Document:

EXHIBIT 10.2

 

GARDENBURGER, INC.

CONSULTING AGREEMENT

 

This Consulting Agreement
(the “Agreement”), dated as of  August 26,
2005, is made and entered into by and between Gardenburger, Inc. (the “Company”)
and Robert T. Trebing, Jr. (“Consultant”).

 

W I T N E S S E T H

 

WHEREAS, the Consultant
is the former Senior Vice President and Chief Financial Officer of the Company
and has knowledge and expertise pertaining to the Company;

 

WHEREAS, the Company
desires to retain Consultant in order to provide services to the Company; and

 

WHEREAS, Consultant is
willing to render services to the Company in the performance of agreed upon
tasks as hereinafter provided.

 

Section 1.                                          The Services

 

1.1                               Consultant
will perform for the Company such services as may be agreed upon from time to
time by the Company and Consultant (the “Services”).  The Services include, but are not necessarily
limited to, the Services described in the attached Exhibit A.

 

1.2                               Consultant
shall (a) diligently and conscientiously devote the time and effort
necessary to discharge Consultant’s duties to the Company in a trustworthy and
efficient manner, (b) perform the Services as and when requested by the
Company, (c) comply with the Company’s general procedures and the
direction of the Company’s officers, and (d) fulfill a general duty of
loyalty to the Company, which includes but is not limited to a duty to keep the
Company fully informed of all relevant information; a duty not to act adversely
to the Company’s business or interests; and a duty not to disparage the
Company, its employees, products or services.

 

Section 2.                                          Compensation
and Payment.  In consideration for
Consultant’s agreement to enter this Agreement and to make himself available to
the Company as required herein and as full compensation for satisfactory
performance of the Services and Consultant’s other obligations under this
Agreement, the Company will pay Consultant the compensation specified in the
attached Exhibit A.

 

Section 3.                                          Performance
by Consultant

 

3.1                               Consultant
is an independent contractor, not an employee or agent, of  the Company. 
Without limitation of the foregoing, Consultant will:  (a) not enter into any

 

 

contract,
agreement or other commitment, or incur any obligation or liability, in the
name or otherwise on behalf of the Company; (b) not be entitled to any
worker’s compensation, pension, retirement, insurance or other benefits
afforded to employees of  the Company; (c) provide
for all federal income tax and other withholding relating to Consultant’s
compensation; (d) pay all social security, unemployment and other employer
taxes relating to Consultant’s employment or compensation; (e) provide all
worker’s compensation and other insurance relating to Consultant’s employment;
and (f) perform all reporting, recordkeeping, administrative and similar
functions relating to Consultant’s employment or compensation.

 

3.2                               Consultant
will not subcontract or otherwise delegate performance of any Services without
the prior written consent of the Company.

 

3.3                               In
performance of the Services and this Agreement, Consultant will comply with all
applicable laws, ordinances, rules, regulations, orders, licenses, permits and
other governmental requirements (including, but not limited to, any such
requirements imposed upon the Company with respect to the Services).

 

3.4                               In
connection with the Services or this Agreement, the Company may disclose to
Consultant certain information that is confidential, proprietary or trade
secret information of  the Company or
others.  Consultant will not disclose,
use or publish any such information, except as required to perform the Services
in accordance with this Agreement or as otherwise authorized by the Company in
writing.  Consultant will take
appropriate steps to protect against any unauthorized disclosure, use or
publication of any such information.

 

3.5                               Consultant
represents and warrants that this Agreement and the performance of Consultant’s
obligations under this Agreement will not constitute or cause any breach,
default or violation of any other consulting, nondisclosure, confidentiality or
other agreement to which Consultant is a party. 
In the performance of the Services and this Agreement, Consultant will
not infringe, misappropriate or violate any patent, copyright, trade secret,
trademark or other intellectual property right of any third party.

 

Section 4.                                          Changes

 

4.1                               If
agreed upon by the Company and Consultant, changes may be made in the Services
to be rendered under this Agreement (including, but not limited to, additions
to or deletions from any Services, suspension of performance and changes in
schedule).

 

4.2                               If
any change under Section 4.1 causes an increase or decrease in the time or
costs required to perform the Services in accordance with this Agreement, then Exhibit A
will be equitably adjusted, and this Agreement shall be amended in writing
accordingly.  Unless agreed to in writing
by Consultant, no decrease in the Services to be rendered under this Agreement
will result in any decrease in the compensation paid or payable to Consultant
under this Agreement.

 

 

Section 5.                                          Term and
Termination

 

5.1                               General.  The Term will commence as of the date of this
Agreement and will continue until the earlier of (i) the date of the
Company’s emergence from bankruptcy under the United States Bankruptcy Code, as
determined by the Company in its sole discretion, or (ii) termination of
the Agreement in accordance with Section 5.2.

 

5.2                               Optional
Termination.  Either Party may, at
its option, terminate the Term by giving the other Party thirty (30) days prior
written notice of termination, provided that no termination pursuant to this Section 5.2
will be effective prior to the expiration of thirty (30) days after the date of
such notice of termination.

 

5.3                               Effect
of Termination.  Upon any termination
of the Term, the following will apply:

 

(a)                                  Consultant
will not be obligated to perform any Services after the end of the Term;

 

(b)                                 The
Company will pay Consultant in accordance with Section 2 for all Services
performed prior to the end of the Term;

 

(c)                                  The
Company will not be obligated to pay Consultant for any Services performed or
expenses incurred after the end of the Term;

 

(d)                                 Consultant
will not be obligated to return any compensation he received prior to the end
of the Term in the event of any termination of this Agreement;

 

(e)                                  the  respective rights and obligations of the
parties hereto under Sections 2, 3, 5 and 6 will survive; and

 

(f)                                    neither
party hereto will have any obligation or liability to the other (e.g. for
anticipated revenues or profits based upon this Agreement or for any costs or
expenses incurred in reliance upon this Agreement) on account of any
termination of the Term.

 

Section 6.                                          Miscellaneous

 

6.1                               Any
notice under this Agreement will be deemed to be properly given if given in
writing and delivered in person or mailed, properly addressed and stamped with
the required postage, to the intended recipient as follows:

 

	
  If to Company:

  	
  Gardenburger, Inc.

  
	
   

  	
  15615
  Alton Parkway, Suite 350

  
	
   

  	
  Irvine,
  California 92618

  
	
   

  	
  Attn:
  Scott C. Wallace

  

 

 

	
  If to Consultant:

  	
  Robert
  T. Trebing, Jr.

  
	
   

  	
  28682
  Vista Ladera

  
	
   

  	
  Laguna
  Niguel, CA 92677

  

 

Either party may
change its address specified in this Section 6.1 by giving the other party
notice of such change in accordance with this Section 6.1.

 

6.2                               Consultant
will not (by contract, operation of law or otherwise) assign this Agreement or
any right or interest in this Agreement without the prior written consent
of  the Company.  Subject to the foregoing restriction on
assignments by Consultant, this Agreement will be fully binding upon, inure to
the benefit of, and be enforceable by the parties and their respective
successors, assigns and legal representatives.

 

6.3                               This
Agreement will be interpreted, construed and enforced in all respects in
accordance with the laws of the State of California without reference to its
choice of law principles.

 

6.4                               The
failure of either party hereto to insist upon or enforce strict performance by
the other of any other provisions of this Agreement, or to exercise any right
or remedy under this Agreement, will not be construed as a waiver or
relinquishment to any extent of such party’s right to assert or rely upon any
such provision, right or remedy in that or any other instance; rather, the same
will be and remain in full force and effect.

 

6.5                               No
third parties are intended to benefit by the covenants, agreements, or any
other terms or conditions of this Agreement.

