        Procedure);

       

      Transferee
        means a
        Person to which a Lender seeks to transfer by novation all or part of such
        Lender’s rights, benefits and obligations under the Finance
        Documents;

       

      USA
        Patriot Act has
        the
        meaning given to such term as set out in Clause 28.6;

       

      US
        Government Agencies
        means US
        government agencies whose debt obligations are fully and explicitly guaranteed
        as to the timely repayment of principal and interest by the full faith and
        credit of the US federal government;

       

      Utilisation
        Date means
        the
        date on which a Letter of Credit is to be issued;

       

      Utilisation
        Request means
        a
        notice substantially in the form set out in Schedule 6 (Form
        of Utilisation Request);

       

      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;

       

      XL
        America means
        X.L. America, Inc., a company incorporated under the laws of Delaware,
        USA;

       

      XL
        Bermuda
        means XL
        Insurance (Bermuda) Ltd, a company organised under the laws of
        Bermuda;

       

      XL
        Capital Group means
        the
        XL Capital Group as determined from time to time by A.M. Best &
Co;

       

      XL
        London Market means
        XL
        London Market Ltd (formerly known as Brockbank), a company incorporated under
        the laws of England and Wales;

       

      XL
        Re
        means XL
        Re Ltd, a company organised under the laws of Bermuda.

       

      Interpretation

       

      1.2 Any
        reference in this Agreement to:

       

      
        	
                (a)

              	
                the
                  Agent,
                  Security
                  Trustee, Arrangers, Lender
                  or
                  any other Person shall be construed so as to include its and any
                  subsequent successors and permitted transferees in accordance with
                  their
                  respective interests;

              

      

       

      
        	
                (b)

              	
                Barclays
                  Capital
                  is
                  a reference to Barclays Capital, the investment banking division
                  of
                  Barclays Bank PLC (and any references shall include Barclays Bank
                  PLC);

              

      

       

      
        	
                (c)

              	
                continuing,
                  in the context of an Event of Default shall be construed as a reference
                  to
                  an Event of Default which has not been remedied or waived in accordance
                  with the terms hereof and in relation to a Potential
                  Event of Default,
                  one which has not been 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      remedied
        within the relevant grace period or waived in accordance with the terms
        hereof;

       

      
        	
                (d)

              	
                a
                  holding
                  company
                  of
                  a company or corporation shall be construed as a reference to any
                  company
                  or corporation of which the first-mentioned company or corporation
                  is a
                  subsidiary;

              

      

       

      
        	
                (e)

              	
                the
                  equivalent
                  on
                  any date in one currency (the first
                  currency)
                  of an amount denominated in another currency (the second
                  currency)
                  is a reference to the amount of the first currency which could
                  be
                  purchased with the amount of the second currency at the spot rate
                  quoted
                  by the Agent at or about 11.00 a.m. on such date for the purchase
                  of the
                  first currency with the second
                  currency;

              

      

       

      
        	
                (f)

              	
                a
                  member
                  shall be construed (as the context may require) as a reference
                  to an
                  underwriting member of Lloyd’s;

              

      

       

      
        	
                (g)

              	
                a
                  month
                  is
                  a reference to a period starting on one day in a calendar month
                  and ending
                  on the numerically corresponding day in the next succeeding calendar
                  month
                  save that, where any such period would otherwise end on a day which
                  is not
                  a Business Day, it shall end on the next succeeding Business Day,
                  unless
                  that day falls in the calendar month succeeding that in which it
                  would
                  otherwise have ended, in which case it shall end on the immediately
                  preceding Business Day, PROVIDED
                  THAT,
                  if a period starts on the last Business Day in a calendar month
                  or if
                  there is no numerically corresponding day in the month in which
                  that
                  period ends, that period shall end on the last Business Day in
                  that later
                  month (and references to months
                  shall be construed accordingly);

              

      

       

      
        	
                (h)

              	
                a
                  Lender’s participation,
                  in relation to a Letter of Credit, shall be construed as a reference
                  to
                  the rights and obligations of such Lender in relation to such Letter
                  of
                  Credit as are expressly set out in this
                  Agreement;

              

      

       

      
        	
                (i)

              	
                a
                  successor
                  shall be construed so as to include an assignee or successor in
                  title of
                  such party and any person who under the laws of its jurisdiction
                  of
                  incorporation or domicile has assumed the rights and obligations
                  of such
                  party under this Agreement or to which, under such laws, such rights
                  and
                  obligations have been transferred;

              

      

       

      
        	
                (j)

              	
                an
                  asset
                  or
                  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;

              

      

       

      
        	
                (k)

              	
                tax
                  shall be construed so as to include any and all present or future
                  stamp or
                  documentary taxes or any other excise or property taxes, charges,
                  interest, penalties or similar levies arising from any payment
                  made
                  hereunder or from the execution, delivery or enforcement of, or
                  otherwise
                  with respect to, this Agreement;

              

      

       

      
        	
                (l)

              	
                VAT
                  shall be construed as a reference to value added tax including
                  any similar
                  tax which may be imposed in place thereof from time to time; 

              

      

       

      
        	
                (m)

              	
                the
                  winding-up,
                  dissolution
                  or
                  administration
                  of
                  a company or corporation shall be construed so as to include any
                  equivalent or analogous proceedings under the Law of the jurisdiction
                  in
                  which such company or corporation is incorporated or any jurisdiction
                  in
                  which such company or corporation carries on business including
                  the
                  seeking of liquidation, winding-up, reorganisation, dissolution,
                  administration, arrangement, adjustment, protection or relief of
                  debtors;
                  and

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (n)

              	
                unless
                  the contrary intention appears:

              

      

       

      
        	 	
                (i)

              	
                a
                  Letter of Credit is cancelled,
                  repaid
                  or
                  prepaid
                  by:

              

      

       

      
        	 	
                (A)

              	
                providing
                  the Issuing Lender(s) with cash cover (as defined below);
                  or

              

      

       

      
        	 	
                (B)

              	
                reducing
                  (in accordance with the terms of this Agreement and the Letter
                  of Credit)
                  the amount that may be demanded under the Letter of Credit (or
                  by that
                  amount automatically reducing in accordance with the terms of the
                  Letter
                  of Credit); or

              

      

       

      
        	 	
                (C)

              	
                cancelling
                  the Letter of Credit by (x) providing written confirmation (in form
                  and substance satisfactory to the Agent or the Issuing Lender)
                  from
                  Lloyd’s that the Issuing Lender(s) has no further liability under the
                  Letter of Credit (including by way of a notice specifying that
                  Lloyd’s
                  does not accept or unconditionally rejects a Letter of Credit (unless
                  the
                  Agent or the Issuing Lender as the case may be, acting reasonably,
                  considers that Lloyd’s remains entitled to make a claim under such Letter
                  of Credit)), and (y) if Lloyd’s agrees, by procuring the return of
                  the original to the Agent;

              

      

       

      
        	 	
                (ii)

              	
                cash
                  cover
                  is
                  provided, pursuant to the terms of the Charge Agreement, in respect
                  of a
                  Lender’s participation in a Letter of Credit at any time by paying an
                  amount in Sterling equal to the outstanding amount of that participation
                  at that time to such account or accounts as the Agent may specify
                  and
                  creating effective security over such amount in favour of the Security
                  Trustee on behalf of the Finance Parties in form and substance
                  satisfactory to the Security Trustee (together with legal opinions,
                  evidence of corporate authorisation, and similar documentation
                  reasonably
                  required by the Security Trustee), in the name of the Account Party
                  from
                  which the only withdrawals which may be made are withdrawals made
                  with the
                  prior written consent of the Security Trustee in accordance with
                  the terms
                  of the Charge Agreement; and

              

      

       

      
        	 	
                (iii)

              	
                a
                  reference to principal
                  amount
                  in
                  respect of a Letter of Credit means the maximum amount which is
                  expressed
                  to be capable of being demanded under a Letter of Credit ignoring
                  the
                  aggregate amount of any cash cover held in relation to that Letter
                  of
                  Credit.

              

      

       

      Accounting
        Terms; GAAP and SAP

       

      1.3 Except
        as
        otherwise expressly provided herein, all terms of an accounting or financial
        nature shall be construed in accordance with GAAP or SAP, as the context
        requires, each as in effect from time to time; provided that, if the Account
        Party notifies the Agent that the Obligors request an amendment to any provision
        hereof to eliminate the effect of any change occurring after the date hereof
        in
        GAAP or SAP, as the case may be, or in the application thereof on the operation
        of such provision (or if the Agent notifies the Obligors that the Majority
        Lenders request an amendment to any provision hereof for such purpose),
        regardless of whether any such notice is given before or after such change
        in
        GAAP or SAP, as the case may be, or in the application thereof, then such
        provision shall be interpreted on the basis of GAAP or SAP, as the case may
        be,
        as in effect and applied immediately before such change shall have become
        effective until such notice shall have been withdrawn or such provision amended
        in accordance herewith.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Agreements
        and Statutes

       

      1.4 Any
        reference in this Agreement to:

       

      
        	
                (a)

              	
                this
                  Agreement or any other agreement or document shall be construed
                  as a
                  reference to this Agreement or, as the case may be, such other
                  agreement
                  or document as the same may have been, or may from time to time
                  be,
                  amended, varied, novated or
                  supplemented; 

              

      

       

      
        	
                (b)

              	
                a
                  statute or treaty shall be construed as a reference to such statute
                  or
                  treaty as the same may have been, or may from time to time be,
                  amended or,
                  in the case of a statute, re-enacted;
                  and

              

      

       

      
        	
                (c)

              	
                a
                  bylaw shall be construed as a reference to a bylaw made under Lloyd’s Acts
                  1871 to 1982 as the same may have been, or may from time to time
                  be,
                  amended or replaced.

              

      

       

      Headings

       

      1.5 Clause
        and Schedule headings are for ease of reference only.

       

      Time

       

      1.6 Any
        reference in this Agreement to a time of day shall, unless a contrary indication
        appears, be a reference to London time.

       

      2. The
        Facility

       

      Grant
        of the Facility

       

      2.1 The
        Lenders, upon the terms and subject to other conditions hereof, grant to
        the
        Account Party a letter of credit facility in an aggregate amount of
£500,000,000.

       

      Purpose
        and Application

       

      
        	
                2.2

              	
                (a)

              	
                The
                  Facility is intended to support Funds at Lloyd’s for the underwriting
                  business of the Applicants, and, accordingly, the Account Party
                  shall
                  apply all Letters of Credit issued hereunder in or towards satisfaction
                  of
                  such purpose.

              

      

       

      
        	
                (b)

              	
                Without
                  prejudice to the Account Party’s obligations under Clause 2.2(a) and
                  the remaining provisions of this Agreement, none of the Finance
                  Parties
                  shall be bound to enquire as to, nor shall any of them be responsible
                  for,
                  the purpose of, or application of the proceeds of any Letter of
                  Credit
                  issued hereunder.

              

      

       

      Conditions
        Precedent

       

      2.3 Save
        as
        the Lenders may otherwise agree, the Account Party may not deliver any
        Utilisation Request unless the Agent has confirmed to the Account Party and
        the
        Lenders that it has waived and/or received all of the documents and other
        evidence listed in Schedule 5 (Conditions
        Precedent)
        and
        that each is, in form and substance, reasonably satisfactory to the
        Agent.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Several
        Obligations

       

      2.4 The
        obligations of each Lender are several and the failure by a Lender to perform
        its obligations hereunder and/or under any Letter of Credit issued hereunder
        shall not affect the obligations of either Obligor towards any other party
        hereto nor shall any other party be liable for the failure by such Lender
        to
        perform its obligations hereunder and/or under such Letter of
        Credit.

       

      Several
        Rights

       

      2.5 The
        rights of each Finance Party are several and any debt arising hereunder at
        any
        time from an Obligor to any Finance Party shall be a separate and independent
        debt. Each such party shall be entitled to protect and enforce its individual
        rights arising out of this Agreement independently of any other party (so
        that
        it shall not be necessary for any party hereto to be joined as an additional
        party in any proceedings for this purpose).

       

      Change
        of Currency

       

      
        	
                2.6

              	
                (a)

              	
                If,
                  after the date of this Agreement, more than one currency or currency
                  unit
                  denomination are at the same time recognised by the central bank
                  of any
                  country as the lawful currency of that country,
                  then:

              

      

       

      (i)       
        any
        reference in the Finance Documents to, and any obligations arising under
        the
        Finance Documents in, the currency of that country shall be translated into,
        or
        paid in, the currency or currency unit of that country designated by the
        Agent;
        and

       

      (ii)      
        any
        translation from one currency or currency unit to another shall be at the
        official rate of exchange or conversion rate recognised by the central bank
        for
        the conversion of that currency or currency unit into the other, rounded
        up or
        down by the Agent acting reasonably.

       

      
        	
                (b)

              	
                If
                  a change in any currency of a country occurs, this Agreement will
                  be
                  amended in the manner determined by the Agent (acting reasonably)
                  so as to
                  reflect the change in currency and to place the parties in the
                  same
                  position, so far as possible, that they would have been in if no
                  change in
                  currency had occurred.

              

      

       

      Cancellation
        of Original Agreement

       

      
        	
                2.7

              	
                (a)

              	
                From
                  the date of this Agreement the Account Party shall not deliver
                  any
                  Utilisation Request (as defined in the Original Agreement) under
                  the
                  Original Agreement.

              

      

       

      
        	
                (b)

              	
                The
                  Original Parties hereby agree that the Original Agreement shall
                  be
                  automatically terminated and the Total Commitments thereunder cancelled
                  upon cancellation of all the Original Letters of Credit in accordance
                  with
                  the terms of the Original
                  Agreement.

              

      

       

      
        	
                (c)

              	
                The
                  letter of credit fees payable by the Account Party in respect of
                  any
                  Original Letter of Credit shall, from the date hereof until any
                  such
                  Original Letter of Credit is cancelled, accrue at the rate set
                  out in
                  clause 9.2(a) (Letter
                  of Credit Fee).

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      3. Utilisation
        of the Facility

       

      Utilisation
        Conditions for the Facility

       

      3.1 Save
        as
        otherwise provided herein, a Letter of Credit will be issued at the request
        of
        the Account Party on behalf of an Applicant if:

       

      
        	
                (a)

              	
                no
                  later than 10.00 a.m. two Business Days before the proposed Utilisation
                  Date, the Agent has received a duly completed Utilisation Request
                  from the
                  Account Party;

              

      

       

      
        	
                (b)

              	
                the
                  proposed Utilisation Date is a Business Day falling within the
                  Availability Period;

              

      

       

      
        	
                (c)

              	
                the
                  proposed amount of such Letter of Credit is less than or equal
                  to the
                  Available Facility;

              

      

       

      
        	
                (d)

              	
                the
                  Letter of Credit is substantially in the form set out in Schedule 7
                  (Form
                  of Letter of Credit)
                  or in such other form requested by the Account Party which is approved
                  by
                  Lloyd’s and the Lenders (such approval by the Lenders not to be
                  unreasonably withheld or delayed and shall not be required unless
                  the
                  other form requested differs materially from the form set out in
                  Schedule 7);

              

      

       

      
        	
                (e)

              	
                the
                  beneficiary of such Letter of Credit is Lloyd’s;
                  and

              

      

       

      
        	
                (f)

              	
                on
                  and as of the proposed Utilisation Date (a) no Default has occurred
                  and is
                  continuing and (b) the Representations are true in all material
                  respects.

              

      

       

      Request
        for Letters of Credit

       

      3.2 The
        Account Party may request the issue by the Lenders hereunder of a total of
        up to
        thirty Letters of Credit in respect of the Applicants. A single Utilisation
        Request may be issued in respect of more than one Letter of Credit.

       

      Completion
        of Letters of Credit

       

      3.3 The
        Agent
        is authorised to arrange for the issue of any Letter of Credit pursuant to
        Clause 3.1 (Utilisation
        Conditions for the Facility)
        by:

       

      
        	
                (a)

              	
                completing
                  the Commencement Date of such Letter of
                  Credit;

              

      

       

      
        	
                (b)

              	
                completing
                  the schedule to such Letter of Credit with the percentage participation
                  of
                  each Lender as allocated pursuant to the terms hereof;
                  and

              

      

       

      
        	
                (c)

              	
                executing
                  such Letter of Credit on behalf of each Lender and following such
                  execution delivering such Letter of Credit to Lloyd’s on the Utilisation
                  Date. 

              

      

       

      Final
        Expiration Date

       

      3.4 Each
        Letter of Credit shall expire on its Final Expiration Date.

       

      Each
        Lender’s Participation in Letters of Credit

       

      
        	
                3.5

              	
                (a)

              	
                Save
                  as otherwise provided herein, each Lender will participate in each
                  Letter
                  of Credit issued pursuant to this Clause 3 in the proportion borne
                  by its
                  Available 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Commitment
        to the Available Facility immediately prior to the issue of such Letter of
        Credit.

       

      
        	
                (b)

              	
                No
                  Lender shall participate in or issue any Letter of Credit to the
                  extent
                  that its LC Exposure would exceed its Commitment following the
                  issue of
                  that Letter of Credit.

              

      

       

      Notification
        to Lenders

       

      3.6 On
        or
        before each Utilisation Date the Agent shall notify each Lender of the Letter
        of
        Credit that is to be issued by the Agent on behalf of the Lenders, the name
        of
        the Applicant in respect of whom the Letter of Credit is being issued and
        the
        aggregate principal amount of the relevant Letter of Credit allocated to
        such
        Lender pursuant to this Agreement.

       

      Cancellation
        of Available Commitments

       

      3.7 On
        the
        expiry of the Availability Period, the Available Facility and each Lender’s
        Available Commitment shall be reduced to zero and accordingly the remaining
        Commitments of each Lender shall be equal to their respective LC Exposure
        under
        any issued Letters of Credit.

       

      4. Termination
        of Letters of Credit

       

      Continuation
        until Lloyd’s Termination Date

       

      4.1 Each
        Party acknowledges that, subject to the terms of this Agreement:

       

      
        	
                (a)

              	
                each
                  issued Letter of Credit shall continue in force unless Lloyd’s receives a
                  notice from the Agent (or any Finance Party, if pursuant to Clause
                  4.6(b))
                  giving Lloyd’s not less than four years’ notice in writing, terminating
                  such Letter of Credit pursuant to Clause 3 of the Letter of Credit
                  (a
                  Lloyd’s
                  Termination Notice):

              

      

       

      (i)       
        on
        the
        later of (x) 31 December 2011 and (y) any subsequent date as specified in
        such
        notice (a Lloyd’s Termination
        Date);
        or

       

      (ii)      
        at
        any
        time after the occurrence of an Acceleration Event or whilst any Continuation
        CP
        Event (as defined in Clause 4.6(b)) is continuing;

       

      
        	
                (b)

              	
                no
                  Party, other than the Agent (or any Lender, if pursuant to Clause
                  4.6(b)),
                  may deliver a Lloyd’s Termination Notice (and the Agent may only deliver a
                  Lloyd’s Termination Notice pursuant to Clause 3 of the Letter of Credit
                  and this Clause 4);

              

      

       

      
        	
                (c)

              	
                if
                  the Account Party or any Lender (a Relevant
                  Party)
                  so requests (a Termination
                  Request),
                  the Agent shall deliver a Lloyd’s Termination Notice as required by this
                  Clause 4, on the later of:

              

      

       

      (i)       
        the
        expiration of the period ending on the day three weeks after the corresponding
        Termination Request Receipt Date, as defined in Clause 4.2(b); and

       

      (ii)      
        the
        expiration of any Declining Lender Notice Period, as defined in
        Clause 4.3(a);

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (d)

              	
                the
                  Agent shall, promptly after delivery by the Agent of a Lloyd’s Termination
                  Notice, provide a copy of such Lloyd’s Termination Notice to each Lender
                  (and shall inform the Account Party of the Lloyd’s Termination Date);
                  and

              

      

       

      
        	
                (e)

              	
                a
                  Letter of Credit will terminate on the Lloyd’s Termination
                  Date.

