Document:

ex10-1.htm

Exhibit 10.1

 

EXECUTION VERSION

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

This FIRST AMENDMENT TO MULTICURRENCY REVOLVING CREDIT AND TERM LOAN AGREEMENT (this “First Amendment”) is made and entered into as of the 30th day of June, 2010, by and among LOJACK CORPORATION (“LoJack”), the Subsidiaries listed on Schedule 1 to the Credit Agreement referred to below (collectively with LoJack, and together with the other Persons that from time to time become Borrowers pursuant to the provisions of the Credit Agreement, the “Borrowers”), the Guarantors listed on Schedule 1 (collectively with the other Persons that from time to time become Guarantors pursuant to the provisions of the Credit Agreement, the “Guarantors”), the Lenders listed on Schedule 2 to such Credit Agreement (collectively, the “Lenders”), RBS CITIZENS, N.A., as Administrative Agent for itself and each of the other Lenders from time to time party to the Credit Agreement (the “Agent”) and Lead Arranger, and TD BANK, N.A., as Issuing Bank. Capitalized terms used herein without definition shall have the respective meaning assigned to such terms in the Credit Agreement.

 

WHEREAS, the Borrowers, Guarantor, Lenders and Agent are party to that certain Multicurrency Revolving Credit Agreement, dated as of December 29, 2009 (as the same may be amended and in effect from time to time, the “Credit Agreement”), pursuant to which the Lenders have extended credit to Borrowers on the terms set forth therein;

 

WHEREAS, the Borrowers and Guarantor have requested that the Credit Agreement be amended to allow the Borrower to add back certain one-time severance costs otherwise deducted in calculating the Consolidated Net Income for the purposes of determining Consolidated EBITDA, on the condition that such addition will only be effective for the for the purposes of determining the Debt Service Coverage Ratio covenant for the quarters ending June 30, 2010 and September 30, 2010; and

 

WHEREAS, the Agent and the Required Lenders are willing to make such amendments to the Credit Agreement on the terms set forth herein;

 

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

 

I. AMENDMENTS TO CREDIT AGREEMENT:

 

Effective as of the First Amendment Date (as defined below), the Credit Agreement is hereby amended as follows:

 

Amended Definition.  Section 1.1 of the Credit Agreement is hereby amended as follows:

 

(a) The definition of “Consolidated EBITDA” is hereby deleted, and the following is inserted in lieu thereof:

 

  

  

  

 

“Consolidated EBITDA.  Means, for any period, for the Borrowers and their Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period

 

plus:  (a) the following to the extent deducted in calculating such Consolidated Net Income:

 

(i) consolidated interest charges for such period,

 

(ii) the provision for federal, state, provincial, local and foreign income taxes payable by the Borrowers and their Subsidiaries for such period,

 

(iii) the amount of depreciation and amortization expense deducted in determining such Consolidated Net Income,

 

(iv) non-cash charges for stock based compensation,

 

(v) non-cash extraordinary and unusual or non-recurring writedowns or writeoffs, which shall include any non-cash writedowns of goodwill and intangible assets,

 

minus (b) any extraordinary, unusual, non-recurring or non-operating gains;

 

all calculated for the Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis.

 

For the purposes of determining Consolidated EBITDA for the relevant period, the following one-time legal expenses and/or severance costs may be added to the Consolidated Net Income for such period to the extent otherwise deducted in calculating Consolidated Net Income: (i) $22,026,000 of legal expenses and severance costs for the quarter ending September 30, 2009; and (ii) in connection with calculating the Debt Service Coverage Ratio on June 30, 2010 and September 30, 2010, an amount not to exceed $1,944,000 of severance costs for the quarter ending June 30, 2010.”

 

II. CONDITIONS TO EFFECTIVENESS:

 

This First Amendment shall become effective when each of the following conditions is met thereto (the “First Amendment Date”):

 

(1) Receipt by the Administrative Agent of this First Amendment, duly and properly authorized, executed and delivered by each of the respective parties; and

 

(2) Borrowers will have paid an administrative fee equal to $15,000 to the Administrative Agent for the account of the Lenders, which fee shall be nonrefundable for any reason whatsoever and shall be in addition to any other fees, costs and expenses payable pursuant to the Credit Agreement in connection with this First Amendment.

 

  

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III. REPRESENTATIONS AND WARRANTIES:

 

Each of the Borrowers and the Guarantor represent and warrant to the Administrative Agent and the Lenders as follows:

 

(1) The execution, delivery and performance of this First Amendment and the transactions contemplated hereby (i) are within the corporate authority of each Borrower and the Guarantor, (ii) have been duly authorized by all necessary corporate proceedings of each Borrower and the Guarantor, (iii) do not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any Borrower or the Guarantor is subject or any judgment, order, writ, injunction, license or permit applicable to any Borrower or the Guarantor, and (iv) do not conflict with any provision of the governing documents of any Borrower or the Guarantor.

 

(2) The execution, delivery and performance of this First Amendment, and the Credit Agreement as amended hereby, will result in valid and legally binding obligations of each Borrower and the Guarantor enforceable against each of them in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief or other equitable remedy is subject to the discretion of the court before which any proceeding therefor may be brought.

