Document:

jh03-2511_ex101.htm

Exhibit 10.1

 

EXECUTION VERSION

 

 

FIRST AMENDMENT TO THE CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO THE CREDIT AGREEMENT (this “Amendment”), dated as of March 25, 2011 is among DARLING INTERNATIONAL INC., a Delaware corporation (the “Borrower”), the Subsidiaries of the Borrower party hereto, each of the lending institutions which is a party hereto, and JPMORGAN CHASE BANK, N.A., as administrative agent (the “Administrative Agent”).

 

RECITALS:

 

Reference is made to that certain Credit Agreement dated as of December 17, 2010 (as amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”) among the Borrower, the Lenders party thereto from time to time, the Administrative Agent, Bank of Montreal, acting under its trade name BMO Capital Markets, as Syndication Agent and PNC Bank, N.A. and Goldman Sachs Bank USA, as Documentation Agents.  The Borrower, the Administrative Agent, the Required Lenders and each of the Revolving Lenders party hereto now desire to amend the Credit Agreement as herein set forth.

 

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows effective as of the date hereof unless otherwise indicated:

 

ARTICLE 1.

 

Definitions

 

Section 1.1.   Definitions. Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same meanings as in the Credit Agreement, as amended hereby.

 

ARTICLE 2.

 

Amendments

 

Section 2.1.   Amendments to the Credit Agreement.

 

(a)  The definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“"Applicable Rate" means, for any day and with respect to a Eurodollar Loan that is a Term Loan, 3.50%, and with respect to any ABR Loan that is a Term Loan, 2.50%; for any day and with respect to any Revolving Loan and with respect to any letter of credit fee or any commitment fee payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption "ABR Spread", "Eurodollar Spread", "Commitment Fee Rate" or "Letter of Credit Fee", as the case may be, based upon the Pricing Ratio as of the most recent determination date; provided that until delivery of the Borrower's consolidated financial statements for the fiscal quarter ended June 30, 2011 as required by Section 5.01(b), the "Applicable Rate" shall be the applicable rate per annum set forth below in Category 2:

 

 

  

  

  

 

 

	
Category

	
Pricing Ratio

	
ABR Spread

	
Eurodollar Spread

	
Commitment Fee Rate

	
Letter of Credit Fee

	
1

	
Greater than or equal to  3.25 to 1.00

	
2.50%

	
3.50%

	
0.500%

	
3.50%

	
2

	
Less than 3.25 to 1.00 but greater than or equal to 2.75 to 1.00

	
2.25%

	
3.25%

	
0.500%

	
3.25%

	
3

	
Less than 2.75 to 1.00 but greater than or equal to 2.25 to 1.00

	
2.00%

	
3.00%

	
0.45%

	
3.00%

	
4

	
Less than 2.25 to 1.00 but greater than or equal to 1.75 to 1.00

	
1.75%

	
2.75%

	
0.40%

	
2.75%

	
5

	
Less than 1.75 to 1.00 but greater than or equal to 1.25 to 1.00

	
1.25%

	
2.25%

	
0.40%

	
2.25%

	
6

	
Less than 1.25 to 1.00 but greater than or equal to 0.75 to 1.00

	
1.00%

	
2.00%

	
0.35%

	
2.00%

	
7

	
Less than 0.75 to 1.00

	
0.75%

	
1.75%

	
0.35%

	
1.75%

 

For purposes of the foregoing, (i) the Pricing Ratio shall be determined as of the end of each fiscal quarter of the Borrower's fiscal year based upon the Borrower's consolidated financial statements delivered pursuant to Section 5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a change in the Pricing Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change; provided that the Pricing Ratio shall be deemed to be in Category 1: (A) at any time that an Event of Default has occurred and is continuing or (B) at the option of the Administrative Agent or at the request of the Required Lenders if the Borrower fails to deliver the consolidated financial statements required to be delivered by it pursuant to Section 5.01(a) or (b), during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.”

 

(b)  The definition of “Revolving Commitment” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirely as follows:

“"Revolving Commitment" means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08, (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.04 and (c) as established or increased from time to time pursuant to an Incremental  Assumption Agreement.  The amount of each Lender's Revolving Commitment as of March 25, 2011 is set forth on Schedule 2.01.  The aggregate amount of the Lenders' Revolving Commitments as of March 25, 2011 is $415,000,000.”

 

 

(c)  Schedule 2.01 to the Credit Agreement is hereby amended and restated such that the Revolving Commitment of each Revolving Lender is as set forth on Exhibit A hereto.  Any lender party hereto that was not a Revolving Lender prior to the Amendment Effective Date (a “New Revolving Lender”) shall, upon the Amendment Effective Date, become a “Lender” and a “Revolving Lender” and its commitment set forth in Exhibit A hereto shall be a “Commitment” and a “Revolving Commitment”, in each case, for all purposes under the Credit Agreement and the other Loan Documents.

 

ARTICLE  3.

 

Representations and Warranties

  

2

  

 

Section 3.1.                      Representations and Warranties.  The Borrower represents and warrants that:

 

(a)  at the time of and immediately after giving effect to this Amendment and any  extension of credit to be made on the Amendment Effective Date (as defined below), the representations and warranties of each Loan Party set forth in the Loan Documents are true and correct in all material respects with the same force and effect as if such representations and warranties had been made on and as of such date except to the extent that such representations and warranties relate specifically to another date;

 

(b)  at the time of and immediately after giving effect to this Amendment and any  extension of credit to be made on the Amendment Effective Date (as defined below), no Default has occurred and is continuing;

 

(c)  the execution, delivery and performance of this Amendment and the transactions contemplated hereby are within the Borrower and each other Loan Party's power and have been duly authorized by all necessary action.  This Amendment has been duly executed and delivered by the Borrower and the other Loan Parties and constitutes a legal, valid and binding obligation of the Borrower and such other Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

 

(d)  the execution, delivery and performance of this Amendment: (a) does not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect and (ii) for immaterial consents, approvals, registrations, filing or other actions, (b) will not violate (i) any applicable law or regulation or (ii) in any material respect, the charter, by-laws or other organizational documents of the Borrower or any of its Restricted 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 the Borrower or any of its Restricted Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Restricted Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Restricted Subsidiaries, except Liens created under and Liens permitted by the Loan Documents, except to the extent such violation or default referred to in clause (b)(i) or (c) above could not reasonably be expected to result in a Material Adverse Effect.

 

ARTICLE 4.

 

Conditions

 

Section 4.1.     Conditions.  This Amendment shall become effective as of the first date (the “Amendment Effective Date”) when each of the following conditions shall have been satisfied:

(a) the Administrative Agent (or its counsel) shall have received from each party hereto (including the Required Lenders and each Revolving Lender) either (i) a counterpart of this Amendment signed on behalf of such party or (ii) written evidence reasonably satisfactory to the Administrative Agent (which may include telecopy, portable document format (.pdf) or email transmission of a signed signature page of this Amendment) that such party has signed a counterpart of this Amendment;

  

3

  

(b) no Default or Event of Default shall have occurred and be continuing or shall result from any extension of credit requested to be made on the Amendment Effective Date;

 

(c) the Administrative Agent shall have received a certificate, dated the Amendment Effective Date and signed by a Responsible Officer of the Borrower, confirming compliance with the conditions set forth in clause (b) of this Section 4.1 and that each of the representations and warranties made by any Loan Party contained in Section 3.1 above shall be true and correct on and as of the Amendment Effective Date after giving effect to the Amendment and to any extension of credit requested to be made on the Amendment Effective Date with the same effect as though such representations and warranties had been made on and as of such date;

 

(d) the Administrative Agent shall have received, for the ratable benefit of each Revolving Lender providing a Revolving Commitment pursuant to this Amendment in excess of the amount of its Revolving Commitment immediately prior to the Amendment Effective Date (which amount existing immediately prior to the Amendment Effective Date shall be deemed to be zero for any New Revolving Lender), a fee equal to 0.25% of the amount of such excess Revolving Commitment;

 

(e) to the extent invoiced at least one (1) Business Day prior to the Amendment Effective Date, the Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Amendment Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under any other Loan Document;

 

(f) the Administrative Agent shall have received such certificates, resolutions or other documents of the Loan Parties as the Administrative Agent may reasonably require in connection herewith, including all documents and certificates it may reasonably request relating to (i) the organization, existence and good standing of each Loan Party, (ii) the corporate or other authority for and validity of this Amendment and (iii) the incumbency of the officers of each Loan Party executing this Amendment, and other matters relevant hereto, all in form and substance reasonably satisfactory to the Administrative Agent;

 

(g) the Administrative Agent shall have received a written opinion of Weil, Gotshal & Manges LLP dated as of the Amendment Effective Date covering such matters relating to the Loan Parties and the Loan Documents (including this Amendment) as are customary for financings of this type; the Borrowers hereby request such counsel to deliver such opinion; and

 

(h) the Administrative Agent shall have received, at least 5 days prior to the Amendment Effective Date, all documentation and other information required by regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations, including the PATRIOT Act that has been reasonably requested by the Administrative Agent at least 10 days prior to the Amendment Effective Date.

 

 

ARTICLE 5.

 

Miscellaneous

 

Section 5.1.         Confirmation of Guarantees and Security Interests.  By signing this Amendment, each Loan Party hereby confirms that (a) the obligations of the Loan Parties under the Credit Agreement as modified hereby and the other Loan Documents (i) are entitled to the benefits of the guarantees and the

  

4

  

 

security interests set forth or created in the Guarantee Agreement, the relevant Security Documents delivered prior to the date hereof and the other Loan Documents, and (ii) constitute Obligations for purposes of the Credit Agreement, the Guarantee Agreement and the Security Agreement and all other relevant Security Documents delivered prior to the date hereof, (b) notwithstanding the effectiveness of the terms hereof, the Guarantee Agreement, the relevant Security Documents delivered prior to the date hereof and the other Loan Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, and (c) each New Revolving Lender shall be a “Secured Party”, “Lender” and a “Revolving Lender” for all purposes of the Credit Agreement and the other Loan Documents.  Each Loan Party ratifies and confirms that all Liens granted, conveyed, or assigned to the Administrative Agent by such Person pursuant to each relevant Loan Document delivered prior to the date hereof to which it is a party remain in full force and effect, are not released or reduced, and continue to secure full payment and performance of the Obligations, as may be increased hereby.

 

Section 5.2.     Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and the other relevant Loan Documents delivered prior to the date hereof are ratified and confirmed and shall continue in full force and effect. The Borrower, each Subsidiary Loan Party, the Lenders party hereto and the Administrative Agent agree that the Credit Agreement as amended hereby and the other relevant Loan Documents delivered prior to the date hereof shall continue to be legal, valid, binding and enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in law or equity. For all matters arising prior to the effective date of this Amendment, the terms of the Credit Agreement (as unmodified by this Amendment) shall control and are hereby ratified and confirmed.

 

Section 5.3.     Reference to Credit Agreement. Each of the Loan Documents, including the Credit Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Credit Agreement shall mean a reference to the Credit Agreement, as amended hereby.

 

Section 5.4.     Severability. Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

Section 5.5.     Applicable Law. This Amendment shall be construed in accordance with and governed by the law of the State of New York.

 

Section 5.6.     Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Lenders, the Administrative Agent, the Borrower and each Subsidiary Loan Party and their respective successors and assigns, except the Borrower and the Subsidiary Loan Parties may not assign or transfer any of their rights or obligations hereunder without the prior written consent of the Required Lenders.

Section 5.7.     Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. THIS AMENDMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PREVIOUS COMMITMENTS, AGREEMENTS,

  

5

  

REPRESENTATIONS AND UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. This Amendment shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of the Borrower, the each Subsidiary Loan Party and each of the Required Lenders. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or in "pdf', “.tif” or similar format by electronic mail shall be effective as delivery of a manually executed counterpart of this Amendment.

 

Section 5.8.      Effect of Waiver. No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power under any Loan Document 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.

 

Section 5.9.      Headings. Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

 

 

[Signature Pages to Follow]

  

6

  

 

Executed as of the date first written above.

 

 

DARLING INTERNATIONAL INC.

CRAIG PROTEIN DIVISION, INC.

DARLING NATIONAL LLC

GRIFFIN INDUSTRIES, INC.

 

By:_/s/ John O. Muse__________________________

Name: John O. Muse

Title: Executive Vice President, Finance and

          Administration

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

JPMORGAN CHASE BANK, N.A, as Administrative 

Agent and as a Lender

 

 

By:_/s/ Laura F. Simmons______________

Name: Laura F. Simmons

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

Bank of Montreal

 

 

 

 

 

 

 

By:_/s/ Philip Langheim_______________

Name: Philip Langheim

Title: Managing Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

PNC Bank, National Association

 

 

 

 

 

 

 

By:_/s/ Christopher T. Belletti_______________

Name: Christopher T. Belletti

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

COMERICA BANK

 

 

 

 

 

 

By:_/s/ Jason D Baker_______________

Name: Jason D Baker

Title: Assistant Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

Compass Bank

 

 

 

 

 

 

By:_/s/ Tom Blake_______________

Name: Tom Blake

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

Cooperatieve Centrale Raiffeisen – Boerenleenbank,

B.A. “Rabobank Nederland”, New York Branch

 

 

By:_/s/ Pamela Beal_______________

Name: Pamela Beal

Title: Executive Director

By:_/s/ Izumi Fukushima______________

Name: Izumi Fukushima

Title: Executive Director

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

CITIBANK, N.A.

 

 

By:_/s/ Deborah T. Purvin______________

Name: Deborah T. Purvin

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

BRANCH BANKING AND TRUST COMPANY

 

 

By:_/s/ Sarah Bryson_______________

Name: Sarah Bryson

Title: Vice President

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

GOLDMAN SACHS BANK USA

 

 

By:_/s/ Lawrence DeCamillo_______________

Name: Lawrence DeCamillo

Title: Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]

  

  

  

 

COMMERCE BANK, N.A.