              

      

       

      Delivery
        by a Relevant Party of a Termination Request

      

      4.2 A
        Termination Request may be delivered by a Relevant Party to the Agent in
        accordance with the following:

       

      
        	
                (a)

              	
                no
                  Termination Request may be delivered before 1 January
                  2007;

              

      

       

      
        	
                (b)

              	
                any
                  Termination Request delivered on a date (a Termination
                  Request Delivery Date)
                  from 1 January 2007 to and including 30 November 2007 will be deemed
                  to
                  have been received by the Agent on (a Termination
                  Request Receipt Date)
                  30 November 2007 and the corresponding Lloyd’s Termination Date shall be
                  31 December 2011; and

              

      

       

      
        	
                (c)

              	
                from
                  1 December 2007, any Termination Request Receipt Date will be the
                  later of
                  (i) 1 January 2008 and (ii) the corresponding Termination Request
                  Delivery
                  Date.

              

      

       

      Declining
        Lender Mechanics (on Delivery by a Lender of a Termination
        Request)

       

      
        	
                4.3

              	
                (a)

              	
                If
                  a Lender (a Declining
                  Lender)
                  delivers a Termination Request to the
                  Agent:

              

      

       

      (i)       
        the
        Agent
        shall notify the Account Party accordingly within two Business Days thereafter;
        and

       

      (ii)     
        during
        the period ending on the day three weeks after the corresponding Termination
        Request Receipt Date (a Declining
        Lender Notice Period)
        the
        Account Party may designate a Substitute Lender as contemplated in Clause
        4.4.

       

      
        	
                (b)

              	
                Unless
                  a Substitute Lender has been designated pursuant to Clause 4.4
                  (in which
                  case the provisions of Clause 4.5(a) shall apply) upon expiry of
                  the
                  Declining Lender Notice Period the Agent shall issue
                  a Lloyd’s Termination Notice (in accordance with Clause 3 of the
                  Letter of Credit) specifying a Lloyd’s Termination Date of the later of
                  (i) 31 December 2011 and (ii) the fourth anniversary of the date of
                  that notice, whereupon the Letter of Credit will terminate on such
                  Lloyd’s
                  Termination Date. 

              

      

       

      
        	
                (c)

              	
                Unless
                  notice is given to the Agent as aforesaid each Lender will be deemed
                  automatically to have agreed to continue its participation in each
                  Letter
                  of Credit.

              

      

       

      Substitute
        Lender

       

      
        	
                4.4

              	
                (a)

              	
                If
                  any Declining Lender delivers a Termination Request, the Account
                  Party may
                  designate by the date which falls no later than two Business Days
                  before
                  the end of the corresponding Declining Lender Notice Period an
                  Approved
                  Credit Institution (which may be an existing Lender or Lenders)
                  (the
                  Substitute
                  Lender)
                  which is willing to assume all of the rights and obligations of
                  the
                  Declining Lender in respect of its participation in the relevant
                  Letter of
                  Credit (the Old
                  Letter of Credit).

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (b)

              	
                If
                  the Account Party has found a Substitute Lender it shall promptly
                  notify
                  the Agent and the Declining Lender thereof and shall use its best
                  efforts
                  to procure the release by Lloyd’s of the Old Letter of Credit (an
                  Old
                  Letter of Credit Release)
                  from the Funds at Lloyd’s of the relevant
                  Applicant.

              

      

       

      
        	
                (c)

              	
                The
                  Declining Lender shall as soon as reasonably practicable after
                  receipt of
                  notice from the Account Party transfer its rights and obligations
                  hereunder to the Substitute Lender in accordance with the provisions
                  of
                  Clause 26.3 (Transfers
                  by Lenders).

              

      

       

      
        	
                (d)

              	
                The
                  Substitute Lender shall pay to the Declining Lender all amounts
                  then due
                  and owing (and all fees accrued to but excluding the date of such
                  transfer) to the Declining Lender in respect of its participation
                  in the
                  Old Letter of Credit.

              

      

       

      Replacement
        Letters of Credit

       

      
        	
                4.5

              	
                (a)

              	
                If
                  a Substitute Lender has become party hereto pursuant to Clause
                  4.4
                  (Substitute
                  Lender),
                  then subject to the provisions of Clause 4.6 (Continuation
                  Conditions Precedent)
                  the Lenders who are deemed to have agreed to the continuation of
                  the Old
                  Letter of Credit (the Extending
                  Lenders)
                  shall, together with the Substitute Lender, participate in, and
                  issue as
                  soon as reasonably practicable (on or immediately after the Old
                  Letter of
                  Credit Release), a new Letter of Credit (the New
                  Letter of Credit)
                  which shall (i) replace the Old Letter of Credit and (ii) be in
                  an amount
                  equal to the Old Letter of Credit. If the New Letter of Credit
                  has not
                  been issued by the end of the Declining Lender Notice Period, Clause
                  4.5(b) shall apply (on the assumption, if not the case, that a
                  Substitute
                  Lender has not been found by the time specified in Clause 4.4(a)) and
                  the Agent shall promptly deliver a Lloyd’s Termination Notice (in
                  accordance with Clause 4.3 (Declining
                  Lender Mechanics)).

              

      

       

      
        	
                (b)

              	
                If
                  a Substitute Lender has not been found by the time specified in
                  Clause 4.4(a), then the Account Party shall use its best efforts to
                  procure an Old Letter of Credit Release, and on or immediately
                  after such
                  Old Letter of Credit Release (i) subject to the provisions of Clause
                  4.6
                  (Continuation
                  Conditions Precedent),
                  the Extending Lenders shall participate in, and issue as soon as
                  reasonably practicable, a new Letter of Credit (the Reduced
                  Letter of Credit)
                  which shall (x) replace their participation in the Old Letter of
                  Credit
                  and (y) be in an amount equal to the Old Letter of Credit less
                  the amount of the Declining Lender’s participation and (ii) the Declining
                  Lender shall participate in a separate Letter of Credit (a Bilateral
                  Letter of Credit)
                  which shall (x) replace its participation in the Old Letter of
                  Credit, (y)
                  be in an amount equal to the Declining Lender’s participation in the Old
                  Letter of Credit and (z) have a Final Expiration Date which is
                  the Lloyd’s
                  Termination Date designated pursuant to Clause 4.3 (Declining
                  Lender Mechanics).

              

      

       

      Continuation
        Conditions Precedent

       

      
        	
                4.6

              	
                (a)

              	
                On
                  or prior to close of business on 1 September of each year (each,
                  a
                  Continuation
                  CP Date),
                  the Account Party shall promptly notify the Agent if (as of such
                  Continuation CP Date):

              

      

       

      (i) an
        Event
        of Default or Potential Event of Default occurs which is
        continuing;

       

      (ii) any
        of
        the Representations cease to be correct in all material respects, or become
        misleading in any material respect; or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      (iii)     
        any
        Letter of Credit ceases solely to be used to support the relevant Applicant’s
        underwriting business at Lloyd’s which has been provided in accordance with the
        requirements of Lloyd’s applicable to it.

       

      
        	
                (b)

              	
                If
                  on any Continuation CP Date any of the events specified in
                  Clause 4.6(a) (each, a Continuation
                  CP Event)
                  has occurred and is continuing, then at any time thereafter (so
                  long as
                  any Continuation CP Event is continuing):

              

      

       

      (i)        the
        Agent
        may, and at the request of the Majority Lenders shall, issue a Lloyd’s
        Termination Notice (containing the earliest possible Lloyd’s Termination Date);
        and 

       

      (ii)      
        any
        Lender shall be entitled to issue a Lloyd’s Termination Notice (containing the
        earliest possible Lloyd’s Termination Date) and such Lender shall promptly
        provide a copy of such Lloyd’s Termination Notice to the Agent,

       

      and
        the
        Agent shall, in each case, provide a copy of the Lloyd’s Termination Notice to
        the Account Party (and each other Lender) within two Business Days of the
        Agent
        (x) issuing a Lloyd’s Termination Notice (in the case of paragraph (i) above) or
        (y) receiving a copy of a Lloyd’s Termination Notice from a Lender (in the case
        of paragraph (ii) above).

      

      Cancellation
        of Bilateral Letters of Credit

       

      4.7 At
        any
        time after the issue of a Bilateral Letter of Credit by a Declining Lender
        the
        Account Party may give the Agent and the Declining Lender not less than fourteen
        days’ prior written notice of its intention to procure that the liability of the
        Declining Lender under such Letter of Credit is reduced to zero (whereupon
        it
        shall do so).

       

      Revised
        Letters of Credit

       

      4.8 In
        the
        event that the Funds at Lloyd’s Requirements of an Applicant changes at or
        around the time of any given Funds Date in terms of amount and/or the identity
        of the Applicant, subject to the approval of Lloyd’s and subject to each
        Lender’s LC Exposures under the Letters of Credit issued hereunder not being
        increased, the Lenders shall co-operate with the Account Party to ensure
        to the
        extent reasonably possible that the Letters of Credit provide for the revised
        Funds at Lloyd’s Requirements of the Applicants.

       

      Increase
        to Facility

       

      4.9 If
        at any
        time a Bilateral Letter of Credit is outstanding, the Account Party shall
        have
        the right to increase the size of the Facility by up to the principal amount
        of
        the Bilateral Letter of Credit(s) outstanding by introducing a new lender
        (which
        may be an existing Lender) and on terms that one or more outstanding Bilateral
        Letters of Credit having an aggregate principal amount at least equal to
        the
        increase are cancelled at the time the increase takes effect. Each Lender
        agrees
        to execute any documentation giving effect to this increase and new lender
        provided that no such documentation may increase the Commitment of any Lender
        without the express consent of that Lender at the time such documentation
        is
        executed.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      5. Payment
        of Demands

       

      Disbursement
        Procedures

       

      
        	
                5.1

              	
                (a)

              	
                The
                  Agent shall, within a reasonable time following its receipt thereof,
                  examine all documents purporting to represent a demand for payment
                  under
                  any Letter of Credit. The Agent shall promptly after such examination
                  (and
                  in any event by 12 noon on the Business Day immediately following
                  receipt
                  of such demand) (i) notify each of the Lenders and the Account
                  Party by
                  facsimile of such demand for payment and (ii) deliver to each Lender
                  and
                  the Account Party a copy of each document purporting to represent
                  a demand
                  for payment under such Letter of Credit.

              

      

       

      
        	
                (b)

              	
                With
                  respect to any drawing properly made under a Letter of Credit,
                  each Lender
                  will make an LC Disbursement in respect of such Letter of Credit
                  in
                  accordance with its liability under such Letter of Credit and this
                  Agreement, such LC Disbursement to be made to the account of the
                  Agent
                  most recently designated by it for such purpose by notice to the
                  Lenders
                  within two Business Days of receipt of a demand for payment under
                  such
                  Letter of Credit by the Agent;

              

      

       

      
        	
                (c)

              	
                The
                  Agent will and undertakes to each Lender that it
                  will:

              

      

       

      (i)       
        make
        any
        such LC Disbursement available to Lloyd’s as the beneficiary of such Letter of
        Credit by promptly crediting the amounts so received from the Lenders, in
        like
        funds, to the account identified by Lloyd’s in connection with such demand for
        payment on the date following two Business Days after the receipt by the
        Agent
        of such demand; and

       

      (ii)      
        notify
        each Lender on the third Business Day after the receipt by the Agent of such
        demand for payment that it has credited such amounts to the account identified
        by Lloyd’s.

       

      
        	
                (d)

              	
                Promptly
                  following any LC Disbursement by any Lender in respect of any Letter
                  of
                  Credit, the Agent will notify the Account Party of such LC Disbursement
                  provided that any failure to give or delay in giving such notice
                  shall not
                  relieve the Account Party of their obligation to reimburse the
                  Lenders
                  with respect to any such LC
                  Disbursement.

              

      

       

      Right
        to make Payments under Letters of Credit

       

      5.2 Each
        Lender shall be entitled to make any payment in accordance with the terms
        of the
        relevant Letter of Credit without any reference to or further authority from
        the
        Account Party or any other investigation or enquiry. 

       

      Liability
        of Lenders

       

      5.3 Neither
        the Agent, nor any Lender nor any of their Related Parties shall have any
        liability or responsibility by reason of or in connection with the issuance
        or
        transfer of any 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 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 Agent or a Lender from liability
        to any Obligor to the extent of any direct damages 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (as
        opposed to consequential damages, claims in respect of which are hereby waived
        by the Obligors to the extent permitted by applicable Law) suffered by any
        Obligor that are caused by the gross negligence or wilful misconduct of the
        Agent or a Lender. The parties hereto expressly agree that:

       

      
        	
                (a)

              	
                the
                  Agent may accept documents that appear on their face to be in substantial
                  compliance with the terms of a 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
                  Letter of Credit;

              

      

       

      
        	
                (b)

              	
                the
                  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 Letter of Credit;
                  and

              

      

       

      
        	
                (c)

              	
                this
                  Clause shall establish the standard of care to be exercised by
                  the Agent
                  when determining whether drafts and other documents presented under
                  a
                  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).

              

      

       

      6. The
        Account Party’s Liabilities in Relation to Letters of
        Credit

       

      The
        Account Party’s Indemnity to Lenders

       

      6.1 The
        Account Party shall irrevocably and unconditionally as a primary obligation
        indemnify (on demand by the Agent (and any Lender may require the Agent to
        make
        such demand)) each Lender against:

       

      
        	
                (a)

              	
                any
                  LC Disbursement paid or payable by such Lender in accordance with
                  the
                  terms of any Letter of Credit requested by the Account Party;
                  and

              

      

       

      
        	
                (b)

              	
                all
                  liabilities, reasonable costs (including, without limitation, any
                  costs
                  incurred in funding any amount which falls due from such Lender
                  in
                  connection with such Letter of Credit), claims, losses and reasonable
                  expenses which such Lender may at any time properly incur or sustain
                  in
                  connection with any Letter of
                  Credit.

              

      

       

      Preservation
        of Rights

       

      6.2 Neither
        the obligations of the Account Party set out in this Clause 6 nor the
        rights, powers and remedies conferred on any Lender by this Agreement or
        by Law
        shall be discharged, impaired or otherwise affected by:

       

      
        	
                (a)

              	
                the
                  winding-up, dissolution, administration or re-organisation of any
                  Lender
                  or any other person or any change in its status, function, control
                  or
                  ownership;

              

      

       

      
        	
                (b)

              	
                any
                  of the obligations of any Lender or any other person hereunder
                  or under
                  any Letter of Credit or under any other security taken in respect
                  of the
                  Account Party’s obligations hereunder or otherwise in connection with any
                  Letter of Credit being or becoming illegal, invalid, unenforceable
                  or
                  ineffective in any respect;

              

      

       

      
        	
                (c)

              	
                time
                  or other indulgence being granted or agreed to be granted to any
                  Lender or
                  any other person in respect of its obligations hereunder or under
                  or in
                  connection with any Letter of Credit or under any such other
                  security;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (d)

              	
                any
                  amendment to, or any variation, waiver or release of, any obligation
                  of
                  any Lender or any other person under any Letter of Credit or this
                  Agreement;

              

      

       

      
        	
                (e)

              	
                any
                  other act, event or omission which, but for this Clause 6 might
                  operate to discharge, impair or otherwise affect any of the obligations
                  of
                  the Account Party set out in this Clause 6 or any of the rights,
                  powers or remedies conferred upon any Lender by this Agreement
                  or by
                  Law.

              

      

       

      The
        obligations of the Account Party set out in this Clause 6 shall be in
        addition to and independent of every other security which any Lender may
        at any
        time hold in respect of the Account Party’s obligations hereunder.

       

      Settlement
        Conditional

       

      6.3 Any
        settlement or discharge between the Account Party and a Lender shall be
        conditional upon no security or payment to such Lender by the Account Party
        or
        any other person on behalf of the Account Party, being avoided or reduced
        by
        virtue of any Laws relating to bankruptcy, insolvency, liquidation or similar
        Laws of general application and, if any such security or payment is so avoided
        or reduced, such Lender shall be entitled to recover the value or amount
        of such
        security or payment from the Account Party subsequently as if such settlement
        or
        discharge had not occurred.

       

      7. Default
        Interest

       

      A
        Demand
        Amount shall bear interest during each Default Period in respect thereof,
        and
        any other amount unpaid when due hereunder shall bear interest for so long
        as it
        remains outstanding at rate of the sum of (i) two per cent. per annum
        (ii) the Mandatory Costs in respect thereof at such time, and
        (iii) LIBOR on each day whilst such amount remains outstanding. Such
        interest shall be payable by the Account Party on the date on which it
        reimburses the Lenders under Clause 6.1(a) and (b) (The
        Account Party’s Indemnity to Lenders).

       

      8. Termination
        and Reduction of the Commitments

       

      Scheduled
        Termination

       

      8.1 Unless
        previously terminated, the unutilised Commitments shall terminate at the
        close
        of business on the Commitment Termination Date.

       

      Voluntary
        Cancellation or Reduction

       

      8.2 The
        Account Party may at any time cancel, or from time to time reduce, the Total
        Commitments; provided that (a) each reduction of the Total Commitments shall
        be
        in an amount of £5,000,000 or a larger multiple of £1,000,000 and (b) the
        Account Party shall not cancel or reduce the Commitments if the Total LC
        Exposures would exceed the Total Commitments.

       

      Notice
        of Voluntary Cancellation or Reduction

       

      8.3 The
        Account Party shall notify the Agent of any election to cancel or reduce
        the
        Total Commitments under Clause 8.2 at least three Business Days prior to
        the effective date of such cancellation or reduction, specifying such election
        and the effective date thereof. Promptly following receipt of any notice,
        the
        Agent shall advise the Lenders of the contents thereof. Each notice delivered
        by
        the Account Party pursuant to this Clause shall be irrevocable; 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      provided
        that a notice of cancellation of the Commitments delivered by the Account
        Party
        may state that such notice is conditioned upon the effectiveness of other
        credit
        facilities, in which case such notice may be revoked by the Account Party
        (by
        notice to the Agent on or prior to the specified effective date) if such
        condition is not satisfied.

       

      No
        Other Repayments or Cancellation

       

      8.4 The
        Account Party shall not repay or cancel all or any part of the LC Exposures
        except at the times and in the manner expressly provided for in this
        Agreement.

       

      Effect
        of Cancellation or Reduction

       

      8.5 Any
        cancellation or reduction of the Commitments shall be permanent. Each reduction
        of the Commitments shall be made rateably among the Lenders in accordance
        with
        their respective Commitments.

       

      9. Fees

       

      Participation
        Fee

       

      9.1 The
        Account Party shall pay to the Agent for the account of the Lenders the
        participation fees specified in the Fee Letter.

       

      Letter
        of Credit Fee

       

      
        	
                9.2

              	
                (a)

              	
                The
                  Account Party shall pay to the Agent for the account of each Lender
                  pro
                  rata according to their respective LC Exposures hereunder a letter
                  of
                  credit fee computed at the rate of 0.50 per cent. per annum (as
                  such rate
                  may be adjusted from time to time in accordance with the provisions
                  of
                  Clause 9.3) on the principal amount of each issued Letter of Credit
                  payable from the Utilisation Date until the Final Expiration Date
                  (as
                  extended) of that Letter of Credit or any earlier cancellation,
                  repayment
                  or prepayment of the Letter of Credit in accordance with Clause 8
                  (Termination
                  and Reduction of the Commitments)
                  of this Agreement;

              

      

       

      
        	
                (b)

              	
                the
                  Letter of Credit Fees shall be payable quarterly in arrears on
                  each
                  Quarterly Date and on the date on which the Lenders cease to have
                  any LC
                  Exposure. Letter of Credit Fees accrued through and including each
                  Quarterly Date shall be payable on the fifth Business Day following
                  such
                  Quarterly Date, commencing on the first such date to occur after
                  the
                  Commencement Date; and

              

      

       

      
        	
                (c)

              	
                the
                  Agent shall notify the Account Party in writing at least ten Business
                  Days
                  prior to each Quarterly Date of (i) the letter of credit fee payable
                  in respect of each Letter of Credit issued and (ii) the aggregate
                  letter of credit fee payable in respect of all Letters of Credit
                  issued.

              

      

       

      Adjustment
        of Letter of Credit Fee

       

      
        	
                9.3

              	
                (a)

              	
                Notwithstanding
                  Clause 9.2(a) above, when the Financial Strength Rating (as defined
                  below)
                  corresponds to a rating set out in Column 1 or Column 2 below of
                  the fee
                  chart (the Fee
                  Chart),
                  the Letter of Credit Fee payable in accordance with Clause 9.2
                  shall be
                  the amount set out in the corresponding row in Column 3 of the
                  Fee Chart;
                  provided however, that whilst AMB Cash Collateral is posted in
                  compliance
                  with the provisions of Clause 19.8 (Ratings
                  Downgrade)
                  the Letter of Credit Fee shall be 0.30 per cent. per annum. Upon
                  any AMB
                  Cash Collateral which has been posted being

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      fully
        released, in each case in compliance with Clause 19.8 (Ratings
        Downgrade),
        then
        the Letter of Credit Fee shall once again be payable in accordance with the
        Fee
        Chart.