 

(3) The execution, delivery and performance by Borrowers and the Guarantor of this First Amendment does not require any approval or consent of, or filing with, any governmental agency or authority other than those already obtained, if any.

 

(4) The representations and warranties contained in Section 7 of the Credit Agreement are true and correct in all material respects (if not qualified as to materiality or Material Adverse Effect) or in any respect (if so qualified) as of the First Amendment Date as though made on and as of the First Amendment Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date.

 

(5) After giving effect to this First Amendment, no Default or Event of Default under the Credit Agreement has occurred and is continuing.

 

IV. MISCELLANEOUS:

 

(1) Ratification, Etc.  Except as expressly amended hereby, the Credit Agreement, the other Loan Documents and all documents, instruments and agreements related thereto are hereby ratified and confirmed in all respects and shall continue in full force and effect. This First Amendment and the Credit Agreement shall hereafter be read and construed together as a single document, and all references in the Credit Agreement, any other Loan Document or any agreement or instrument related to the Credit Agreement shall hereafter refer to the Credit Agreement as amended by this First Amendment.

 

  

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(2) Guarantor Consent.  The undersigned Guarantor has guaranteed all of the Obligations under (and as defined in) the Credit Agreement. By executing this First Amendment, the Guarantor hereby absolutely and unconditionally reaffirms to the Lenders that the Guarantor’s Guaranty remains in full force and effect and covers all Obligations under the Credit Agreement. In addition, the Guarantor hereby acknowledges and agrees to the terms and conditions of this First Amendment (including, without limitation, the making of the representations and warranties and the performance of the covenants applicable herein).

 

(3) Governing Law.  THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

 

(4) Counterparts.  This First Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which counterparts taken together shall be deemed to constitute one and the same instrument.

 

  

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IN WITNESS WHEREOF, each of the undersigned has duly executed this First Amendment to Credit Agreement as of the date first set forth above.

 

	  	
BORROWERS:

 

 

LOJACK CORPORATION

 

 

By: /s/ Timothy P. O’Connor

Name: Timothy P. O’Connor

Title:  EVP & CFO

 

  

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LOJACK GLOBAL LLC

 

 

By: /s/ Timothy P. O’Connor

Name: Timothy P. O’Connor

Title:  Vice President

  

  

  

	  	
LOJACK OPERATING COMPANY, L.P.

 

By:  LoJack Corporation, Its General Partner

 

By: /s/ Timothy P. O’Connor

Name: Timothy P. O’Connor

Title:  EVP & CFO

  

  

  

	  	
LOJACK SAFETYNET, INC.

 

 

By: /s/ Timothy P. O’Connor

Name: Timothy P. O’Connor

Title:  Treasurer

  

  

  

	  	
BOOMERANG TRACKING, INC.

 

 

By: /s/ Timothy P. O’Connor

Name: Timothy P. O’Connor

Title:  Vice President & Treasurer

  

  

  

	  	
GUARANTOR:

LSC LOCATOR SYSTEMS INTERNATIONAL CORP.

 

 

By: /s/ Timothy P. O’Connor

Name: Timothy P. O’Connor

Title:  Treasurer

 

  

  

  

	  	
LENDERS

RBS CITIZENS, N.A.

as Lender and Administrative Agent

 

 

By:  /s/ David J. Bugbee

Name: David J. Bugbee

Title:  Senior Vice President

 

 

 

 

 

 

 

 

 

 

  

  

  

	  	
TD BANK, N.A.

as Lender and Issuing Bank

 

 

By:  /s/ Amy LeBlanc Hackett

Name: Amy LeBlanc Hackett

Title:  Senior Vice PresidentExhibit 4.1

          THIS
FIRST SUPPLEMENT TO THE PURCHASE CONTRACT AGREEMENT, dated as of June 30, 2010
(this “Supplemental Agreement”), among XL Company Switzerland GmbH, a
limited liability company incorporated under the laws of Switzerland and wholly
owned by XL-Cayman (as defined below) (“XL-Switzerland”), XL Group plc,
a public limited company incorporated under the laws of Ireland (“Parent”),
XL Capital Ltd, a Cayman Islands exempted limited company (“XL-Cayman”),
the entire issued ordinary share capital of which is owned by Parent, and The
Bank of New York Mellon, a New York banking corporation, acting as purchase
contract agent and attorney-in-fact for the Holders of Units from time to time
(the “Agent”) pursuant to the Purchase Contract Agreement (as defined
below). 

          WHEREAS,
XL-Cayman and the Agent executed and delivered a Purchase Contract Agreement,
dated as of August 5, 2008 (the “Purchase Contract Agreement”), to
provide for the execution and delivery of the Purchase Contracts and Certificates
related to the Normal Units and the Stripped Units (collectively, the “Units”);

          WHEREAS,
XL-Cayman will undertake a scheme of arrangement under Cayman Islands law (the
“Scheme”), pursuant to which at the time the Scheme becomes effective
(the “Effective Time”), all previously outstanding Ordinary Shares (as
defined in the Purchase Contract Agreement) of XL-Cayman (such Ordinary Shares,
the “Cayman Ordinary Shares”) will be transferred to Parent and Parent
will issue its Ordinary Shares, nominal value $0.01 per share, (the “Parent
Ordinary Shares”) on a one-for-one basis to the holders of whole Cayman
Ordinary Shares and will pay cash to holders of fractional Cayman Ordinary
Shares (such exchange, the “Parent Exchange Event”); 