 

 

By:_/s/ Wayne C. Lewis_______________

Name: Wayne C. Lewis

Title: Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment of Darling Credit Agreement]Exhibit 10.1

CREDIT AGREEMENT

dated as of

March 25, 2011

between

XL GROUP PLC,

XL GROUP LTD., X.L. AMERICA, INC., XL INSURANCE

(BERMUDA) LTD, XL RE LTD, XL RE EUROPE LIMITED, XL INSURANCE COMPANY 

LIMITED, XL INSURANCE SWITZERLAND LTD AND XL LIFE LTD,

as Account Parties,

XL GROUP PLC,

XL GROUP LTD., X.L. AMERICA, INC., XL INSURANCE (BERMUDA) LTD, XL RE LTD 

AND XL LIFE LTD,

as Guarantors,

The LENDERS Party
Hereto,

JPMORGAN CHASE
BANK, N.A.,

as Administrative Agent

and

THE BANK OF NEW
YORK MELLON,

as Collateral
Agent

	
 

	
 

	
 

	
 

	

	
 

	
 

	
$1,000,000,000

	
 

	
 

	
 

	
 

	
 

	

	
 

J.P. MORGAN
SECURITIES LLC

and

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

	
 

	
 

	
 

	
 

	

	
 

	
DEUTSCHE BANK
SECURITIES INC.,

	
as Syndication Agent

	
 

	
                        

	
 

	
 

	

	
 

	
 

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

	
BANK, NATIONAL
ASSOCIATION

	
as Documentation Agents

	
 

	
 

	
 

	
TABLE OF CONTENTS

	
 

	
 

	
 

	
Page

	
 

	
 

	

	
ARTICLE I

	
 

	
1

	
 

	
 

	
 

	
DEFINITIONS

	
 

	
1

	
SECTION 1.01. Defined
Terms

	
 

	
1

	
SECTION 1.02. Terms
Generally

	
 

	
19

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

	
 

	
20

	
SECTION 1.04. Exchange
Rates; Currency Equivalents

	
 

	
20

	
 

	
 

	
 

	
ARTICLE II

	
 

	
20

	
 

	
 

	
 

	
THE CREDITS

	
 

	
20

	
SECTION 2.01. Syndicated
Letters of Credit

	
 

	
20

	
SECTION 2.02. Issuance
and Administration

	
 

	
22

	
SECTION 2.03. Reimbursement
of LC Disbursements, Etc.

	
 

	
23

	
SECTION 2.04. Non-Syndicated
Letters of Credit

	
 

	
25

	
SECTION 2.05. Participated
Letters of Credit

	
 

	
30

	
SECTION 2.06. Alternative
Currency Letters of Credit

	
 

	
35

	
SECTION 2.07. Termination,
Reduction and Increase of the Commitments

	
 

	
36

	
SECTION 2.08. Fees

	
 

	
37

	
SECTION 2.09. Interest

	
 

	
38

	
SECTION 2.10. Increased
Costs

	
 

	
39

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

	
 

	
43

	
SECTION 2.13. Mitigation
Obligations; Replacement of Lenders

	
 

	
45

	
SECTION 2.14. Defaulting
Lenders

	
 

	
46

	
SECTION 2.15. Absence
of Rating

	
 

	
47

	
 

	
 

	
 

	
ARTICLE III

	
 

	
47

	
 

	
 

	
 

	
GUARANTEE

	
 

	
47

	
SECTION 3.01. The
Guarantee

	
 

	
47

	
SECTION 3.02. Obligations
Unconditional

	
 

	
47

	
SECTION 3.03. Reinstatement

	
 

	
48

	
SECTION 3.04. Subrogation

	
 

	
49

	
SECTION 3.05. Remedies

	
 

	
49

	
SECTION 3.06. Continuing
Guarantee

	
 

	
49

	
SECTION 3.07. Rights
of Contribution

	
 

	
49

	
SECTION 3.08. General
Limitation on Guarantee Obligations

	
 

	
50

	
 

	
 

	
 

	
ARTICLE IV

	
 

	
50

	
 

	
 

	
 

	
REPRESENTATIONS
AND WARRANTIES

	
 

	
50

	
SECTION 4.01. Organization;
Powers

	
 

	
50

	
SECTION 4.02. Authorization;
Enforceability

	
 

	
50

	
SECTION 4.03. Governmental
Approvals; No Conflicts

	
 

	
51

	
SECTION 4.04. Financial
Condition; No Material Adverse Change

	
 

	
51

i

	
 

	
 

	
 

	
SECTION 4.05. Properties

	
 

	
51

	
SECTION 4.06. Litigation
and Environmental Matters

	
 

	
52

	
SECTION 4.07. Compliance
with Laws and Agreements

	
 

	
52

	
SECTION 4.08. Investment
Company Status

	
 

	
52

	
SECTION 4.09. Taxes

	
 

	
52

	
SECTION 4.10. ERISA

	
 

	
52

	
SECTION 4.11. Disclosure

	
 

	
53

	
SECTION 4.12. Use
of Credit

	
 

	
53

	
SECTION 4.13. Subsidiaries

	
 

	
53

	
SECTION 4.14. Withholding
Taxes

	
 

	
54

	
SECTION 4.15. Stamp
Taxes

	
 

	
54

	
SECTION 4.16. Legal
Form

	
 

	
54

	
 

	
 

	
 

	
ARTICLE V

	
 

	
54

	
 

	
 

	
 

	
CONDITIONS

	
 

	
54

	
SECTION 5.01. Effective
Date

	
 

	
54

	
SECTION 5.02. Each
Credit Event

	
 

	
55

	
 

	
 

	
 

	
ARTICLE VI

	
 

	
56

	
 

	
 

	
 

	
AFFIRMATIVE
COVENANTS

	
 

	
56

	
SECTION 6.01. Financial
Statements and Other Information

	
 

	
56

	
SECTION 6.02. Notices
of Material Events

	
 

	
59

	
SECTION 6.03. Preservation
of Existence and Franchises

	
 

	
59

	
SECTION 6.04. Insurance

	
 

	
60

	
SECTION 6.05. Maintenance
of Properties

	
 

	
60

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

                       Liabilities

	
 

	
60

	
SECTION 6.07. Financial
Accounting Practices

	
 

	
61

	
SECTION 6.08. Compliance
with Applicable Laws

	
 

	
61

	
SECTION 6.09. Use
of Letters of Credit

	
 

	
61

	
SECTION 6.10. Continuation
of and Change in Businesses

	
 

	
61

	
SECTION 6.11. Visitation

	
 

	
61

	
 

	
 

	
 

	
ARTICLE VII

	
 

	
62

	
 

	
 

	
 

	
NEGATIVE
COVENANTS

	
 

	
62

	
SECTION 7.01. Mergers

	
 

	
62

	
SECTION 7.02. Dispositions

	
 

	
62

	
SECTION 7.03. Liens

	
 

	
63

	
SECTION 7.04. Transactions
with Affiliates

	
 

	
65

	
SECTION 7.05. Ratio
of Total Funded Debt to Total Capitalization

	
 

	
65

	
SECTION 7.06. Consolidated
Net Worth

	
 

	
65

	
SECTION 7.07. Indebtedness

	
 

	
65

	
SECTION 7.08. Financial
Strength Ratings

	
 

	
66

	
SECTION 7.09. Private
Act

	
 

	
66

	
SECTION 7.10. Collateral
Accounts

	
 

	
66

ii

	
 

	
 

	
 

	
ARTICLE VIII

	
 

	
67

	
 

	
 

	
 

	
EVENTS OF
DEFAULT

	
 

	
67

	
 

	
 

	
 

	
ARTICLE IX

	
 

	
69

	
 

	
 

	
 

	
THE
ADMINISTRATIVE AGENT

	
 

	
69

	
 

	
 

	
 

	
ARTICLE X

	
 

	
76

	
 

	
 

	
 

	
MISCELLANEOUS

	
 

	
76

	
SECTION 10.01. Notices

	
 

	
76

	
SECTION 10.02. Waivers;
Amendments

	
 

	
77

	
SECTION 10.03. Expenses;
Indemnity; Damage Waiver

	
 

	
79

	
SECTION 10.04. Successors
and Assigns

	
 

	
80

	
SECTION 10.05. Survival

	
 

	
84

	
SECTION 10.06. Counterparts;
Integration; Effectiveness

	
 

	
85

	
SECTION 10.07. Severability

	
 

	
85

	
SECTION 10.08. Right
of Setoff

	
 

	
85

	
SECTION 10.09. Governing
Law; Jurisdiction; Etc.

	
 

	
85

	
SECTION 10.10. WAIVER
OF JURY TRIAL

	
 

	
86

	
SECTION 10.11. Headings

	
 

	
87

	
SECTION 10.12. Treatment
of Certain Information; Confidentiality

	
 

	
87

	
SECTION 10.13. Judgment
Currency

	
 

	
88

	
SECTION 10.14. USA
PATRIOT Act

	
 

	
88

	
SECTION 10.15. RELEASE
OF LIENS

	
 

	
89

	
SECTION 10.16. NO
FIDUCIARY DUTY

	
 

	
89

iii

	
 

	
 

	
 

	
SCHEDULE I

	
-

	
Commitments

	
SCHEDULE II

	
-

	
Indebtedness and Liens

	
SCHEDULE III

	
-

	
Litigation

	
SCHEDULE IV

	
-

	
Environmental Matters

	
SCHEDULE V

	
-

	
Subsidiaries

	
 

	
 

	
 

	
EXHIBIT A

	
-

	
Form of Assignment and Assumption

	
EXHIBIT B

	
-

	
Form of Confirming Lender Agreement

iv

                    CREDIT
AGREEMENT dated as of March 25, 2011 (as amended, restated, supplemented or otherwise
modified from time to time, this “Agreement”), among XL GROUP PLC, an
Irish public limited company (“XL Group”), XL GROUP LTD., an exempted
company incorporated in the Cayman Islands with limited liability (“XL Group
Ltd”), X.L. AMERICA, INC., a Delaware corporation (“XL America”), XL
INSURANCE (BERMUDA) LTD, a Bermuda limited liability company (“XL Insurance
(Bermuda)”), XL RE LTD, a Bermuda limited liability company (“XL Re”),
XL RE EUROPE LIMITED, an Irish limited liability company (“XL Re Europe”),
XL INSURANCE COMPANY LIMITED, a limited company domiciled in the United Kingdom
(“XL Insurance”), XL INSURANCE SWITZERLAND LTD, a company limited by
shares organized under the laws of Switzerland (“XL Switzerland”), and
XL LIFE LTD, a Bermuda company (“XL Life” and together with XL Group, XL
Group Ltd, XL America, XL Insurance (Bermuda), XL Re, XL Re Europe, XL
Insurance and XL Switzerland, each an “Account Party” and collectively,
the “Account Parties”; XL Group, XL Group Ltd, XL America, XL Insurance
(Bermuda), XL Re and XL Life, each a “Guarantor” and collectively the “Guarantors”;
the Account Parties and the Guarantors being collectively referred to as the “Obligors”),
the LENDERS party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent,
and THE BANK OF NEW YORK MELLON, as Collateral Agent.

                    The
Account Parties have requested that the Lenders issue letters of credit for
their account in an aggregate face amount not exceeding $1,000,000,000 at any
one time outstanding, and the Lenders are prepared to issue such letters of
credit upon the terms and conditions hereof. Accordingly, the parties hereto
agree as follows:

ARTICLE I

DEFINITIONS 

                    SECTION
1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

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

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

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

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

1

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

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

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

	
 

	
 

	
Cash and Eligible Assets

	
Advance Rate

	
 

	
 

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

	
100%
of Market

	
 

	
 

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

	
98% of Market

	
 

	
 

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

	
 

	
 

	
 

	
Maturity less than 2 years

	
98% of Market

	
Maturity 2 years to 5 years

	
95% of Market

	
Maturity 5 years to 10 years

	
95% of Market

	
Maturity over 10 years

	
93% of Market

	
 

	
 

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

	
 

	
 

	
 

	
Maturity less than 5

	
95% of Market

	
Maturity 5 years to 10 years

	
90% of Market

	
Maturity over 10 years

	
85% of Market

	
 

	
 

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

	
 

	
 

	
 

	
Maturity less than 5 years

	
90% of Market

	
Maturity 5 years to 10 years

	
85% of Market

	
Maturity over 10 years

	
80% of Market

	
 

	
 

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

	
 

	
 

	
 

	
Maturity less than 5 years

	
95% of Market

	
Maturity 5 years or longer

	
90% of Market

2

	
 

	
 

	
US-GNMAMBS

	
 

	
 

	
 

	
Maturity less than 5 years

	
98% of Market

	
Maturity 5 years to 10 years

	
95% of Market

	
Maturity over 10 years

	
93% of Market

	
 

	
 

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

	
 

	
(Rating AA-/Aa3 or better)

	
 

	
 

	
 

	
Maturity less than 5 years

	
95% of Market

	
Maturity 5 years to 10 years

	
93% of Market

	
Maturity over 10 years and less than 30 years

	
90% of Market

As used
in this Agreement, “EU Cash” shall mean the lawful currency of the
member states of the European Union that adopt the single currency in
accordance with the EC Treaty, “GB Cash” shall mean the lawful currency
of the United Kingdom, “GB-GILT” shall mean fixed coupon, sterling
denominated negotiable debt obligations issued by either the Bank of England
(prior to April 1, 1998) or Her Majesty’s Treasury (after April 1, 1998) backed
by the credit of the United Kingdom of Great Britain and Northern Ireland with
initial maturity of greater than 365 days when issued, “DE-NOTE2” shall
mean negotiable debt obligations issued pursuant to Artikel 115 Grundgesetz and
backed by Federal Republic of Germany, having an original maturity at issuance
of 2 years, “DE-NOTE5.5” shall mean negotiable debt obligations issued
pursuant to Artikel 115 Grundgesetz and backed by Federal Republic of Germany,
having a maturity at issuance of 5.5 years, “DE-BOND” shall mean
negotiable debt obligations issued pursuant to Artikel 115 Grundgesetz and
backed by Federal Republic of Germany, having a maturity at issuance of 10 to
30 years, “FR-BTF” shall mean discount debt securities issued by the
French Treasury having an initial maturity at issuance of 13, 26 or 52 weeks, “FR-BTAN”
shall mean fixed interest debt securities issued by the French Treasury having
an initial maturity at issuance of 2 or 5 years, “FR-OAT” shall mean
fixed or floating interest debt securities issued by the French Treasury having
an initial maturity at issuance of between 4 and 30 years, provided that any
floating rate OATs (i.e. OATs that are indexed to the Consumer Price Index
(OATi’s)) and OATs that are linked to the TEC10 index (TEC OATs) are excluded,
and “US-GNMAMBS” shall mean single-class fully modified pass-through
certificates (GNMA Certificates) in book-entry form backed by single-family
residential mortgage loans, the full and timely payment of principal and
interest of which is guaranteed by the Government National Mortgage Association
(excluding Real Estate Mortgage Investment Conduit (REMIC) or other multi-class
pass-through certificates, collateralized mortgage obligations, pass-through
certificates backed by adjustable rate mortgages, securities paying interest or
principal only and derivatives and similar derivatives securities).