 

6.6                               This
Agreement sets forth the entire agreement between the parties hereto, and
supersedes any and all prior agreements of the parties with respect to the
Services.  No amendment of any provision
of this Agreement will be valid unless set forth in a written amendment signed
by both parties.

 

Signatures on Following Page

 

 

IN WITNESS WHEREOF the
parties hereto have caused this Agreement to be duly executed as of the date
set forth below.

 

 

	
  Company:

  	
  Consultant:

  
	
   

  	
   

  
	
  Gardenburger, Inc.

  	
   Robert T.
  Trebing, Jr.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  Scott C. Wallace 

  	
   

  	
    /s/
  Robert T. Trebing, Jr.

  	
   

  
	
  Name:  Scott C. Wallace 

  	
   

  
	
  Title:  President and Chief Executive Officer

  	
   

  
					

 

 

EXHIBIT A

 

Services and
Compensation

 

Services

 

Consultant shall render
financial consulting services and advice to the Company relating to general
operation financing, financial reporting, SEC compliance (to the extent necessary),
secured financing, and other assignments involving financial matters and issues
that are mutually agreeable to the Company and Consultant.

 

Compensation

 

As of the date of this
Agreement, the Company shall pay Consultant a non-refundable, lump-sum amount
equal to $25,500 as consideration for Consultant’s agreement to enter into this
Agreement and make himself available to the Company as required herein.  Thereafter, the Company shall pay Consultant
$8,500 every two weeks in accordance with the Company’s general practices.

 

The Company shall
reimburse Consultant for approved travel and other out-of-pocket expenses
reasonably incurred by Consultant in the course of performing the Services
under this Agreement.Exhibit 10.14

 

EXECUTION COPY

 

 

CREDIT AGREEMENT

 

dated as of

 

August 25,
2005

 

among

 

AXIS CAPITAL
HOLDINGS LIMITED,

 

The SUBSIDIARY
CREDIT PARTIES Party Hereto,

 

The LENDERS Party
Hereto

 

and

 

JPMORGAN CHASE
BANK, N.A.

as Administrative
Agent

 

 

$1,500,000,000

 

 

J.P. MORGAN
SECURITIES INC.

and

BARCLAYS CAPITAL,

as Joint Lead
Arrangers and Joint Bookrunners

 

BARCLAYS BANK PLC,

as Syndication
Agent

 

CITIBANK, N.A.,
ING BANK N.V.,

WACHOVIA BANK,
N.A., CALYON NEW YORK BRANCH,

HSBC BANK USA, N.A., LLOYDS TSB BANK PLC, and

THE ROYAL BANK OF SCOTLAND PLC,

as Documentation
Agents

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
  SECTION 1.01. Defined
  Terms

  	
   

  
	
  SECTION 1.02.
  Terms Generally

  	
   

  
	
  SECTION 1.03.
  Accounting Terms; GAAP and SAP; Fiscal Year

  	
   

  
	
  SECTION 1.04.
  Currencies; Currency Equivalents

  	
   

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  THE CREDITS

  	
   

  
	
  SECTION 2.01.
  Syndicated Letters of Credit

  	
   

  
	
  SECTION 2.02.
  Issuance and Administration

  	
   

  
	
  SECTION 2.03.
  Reimbursement of LC Disbursements, Etc

  	
   

  
	
  SECTION 2.04.
  Participated Letters of Credit

  	
   

  
	
  SECTION 2.05.
  Loans and Borrowings

  	
   

  
	
  SECTION 2.06.
  Requests for Borrowings

  	
   

  
	
  SECTION 2.07.
  Funding of Borrowings

  	
   

  
	
  SECTION 2.08.
  Interest Elections

  	
   

  
	
  SECTION 2.09.
  Termination, Reduction and Increase of the Commitments

  	
   

  
	
  SECTION 2.10.
  Repayment of Loans; Evidence of Debt

  	
   

  
	
  SECTION 2.11.
  Prepayment of Loans

  	
   

  
	
  SECTION 2.12.
  Addition and Termination of Subsidiary Credit Parties

  	
   

  
	
  SECTION 2.13. Fees

  	
   

  
	
  SECTION 2.14.
  Interest

  	
   

  
	
  SECTION 2.15.
  Alternate Rate of Interest

  	
   

  
	
  SECTION 2.16.
  Increased Costs

  	
   

  
	
  SECTION 2.17.
  Break Funding Payments

  	
   

  
	
  SECTION 2.18. Taxes

  	
   

  
	
  SECTION 2.19.
  Payments Generally; Pro Rata Treatment; Sharing of Set-offs

  	
   

  
	
  SECTION 2.20.
  Mitigation Obligations; Replacement of Lenders

  	
   

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  SECTION 3.01.
  Organization; Powers

  	
   

  
	
  SECTION 3.02.
  Authorization; Enforceability

  	
   

  
	
  SECTION 3.03.
  Governmental Approvals; No Conflicts

  	
   

  
	
  SECTION 3.04.
  Financial Condition; No Material Adverse Change

  	
   

  
	
  SECTION 3.05.
  Litigation

  	
   

  
	
  SECTION 3.06.
  Compliance with Laws and Agreements

  	
   

  
	
  SECTION 3.07.
  Investment and Holding Company Status

  	
   

  
	
  SECTION 3.08.
  Taxes

  	
   

  
	
  SECTION 3.09.
  Pension-Related Matters

  	
   

  

 

i

 

	
  SECTION 3.10.
  Disclosure

  	
   

  
	
  SECTION 3.11.
  Use of Credit

  	
   

  
	
  SECTION 3.12

  	
   

  
	
  SECTION 3.13.
  Subsidiaries

  	
   

  
	
  SECTION 3.14.
  Withholding Taxes

  	
   

  
	
  SECTION 3.15.
  Stamp Taxes

  	
   

  
	
  SECTION 3.16.
  Legal Form

  	
   

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  CONDITIONS

  	
   

  
	
  SECTION 4.01.
  Effective Date

  	
   

  
	
  SECTION 4.02.
  Each Credit Event

  	
   

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  AFFIRMATIVE COVENANTS

  	
   

  
	
  SECTION 5.01.
  Financial Statements and Other Information

  	
   

  
	
  SECTION 5.02.
  Notices of Material Events

  	
   

  
	
  SECTION 5.03.
  Existence; Conduct of Business

  	
   

  
	
  SECTION 5.04.
  Insurance

  	
   

  
	
  SECTION 5.05.
  Maintenance of Properties

  	
   

  
	
  SECTION 5.06.
  Payment of Obligations

  	
   

  
	
  SECTION 5.07.
  Financial Accounting Practices

  	
   

  
	
  SECTION 5.08.
  Compliance with Applicable Laws

  	
   

  
	
  SECTION 5.09.
  Use of Letters of Credit and Proceeds of Loans

  	
   

  
	
  SECTION 5.10.
  Inspection Rights

  	
   

  
	
  SECTION 5.11.
  Financial Strength Rating

  	
   

  
	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  NEGATIVE COVENANTS

  	
   

  
	
  SECTION 6.01.
  Fundamental Changes

  	
   

  
	
  SECTION 6.02.
  Liens

  	
   

  
	
  SECTION 6.03.
  Transactions with Affiliates

  	
   

  
	
  SECTION 6.04.
  Financial Covenants

  	
   

  
	
  SECTION 6.05.
  Indebtedness

  	
   

  
	
  SECTION 6.06.
  Investments

  	
   

  
	
  SECTION 6.07.
  Restricted Payments

  	
   

  
	
  SECTION 6.08.
  Continuation of and Change in Businesses

  	
   

  
	
  SECTION 6.09.
  Private Act

  	
   

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  THE ADMINISTRATIVE
  AGENT

  	
   

  
	
  ARTICLE IX GUARANTEE

  	
   

  
	
  SECTION 9.01.
  The Guarantee

  	
   