          WHEREAS,
concurrently with the execution and delivery of this Supplemental Agreement and
in connection with the Scheme, Parent is listing the Parent Ordinary Shares on
the New York Stock Exchange; 

          WHEREAS,
the Parent Exchange Event results in the occurrence of a Reorganization Event; 

          WHEREAS,
Section 5.6(b)(i) of the Purchase Contract Agreement provides that in the event
of a Reorganization Event, the Person formed thereby shall execute and deliver
to the Agent an agreement supplemental to the Purchase Contract Agreement
providing that the Holder of each Outstanding Unit shall have the rights
provided by Section 5.6 of the Purchase Contract Agreement and for adjustments
which, for events subsequent to the date hereof, are as nearly equivalent as
may be practicable to the adjustments provided for in Section 5.6 of the
Purchase Contract Agreement; 

          WHEREAS,
Section 8.1(d) of the Purchase Contract Agreement authorizes XL-Cayman and the
Agent to enter into a supplemental agreement without the consent of any Holders
to make provision with respect to the rights of Holders pursuant to the
requirements of Section 5.6(b) of the Purchase Contract Agreement; 

          WHEREAS,
concurrently with the execution and delivery of this Supplemental Agreement,
XL-Cayman is transferring substantially all of its assets to XL-Switzerland
(the “Succession Event”); 

          WHEREAS,
as a condition to the Succession Event, Section 9.1 of the Purchase Contract
Agreement requires, among other things, that XL-Switzerland execute and deliver
one or more supplemental agreements to expressly assume all the obligations of
XL-Cayman under the Purchase Contracts, the Purchase Contract Agreement and the
Pledge Agreement; 

          WHEREAS,
XL-Switzerland shall have expressly assumed such obligations pursuant to (1)
this Supplemental Agreement; and (2) the First Amendment to the Pledge
Agreement, dated as of the date hereof among XL-Cayman, XL-Switzerland, the
Agent and The Bank of New York Mellon, as collateral agent, custodial agent and
securities intermediary; 

          WHEREAS,
Section 8.1(a) of the Purchase Contract Agreement authorizes XL-Cayman and the
Agent to enter into a supplemental agreement without the consent of any Holders
to evidence the succession of another Person to XL-Cayman, and the assumption
by any such successor of the covenants of XL-Cayman in the Purchase Contract
Agreement and in the Certificates; 

          WHEREAS,
each of Parent and XL-Cayman (each, a “Guarantor”) desires to Guarantee
the Obligations (each as defined below); 

          WHEREAS,
Section 8.1(b) of the Purchase Contract Agreement authorizes XL-Cayman (or its
successor hereby thereto) and the Agent to enter into a supplemental agreement
without the consent of any Holders to add to the covenants of XL-Cayman for the
benefit of the Holders, or to surrender any right or power conferred upon
XL-Cayman in the Purchase Contract Agreement; provided such covenants or
such surrender shall not adversely affect the validity, perfection or priority
of the security interests granted or created under the Pledge Agreement; 

          WHEREAS,
Section 8.1(e) of the Purchase Contract Agreement authorizes XL-Cayman (or its
successor hereby with respect thereto) to enter into a supplemental agreement
without the consent of any Holders to cure any ambiguity, to correct or
supplement any provisions under the Purchase Contract Agreement, or to make any
other provisions with respect to such matters or questions arising under the
Purchase Contract Agreement; provided such action shall not shall not
adversely affect the interest of the Holders; 

          WHEREAS,
the changes to the Purchase Contract Agreement set forth in this Supplemental
Agreement do not adversely affect (i) the interest of the Holders or (ii) the
validity, perfection or priority of the security interests granted or created
under the Pledge Agreement; and 

          WHEREAS,
XL-Cayman, XL-Switzerland and Parent have requested that the Agent execute and
deliver this Supplemental Agreement; 

          NOW,
THEREFORE, in consideration of their mutual promises, XL-Switzerland, Parent
and XL-Cayman covenant and agree with the Agent as follows: 

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ARTICLE I

DEFINITIONS

          Section
1.1. Definition of Terms. Unless the context otherwise requires: 

          (a)
a term defined in the Purchase Contract Agreement has the same meaning when
used in this Supplemental Agreement; 

          (b)
a term defined anywhere in this Supplemental Agreement has the same meaning
throughout; 

          (c)
the terms defined in this Supplemental Agreement include the plural as well as
the singular, and nouns and pronouns of the masculine gender include the
feminine and neuter genders; 

          (d)
all accounting terms not otherwise defined in this Supplement Agreement have
the meaning assigned to them in accordance with generally accepted accounting
principles in the United States; 

          (e)
the words “herein,” “hereof” and “hereunder” and other words of similar import
refer to this Supplemental Agreement as a whole and not to any particular
Article, Section or other subdivision; and 

          (f)
the Article and Section headings herein are for convenience only and shall not
affect the construction hereof. 

ARTICLE II

CONCERNING THE PARENT EXCHANGE EVENT

          Section
2.1. Parent as Issuer of Common Stock upon Settlement. 