       

      
        	
                (b)

              	
                Any
                  change to the Letter of Credit Fee described above shall take effect
                  on
                  the day on which the Financial Strength Rating change is publicly
                  announced by the applicable rating agency; or, in the event either
                  of the
                  conditions set forth in Clause 19.8(a) or (b) are not satisfied,
                  the day
                  on which the provisions of Clause 19.8 (Ratings
                  Downgrade)
                  have been complied with.

              

      

       

      Fee
        Chart

       

      
        	
                A.M.
                  Best & Co. 

                Financial-Strength
                  Rating

                Column
                  1

              	
                Standard
                  & Poor’s 

                Rating
                  Services

                Financial-Strength
                  Rating 

                Column
                  2

              	
                Letter
                  of Credit Fee 

                Column
                  3

              
	
                A++
                  

              	
                    
                  Greater than or equal to AA+ 

              	
                0.30
                  per cent. per annum

              
	
                A+

              	
                    
                  AA 

              	
                0.40
                  per cent. per annum

              
	
                A

              	
                    
                  AA-

              	
                0.45
                  per cent. per annum

              
	
                A-

              	
                    
                  A+

              	
                0.50
                  per cent. per annum

              
	
                B++
                  and below

              	
                 
                     A and below

              	
                0.65
                  per cent. per annum

              

      

      

       

      
        	
                (c)

              	
                In
                  this Clause 9.3 and in Clause 19.8, Financial
                  Strength Rating
                  means the lower of:

              

      

       

      
        	 	
                (i)

              	
                the
                  financial-strength rating of the XL Capital Group from A.M. Best
& Co.
                  (or its successor); and

              

      

       

      
        	 	
                (ii)

              	
                the
                  lower of the financial-strength rating from Standard & Poor’s Rating
                  Services (or its successor) of XL Bermuda and XL
                  Re.

              

      

       

      In
        the
        event that either A.M. Best & Co. or Standard & Poor's Ratings Services
        changes the designation of its ratings (including without limitation by
        increasing the number of ratings available or notches within ratings), then
        the
        Agent and all the Lenders shall negotiate in good faith such amendments
        to this Clause 9.3 as are necessary to ensure that (in the
        opinion of the Lenders, acting reasonably) the Letter of Credit Fees payable
        relative to the strength of the relevant rating are the same as they are
        on the
        date hereof.

       

      Commitment
        fee

       

      
        	
                9.4

              	
                (a)

              	
                The
                  Account Party shall pay to the Agent for the account of each Lender
                  a fee
                  computed at the rate of 33 per cent. per annum of the applicable
                  Letter of
                  Credit Fee from time to time on that Lender’s Available Commitment for the
                  Availability Period.

              

      

       

      
        	
                (b)

              	
                The
                  accrued commitment fee is payable quarterly in arrears on each
                  Quarterly
                  Date during the Availability Period, on the last day of the Availability
                  Period and, if 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      cancelled
        in full, on the cancelled amount of the relevant Lender’s Commitment at the time
        the cancellation is effective.

       

      Agent
        Fees

       

      9.5 The
        Account Party agrees to pay to the Agent, for its own account, the agency
        fees
        payable in the amounts and at the times specified in the Fee
        Letter.

       

      Payment
        of Fees

       

      9.6 All
        fees
        payable hereunder shall be paid on the dates due, in immediately available
        funds, to the Agent for distribution, in the case of the Letter of Credit
        Fees
        referred to in Clause 9.2 and the commitment fee referred in Clause 9.4, to
        the Lenders entitled thereto. Fees paid shall not be refundable under any
        circumstances absent manifest error in the calculation or payment of fees
        due
        and payable.

       

      Basis
        of Calculation

       

      9.7 The
        fees
        payable pursuant to Clauses 9.1, 9.2 and 9.4 shall be calculated on the
        basis of actual days elapsed and a 365 day year.

       

      10. Taxes

       

      Tax
        Gross-up

       

      10.1 All
        payments to be made by an Obligor to any Finance Party hereunder, whether
        in
        respect of principal, interest, fees or any other item, shall be made free
        and
        clear of and without deduction for or on account of tax unless such Obligor
        is
        required to make such a payment subject to the deduction or withholding of
        tax,
        in which case the sum payable by such Obligor (in respect of which such
        deduction or withholding is required to be made) shall be increased to the
        extent necessary to ensure that such Finance Party receives a sum net of
        any
        deduction or withholding equal to the sum which it would have received had
        no
        such deduction or withholding been made or required to be made.

       

      Tax
        Indemnity

       

      10.2 Without
        prejudice to Clause 10.1 (Tax
        Gross-up),
        if any
        Finance Party is required to make any payment of or on account of tax on
        or in
        relation to any sum received or receivable hereunder (including any sum deemed
        for purposes of tax to be received or receivable by such Finance Party whether
        or not actually received or receivable) or if any liability in respect of
        any
        such payment is asserted, imposed, levied or assessed against any Finance
        Party,
        the Account Party shall, upon demand of the Agent, promptly indemnify the
        Finance Party which suffers a loss or liability as a result against such
        payment
        or liability, together with any interest, penalties, costs and expenses payable
        or incurred in connection therewith, PROVIDED
        THAT this
        Clause 10.2 shall not apply to:

       

      
        	
                (a)

              	
                any
                  tax imposed on and calculated by reference to the net income actually
                  received or receivable by such Finance Party by the jurisdiction
                  in which
                  such Finance Party is incorporated;
                  or

              

      

       

      
        	
                (b)

              	
                any
                  tax imposed on and calculated by reference to the net income of
                  the
                  Facility Office of such Finance Party actually received or receivable
                  by
                  such Finance Party by the jurisdiction in which its Facility Office
                  is
                  located; or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (c)

              	
                the
                  extent a loss, liability or cost is compensated for by an increased
                  payment under Clause 10.1 (Tax
                  Gross-up).

              

      

       

      Claims
        by Lenders

       

      10.3 A
        Lender
        intending to make a claim pursuant to Clause 10.2 (Tax
        Indemnity)
        shall
        promptly notify the Agent of the event giving rise to the claim, whereupon
        the
        Agent shall promptly notify the Account Party thereof.

       

      11. Tax
        Receipts

       

      Notification
        of Requirement to Deduct Tax

       

      11.1 If,
        at
        any time, an Obligor is required by Law to make any deduction or withholding
        from any sum payable by it hereunder (or if thereafter there is any change
        in
        the rates at which or the manner in which such deductions or withholdings
        are
        calculated), such Obligor shall promptly, upon becoming aware of the same,
        notify the Agent.

       

      Evidence
        of Payment of Tax

       

      11.2 If
        an
        Obligor makes any payment hereunder in respect of which it is required to
        make
        any deduction or withholding, it shall pay the full amount required to be
        deducted or withheld to the relevant taxation or other authority within the
        time
        allowed for such payment under applicable Law and shall deliver to the Agent
        for
        each Lender, within thirty days after it has made such payment to the applicable
        authority, an original receipt (or a certified copy thereof) issued by such
        authority evidencing the payment to such authority of all amounts so required
        to
        be deducted or withheld in respect of that Lender’s share of such
        payment.

       

      Tax
        Credit Payment

       

      11.3 If
        an
        additional payment is made under Clause 10 (Taxes)
        by an
        Obligor for the benefit of any Finance Party and such Finance Party, in its
        sole
        discretion, determines that it has obtained (and has derived full use and
        benefit from) a credit against, a relief or remission for, or repayment of,
        any
        tax, then, if and to the extent that such Finance Party, in its sole opinion,
        determines that:

       

      
        	
                (a)

              	
                such
                  credit, relief, remission or repayment is in respect of or calculated
                  with
                  reference to the additional payment made pursuant to Clause 10
                  (Taxes);
                  and

              

      

       

      
        	
                (b)

              	
                its
                  tax affairs for its tax year in respect of which such credit, relief,
                  remission or repayment was obtained have been finally
                  settled,

              

      

       

      such
        Finance Party shall, to the extent that it can do so without prejudice to
        the
        retention of the amount of such credit, relief, remission or repayment, pay
        to
        such Obligor such amount as such Finance Party shall, in its sole opinion,
        determine to be the amount which will leave such Finance Party (after such
        payment) in no worse after-tax position than it would have been in had the
        additional payment in question not been required to be made by such
        Obligor.

      

      Tax
        Credit Clawback

       

      11.4 If
        any
        Finance Party makes any payment to an Obligor pursuant to Clause 11.3
        (Tax
        Credit Payment)
        and
        such Finance Party subsequently determines, in its sole opinion, that the
        credit, relief, remission or repayment in respect of which such payment was
        made
        was not available or has been withdrawn or that it was unable to use such
        credit, relief, remission or 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      repayment
        in full, the Obligor shall reimburse such Finance Party such amount as such
        Finance Party determines, in its sole opinion, is necessary to place it in
        the
        same after-tax position as it would have been in if such credit, relief,
        remission or repayment had been obtained and fully used and retained by such
        Finance Party.

       

      Tax
        and Other Affairs

       

      11.5 No
        provision of this Agreement shall interfere with the right of any Finance
        Party
        to arrange its tax or any other affairs in whatever manner it thinks fit,
        oblige
        any Finance Party to claim any credit, relief, remission or repayment in
        respect
        of any payment under Clause 10.1 (Tax
        Gross-up)
        in
        priority to any other credit, relief, remission or repayment available to
        it nor
        oblige any Finance Party to disclose any information relating to its tax
        or
        other affairs or any computations in respect thereof.

       

      12. Increased
        Costs

       

      Increased
        Costs

       

      12.1 Subject
        to Clause 12.2 (Exceptions),
        if
        after the date of this Agreement, the result of:

       

      
        	
                (a)

              	
                the
                  introduction of or any change in the official or judicial interpretation
                  or application of any Law (having the force of law or if not having
                  the
                  force of law, generally complied with by a Lender in relation to
                  any
                  relevant jurisdiction); and/or

              

      

       

      
        	
                (b)

              	
                compliance
                  (without adopting materially less prudent policies or standards
                  than those
                  previously adopted by it) by any Lender or by the holding company
                  of any
                  Lender with any of the matters mentioned in paragraph (a)
                  above,

              

      

       

      including
        in each case, without limitation, those Laws relating to Taxation, any change
        in
        currency, any reserve, special deposit, cash ratio, liquidity or capital
        adequacy requirement or any other form of banking or monetary controls, is
        that:

      

      (i)       
        a
        Lender
        or its holding company incurs an additional cost as a result of that Finance
        Party having entered into, or performing, maintaining or funding its obligations
        under this Agreement; or

       

      (ii)      
        a
        Lender
        or its holding company incurs an additional cost in making, funding or
        maintaining any Letters of Credit made or to be made by it under this Agreement;
        or

       

      (iii)    
        any
        amount payable to a Lender or the effective return to a Lender under this
        Agreement or the effective return to a Lender or its holding company on its
        capital is reduced as a result of any change in the amount or nature of the
        capital resources required to be allocated in respect of a Lender’s
        participation under this Agreement; or

       

      (iv)    
        a
        Lender
        makes any payment or foregoes any interest or other return on or calculated
        by
        reference to any amount received or receivable by it from the Account Party
        or
        the Agent under this Agreement;

       

      then
        and
        in each such case:

      

      
        	 	
                (A)

              	
                the
                  Lender shall notify the Account Party through the Agent of the
                  relevant
                  event promptly upon becoming aware of the event giving
                  

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      details
        of any costs or amount likely to be demanded under paragraph (B);

       

      
        	 	
                (B)

              	
                promptly
                  following any demand from time to time by that Lender through the
                  Agent,
                  the Account Party shall pay to the Agent for the account of that
                  Finance
                  Party (or, as the case may be, its holding company) such amount
                  as shall
                  compensate such Finance Party or its holding company for the additional
                  cost, reduction, payment or foregone interest or other
                  return.

              

      

       

      Exceptions

       

      12.2 Clause 12.1
        shall not apply to or in respect of:

       

      
        	
                (a)

              	
                any
                  circumstances referred to in Clause 10.2 (Tax
                  Indemnity);

              

      

       

      
        	
                (b)

              	
                any
                  circumstances for which a relevant Lender has been compensated
                  for under
                  Clause 11.3 (Tax
                  Credit Payment).

              

      

       

      13. Illegality

       

      If,
        after
        the date of this Agreement, any Change in Law or in the official or judicial
        interpretation or application thereof shall make it unlawful or contrary
        to an
        official directive in any jurisdiction for any Lender to make available or
        fund
        or maintain or to give effect to its obligations as contemplated by this
        Agreement or the Letters of Credit (or, by reason only of a Change of Law,
        the
        Lender ceases to be an Approved Credit Institution), the Lender shall promptly
        on becoming aware of the same give notice thereof to the Account Party through
        the Agent, whereupon:

      

      
        	
                (a)

              	
                where
                  such change makes it unlawful or contrary to an official directive
                  to
                  maintain or give effect to its obligations under this Agreement,
                  if the
                  Agent on behalf of such Lender so requires, the Account Party shall
                  by no
                  later than the last day of any applicable grace period specified
                  by the
                  applicable Law ensure that the liabilities of such Lender under
                  or in
                  respect of each Letter of Credit are cancelled within the meaning
                  of
                  Clause 1.2(n)(i)(A) (or use its best efforts to ensure that such
                  liabilities are cancelled within the meaning of Clause 1.2(n)(i)(C)),
                  the Commitment of that Lender shall forthwith be cancelled and
                  the Account
                  Party shall prepay forthwith fees, costs and expenses due to that
                  Lender
                  hereunder;

              

      

       

      
        	
                (b)

              	
                where
                  such change only makes it unlawful or contrary to an official directive
                  to
                  participate in further Letters of Credit under this Agreement,
                  then upon
                  receipt by the Agent of that notice, the Available Commitment of
                  that
                  Lender shall be reduced to zero, and upon the expiry of each Letter
                  of
                  Credit in which it is participating at such time, its resulting
                  Available
                  Commitment shall also be cancelled, provided that if the Lender
                  subsequently transfers or assigns its rights and obligations under
                  this
                  Agreement to a new lender pursuant to Clause 26.5 (Rights
                  to substitute a single Bank),
                  the Account Party may by notice to the Agent increase the Commitment
                  of
                  such new lender by the amount of the Available Commitment that
                  was
                  previously cancelled.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      14. Mitigation
        Obligations; Replacement of Lenders.

       

      Designation
        of a Different Lending Office

       

      14.1 If
        any
        Lender requests compensation under Clause 12 (Increased
        Costs),
        or if
        the Account Party is required to pay any additional amount to any Lender
        or any
        Governmental Authority for account of any Lender pursuant to Clause 10
        (Taxes),
        then
        such Lender shall use reasonable efforts to designate a different lending
        office
        for funding or booking its Letters of Credit hereunder or to transfer 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
        (a)
        would eliminate or reduce amounts payable pursuant to Clause 12 (Increased
        Costs)
        or 10
        (Taxes),
        as the
        case may be, in the future and (b) would not subject such Lender to any
        unreimbursed cost or expense and would not otherwise be disadvantageous to
        such
        Lender. The Account Party hereby agrees to pay all reasonable costs and expenses
        incurred by any Lender in connection with any such designation or
        assignment.

       

      Replacement
        of Lenders

       

      14.2 If
        any
        Lender requests compensation under Clause 12 (Increased
        Costs),
        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 Clause 10
        (Taxes), or
        if any
        Lender defaults in its obligation to make LC Disbursements hereunder, or
        if any
        Lender ceases to be an Approved Credit Institution, then the Account Party
        may,
        at its sole expense and effort, upon notice to such Lender and the Agent,
        require such Lender to assign and delegate, without recourse (in accordance
        with
        and subject to the restrictions contained in Clause 26.5 (Right
        to substitute single Lender)),
        all
        its interests, rights and obligations under this Agreement to an Approved
        Credit
        Institution that shall assume such obligations (which assignee may be another
        Lender, if a Lender accepts such assignment); provided that:

       

      
        	
                (a)

              	
                the
                  Account Party shall have received the prior written consent of
                  the Agent,
                  which consent shall not unreasonably be withheld;
                  

              

      

       

      
        	
                (b)

              	
                such
                  Lender shall have received payment of an amount equal to the outstanding
                  amount of its LC Disbursements, accrued interest thereon, accrued
                  fees and
                  all other amounts payable to it hereunder, from the assignee (to
                  the
                  extent of such outstanding principal and accrued interest and fees)
                  or the
                  relevant Account Party (in the case of all other amounts); and
                  

              

      

       

      
        	
                (c)

              	
                in
                  the case of any such assignment resulting from a claim for compensation
                  under Clause 12 (Increased
                  Costs)
                  or payments required to be made pursuant to Clause 10 (Taxes),
                  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.

       

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

       

      Payments
        by the Account Party

       

      15.1 (a) The
        Account Party shall make each payment required to be made by them hereunder
        or
        under any other Finance Document (except to the extent otherwise provided
        therein) in Sterling on the date when due, in immediately available cleared
        funds, without set-off or counterclaim (and in the case of payments required
        pursuant to 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Clause 6,
        by 11.00 a.m. on the due date). Any amounts received after such time on any
        date
        may, in the discretion of the Agent, be deemed to have been received on the
        next
        succeeding Business Day for the purposes of calculating interest thereon.
        All
        such payments shall be made to the Agent at the account most recently notified
        by it, except payments pursuant to Clauses 12 (Increased
        Costs),
        10 (Taxes),
        24 (Costs
        and Expenses)
        and 25
        (Indemnities),
        which
        shall be made directly to the Persons entitled thereto. The Agent shall
        distribute any such payments received by it for account of any other Person
        to
        the appropriate recipient promptly following receipt thereof.

       

      
        	
                (b)

              	
                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.

              

      

       

      Currency

       

      15.2 All
        amounts payable under this Agreement in respect of any Letter of Credit shall
        be
        payable in Sterling.

       

      Application
        of Insufficient Payments

       

      15.3 If
        at any
        time insufficient funds are received by and available to the Agent to pay
        fully
        all Demand Amounts, interest, fees and expenses then due hereunder, such
        funds
        shall be applied:

       

      
        	
                (a)

              	
                first,
                  in or towards payment pro rata of any unpaid fees, costs, expenses,
                  indemnity payments and other amounts due to the Agent and the Security
                  Trustee under the Finance
                  Documents;

              

      

       

      
        	
                (b)

              	
                secondly,
                  in or towards payment pro rata of any unpaid costs and expenses
                  of the
                  Lenders under the Finance
                  Documents;

              

      

       

      
        	
                (c)

              	
                thirdly,
                  in or towards payment pro rata of any outstanding fees (other than
                  Letter
                  of Credit Fees) payable to the Lenders under the Finance
                  Documents;

              

      

       

      
        	
                (d)

              	
                fourthly,
                  in or towards payment pro rata of all accrued Letter of Credit
                  Fees due to
                  Issuing Lenders but unsatisfied under this
                  Agreement;

              

      

       

      
        	
                (e)

              	
                fifthly,
                  in or towards payment pro rata of any interest on Demand
                  Amounts;

              

      

       

      
        	
                (f)

              	
                sixthly,
                  in
                  or towards payment pro rata of Demand
                  Amounts;

              

      

       

      
        	
                (g)

              	
                seventhly,
                  in or towards payment pro rata of any principal (other than a Demand
                  Amount) due but unsatisfied under this Agreement (including, for
                  the
                  avoidance of doubt, any cash cover to be provided under a Letter
                  of
                  Credit); and

              

      

       

      
        	
                (h)

              	
                eighthly,
                  in or towards payment pro rata of any other sum due but unsatisfied
                  under
                  this Agreement.

              

      

       

      Pro
        Rata Treatment

       

      15.4 Except
        to
        the extent otherwise provided herein: 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (a)

              	
                each
                  reimbursement of LC Disbursements shall be made to the Lenders,
                  each
                  payment of fees under Clause 9 (Fees)
                  shall be made for account of the Lenders, and each termination
                  or
                  reduction of the Commitments under Clause 8 (Termination
                  and Reduction of the Commitments)
                  shall be applied to the respective Commitments of the Lenders,
                  pro rata
                  according to their respective Commitments; and

              

      

       

      
        	
                (b)

              	
                each
                  payment of interest shall be made for account of the Lenders pro
                  rata in
                  accordance with the amounts of interest then due and payable to
                  the
                  respective Lenders.