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

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

3

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

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

                    
“Alternative Currency” means any currency other than Dollars (a) that
is freely transferable and convertible into Dollars in the London foreign
exchange market and (b) for which no central bank or other governmental
authorization in the country of issue of such currency is required to permit
use of such currency by any Lender for issuing, renewing, extending or amending
letter of credits or funding or making drawings thereunder and/or to permit any
Account Party to pay the reimbursement obligations and interest thereon, each
as contemplated hereunder, unless such authorization has been obtained and is
in full force and effect.

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

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

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

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

                    
“Applicable Percentage” means with respect to any Lender in relation to
its obligations to issue or participate in Letters of Credit (or related
matters), the percentage of the Commitments of all the Lenders represented by
such Lender’s Commitment. If the 

4

Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.

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

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

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

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

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

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

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

                    “Borrowing Base” means at any time, and in respect of each Account Party,
the aggregate amount of cash and Eligible
Assets held in the Accounts applicable to such Account Party (including any
cash or Eligible Securities deposited on behalf of such Account Party by a
Guarantor) under the applicable Collateral Account Control Agreement at such time multiplied in each case by the
respective Advance Rates for cash and such Eligible Assets, in each case as of
the close of business on the immediately preceding Business Day or, if such 

5

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

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

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

                    
“Cash Equivalents” means at any time:

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

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

6

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

                    
“Change in Law” means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law,
rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance
by any Lender (or, for purposes of Section 2.10(b), by any lending office
of such Lender or by such Lender’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

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

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

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

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

                    
“Commitment” means, with respect to any Lender, the commitment of such
Lender to issue Syndicated Letters of Credit and Non-Syndicated Letters of
Credit and acquire participations in Participated Letters of Credit, as such
commitment may be (i) reduced from time to time pursuant to
Section 2.07 and (ii) reduced or increased from time to time pursuant
to 

7

assignments by or to such Lender pursuant to
Section 10.04. The initial amount of each Lender’s Commitment is set forth
on Schedule I or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Commitment, as applicable. The initial aggregate
amount of the Lenders’ Commitments is $1,000,000,000.

                    
“Commitment Termination Date” means March 25, 2014.

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

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

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

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

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

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

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

                    
“Defaulting Lender” means any Lender that (a) has failed, within three
Business Days of the date required to be funded or paid, to (i) fund any
portion of its participations in Letters of Credit or (ii) pay over to any
Obligor any other amount required to be paid by it hereunder, in either case,
unless such Lender notifies the Administrative Agent in writing that 

8

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

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

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

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

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

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

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

9

agreement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

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

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

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

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

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

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

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

                    
“Excluded Taxes” means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Obligor hereunder, or under any Credit Document,
(a) income or franchise Taxes imposed on (or measured by) its net income,
net profits or overall gross receipts (including, without limitation, 

10

branch profits or similar taxes) by the United States
of America, or by any jurisdiction under the laws of which such recipient is
organized or resident, in which such recipient’s principal office is located or
with which such recipient has any other connection (other than a connection
that arises solely by reason of an Account Party having executed, delivered or
performed its obligations or a Lender or the Administrative Agent having
received a payment under this Agreement or any Credit Document), (b) any
Tax imposed pursuant to a law in effect at the time such recipient first
becomes a party to this Agreement or designates a new lending office (or at the time such recipient acquires an
additional interest, but only with respect to Taxes attributable to such
additional interest) except to the extent that such recipient (or such
recipient’s assignor, if any) was entitled at the time of the designation of a
new lending office (or assignment) to receive additional amounts from the
Account Parties with respect to such Tax under Section 2.11(a) or 2.11(c), (c)
any Tax that is attributable to a recipient’s failure to comply with Section
2.11(f), and (d) any Tax imposed pursuant to FATCA.

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

                    
“Existing Credit Agreement” means the 5-Year Credit Agreement dated as
of June 21, 2007 among XL Group Ltd. (formerly XL Capital Ltd), XL America, XL
Insurance (Bermuda), and XL Re, the lenders party thereto and JPMCB, as
administrative agent, as amended, restated, supplemented or otherwise modified
from time to time, including any renewals, extensions or replacements thereof
that increase the principal amount thereof as of the Effective Date; provided,
however, that to the extent such principal amount exceeds $3,000,000,000
at any time, such excess amount shall not be deemed to be incurred under the
Existing Credit Agreement. 

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

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

11

necessary, to the next 1/100 of 1%) of the quotations
for such day for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.

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

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

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

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

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

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

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

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

                    
“Hazardous Materials” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or 

12

petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

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

                    
“Indebtedness” means,
for any Person, without duplication: (i) all indebtedness or liability for or
on account of money borrowed by, or for or on account of deposits with or
advances to (but not including accrued pension costs, deferred income taxes or
accounts payable of) such Person; (ii) all obligations (including contingent
liabilities) of such Person evidenced by bonds, debentures, notes, banker’s
acceptances or similar instruments; (iii) all indebtedness or liability for or
on account of property or services purchased or acquired by such Person; (iv)
any indebtedness or liability secured by a Lien on property owned by such Person
(whether or not assumed) and Capital Lease Obligations of such Person (without
regard to any limitation of the rights and remedies of the holder of such Lien
or the lessor under such capital lease to repossession or sale of such
property); (v) the maximum available amount of all standby letters of credit
issued for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed); and (vi) all Guarantees of such
Person; provided that the following shall be excluded from Indebtedness
of XL Group and any of its Subsidiaries for purposes of this Agreement: (a) all
payment liabilities of any such Person under insurance and reinsurance policies
from time to time issued by such Person, including guarantees of any such
payment liabilities; (b) all other liabilities (or guarantees thereof) arising
in the ordinary course of any such Person’s business as an insurance or
reinsurance company (including GICs and Stable Value Instruments and any
Specified Transaction Agreement relating thereto), or as a corporate member of
The Council of Lloyd’s, or as a provider of financial or investment services or
contracts (including GICs and Stable Value Instruments and any Specified
Transaction Agreement relating thereto); and (c) any Exempt Indebtedness.

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

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

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

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

13

Letter of Credit, each Lender, in its capacity as the
issuer of such Syndicated Letter of Credit and (c) with respect to any
Non-Syndicated Letter of Credit, the Lender named therein as the issuer
thereof.

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

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

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

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

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

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

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

                    
“LIBO Rate” means the rate appearing on Reuters Page LIBOR01 (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative
Agent from time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at 

14

approximately 11:00 a.m., London time, as the
rate for the offering of Dollar deposits with a maturity equal to one month. In
the event that such rate is not available at such time for any reason, then the
LIBO Rate shall be the rate at which Dollar deposits of $5,000,000 and for a
maturity equal to one month are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time.

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

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

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

                    
“Material Adverse Effect” means a material adverse effect on: (a) the
assets, business, financial condition or operations of an Account Party and its
Subsidiaries taken as a whole; or (b) the ability of an Account Party to
perform any of its payment or other material obligations under this Agreement.

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

                    
“NAIC” means the National Association of Insurance Commissioners.

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

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

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

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

15

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

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

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

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

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

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

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

                    
“Pledge Agreement” means the Pledge Agreement, dated as of March 25,
2011, among each Account Party, the Collateral Agent and the Administrative
Agent, in form and substance reasonably satisfactory to the Administrative
Agent.

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

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

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

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

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

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

16

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

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

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

                     “Revaluation Date” means each of the following:
(i) each date of issuance, renewal or amendment of a Letter of Credit denominated
in an Alternative Currency, (ii) each date of an amendment of any such
Letter of Credit having the effect of increasing the amount thereof (solely
with respect to the increased amount), (iii) each date of any payment by
the Specified Account Party under any Letter of Credit denominated in an
Alternative Currency and (iv) such additional dates as the Administrative Agent
or the Issuing Lender shall determine or the Required Lenders shall require; provided
that not more than four requests in the aggregate may be made in any calendar
year pursuant to this clause (iv).

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

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

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

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

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

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

                    
“Specified Transaction Agreement” means any agreement, contract or
documentation with respect to the following types of transactions: cash pooling
arrangements, 

17

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

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

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

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

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

                    
“Subsidiary” means, with respect to any Person (the “parent”), at
any date, any corporation (or similar entity) of which a majority of the shares
of outstanding capital stock normally entitled to vote for the election of
directors (regardless of any contingency which does or may suspend or dilute
the voting rights of such capital stock) is at such time owned directly or 

18

indirectly by the parent or one or more subsidiaries
of the parent. Unless otherwise
specified, “Subsidiary” means a Subsidiary of an Account Party.

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

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

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

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

                    
“Total Funded Debt” means, at any time, all Indebtedness of XL Group and its Subsidiaries and
any other Person which would at such time be classified in whole or in part as
a liability on the consolidated balance sheet of XL Group and its consolidated
Subsidiaries in accordance with GAAP (it being understood for avoidance of
doubt that any liability or obligation excluded from the definition of
Indebtedness shall not constitute Indebtedness for purposes of this
definition).

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

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

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

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

19

meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

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

                    SECTION
1.04. Exchange Rates; Currency Equivalents

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

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

ARTICLE II

THE CREDITS 

                    SECTION
2.01. Syndicated Letters of Credit.

                    (a)
General. Subject to the terms and conditions set forth herein, at the
request of any Account Party the Lenders agree at any time and from time to
time during the Availability 

20

Period to issue Syndicated Letters of Credit for the
account of such Account Party in an aggregate amount that will not result in
the LC Exposure exceeding the Commitments (it being understood that Syndicated
Letters of Credit may be issued, or be outstanding, for the account of more
than one of the Account Parties at any time). Each Syndicated Letter of Credit
shall be in such form as is consistent with the requirements of the applicable
regulatory authorities as reasonably required by the Administrative Agent (in
consultation with XL Group) or as otherwise agreed to by the Administrative
Agent and XL Group; provided that, without the prior consent of each
Lender, no Syndicated Letter of Credit may be issued that would vary the
several and not joint nature of the obligations of the Lenders thereunder as
provided in the next succeeding sentence. Each Syndicated Letter of Credit
shall be issued by all of the Lenders, acting through the Administrative Agent,
at the time of issuance as a single multi-bank letter of credit, but the
obligation of each Lender thereunder shall be several and not joint, based upon
its Applicable Percentage of the aggregate undrawn amount of such Syndicated
Letter of Credit.

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

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

21

each Lender shall not exceed the Commitment of such
Lender.

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

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

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

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

22

                    SECTION
2.03. Reimbursement of LC Disbursements, Etc. 

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

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

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

23

	
  

 	
  

 
	
  

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

 
	
  

 
	
  

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

 
	
  

 
	
  

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

 

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

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

24

                    SECTION
2.04. Non-Syndicated Letters of Credit. 

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

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

25

Agreement and
the terms and conditions of any form of letter of credit application or other
agreement submitted by such Account Party to, or entered into by such Account
Party with, the Administrative Agent (acting on behalf of the relevant Issuing
Lenders) relating to a Non-Syndicated Letter of Credit, the terms and
conditions of this Agreement shall control. 

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

26

due
authorization, execution, delivery and validity of such power of attorney as
the Administrative Agent may reasonably request). Without limiting any
provision of Article IX, the Administrative Agent may perform any and all of
its duties and exercise any and all of its rights and powers under this Section
through its Related Parties. 

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

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

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

27

interests may
appear. Any payment made by a Lender pursuant to this paragraph to reimburse an
Issuing Lender for any LC Disbursement shall not relieve the Specified Account
Party of its obligation to reimburse such LC Disbursement. 

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

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

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

                    Neither
the Administrative Agent, the Lenders nor any Issuing Lender, nor any of their
respective Related Parties, shall have any liability or responsibility by
reason of or in connection with the payment or failure to make any payment
under a Non-Syndicated Letter of Credit (irrespective of any of the
circumstances referred to in the preceding sentence) as a result of determining
whether drafts or other documents presented under a Non-Syndicated Letter of
Credit comply with the terms thereof, or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Non-Syndicated Letter of Credit
(including any document required to make a drawing 

28

thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of an Issuing Lender; provided that the foregoing
shall not be construed to excuse the Administrative Agent or a Lender from
liability to the Account Parties to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Account Parties to the extent permitted by applicable law) suffered by
the Account Parties that are caused by the gross negligence or willful
misconduct of the Administrative Agent or a Lender when determining whether
drafts and other documents presented under a Non Syndicated Letter of Credit
comply with the terms hereof. The parties hereto expressly agree that:  

	
  

 	
  

 
	
  

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

 
	
  

 
	
  

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

 
	
  

 
	
  

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

 

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

29

Party of its
obligation to reimburse such Issuing Lender with respect to any such LC
Disbursement. 

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

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

                    SECTION
2.05. Participated Letters of Credit. 