          (a)
The Parent hereby agrees with XL-Cayman (and XL-Switzerland as its successor
hereby with respect to the Purchase Contract Agreement) that, from and after
the Effective Time of the Parent Exchange Event, upon payment in full of the
Purchase Price for such Parent Ordinary Shares (subject to Sections 5.6(c) and
5.4(b)(iii) of the Purchase Contract Agreement), the Parent shall issue and
deliver the number of Parent Ordinary Shares which is sufficient to settle the
Purchase Contracts, as provided in the Purchase Contracts and Purchase Contract
Agreement as amended and supplemented hereby. 

          (b)
XL-Cayman (and XL-Switzerland as its successor hereby with respect to the
Purchase Contract Agreement) hereby agrees that from and after the Effective
Time of the Parent Exchange Event, upon payment in full of the Purchase Price
for such Parent Ordinary Shares (subject to Sections 5.6(c) and 5.4(b)(iii) of
the Purchase Contract Agreement), it shall cause Parent to issue and deliver
the number of Parent Ordinary 

3

Shares which
is sufficient to settle the Purchase Contracts, as provided in the Purchase
Contracts and Purchase Contract Agreement as amended and supplemented hereby. 

          (c)
XL-Switzerland (as successor hereby with respect to the Purchase Contract
Agreement) hereby agrees that, from and after the Effective Time of the Parent
Exchange Event, it will immediately forward to XL-Cayman all funds or other consideration
received by it under the Purchase Contract Agreement for payment of the
Purchase Price upon settlement of each Purchase Contract for the Parent
Ordinary Shares so issued. 

          (d)
The Parent hereby agrees that it shall continue to own the entire issued
ordinary share capital of XL-Cayman, and shall cause XL-Cayman to continue to
own the entire issued ordinary share capital of XL-Switzerland, at least until
such time as Parent issues and delivers the number of Parent Ordinary Shares
which is sufficient to settle the Purchase Contracts, as provided in the
Purchase Contracts and Purchase Contract Agreement as amended and supplemented
hereby. 

          (e)
Subject to the other provisions of this Supplemental Agreement, from and after
the Effective Time of the Parent Exchange Event, references to the “Ordinary
Shares” shall relate to Parent Ordinary Shares by operation of Section
5.6(b)(i) of the Purchase Contract Agreement, except to the extent that such
reference is a reference to the Cayman Ordinary Shares as of a time preceding
the Parent Exchange Event. 

          (f)
Subject to the other provisions of this Supplemental Agreement, from and after
the Effective Time of the Parent Exchange Event: 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Any
 reference to the “Company” in the definition of “Fundamental Change” and
 Section 5.6 (except Section 5.6(b)(ii)) of the Purchase Contract Agreement
 shall be deemed to be a reference to Parent, in each case solely to the
 extent necessary to give effect to Section 5.6(b) of the Purchase Contract
 Agreement and this Supplemental Agreement; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 The text of
 Section 10.3 of the Purchase Contract Agreement shall be replaced in its
 entirety by the following: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 “Parent
 shall, and XL-Cayman (and XL-Switzerland as its successor hereto) shall cause
 Parent to, at all times prior to the Stock Purchase Date reserve and keep
 available, free from preemptive rights, out of its authorized but unissued
 Ordinary Shares the maximum number of Ordinary Shares issuable against tender
 of payment in respect of all Purchase Contracts constituting a part of the
 Units evidenced by Outstanding Certificates”;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii) 

 	
 The text of
 Section 10.4 of the Purchase Contract Agreement shall be replaced in its
 entirety by the following:

 

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 “Each of
 Parent and XL-Cayman (and XL-Switzerland as its successor hereto) covenants
 that all Ordinary Shares which may be issued against tender of payment in
 respect of any Purchase Contract constituting a part of the Outstanding Units
 will, upon issuance, be duly authorized, validly issued, fully paid and
 nonassessable and shall be free from preemptive rights and free of any lien
 or adverse claim. Parent will endeavor to, and XL-Cayman (and XL-Switzerland
 as its successor hereto) shall cause Parent to endeavor to, promptly list or
 cause to have quoted such Ordinary Shares on each national exchange or in the
 over-the-counter market or other such market on which the Ordinary Shares are
 then listed or quoted”; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 Any
 reference in the Purchase Contract Agreement or the Purchase Contracts to an
 “issuance” of “Ordinary Shares” by the “Company” shall be deemed to be a
 reference to Parent issuing, and XL-Switzerland procuring the issuance of,
 Parent Ordinary Shares by Parent. Any reference to the “Company” in the
 definition of “Registration Statement” shall be deemed to be a reference to
 Parent, in each case solely to the extent related to the issuance of Parent
 Ordinary Shares pursuant to this Supplemental Agreement. 

 

ARTICLE III

CONCERNING SETTLEMENT

                    Section
3.1. Purchase Contract Settlement. The parties hereby understand and
agree that, pursuant to Section 5.6(b)(i) of the Purchase Contract Agreement,
the Parent Exchange Event constitutes a Reorganization Event, as a result of
which each Cayman Ordinary Share covered by each Purchase Contract forming part
of a Unit prior to such Parent Exchange Event shall, after such Parent Exchange
Event, be a Parent Ordinary Share for purposes of the Purchase Contract. 