              

      

       

      Sharing
        of Payments by Lenders

       

      15.5 If
        any
        Lender shall, by exercising any right of set-off or counterclaim or otherwise,
        obtain payment in respect of any LC Exposures resulting in such Lender receiving
        payment of a greater proportion of the aggregate amount of its LC Exposures
        and
        accrued interest thereon then due than the proportion received by any other
        Lender, then the Lender receiving such greater proportion shall purchase
        (for
        cash at face value) participations in the LC Exposures of other Lenders to
        the
        extent necessary so that the benefit of all such payments shall be shared
        by the
        Lenders rateably in accordance with the aggregate amount of LC Exposures;
        provided that:

       

      
        	
                (a)

              	
                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 

              

      

       

      
        	
                (b)

              	
                the
                  provisions of this Clause shall not be construed to apply to any
                  payment
                  made by any Obligor 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 LC Disbursements
                  to any
                  assignee or participant, other than to the Account Party or any
                  Subsidiary
                  or Affiliate thereof (as to which the provisions of this paragraph
                  shall
                  apply). 

              

      

       

      Each
        Obligor consents to the foregoing and agrees, to the extent it may effectively
        do so under applicable Law, that any Lender acquiring a participation pursuant
        to the foregoing arrangements may exercise against the Account Party rights
        of
        set-off and counterclaim with respect to such participation as fully as if
        such
        Lender were a direct creditor of the Account Party in the amount of such
        participation and the Obligors authorise the Lenders to exchange Transfer
        Certificates and any other documentation to give effect to those purchases
        of
        participations.

       

      Presumptions
        of Payment

       

      15.6 Unless
        the Agent shall have received notice from any party prior to the date on
        which
        any payment is due to the Agent hereunder that the payor will not make such
        payment, the Agent may assume that the payor has made such payment on such
        date
        in accordance herewith and may, in reliance upon such assumption, distribute
        to
        the relevant payee the amount due. In such event, if the payor has not in
        fact
        made such payment, then each of the payees severally agrees to repay to the
        Agent forthwith on demand the amount so distributed to that payee 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 Agent, at the Agent’s cost of
        funds from such sources as the Agent may reasonably select.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Certain
        Deductions by the Agent

       

      15.7 If
        any
        Lender shall fail to make any payment required to be made by it pursuant
        to
        Clause 15.5 (Sharing
        of Payments by Lenders),
        then
        the Agent may, in its discretion (notwithstanding any contrary provision
        hereof), apply any amounts thereafter received by the Agent for account of
        such
        Lender to satisfy such Lender’s obligations under such Clauses until all such
        unsatisfied obligations are fully paid.

       

      16. Guarantee
        and Indemnity

       

      Guarantee
        and Indemnity

       

      16.1 The
        Guarantors, jointly and severally, irrevocably and unconditionally:

       

      
        	
                (a)

              	
                guarantee
                  to each Finance Party the due and punctual payment from time to
                  time on
                  demand any and every sum or sums of money which the Account Party
                  is at
                  any time liable to pay to any Finance Party under or pursuant to
                  the
                  Finance Documents and which has become due and payable but has
                  not been
                  paid at the time such demand is made (the Guaranteed
                  Obligations);
                  and

              

      

       

      
        	
                (b)

              	
                agree
                  as a primary obligation to indemnify each Finance Party from time
                  to time
                  on demand from and against any loss incurred by any Finance Party
                  as a
                  result of any of the obligations of the Account Party under or
                  pursuant to
                  the Finance Documents being or becoming void, voidable, unenforceable
                  or
                  ineffective as against the Account Party for any reason whatsoever,
                  whether or not known to any Finance Party or any other person,
                  the amount
                  of such loss being the amount which the person or persons suffering
                  it
                  would otherwise have been entitled to recover from the Account
                  Party.

              

      

       

      Additional
        Security

       

      16.2 The
        obligations of each Guarantor herein contained shall be in addition to and
        independent of every other security which any Finance Party may at any time
        hold
        in respect of any of the Account Party’s obligations under the Finance
        Documents.

       

      Continuing
        Obligations

       

      16.3 The
        obligations of each Guarantor herein contained shall constitute and be
        continuing obligations notwithstanding any settlement of account or other
        matter
        or thing whatsoever and shall not be considered satisfied by any intermediate
        payment or satisfaction of all or any of the obligations of the Account Party
        under the Finance Documents and shall continue in full force and effect until
        final payment in full of all amounts owing by the Account Party under this
        Agreement and total satisfaction of all the Account Party’s actual and
        contingent obligations under the Finance Documents.

       

      Obligations
        not Discharged

       

      16.4 Neither
        the obligations of the Guarantors herein contained nor the rights, powers
        and
        remedies conferred in respect of the Guarantors upon any Finance Party by
        the
        Finance Documents or by Law shall be discharged, impaired or otherwise affected
        by:

       

      
        	
                (a)

              	
                the
                  winding-up, dissolution, administration or re-organisation of the
                  Account
                  Party or any other person or any change in its status, function,
                  control
                  or ownership;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (b)

              	
                any
                  of the obligations of the Account Party or any other person under
                  the
                  Finance Documents or under any other security taken in respect
                  of any of
                  its obligations under the Finance Documents being or becoming illegal,
                  invalid, unenforceable or ineffective in any
                  respect;

              

      

       

      
        	
                (c)

              	
                time
                  or other indulgence being granted or agreed to be granted to any
                  Obligor
                  in respect of its obligations under the Finance Documents or under
                  any
                  such other security;

              

      

       

      
        	
                (d)

              	
                any
                  amendment to, or any variation, waiver or release of, any obligation
                  of
                  any Obligor under the Finance Documents or under any such other
                  security;

              

      

       

      
        	
                (e)

              	
                any
                  failure to take, or fully to take, any security contemplated hereby
                  or
                  otherwise agreed to be taken in respect of the Obligors’ obligations under
                  the Finance Documents;

              

      

       

      
        	
                (f)

              	
                any
                  failure to realise or fully to realise the value of, or any release,
                  discharge, exchange or substitution of, any security taken in respect
                  of
                  the Obligors’ obligations under the Finance Documents;
                  or

              

      

       

      
        	
                (g)

              	
                any
                  other act, event or omission which, but for this Clause 16.4, might
                  operate to discharge, impair or otherwise affect any of the obligations
                  of
                  any Guarantor herein contained or any of the rights, powers or
                  remedies
                  conferred upon any of the Finance Parties by the Finance
                  Documents or
                  by Law.

              

      

       

      Settlement
        Conditional

       

      16.5 Any
        settlement or discharge between any Obligor and any of the Finance Parties
        shall
        be conditional upon no security or payment to any Finance Party by the Account
        Party or any other person on behalf of the Account Party being avoided or
        reduced by virtue of any Laws relating to bankruptcy, insolvency, liquidation
        or
        similar Laws of general application and, if any such security or payment
        is so
        avoided or reduced, each Finance Party shall be entitled to recover the value
        or
        amount of such security or payment from the Account Party subsequently as
        if
        such settlement or discharge had not occurred.

       

      Exercise
        of Rights

       

      16.6 No
        Finance Party shall be obliged before exercising any of the rights, powers
        or
        remedies conferred upon them in respect of any Guarantor by the Finance
        Documents or by Law to:

       

      
        	
                (a)

              	
                make
                  any demand of the Account Party or any other
                  Obligor;

              

      

       

      
        	
                (b)

              	
                take
                  any action or obtain judgment in any court against the Account
                  Party or
                  any other Obligor;

              

      

       

      
        	
                (c)

              	
                make
                  or file any claim or proof in a winding-up or dissolution of the
                  Account
                  Party or any other Obligor; or

              

      

       

      
        	
                (d)

              	
                enforce
                  or seek to enforce any other security taken in respect of any of
                  the
                  obligations of the Account Party or any other Obligor under the
                  Finance
                  Documents.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Deferral
        of Guarantor’s Rights

       

      16.7 Each
        Guarantor agrees that, so long as any amounts are or may be owed by the Account
        Party under the Finance Documents or the Account Party is under any actual
        or
        contingent obligations under the Finance Documents, it shall not exercise
        any
        rights which it may at any time have by reason of performance by it of its
        obligations under the Finance Documents:

       

      
        	
                (a)

              	
                to
                  be indemnified by the Account Party;
                  and/or

              

      

       

      
        	
                (b)

              	
                to
                  claim any contribution from any other Guarantor of the Account
                  Party’s
                  obligations under the Finance Documents;
                  and/or

              

      

       

      
        	
                (c)

              	
                to
                  take the benefit (in whole or in part and whether by way of subrogation
                  or
                  otherwise) of any rights of the Finance Parties under the Finance
                  Documents or of any other security taken pursuant to, or in connection
                  with, this Agreement by all or any of the Finance
                  Documents.

              

      

       

      Rights
        of Contribution

       

      16.8 The
        Guarantors (other than the Account Party) 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 the Account Party) 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 Clause
        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
        Clause 16 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 Clause, (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 the Account Party) 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 Clause
        16) of all of the Guarantors (other than the Account Party), 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.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      General
        Limitation on Guarantee Obligations

       

      16.9 In
        any
        action or proceeding involving any state corporate Law, or any state or Federal
        bankruptcy, insolvency, reorganisation or other Law in any other jurisdiction
        affecting the rights of creditors generally, if the obligations of any Guarantor
        under Clause 16.1 (Guarantee
        and Indemnity)
        would
        otherwise, taking into account the provisions of Clause 16.8, 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
        Clause 16.1 (Guarantee
        and Indemnity),
        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
        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.

       

      17. Representations
        and Warranties

       

      17.1 Each
        Obligor represents and warrants to the Lenders on the date of this Agreement,
        the Closing Date and on 1 September of each year unless all of the Letters
        of
        Credit will terminate on or before the fourth anniversary of such date (with
        reference to the facts and circumstances subsisting on each such date) as
        follows.

       

      Organisation;
        Powers

       

      17.2 It
        and
        each of its Significant Subsidiaries is duly organised, validly existing
        and in
        good standing under the Laws of the jurisdiction of its organisation, 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.

       

      Authorisation;
        Enforceability

       

      17.3 The
        Transactions are within such Obligor’s corporate powers and have been duly
        authorised by all necessary corporate and, if required, by all necessary
        shareholder action. Each Finance Document to which such Obligor is party
        has
        been duly executed and delivered by such Obligor and constitutes a legal,
        valid
        and binding obligation of such Obligor, enforceable against such Obligor
        in
        accordance with its terms, except as such enforceability may be limited by
        (a)
        bankruptcy, insolvency, reorganisation, moratorium 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).

       

      Governmental
        Approvals; No Conflicts

       

      17.4 The
        Transactions (a) do not require any consent or approval of (including any
        exchange control approval), registration or filing with, or any other action
        by,
        any Governmental Authority, 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 organisational documents of such Obligor 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 such Obligor 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 such Obligor or any of its Significant
        Subsidiaries.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Financial
        Condition; No Material Adverse Change

       

      17.5 (a) Financial
        Condition.
        The
        Account Party has heretofore furnished to the Lenders the consolidated balance
        sheet and statements of income, stockholders' equity and cash flows of the
        Account Party and its consolidated Subsidiaries (A) as of and for the fiscal
        year ended December 31, 2005, reported on by PricewaterhouseCoopers LLP,
        independent public accountants (as provided in the Account Party's Report
        on
        Form 10-K filed with the SEC for the fiscal year ended December 31, 2005,
        and
        (B) as of and for the fiscal quarter ended September 30, 2005, as provided
        in
        the Account Party's Report on Form 10-Q filed with the SEC for the fiscal
        quarter ended September 30, 2005. Such financial statements present fairly,
        in
        all material respects, the financial position and results of operations and
        cash
        flows of the Account Party and its respective consolidated Subsidiaries as
        of
        such dates and for such periods in accordance with GAAP or (in the case of
        XL
        Bermuda or XL Re) SAP, subject to year-end audit adjustments and the absence
        of
        footnotes in the case of the statements referred to in Clause (B) of the
        first
        sentence of this paragraph.

       

      
        	
                (b)

              	
                No
                  Material Adverse Change.
                  Since December 31, 2005, there has been no material adverse change
                  in the
                  assets, business, financial condition or operations of such Obligor
                  and
                  its Subsidiaries, taken as a whole, except as disclosed in the
                  Account
                  Party's filings with the SEC.

              

      

       

      Properties

       

      17.6 (a) Property
        Generally.
        Such
        Obligor and each of its Significant Subsidiaries has good title to, or valid
        leasehold interests in, all its real and personal property material to its
        business, subject only to Liens permitted by Clause 19.3 (Liens)
        and
        except for minor defects in title that do not interfere with its ability
        to
        conduct its business as currently conducted or to utilise such properties
        for
        their intended purposes.

       

      
        	
                (b)

              	
                Intellectual
                  Property.
                  Such Obligor 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 Obligor and its Significant 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.

              

      

       

      Litigation
        and Environmental Matters

       

      17.7 (a) Actions,
        Suits and Proceedings.
        Except
        as disclosed in Schedule 2 or as disclosed in the Account Party's filings
        with the SEC, or as routinely encountered in claims activity, there are no
        actions, suits or proceedings by or before any arbitrator or Governmental
        Authority now pending against or, to the knowledge of such Obligor, threatened
        against or affecting such Obligor or any of its Subsidiaries (x) as to which
        there is a reasonable possibility of an adverse determination and that could
        reasonably be expected, individually or in the aggregate, to result in a
        Material Adverse Effect or (y) that involve the Finance Documents or the
        Transactions.

       

      
        	
                (b)

              	
                Environmental
                  Matters.
                  Except as disclosed in Schedule 2 and except with respect to any
                  other matters that, individually or in the aggregate, could not
                  reasonably
                  be expected to result in a Material Adverse Effect, neither such
                  Obligor
                  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.

       

      Compliance
        with Laws and Agreements

       

      17.8 Such
        Obligor 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.

       

      Investment
        and Holding Company Status

       

      17.9 Such
        Obligor is not (a) an investment
        company as
        defined in, or subject to regulation under, the Investment Company Act of
        1940
        or (b) a holding
        company as
        defined in, or subject to regulation under, the Public Utility Holding Company
        Act of 1935.

       

      Taxes

       

      17.10 Such
        Obligor 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 do so could not reasonably be expected to result in a Material Adverse
        Effect.

       

      ERISA

       

      17.11 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 Obligor 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 Obligor nor any of their Subsidiaries has incurred any obligation
        in
        connection with the termination or withdrawal from any Non-U.S. Benefit
        Plan.

      Disclosure

       

      17.12 The
        reports, financial statements, certificates or other information furnished
        by
        such Obligor to the Lenders in connection with the negotiation of this Agreement
        or any other Finance Document 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 Obligor represents only 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      that
        such
        information was prepared in good faith based upon assumptions believed to
        be
        reasonable at the time.

       

      Use
        of Credit

       

      17.13 Neither
        such Obligor 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.

       

      Subsidiaries 

       

      17.14 Set
        forth
        in Schedule 3 is a complete and correct list of all of the Subsidiaries of
        the Account Party as of 31 December, 2005, together with, for each such
        Subsidiary, (i) the jurisdiction of organisation of such Subsidiary, (ii)
        each
        Person holding ownership interests in such Subsidiary and (iii) the percentage
        of ownership of such Subsidiary represented by such ownership interests.
        Except
        as disclosed in Schedule 3, (x) each of the Account Party and its
        Subsidiaries owns, free and clear of Liens, and has the unencumbered right
        to
        vote, all outstanding ownership interests in each Person shown to be held
        by it
        in Schedule 3, (y) all of the issued and outstanding capital stock of each
        such Person organised as a corporation is validly issued, fully paid and
        nonassessable and (z) except as disclosed in filings of the Account Party
        with
        the SEC prior to the date hereof, there are no outstanding Equity Rights
        with
        respect to any Obligor.

       

      Withholding
        Taxes

       

      17.15 Based
        upon information with respect to each Lender provided by each Lender to the
        Agent, as of the date hereof, the payment of the LC Disbursements and interest
        thereon, the fees under Clause 9 (Fees)
        and all
        other amounts payable hereunder will not be subject, by withholding or
        deduction, to any Taxes imposed by any Obligor Jurisdiction.

       

      Stamp
        Taxes

       

      17.16 To
        ensure
        the legality, validity, enforceability or admissibility in evidence of the
        Finance Documents, it is not necessary that the Finance Documents or any
        other
        document be filed or recorded with any Governmental Authority or that any
        stamp
        or similar tax be paid on or in respect of any of the Finance Documents,
        or any
        other document other than such filings and recordations that have already
        been
        made and such stamp or similar taxes that have already been paid.

       

      Legal
        Form

       

      17.17 The
        Finance Documents are in proper legal form under the Laws of any Obligor
        Jurisdiction for the admissibility thereof in the courts of such Obligor
        Jurisdiction.

       

      Claims
        Pari Passu

       

      17.18 Under
        the
        Laws of its jurisdiction of incorporation in force at the date hereof, the
        claims of the Finance Parties against it under this Agreement or any other
        Finance Document will rank at least pari passu with the claims of all its
        other
        unsecured and unsubordinated creditors save (i) those whose claims are preferred
        solely by any bankruptcy, insolvency, liquidation or other similar Laws of
        general application; and (ii) with respect to XL Re only, those claims required
        to be preferred by and under the Bermuda Insurance Act 1978.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      18. Affirmative
        Covenants

       

      Until
        the
        Commitments have expired or been terminated and all fees payable hereunder
        shall
        have been paid in full and all Letters of Credit shall have expired or
        terminated and all LC Disbursements shall have been reimbursed, the Obligors
        covenant and agree with the Lenders that:

      

      Financial
        Statements and Other Information

       

      18.1 Each
        Obligor will furnish to the Agent and each Lender:

       

      
        	
                (a)

              	
                within
                  135 days after the end of each fiscal year of such Obligor except
                  for XL
                  America (but in the case of the Account Party, within 100 days
                  after the
                  end of each fiscal year of the Account Party), the audited consolidated
                  balance sheet and related statements of operations, stockholders’ equity
                  and cash flows of such Obligor and its consolidated Subsidiaries
                  as of the
                  end of and for such year, setting forth in each case in comparative
                  form
                  the figures for the previous fiscal year (if such figures were
                  already
                  produced for such corresponding period or periods) (it being understood
                  that delivery to the Lenders of the Account Party’s Report on Form 10-K
                  filed with the SEC shall satisfy the financial statement delivery
                  requirements of this paragraph (a) to deliver the annual financial
                  statements of the Account Party so long as the financial information
                  required to be contained in such Report is substantially the same
                  as the
                  financial information required under this paragraph (a)), all reported
                  on
                  by independent public accountants of recognised national standing
                  (without
                  a “going concern” or like qualification or exception and without any
                  qualification or exception as to the scope of such audit) to the
                  effect
                  that such consolidated financial statements present fairly in all
                  material
                  respects the financial condition and results of operations of such
                  Obligor
                  and its consolidated Subsidiaries on a consolidated basis in accordance
                  with GAAP or (in the case of XL Bermuda and XL Re) SAP, as the
                  case may
                  be, consistently applied;

              

      

       

      
        	
                (b)

              	
                by
                  June 15 of each year, (1) an 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 the previous fiscal year (if such
                  figures
                  were already produced for such corresponding period or periods),
                  all
                  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 (2) audited
                  statutory
                  financial statements for each Insurance Subsidiary of XL America
                  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 consolidated financial statements present
                  fairly
                  in all material respects the financial condition and results of
                  operations
                  of such Insurance Subsidiaries 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 such Obligor, the consolidated balance sheet and
                  related
                  statements of operations, stockholders’ equity and cash flows of such
                  Obligor 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 such Obligor as presenting
        fairly in all material respects the financial condition and results of
        operations of such Obligor and its consolidated Subsidiaries on a consolidated
        basis in accordance with GAAP or (in the case of XL Bermuda and XL Re) SAP,
        as
        the case may be, consistently applied, subject to normal year-end audit
        adjustments and the absence of footnotes (it being understood that delivery
        to
        the Lenders of the Account Party’s Report on Form 10-Q filed with the SEC shall
        satisfy the financial statement delivery requirements of this paragraph (c)
        to
        deliver the quarterly financial statements of the Account Party so long as
        the
        financial information required to be contained in such Report is substantially
        the same as the financial information required under this paragraph
        (c)); 