  

 

ii

 

	
  SECTION 9.02.
  Obligations Unconditional

  	
   

  
	
  SECTION 9.03. Reinstatement

  	
   

  
	
  SECTION 9.04. Subrogation

  	
   

  
	
  SECTION 9.05. Remedies

  	
   

  
	
  SECTION 9.06. Instrument for the Payment of Money

  	
   

  
	
  SECTION 9.06. Continuing Guarantee

  	
   

  
	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
  SECTION 10.01. Notices

  	
   

  
	
  SECTION 10.02. Waivers; Amendments

  	
   

  
	
  SECTION 10.03. Expenses; Indemnity; Damage Waiver

  	
   

  
	
  SECTION 10.04. Successors and Assigns

  	
   

  
	
  SECTION 10.05. Survival

  	
   

  
	
  SECTION 10.06. Counterparts; Integration;
  Effectiveness

  	
   

  
	
  SECTION 10.07. Severability

  	
   

  
	
  SECTION 10.08. Right of Setoff

  	
   

  
	
  SECTION 10.09. Governing Law; Jurisdiction; Etc

  	
   

  
	
  SECTION 10.10. WAIVER OF JURY TRIAL

  	
   

  
	
  SECTION 10.11. Headings

  	
   

  
	
  SECTION 10.12. Treatment of Certain Information;
  Confidentiality

  	
   

  
	
  SECTION 10.13. Judgment Currency

  	
   

  
	
  SECTION 10.14. USA Patriot Act

  	
   

  

 

iii

 

	
  SCHEDULE 1.01

  	
  -

  	
  Commitments

  	
   

  
	
  SCHEDULE 3.05(a)

  	
  -

  	
  Litigation

  	
   

  
	
  SCHEDULE 3.13

  	
  -

  	
  Subsidiaries

  	
   

  
	
  SCHEDULE 6.05

  	
  -

  	
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  -

  	
  Form of Assignment and
  Assumption

  	
   

  
	
  EXHIBIT B

  	
  -

  	
  Form of Subsidiary Joinder
  Agreement

  	
   

  
	
  EXHIBIT C

  	
  -

  	
  Form of Process Agent
  Acceptance Letter

  	
   

  
	
  EXHIBIT D

  	
  -

  	
  Form of Subsidiary Credit Party
  Termination Notice

  	
   

  
	
  EXHIBIT E-1

  	
  -

  	
  Form of Opinion of Conyers
  Dill & Pearman, Bermuda Counsel to AXIS Capital and AXIS Specialty

  	
   

  
	
  EXHIBIT E-2

  	
  -

  	
  Form of Opinion of New York
  counsel to the Credit Parties

  	
   

  
	
  EXHIBIT E-3

  	
  -

  	
  Form of Opinion of Irish
  Counsel to AXIS Re and AXIS Specialty Europe

  	
   

  
	
  EXHIBIT F

  	
  -

  	
  Form of Opinion of Special New
  York Counsel to JPMCB

  	
   

  
	
  EXHIBIT G

  	
  -

  	
  Form of Confirming Lender
  Agreement

  	
   

  
						

 

iv

 

CREDIT AGREEMENT dated as
of August 25, 2005, among AXIS CAPITAL HOLDINGS LIMITED, a Bermuda limited
liability corporation, the SUBSIDIARY CREDIT PARTIES party hereto (or that
shall become party hereto from time to time pursuant to Section 2.12), the
LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

 

AXIS Capital (as
hereinafter defined) has requested that the Lenders (as so defined) make loans
and extend credit to it and certain of its Subsidiaries in an aggregate
principal or face amount not exceeding $1,500,000,000 at any one time
outstanding, and the Lenders are prepared to extend such 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:

 

“ABR”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans constituting such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Account Party”
means any of AXIS Capital and the Subsidiary Account Parties, as the context
may require, and “Account Parties” means all of the foregoing.

 

“Acquisition”
means, as to any Person, any transaction or series of related transactions
pursuant to which such Person acquires (i) a majority of the voting shares
of another Person, (ii) all or any substantial part of the assets or
business of another Person, or (iii) any assets that constitute a division
or operating unit of another Person (whether by way of purchase of assets or
stock, including any tender for outstanding shares of stock, by merger or
consolidation, or otherwise).

 

“Additional Margin”
means, with respect to any Eurodollar Loan, the rate per annum specified under
the caption “Additional Margin” in the table contained in the definition of “Applicable
Rate” in this Section or otherwise determined in accordance with such
definition.

 

“Adjusted
LIBO Rate” means, for the Interest Period for any Eurodollar Borrowing, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate for such Interest Period.

 

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

 

Credit Agreement

 

 

“Administrative Agent’s
Account” means, for each Currency, an account in respect of such Currency
designated by the Administrative Agent in a written notice to AXIS Capital and
the Lenders.

 

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

 

“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.

 

“Agreed Foreign
Currency” means, at any time, (a) Pounds Sterling, (b) Euro, (c) Australian
Dollars, (d) Canadian Dollars, (e) Japanese Yen and (f) (i) with
respect to the denomination of Syndicated Letters of Credit hereunder, any
other Foreign Currency agreed to by the Administrative Agent and each Lender or
(ii) with respect to the denomination of any Participated Letter of
Credit, any other Foreign Currency agreed to by the Administrative Agent and
the Issuing Lender of such Participated Letter of Credit, so long as, in
respect of any such specified Currency or other Foreign Currency, at such time (A) such
Currency is dealt with in the London interbank deposit market, (B) such
Currency is freely transferable and convertible into U.S. Dollars in the London
foreign exchange market and (C) no central bank or other governmental
authorization in the country of issue of such Currency (including, in the case
of the Euro, any authorization by the European Central Bank) is required to
permit use of such Currency (I) with respect to any Syndicated Letter of
Credit, by any Issuing Lender thereof for issuing such Syndicated Letter of
Credit and/or to permit the relevant Account Party to reimburse any Lender for
any such disbursement or pay the interest thereon or (II) with respect to any
Participated Letter of Credit, by the applicable Issuing Lender thereof for
issuing or making any disbursement with respect to such Participated Letter of
Credit hereunder and/or to permit the relevant Account Party to reimburse such
Issuing Lender for any such disbursement or pay the interest thereon or to
permit any Lender to acquire a participation interest in such Participated
Letter of Credit or make any payment to such Issuing Lender in consideration
therefor, unless in each case such authorization has been obtained and is in
full force and effect.

 

“Alternate Base Rate”
means, for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate for
such day plus 1/2 of 1%.  Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, as the case may be.

 

“Applicable Insurance
Regulatory Authority” means, with respect to any Insurance Company, the
insurance department or similar administrative authority or agency of the
jurisdiction in which such Insurance Company is domiciled.

 

“Applicable Margin”
means, with respect to any Eurodollar Loan, the rate per annum specified under
the caption “Applicable Margin” in the table contained in the definition of “Applicable
Rate” in this Section or otherwise determined in accordance with such
definition.

 

“Applicable Percentage”
means, with respect to any Lender, the percentage of the total Commitments
represented by such Lender’s Commitment. 
If the Commitments have

 

2

 

terminated or expired,
the Applicable Percentages shall be determined based upon the total Credit
Exposures or, if no Letters of Credit or Loans are outstanding, the Commitments
most recently in effect, giving effect to any assignments.