                    Section
3.2. Rights of Holders. Each Holder of an Outstanding Unit shall have
the rights provided by Section 5.6(b)(i) of the Purchase Contract Agreement. 

                    Section
3.3. Further Adjustments. In accordance with the last paragraph of
Section 5.6(b)(i) of the Purchase Contract Agreement, the Settlement Rate shall
be adjusted for events subsequent to the Parent Exchange Event, in a manner
that is as nearly equivalent as may be practicable to the adjustments provided
for in Section 5.6 of the Purchase Contract Agreement, as if Parent were the
original “Company” (to the extent provided in Section 2.1(f) herein) and the
Parent Ordinary Shares were the original “Ordinary Shares” under the provisions
of Section 5.6 of the Purchase Contract Agreement. 

5

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

                    Section
4.1. Each of XL-Cayman, XL-Switzerland and Parent represents and warrants that
it has all requisite power and authority to execute and deliver the
Supplemental Agreement and to perform its obligations hereunder, and under the
Purchase Contract Agreement, the Purchase Contracts and the Pledge Agreement to
which it is a party, in each case as amended and supplemented, and that the
execution, delivery and performance by XL-Cayman, XL-Switzerland and Parent of
this Supplemental Agreement and the Purchase Contract Agreement have been duly
authorized by all necessary corporate or other organizational action. 

                    Section
4.2. Each of XL-Switzerland and XL-Cayman represents and warrants that the
Succession Event constitutes the transfer of substantially all the XL-Cayman’s
assets to the XL-Switzerland. 

                    Section
4.3. XL-Switzerland represents and warrants that it is a limited liability
company duly organized and validly existing under the laws of Switzerland. 

                    Section
4.4. Each of XL-Cayman and XL-Switzerland represents and warrants that neither
XL-Cayman nor XL-Switzerland shall, immediately after the Succession Event, be
in default of any covenant or condition under the Purchase Contracts, the
Purchase Contract Agreement or the Pledge Agreement. 

ARTICLE V

ASSUMPTION OF OBLIGATIONS BY XL-SWITZERLAND

                    Section
5.1. Assumption. Subject to the terms and conditions of this
Supplemental Agreement, including Articles II and III hereof, XL-Switzerland
hereby expressly assumes all the obligations of XL-Cayman under the Purchase
Contracts and the Purchase Contract Agreement. 

                    Section
5.2. Succession and Substitution. Upon the consummation of the
Succession Event: 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Section 9.2
 of the Purchase Contract Agreement shall have effect to the extent set forth
 therein, subject to such Section and Section 2.1(f) herein; provided
 that, for the avoidance of doubt, nothing in this Supplemental Agreement
 shall alter the Indenture or the rights and obligations of the parties hereto
 with respect to the Notes as provided therein; and provided further
 that XL-Cayman shall remain obligated under the Purchase Contract Agreement
 and the Purchase Contracts as provided in Article VII; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 From and
 after the Succession Event, any reference in the Purchase Contract Agreement
 to the “Company” shall be deemed to be references to XL-Switzerland, except
 (A) to the extent set forth in 

 

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 Section
 2.1(f) herein and (B) that any references to the “Company” in the definitions
 of “Accounting Redemption Event,” “Notes” or “Special Event Redemption” shall
 be deemed to be references to XL-Cayman. 

 

ARTICLE VI

NOTICES TO PARTIES

                    Section
6.1. Notices. Pursuant to Section 10.4 of the Purchase Contract
Agreement, any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by the
Purchase Contract Agreement, as amended and supplemented hereby: 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 To be filed
 with XL-Switzerland by the Purchase Contract Agent or by any Holder shall be
 sufficient for every purpose under the Purchase Contract Agreement, as
 amended and supplemented hereby, (unless otherwise therein expressly
 provided) if made, given, furnished or filed in writing and personally
 delivered, mailed, first-class postage prepaid, telecopied or delivered by
 overnight air courier guaranteeing at least second day delivery, addressed to
 and received by XL-Switzerland at XL Company Switzerland GmbH, XL House, One
 Bermudiana Road, Hamilton, HM 08, Bermuda (facsimile: 441-292-5280),
 Attention: Manager, or at any other address furnished in writing to the
 Purchase Contract Agent by XL-Switzerland, or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 To be filed
 with Parent by the Purchase Contract Agent or by any Holder shall be
 sufficient for every purpose under the Purchase Contract Agreement, as
 amended and supplemented hereby, (unless otherwise therein expressly
 provided) if made, given furnished or filed in writing and personally
 delivered, mailed, first-class postage prepaid, telecopied or delivered by
 overnight air courier guaranteeing at least second day delivery, addressed to
 and received by Parent at XL Group plc, No. 1 Hatch Street Upper, 4th
 Floor, Dublin 2, Ireland (facsimile: +353 (0) 1 405 2033), Attention:
 Secretary, or at any other address furnished in writing to the Purchase
 Contract Agent by Parent, with a copy to XL Group plc, XL House, One
 Bermudiana Road, Hamilton, HM 08, Bermuda (facsimile: 441-292-5280),
 Attention: General Counsel; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 Shall be
 sufficient as set forth in Section 10.4 of the Purchase Contract Agreement; provided
 that in each case, any such request, demand, authorization, direction, notice,
 consent, waiver or Act of Holders or other document made, given, furnished or
 filed by any of XL-Cayman, XL-Switzerland or Parent shall be deemed 