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

30

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

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

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

                    (e)
Participations. By the issuance of a Participated Letter of Credit (or
an amendment to a Participated Letter of Credit increasing the amount thereof)
by the Issuing Lender, and without any further action on the part of the
Issuing Lender or the Lenders, the Issuing Lender hereby grants to each Lender,
and each Lender hereby acquires from the Issuing 

31

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

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

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

                    (g)
Obligations Absolute. The several obligations of the Specified Account
Party with respect to any Letter of Credit to reimburse LC Disbursements in
respect of any Participated Letter of Credit as provided in paragraph (f) of
this Section shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Participated Letter of Credit, or any term or provision
therein, (ii) any draft or other document presented under a Participated Letter
of Credit proving to be forged, fraudulent or 

32

invalid in any
respect or any statement therein being untrue or inaccurate in any respect,
(iii) payment by the Issuing Lender under a Participated Letter of Credit
against presentation of a draft or other document that does not comply strictly
with the terms of such Participated Letter of Credit (provided that such
Specified Account Party shall not be obligated to reimburse such LC
Disbursements unless payment is made against presentation of a draft or other
document that at least substantially complies with the terms of such
Participated Letter of Credit), (iv) the occurrence of any Default or (v) any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the obligations of such Specified Account Party
hereunder. 

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

                    (h)
Disbursement Procedures. The Issuing Lender shall, within a reasonable
time following its receipt thereof, examine all documents purporting to
represent a demand for 

33

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

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

                    (j)
Replacement of the Issuing Lender. The Issuing Lender may be replaced at
any time by written agreement between XL Group, the Administrative Agent, the
replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender.
At the time any such replacement shall become effective, XL Group shall pay all
unpaid fees accrued for account of the replaced Issuing Lender pursuant to
Section 2.08(c). From and after the effective date of any such replacement, (i)
the successor Issuing Lender shall have all the rights and obligations of the
replaced Issuing Lender under this Agreement with respect to Participated
Letters of Credit to be issued thereafter and (ii) references herein to the
term “Issuing Lender” shall be deemed to refer to such successor or to any
previous Issuing Lender, or to such successor and all previous Issuing Lenders,
as the context shall require. After the replacement of an Issuing Lender
hereunder, the replaced Issuing Lender shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Lender under this
Agreement with respect to Participated Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Participated
Letters of Credit. 

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

34

                    SECTION
2.06. Alternative Currency Letters of Credit. 

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

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

35

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

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

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

                    (b)
Voluntary Termination or Reduction. The Account Parties may at any time
terminate, or from time to time reduce, the Commitments; provided that
(i) each reduction of the Commitments shall be in an amount that is $25,000,000
or a larger multiple of $5,000,000 and (ii) the Account Parties shall not
terminate or reduce the Commitments if the Aggregate LC Exposure would exceed
the Commitments. XL Group shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under this paragraph (b) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders
of the contents thereof. Each notice delivered by XL Group pursuant to this
paragraph (b) shall be irrevocable; provided that a notice of
termination of the Commitments delivered by XL Group may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by XL Group (by notice to the Administrative Agent
on or prior to the specified effective date) if such condition is not
satisfied. Subject to the proviso in the immediately preceding sentence, any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments. 

                    (c)
Increases to Commitments. XL Group shall have the right, at any time by
notice to the Administrative Agent, to increase the Commitments hereunder (i)
by including as a Lender hereunder with a new Commitment, any Person which is a
NAIC Approved Bank (or any other Person whose obligations in respect of Letters
of Credit issued under the Agreement shall be confirmed by a NAIC Approved
Bank) that is not an existing Lender or (ii) by having an existing Lender
increase its Commitment then in effect (with the consent of such Lender in its
sole discretion) (each new or increasing Lender, a “Supplemental Lender”)
in each case with the approval (not to be unreasonably withheld) of the
Administrative Agent, which notice shall specify the name of each Supplemental
Lender, the aggregate amount of such increase and the portion thereof being
assumed by each such Supplemental Lender, and the date on which such increase
is to become effective (each a “Supplemental Commitment Date”) (which
shall be a Business Day at least three Business Days after the delivery of such
notice and 30 days prior to the Commitment Termination Date); provided
that (w) the aggregate amount of increases of the Commitments under this
paragraph shall not exceed $500,000,000, (x) no existing Lender shall have any
obligation to participate in such increase of aggregate Commitments (y) the
Commitment of any Supplemental Lender that is not an existing Lender shall be
in an amount of at least $25,000,000 and (z) the aggregate amount of the
increase of the Commitments effected on any day shall be in an aggregate amount
of at least $25,000,000 and larger multiples of 

36

$1,000,000.
Each such Supplemental Lender shall enter into an agreement in form and
substance satisfactory to XL Group and the Administrative Agent pursuant to
which such Supplemental Lender shall, as of the applicable Supplemental
Commitment Date, undertake a Commitment (or, if any such Supplemental Lender is
an existing Lender, pursuant to which such Supplemental Lender’s Commitment
shall be increased in the agreed amount on such date) and such Supplemental
Lender shall thereupon become (or, if it is already a Lender, continue to be) a
“Lender” for all purposes hereof; provided that, in the case of any
Supplemental Lender that is not a Lender immediately prior to such Supplemental
Commitment Date and is not listed on the NAIC Approved Bank List, such
Supplemental Lender and its Confirming Lender shall have entered into an
agreement of the type contemplated in the definition of “Confirming Lender” in
Section 1.01. 

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

                    SECTION
2.08. Fees.

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

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

37

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

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

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

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

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

                    SECTION
2.09. Interest.

                    (a)
Default Interest. If any amount of reimbursement obligation, interest,
fees, and other amounts payable by the Account Parties hereunder is not paid
when due, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of any Reimbursement
Obligations, 3.0% plus the Alternate Base Rate and (ii) in the case of
any amounts other than Reimbursement Obligations, 2.0% plus the
Alternate Base Rate. 

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

                    (c)
Computation. All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when

38

the Alternate
Base Rate is based on the Prime Rate shall be computed on the basis of a year
of 365 days (or 366 days in a leap year), and in each case shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error. 

                    SECTION
2.10. Increased Costs.

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

                    and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining, or participating in, any Letter of Credit (or of
maintaining any participation therein) or to reduce the amount of any sum
received or receivable by such Lender hereunder, then XL Group (and in the case
of any specific Letter of Credit, the Specified Account Party on behalf of
which such Letter of Credit was issued) agrees that it will pay to such Lender
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered. Notwithstanding anything
herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith shall be deemed to be a Change in Law,
regardless of the date enacted, adopted or issued. 

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

39

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

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

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

                    SECTION
2.11. Taxes.

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

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

                    (c)
Indemnification by the Account Parties. XL Group (and in the case of any
specific Letter of Credit, the Specified Account Party on behalf of which such
Letter of Credit was issued) shall indemnify the Administrative Agent, the
Collateral Agent and each Lender,

40

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

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

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

                    (f)
Exemptions. (1) Each recipient of payments under this Agreement or any
Credit Document (or a Transferee, including any Participant, in which case such
Participant’s obligations to a Specified Account Party and the Administrative
Agent described in this Section 2.11(f) shall also extend to the Lender from
which the related participation shall have been purchased) (i) that is a
“United States Person” as defined in Section 7701(a)(30) of the Code (a “U.S.
Lender”) shall deliver to the Specified Account Party and the Administrative
Agent two properly completed and duly signed copies of U.S. Internal Revenue
Service (“IRS”) Form W-9 (or any successor form) certifying that such U.S.
Lender is exempt from U.S. federal withholding tax or (ii) that is not a
“United States Person” as defined in Section 7701(a)(30) of the Code (a
“Non-U.S. Lender”) shall deliver to the Specified Account Party and the
Administrative Agent (I) two copies of IRS Form W-8BEN, Form W-8ECI or Form
W-8IMY(or any successor form) (together with any applicable underlying IRS
forms), (II) in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest”, a certification to the effect that such Non-U.S.
Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, (b) a “10 percent shareholder” of the Specified Account party within the
meaning of Section 881(c)(3)(B) of the Code, (c) a “controlled foreign
corporation” described in Section  

41

881(c)(3)(C)
of the Code or (d) conducting a trade or business in the United States with
which the relevant interest payments are effectively connected; and the
applicable IRS Form W-8 (or any successor form) properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from U.S. federal
withholding tax on payments under this Agreement and the other Credit
Documents, or (III) any other form prescribed by applicable requirements of
U.S. federal income tax law as a basis for claiming exemption from or a
reduction in U.S. federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable requirements of
law to permit the Specified Account Party and the Administrative Agent to
determine the withholding or deduction required to be made. Such forms shall be
delivered by each U.S. Lender and each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation) and from
time to time thereafter upon the request of the Specified Account Party or the
Administrative Agent. In addition, each U.S. Lender and each Non-U.S. Lender
shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by it. Each U.S. Lender and each Non-U.S. Lender
shall promptly notify the Specified Account Party and the Administrative Agent
at any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Specified Account Party (or any other
form of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this Section, no U.S. Lender or Non-U.S.
Lender shall be required to deliver any form pursuant to this Section that such
Non-U.S. Lender is not legally able to deliver. 

                    (2)
Each U.S. Lender and each Non-U.S Lender that is entitled to an exemption from
or reduction of non-U.S. withholding tax under the law of the jurisdiction in
which the Specified Account Party is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Specified Account Party (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Specified Account Party or the Administrative Agent, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate; provided
that such U.S. Lender or Non-U.S. Lender is legally entitled to complete,
execute and deliver such documentation and in its reasonable judgment such
completion, execution or submission would not materially prejudice its legal or
commercial position. 

                    (g)
If the Administrative Agent or a Lender determines, in its reasonable
discretion, that it has received a refund from the relevant Governmental
Authority of any Taxes or Other Taxes as to which it has been indemnified by an
Account Party or with respect to which an Account Party has paid additional
amounts pursuant to this Section, it shall pay over such refund to such Account
Party (but only to the extent of indemnity payments made, or additional amounts
paid, by such Account Party under this Section with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided that such Account Party, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
such Account Party (plus any penalties, interest or other charges imposed by
the relevant Governmental 

42

Authority) to
the Administrative Agent or such Lender in the event the Administrative Agent
or such Lender is required to repay such refund to such Governmental Authority.
This Section shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes not expressly required to be made available hereunder which it
reasonably deems confidential) to any Account Party or any other Person. 

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

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

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

                    (c)
Pro Rata Treatment. Except to the extent otherwise provided herein: each
reimbursement of LC Disbursements (other than in respect of Alternative
Currency Letters of Credit) shall be made to the relevant Lenders, each payment
of fees under Section 2.08 shall be made for account of the relevant Lenders,
each termination or reduction of the amount of the Commitments under Section
2.07 and any interest paid in respect of any Reimbursement Obligation shall be
applied to the respective Commitments of the Lenders, in each case pro rata
according to the amounts of their respective Commitments (or, in the case of
any such reimbursement or payment after the termination of the Commitments, pro
rata according to the Aggregate LC Exposure). 

43

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

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

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

44

                    SECTION
2.13. Mitigation Obligations; Replacement of Lenders. 

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

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

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

45

                    SECTION
2.14. Defaulting Lenders

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

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

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

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

46

	
  

 	
  

 
	
  

 	
 LC Exposure
 shall be payable to the Administrative Agent until and to the extent that
 such LC Exposure is reallocated and/or cash collateralized; and

 

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

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

                    SECTION
2.15. Absence of Rating.

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

ARTICLE III

GUARANTEE

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

                    SECTION
3.02. Obligations Unconditional. The obligations of the Guarantors under
Section 3.01 are absolute and unconditional, joint and several, irrespective of
the value, 

47

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

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

                    SECTION
3.03. Reinstatement. The obligations of the Guarantors under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Account Party in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantors jointly and
severally agree that they will indemnify the Administrative Agent, the
Collateral Agent and each Lender on demand for all reasonable costs and
expenses (including reasonable fees of counsel) incurred by the Administrative
Agent, the Collateral Agent or such Lender in connection with such rescission
or restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or 

48

similar
payment under any bankruptcy, insolvency or similar law. 

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

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

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

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

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

49

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

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

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

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

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

                    SECTION
4.02. Authorization; Enforceability. The Transactions are within each
Account Party’s corporate powers and have been duly authorized by all necessary
corporate and, if required, by all necessary shareholder action. Each of this
Agreement, the Pledge Agreement and the Collateral Account Control Agreement
has been duly executed and delivered by each Account Party and constitutes a
legal, valid and binding obligation of such Account Party, enforceable against
such Account Party in accordance with its terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium,
examination or similar laws of general applicability affecting the enforcement
of creditors’ rights 

50

and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). 

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

                    SECTION
4.04. Financial Condition; No Material Adverse Change. 

                    (a)
Financial Condition. XL Group has heretofore furnished to the Lenders
the financial statements specified in Section 6.01(a)(i) with respect to the
fiscal year ended December 31, 2010. Such financial statements present fairly
in all material respects the financial position and results of operations of XL
Group and its consolidated Subsidiaries as of such date and for such period on
a consolidated basis in accordance with GAAP. 

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

                    SECTION
4.05. Properties. 

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

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

51

                    SECTION
4.06. Litigation and Environmental Matters. 

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

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

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

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

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

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

                    SECTION
4.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability

52

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

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

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

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

                    SECTION
4.13. Subsidiaries. Set forth in Schedule V is a complete and correct
list of all of the Subsidiaries of XL Group as of December 31, 2010, together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Schedule V, as of the date hereof,
(x) each of XL Group and its Subsidiaries owns, free and clear of Liens, and
has the unencumbered right to vote, all outstanding ownership interests in each
Person shown to be held by it in Schedule V, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) except as disclosed in
filings of XL Group with the SEC prior to the date hereof, there are no
outstanding 

53

Equity Rights with respect
to any Account Party. 

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

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

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

ARTICLE V

CONDITIONS

                    SECTION
5.01. Effective Date. The obligations of the Lenders (or the Issuing
Lender, as the case may be) to issue Letters of Credit are subject to the
receipt by the Administrative Agent of each of the following documents, each of
which shall be satisfactory to the Administrative Agent (and to the extent
specified below, to each Lender) in form and substance (or such condition shall
have been waived in accordance with Section 10.02): 

	
  

 	
  

 
	
  

 	
           (a)
 Executed Counterparts. (i) From each party hereto either (x) a
 counterpart of this Agreement signed on behalf of such party or (y) written
 evidence satisfactory to the Administrative Agent (which may include telecopy
 transmission of a signed signature page to this Agreement) that such party
 has signed a counterpart of this Agreement and (ii) each Security Document,
 executed and delivered by each party thereto. 