       

      
        	
                (d)

              	
                concurrently
                  with any delivery of financial statements under Clause 18.1(a),
                  (b) or
                  (c), a certificate signed on behalf of each Obligor 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 Clauses 19.3 (Liens),
                  19.5 (Ratio
                  of Total Funded Debt to Total Capitalisation),
                  19.6 (Consolidated
                  Net Worth)
                  and 19.7 (Indebtedness)
                  and (iii) stating whether any change in GAAP or (in the case of
                  XL
                  Bermuda, XL Re and any Insurance Subsidiary of XL America) SAP
                  or in the
                  application thereof has occurred since the date of the audited
                  financial
                  statements referred to in Clause 17.5(a) and, if any such change
                  has
                  occurred, specifying any material effect of such change on the
                  financial
                  statements accompanying such certificate;

              

      

       

      
        	
                (e)

              	
                concurrently
                  with any delivery of financial statements under Clause 18.1(a)
                  and
                  (b)(ii), a certificate of the accounting firm that reported on
                  such
                  financial statements stating whether they obtained knowledge during
                  the
                  course of their examination of such financial statements of any
                  Default
                  (which certificate may be limited to the extent required by accounting
                  rules or guidelines); 

              

      

       

      
        	
                (f)

              	
                promptly
                  after the same become publicly available, copies of all periodic
                  and other
                  reports, proxy statements and other materials filed by such Obligor
                  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 Obligor
                  to its
                  shareholders generally, as the case may be;

              

      

       

      
        	
                (g)

              	
                concurrently
                  with any delivery of financial statements under Clause 18.1(a),
                  (b) or (c)
                  a certificate of a Financial Officer of the Account Party, setting
                  forth
                  on a consolidated basis for the Account Party 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 Clause 19.3(g) (Liens)
                  and the aggregate book value of liabilities which are subject to
                  Liens
                  permitted under Clause 19.3(g) (it being understood that the reports
                  required by paragraphs (a), (b) and (c) of this Clause shall satisfy
                  the
                  requirement of this Clause (i) of this Clause 18.1(g) 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 the Account Party;
                  

              

      

       

      
        	
                (h)

              	
                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 the
                  Account Party, a 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      statement
        of a Financial Officer of the Account Party listing, as of the end of the
        immediately preceding fiscal quarter of the Account Party, the amount of
        cash
        and the securities of the Obligors and their Subsidiaries that have been
        posted
        as collateral under Clause 19.3(f); and

       

      
        	
                (i)

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

              

      

       

      “Know
        your customer” checks

       

      18.2 (a) If:

       

      (i)       
        the
        introduction of or any change in (or in the interpretation, administration
        or
        application of) any law or regulation made after the date of this
        Agreement;

       

      (ii)      
        any
        change in the status of an Obligor after the date of this Agreement;
        or

       

      (iii)     
        a
        proposed assignment or transfer by a Lender of any of its rights and obligations
        under this Agreement to a party that is not a Lender prior to such assignment
        or
        transfer,

       

      obliges
        the Agent or any Lender (or, in the case of paragraph (iii) above, any
        prospective new Lender) to comply with "know your customer" or similar
        identification procedures in circumstances where the necessary information
        is
        not already available to it, each Obligor shall promptly upon the request
        of the
        Agent or any Lender supply, or procure the supply of, such documentation
        and
        other evidence as is reasonably requested by the Agent (for itself or on
        behalf
        of any Lender) or any Lender (for itself or, in the case of the event described
        in paragraph (iii) above, on behalf of any prospective new Lender) in order
        for
        the Agent, such Lender or, in the case of the event described in paragraph
        (iii)
        above, any prospective new Lender to carry out and be satisfied it has complied
        with all necessary "know your customer" or other similar checks under all
        applicable laws and regulations pursuant to the transactions contemplated
        in the
        Finance Documents.

      

      
        	
                (b)

              	
                Each
                  Lender shall promptly upon the request of the Agent supply, or
                  procure the
                  supply of, such documentation and other evidence as is reasonably
                  requested by the Agent (for itself) in order for the Agent to carry
                  out
                  and be satisfied it has complied with all necessary "know your
                  customer"
                  or other similar checks under all applicable laws and regulations
                  pursuant
                  to the transactions contemplated in the Finance
                  Documents.

              

      

       

      Notices
        of Material Events

       

      18.3 Each
        Obligor will furnish to the 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 Clause shall be accompanied by a statement of
        a
        Financial Officer or other executive officer of the relevant Obligor setting
        forth the details of the event or development requiring such notice and any
        action taken or proposed to be taken by such Obligor with respect
        thereto.

      

      Preservation
        of Existence and Franchises

       

      18.4 Each
        Obligor 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 except where the failure to maintain
        such corporate existence and material rights and franchises would not reasonably
        be expected to have, either individually or in the aggregate, a Material
        Adverse
        Effect; provided that the foregoing shall not prohibit any merger or
        consolidation permitted under Clause 19.1 (Mergers)
        or 19.2
        (Dispositions).
        Each
        Obligor will, and will cause each of its Significant 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.

       

      Insurance

       

      18.5 Each
        Obligor 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.

       

      Maintenance
        of Properties

       

      18.6 Each
        Obligor will, and will cause each of its Significant 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 Obligor or any Subsidiary
        of such Obligor any obligation in respect of any property leased by such
        Obligor
        or such Subsidiary in addition to such Obligor’s obligations under the
        applicable document creating such Obligor’s or such Subsidiary’s lease or
        tenancy.

       

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

       

      18.7 Each
        Obligor 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 Clause 19.3 (Liens))
                  or which, if unpaid, might give rise to a claim entitled to priority
                  over
                  general creditors of such Obligor 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 Obligor or such Subsidiary;

       

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

      

      Financial
        Accounting Practices

       

      18.8 Such
        Obligor 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 Clause 18.1 (Financial
        Statements and Other Information)
        in
        conformity with GAAP and SAP, as applicable, and to maintain accountability
        for
        assets.

       

      Compliance
        with Applicable Laws

       

      18.9 Each
        Obligor will, and will cause each of its Subsidiaries to, comply with all
        applicable Laws (including but not limited to the Bermuda Companies Law and
        Bermuda Insurance Laws) in all respects; provided that such Obligor or any
        Subsidiary of such Obligor will not be deemed to be in violation of this
        Clause
        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 Obligor to perform its obligations
        under this Agreement.

       

      Use
        of Letters of Credit
        and Proceeds

       

      18.10 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 Applicant will use the Letters of Credit issued
        for
        its account hereunder in the ordinary course of business of such Applicant
        and
        its Affiliates. For the avoidance of doubt, the Parties agree that the Account
        Party may apply for a Letter of Credit hereunder to support the obligations
        of
        any Affiliate of an Applicant, it being understood that the Account Party
        shall
        nonetheless remain the Obligor and as such be liable with respect to such
        Letter
        of Credit.

       

      Continuation
        of and Change in Businesses

       

      18.11 Each
        Obligor and its Significant Subsidiaries will continue to engage in
        substantially the same business or businesses it engaged in (or proposes
        to
        engage in) on the date of this Agreement and businesses related or incidental
        thereto.

       

      Visitation

       

      18.12 Each
        Obligor will permit such Persons as any Lender may reasonably designate to
        visit
        and inspect any of the properties of such Obligor, to discuss its affairs
        with
        its financial management, and provide such other information relating to
        the
        business and financial condition of such Obligor at such times as such Lender
        may reasonably request. Each Obligor 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      hereby
        authorises its financial management to discuss with any Lender the affairs
        of
        such Obligor.

       

      19. Negative
        covenants

       

      Until
        the
        Total Commitments have expired or terminated and all fees payable hereunder
        have
        been paid in full and all Letters of Credit have expired or terminated and
        all
        LC Disbursements have been reimbursed, each of the Obligors covenants and
        agrees
        with the Lenders that:

       

      Mergers

       

      19.1 No
        Obligor 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
                  Obligor may merge or consolidate with any other corporation, including
                  a
                  Subsidiary, if such Obligor shall be the surviving
                  corporation;

              

      

       

      
        	
                (b)

              	
                the
                  Account Party 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 the
                  Account Party (other than the cancellation of any outstanding shares
                  of
                  capital stock of the Account Party held by the Person with whom
                  it merges
                  or consolidates); and 

              

      

       

      
        	
                (c)

              	
                any
                  Obligor may enter into a merger or consolidation which is effected
                  solely
                  to change the jurisdiction of incorporation of such Obligor and
                  results in
                  a reclassification, conversion or exchange of outstanding shares
                  of
                  capital stock of such Obligor solely into shares of capital stock
                  of the
                  surviving entity.

              

      

       

      Dispositions

       

      19.2 No
        Obligor 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 Clause 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 Obligor’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 Obligor and their respective Subsidiaries, exceed $500,000,000
                  in any
                  calendar year; 

              

      

       

      
        	
                (c)

              	
                Dispositions
                  of equipment or other property which is obsolete or no longer used
                  or
                  useful in the conduct of the business of such Obligor or its
                  Subsidiaries;

              

      

       

      
        	
                (d)

              	
                Dispositions
                  between or among the Obligors and their wholly owned Subsidiaries;
                  or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (e)

              	
                Dispositions
                  with Affiliates in accordance with Clause 19.4(c) (Transactions
                  with Affiliates).

              

      

       

      Liens

       

      19.3 No
        Obligor 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
                  listed in Part B of Schedule 2 (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 Liens listed in Part B of
                  Schedule 2);

              

      

       

      
        	
                (b)

              	
                Liens
                  arising from taxes, assessments, charges, levies or claims described
                  in
                  Clause 18.7 (Payment
                  of Taxes and other potential charges and priority claims, payments
                  of
                  other current liabilities)
                  that are not yet due or that remain payable without penalty or
                  to the
                  extent permitted to remain unpaid under the provision of Clause
                  18.7;

              

      

       

      
        	
                (c)

              	
                Liens
                  on property securing all or part of the purchase price thereof
                  to such
                  Obligor and Liens (whether or not assumed) existing on property
                  at the
                  time of purchase thereof by such Obligor (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
                  Obligor, 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;

              

      

       

      
        	
                (d)

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

              

      

       

      
        	
                (e)

              	
                Liens
                  securing Indebtedness permitted by Clause 19.7(b) (Indebtedness)
                  covering assets whose market value is not materially greater than
                  the
                  amount of the Indebtedness secured thereby plus a commercially
                  reasonable
                  margin;

              

      

       

      
        	
                (f)

              	
                Liens
                  on cash and securities of an Obligor or any of its Subsidiaries
                  incurred
                  as part of the management of its investment portfolio including,
                  but not
                  limited to, pursuant to any International Swaps and Derivatives
                  Association, Inc. (ISDA)
                  documentation or any Specified Transaction Agreement in accordance
                  with
                  the Account Party’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 resolution duly adopted by the board of directors
                  of the
                  Account Party (or any committee thereof);

              

      

       

      
        	
                (g)

              	
                Liens
                  on cash and securities not to exceed $500,000,000 in the aggregate
                  securing obligations of an Obligor 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 paragraph (g)
                  preclude
                  any Person (other than any Subsidiary of the Account Party) in
                  which the
                  Account Party 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
                  the
                  Account Party 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 paragraph (g) the
        aggregate amount of cash and/or securities on which any Obligor or any
        Subsidiary shall have granted a Lien in favour of a counterparty at any time
        shall be netted against the aggregate amount of cash and/or securities on
        which
        such counterparty shall have granted a Lien in favour of such Obligor or
        Subsidiary, as the case may be, at such time, so long as the relevant agreement
        between such Obligor or such Subsidiary, as the case may be, provides for
        the
        netting of their respective obligations thereunder;

       

      
        	
                (h)

              	
                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 Obligors’ or any of
                  their Subsidiary’s business as an insurance or reinsurance company
                  (including GICs and Stable Value Instruments) or corporate member
                  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 the Account Party or any of its Affiliates) in the
                  event such
                  Exempt Indebtedness is consolidated on the consolidated balance
                  sheet of
                  the Account Party 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 (h);

              

      

       

      
        	
                (i)

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

              

      

       

      
        	
                (j)

              	
                Liens
                  existing on property of a Person immediately prior to its being
                  consolidated with or merged into any Obligor or any of their Subsidiaries
                  or its becoming a Subsidiary, and Liens existing on any property
                  acquired
                  by any Obligor 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.

              

      

       

      Transactions
        with Affiliates

       

      19.4 No
        Obligor will, nor will it permit any of its Significant Subsidiaries to,
        enter
        into or carry out any transaction with (including, without limitation, 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 Obligor, or directly or indirectly agree to do any of the
        foregoing, except:

       

      
        	
                (a)

              	
                transactions
                  involving guarantees or co-obligors with respect to any Indebtedness
                  described in Part A of
                  Schedule 2;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (b)

              	
                transactions
                  between any Obligor and its wholly-owned Subsidiaries;
                  and

              

      

       

      
        	
                (c)

              	
                transactions
                  with Affiliates in good faith in the ordinary course of such Obligor’s
                  business consistent with past practice and on terms no less favourable
                  to
                  such Obligor or any Subsidiary than those that could have been
                  obtained in
                  a comparable transaction on an arm’s length basis from an unrelated
                  Person.

              

      

       

      Ratio
        of Total Funded Debt to Total Capitalisation

       

      19.5 The
        Account Party will not permit 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
        at
        any time.

       

      Consolidated
        Net Worth

       

      19.6 The
        Account Party will not permit its Consolidated Net Worth to be less than
        the sum
        of (a) $5,000,000,000 plus (b) 25% of consolidated net income (if positive)
        of
        the Account Party and its Subsidiaries for each fiscal quarter ending on
        or
        after March 31, 2006.

       

      Indebtedness 

       

      19.7 No
        Obligor 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 and under any other Finance
                  Document;

              

      

       

      
        	
                (b)

              	
                secured
                  Indebtedness (including secured reimbursement obligations with
                  respect to
                  letters of credit) of any Obligor or any Subsidiary in an aggregate
                  principal amount (for all Obligors and their respective Subsidiaries)
                  not
                  exceeding at any time outstanding 15% of Consolidated Net
                  Worth;

              

      

       

      
        	
                (c)

              	
                other
                  unsecured Indebtedness, so long as upon the incurrence thereof
                  no Default
                  would occur or exist;

              

      

       

      
        	
                (d)

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

              

      

       

      
        	
                (e)

              	
                Indebtedness
                  incurred in transactions described in Clauses 19.3(f) and 19.3(g);
                  and

              

      

       

      
        	
                (f)

              	
                Indebtedness
                  described in Part A of Schedule 2 and extensions, renewals and
                  replacements of any such Indebtedness that do not increase the
                  outstanding
                  principal amount thereof.

              

      

       

      Ratings
        Downgrade

       

      19.8 The
        Account Party will not permit the financial-strength rating from A.M. Best
&
Co. or its successor (such rating, an AMB
        Rating)
        each of
        the XL Capital Group, XL Bermuda and XL Re to fall below “A-”
        (the
AMB
        Rating Undertaking).
        The
        Agent may (and if so instructed by the Majority Lenders shall) require the
        Account Party within 5 Business Days of a failure to comply with the AMB
        Rating
        Undertaking, either:

       

      
        	
                (a)

              	
                to
                  provide cash cover in an amount equal to the aggregate LC Exposures
                  for
                  the time being; or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (b)

              	
                to
                  deposit BIS Qualifying Assets with a custodian acceptable to the
                  Agent,
                  and enter into custodian and other relevant documentation, together
                  with
                  documentation required by the Security Trustee to give the Security
                  Trustee (for the benefit of itself and the other Finance Parties)
                  an
                  effective and perfected security interest in respect of those BIS
                  Qualifying Assets, in an aggregate amount equal to 105% of the
                  aggregate
                  LC Exposures for the time being.

              

      

       

      (each
        of
        (a) and (b), AMB Cash
        Collateral)

      

      Notwithstanding
        any of the foregoing provisions of this Clause 19.8, if at any time subsequent
        to the Account Party posting AMB Cash Collateral, any of the XL Capital Group,
        XL Bermuda and XL Re has an AMB Rating of at least “A”, the Security Trustee
        will instruct a bank holding any cash cover or otherwise take all necessary
        actions to release and return any AMB Cash Collateral to the Account Party
        and
        the Letter of Credit Fee shall be determined by reference to
        Clause 9.3.

      

      Private
        Act

       

      19.9 No
        Obligor will become subject to a Private Act other than the X.L. Insurance
        Company, Ltd. Act, 1989.

       

      20. Events
        of default

       

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

       

      
        	
                (a)

              	
                Failure
                  to Pay:

              

      

       

      (i)       
        any
        Obligor shall fail to pay any Demand Amount when and as the same shall become
        due and payable; or

       

      (ii)      
        any
        Obligor shall fail to pay any interest or any fee payable under this Agreement
        or any other Finance Document or any other amount (other than an amount referred
        to in Clause 20(a)(i)) payable under this Agreement or any other Finance
        Document, when and as the same shall become due and payable, and such failure
        shall continue unremedied for a period of 3 or more days;

       

      
        	
                (b)

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

              

      

       

      
        	
                (c)

              	
                Breach
                  of Obligations:

              

      

       

      (i)       
        any
        Obligor shall fail to observe or perform any covenant, condition or agreement
        contained in Clause 19 (Negative
        Covenants)
        provided that any failure by the Account Party to comply with the AMB Rating
        Undertaking shall not constitute an Event of Default unless the Agent requires
        the Account Party to post and maintain AMB Cash Collateral in accordance
        with
        Clause 19.8 (Ratings
        Downgrade)
        and the
        Account Party fails to do so within 5 Business Days of such failure to comply
        with such AMB Rating Undertaking; or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      (ii)      
        any
        Obligor shall fail to observe or perform any covenant, condition or agreement
        contained in this Agreement or any other Finance Document (other than those
        specified in Clause 20(a) or (c)(i)) and such failure shall continue unremedied
        for a period of 20 or more days after notice thereof from the Agent (given
        at
        the request of any Lender) to such Obligor;

       

      
        	
                (d)

              	
                Cross
                  Default:
                  any Obligor 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 20(d)
                  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;

              

      

       

      
        	
                (e)

              	
                Winding-up:
                  a
                  decree or order by a court having jurisdiction in the premises
                  shall have
                  been entered adjudging any Obligor a bankrupt or insolvent, or
                  approving
                  as properly filed a petition seeking reorganisation of such Obligor
                  under
                  the Bermuda Companies Law or the Cayman Islands Companies Law (2002
                  Revision) 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 a receiver or liquidator or trustee or assignee
                  in
                  bankruptcy or insolvency of such Obligor 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;

              

      

       

      
        	
                (f)

              	
                Insolvency
                  and Rescheduling:
                  any Obligor 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
                  reorganisation under the Bermuda Companies Law or the Cayman Islands
                  Companies Law (2002 Revision) or any other similar applicable Law,
                  or
                  shall consent to the filing of any such petition, or shall consent
                  to the
                  appointment of a 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 Obligor in furtherance
                  of
                  any of the aforesaid purposes;

              

      

       

      
        	
                (g)

              	
                Material
                  unsatisfied judgment or order:
                  one or more judgments for the payment of money in an aggregate
                  amount in
                  excess of $100,000,000 shall be rendered against any Obligor 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 45 days from the entry
                  thereof;

              

      

       

      
        	
                (h)

              	
                ERISA
                  Event:
                  an ERISA Event (or similar event with respect to any Non-U.S. Benefit
                  Plan) shall have occurred that, in the opinion of the Majority
                  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 Obligors and their Subsidiaries in an aggregate amount exceeding
                  $100,000,000;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (i)

              	
                Change
                  of Control:
                  a
                  Change in Control shall occur;

              

      

       

      
        	
                (j)

              	
                Change
                  in Ownership:
                  the Account Party shall cease to own, beneficially and of record,
                  directly
                  or indirectly all of the outstanding voting shares of capital stock
                  of XL
                  Bermuda, XL Re or XL America; or

              

      

       

      
        	
                (k)

              	
                Illegality:
                  at any time it is or becomes unlawful for any Obligor to perform
                  or comply
                  with any or all of its obligations hereunder or any court or arbitrator
                  or
                  any governmental body, agency or official which has jurisdiction
                  in the
                  matter shall decide, rule or order that any provision of the Finance
                  Documents is invalid or unenforceable in any material respect,
                  or any
                  Obligor shall so assert in writing;

              

      

       

      
        	
                (l)

              	
                Default
                  under Guarantee:
                  the guarantee contained in Clause 16 (Guarantee
                  and Indemnity)
                  shall terminate or cease, in whole or material part, to be a legally
                  valid
                  and binding obligation of each Guarantor 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
                  other Person shall assert any of the
                  foregoing,

              

      

       

      then,
        and
        in every such event (other than an event with respect to any Obligor described
        in Clause 20(e) or 20(f)), and at any time thereafter during the continuance
        of
        such event, the Agent may, and at the request of the Majority Lenders shall,
        by
        notice to the Account Party (an Acceleration
        Notice),
        take
        any of the following actions, at the same or different times: 

      

      (i)       
        terminate
        the Total Commitments, and thereupon the Total Commitments shall terminate
        immediately; 

       

      (ii)      
        require
        the Account Party forthwith to provide cash cover in respect of any LC Exposure
        pursuant to a Letter of Credit; and

       

      (iii)      declare
        all fees and other obligations of the Account Party accrued hereunder to
        be due
        and payable in whole (or in part, in which case any fees and other obligations
        not so declared to be due and payable may thereafter be declared to be due
        and
        payable) and thereupon such fees and other obligations, shall become due
        and
        payable immediately, without presentment, demand, protest or other notice
        of any
        kind, all of which are hereby waived by the Account Party, 

       

      and
        in
        case of any event with respect to any Obligor described in Clause 20(e) or
        20(f):

       

      
        	 	
                (A)

              	
                the
                  Commitments shall automatically terminate; and

              

      

       

      
        	 	
                (B)

              	
                the
                  Account Party shall automatically be required to provide cash cover
                  in
                  respect of any LC Exposure pursuant to a Letter of Credit;
                  and

              

      

       

      
        	 	
                (C)

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

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      21. The
        Agent, the Arrangers and the Lenders

       

      Appointment
        of the Agent

       

      21.1 The
        Arrangers and each of the Lenders hereby appoints the Agent to act as its
        agent
        in connection herewith and authorises the Agent to exercise such rights,
        powers,
        authorities and discretions as are specifically delegated to the Agent by
        the
        terms hereof together with all such rights, powers, authorities and discretions
        as are reasonably incidental thereto.