 

7

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 sufficient
 for every purpose under the Purchase Contract Agreement, as amended and
 supplemented hereby, (unless otherwise therein expressly provided) to the
 full extent that such request, demand, authorization, direction, notice,
 consent, waiver or Act of Holders or other document would have been deemed
 sufficient pursuant to such Section 10.4 if made, given, furnished or filed
 by the “Company”; provided further that any change in address
 as provided under Section 10.4 of the Purchase Contract Agreement shall also
 be furnished in writing to the Guarantors. 

 

ARTICLE VII

GUARANTEE

          Section
7.1. Unconditional Guarantee. 

          (a)
Each Guarantor hereby jointly and severally, fully and unconditionally
guarantees (each, together with the XL-Cayman Guarantees and the Parent
Guarantees, each as defined below, a “Guarantee”) to the Holders of the
Purchase Contracts (i) all payments on the Purchase Contracts when due and (ii)
the performance of XL-Switzerland’s obligation to deposit with the Agent one or
more certificates representing validly issued, fully paid and non-assessable
newly issued Parent Ordinary Shares (herein, the “deposit of shares”)
upon payment in full of the Purchase Price for such Parent Ordinary Shares
(together with the XL-Cayman Obligations and the Parent Obligations, each as
defined below, the “Obligations”), each in accordance with the
provisions of the Purchase Contracts and the Purchase Contract Agreement, each
as amended and supplemented hereby, as provided below. 

          (b)
In addition to the Guarantees described in Section 7.1(a) herein, XL-Cayman
also hereby fully and unconditionally guarantees (each, an “XL-Cayman
Guarantee”) to the Holders of the Purchase Contracts the performance of all
other obligations of XL-Switzerland under the Purchase Contract (the “XL-Cayman
Obligations”), each in accordance with the provisions of the Purchase
Contracts and the Purchase Contract Agreement, each as amended and supplemented
hereby, as provided below. 

          (c)
In addition to the Guarantees described in Section 7.1(a) herein, the Parent
also hereby fully and unconditionally guarantees (each, a “Parent Guarantee”)
the XL-Cayman Obligations described in Section 7.1(b) herein (the “Parent
Obligations”). 

          (d)
Each Guarantor hereby waives notice of acceptance of the applicable Guarantee
and of default of performance by XL-Switzerland, and hereby agrees that payment
or the performance of any Obligation, including, but not limited to, the
deposit of shares, as applicable, under the Guarantees shall be subject to no
condition other than the giving of a written request for payment or
performance, as applicable, in the manner provided in Section 1.5 of the
Purchase Contract Agreement, as amended and 

8

supplemented
by Section 6.1 of this Supplemental Agreement. Each Guarantee is a guarantee of
payment or performance, as applicable, and not of collection. 

          (e)
The obligations of the Guarantors under the Guarantees shall in no way be
impaired by: (i) any extension, amendment, modification or renewal of the
Purchase Contracts or the Purchase Contract Agreement or this Supplemental
Agreement; (ii) any waiver of any default, extension of time or failure to
enforce any of the provisions of the Purchase Contracts, the Purchase Contract
Agreement or this Supplemental Agreement; or (iii) any extension, moratorium or
other relief granted to XL-Switzerland, as applicable, pursuant to any
applicable law or statute. 

          (f)
The Guarantors shall jointly and severally be obligated to make payment or
perform, as applicable, under the Guarantees, for the benefit of the Holders of
the Purchase Contracts, in the same manner in which XL-Switzerland is obligated
to make payments on the Purchase Contracts or perform under the Purchase
Contract Agreement, as amended and supplemented hereby, as applicable. 

          (g)
Subject to clause (f) below, the Guarantors hereby agree that: 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the Purchase
 Contracts will be paid and performed under, as applicable, strictly in
 accordance with the terms of the Purchase Contracts and the Purchase Contract
 Agreement, each as amended and supplemented hereby, regardless of the value,
 genuineness, validity, regularity or enforceability of the Purchase Contracts
 and the Purchase Contract Agreement, and of any law, regulation or order now
 or hereafter in effect in any jurisdiction affecting any of such terms or the
 rights of the Agent with respect thereto, to the fullest extent permitted by
 law; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the joint
 and several liability of each Guarantor to the extent herein set forth shall
 be absolute and unconditional, not subject to any reduction, limitation,
 impairment, termination, defense, offset, counterclaim, or recoupment
 whatsoever (all of which are hereby expressly waived by each Guarantor),
 whether by reason of any claim of any character whatsoever, including,
 without limitation, any claim of waiver, release, surrender, alteration or
 compromise, or by reason of any liability at any time to such Guarantor or
 otherwise, whether based upon any obligations or any other agreement or
 otherwise, and howsoever arising, whether out of action or inaction or
 otherwise and whether resulting from default, willful misconduct, negligence
 or otherwise, and without limiting the foregoing, irrespective of: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)

 	
 any lack of
 validity or enforceability of any agreement or instrument relating to the
 Purchase Contracts;