 

“Applicable Rate”
means, for any day, with respect to the commitment fees payable hereunder, the
letter of credit fees payable hereunder or the interest margins applicable to
Eurodollar Loans, as the case may be, the applicable rate per annum set forth
below under the caption “Commitment Fee”, “Letter of Credit Fee” or, with
respect to such interest margins, “Applicable Margin” and/or “Additional Margin”,
respectively, based upon the ratings by Moody’s and S&P, respectively,
applicable on such date to the Index Debt:

 

	
   

  	
   

  	
  Index Debt Ratings

  (Moody’s/S&P)

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Letter of

  Credit Fee

  	
   

  	
  Applicable

  Margin

  (for Eurodollar

  Loans only)

  	
   

  	
  Additional

  Margin

  (for Eurodollar

  Loans only)

  	
   

  
	
  Category 1

  	
   

  	
  > A3/A-

  	
   

  	
  0.07

  	
  %

  	
  0.325

  	
  %

  	
  0.325

  	
  %

  	
  0.10

  	
  %

  
	
  Category 2

  	
   

  	
  Baa1/BBB+

  	
   

  	
  0.08

  	
  %

  	
  0.375

  	
  %

  	
  0.375

  	
  %

  	
  0.10

  	
  %

  
	
  Category 3

  	
   

  	
  Baa2/BBB

  	
   

  	
  0.10

  	
  %

  	
  0.50

  	
  %

  	
  0.50

  	
  %

  	
  0.10

  	
  %

  
	
  Category 4

  	
   

  	
  < Baa3/BBB-

  	
   

  	
  0.15

  	
  %

  	
  0.75

  	
  %

  	
  0.75

  	
  %

  	
  0.10

  	
  %

  

 

For purposes of the
foregoing, (a) if the ratings established or deemed to have been
established by Moody’s and S&P for the Index Debt shall fall within
different Categories that are one Category apart, the Applicable Rate shall be
determined by reference to the Category of the higher of the two ratings; (b) if
the ratings established or deemed to have been established by Moody’s and
S&P for the Index Debt shall fall within different Categories that are more
than one Category apart, the Applicable Rate shall be determined by reference
to the Category next above that of the lower of the two ratings; (c) if
only one of Moody’s and S&P shall have in effect a rating for the Index
Debt, the Applicable Rate shall be determined by reference to the Category of
such rating; (d) if neither Moody’s nor S&P shall have in effect a rating
for the Index Debt (other than by reason of the circumstances referred to in
the last sentence of this definition), then the applicable rating shall be
determined by reference to Category 4; and (e) if the ratings established
or deemed to have been established by Moody’s and S&P for the Index Debt
shall be changed (other than as a result of a change in the rating system of
Moody’s or S&P), such change shall be effective as of the date on which it
is first announced by the applicable rating agency.  Each change in the Applicable Rate shall
apply during the period commencing on such effective date of such change and
ending on the date immediately preceding the effective date of the next such
change.  If the rating system of Moody’s
or S&P shall change, or if either such rating agency shall cease to be in
the business of rating corporate debt obligations, AXIS Capital and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the Applicable Rate shall be
determined by reference to the rating of Moody’s and/or S&P, as the case
may be, applicable to Index Debt most recently in effect prior to such change
or cessation.

 

3

 

“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.

 

“Australian Dollar”
means lawful currency of the Commonwealth of Australia.

 

“Availability Period”
means the period from and including the Effective Date to but excluding the
earlier of the Commitment Termination Date and the date of termination of the
Commitments.

 

“AXIS Capital”
means AXIS Capital Holdings Limited, a Bermuda limited liability corporation.

 

“AXIS Re” means
AXIS Re Limited, an Irish limited liability company.

 

“AXIS Specialty”
means AXIS Specialty Limited, a Bermuda limited liability corporation.

 

“AXIS Specialty Europe”
means AXIS Specialty Europe Limited, an Irish limited liability company.

 

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

 

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

 

“Borrower” means
each of AXIS Capital and the Subsidiary Borrowers, as the context may require,
and “Borrowers” means all of the foregoing.

 

“Borrowing”
means, with respect to any Borrower, (a) all ABR Loans of such
Borrower made, converted or continued on the same date or (b) all
Eurodollar Loans of such Borrower that have the same Interest Period.

 

“Borrowing
Request” means a request by a Borrower for a Borrowing consisting of Loans
in accordance with Section 2.06.

 

4

 

“Business Day”
means any day (a) that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Bermuda are authorized or required
by law to remain closed, (b) if
such day relates to a borrowing of, a payment or prepayment of principal of or
interest on, a continuation or conversion of or into, or the Interest Period
for, a Eurodollar Borrowing, or to a notice by a Borrower with respect to any
such borrowing, payment, prepayment, continuation, conversion, or Interest
Period, that is also a day on which dealings in U.S. Dollar deposits are carried out in the London
interbank market, (c) if such day relates to the issuance or payment under
any Letter of Credit denominated in any Foreign Currency (other than Euro) (or
any notice with respect thereto), that is also a day on which commercial banks
and the foreign exchange market settle payments in the Principal Financial
Center for such Foreign Currency and/or (d) if such day relates to the
issuance or payment under any Letter of Credit denominated in Euro (or any
notice with respect thereto), that is also a TARGET Day.

 

“Canadian Dollar”
means the lawful currency of Canada.

 

“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.

 

“Change in Control”
means (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934,
as amended, and the rules of the SEC thereunder as in effect on the date
hereof), of shares representing more than 50% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of AXIS Capital; (b) occupation
of a majority of the seats (other than vacant seats) on the board of directors
of AXIS Capital by Persons who were neither (i) nominated by the board of
directors of AXIS Capital nor (ii) appointed by directors so nominated; or
(c) the acquisition of direct or indirect Control of AXIS Capital by any
Person or group.

 

“Change in Law”
means (a) the adoption of any law, rule or regulation after the date
hereof, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date hereof or (c) compliance by any Lender (or, for purposes of Section 2.16(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 hereof.

 

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

 

“Commitment”
means, with respect to each Lender, the commitment of such Lender to (a) issue
Syndicated Letters of Credit and/or acquire participations in Participated
Letters of Credit and/or (b) to make Loans hereunder, expressed as an
amount representing the maximum aggregate amount of such Lender’s Credit
Exposure hereunder.  The initial amount
of each Lender’s Commitment is set forth on Schedule 1.01, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable, but in each

 

5

 

case as such Commitment
may be (a) reduced from time to time pursuant to Section 2.09, (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04 and (c) increased from time to time
pursuant to Section 2.09(c).  The
initial aggregate amount of the Lenders’ Commitments is $1,500,000,000.

 

“Commitment
Termination Date” means August 25, 2010.

 

“Commitment
Utilization Day” means any day on which the aggregate outstanding principal
amount of Loans shall equal or exceed 50% of the Revolving Credit Sublimit
(whether or not the Commitments shall have terminated on or prior to such day).

 

“Confirming Lender”
means, with respect to any Lender, any other bank listed on the NAIC Lender
List that has agreed, by delivery of an agreement between such Lender and such
other bank in substantially the form of Exhibit G or such other agreement
in form and substance satisfactory to the Administrative Agent, that such other
bank will itself honor the obligations of such Lender in respect of a draft
complying with the terms of a Letter of Credit, as if, and to the extent, such
other bank were an “issuing lender” (in place of such Lender) named in such
Letter of Credit.

 

“Consolidated Net
Worth” means, at any time, the consolidated stockholders’ equity of AXIS
Capital and its Subsidiaries at such time.

 

“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, (a) this Agreement, (b) the Letter of Credit
Documents and (c) any Subsidiary Joinder Agreements.

 

“Credit
Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and its LC Exposure at
such time.

 

“Credit Party”
means an Account Party or a Borrower.

 

“Credit Party
Jurisdiction” means, with respect to any Credit Party, any of (a) the
jurisdictions of its organization and (b) any other country or countries (i) where
such Credit Party is licensed or qualified to do business or (ii) from or
through which payments hereunder are made by such Credit Party.

 

“Currency” means
the lawful currency of any country.

 

“Currency Valuation
Date” means the first Business Day of each calendar month.