 
	
  

 	
  

 
	
  

 	
           (b)
 Opinions of Counsel to the Obligors. Opinions, each dated the
 Effective Date, of Cleary Gottlieb Steen & Hamilton LLP, special U.S.
 counsel for the Obligors and opinions provided by counsel to the applicable
 Obligors in the jurisdictions of Ireland, the Cayman Islands, Bermuda, the
 United Kingdom and Switzerland, in each case, reasonably satisfactory to the
 Administrative Agent and its counsel. 

 
	
  

 	
  

 
	
  

 	
           (d)
 Corporate Documents. Such documents and certificates as the
 Administrative Agent or its counsel may reasonably request relating to the
 organization, existence and good standing, if applicable, of the Obligors,
 the authorization of the Transactions and

 

54

	
  

 	
  

 
	
  

 	
 any other legal matters
 relating to the Obligors, this Agreement or the Transactions, all in form and
 substance reasonably satisfactory to the Administrative Agent and its
 counsel.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

                    The
Administrative Agent shall notify the Account Parties and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders (or the Issuing
Lender, as the case may be) to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 10.02) at or prior to 5:00 p.m., New York City time,
on March 25, 2011 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time). 

                    SECTION
5.02. Each Credit Event. The obligation of each Lender to issue,
continue, amend, renew or extend any Letter of Credit is additionally subject
to the satisfaction of the following conditions: 

	
  

 	
  

 
	
  

 	
           (a)
 the representations and warranties of the Obligors set forth in this
 Agreement, the Pledge Agreement and the Collateral Account Control Agreement
 (other than, at any time after the Effective Date, in Section 4.04(b)) shall
 be true and correct on and as of the

 

55

	
  

 	
  

 
	
  

 	
 date of issuance, continuation,
 amendment, renewal or extension of such Letter of Credit(or, if any such
 representation or warranty is expressly stated to have been made as of a
 specific date, as of such specific date); 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

ARTICLE VI

AFFIRMATIVE COVENANTS

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

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

	
  

 	
  

 
	
  

 	
           (a)
 by April 10 of each year, (i) the audited balance sheet and related
 statements of operations, stockholders’ equity and cash flows of XL Group and
 its consolidated Subsidiaries as of the end of and for the immediately
 preceding fiscal year, setting forth in comparative form the figures for (or,
 in the case of the balance sheet, as of the end of) the previous fiscal year
 (if such figures were already produced for such corresponding period),
 reported on by independent public accountants of recognized national standing
 (without a “going concern” or like qualification or exception and without any
 qualification or exception as to the scope of such audit) to the effect that
 such financial statements present fairly in all material respects the
 financial condition and results of operations of XL Group and its
 consolidated Subsidiaries on a consolidated basis in accordance with GAAP
 consistently applied (it being understood that delivery to the Lenders of XL
 Group’s Report on Form 10-K filed with the SEC shall satisfy the

 

56

	
  

 	
  

 
	
  

 	
 financial statement
 delivery requirements under this clause (i) so long as the financial
 information required to be contained in such report is substantially the same
 as the financial information required under this clause (i)); and (ii) the
 unaudited consolidated balance sheet and related statements of operations,
 stockholders’ equity and cash flows of XL Group Ltd and its consolidated Subsidiaries
 as of the end of and for the immediately preceding fiscal year, setting forth
 in each case in comparative form the figures for (or, in the case of the
 balance sheet, as of the end of) the previous fiscal year (if such figures
 were already produced for such corresponding period), certified by a
 Financial Officer of XL Group Ltd as presenting fairly in all material
 respects the financial condition and results of operations of XL Group Ltd
 and its consolidated Subsidiaries on a consolidated basis in accordance with
 GAAP consistently applied, subject to normal year-end audit adjustments and
 the absence of footnotes; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (c)
 within 60 days after the end of each of the first three fiscal quarters of
 each fiscal year of XL Group, (i) the unaudited consolidated balance sheet
 and related

 

57

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

58

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (g)
 within 90 days after the end of each of the first three fiscal quarters of
 each fiscal year and within 135 days after the end of each fiscal year of XL
 Group (commencing with the fiscal year ending December 31, 2010), a statement
 of a Financial Officer of XL Group listing, as of the end of the immediately
 preceding fiscal quarter of XL Group, the amount of cash and the securities
 of the Account Parties and their Subsidiaries that have been posted as
 collateral under Section 7.03(e); and 

 
	
  

 	
  

 
	
  

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

 

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

                    (a)
the occurrence of any Default; and 

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

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

                    SECTION
6.03. Preservation of Existence and Franchises. Each Account Party will,
and will cause each of its Significant Subsidiaries to, maintain its corporate
existence and its material rights and franchises in full force and effect in
its jurisdiction of incorporation; provided that the foregoing shall not
prohibit any merger or consolidation permitted under Section 7.01. Each Account
Party will, and will cause each of its Subsidiaries to, qualify and remain
qualified as a foreign corporation in each jurisdiction in which failure to
receive or retain such qualification would have a Material Adverse Effect. 

59

                    SECTION
6.04. Insurance. Each Account Party will, and will cause each of its
Significant Subsidiaries to, maintain with financially sound and reputable
insurers, insurance with respect to its properties in such amounts as is
customary in the case of corporations engaged in the same or similar businesses
having similar properties similarly situated. 

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

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

60

                    SECTION
6.07. Financial Accounting Practices. Each Account Party will, and will
cause each of its consolidated Subsidiaries to, make and keep books, records
and accounts which, in reasonable detail, accurately and fairly reflect its
transactions and dispositions of its assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
transactions are recorded as necessary to permit preparation of financial
statements required under Section 6.01 in conformity with GAAP, Local GAAP, SAP
and SFR, as applicable, and to maintain accountability for assets. 

                    SECTION
6.08. Compliance with Applicable Laws. Each Account Party will, and will
cause each of its Subsidiaries to, comply with all applicable Laws (including
but not limited to the Bermuda Companies Law or Bermuda Insurance Law) in all
respects; provided that such Account Party or any Subsidiary of such Account
Party will not be deemed to be in violation of this Section as a result of any
failure to comply with any such Law which would not (i) result in fines,
penalties, injunctive relief or other civil or criminal liabilities which, in
the aggregate, would have a Material Adverse Effect or (ii) otherwise impair
the ability of such Account Party to perform its obligations under this
Agreement. 

                    SECTION
6.09. Use of Letters of Credit. No Letter of Credit will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the regulations of the Board, including Regulations U and X. Each Account
Party will use the Letters of Credit issued for its account hereunder in the
ordinary course of business of such Account Party and its Affiliates. For the
avoidance of doubt, the parties agree that any Account Party may apply for a
Letter of Credit hereunder to support the obligations of any Affiliate of XL
Group, it being understood that such Account Party shall nonetheless remain the
account party and as such be liable with respect to such Letter of Credit. 

                    SECTION
6.10. Continuation of and Change in Businesses. The Account Parties and
their respective Significant Subsidiaries, taken as a whole, will continue to
engage in substantially the same business or businesses they engaged in (or
propose to engage in) on the date of this Agreement and businesses related or
incidental thereto. 

                    SECTION
6.11. Visitation. Each Account Party will permit such Persons as any
Lender may reasonably designate to visit and inspect any of the properties of
such Account Party, to discuss its affairs with its financial management, and
provide such other information relating to the business and financial condition
of such Account Party at such times as such Lender may reasonably request. Each
Account Party hereby authorizes its financial management to discuss with any
Lender the affairs of such Account Party. 

61

ARTICLE VII

NEGATIVE COVENANTS

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

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

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (b)
 sales, conveyances, assignments or other transfers or dispositions in
 immediate exchange for cash or tangible assets, provided that any such sales,
 conveyances or transfers shall not individually, or in the aggregate for the
 Account Parties and their respective Subsidiaries, exceed 5% of Consolidated
 Total Assets; 

 

62

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (e)
 the Disposition of XL Life; provided that prior to such Disposition,
 the obligations hereunder of XL Life with respect to any outstanding Letters
 of Credit issued for its account have been (i) assumed by another Account
 Party, (ii) terminated or expired or (iii) dealt with in any other manner
 satisfactory to the Administrative Agent. 

 

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (b)
 Liens securing Indebtedness incurred to refinance or replace the Existing
 Credit Agreement; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (f)
 Liens on cash and securities not to exceed $1,000,000,000 in the aggregate
 securing obligations of an Account Party or any of its Subsidiaries arising
 under any ISDA documentation or any other Specified Transaction Agreement (it
 being understood that in no event shall this clause (f) preclude any Person
 (other than any Subsidiary of XL Group) in which XL Group or any of its
 Subsidiaries shall invest (each an “investee”) 

 

63

	
  

 	
  

 
	
  

 	
 from granting Liens on
 such Person’s assets to secure hedging obligations of such Person, so long as
 such obligations are non-recourse to XL Group or any of its Subsidiaries
 (other than any investees)), provided that, for purposes of determining the
 aggregate amount of cash and/or securities subject to such Liens under this
 clause (f), the aggregate amount of cash and/or securities on which any
 Account Party or any Subsidiary shall have granted Liens in favor of the
 counterparties of such Account Party or such Subsidiary at any time shall be
 netted against the aggregate amount of cash and/or securities on which such
 counterparties shall have granted Liens in favor of such Account Party or
 such Subsidiary, as the case may be, at such time, so long as the relevant
 agreements between such Account Party or such Subsidiary, as the case may be,
 provide for the netting of their respective obligations thereunder;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (j)
 Liens existing on property of a Person immediately prior to its being
 consolidated with or merged into any Account Party or any of their
 Subsidiaries or its becoming a Subsidiary, and Liens existing on any property
 acquired by any Account 

 

64

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

                    SECTION
7.04. Transactions with Affiliates. No Account Party will, nor will it
permit any of its Significant Subsidiaries to, enter into or carry out any
transaction with (including purchase or lease property or services to, loan or
advance to or enter into, suffer to remain in existence or amend any contract,
agreement or arrangement with) any Affiliate of such Account Party, or directly
or indirectly agree to do any of the foregoing, except (i) transactions
involving guarantees or co-obligors with respect to any Indebtedness described
in Part A of Schedule II, (ii) transactions among the Account Parties and their
wholly-owned Subsidiaries, (iii) transactions with Affiliates in good faith in
the ordinary course of such Account Party’s business consistent with past practice
and on terms no less favorable to such Account Party or any Subsidiary than
those that could have been obtained in a comparable transaction on an arm’s
length basis from an unrelated Person and (iv) transactions permitted by
Sections 7.01 and 7.07. 

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

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

                    SECTION
7.07. Indebtedness. No Account Party will, nor will it permit any of its
Subsidiaries to, at any time create, incur, assume or permit to exist any
Indebtedness, or agree,

65

become or remain liable
(contingent or otherwise) to do any of the foregoing, except: 

	
  

 	
  

 
	
  

 	
           (a)
 Indebtedness created hereunder; 

 
	
  

 	
  

 
	
  

 	
           (b)
 Indebtedness incurred under the Existing Credit Agreement;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

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

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

66

ARTICLE VIII

EVENTS OF DEFAULT

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (f)
any Account Party or any of its Subsidiaries shall default (i) in any payment
of principal of or interest on any other obligation for borrowed money in
principal amount of $50,000,000 or more, or any payment of any principal
amount of $50,000,000 or more under Hedging Agreements, in each case beyond
any period of grace provided with respect thereto, or (ii) in the performance
of any other agreement, term or condition contained in any such agreement
(other than Hedging Agreements) under which any such obligation in principal
amount of $50,000,000 or more is created, if the effect of such default is to
cause or permit the holder or holders of such obligation (or trustee on
behalf of such holder or holders) to cause such obligation to become due
prior to its stated maturity or to terminate its commitment under such
agreement, provided that this clause  

 

67

	
  

 	
  

 
	
  

 	
 (f)
 shall not apply to secured Indebtedness that becomes due as a result of the
 voluntary sale or transfer of the property or assets securing such
 Indebtedness;

 

	
  

 	
  

 
	
  

 	
           (g)
 a decree or order by a court having jurisdiction in the premises shall have
 been entered adjudging any Account Party a bankrupt or insolvent, or
 approving as properly filed a petition seeking reorganization of such Account
 Party under the Bermuda Companies Law or the Companies Law (2010 Revision) of
 the Cayman Islands or any other similar applicable Law, and such decree or
 order shall have continued undischarged or unstayed for a period of 60 days;
 or a decree or order of a court having jurisdiction in the premises for the
 appointment of an examiner, receiver or liquidator or trustee or assignee in
 bankruptcy or insolvency of such Account Party or a substantial part of its
 property, or for the winding up or liquidation of its affairs, shall have
 been entered, and such decree or order shall have continued undischarged and
 unstayed for a period of 60 days; 

 
	
  

 	
  

 
	
  

 	
           (h)
 any Account Party shall institute proceedings to be adjudicated a voluntary
 bankrupt, or shall consent to the filing of a bankruptcy proceeding against
 it, or shall file a petition or answer or consent seeking reorganization
 under the Bermuda Companies Law or the Companies Law (2010 Revision) of the
 Cayman Islands or any other similar applicable Law, or shall consent to the
 filing of any such petition, or shall consent to the appointment of an
 examiner, receiver or liquidator or trustee or assignee in bankruptcy or
 insolvency of it or a substantial part of its property, or shall make an
 assignment for the benefit of creditors, or shall admit in writing its
 inability to pay its debts generally as they become due, or corporate or
 other action shall be taken by such Account Party in furtherance of any of
 the aforesaid purposes; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (j)
 an ERISA Event (or similar event with respect to any Non-U.S. Benefit Plan)
 shall have occurred that, in the opinion of the Required Lenders, when taken
 together with all other ERISA Events and such similar events that have
 occurred, could reasonably be expected to result in liability of the Account
 Parties and their Subsidiaries in an aggregate amount exceeding $100,000,000;
 

 
	
  

 	
  

 
	
  

 	
           (k)
 a Change in Control shall occur; 

 
	
  

 	
  

 
	
  

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

 

68

	
  

 	
  

 
	
  

 	
           (m)
 the guarantee contained in Article III shall terminate or cease, in whole or
 material part, to be a legally valid and binding obligation of each Guarantor
 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; or 

 
	
  

 	
  

 
	
  

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

 

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

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

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

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

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

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

ARTICLE IX

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

                    Each
of the Lenders hereby irrevocably appoints the Administrative Agent as its
agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise 

69

such powers as
are delegated to the Administrative Agent by the terms hereof and under the
other Credit Documents (including, but not limited to, providing instructions
to the Collateral Agent and the Custodian as provided therein), together with
such actions and powers as are reasonably incidental thereto. 