 

9

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)

 	
 any change
 in the time, manner or place of payment or performance, as applicable, under,
 or in any other term in respect of, all or any of the Purchase Contracts, or
 any other amendment or waiver of or consent to any departure from any other
 agreement relating to the Purchase Contracts; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (C)

 	
 any increase
 in, addition to, exchange or release of, or nonperfection of any lien on or
 security interest in, any collateral, or any release or amendment or waiver
 of or consent to any departure from or failure to enforce any other
 guarantee, for all or any of the Purchase Contracts; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (D)

 	
 any other
 circumstance that might otherwise constitute a defense available to, or a
 discharge of, XL-Switzerland in respect of the Purchase Contracts; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (E)

 	
 the absence
 of any action on the part of the Agent to obtain payment or performance, as
 applicable, under the Purchase Contracts or the Purchase Contract Agreement
 from XL-Switzerland; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (F)

 	
 any
 insolvency, bankruptcy, reorganization or dissolution, or any similar
 proceeding of or in respect of XL-Switzerland, including, without limitation,
 rejection of the Purchase Contracts in such bankruptcy; or 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (G)

 	
 the absence
 of notice or any delay in any action to enforce any provision of the Purchase
 Contracts or the Purchase Contract Agreement or to exercise any right or
 remedy against a Guarantor or XL-Switzerland, whether under the Purchase
 Contract Agreement, the Purchase Contracts or any agreement or any
 indulgence, compromise or extension granted. 

 

          (h)
Notwithstanding anything to the contrary in the Guarantees, no Guarantor waives
any defense that would be available to XL-Switzerland based on a breach,
default or misrepresentation by the Agent, or failure of any condition to
XL-Switzerland’s obligations under the Purchase Contract Agreement or the
illegality of any provision of the Purchase Contract Agreement. 

          (i)
Each Guarantor further agrees that, to the extent that XL-Switzerland or such
Guarantor makes a payment or payments to, or a deposit or deposits of shares
with, the Agent, which payment or payments or deposit or deposits or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or repaid or returned to XL-Switzerland or the Guarantor or their
respective estate, trustee, receiver or any other party under any bankruptcy
laws, state or federal law, common law or 

10

equitable
cause, then to the extent of such payment, repayment, deposit or return, the
Guarantee and the advances or part thereof which have been paid, deposited,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, deposit, reduction or
satisfaction occurred. 

          Section
7.2. Execution and Delivery of Guarantee. 

          (a)
If an officer whose signature is on this Supplemental Agreement, including an
officer of a Guarantor, no longer holds that office, a Guarantee shall be valid
nevertheless. 

          (b)
The Guarantees contained in this Supplemental Agreement are entered into by the
Guarantors for the benefit of the Holders from time to time of the Purchase
Contracts. Such provisions shall not be deemed to create any right, or to be in
whole or in part for the benefit, of any Person other than the Agent, the
Guarantors, the Holders from time to time of the Purchase Contracts and their
permitted successors and assigns. 

          (c)
The delivery of the Guarantees to the Agent shall constitute due delivery of
the Guarantees on behalf of the Guarantors to all Holders of the Purchase
Contracts authenticated and delivered under the Purchase Contract Agreement,
whether or not notation of the Guarantees is made upon any such Purchase
Contract. 

                       Section
7.3. Waiver of Subrogation. The Guarantors shall be subrogated to all
rights (other than the right to receive Parent Ordinary Shares as described in
Section 2.1(a) herein) of the Holders of the Purchase Contracts and the Agent
against XL-Switzerland pursuant to the provisions of the Guarantees; provided,
however, that the Guarantors shall not be entitled to enforce, or to
receive any payments or require performance arising out of or based upon, such
right of subrogation until the Contract Adjustment Payments, Deferred Contract
Adjustment Payments, if any, and additional amounts, if any, payable in respect
of all of the Purchase Contracts issued under the Purchase Contract Agreement
shall have been paid in full and all performance required under all of the
Purchase Contracts issued under the Purchase Contract Agreement, shall have
been completed, as applicable. 

                       Section
7.4. No Suspension of Remedies. Nothing contained in this Article VII
shall limit the right of the Agent or the Holders of the Purchase Contracts to
take any action pursuant to Article VI of the Purchase Contract Agreement or to
pursue any other rights or remedies under the Purchase Contract Agreement, this
Supplemental Agreement or under applicable law. 

                       Section
7.5. Termination. The Guarantees shall remain in full force and effect
and shall be binding on the Guarantors, their successors and assigns until all
of the Obligations have been satisfied in full. 

11

ARTICLE VIII

MISCELLANEOUS

                       Section
8.1. Acceptance by Agent. The Agent accepts this Supplemental Agreement
and agrees to execute its duties and responsibilities as hereby amended and
supplemented upon the terms and conditions set forth in the Purchase Contract
Agreement, including without limitation the terms and provisions defining and
limiting the liabilities and responsibilities of the Agent, which terms and
provisions shall in like manner define and limit its liabilities and responsibilities
in the performance of its duties created by the Purchase Contract Agreement as
hereby amended and supplemented; and without limiting the generality of the
foregoing, XL-Switzerland affirms as its own the rights and responsibilities of
XL-Cayman with respect to the Agent under Section 7.7(c) of the Purchase
Contract Agreement. 