       

      Agent’s
        Discretions

       

      21.2 The
        Agent
        may:

       

      
        	
                (a)

              	
                assume,
                  unless it has, in its capacity as agent for the Lenders, received
                  notice
                  to the contrary from any other party hereto, that (a) any representation
                  made or deemed to be made by an Obligor in connection with the
                  Finance
                  Documents is true, (b) no Event of Default or Potential Event of
                  Default
                  has occurred, (c) no Obligor is in breach of or default under its
                  obligations under the Finance Documents and (d) any right, power,
                  authority or discretion vested therein upon the Majority Lenders,
                  the
                  Lenders or any other person or group of persons has not been
                  exercised;

              

      

       

      
        	
                (b)

              	
                assume
                  that the Facility Office of each Lender is that notified to it
                  by such
                  Lender in writing prior to the date hereof (or, in the case of
                  a
                  Transferee, at the end of the Transfer Certificate to which it
                  is a party
                  as Transferee) until it has received from such Lender a notice
                  designating
                  some other office of such Lender to replace its Facility Office
                  and act
                  upon any such notice until the same is superseded by a further
                  such
                  notice;

              

      

       

      
        	
                (c)

              	
                engage
                  and pay for the advice or services of any lawyers, accountants,
                  surveyors
                  or other experts whose advice or services may to it seem necessary,
                  expedient or desirable and rely upon any advice so
                  obtained;

              

      

       

      
        	
                (d)

              	
                rely
                  as to any matters of fact which might reasonably be expected to
                  be within
                  the knowledge of an Obligor upon a certificate signed by or on
                  behalf of
                  such Obligor;

              

      

       

      
        	
                (e)

              	
                rely
                  upon any communication or document believed by it to be
                  genuine;

              

      

       

      
        	
                (f)

              	
                refrain
                  from exercising any right, power or discretion vested in it as
                  agent
                  hereunder unless and until instructed by the Majority Lenders as
                  to
                  whether or not such right, power or discretion is to be exercised
                  and, if
                  it is to be exercised, as to the manner in which it should be
                  exercised;

              

      

       

      
        	
                (g)

              	
                refrain
                  from acting in accordance with any instructions of the Majority
                  Lenders to
                  begin any legal action or proceeding arising out of or in connection
                  with
                  the Finance Documents until it shall have received such security
                  as it may
                  require (whether by way of payment in advance or otherwise) for
                  all costs,
                  claims, losses, expenses (including legal fees) and liabilities
                  together
                  with any VAT thereon which it will or may expend or incur in complying
                  with such instructions; and

              

      

       

      
        	
                (h)

              	
                assume
                  (unless it has specific notice to the contrary) that any notice
                  or request
                  made by the Account Party is made on behalf of the
                  Obligors.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Agent’s
        Obligations

       

      21.3 The
        Agent
        shall:

       

      
        	
                (a)

              	
                promptly
                  inform each Lender of the contents of any notice or document received
                  by
                  it in its capacity as Agent from an Obligor under the Finance Documents
                  and shall promptly deliver to each Lender a copy of each Letter
                  of Credit
                  delivered to Lloyd’s pursuant to Clause 3.3 (Completion
                  of Letters of Credit);

              

      

       

      
        	
                (b)

              	
                promptly
                  notify each Lender of the occurrence of any Event of Default or
                  any
                  default by an Obligor in the due performance of or compliance with
                  its
                  obligations under the Finance Documents of which the Agent has
                  notice from
                  any other party hereto;

              

      

       

      
        	
                (c)

              	
                save
                  as otherwise provided herein, act as agent under the Finance Documents
                  in
                  accordance with any instructions given to it by an Majority Lenders,
                  which
                  instructions shall be binding on the Arrangers and the
                  Lenders; and

              

      

       

      
        	
                (d)

              	
                if
                  so instructed by the Majority Lenders, refrain from exercising
                  any right,
                  power or discretion vested in it as agent under the Finance
                  Documents.

              

      

       

      The
        Agent’s duties under the Finance Documents are solely mechanical and
        administrative in nature.

       

      Excluded
        Obligations

       

      21.4 Notwithstanding
        anything to the contrary expressed or implied herein, neither the Agent nor
        the
        Arrangers shall:

       

      
        	
                (a)

              	
                be
                  bound to enquire as to (i) whether or not any representation made
                  or
                  deemed to be made by an Obligor in connection with the Finance
                  Documents
                  is true, (ii) the occurrence of any Default, (iii) the performance
                  by an
                  Obligor of its obligations under the Finance Documents or (iv)
                  any breach
                  of or default by an Obligor of or under its obligations under the
                  Finance
                  Documents;

              

      

       

      
        	
                (b)

              	
                be
                  bound to account to any Lender for any sum or the profit element
                  of any
                  sum received by it for its own
                  account;

              

      

       

      
        	
                (c)

              	
                be
                  bound to disclose to any other person any information relating
                  to any
                  Obligor or any Related Party if (i) such person, on providing such
                  information, expressly stated to the Agent or, as the case may
                  be, the
                  Arrangers, that such information was confidential or (ii) such
                  disclosure
                  would or might in its opinion constitute a breach of any Law or
                  be
                  otherwise actionable at the suit of any
                  person;

              

      

       

      
        	
                (d)

              	
                be
                  under any obligations other than those for which express provision
                  is made
                  herein;

              

      

       

      
        	
                (e)

              	
                be
                  or be deemed to be a fiduciary for any other party hereto;
                  or

              

      

       

      
        	
                (f)

              	
                be
                  obliged to carry out any "know your customer" or other checks in
                  relation
                  to any person on behalf of any Lender and each Lender confirms
                  to the
                  Agent and the Arranger that it is solely responsible for any such
                  checks
                  it is required to carry out and that it may not rely on any statement
                  in
                  relation to such checks made by the Agent or the
                  Arranger.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Indemnification

       

      21.5 Each
        Lender shall, pro rata according to its Applicable Percentage (determined
        as of
        the time that the applicable cost, claim, loss, expense and/or liability
        is
        sought), from time to time on demand by the Agent, indemnify the Agent against
        any and all costs, claims, losses, expenses (including legal fees) and
        liabilities together with any value added tax thereon (or equivalent) which
        the
        Agent may incur, otherwise than by reason of its own gross negligence or
        wilful
        misconduct, in acting in its capacity as agent hereunder (unless the Agent
        has
        been reimbursed by an Obligor pursuant to a Finance Document).

       

      Exclusion
        of Liabilities

       

      21.6 Except
        in
        the case of gross negligence or wilful default, neither the Agent nor the
        Arrangers accept any responsibility:

       

      
        	
                (a)

              	
                for
                  the adequacy, accuracy and/or completeness of any information supplied
                  by
                  the Agent or the Arrangers, by an Obligor or by any other person
                  in
                  connection with the Finance Documents or any other agreement, arrangement
                  or document entered into, made or executed in anticipation of,
                  pursuant to
                  or in connection with the Finance
                  Documents;

              

      

       

      
        	
                (b)

              	
                for
                  the legality, validity, effectiveness, adequacy or enforceability
                  of the
                  Finance Documents or any other agreement, arrangement or document
                  entered
                  into, made or executed in anticipation of, pursuant to or in connection
                  with the Finance Documents; or

              

      

       

      
        	
                (c)

              	
                for
                  the exercise of, or the failure to exercise, any judgement, discretion
                  or
                  power given to any of them by or in connection with the Finance
                  Documents
                  or any other agreement, arrangement or document entered into, made
                  or
                  executed in anticipation of, pursuant to or in connection with
                  the Finance
                  Documents.

              

      

       

      Accordingly,
        neither the Agent nor the Arrangers shall be under any liability (whether
        in
        negligence or otherwise) in respect of such matters, save in the case of
        gross
        negligence or wilful misconduct.

      

      No
        Actions

       

      21.7 Each
        of
        the Lenders agree that it will not assert or seek to assert against any
        director, officer or employee of the Agent or the Arrangers any claim it
        might
        have against any of them in respect of the matters referred to in
        Clause 21.6 (Exclusion
        of Liabilities).

       

      Business
        with the Group

       

      21.8 The
        Agent
        and the Arrangers may accept deposits from, lend money to and generally engage
        in any kind of banking or other business with any of the Obligors or their
        Subsidiaries.

       

      Resignation

       

      21.9 The
        Agent
        may resign its appointment hereunder at any time without assigning any reason
        therefor by giving not less than thirty days’ prior notice to that effect to
        each of the other parties hereto, PROVIDED
        THAT
        no such
        resignation shall be effective until a successor for the Agent is appointed
        in
        accordance with the succeeding provisions of this Clause 21.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Successor
        Agent

       

      21.10 If
        the
        Agent gives notice of its resignation pursuant to Clause 21.9 (Resignation)
        then
        any reputable and experienced Lender or other financial institution may be
        appointed as a successor to the Agent by the Majority Lenders (with the approval
        of the Account Party, not to be unreasonably withheld or delayed,) during
        the
        period of such notice (with the co-operation of the Agent) but, if no such
        successor is so appointed, the Agent may appoint such a successor
        itself.

       

      Rights
        and Obligations

       

      21.11 If
        a
        successor to the Agent is appointed under the provisions of Clause 21.10
        (Successor
        Agent),
        then
        (a) the retiring Agent shall be discharged from any further obligation
        hereunder but shall remain entitled to the benefit of the provisions of this
        Clause 21 and (b) its successor and each of the other parties hereto
        shall have the same rights and obligations amongst themselves as they would
        have
        had if such successor had been a party hereto.

       

      Own
        Responsibility

       

      21.12 It
        is
        understood and agreed by each Lender that at all times it has itself been,
        and
        will continue to be, solely responsible for making its own independent appraisal
        of and investigation into all risks arising under or in connection with this
        Agreement including, but not limited to:

       

      
        	
                (a)

              	
                the
                  financial condition, creditworthiness, condition, affairs, status
                  and
                  nature of each member of the Group;

              

      

       

      
        	
                (b)

              	
                the
                  legality, validity, effectiveness, adequacy and enforceability
                  of the
                  Finance Documents and any other agreement, arrangement or document
                  entered
                  into, made or executed in anticipation of, pursuant to or in connection
                  with the Finance Documents;

              

      

       

      
        	
                (c)

              	
                whether
                  such Lender has recourse, and the nature and extent of that recourse,
                  against an Obligor or any other person or any of its assets under
                  or in
                  connection with the Finance Documents, the Transactions or any
                  other
                  agreement, arrangement or document entered into, made or executed
                  in
                  anticipation of, pursuant to or in connection with the Finance
                  Documents; and

              

      

       

      
        	
                (d)

              	
                the
                  adequacy, accuracy and/or completeness of any information provided
                  by the
                  Agent or the Arrangers, an Obligor or by any other person in connection
                  with the Finance Documents, the Transactions or any other agreement,
                  arrangement or document entered into, made or executed in anticipation
                  of,
                  pursuant to or in connection with the Finance
                  Documents.

              

      

       

      Accordingly,
        each Lender acknowledges to the Agent and the Arrangers that it has not relied
        on and will not hereafter rely on the Agent and the Arrangers or any of them
        in
        respect of any of these matters.

      

      Agency
        Division Separate

       

      21.13 In
        acting
        as agent hereunder for the Lenders, the Agent shall be regarded as acting
        through its agency division which shall be treated as a separate entity from
        any
        other of its divisions or departments and, notwithstanding the foregoing
        provisions of this Clause 21, any information received by some other division
        or
        department of the Agent may be treated as confidential and shall not be regarded
        as having been given to the Agent’s agency division.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Declaration
        of Agent as Security Trustee

       

      21.14 The
        Agent
        hereby declares that it shall hold:

       

      
        	
                (a)

              	
                all
                  rights, titles and interests that may hereafter be mortgaged, charged,
                  assigned or otherwise secured in favour of the Agent by or pursuant
                  to the
                  Finance Documents;

              

      

       

      
        	
                (b)

              	
                the
                  benefit of all representations, covenants, guarantees, indemnities
                  and
                  other contractual provisions given in favour of the Agent (other
                  than any
                  such benefits given to the Agent solely for its own benefit) by
                  or
                  pursuant to the Finance Documents (other than this Agreement);
                  and

              

      

       

      
        	
                (c)

              	
                all
                  proceeds of the security referred to in paragraph (a) above and of
                  the enforcement of the benefits referred to in paragraph (b)
                  above,

              

      

       

      on
        trust
        for itself and the other Finance Parties from time to time.

      

      Such
        declaration shall remain valid notwithstanding that the Agent may on the
        date
        hereof or at any other time be the sole Finance Party; for the avoidance
        of
        doubt, however, such declaration shall, in such case, be deemed repeated
        on each
        date on which the Agent ceases to be the sole Finance Party.

      

      Each
        of
        the parties hereto agrees that the obligations, rights and benefits vested
        or to
        be vested in the Agent as trustee as aforesaid by the Finance Documents or
        any
        document entered into pursuant thereto shall (as well before as after
        enforcement) be performed and (as the case may be) exercised by the Agent
        in
        accordance with the provisions of this Clause 21.

      

      Powers
        and Discretions

       

      21.15 The
        Agent
        shall have all the powers and discretions conferred upon trustees by the
        Trustee
        Act 1925 (to the extent not inconsistent herewith) and by way of supplement
        it
        is expressly declared as follows:

       

      
        	
                (a)

              	
                the
                  Agent shall be at liberty to place any of the Finance Documents
                  and any
                  other instruments, documents or deeds delivered to it pursuant
                  thereto or
                  in connection therewith for the time being in its possession in
                  any safe
                  deposit, safe or receptacle selected by the Agent or with any Lender,
                  any
                  company whose business includes undertaking the safe custody of
                  documents
                  or any firm of lawyers of good
                  repute;

              

      

       

      
        	
                (b)

              	
                the
                  Agent may, whenever it thinks fit, delegate by power of attorney
                  or
                  otherwise to any person or persons or fluctuating body of persons
                  all or
                  any of the rights, trusts, powers, authorities and discretions
                  vested in
                  it by any of the Finance Documents and such delegation may be made
                  upon
                  such terms and subject to such conditions (including the power
                  to
                  sub-delegate) and subject to such regulations as the Agent may
                  think fit
                  and the Agent shall not be bound to supervise, or be in any way
                  responsible for any loss incurred by reason of any misconduct or
                  default
                  on the part of, any such delegate (or
                  sub-delegate);

              

      

       

      
        	
                (c)

              	
                notwithstanding
                  anything else herein contained, the Agent may refrain from doing
                  anything
                  which would or might in its opinion be contrary to any Law of any
                  jurisdiction or any directive or regulation of any agency of any
                  state or
                  which would or might otherwise render it liable to any person and
                  may do
                  anything which is, in its opinion, necessary to comply with any
                  such Law,
                  directive or regulation;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (d)

              	
                save
                  in the case of gross negligence or wilful misconduct, the Agent
                  and every
                  attorney, agent, delegate, sub-delegate and any other person appointed
                  by
                  any of them under any of the Finance Documents may indemnify itself
                  or
                  himself out of the security held by the Agent against all liabilities,
                  costs, fees, charges, losses and expenses incurred by any of them
                  in
                  relation to or arising out of the taking or holding of any of the
                  security
                  constituted by, or any of the benefits provided by, any of the
                  Finance
                  Documents, in the exercise or purported exercise of the rights,
                  trusts,
                  powers and discretions vested in any of them or in respect of any
                  other
                  matter or thing done or omitted to be done in any way relating
                  to any of
                  the Finance Documents or pursuant to any Law or regulation;
                  and

              

      

       

      
        	
                (e)

              	
                without
                  prejudice to the provisions of any of the Finance Documents, the
                  Agent
                  shall not be under any obligation to insure any property or to
                  require any
                  other person to maintain any such insurance and shall not be responsible
                  for any loss which may be suffered by any person as a result of
                  the lack
                  of or inadequacy or insufficiency of any such
                  insurance.

              

      

       

      Liability

       

      21.16 The
        Agent
        shall not be liable for any failure:

       

      
        	
                (a)

              	
                to
                  require the deposit with it of any deed or document certifying,
                  representing or constituting the title of the Account Party to
                  any of the
                  property mortgaged, charged, assigned or otherwise encumbered by
                  or
                  pursuant to any of the Finance
                  Documents;

              

      

       

      
        	
                (b)

              	
                to
                  obtain any licence, consent or other authority for the execution,
                  delivery, validity, legality, adequacy, performance, enforceability
                  or
                  admissibility in evidence of any of the Finance
                  Documents;

              

      

       

      
        	
                (c)

              	
                to
                  register or notify any deed or document mentioned at paragraph (a)
                  above in accordance with the provisions of any of the documents
                  of title
                  of the Account Party;

              

      

       

      
        	
                (d)

              	
                to
                  effect or procure registration of or otherwise protect any of the
                  security
                  created by any of the Finance Documents by registering the same
                  under any
                  applicable registration Laws in any territory or otherwise by registering
                  any notice, caution or other entry prescribed by or pursuant to
                  the
                  provisions of relevant Laws;

              

      

       

      
        	
                (e)

              	
                to
                  take or to require the Account Party to take any steps to render
                  the
                  security created or purported to be created by or pursuant to any
                  of the
                  Finance Documents effective or to secure the creation of any ancillary
                  charge under the Laws of any jurisdiction;
                  or

              

      

       

      
        	
                (f)

              	
                to
                  require any further assurances in relation to any of the Finance
                  Documents.

              

      

       

      Title
        to Security etc.