 

“Currency Valuation
Notice” has the meaning set forth in Section 2.11(b).

 

“Currency Valuation
Period” means the period commencing from each Currency Valuation Date to
but not including the next succeeding Currency Valuation Date.

 

6

 

“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.

 

“Designation Date”
has the meaning assigned to such term in Section 2.12(a).

 

“Disposition” has
the meaning assigned to such term in Section 6.01(c).

 

“Effective Date”
means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 10.02).

 

“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 of, 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
AXIS Capital, 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 AXIS Capital or any ERISA
Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by AXIS Capital 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 AXIS Capital or any ERISA Affiliate of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by AXIS Capital or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from AXIS
Capital 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.

 

“Euro”
means the single currency of Participating Member States of the European Union.

 

“Eurodollar”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans constituting such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.

 

7

 

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

 

“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
Credit Party hereunder, (a) income or franchise Taxes imposed on (or
measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which
its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits Taxes imposed
by the United States of America or any similar Tax imposed by any other
jurisdiction in which any Credit Party is located or (c) with respect to
any Lender (other than an assignee pursuant to a request by AXIS Capital pursuant
to Section 2.20(b)) any withholding Tax that (i) is in effect and
would apply to amounts payable to such Lender at the time such Lender becomes a
party to this Agreement (or designates a new lending office), other than any
withholding Tax imposed on any payment to any Lender to the extent such Lender
(or its assignee, as the case may be) was entitled, at the time of designation
of a new lending office (or assignment, as the case may be) to receive
additional amounts from any Credit Party with respect to such withholding Tax
pursuant to Section 2.18(a) or (ii) is attributable to such
Lender’s failure or inability to comply with Section 2.18(e).

 

“Existing Credit
Agreement” means the $750,000,000 Credit Agreement dated as of March 25,
2004 among AXIS Capital, certain of its Subsidiaries, the lenders party thereto
and JPMCB (formerly known as JPMorgan Chase Bank), as administrative agent.

 

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

 

“Financial Officer”
means the chief financial officer, principal accounting officer, treasurer or
controller of AXIS Capital.

 

“Foreign Currency”
means at any time any Currency other than U.S. Dollars.

 

“Foreign Currency
Sublimit” means $300,000,000.

 

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

 

“Governmental
Authority” means the government of the United States of America, Bermuda or
any other nation, or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity (including any federal or other association of or with
which any such nation may be a

 

8

 

member or associated)
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct
or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party or applicant in respect of any letter of credit
or letter of guaranty issued to support such Indebtedness or obligation; provided
that the term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business.

 

“Guaranteed
Obligations” has the meaning assigned to such term in Section 9.01.

 

“Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (d) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all
obligations, contingent or otherwise, of such Person as an account party or
applicant in respect of letters of credit and letters of guaranty and (i) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor; provided
that Indebtedness shall not include (x) trade payables (including payables
under insurance contracts and reinsurance payables) and accrued expenses, in
each case arising in the ordinary course of business and (y) obligations with respect
to Policies.

 

“Indemnified Taxes”
means Taxes (including Other Taxes) imposed on the Administrative Agent or any
Lender on or with respect to any payment hereunder or the execution, delivery
or enforcement of, or otherwise with respect to this Agreement other than
Excluded Taxes.

 

9

 

“Index Debt” means
senior, unsecured, long-term indebtedness for borrowed money evidenced by
bonds, debentures, notes or similar instruments of AXIS Capital that is not guaranteed
by any other Person or subject to any other credit enhancement.

 

“Insurance Company”
means any Subsidiary which is subject to the regulation of, and is required to
file statements with, any governmental body, agency or official in any
jurisdiction which regulates insurance and/ or reinsurance companies or the
doing of an insurance and/ or reinsurance business therein.

 

“Interest
Election Request” means a request by a Borrower to convert or continue a
Borrowing in accordance with Section 2.08.

 

“Interest
Payment Date” means (a) with respect to any ABR Loan, each
Quarterly Date and (b) with respect to any Eurodollar Loan, the last day
of each Interest Period therefor and, in the case of any Interest Period of
more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at three-month intervals after the first day of
such Interest Period.

 

“Interest
Period” means, for any Eurodollar Loan or Borrowing, the period commencing
on the date of such Loan or Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as specified in the applicable Borrowing Request or Interest
Election Request; provided that (a) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day, and (b) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period.  For purposes
hereof, the date of a Loan initially shall be the date on which such Loan is
made and thereafter shall be the effective date of the most recent conversion
or continuation of such Loan, and the date of a Borrowing comprising Loans that
have been converted or continued shall be the effective date of the most recent
conversion or continuation of such Loans.

 

“Investment”
means, for any Person:  (a) the
acquisition (whether for cash, property, services or securities or otherwise)
of capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of any other Person or any agreement to make any
such acquisition (including any “short sale” or any sale of any securities at a
time when such securities are not owned by the Person entering into such sale);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such Person), but excluding any such advance, loan or
extension of credit having a term not exceeding 90 days arising in connection
with the sale of inventory or supplies or other trade credit by such Person in
the ordinary course of business; (c) the entering into of any Guarantee
of, or other contingent obligation with respect to, Indebtedness or other
liability of any other Person (excluding any Guarantee or other contingent
obligation arising in the ordinary course of such Person’s business as a
reinsurance company)

 

10

 

and
(without duplication) any amount committed to be advanced, lent or extended to
such Person; or (d) the entering into of any Swap Agreement.

 

“Investment Guidelines”
means, with respect to any Credit Party or any Subsidiary, the “Statement of
Investment Policy and Objectives” of such Credit Party or Subsidiary (a) as
in effect on, and delivered to the Adminstrative Agent on or prior to, the
Effective Date or (b) delivered to the Administrative Agent pursuant to Section 2.12(a),
as applicable, in each case as may be changed from time to time by a resolution
duly adopted by the board of directors of such Credit Party or Subsidiary (or
any committee thereof).

 

“Issuing Lender”
means (a) with respect to any Syndicated Letter of Credit, each Lender, in
its capacity as an issuer under such Syndicated Letter of Credit, and (b) with
respect to any Participated Letter of Credit, JPMCB and each other Lender
designated by AXIS Capital as an “Issuing Lender” hereunder that has agreed to
such designation and is reasonably acceptable to the Administrative Agent, in
each case, in its capacity as the issuer of such Participated Letter of Credit
hereunder, and its respective successors in such capacity as provided in Section 2.04(k).

 

“Japanese Yen”
means the lawful currency of Japan.

 

“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, a payment
made by an Issuing Lender pursuant thereto and (b) with respect to any
Syndicated Letter of Credit, a payment made by a Lender pursuant thereto.

 

“LC Exposure”
means, at any time, the sum of the U.S. Dollar Amount 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 its Applicable Percentage of the total LC Exposure at such time.

 

“Lenders” means
the Persons listed on Schedule 1.01 and any other Person that shall have
become a Lender party hereto pursuant to an Assignment and Assumption or an
agreement under Section 2.09(c), other than any such Person that ceases to
be a Lender party hereto pursuant to an Assignment and Assumption.

 

“Letter
of Credit” means each of the Syndicated Letters of Credit and the
Participated Letters of Credit.

 

“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 (a) the rights and obligations of the
parties concerned or at risk with respect to

 

11

 

such Letter of Credit or (b) any
collateral security for any of such obligations, each as the same may be
modified and supplemented and in effect from time to time.

 

“LIBO
Rate” means, for the Interest Period for any Eurodollar Borrowing, the rate
appearing on Page 3750 of the Telerate Service (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 Person serving as the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. Dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for the offering of U.S. Dollar deposits with a maturity comparable to such Interest
Period.  In the event that such rate is
not available at such time for any reason, then the LIBO Rate for such Interest
Period shall be the rate at which U.S. Dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period 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, two Business Days prior
to the commencement of such Interest Period.