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

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

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

70

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

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

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

                    Each
of the Lenders hereby irrevocably appoints The Bank of New York Mellon to serve
initially as Collateral Agent hereunder and authorizes the Collateral Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Collateral Agent by the terms hereof, together with such actions and powers
as are reasonably incidental thereto. The Bank of New York Mellon and any
person succeeding it as Collateral Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may

71

 exercise the same as though it were not the
Collateral Agent, and The Bank of New York Mellon or such Person and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Account Party or any Subsidiary or other Affiliate
thereof as if it were not the Collateral Agent hereunder. 

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

72

                    The
Collateral Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by the Collateral
Agent. The Collateral Agent and any such sub-agent may perform any and all its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Collateral Agent and any
such sub-agent. 

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

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

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

73

document or
instrument referred to or provided for herein or in connection herewith or
therewith, except for its own gross negligence or willful misconduct. 

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

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

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

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

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

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

74

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

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

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

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

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

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

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

75

delegates or
attorneys-in-fact appointed by the Collateral Agent in good faith. The
Collateral Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers by or through its respective Affiliates. 

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

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

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

ARTICLE X

MISCELLANEOUS

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           with
 a copy to 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

76

 

	
  

 	
  

 
	
  

 	
           (d)
 if to a Lender, to it at its address (or telecopy number) set forth in its
 Administrative Questionnaire.

 

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

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

                    SECTION
10.02. Waivers; Amendments. 

                    (a)
No Deemed Waivers; Remedies Cumulative. No failure or delay by the
Administrative Agent, the Collateral Agent or any Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent, the Collateral Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by the Account Parties therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, the Collateral Agent or any Lender may have had notice or knowledge of
such Default at the time. 

                    (b)
Amendments. Neither this Agreement, nor the Pledge Agreement nor the
Collateral Account Control Agreement, nor any provision hereof or thereof may
be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Obligors and the Required Lenders or by the
Obligors and the Administrative Agent with the consent of the Required Lenders
(provided that, in the case of the Pledge Agreement or Collateral
Account Control Agreement, the Administrative Agent may, in its discretion,
enter

77

into waivers,
amendments or modifications which it reasonably deems ministerial without the
consent of the Required Lenders); provided that no such agreement shall:  

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (v)
 release any of the Guarantors from any of their guarantee obligations under
 Article III without the written consent of each Lender, 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (vii)
 change any of the provisions of this Section or the percentage in the
 definition of the term “Required Lenders” or any other provision hereof
 specifying the number or percentage of Lenders required to waive, amend or
 modify any rights hereunder or make any determination or grant any consent
 hereunder, without the written consent of each Lender; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

78

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

                    SECTION
10.03. Expenses; Indemnity; Damage Waiver. 

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

                    (b)
Indemnification by the Account Parties. XL Group, and to the extent this
Section 10.03(b) applies to any Letter of Credit issued on behalf of, or
property of, any Account Party, such Account Party, jointly and severally with
XL Group, agree to indemnify the Administrative Agent, the Collateral Agent,
each Issuing Lender and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee (but not including Excluded
Taxes), incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance
by the parties hereto of their respective obligations hereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Letter of Credit or the use thereof (including any refusal by any
Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by such Account
Party or any of its Subsidiaries, or any Environmental Liability related in any
way to such Account Party or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the 

79

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

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

                    (d)
Waiver of Consequential Damages, Etc. To the extent permitted by
applicable law, no Account Party shall assert, and each Account Party hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Letter of Credit or the use of the proceeds thereof. 

                    (e)
Payments. All amounts due under this Section shall be payable promptly
after written demand therefor. 

                    SECTION
10.04. Successors and Assigns. 

                    (a)
Assignments Generally. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that (i) no Account Party may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by an Account Party without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement. 

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

80

 

	
  

 	
  

 
	
  

 	
                     (A)
the Account Parties, provided that no consent of any Account Party shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default under clause (a), (b), (g) or (h) of Article
VIII has occurred and is continuing, any other assignee; and  

 

	
  

 	
  

 
	
  

 	
                     (B)
 the Administrative Agent; and 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

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

 

81

Section. 

                    (iv)
Notwithstanding anything to the contrary contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose vehicle (an “SPV”) of such
Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Account Parties, the option
to provide to the Account Parties all or any part of any LC Disbursement that
such Granting Lender would otherwise be obligated to make to the Account
Parties pursuant to Section 2.01, provided that (i) nothing herein shall
constitute a commitment by any SPV to make any LC Disbursement, (ii) if an SPV
elects not to exercise such option or otherwise fails to provide all or any
part of such LC Disbursement, the Granting Lender shall be obligated to make
such LC Disbursement pursuant to the terms hereof and (iii) the Account Parties
may bring any proceeding against either or both the Granting Lender or the SPV
in order to enforce any rights of the Account Parties hereunder. The making of
a LC Disbursement by an SPV hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such LC Disbursement were made
by the Granting Lender. Each party hereto hereby agrees that no SPV shall be
liable for any payment under this Agreement for which a Lender would otherwise
be liable, for so long as, and to the extent, the related Granting Lender makes
such payment. In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that, prior
to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPV, it will
not institute against, or join any other person in instituting against, such
SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United States or any
State thereof arising out of any claim against such SPV under this Agreement.
In addition, notwithstanding anything to the contrary contained in this
Section, any SPV may with notice to, but without the prior written consent of,
the Account Parties or the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Letter
of Credit to its Granting Lender or to any financial institutions (consented to
by the Account Parties and the Administrative Agent) providing liquidity and/or
credit support (if any) with respect to commercial paper issued by such SPV to
issue such Letters of Credit and such SPV may disclose, on a confidential
basis, confidential information with respect to any Account Party and its
Subsidiaries to any rating agency, commercial paper dealer or provider of a
surety, guarantee or credit liquidity enhancement to such SPV. Notwithstanding
anything to the contrary in this Agreement, no SPV shall be entitled to any
greater rights under Section 2.10 or Section 2.11 than its Granting Lender
would have been entitled to absent the use of such SPV. This paragraph may not
be amended without the consent of any SPV at the time holding LC Disbursements
under this Agreement. 

                    (v)
The Administrative Agent, acting for this purpose as an agent of the Account
Parties, shall maintain at one of its offices in New York City a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, the Commitment of, and principal amount
of the LC Disbursements owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be
conclusive, and the Account Parties, the Administrative Agent and the Lenders 

82

shall treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by any
Account Party and any Lender, at any reasonable time and from time to time upon
reasonable prior notice. 

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

                    (c)
Participations. (i) Any Lender may, without the consent of the Account
Parties, the Administrative Agent or any Issuing Lender, sell participations to
one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and obligations under this Agreement and the
other Credit Documents (including all or a portion of its Commitment and the LC
Disbursements owing to it); provided that (A) any such participation
sold to a Participant which is not a Lender, an Approved Fund or a Federal
Reserve Bank shall be made only with the consent (which in each case shall not
be unreasonably withheld) of XL Group and the Administrative Agent, unless a
Default has occurred and is continuing, in which case the consent of XL Group
shall not be required, (B) such Lender’s obligations under this Agreement and
the other Credit Documents shall remain unchanged, (C) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (D) the Account Parties, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
the other Credit Documents. Any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and the other Credit Documents and to
approve any amendment, modification or waiver of any provision of this
Agreement or the other Credit Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (c)(ii) of this Section, the Account Parties agree that each
Participant shall be entitled to the benefits and subject to the limitations of
Sections 2.10 and 2.11 (subject to the requirements of such Sections) to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.08 as though
it were a Lender, provided such Participant agrees to be subject to Section
2.12(d) as though it were a Lender.  

                    (ii)
A Participant shall not be entitled to receive any greater payment under
Section 2.10 or 2.11 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant or the
Lender interest assigned, unless (A) the sale of 

83

the
participation to such Participant is made with the Account Parties’ prior
written consent and (B) in the case of Section 2.10 or 2.11, the entitlement to
greater payment results solely from a Change in Law formally announced after
such Participant became a Participant. 

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

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

                    (e)
No Assignments to Account Parties or Affiliates. Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate
any interest in any LC Exposure held by it hereunder to any Account Party or
any of its Affiliates or Subsidiaries without the prior consent of each Lender.

                    SECTION
10.05. Survival. All covenants, agreements, representations and
warranties made by the Account Parties herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of the
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Collateral Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of, or any accrued interest on, any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.10, 2.11 and 10.03 and Article IX shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the 

84

expiration or
termination of the Letters of Credit and the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof. 

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

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

                    SECTION
10.08. Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and their Affiliates (collectively, solely for
purposes of this paragraph, the “Lenders”) are hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of any Account Party or Guarantor
against any of and all the obligations of such Account Party or Guarantor now
or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have. 

                    SECTION
10.09. Governing Law; Jurisdiction; Etc. 

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

                    (b)
Submission to Jurisdiction. Each party hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Supreme Court of the State of New York sitting in the
Borough of Manhattan in the City of New York and of the United States District
Court of the Southern District of New York, and any appellate court 

85

from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Collateral
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Obligor or its properties in the courts
of any jurisdiction. 

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

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

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

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

86

BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION. 

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

                    SECTION
10.12. Treatment of Certain Information; Confidentiality. 

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

                    (b)
Confidentiality. Each of the Administrative Agent, the Collateral Agent,
the Lenders and each SPV agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (i) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential),
(ii) to the extent requested by any regulatory authority (including
self-regulating organizations) having jurisdiction over the Administrative
Agent, the Collateral Agent or any Lender (or any Affiliate thereof), (iii) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (iv) to any other party to this Agreement, (v) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(vi) subject to an agreement in writing containing provisions substantially the
same as those of this paragraph and for the benefit of the Account Parties, to
(a) any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (b) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to any Account Party and its obligations or (c) any credit
insurance provider (or its advisors), (vii) with the consent of the Account
Parties or (viii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this paragraph or (B) becomes available
to the Administrative Agent, the Collateral Agent or any Lender on a
nonconfidential basis from a source other than an Account Party. For the
purposes of this paragraph, “Information” means all information received
from an Account Party relating to an Account Party or its business, other than
any such 

87

information
that is available to the Administrative Agent, the Collateral Agent or any
Lender on a nonconfidential basis prior to disclosure by such Account Party;
provided that, in the case of information received from an Account Party after
the date hereof, such information is clearly identified at the time of delivery
as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. Notwithstanding the foregoing, each
of the Administrative Agent, the Collateral Agent and the Lenders agree that
they will not trade the securities of any of the Account Parties based upon
non-public Information that is received by them.  

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

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

88

and take such
actions as are reasonably requested by the Administrative Agent or any Lender
in order to assist the Administrative Agent and the Lenders in maintaining
compliance with the USA Patriot Act. 

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

                    (b)
At such time as all Letters of Credit shall have expired or been terminated and
the Commitments have been terminated, any other Obligations (as defined in the
Pledge Agreement) shall have been paid in full in cash and no Default or Event
of Default has occurred and is continuing, the Collateral shall cease to secure
the Obligations (as defined in the Pledge Agreement), the Collateral shall be
released from the Liens created by the Pledge Agreement, and the Pledge
Agreement and the Collateral Account Control Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent, the Collateral Agent and each Account Party under the
Pledge Agreement and the Collateral Account Control Agreement shall terminate,
all without delivery of any instrument or performance of any act by any Person.

                    SECTION
10.16. NO FIDUCIARY DUTY. The Administrative Agent, each Lender and
their Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”),
may have economic interests that conflict with those of the Obligors, their
stockholders and/or their affiliates. Each Obligor agrees that nothing in the
Credit Documents or otherwise will be deemed to create a fiduciary relationship
or fiduciary or other implied duty between any Lender, on the one hand, and
such Obligor, its stockholders or its affiliates, on the other. The Obligors
acknowledge and agree that (i) the transactions contemplated by the Credit
Documents are arm’s-length commercial transactions between the Lenders, on the
one hand, and the Obligors, on the other, and (ii) in connection therewith and
with the process leading thereto, (x) no Lender has assumed a fiduciary
responsibility in favor of any Obligor, its stockholders or its affiliates with
respect to the transactions contemplated hereby or the process leading thereto
(irrespective of whether any Lender has advised, is currently advising or will
advise any Obligor, its stockholders or its Affiliates on other matters) or any
other obligation to any Obligor except the 

89

obligations
expressly set forth in the Credit Documents and (y) each Lender is acting
solely as principal and not as the fiduciary of any Obligor, its management,
stockholders, creditors or any other Person. Each Obligor acknowledges and
agrees that it has consulted its own legal and financial advisors to the extent
it deemed appropriate and that it is responsible for making its own independent
judgment with respect to such transactions and the process leading thereto. Each
Obligor agrees that it will not claim that any Lender owes a fiduciary or
similar duty to such Obligor, in connection with such transaction or the
process leading thereto. 