       

      21.17 The
        Agent
        may accept without enquiry, requisition or objection such right and title
        as the
        Account Party may have to the property belonging (or purportedly belonging)
        to
        it (or any part thereof) which is the subject matter of any of the Finance
        Documents and shall not be bound or concerned to investigate or make any
        enquiry
        into the right or title of the Account Party to such property (or any part
        thereof) or, without prejudice to the foregoing, to require the Account Party
        to
        remedy any defect in the Account Party’s right or title as
        aforesaid.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      New
        Security Trustee

       

      21.18 The
        Agent
        may at any time appoint any person (whether or not a trust corporation) to
        act
        either as a separate trustee or as a co-trustee jointly with the
        Agent:

       

      
        	
                (a)

              	
                if
                  the Agent considers such appointment to be in the interests of
                  the
                  Lenders; or

              

      

       

      
        	
                (b)

              	
                for
                  the purposes of conforming to any legal requirements, restrictions
                  or
                  conditions which the Agent deems relevant for the purposes of the
                  Finance
                  Documents and the Agent shall give prior notice to the Account
                  Party and
                  the Lenders of any such
                  appointment.

              

      

       

      Any
        person so appointed shall (subject to the provisions of the Finance Documents)
        have such powers, authorities and discretions and such duties and obligations
        as
        shall be conferred or imposed or such person by the instrument of appointment
        and shall have the same benefits under this Clause 21 as the
        Agent.

      

      The
        Agent
        shall have power in like manner to remove any person so appointed.

      

      Such
        reasonable remuneration as the Agent may pay to any person so appointed,
        and any
        costs, charges and expenses incurred by such person in performing its functions
        pursuant to such appointment, shall for the purposes hereof be treated as
        costs,
        charges and expenses incurred by the Agent under the Finance
        Documents.

      

      Perpetuity
        Period

       

      21.19 The
        perpetuity period under the rule against perpetuities if applicable to the
        trusts constituted in this Clause 21 and the other Finance Documents shall
        be the period of eighty years from the date of this Agreement and, subject
        thereto, if the Agent determines that all of the obligations of the Account
        Party under any of the Finance Documents have been fully and unconditionally
        discharged, such trusts shall be wound up.

       

      Lender
        Representations

       

      21.20 Each
        Lender represents to the Agent on the date of issue of each Letter of Credit
        that:

       

      
        	
                (a)

              	
                the
                  execution and delivery of each Letter of Credit by the Agent on
                  the
                  Lender’s behalf has been duly authorised by all necessary action on the
                  part of the Lender; and

              

      

       

      
        	
                (b)

              	
                the
                  obligations of the Lender under each Letter of Credit constitute
                  its
                  legal, valid and binding
                  obligations.

              

      

       

      Letters
        of Credit

       

      21.21 Each
        Lender shall, (a) pro rata according to its respective Commitment, indemnify
        the
        Agent against any and all liabilities, costs and expenses which the Agent
        may
        incur otherwise than by reason of its own gross negligence or wilful misconduct
        (in its capacity as Agent) as a result of the execution and delivery of any
        Letter of Credit and any documents executed and delivered by the Agent in
        connection therewith; and (b) inform the Agent promptly if at any time the
        collateral securing the repayment of any amounts payable under any Letter
        of
        Credit comprises directly or indirectly a security interest over a principal
        private residence.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      22. 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 facsimile, as follows:

      

      
        	
                (a)

              	
                if
                  to any Obligor, to:

              

      

       

      
        	
                XL
                  Capital Ltd

                XL
                  House

                One
                  Bermudiana Road

                Hamilton
                  HM 11 

                Bermuda
                  

                 

              
	
                Fax: 1
                  441 295 4867

                Attention: Senior
                  Vice President, Chief Corporate Legal Officer and Secretary

                 

              

      

       

      
        	
                (b)

              	
                if
                  to the Agent:

              

      

       

      
        	
                2nd
                  Floor

                4
                  Harbour Exchange Square

                London
                  E14 9GE

                 

              
	
                Fax: 44
                  207 500 4482/4484

                Attention: Loans
                  Agency

                 

              

      

       

      
        	
                (c)

              	
                if
                  to a Lender, to it at its address (or facsimile number) on the
                  signature
                  pages of this Agreement, or such other address as it shall notify
                  to the
                  Agents and the Account Party.

              

      

       

      Any
        party
        hereto may change its address or facsimile number for notices and other
        communications hereunder by notice to the other parties hereto (or, in the
        case
        of any such change by a Lender, by notice to the Account Party and the 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.

      

      23. Waivers
        and Amendments

       

      No
        Deemed Waivers 

       

      23.1 No
        failure or delay by any Finance Party 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. No waiver of any provision of this
        Agreement or consent to any departure by an Obligor therefrom shall in any
        event
        be effective unless the same shall be permitted by Clause 23.3
        (Amendments),
        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 Agent or any Lender may have had
        notice or knowledge of such Default at the time.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Remedies
        Cumulative

       

      23.2 The
        rights and remedies of the Finance Parties hereunder are cumulative and are
        not
        exclusive of any rights or remedies that they would otherwise have.

       

      Amendments

       

      23.3 Neither
        this Agreement nor any provision hereof may be waived, amended or modified
        except pursuant to an agreement or agreements in writing entered into by
        the
        Obligors and the Majority Lenders or by the Obligors and the Agent with the
        consent of the Majority Lenders; PROVIDED
        that
        no
        such agreement shall:

       

      
        	
                (a)

              	
                increase
                  the Commitment of any Lender without the written consent of such
                  Lender,

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                (c)

              	
                postpone
                  the scheduled date 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 Clause 4), without the written consent
                  of each Lender affected thereby,

              

      

       

      
        	
                (d)

              	
                change
                  Clause 15.4 (Pro
                  Rata Treatment)
                  or 15.5 (Sharing
                  of Payments By Lenders)
                  without the consent of each Lender affected
                  thereby,

              

      

       

      
        	
                (e)

              	
                release
                  any of the Guarantors from any of their guarantee obligations under
                  Clause 16 (Guarantee
                  and Indemnity)
                  without the written consent of each
                  Lender,

              

      

       

      
        	
                (f)

              	
                release
                  any security granted by the Account Party pursuant to Clause 19.8
                  (Ratings
                  Downgrade)
                  or 20 (Events
                  of Default)
                  without the written consent of each Lender,
                  and

              

      

       

      
        	
                (g)

              	
                change
                  any of the provisions of this Clause or the percentage in the definition
                  of the term Majority
                  Lenders
                  or
                  any other provision hereof specifying the number or percentage
                  of Lenders
                  required to waive, amend or modify any rights hereunder or make
                  any
                  determination or grant any consent hereunder, without the written
                  consent
                  of each Lender;

              

      

       

      and
        PROVIDED
        FURTHER that
        no
        such agreement shall amend, modify or otherwise affect the rights or duties
        of
        the Agent hereunder without the prior written consent of the Agent.

       

      24. Costs
        and Expenses

       

      24.1 The
        Account Party shall pay:

       

      
        	
                (a)

              	
                all
                  reasonable out-of-pocket expenses and charges incurred by the Agent
                  and/or
                  the Arrangers (together with VAT or any similar tax thereon and
                  including
                  the reasonable fees, charges and disbursements of counsel for the
                  Agent)
                  in connection with the syndication of the credit facilities provided
                  for
                  herein, the negotiation, preparation, execution and administration
                  of the
                  Finance Documents (subject to the terms of the Commitment Letter)
                  or any
                  amendments, modifications or waivers of the provisions
                  

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      hereof
        (whether or not the transactions contemplated hereby or thereby shall be
        consummated);

       

      
        	
                (b)

              	
                all
                  reasonable out-of-pocket expenses incurred by the Agent, the Security
                  Trustee or any Lender, (together with VAT or any similar tax thereon
                  and
                  including the reasonable fees, charges and disbursements of one
                  legal
                  counsel for the Agent and one legal counsel for the Lenders), in
                  connection with the preservation and/or enforcement or protection
                  of its
                  rights in connection with the Finance Documents, including its
                  rights
                  under this Clause, or in connection with Letters of Credit issued
                  hereunder, including in connection with any workout, restructuring
                  or
                  negotiations in respect thereof.

              

      

       

      Stamp
        Duty

       

      24.2 The
        Account Party shall pay all transfer, stamp, documentary or other similar
        taxes,
        assessments or charges levied by any governmental or revenue authority in
        respect of this Agreement or any other document referred to herein.

       

      25. Indemnities

       

      Currency
        Indemnity

       

      25.1 (a) If:

       

      (i)       
        any
        amount payable by the Account Party under or in connection with this Agreement
        is received by any Finance Party in a currency (the Payment
        Currency)
        other
        than that agreed in this Agreement (the Agreed
        Currency)
        whether
        as a result of any judgement or order or the enforcement thereof, the
        liquidation of the payer or otherwise; and

       

      (ii)      
        the
        amount produced by converting the Payment Currency so received into the Agreed
        Currency is less than the relevant amount of the Agreed Currency.

       

      then
        the
        Account Party shall, as an independent obligation, indemnify such Finance
        Party
        for the deficiency and any loss sustained as a result. Such conversion shall
        be
        made at such prevailing rate of exchange, on such date and in such market
        as is
        determined by such Finance Party (acting reasonably) as being most appropriate
        for the conversion. The Account Party shall in addition pay the costs of
        the
        conversion.

      

      
        	
                (b)

              	
                The
                  Account Party waives any right it may have in any jurisdiction
                  to pay any
                  amount under this Agreement in a currency other than that in which
                  it is
                  expressed to be payable in this
                  Agreement.

              

      

       

      Other
        Indemnities

       

      25.2 The
        Obligors shall indemnify the Agent 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, incurred by or asserted
        against
        any Indemnitee arising out of, in connection with, or as a result
        of:

       

      
        	
                (a)

              	
                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; 

       

      
        	
                (b)

              	
                any
                  Letter of Credit or the use of any thereof (including any refusal
                  by any
                  Lender to honour 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);

              

      

       

      
        	
                (c)

              	
                any
                  actual or prospective claim, litigation, investigation or proceeding
                  relating to any of the foregoing, whether based on contract, tort
                  or any
                  other theory and regardless of whether any Indemnitee is a party
                  thereto;
                  provided that such indemnity shall not, as to any Indemnitee, be
                  available
                  to the extent that such losses, claims, damages, liabilities or
                  related
                  expenses result from or arise out of the gross negligence or wilful
                  misconduct of such Indemnitee.

              

      

       

      Reimbursement
        by Lenders

       

      25.3 To
        the
        extent that the Obligors fail to pay any amount required to be paid by them
        to
        the Agent under Clauses 24.1 (Costs
        and Expenses)
        or 25.1
        (Currency
        Indemnity)
        and
        25.2 (Other
        Indemnities),
        each
        Lender severally agrees to pay to the 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 Agent
        in
        its capacity as such.

       

      26. Alteration
        to the parties

       

      Successors
        

       

      26.1 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.

       

      Assignments
        and Transfers by the Account Party

       

      26.2 The
        Account Party shall not 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 the Account Party without such consent
        shall
        be null and void). 

       

      Transfers
        by Lenders.
        

       

      26.3 (a)      
        Any
        Lender (the Transferor)
        may at
        any time transfer to another Approved Credit Institution (the Transferee)
        all or
        a portion of its rights and obligations under this Agreement (including all
        or a
        portion of its Commitment) and under any Letter of Credit to which it is
        a
        party; PROVIDED
        THAT:

       

      (i)       
        except
        in
        the case of an transfer to a Lender or a Lender Affiliate, each of the Account
        Party and the Agent must give their prior written consent to such assignment
        (which consent shall not be unreasonably withheld or delayed);

       

      (ii)      
        except
        in
        the case of an transfer to a Lender or a Lender Affiliate or a transfer of
        the
        entire remaining amount of the Transferor’s Commitment, the amount of the
        Commitment of the Transferor subject to each such transfer (determined as
        of the
        date of the Transfer Certificate) shall not be less than 

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      £3,000,000
        unless each of the Account Party and the
        Agent otherwise consent;

       

      (iii)      
        a
        transfer of obligations shall only be effective if the Transferee: 

       

      (A)         
        if
        it
        shall not be a Lender, has delivered relevant contact, notice and account
        details to the Agent (with a copy to the Account Party) as well as any
        information required by the Agent to perform "know your customer" or other
        checks relating to any person that it is required to carry out in relation
        to
        the Transferee, the completion of which the Agent shall promptly notify to
        the
        Transferor and the Transferee; and

       

      (B)         
        has
        confirmed to the Agent and the Account Party prior to the transfer taking
        effect
        that it undertakes to be bound by the terms of this Agreement as Lender in
        form
        and substance reasonably satisfactory to the Agent and the Account Party;
        and on
        any such transfer being made the Transferor shall be relieved of its obligations
        to the extent they are transferred to the Transferee.

       

      PROVIDED
        FURTHER that
        any
        consent of the Account Party otherwise required under this paragraph shall
        not
        be required if an Event of Default under Clause 20(a), (e) or (f) has
        occurred and is continuing. Upon transfer pursuant to Clause 26.4, from and
        after the last to occur of (i) the effective date specified in each
        Transfer Certificate; and (ii) the cancellation of a Letter of Credit and
        the issue of a new Letter of Credit with the Transferee identified as an
        Issuing
        Lender (the Issuing
        Lender Transfer),
        the
        Transferee thereunder shall be a party hereto and, to the extent of the lesser
        of the interest assigned by such Transfer Certificate and the Transferee’s
        participation as an Issuing Lender of a re-issued Letter of Credit (the
Transferred
        Interest),
        have
        the rights and obligations of a Lender under this Agreement, and the Transferor
        thereunder shall, to the extent of the Transferred Interest, be released
        from
        its obligations under this Agreement (and, in the case of Transfer Certificate
        covering all of the Transferor’s rights and obligations under this Agreement,
        such Lender shall cease to be a party hereto but shall continue to be entitled
        to the benefits of Clauses 12 (Increased
        Costs),
        10
        (Taxes)
        24
        (Costs
        and Expenses)
        and 25
        (Indemnities)).
        Any
        assignment or transfer by a Lender of rights or obligations under this Agreement
        that does not comply with this paragraph shall be treated for purposes of
        this
        Agreement as a sale by such Lender of a participation in such rights and
        obligations in accordance with Clause 26.7 (Participations).

      

      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 Agent and the Account Party, the option to provide to the Account
        Party all or any part of any LC Disbursement that such Granting Lender would
        otherwise be obligated to make to the Account Party pursuant to Clause 2.1,
        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 Party may bring any proceeding against either or both the
        Granting Lender or the SPV in order to enforce any rights of the Account
        Party
        hereunder; and (iv) the SPV shall agree to the terms of Clause 30.2
        (Confidentiality).
        The
        making of an LC Disbursement by an 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SPV
        hereunder shall utilise 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, reorganisation,
        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 Clause, any SPV may with notice to, but without
        the prior written consent of, the Account Party or the 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 Party and the 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. This paragraph may not be amended
        without the consent of any SPV at the time holding LC Disbursements under
        this
        Agreement. 

      

      
        	
                (b)

              	
                On
                  each occasion a Transferor assigns, transfers or novates any of
                  its rights
                  and/or obligations under this Agreement, the Transferee (unless
                  it is
                  already a Lender or a Lender Affiliate immediately prior to the
                  transfer)
                  shall ensure that the Agent has notice of the same and shall, on
                  the date
                  the assignment, transfer and/or novation takes effect, pay to the
                  Agent
                  for its own account a fee of
£1,000.

              

      

       

      
        	
                (c)

              	
                Neither
                  a Transferor nor any other Finance Party is responsible to a Transferee
                  for:

              

      

       

      (i)        the
        execution, genuineness, validity, enforceability or sufficiency of any Finance
        Documents or any other document;

       

      (ii)       the
        collectability of amounts payable under any Finance Documents or the financial
        condition of or the performance of its obligations under the Finance Documents
        by any Obligor; or

       

      (iii)     
        the
        accuracy of any statements or information (whether written or oral) made
        in or
        in connection with or supplied in connection with any Finance
        Documents.

       

      
        	
                (d)

              	
                Each
                  Transferee confirms to the Transferor and the other Finance Parties
                  that
                  it:

              

      

       

      (i)       
        has
        made
        its own independent investigation and assessment of the financial condition
        and
        affairs of each Obligor and its related entities in connection with its
        participation in this Agreement and has not relied exclusively on any
        information provided to it by the Transferor or any other Finance Party in
        connection with any Finance Documents; and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      (ii)       will
        continue to make its own independent appraisal of the creditworthiness of
        each
        Obligor and its related entities for so long as there are any Commitments
        or LC
        Exposures under this Agreement.

       

      
        	
                (e)

              	
                Nothing
                  in any Finance Document obliges a Transferor
                  to:

              

      

       

      (i)       
        accept
        a
        re-transfer from a Transferee of any of the rights and/or obligations assigned,
        transferred or novated under this Clause; or

       

      (ii)      
        support
        any losses incurred by the Transferee by reason of the non-performance by
        any
        Obligor of its obligations under any Finance Document or otherwise.

       

      26.4 Transfer
        Procedure:

       

      
        	
                (a)

              	
                A
                  novation is effected if:

              

      

       

      (i)       
        the
        Transferor and the Transferee deliver to the Agent a duly completed Transfer
        Certificate executed by the Transferor and the Transferee; and

       

      (ii)      
        the
        Agent
        executes it 

       

      PROVIDED
        THAT
        the
        Agent shall only be obliged to execute a Transfer Certificate delivered to
        it by
        the Transferor and the Transferee once it is satisfied it has complied with
        all
        necessary "know your customer" or similar other checks under all applicable
        laws
        and regulations in relation to the transfer to such Transferee.

      

      
        	
                (b)

              	
                Each
                  Party (other than the Transferor and the Transferee) irrevocably
                  authorises the Agent to execute any duly completed Transfer Certificate
                  on
                  its behalf.

              

      

       

      
        	
                (c)

              	
                To
                  the extent that they are expressed to be the subject of the novation
                  in
                  the Transfer Certificate:

              

      

       

      (i)       
        the
        Transferor and the other Parties (the existing
        Parties)
        will be
        released from their obligations to each other under the Finance Documents
        (the
discharged
        obligations);

       

      (ii)      
        the
        Transferee and the existing Parties will assume obligations towards each
        other
        under the Finance Documents which differ from the discharged obligations
        only
        insofar as they are owed to or assumed by the Transferee instead of the
        Transferor; 

       

      (iii)     
        the
        rights of the Transferor against the existing Parties under the Finance
        Documents and vice versa (the discharged
        rights)
        will be
        cancelled; and

       

      (iv)     
        the
        Transferee and the existing Parties will acquire rights against each other
        under
        the Finance Documents which differ from the discharged rights only insofar
        as
        they are exercisable by or against the Transferee instead of the Transferor,
        

       

      all
        on
        the date specified in the proviso to Clause 26.3(a).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Right
        to substitute single Lender

       

      26.5 If:

       

      
        	
                (a)

              	
                any
                  sum payable to any Finance Party by the Account Party is required
                  to be
                  increased under Clause 10 (Taxes);
                  or

              

      

       

      
        	
                (b)

              	
                any
                  Lender claims indemnification from the Account Party under
                  Clause 12.1 (Increased
                  Costs);
                  or

              

      

       

      
        	
                (c)

              	
                a
                  Lender’s Available Commitment has been reduced to zero pursuant to
                  Clause 13(b) (Illegality),

              

      

       

      the
        Account Party may give the Agent notice of its intention to arrange the
        substitution of that Lender with a new bank or financial
        institution.

       

      On
        receipt of a notice from the Account Party referred to above, the Lender
        shall
        use its best endeavours to promptly assign or transfer all of its rights
        and
        obligations under this Agreement to an Approved Credit Institution nominated
        by
        the Account Party. Such transfer will be effected in accordance with
        Clause 26.4 (Transfer
        Procedure)
        and the
        consideration for such transfer shall be an amount equal to the sum of all
        amounts accrued and owing by the Account Party to the transferring Lender
        as
        calculated on the date of transfer.

      

      Reference
        Banks

       

      26.6 If
        a
        Reference Bank ceases to be one of the Lenders, the Agent shall (in consultation
        with the Account Party) appoint another Lender or an affiliate of a Lender
        to
        replace that Reference Bank.