 

“Lien” means, with
respect to any asset, (a) any mortgage, deed of trust, pledge, lien,
hypothecation, security interest, charge or other encumbrance or security
arrangement of any nature whatsoever in, on or of such asset, and (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset.

 

“Loans” means the
loans made by the Lenders to the Borrowers pursuant to Section 2.05.

 

“Local Time”
means, (a) with respect to any Letter of Credit denominated in or any
payment to be made in U.S. Dollars, New York City time, (b) with respect
to any Letter of Credit denominated in or any payment to be made in any Foreign
Currency (other than Euro), the local time in the Principal Financial Center
for the Foreign Currency in which such Letter of Credit is denominated or such
payment is to be made and (c) with respect to any Letter of Credit
denominated in or any payment to be made in Euro, the local time in London,
England.

 

“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 business,
operations, property or condition (financial or otherwise) of AXIS Capital and
its Subsidiaries taken as a whole, (b) the ability of any Credit Party to
perform any of its obligations under this Agreement or any of the other Credit
Documents or (c) the validity of this Agreement or any of the other Credit
Documents or the rights
of or benefits available to the Administrative Agent and/or the Lenders
hereunder or thereunder.

 

“Material
Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one
or more of AXIS Capital and
its Subsidiaries in an aggregate principal amount exceeding $75,000,000.  For

 

12

 

purposes
of determining Material Indebtedness, the “principal amount” of the
obligations of any Person in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that
such Person would be required to pay if such Swap Agreement were terminated at
such time.

 

“Moody’s” means
Moody’s Investors Service, Inc.

 

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

 

“Other Taxes”
means any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under, or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement or any other Credit Document.

 

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

 

“Participated Letter
of Credit Sublimit” means $300,000,000.

 

“Participated Letters
of Credit” means letters of credit issued under Section 2.04.

 

“Participating Member
State” means any member state of the European Community that adopts or has
adopted the Euro as its lawful currency in accordance with the legislation of
the European Union relating to the European Monetary Union.

 

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

 

“Permitted
Investments” means, with respect to any Credit Party or any Subsidiary, investments
made consistent with, and subject to, the Investment Guidelines of such Credit
Party or such Subsidiary; provided that the aggregate amount of
Permitted Investments with respect to any Credit Party or any Subsidiary in
non-fixed income investments shall not exceed 30% of the aggregate amount of
all Permitted Investments with respect to such Credit Party or such Subsidiary at
any time.

 

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

 

“Plan” means any
employee pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which AXIS Capital or any ERISA Affiliate is (or,
if such plan were

 

13

 

terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

 

“Policies” means
all insurance and reinsurance policies, annuity contracts, guaranteed interest
contracts and funding agreements (including riders to any such policies or
contracts, certificates issued with respect to group life insurance or annuity
contracts and any contracts issued in connection with retirement plans or
arrangements) and assumption certificates issued or to be issued (or filed
pending current review by applicable Governmental Authorities) by any Insurance
Company and any coinsurance agreements entered into or to be entered into by an
Insurance Company.

 

“Pounds Sterling”
means the lawful currency of the United Kingdom of Great Britain and Northern
Ireland.

 

“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.

 

“Principal Financial
Center” means, in the case of any Currency, the principal financial center
in the country of issue of such Currency, as determined by the Administrative
Agent.

 

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

 

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

 

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

 

“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 Credit Exposures and unused Commitments representing more than
50% of the sum of the total Credit Exposures and unused Commitments at such
time.

 

“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of
capital stock of AXIS Capital or any of its Subsidiaries, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
AXIS Capital or any option, warrant or other right to acquire any such shares
of capital stock of AXIS Capital.

 

“Revolving
Credit Sublimit” means $500,000,000.

 

14

 

“SAP” means, as to
each Insurance Company, the statutory accounting practices prescribed or
permitted by the Applicable Insurance Regulatory Authority for the preparation
of its financial statements and other reports by insurance corporations of the
same type as such Insurance Company in effect on the date such statements or
reports are to be prepared, except if otherwise notified by AXIS Capital
pursuant to Section 1.03.

 

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

 

“S&P” means
Standard & Poor’s Ratings Services.

 

“Statutory
Reserve Rate” means, for the Interest Period for any Eurodollar Borrowing,
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 arithmetic
mean, taken over each day in such Interest Period, of 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 Person serving as the Administrative Agent is subject 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.  Eurodollar Loans
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. 
The Statutory Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

 

“Statutory Statement”
means, for any Insurance Company, for any fiscal year of such Insurance
Company, the most recent annual statement filed with the Applicable Insurance
Regulatory Authority, which annual statements shall be prepared in accordance
with SAP.

 

“Subordinated
Indebtedness” means unsecured Indebtedness (i) for which AXIS Capital
is directly and primarily liable, (ii) in respect of which none of its
Subsidiaries is contingently or otherwise obligated (other than obligations pursuant
to subordinated guarantees) and (iii) that is subordinated to the
obligations of AXIS Capital to pay principal of and interest on the Loans and its
reimbursement obligations in respect of LC Disbursements hereunder.

 

“Subsidiary”
means, with respect to any Person (the “parent”), at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP
as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held
by the parent or one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent. 
Unless otherwise specified, “Subsidiary” means a Subsidiary of AXIS
Capital.

 

15

 

“Subsidiary
Account Party” means each Subsidiary that is listed under the
caption “Subsidiary Credit Parties” on the signature pages hereof and each
other Subsidiary that shall become a Subsidiary Account Party pursuant to Section 2.12,
in each case so long as such Subsidiary shall remain a Subsidiary Account Party
hereunder.

 

“Subsidiary
Borrower” means each Subsidiary that is listed under the caption “Subsidiary
Credit Parties” on the signature pages hereof and each other Subsidiary
that shall become a Subsidiary Borrower pursuant to Section 2.12, in each
case so long as such Subsidiary shall remain a Subsidiary Borrower hereunder.

 

“Subsidiary Credit
Party” means a Subsidiary Account Party or a Subsidiary Borrower.

 

“Subsidiary Joinder
Agreement” means a Subsidiary Joinder Agreement entered into by AXIS
Capital and a Subsidiary pursuant to Section 2.12, substantially in the
form of Exhibit B or any other form approved by the Administrative Agent.

 

“Supplemental
Commitment Date” has the
meaning assigned to such term in Section 2.09(c).

 

“Supplemental
Lender” has the meaning
assigned to such term in Section 2.09(c).

 

“Swap Agreement”
means any agreement with respect to any swap, forward, future or derivative transaction
or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of AXIS Capital or its
Subsidiaries shall be a Swap Agreement.

 

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

 

“TARGET Day” means
any day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer payment system (or any successor settlement system as
determined by the Administrative Agent) is open for the settlement of payments
in Euro.

 

“Taxes” means any
and all present or future taxes, levies, imposts, duties, deductions, charges
or withholdings imposed by any Governmental Authority.

 

“Total Funded Debt”
means, at any time, all Indebtedness of AXIS Capital and its Subsidiaries which
would at such time be classified in whole or in part as a liability on the
consolidated balance sheet of AXIS Capital in accordance with GAAP.

 

“Transactions”
means the execution, delivery and performance by the Credit Parties of this
Agreement and the other Credit Documents, the borrowing of Loans, the use of
the proceeds thereof and the issuance of Syndicated Letters of Credit
hereunder.