90

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

	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 DEBTORS:
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 Signed and
 Delivered as a Deed
 	
  
 	
  
 
	
  
 	
 For and on
 behalf of
 	
  
 	
  
 
	
  
 	
 XL GROUP
 PLC,
 	
  
 	
  
 
	
  
 	
 as an
 Account Party and a Guarantor
 	
  
 	
  
 
	
  
 	
 by its duly
 authorized attorney in the presence of:
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By
 	
 /s/ Simon
 Rich
 	
  
 	
  
 
	
  
 	
  
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Name: Simon
 Rich
 	
  
 	
  
 
	
  
 	
  
 	
 Title:   Attorney
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
 /s/ Robert
 Hawley
 	
  
 	
  
 
	
  
 	
  
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Witness
 	
  
 	
  
 
	
  
 	
  
 	
 Name: Robert
 Hawley
 	
  
 	
  
 
	
  
 	
  
 	
 Title:   V.P.
 Corporate Treasury
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 XL GROUP
 LTD.,
 	
  
 	
  
 
	
  
 	
 as an
 Account Party and a Guarantor
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By
 	
 /s/ Simon
 Rich
 	
  
 	
  
 
	
  
 	
  
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Name: Simon
 Rich
 	
  
 	
  
 
	
  
 	
  
 	
 Title:   Director
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 X.L.
 AMERICA, INC.,
 	
  
 	
  
 
	
  
 	
 as an
 Account Party and a Guarantor
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By
 	
 /s/ Gabriel
 G. Carino III
 	
  
 	
  
 
	
  
 	
  
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Name:
 Gabriel G. Carino III
 	
  
 	
  
 
	
  
 	
  
 	
 Title:   Vice
 President & Treasurer
 	
  
 
	 
	 
	 
	 
	 

	
  
 	
  
 	
  
 	
  
 

CREDIT AGREEMENT

	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 XL INSURANCE
 (BERMUDA) LTD,
 	
  
 
	
  
 	
 as an
 Account Party and a Guarantor
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By
 	
 /s/ C.
 Stanley Lee
 	
  
 	
  
 
	
  
 	
  
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Name: C.
 Stanley Lee
 	
  
 	
  
 
	
  
 	
  
 	
 Title:   Chief
 Financial Officer
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 XL RE LTD,
 	
  
 	
  
 
	
  
 	
 as an
 Account Party and a Guarantor
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By
 	
 /s/ Mark
 Twite
 	
  
 	
  
 
	
  
 	
  
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Name: Mark
 Twite
 	
  
 	
  
 
	
  
 	
  
 	
 Title:
   Senior Vice President and
 	
  
 
	
  
 	
  
 	
            Chief
 Financial Officer
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 Signed and
 Delivered as a Deed
 	
  
 	
  
 
	
  
 	
 For and on
 behalf of
 	
  
 	
  
 
	
  
 	
 XL RE EUROPE
 LIMITED,
 	
  
 	
  
 
	
  
 	
 as an
 Account Party
 	
  
 	
  
 
	
  
 	
 by its duly
 authorized attorney
 	
  
 	
  
 
	
  
 	
 in the
 presence of:
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By
 	
 /s/ Rhicert
 J. Webb
 	
  
 	
  
 
	
  
 	
  
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Name: Rhicert J.
 Webb
 	
  
 	
  
 
	
  
 	
  
 	
 Title:
 Attorney
 	
  
 	
  
 
	 
	 
	 
	 
	 

	
  
 	
 /s/
 	
 Janet Dray
 	
  
 	
  
 
	
  
 	

 
 	

 
 	
  
 	
  
 
	
  
 	
  
 	
 Witness
 	
  
 	
  
 
	
  
 	
  
 	
 Name: Janet D.
 Dray
 	
  
 	
  
 
	
  
 	
  
 	
 Title:
 Executive Assistant
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 

CREDIT AGREEMENT

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 XL INSURANCE
 COMPANY LIMITED,

 	
  

 
	
  

 	
 as an
 Account Party

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Paul
 Bradbrook

 	
  

 	
  

 
	
  

 	
  

 	

 

 	
  

 	
  

 
	
  

 	
  

 	
 Name: Paul R.
 Bradbrook

 	
  

 	
  

 
	
  

 	
  

 	
 Title:   Finance
 Director

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 XL INSURANCE
 SWITZERLAND LTD,

 	
  

 
	
  

 	
 as an
 Account Party

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Daniel
 Maurer

 	
  

 	
  

 
	
  

 	
  

 	

 

 	
  

 	
  

 
	
  

 	
  

 	
 Name: Daniel
 Maurer

 	
  

 	
  

 
	
  

 	
  

 	
 Title:   Chairman

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Bruno Länzlinger

 	
  

 	
  

 
	
  

 	
  

 	

 

 	
  

 	
  

 
	
  

 	
  

 	
 Name: Bruno
 Länzlinger

 	
  

 	
  

 
	
  

 	
  

 	
 Title:   CEO

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 XL LIFE LTD,

 	
  

 	
  

 
	
  

 	
 as an
 Account Party and a Guarantor

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Susan L.
 Cross

 	
  

 	
  

 
	
  

 	
  

 	

 

 	
  

 	
  

 
	
  

 	
  

 	
 Name: Susan
 L. Cross

 	
  

 	
  

 
	
  

 	
  

 	
 Title:   Director

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 

CREDIT AGREEMENT

	
  
 	
  
 	
  
 	
  
 
	
  
 	
 LENDERS
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 JPMORGAN
 CHASE BANK, N.A., as Lender
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Erin
 O’Rourke
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Erin
 O’Rourke
 
	
  
 	
   Title:
 	
 Managing
 Director
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	DEUTSCHE BANK AG NEW YORK BRANCH, as
       Lender
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ John
 McGill
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 John S. McGill
 
	
  
 	
   Title:
 	
 Director
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Kathleen
 Bowers
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Kathleen
 Bowers
 
	
  
 	
   Title:
 	
 Director
 

CREDIT AGREEMENT

	
  
 	
  
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 BARCLAYS BANK PLC, as Lender
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Alicia
 Borys
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Alicia Borys
 
	
  
 	
   Title:
 	
 Vice
 President
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 UBS AG,
 STAMFORD BRANCH, as Lender
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Mary E.
 Evans
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Mary E.
 Evans
 
	
  
 	
   Title:
 	
 Associate
 Director
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Irja R.
 Otsa
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Irja R. Otsa
 
	
  
 	
   Title:
 	
 Associate
 Director
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 COMMERZBANK
 AG, New York and
 
	
  
 	
 Grand Cayman
 Branches, as Lender
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Paul
 Vedova
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Paul Vedova
 
	
  
 	
   Title:
 	
 Vice
 President
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Michael
 McCarthy
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Michael
 McCarty
 
	
  
 	
   Title:
 	
 Managing
 Director
 

CREDIT AGREEMENT

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 CITIBANK,
 N.A., as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Peter C.
 Bickford

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Peter C.
 Bickford

 
	
  

 	
   Title:

 	
 Vice
 President

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

 
	
  

 	
 as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Charles
 Kornberger

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Charles
 Kornberger

 
	
  

 	
   Title:

 	
 Managing
 Director

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Michael
 Madnick

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Michael
 Madnick

 
	
  

 	
   Title:

 	
 Managing
 Director

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 HSBC BANK
 USA, NATIONAL ASSOCIATION, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Jody T.
 Feldman

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Jody T.
 Feldman

 
	
  

 	
   Title:

 	
 Vice
 President – Global Banking FIG

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BANK OF
 AMERICA, N.A., as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Debra
 Basler

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Debra Basler

 
	
  

 	
   Title:

 	
 Managing
 Director

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE BANK OF
 NEW YORK MELLON, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Michael
 Pensari

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Michael
 Pensari

 
	
  

 	
   Title:

 	
 Managing
 Director

 

CREDIT AGREEMENT

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 LLOYDS TSB
 BANK PLC, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Shane
 Klein

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Shane Klein

 
	
  

 	
   Title:

 	
 Senior Vice
 President

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Morgan
 Beanland

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Morgan
 Beanland

 
	
  

 	
   Title:

 	
 Senior Vice
 President

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 MIZUHO
 CORPORATE BANK LIMITED, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ David
 Lim

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 David Lim

 
	
  

 	
   Title:

 	
 Authorized
 Signatory

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE BANK OF NOVA SCOTIA, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ David
 Schwartzbard

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 David
 Schwartzbard

 
	
  

 	
   Title:

 	
 Director

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE BANK OF
 TOKYO-MITSUBISHI UFJ, LTD.,

 
	
  

 	
 NEW YORK
 BRANCH, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Rick
 Adler

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Rick Adler

 
	
  

 	
   Title:

 	
 Authorized
 Signatory

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO
 BANK, NATIONAL ASSOCIATION, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ William
 R. Goley

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 William R.
 Goley

 
	
  

 	
   Title:

 	
 Director

 

CREDIT AGREEMENT

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BNP PARIBAS,
 as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Nair P.
 Raghu

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Nair P.
 Raghu

 
	
  

 	
   Title:

 	
 Vice
 President

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Joseph
 Malley

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Joseph
 Malley

 
	
  

 	
   Title:

 	
 Managing
 Director

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 GOLDMAN
 SACHS BANK USA, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Mark
 Walton

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Mark Walton

 
	
  

 	
   Title:

 	
 Authorized
 Signatory

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 LANDESBANK HESSEN-THÜRINGEN

 
	
  

 	
 GIROZENTRALE,
 New York Branch, as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Samuel
 W. Bridges

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Samuel W.
 Bridges

 
	
  

 	
   Title:

 	
 Senior Vice
 President

 
	
  

 	
  

 	
  

 	
 Financial
 Institutions

 
	
  

 	
  

 	
  

 	
 Public
 Finance

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Irina
 Rakhlis

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Irina
 Rakhlis

 
	
  

 	
   Title:

 	
 Assistant
 Vice President

 
	
  

 	
  

 	
  

 	
 Financial
 Institutions

 
	
  

 	
  

 	
  

 	
 Public
 Finance

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 MORGAN
 STANLEY BANK, N.A., as Lender

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Sherrese
 Clark

 
	
  

 	
  

 	

 

 
	
  

 	
   Name:

 	
 Sherrese
 Clarke

 
	
  

 	
   Title:

 	
 Authorized
 Signatory

 

CREDIT AGREEMENT

	
  
 	
  
 	
  
 	
  
 
	
  
 	
 COMERICA
 BANK, as Lender
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Chatphet
 Saipetch
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 Chatphet
 Saipetch
 
	
  
 	
   Title:
 	
 Vice
 President
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 THE ROYAL
 BANK OF SCOTLAND PLC, as Lender
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ George
 J. Urban
 
	
  
 	
  
 	

 
 
	
  
 	
   Name:
 	
 George J.
 Urban
 
	 
	  Title:
	Vice President

	 
	 
	 

	 
	JPMORGAN CHASE BANK, N.A.,

	 
	as Administrative Agent

	 
	 
	 

	 
	By:
	/s/ Erin O’Rourke

	 
	 
	
   
	 
	  Name:
	Erin O’Rourke

	 
	  Title:
	Managing Director

	 
	 
	 
	 

	 
	THE BANK OF NEW YORK MELLON,

	 
	as Collateral Agent

	 
	 
	 
	 

	 
	By:
	/s/ Cindy Jean Paul

	 
	 
	
   
	 
	  Name:
	Cindy Jean Paul

	 
	  Title:
	Senior Associate

CREDIT AGREEMENT

SCHEDULE II

Indebtedness and Liens

Part A – Indebtedness

	
  

 	
  

 	
  

 
	
  

 	
 1.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Replacement
 Capital Covenant, dated March 15, 2007.

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

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

 

	
  

 	
  

 	
  

 
	
  

 	
 9.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 10.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 11.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 12.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 13.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 14.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 15.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 16.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 17.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 18.

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

 

II - 2

	
  

 	
  

 	
  

 
	
  

 	
 19.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 20.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 21.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 22.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 23.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 24.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 25.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 26.

 	
 Pledge
 Agreement, dated August 5, 2008, by and among XL Capital Ltd, XL Company
 Switzerland GmbH and The Bank of New York Mellon, as Collateral Agent
 Custodial Agent and Securities Intermediary and Purchase Contract Agent.

 
	
  

 	
  

 	
  

 
	
  

 	
 27.

 	
 First
 Amendment, dated as of June 30, 2010, to the Pledge Agreement, dated August
 5, 2008, by and among XL Capital Ltd, XL Company Switzerland GmbH and The
 Bank of New York Mellon, as Collateral Agent Custodial Agent and Securities
 Intermediary and

 

II - 3

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Purchase Contract Agent.

 
	
  

 	
  

 	
  

 
	
  

 	
 28.

 	
 First
 Amendment, dated as of June 30, 2010, to the Purchase Contract Agreement,
 dated August 5, 2008, between the Registrant, XL Capital Ltd, XL Company
 Switzerland and The Bank of New York Mellon, as Purchase Contract Agent.

 
	
  

 	
  

 	
  

 
	
  

 	
 29.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 30.

 	
 10.75%
 Equity Security Units, comprised of the 8.25% Notes due 2021, under the Fifth
 Supplemental Indenture, dated August 5, 2008, to the Indenture, dated as of
 June 2, 2004, between XL Capital Ltd and The Bank of New York Mellon, as trustee,
 and a forward purchase contract. 

 
	
  

 	
  

 	
  

 
	
  

 	
 31.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 32.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 33.

 	
 70
 Gracechurch, London, EC3V 0XL Capital Lease. 

 

II - 4

Part B - Liens

	
  

 	
  

 	
  

 
	
  

 	
 1.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 7.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 9.

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

 

II - 5

	
  

 	
  

 	
  

 
	
  

 	
 10.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 11.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 12.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 13.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 14.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 15.

 	
 Pledge
 Agreement, dated August 5, 2008, by and among XL Capital Ltd, XL Company
 Switzerland GmbH and The Bank of New York Mellon, as Collateral Agent
 Custodial Agent and Securities Intermediary and Purchase Contract Agent.

 
	
  

 	
  

 	
  

 
	
  

 	
 16.

 	
 First
 Amendment, dated as of June 30, 2010, to the Pledge Agreement, dated August
 5, 2008, by and among XL Capital Ltd, XL Company Switzerland GmbH and The
 Bank of New York Mellon, as Collateral Agent Custodial Agent and Securities
 Intermediary and Purchase Contract Agent.

 

II - 6

SCHEDULE III

Litigation

	
  

 	
  

 	
  

 
	
  

 	
 1.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

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

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 Securities
 Litigation In Re Security Capital Assurance Ltd, Civil Action No. 07 CV
 11086.

 

SCHEDULE IV

Environmental Matters

None.

SCHEDULE V

Subsidiaries

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  %

  	
   

  	
  JURISDICTION

  
	

	

	

	

	

	
  XL Group plc

  	
   

  	
   

  	
   

  	
  Ireland

  
	
  XL Group Ltd.