       

      Participations

       

      26.7 Any
        Lender may sell participations to one or more Lenders or other entities (a
        Participant)
        in all
        or a portion of such Lender’s rights and obligations under this Agreement and
        the other Credit Documents (including all or a portion of its Commitment);
        PROVIDED
        that:

       

      
        	
                (a)

              	
                any
                  such participation sold to a Participant which is not a Lender
                  or a Lender
                  Affiliate shall be made only with the consent (which in each case
                  shall
                  not be unreasonably withheld) of the Account Party and the Agent,
                  unless
                  an Event of Default under Clause 20(a), (e) or (f) has occurred and
                  is continuing, in which case the consent of the Account Party shall
                  not be
                  required;

              

      

       

      
        	
                (b)

              	
                such
                  Lender’s obligations under this Agreement and the other Finance Documents
                  shall remain unchanged;

              

      

       

      
        	
                (c)

              	
                such
                  Lender shall remain solely responsible to the other parties hereto
                  for the
                  performance of such obligations; 

              

      

       

      
        	
                (d)

              	
                the
                  Account Party, the Agent, the Security Trustee 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
                  Finance Documents; and

              

      

       

      
        	
                (e)

              	
                the
                  Participant shall agree to the terms of Clause 30.2 (Confidentiality).
                  

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      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 Finance Documents and to approve any amendment,
        modification or waiver of any provision of this Agreement or the other Finance
        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 Clause 23.3 (Amendments)
        that
        affects such Participant. Subject to Clause 26.8 (No
        Increased Costs),
        the
        Obligors agree that each Participant shall be entitled to the benefits of
        Clauses 12 (Increased
        Costs) and
        10
        (Taxes)
        to the
        same extent as if it were a Lender and had acquired its interest by assignment
        pursuant to Clause 26.3 (Transfers
        by Lenders).

      

      No
        Increased Costs

       

      26.8 No
        Participant or Transferee shall be entitled to receive any greater payment
        under
        Clause 12 (Increased
        Costs)
        and 10
        (Taxes)
        than
        the applicable Lender would have been entitled to receive with respect to
        the
        participation sold to such Participant or the Lender interest
        transferred.

       

      Certain
        Pledges

       

      26.9 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,
        and this Clause shall not apply to any such pledge or assignment of a security
        interest; PROVIDED
        that no
        such pledge or assignment of a security interest shall release a Lender from
        any
        of its obligations hereunder or substitute any such assignee for such Lender
        as
        a party hereto.

       

      No
        Transfers to any Account Party or Affiliates

       

      26.10 Anything
        in this Clause to the contrary notwithstanding, no Lender may assign or
        participate any interest in any LC Exposure held by it hereunder to any Obligor
        or any of its Affiliates or Subsidiaries without the prior consent of each
        Lender.

       

      Maintenance
        of Register by the Agent

       

      26.11 The
        Agent, acting for this purpose as an agent of the Account Party, shall maintain
        at one of its offices in London a copy of each Transfer Certificate delivered
        to
        it and a register of the names and addresses of the Lenders, and 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 Party, the Agent,
        the Security Trustee and the Lenders may treat each Person whose name is
        recorded in the Register pursuant to the terms hereof as a Lender hereunder
        for
        all purposes of this Agreement, notwithstanding notice to the contrary. The
        Register shall be available for inspection by any Account Party and any Lender,
        at any reasonable time and from time to time upon reasonable prior
        notice.

       

      27. Set
        off

       

      Right
        of Set-off

       

      If
        an
        Event of Default shall have occurred and be continuing, each Finance Party
        is
        hereby authorised at any time and from time to time, to the fullest extent
        permitted by Law, to set off and apply any and all deposits in any currency
        (general or special, time or demand, provisional or final) at any time held
        and
        other indebtedness in any currency at any time owing by such Finance Party
        to or
        for the credit or the account of any Obligor against any of 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      and
        all
        the obligations of such Obligor now or hereafter existing under this Agreement
        held by such Finance Party, irrespective of whether or not such Finance Party
        shall have made any demand under this Agreement and although such obligations
        may be unmatured. The rights of each Finance Party under this Clause are
        in
        addition to other rights and remedies (including other rights of set-off)
        which
        such Finance Party may have. The relevant Finance Party may effect any
        appropriate currency exchanges to implement such set-off.

      

      28. Miscellaneous
        provisions

       

      Certificates

       

      28.1 Any
        determination or notification by the Agent or any other Finance Party concerning
        any rate or amount under the Finance Documents shall, in the absence of manifest
        error, be conclusive evidence as to that matter.

       

      Survival

       

      28.2 All
        covenants, agreements, representations and warranties made by the Account
        Party
        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 issuance of any Letters of Credit, regardless of any
        investigation made by any such other party or on its behalf and notwithstanding
        that the 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 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 Clauses 12 (Increased
        Costs),
        10
        (Taxes),
        24
        (Costs
        and Expenses),
        25
        (Indemnities)
        and 21
        (Agent)
        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 Commitments or the termination of this Agreement
        or
        any provision hereof.

       

      Counterparts

       

      28.3 This
        Agreement may be executed in counterparts (and by different parties hereto
        on
        separate counterparts), each of which shall constitute an original, but all
        of
        which when taken together shall constitute one and the same instrument.

       

      Entire
        Agreement

       

      28.4 This
        Agreement and the other Finance Documents constitute the entire contract
        between
        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.

       

      Severability 

       

      28.5 Any
        provision of this Agreement or any other Finance Document 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. The invalidity of a particular provision in a particular
        jurisdiction shall not invalidate such provision in any other jurisdiction.
        To
        the extent permitted by applicable Law, each Obligor hereby waives any provision
        of Law which renders any provision of the Finance Documents prohibited or
        unenforceable in any respect.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      USA
        Patriot Act Notification

       

      28.6 Each
        Lender hereby notifies each Obligor that pursuant to the requirements of
        the USA
        Patriot Act (Title III of Pub. L. 107-56 (signed into law on October 26,
        2001))
        (the Act)
        it is
        required to obtain, verify and record information that identifies each Obligor
        which information includes the name and address of such Obligor and other
        information that will allow such Lender to identify the Obligor in accordance
        with the Act. Each Obligor agrees to promptly upon the request of such Lender
        supply, or procure the supply of, such information as is reasonably requested
        by
        such Lender in order for such Lender to be satisfied that it has complied
        with
        the Act.

       

      29. Governing
        Law and Jurisdiction

       

      Governing
        Law

       

      29.1 This
        Agreement shall be construed in accordance with and governed by English
        law.

       

      Jurisdiction

       

      29.2 (a) All
        the
        parties agree that the courts of England are, subject to Clause 29.2(b) and
        (c) below, to have jurisdiction to settle any disputes which may arise in
        connection with the creation, validity, effect, interpretation or performance
        of, or the legal relationships established by, this Agreement (including,
        without limitation, claims for set-off or counterclaim) or otherwise arising
        in
        connection with this Agreement and for such purposes irrevocably submit to
        the
        jurisdiction of the English courts;

       

      
        	
                (b)

              	
                notwithstanding
                  the agreement in (a) above, each of the Finance Parties shall retain
                  the
                  right to bring proceedings in any other court which has jurisdiction
                  whether by virtue of the Convention on Jurisdiction and the Enforcement
                  of
                  Judgments signed on 27 September 1968 (as from time to time amended
                  and extended) or by virtue of the Convention on Jurisdiction and
                  the
                  Enforcement of Judgments signed on 16 September 1988 (from time to
                  time amended and extended) or otherwise; 

              

      

       

      
        	
                (c)

              	
                with
                  respect to the courts agreed in paragraphs (a) and (b) above, each
                  of the
                  Parties irrevocably waives any objections on the ground of venue
                  or forum
                  non conveniens or any similar
                  ground;

              

      

       

      
        	
                (d)

              	
                each
                  of the Parties irrevocably agrees that a judgment or order of any
                  court
                  referred to in this Clause in connection with this Agreement is
                  conclusive
                  and binding on it and may be enforced against it in the courts
                  of any
                  other jurisdiction; and

              

      

       

      
        	
                (e)

              	
                each
                  of the Parties irrevocably consents to service of process by mail
                  or in
                  any other manner permitted by the relevant
                  Law.

              

      

       

      Agent
        for Service of Process

       

      29.3 Each
        Obligor shall at all times maintain an agent for service of process and any
        other documents in proceedings in England or any other proceedings in connection
        with this Agreement (a Process
        Agent).
        The
        Process Agent shall be XL Services UK Limited, XL House, 70 Gracechurch Street,
        London EC3V 0XL (Attn: Company Secretary) and any writ, judgment or other
        notice
        of legal process shall be sufficiently served on the relevant Obligor if
        delivered to the Process Agent marked for the attention of the Finance Director
        at its address for the time being. Each Obligor undertakes not to revoke
        the
        authority of the Process Agent without promptly appointing a successor and
        notifying the Agent thereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Waiver
        of Immunities

       

      29.4 To
        the
        extent that any Obligor 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 the Finance
        Documents.

       

      30. Treatment
        of Certain Information; Confidentiality

       

      Treatment
        of Certain Information

       

      30.1 Each
        of
        the Obligors acknowledges that from time to time financial advisory, investment
        banking and other services may be offered or provided to any Obligor 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 Obligors hereby authorises each Lender to share any information delivered
        to such Lender by such Obligor 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 (a) any such
        information shall be used only for the purpose of advising the Obligor or
        preparing presentation materials for the benefit of the Obligor and (b) any
        such
        subsidiary or affiliate receiving such information shall be bound by Clause
        30.2
        (Confidentiality)
        as if
        it were a Lender hereunder. Such authorisation shall survive the expiration
        or
        termination of the Letters of Credit and the Commitments or the termination
        of
        this Agreement or any provision hereof.

       

      Confidentiality

       

      30.2 Each
        of
        the Finance Parties agrees to maintain the confidentiality of the Information
        (as defined below), except that Information may be disclosed:

       

      
        	
                (a)

              	
                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);

              

      

       

      
        	
                (b)

              	
                to
                  the extent requested by any regulatory authority having jurisdiction
                  over
                  the Agent or any Lender;

              

      

       

      
        	
                (c)

              	
                to
                  the extent required by applicable Laws or regulations or by any
                  subpoena
                  or similar legal process;

              

      

       

      
        	
                (d)

              	
                to
                  any other Party;

              

      

       

      
        	
                (e)

              	
                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;

              

      

       

      
        	
                (f)

              	
                subject
                  to an agreement in writing containing provisions substantially
                  the same as
                  those of this paragraph and for the benefit of the Obligor, to
                  (i) any assignee of or Participant in, or any prospective assignee
                  of
                  or Participant in, any of its rights or obligations under this
                  Agreement
                  or (ii) any actual or prospective counterparty (or its advisors) to
                  any swap or derivative transaction relating to any Obligor and
                  its
                  obligations;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                (g)

              	
                with
                  the consent of the Obligor; or 

              

      

       

      
        	
                (h)

              	
                to
                  the extent such Information (i) becomes publicly available other than
                  as a result of a breach of this Clause 30.2 or (ii) becomes available
                  to the Agent or any Lender on a non-confidential basis from a source
                  other
                  than an Obligor. 

              

      

       

      For
        the
        purposes of this Clause, Information
        means
        all information received from an Obligor relating to an Obligor or its business,
        other than any such information that is available to the Finance Parties
        on a
        non-confidential basis prior to disclosure by such Obligor; PROVIDED
        that, in
        the case of information received from an Obligor 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 Clause 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 Finance
        Parties agree that they will not trade the securities of any of the Obligors
        based upon non-public Information that is received by them.

      

      30.3 Notwithstanding
        anything in this Agreement to the contrary, the Agent, the Lenders and the
        Account Party (and each of their respective employees, representatives or
        other
        agents) may disclose to any and all persons, without limitation of any kind,
        the
        U.S. tax treatment and U.S. tax structure of the transactions contemplated
        by
        this Agreement and all materials of any kind (including opinions or other
        tax
        analyses) that are provided to such person relating to such tax treatment
        or tax
        structure, other than any information for which nondisclosure is reasonably
        necessary in order to comply with applicable securities laws, and except
        that,
        with respect to any document or similar item that in either case contains
        information concerning the U.S. tax treatment or U.S. tax structure of such
        transactions as well as other information, this paragraph shall only apply
        to
        such portions of the document or similar item that relate to such tax treatment
        or tax structure

       

      31. Third
        Party Rights

       

      A
        person
        who is not a Party shall have no rights under the Contracts (Rights of Third
        Parties) Act 1999 to enforce any of its terms.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      In
        witness whereof,
        XL
        CAPITAL LTD
        has
        caused this Agreement to be duly executed by an authorised officer on the
        day
        and year first above written.

       

      Account
        Party

       

      SIGNED

      for
        and
        on behalf of XL
        CAPITAL LTD

       

      By:                          
        /s/
        FIONA
        LUCK

       

      

       

      Guarantors

       

      SIGNED

      for
        and
        on behalf of XL
        CAPITAL LTD

       

      By:                         
        /s/
        FIONA
        LUCK

       

       

       

      SIGNED
        for and
        on behalf of XL
        AMERICA, INC.

       

      By:                        
        /s/
        GABRIEL
        C. CARINO

       

      Title:                      Senior
        Vice-President

       

      SIGNED
        for and
        on behalf of XL
        INSURANCE (BERMUDA) LTD

       

      By:                       
        /s/
        CHRISTOPHER
        A. COELHO

       

      Title:                    
        Senior
        Vice-President and Chief Financial Officer

       

       

      SIGNED
        for
        and
        on behalf of XL
        RE LTD

       

      By:                      
        /s/
        GREGORY
        S. HENDRICK

       

      Title:                   
        President
        and Chief Underwriting Officer

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Agent

       

      SIGNED
        for
        and
        on behalf of CITIBANK
        INTERNATIONAL PLC

       

      By:                        
        /s/
        PAUL
        GIBBS

       

      Address:             
        Citigroup
        Centre

                
           33 Canada Square

                  
         Canary Wharf

                 
          London E14 5LB

       

      Fax:                     
         +44
        20
        7500 4482/4484

      Tel:                      
        +44
        20
        7500 4712

      Attention:           
        Loans
        Agency

       

       

      Arrangers

       

      SIGNED
        for
        and
        on behalf of BARCLAYS
        CAPITAL

       

      By:                      
        /s/ KEITH
        HATTON

       

      Address:            5
        The
        North Colonnade

                 
        Canary Wharf

                 
        London E14 4BB

       

      Fax:                    
        +44
        20
        7773 3820

      Tel:                    
        +44
        20
        7773 1572

      Attention:        
        Keith
        Hatton

       

      

       

      SIGNED
        for
        and
        on behalf of CITIGROUP
        GLOBAL MARKETS LIMITED

       

      By:                     
        /s/
        PAUL
        GIBBS

       

      Address:          
        Citigroup
        Centre

                
        33 Canada Square

                
        Canary Wharf

                
        London E14 5LB

       

      Fax:                   
        +44
        20
        7986 8275

      Tel:                   
        +44
        20
        7986 7569

      Attention:        
        Pareejat
        Singhal 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Security
        Trustee

       

      SIGNED
        for
        and
        on behalf of CITIBANK
        INTERNATIONAL PLC

       

      By:                    
        /s/
        PAUL
        GIBBS

       

      Address:         
        Citigroup
        Centre

               
        33 Canada Square

               
        Canary Wharf

               
        London E14 5LB

       

      Fax:                  
        +44
        20
        7500 4482/4484

      Tel:                  
        +44
        20
        7500 4712

      Attention:       
        Loans
        Agency

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Lenders

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      ABN
        AMRO BANK N.V.

       

      

       

      By:                  
        /s/
        MARTYN
        TAPLIN                   
/s/
        MARTIN BYRNE

       

      Address:        250
        Bishopsgate

                             
        London EC2M 4AA

       

      Fax:                
        +44
        (0)
        207 678 8604

      Attention:      Martin
        Byrne

       

      

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      BARCLAYS
        BANK PLC

       

       

      By:                  
        /s/
        KEITH
        HATTON

       

      Address:        1 Churchill
        Place

                              
        London

                              
        E14 5HP 

       

      Fax:                
        +44
        (0)
        207 6992407

      Attention:     
        Paul
        Johnson

       

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      SIGNED
        for
        and
        on behalf of

       

      BAYERISCHE
        HYPO-UND VEREINSBANK AG

       

      

       

      By:                   
        /s/
        STEVE
        LUCKER

       

      By:                  
        /s/
        MICHAEL
        DAVIS

       

      Address:       
         150
        East
        42nd Street, 30th
        Floor

                              
        New York, NY 10017

       

      Fax:                  +1
        (212)
        672-5517

       

      Attention:       Sylvie
        DeMetrio, Insurance Structuring Group

       

      Copy:              
        Credit
        Group

                               
        150 East 42nd
        Street,
        30th
        Floor

                               
        New York, NY 10017

       

      Fax:                   +1
        (212)
        672-5898

       

      Attention:         Michael
        Davis

       

       

      

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      CALYON

       

      

       

      By:                  
        /s/
        SEBASTIAN
        ROCCO                  
/s/
        CHARLES
        KORNBERGER

       

      Address:       
        Calyon
        Building

                             
        1301 Avenue of the Americas

                             
        New
        York, NY 10019

      

       

      Fax:                
        +1
        (212)
        261 3759

       

      Attention:      Charles
        Kornberger

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      SIGNED
        for
        and
        on behalf of

       

      CITIBANK,
        N.A.

       

      

       

      By:                   
        /s/
        PAUL
        GIBBS

       

      Address:         Citigroup
        Centre

                              
        33 Canada Square

                              
        Canary Wharf

                              
        London E14 5LB

       

      Fax:                 
        +44
        (0)
        207 500 5806

       

      Attention:       Loans
        Processing Unit

       

      

       

      

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      COMMERZBANK
        AKTIENGESELLSCHAFT, 

      NEW
        YORK AND GRAND CAYMAN BRANCHES

       

       

      By:                  
        /s/
        JOSEPH
        J. HAYES

       

      By:                 
        /s/
        ARNDT
        E. BRUNS

       

      Address:      
        Two
        World
        Financial Center

                            
        New York, New York 10281-1050

       

      Fax:               
        +1
        (212)
        266-7629

       

      Attention:     
        Arndt
        Bruns

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      SIGNED
        for
        and
        on behalf of

       

      ING
        BANK N.V., LONDON BRANCH

       

      

       

      By:                  
        /s/
        M.
        SHARMAN                 
/s/
        N.
        MARCHANT

       

      Address:       
        60
        London
        Wall

                             
        London, EC2M 5TQ

       

      Fax:                 +44
        (0)207 767 7507

       

      Attention:      Nicola
        Haffner

       

      Copy:             
        Paul
        Meade

       

      Fax:                  +44
        (0)207 767 7507

       

      

       

      

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      LANDESBANK
        HESSEN-THURINGEN GIROZENTRALE

       

       

      By:                  
        /s/
        PERHAM
        HARDING                    
/s/
        JAMES
        LOWE

       

      Address:        
        3rd
        Floor,
        95 Queen Victoria Street

                              
        London, EC4V 4HN

       

       

      Fax:                 
        +44
        (0)207 334 4534

       

      Attention:       
        John
        Blewett

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      LLOYDS
        TSB BANK PLC

       

       

      By:                   
        /s/
        JAMES
        BOULDEN

       

      Address:         
        25
        Gresham Street

                               
        London EC2V 7HN

       

      Fax:                   +44
        (0)
        207 661 4860

       

      Attention:       
        James
        Boulden

       

      

       

      
 

       

      SIGNED
        for
        and
        on behalf of

       

      NATIONAL
        AUSTRALIA BANK LIMITED

      A.B.N.
        12 004 044 937 

       

       

      By:                  
        /s/
        MARCUS
        KORFF

       

      Address:       
        88
        Wood
        Street

                             
        London EC2V 7QQ

       

      Fax:                 +44
        (0)
        207 588 8356

       

      Attention:      Lending
        Admin NHH

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      THE
        BANK OF TOKYO MITSUBISHI UFJ, LTD., NEW YORK BRANCH

       

       

       

      By:                  
        /s/
        CHIMIE
        T. PEMBA

       

      Address:        1251
        Avenue of the Americas

                             
        New York, NY 10020-1104

       

      Fax:                
        +1
        (212)
        521-2304 / +44 (212) 521-2305

       

      Attention:     
        Mr.
        Rolando Uy, AVP, Loan Operations Dept.

       

      Copy:             
        Chimie
        T.
        Pemba

       

      Fax:                
        +1
        (212)
        782-6440

       

      

       

      

       

      

       

      SIGNED
        for
        and
        on behalf of

       

      THE
        ROYAL BANK OF SCOTLAND PLC

       

      

      By:                   
        /s/
        ALAN
        HAMES 

       

      Address:         135
        Bishopsgate

                               
        London, EC2M 3UR

       

      Fax:                  
        +44
        (0)207 085 2269

       

      Attention:       
        Alan
        Hames

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