 

16

 

“Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans constituting such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

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

 

“U.S. Dollar Amount”
means, at any time, (a) with respect to any Letter of Credit, (i) if
such Letter of Credit is denominated in U.S. Dollars, the undrawn amount
thereof at such time and (ii) if such Letter of Credit is made in a
Foreign Currency, the U.S. Dollar Equivalent of the undrawn amount thereof at
such time and (b) with respect to any LC Disbursement, (i) if such LC
Disbursement is made in U.S. Dollars, the amount of such LC Disbursement at
such time and (ii) if such LC Disbursement is made in a Foreign Currency,
the U.S. Dollar Equivalent of the amount of such LC Disbursement at such time.

 

“U.S. Dollar
Equivalent” means:

 

(a)  for the
purposes of calculating the LC Exposure, with respect to any Letter of Credit
denominated in any Foreign Currency, (i) in the case of any determination
made on any Currency Valuation Date under Section 2.11(b), the amount of
U.S. Dollars that would be required to purchase an amount of such Foreign
Currency equal to the undrawn amount of such Letter of Credit if such purchase
were made on such Currency Valuation Date, (ii) in the case of any
determination made upon receipt by the Administrative Agent of any Currency
Valuation Notice under Section 2.11(b), (A) if such Currency
Valuation Notice is received by the Administrative Agent prior to 11:00 a.m.,
New York City time, on a Business Day, the amount of U.S. Dollars that would be
required to purchase an amount of such Foreign Currency equal to the undrawn
amount of such Letter of Credit if such purchase were made on such Business Day
or (B) if such Currency Valuation Notice is otherwise received, the amount
of U.S. Dollars that would be required to purchase an amount of such Foreign
Currency equal to the undrawn amount of such Letter of Credit if such purchase
were made on the first Business Day after such Currency Valuation Notice is
received, (iii) in the case of any determination for purposes of Section 2.01(c),
2.04(c) and 2.05(a), the amount of U.S. Dollars that would be required to
purchase an amount of such Foreign Currency equal to the undrawn amount of such
Letter of Credit if such purchase were made on the immediately preceding
Currency Valuation Date, (iv) in the case of any determination for
purposes of Section 2.13, the amount of U.S. Dollars that would be
required to purchase an amount of such Foreign Currency equal to the average
daily undrawn amount of such Letter of Credit outstanding during each Currency
Valuation Period during the relevant payment period if such purchase were made
on the Currency Valuation Date in each applicable Currency Valuation Period or (v) in
any other case, on the date one Business Day prior to the date of determination
of (or, if later, on the date of any Issuing Lender’s LC Disbursement with
respect to) such Letter of Credit; and

 

(b)  with
respect to any LC Disbursement made in any Foreign Currency, the amount of U.S.
Dollars that would be required to purchase an amount of such Foreign Currency
equal to the amount of such LC Disbursement if such purchase were made (i) in

 

17

 

the case of any
determination of the amount which any Lender is obligated to pay to an Issuing
Lender pursuant to Section 2.04(e) in respect of any such LC
Disbursement, on the date of the request by such Issuing Lender for such
payment or, if earlier, on the date of any redenomination under the last
sentence of Section 2.19(a) or (ii) in any other case, on the
date of such LC Disbursement;

 

in each case based upon
the spot selling rate at which the Person serving as the Administrative Agent
offers to sell such Foreign Currency for U.S. Dollars in the London foreign
exchange market at approximately 11:00 a.m., London, England time on the
immediately preceding Business Day or at such other time and/or rate as agreed
to by AXIS Capital and the Administrative Agent.

 

“U.S. Dollars” and
“$” refers to lawful money of the United States of America.

 

“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.

 

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 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 and SAP; Fiscal
Year.  Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP or SAP, as the context requires, each as in
effect from time to time; provided that, if AXIS Capital notifies the
Administrative Agent that AXIS Capital requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or SAP, as the case may be, or in the application thereof on the operation
of such provision (or if the Administrative Agent notifies AXIS Capital 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 or SAP, as the case may be, or in the application thereof, then
such provision shall be interpreted on the basis of GAAP or SAP, as the case
may be, as in effect and applied immediately before such change shall have

 

18

 

become effective until
such notice shall have been withdrawn or such provision amended in accordance
herewith.  To enable the ready and consistent
determination of compliance with the covenants set forth in Article VI, AXIS
Capital will not change the last day of
its fiscal year from December 31, or the last days of the first three
fiscal quarters in each of its fiscal years from March 31, June 30
and September 30, respectively.

 

SECTION 1.04.  Currencies; Currency Equivalents.  (a)  At any time, any reference in the
definition of the term “Agreed Foreign Currency” or in any other provision of
this Agreement to the Currency of any particular country means the lawful
currency of such country at such time whether or not the name of such Currency
is the same as it was on the date hereof.

 

(b)  Each obligation
hereunder of any party hereto that is denominated in a Currency of a country
that is not a Participating Member State on the date hereof shall, effective
from the date on which such country becomes a Participating Member State, be
redenominated in Euro in accordance with the legislation of the European Union
applicable to the European Monetary Union; provided that, if and to the
extent that any such legislation provides that any such obligation of any such
party payable within such Participating Member State by crediting an account of
the creditor can be paid by the debtor either in Euro or such Currency, such
party shall be entitled to pay or repay such amount either in Euro or in such
Currency.  If the basis of accrual of
interest or fees expressed in this Agreement with respect to an Agreed Foreign
Currency of any country that becomes a Participating Member State after the
date on which such currency becomes an Agreed Foreign Currency shall be
inconsistent with any convention or practice in the interbank market for the
basis of accrual of interest or fees in respect of the Euro, such convention or
practice shall replace such expressed basis effective as of and from the date
on which such country becomes a Participating Member State.  Without prejudice to the respective
liabilities of the Borrowers and the Subsidiary Account Parties to the Lenders
and of the Lenders to the Borrowers and the Subsidiary Account Parties under or
pursuant to this Agreement, each provision of this Agreement shall be subject
to such reasonable changes of construction as the Administrative Agent may from
time to time reasonably specify to be necessary or appropriate to reflect the
introduction or changeover to the Euro in any country that becomes a
Participating Member State after the date hereof.

 

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 an Account Party each Lender agrees at any time and
from time to time during the Availability Period to issue Syndicated Letters of
Credit denominated in U.S. Dollars or in any Agreed Foreign Currency for
account of such Account Party in an aggregate amount that will not result in (i) such
Lender’s Credit Exposure exceeding such Lender’s Commitment or (ii) the
total Credit Exposures exceeding the total Commitments or (iii) the
aggregate LC Exposure in respect of Letters of Credit denominated in the Agreed
Foreign Currencies exceeding the Foreign

 

19

 

Currency Sublimit.  Each Syndicated Letter of Credit shall be in
such form as such Account Party shall request and which (x) the Administrative
Agent shall determine in good faith and on a commercially reasonable basis does
not contain any obligations, or diminish any rights, of any Lender with respect
thereto that are inconsistent with the terms hereof or (y) the Required Lenders
shall approve; 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 Section 2.01(e).  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 as provided in Section 2.01(e).

 

(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 (if by hand delivery or telecopy, not later than 11:00 a.m.,
New York City time, one Business Day prior to 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 and
Currency 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 in accordance
with the terms of such Syndicated Letter of Credit 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; provided
that, unless all of the Lenders shall otherwise agree, if any Syndicated Letter
of Credit is outstanding on the Commitment Termination Date, the Administrative
Agent shall thereafter give such notice of non-extension in accordance with the
terms of such Syndicated Letter of Credit. 
If requested by the Administrative Agent, an 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 an Account
Party to, or entered into by an Account Party with, the Administrative Agent
relating to any 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
the applicable Account Party shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension, (A) the
aggregate Credit Exposure of the Lenders shall not exceed the aggregate amount
of the Commitments, (B) the Credit Exposure of each Lender at the time
outstanding

 

20

 

shall not exceed the
Commitment of such Lender and (C) the aggregate LC Exposure in respect of
Letters of Credit denominated in the Agreed Foreign Currencies shall not exceed
the Foreign Currency Sublimit.