  	
   

  	
   

  	
   

  	
  Cayman

  
	
  XL Company Switzerland GmbH

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
  XL Capital Partners
  Corporation

  	
   

  	
   

  	
   

  	
  Cayman

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

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  EXEL Holdings Limited

  	
   

  	
   

  	
   

  	
  Cayman

  
	
  EXEL Acquisition Ltd.

  	
   

  	
   

  	
   

  	
  Cayman

  
	
  X.L. Property Holdings
  Limited

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL Insurance (Bermuda) Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  Mid Ocean Limited

  	
   

  	
   

  	
   

  	
  Cayman

  
	
  Mid Ocean Holdings Limited

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  Ridgewood Holdings Limited

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL London Market Group Ltd

  	
   

  	
   

  	
   

  	
  UK

  
	
  Brockbank Holdings Ltd

  	
   

  	
   

  	
   

  	
  UK

  
	
  Baltusrol Holdings Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  County Down Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  Dornoch Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  Stonebridge Underwriting
  Ltd

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL London Market Services
  Ltd

  	
   

  	
   

  	
   

  	
  UK

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

  	
   

  	
   

  	
   

  	
  South Africa

  
	
  XL London Market
  Ltd- Syndicates 588/861/990/1209

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL Re Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL BCM Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL FC Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL CCM Ltd

  	
   

  	
   

  	
   

  	
  UK

  
	
  ECS Reinsurance
  Company Inc.

  	
   

  	
   

  	
   

  	
  Barbados

  
	
  Global Capital
  Underwriting Ltd.

  	
   

  	
   

  	
   

  	
  UK

  
	
  Fundamental
  Insurance Investments Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  FII Partners LLC

  	
   

  	
  99

  	
   

  	
  Delaware

  
	
  FII Partners Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  FII Partners LLC

  	
   

  	
  1

  	
   

  	
  Delaware

  
	
  XL Re Europe Limited

  	
   

  	
   

  	
   

  	
  Ireland

  
	
  XL Re Latin America Ltd

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
  XL Latin America
  Investments Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XL Re Brazil Holdings AG

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
  XL Re Participacoes Brasil
  Ltda.

  	
   

  	
   

  	
   

  	
  Brazil

  
	
  XL Resseguros Brasil S.A.

  	
   

  	
   

  	
   

  	
  Brazil

  
	
  XL Re Latin America
  (Argentina SA)

  	
   

  	
  80

  	
   

  	
  Argentina

  
	
  XL Re Latin Escritorio de
  Representacao no Brasil Ltda

  	
   

  	
   

  	
   

  	
  Brazil

  
	
  XL Re Europe Services AG

  	
   

  	
   

  	
   

  	
  Germany

  
	
  XL PP Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL International (Bermuda)
  Ltd

  	
   

  	
  91

  	
   

  	
  Bermuda

  
	
  XL (Brazil) Holdings Ltda

  	
   

  	
   

  	
   

  	
  Brazil

  
	
  XL Financial Solutions Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL Services (Bermuda) Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL Life Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  Reeve Court General
  Partner Limited

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  Reeve Court 4 Limited
  Partnership

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  Reeve Court 6 Limited
  Partnership

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL Gracechurch Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL Insurance (UK) Holdings
  Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL Capital Finance
  (Europe) plc

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL Insurance Argentina
  S.A. Compañia de Seguros

  	
   

  	
  90

  	
   

  	
  Argentina

  
	
  XL Services UK Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL Insurance Company
  Limited

  	
   

  	
   

  	
   

  	
  UK

  
	
  XL Insurance
  Argentina S.A. Compañia de Seguros

  	
   

  	
  10

  	
   

  	
  Argentina

  
	
  XL Insurance
  (China) Company Ltd

  	
   

  	
  49

  	
   

  	
  China

  
	
  XL Holdings
  Proprietary Limited

  	
   

  	
   

  	
   

  	
  South Africa

  
	
  XL Insurance
  Company Ltd (In Liquidation)

  	
   

  	
   

  	
   

  	
  South Africa

  
	
  XL Financial
  Holdings (Ireland) Limited

  	
   

  	
   

  	
   

  	
  Ireland

  
	
  XL Finance
  (Ireland) Limited

  	
   

  	
   

  	
   

  	
  Ireland

  
	
  XL Services
  Canada Ltd.

  	
   

  	
   

  	
   

  	
  Canada

  
	
  *X.L. America,
  Inc.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Financial Solutions,
  Inc.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Capital Investment
  Partners Inc.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Investment Management
  Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XLA Garrison L.P.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  NAC Re Corporation

  	
   

  	
   

  	
   

  	
  Delaware

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

  	
   

  	
   

  	
   

  	
  New York

  
	
  XL Insurance (China)
  Company Ltd

  	
   

  	
  51

  	
   

  	
  China

  
	
  Greenwich Insurance
  Company *(A-12%)

  	
   

  	
   

  	
   

  	
  Delaware

  

V - 2

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Asset Protection
  Services, LLC

  	
   

  	
   

  	
   

  	
  Connecticut

  
	
  Global Asset Protection
  Services Company Limited

  	
   

  	
   

  	
   

  	
  Japan

  
	
  Global Asset Protection
  Services Consultancy (Beijing) Company Limited

  	
   

  	
   

  	
   

  	
  China

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

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Select Insurance
  Company *(A-2%)

  	
   

  	
   

  	
   

  	
  Delaware

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

  	
   

  	
   

  	
   

  	
  New York

  
	
  XL Specialty Insurance
  Company *(A-6%)

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  Indian Harbor Insurance
  Company *(A-2%)

  	
   

  	
   

  	
   

  	
  North Dakota

  
	
  37 Lambert Road LLC

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Global, Inc.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Insurance, Inc.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  X.L. Global Services, Inc.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Investment Management
  (USA) LLC

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  Eagleview Insurance
  Brokerage Services, LLC

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Life and Annuity
  Holding Company

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  XL Life Insurance and
  Annuity Company

  	
   

  	
   

  	
   

  	
  Illinois

  
	
  XL Asset Funding
  Company I LLC

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  ECS, Inc. (In
  Liquidation)

  	
   

  	
   

  	
   

  	
  Pennsylvania

  
	
  ECS Child Care Center,
  Inc. (In Liquidation)

  	
   

  	
   

  	
   

  	
  Pennsylvania

  
	
  XL
  Investments Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL Capital
  Products Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  XL SGS Holdings
  Inc.

  	
   

  	
   

  	
   

  	
  Delaware

  
	
  Garrison
  Investments Inc. (**)

  	
   

  	
   

  	
   

  	
  Barbados

  
	
  Kensington
  Investments Inc.

  	
   

  	
   

  	
   

  	
  Barbados

  
	
  XLB Partners Inc.

  	
   

  	
   

  	
   

  	
  Barbados

  
	
  X.L. Investment Private
  Trustee Ltd.

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
  X.L. Investments
  (Barbados) Inc.

  	
   

  	
   

  	
   

  	
  Barbados

  
	
  ClearWater Opportunity
  Fund Ltd.

  	
   

  	
   

  	
   

  	
  Cayman

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

  	
   

  	
   

  	
   

  	
  Luxembourg

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

  	
   

  	
   

  	
   

  	
  Luxembourg

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

  	
   

  	
   

  	
   

  	
  Luxembourg

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

  	
   

  	
   

  	
   

  	
  Luxembourg

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

  	
   

  	
   

  	
   

  	
  Luxembourg

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

  	
   

  	
   

  	
   

  	
  Luxembourg

  
	
  XL Swiss Holdings Ltd

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
  XL Re Latin America
  (Argentina SA)

  	
   

  	
  20

  	
   

  	
  Argentina

  

V - 3

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XL Insurance Switzerland
  Ltd.

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
  Vitodurum Reinsurance
  Company Ltd.

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
  XL Services Switzerland
  AG

  	
   

  	
   

  	
   

  	
  Switzerland

  
	
  XL India Business
  Services Private Limited

  	
   

  	
   

  	
   

  	
  India

  
	
  XL Insurance Mexico SA
  de CV

  	
   

  	
   

  	
   

  	
  Mexico

  
	
  XL Europe Holdings Ltd

  	
   

  	
   

  	
   

  	
  Bermuda

  

*A =
Company is a member of the Reinsurance America Inc. Pooling Agreement with
individual company pooling % noted

(**) - Limited Partner of XLA Garrison L.P.

V - 4

EXHIBIT A

ASSIGNMENT AND
ASSUMPTION

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

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

	
  

 	
  

 	
  

 
	
 1.

 	
 Assignor:

 	
 ______________________________

 
	
  

 	
  

 	
  

 
	
 2.

 	
 Assignee:

 	
 ______________________________

 
	
  

 	
  

 	
 [and is an
 Affiliate/Approved Fund of [identify Lender]1 [and is a 

 NAIC Approved Bank]2 ]

 

1
Select as applicable.

2
Insert to the extent required by Section 10.04(b) of the Credit Agreement.

Assignment and Assumption

	
  

 	
  

 	
  

 
	
 3.

 	
 Account
 Parties:

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

 
	
  

 	
  

 	
  

 
	
 4.

 	
 Administrative
 Agent:

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

 
	
  

 	
  

 	
  

 
	
 5.

 	
 Credit
 Agreement:

 	
 Credit
 Agreement dated as of March 25, 2011 (as amended and in effect from time to
 time, the “Credit Agreement”), between XL Group plc, XL Group Ltd.,
 X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe
 Limited, XL Insurance Company Limited, XL Insurance Switzerland Ltd and XL
 Life Ltd, the Lenders named therein and JPMorgan Chase Bank, N.A., as
 Administrative Agent

 

- 2 -

Assignment and Assumption

	
  

 	
  

 
	
 6.

 	
 Assigned
 Interest:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Aggregate Amount of

 Commitment for all

 Lenders

 	
  

 	
 Amount of 

 Commitment

 Assigned

 	
  

 	
 Percentage Assigned

 of Commitment3

 	
  

 
	

 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 
	
 $

 	
  

 	
 $

 	
  

 	
  

 	
  

 	
  

 	
 %

 
	
 $

 	
  

 	
 $

 	
  

 	
  

 	
  

 	
  

 	
 %

 
	
 $

 	
  

 	
 $

 	
  

 	
  

 	
  

 	
  

 	
 %

 

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

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ASSIGNOR

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF
 ASSIGNOR]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
    Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ASSIGNEE

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF
 ASSIGNEE]

 
	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
    Title:

 	
  

 

3
Set forth, to at least 9 decimals, as a percentage of the Commitment of all
Lenders thereunder.

- 3 -

Assignment and Assumption

Consented to
and Accepted:

JPMORGAN CHASE
BANK, N.A.,

  as Administrative Agent

	
  

 	
  

 	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Title:

 	
  

 
	
  

 	
  

 
	
 [Consented
 to:]4

 
	
  

 
	
 XL GROUP PLC

 
	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 
	
  

 
	
 XL GROUP
 LTD.

 
	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 
	
  

 
	
 X.L.
 AMERICA, INC.

 
	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 

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

- 4 -

Assignment and Assumption

	
  

 	
  

 	
  

 
	
 XL INSURANCE
 (BERMUDA) LTD

 
	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 
	
  

 
	
 XL RE LTD

 
	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 
	
  

 
	
 XL RE EUROPE
 LIMITED

 
	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 
	
  

 
	
 XL INSURANCE
 COMPANY LIMITED

 
	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 
	
  

 
	
 XL INSURANCE
 SWITZERLAND LTD

 
	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:

 
	
  

 
	
 XL LIFE LTD

 
	
  

 
	
 By

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
   Name:

 
	
   Title:]

 

- 5 -

Assignment and Assumption

ANNEX 1 

CREDIT AGREEMENT DATED AS OF MARCH 25, 2011,
BETWEEN XL GROUP PLC, CERTAIN OF ITS SUBSIDIARIES, THE LENDERS NAMED THEREIN
AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

STANDARD TERMS AND CONDITIONS FOR 

ASSIGNMENT AND ASSUMPTION

                    1.
Representations and Warranties. 

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

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

Assignment and Assumption

is a Foreign
Lender5, attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents, and
(ii) it will perform in accordance with their terms all of the obligations
which by the terms of the Credit Documents are required to be performed by it
as a Lender. 

                    2.
Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date. 

                    3.
General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption
shall be governed by, and construed in accordance with, the law of the State of
New York. 

5 The concept of “Foreign Lender” should be
conformed to the section in the Credit Agreement governing withholding taxes
and gross-up. 

- 2 -

Assignment and Assumption

EXHIBIT B 

[Form of Confirming Lender Agreement] 

[Letterhead of Issuing Lender]

[_____]

[Name of
Confirming Lender] 

[Address] 

Ladies and
Gentlemen: 

                    Reference
is made to the Credit Agreement dated as of March 25, 2011 (as amended and in
effect, the “Credit Agreement”), between XL Group plc, XL Group Ltd., X.L.
America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe Limited, XL
Insurance Company Limited, XL Insurance Switzerland Ltd and XL Life Ltd, the
Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.  

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

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

Form of Confirming Lender Agreement

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

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

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

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

                    Please
indicate your acceptance of the foregoing terms and conditions by signing the
two enclosed copies of this letter agreement and returning (a) one such signed
copy to the undersigned at the address of the Issuing Lender indicated herein
and (b) the other such signed copy to the Administrative Agent, JPMorgan Chase
Bank, N.A., 1111 Fannin Street, 10th Floor, Houston, Texas 77002-6925,
Attention of Wanda G Grace (Telecopy No. (713) 750-2223; Telephone No. (713)
374-4472); email address, wanda.g.grace@jpmchase.com; with a copy to JPMorgan
Chase Bank, N.A., 277 Park Avenue, 11th Floor, New York, New York 10172,
Attention of Brij S Grewal (Telecopy No. (917) 456-3256; email address
brijendra.s.grewal@jpmorgan.com; Telephone No. (212) 270-5305). 

- 2 -

Form of Confirming Lender Agreement

	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF
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 AGREED AS
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 [NAME OF
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- 3 -

Form of Confirming Lender Agreement

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