                       Section
8.2. Ratification of Purchase Contract Agreement. The Purchase Contract
Agreement, as amended and supplemented by this Supplemental Agreement, is in
all respects ratified and confirmed, and this Supplemental Agreement shall be
deemed part of the Purchase Contract Agreement in the manner and to the extent
herein and therein provided. 

                       Section
8.3. Effectiveness. This Supplemental Agreement shall become a legally
effective and binding instrument upon the execution and delivery hereof by all
parties hereto. 

                       Section
8.4. Purchase Contract Agreement. Except as amended and supplemented
hereby, all provisions in the Purchase Contract Agreement shall remain in full
force and effect. 

                       Section
8.5. Units Deemed Conformed. As of the Effective Time, the provisions of
each Unit then outstanding shall be deemed to be conformed, without the
necessity for any reissuance or exchange of such Unit or any other action on
the part of the Holders, Parent, XL-Cayman, XL-Switzerland or Agent, so as to
reflect this Supplemental Agreement. 

                       Section
8.6. Successors and Assigns. All covenants and agreements in this
Supplemental Agreement by XL-Cayman, XL-Switzerland and Parent shall bind their
successors and assigns, whether so expressed or not.

                       Section 8.7. Separability
Clause. If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction. 

                       Section
8.8. Benefits of Agreement. Nothing in this Supplemental Agreement or in
the Units, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and, to the extent provided hereby, the
Holders, any benefits or any legal or equitable right, remedy or claim under
this Supplemental Agreement. The Holders from time to time shall be
beneficiaries of this Supplemental Agreement and shall be bound by all of 

12

the terms and
conditions hereof and of the Units evidenced by their Certificates by their
acceptance of delivery of such Certificates. 

                       Section
8.9. Governing Law. THIS SUPPLEMENTAL AGREEMENT AND THE UNITS SHALL BE
GOVERNED BY, DEEMED TO BE A CONTRACT UNDER, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. XL-Cayman, XL-Switzerland, Parent, the Agent
and the Holders from time to time of the Units, acting through the Agent as
their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in the Borough of Manhattan in New York City for
the purposes of all legal proceedings arising out of or relating to this
Supplemental Agreement or the transactions contemplated hereby. XL-Cayman,
XL-Switzerland, Parent, the Agent and the Holders from time to time of the
Units, acting through the Agent as their attorney-in-fact, irrevocably waive,
to the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of the venue of any such proceeding brought
in such court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum. 

                       Section
8.10. Counterparts. This Supplemental Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this
Supplemental Agreement by signing any such counterpart. 

                       Section
8.11. Inspection of Agreement. A copy of this Supplemental Agreement
shall be available at all reasonable times during normal business hours at the
Corporate Trust Office for inspection by any Holder. 

                       Section
8.12. No Waiver. No failure on the part of XL-Cayman, XL-Switzerland,
Parent, the Agent, the Collateral Agent, the Securities Intermediary or any of
their respective agents to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by XL-Cayman,
XL-Switzerland, Parent, the Agent, the Collateral Agent, the Securities
Intermediary or any of their respective agents of any right, power or remedy
hereunder preclude any further exercise thereof or the exercise of any right,
power or remedy. The remedies herein are cumulative and are not exclusive of
any remedies provided by law. 

                       Section
8.13. Waiver of Jury Trial. EACH OF XL-CAYMAN, XL-SWITZERLAND, PARENT
AND THE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTION CONTEMPLATED
HEREBY. 

                       Section
8.14. Validity and Sufficiency. The Agent shall not be responsible in
any manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Agreement or for or in respect of the recitals contained herein,
all of which are made solely by XL-Cayman, XL-Switzerland and the Parent. 

13

          IN
WITNESS WHEREOF, this First Supplement to the Purchase Contract Agreement is
executed as of the date first set forth above. 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 XL CAPITAL
 LTD

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Simon
 Rich

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Name: Simon
 Rich

 	
  

 
	
  

 	
  

 	
 Title:
   Senior Vice President

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 XL COMPANY
 SWITZERLAND GMBH

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ John
 Hume

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Name: John
 Hume

 	
  

 
	
  

 	
  

 	
 Title:   Manager

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Gérald
 Kanis

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Name: Gérald
 Kanis

 	
  

 
	
  

 	
  

 	
 Title:
   Manager

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 GIVEN under
 the Common Seal of

 	
  

 
	
  

 	
  

 	
 XL GROUP PLC

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Simon
 Rich

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Name: Simon Rich

 	
  

 
	
  

 	
  

 	
 Title:
   Director

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Mervyn
 Skeet

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Name: Mervyn
 Skeet

 	
  

 
	
  

 	
  

 	
 Title:
   Director

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE BANK OF
 NEW YORK MELLON, as

 	
  

 
	
  

 	
  

 	
 Purchase
 Contract Agent

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Timothy
 W. Casey

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Name:
 Timothy W. Casey

 	
  

 
	
  

 	
  

 	
 Title:
   Senior Associate

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