 

(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 each such renewal or extension); provided
that in no event shall any Syndicated Letter of Credit have an expiry date
after 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) the
addition of a Person as Lender hereunder or the increase of the Commitment of a
Lender, in each case pursuant to Section 2.09(c) or (ii) the
assignment of all or a portion of the Commitment and interests in outstanding
Loans and Syndicated Letters of Credit of a Lender pursuant to Section 2.20(b) or
10.04(b), the Administrative Agent shall promptly notify each beneficiary under
an outstanding Syndicated Letter of Credit as to the Lenders that are parties
to such Syndicated Letter of Credit, after giving effect to such assignment,
and their respective Applicable Percentages as of the effective date of such
assignment.

 

(g)  Continuation
of Existing Syndicated Letters of Credit. 
Subject to the terms and conditions hereof, each outstanding Syndicated Letter
of Credit under (and as defined in) the Existing Credit Agreement that was
issued for the account of any of the Account Parties hereunder shall be deemed
to be continued as a Syndicated Letter of Credit hereunder by all of the Lenders
having Commitments on the Effective Date, and the obligation of each such
Lender under such Syndicated Letter of Credit as so continued shall be several
and not joint, based upon its Applicable Percentage and the aggregate undrawn
amount of such Syndicated Letter of Credit, and such Syndicated Letter of
Credit shall be deemed a Syndicated Letter of Credit for all purposes of this
Agreement and the other Credit Documents as of the Effective Date.  The Administrative Agent shall, on the
Effective Date or promptly thereafter, notify each beneficiary of each such Syndicated
Letter of Credit that is continued hereunder as to the names of the Lenders
that, as of the Effective Date, will be the issuing lenders under, and party
to, such Syndicated Letter of Credit and the Lenders’ respective Applicable
Percentages thereunder as of such date.

 

SECTION 2.02.  Issuance and Administration.  Each Syndicated Letter of Credit shall be
executed and delivered by the Administrative Agent in the name and on behalf
of, and as attorney-in-fact for, each Lender party to such Syndicated Letter of
Credit, and the Administrative Agent shall act under each Syndicated Letter of
Credit, and each Syndicated Letter of Credit shall expressly provide that the
Administrative Agent shall act, as the agent of each Lender to (a) receive
drafts, other demands for payment and other documents presented by the
beneficiary under such Syndicated Letter of Credit, (b) determine whether
such drafts,

 

21

 

demands and documents are
in compliance with the terms and conditions of such Syndicated Letter of Credit
and (c) notify such Lender and the applicable 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 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 the Person serving as the Administrative Agent, 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.  Upon the request of any Lender following the
issuance of any Syndicated Letter of Credit, the Administrative Agent will
furnish to such Lender a copy of such Syndicated Letter of Credit.

 

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 denominated in U.S. Dollars, the
applicable Account Party agrees that it shall reimburse such Lender in respect
of such LC Disbursement by paying to the Administrative Agent an amount in U.S.
Dollars equal to the amount of such LC Disbursement not later than noon, New
York City time, on (i) the Business Day that such Account Party 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 such Account Party receives such notice, if such notice is not received
prior to such time.

 

If any Lender shall make
any LC Disbursement in respect of any Syndicated Letter of Credit denominated
in an Agreed Foreign Currency, the applicable Account Party agrees that it
shall reimburse such Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount in U.S. Dollars equal to the U.S. Dollar Amount of
such LC Disbursement not later than noon, Local Time, (i) two Business
Days following the day that such Account Party receives notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., Local Time,
or (ii) three Business Days following the day that such Account Party
receives such notice, if such notice is not received prior to 10:00 a.m.,
Local Time.

 

Without limiting any
other obligations of any of the Account Parties hereunder, the applicable Account
Party hereby agrees (severally and not jointly) to indemnify each Lender in
respect of any Syndicated Letter of Credit denominated in a Foreign Currency
for any and all costs, expenses and losses incurred by it as a result of
receiving payment or reimbursement for any LC Disbursement thereunder from any
Person in a Currency other than U.S. Dollars.  Any such amount payable to any Lender shall be
payable within 10 days after demand by the Administrative Agent.

 

(b)  Reimbursement
Obligations Absolute.  Each of the applicable
Account Parties’ obligations to reimburse LC Disbursements as provided in paragraph (a) of
this Section shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance

 

22

 

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 not complying strictly with the terms
of such Syndicated Letter of Credit, (iv) at any time or from time to
time, without notice to any Account Party, the time for any performance of or
compliance with any of such reimbursement obligations of any other Account
Party shall be waived, extended or renewed, (v) any of such reimbursement
obligations of any other Account Party being amended or otherwise modified in
any respect, or any guarantee of any of such reimbursement obligations or any
security therefor being released, substituted or exchanged in whole or in part
or otherwise dealt with, (vi) any lien or security interest granted to, or
in favor of, the Administrative Agent or any of the Lenders as security for any
of such reimbursement obligations failing to be perfected, (vii) the
occurrence of any Default, (viii) the existence of any proceeding of the
type described in clause (h) or (i) of Article VII with respect
to any other Account Party, AXIS Capital (if it is not an Account Party) or any
other guarantor of any of such reimbursement obligations, (ix) any lack of
validity or enforceability of any of such reimbursement obligations against any
other Account Party, AXIS Capital (if it is not an Account Party) or any other
guarantor of any of such reimbursement obligations or (x) 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 an Account Party hereunder.

 

Neither the
Administrative Agent nor any Lender nor any of their Related Parties shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any 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 an Account Party to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by each Account Party to the extent permitted by applicable law)
suffered by such Account Party 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 Syndicated Letter of Credit comply
with the terms thereof.  The parties
hereto expressly agree that:

 

(A)  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;

 

23

 

(B)  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

 

(C)  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 applicable Account Party by telephone (confirmed by telecopy) 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; provided that any failure to give or delay in giving
such notice or delivering such documents shall not relieve any Account Party of
its obligation to reimburse the Lenders with respect to any such
LC Disbursement.  With
respect to any drawing determined by the Administrative Agent to be 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 applicable Account Party of such LC Disbursement; provided
that any failure to give or delay in giving such notice shall not relieve such
Account Party of its obligation to reimburse the Lenders with respect to any
such LC Disbursement or (if such Account Party is a Subsidiary Account Party)
AXIS Capital of its guarantee of such obligation.

 

(d)  Interim
Interest.  If any LC Disbursement
with respect to a Syndicated Letter of Credit is made, then, unless the
applicable Account Party shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, 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 that such Account Party reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided
that if such Account Party fails to reimburse such LC Disbursement when due
pursuant to paragraph (a) of this Section, then Section 2.14(c) shall
apply.

 

(e)  Cash
Collateralization.  If either (i) an
Event of Default shall occur and be continuing and AXIS Capital receives notice
from the Administrative Agent or the Required Lenders demanding the deposit of
cash collateral for the aggregate LC Exposure of all the Lenders pursuant to
this paragraph or (ii) AXIS Capital shall be required to provide cover for
LC

 

24

 

Exposure pursuant to Section 2.11,
AXIS Capital shall immediately deposit into an account established and
maintained on the books and records of the Administrative Agent, which account
may be a “securities account” (within the meaning of Section 8-501 of the
UCC), in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash in U.S. Dollars equal to (x) in the case of clause (i) above,
the total LC Exposure as of such date plus any accrued and unpaid
interest thereon and (y) in the case of cover pursuant to Section 2.11,
the amount required under Section 2.11; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default described
in clause (h) or (i) of Article VII.  Such deposit shall be held by the
Administrative Agent as collateral for the LC Exposure under this Agreement,
and for this purpose AXIS Capital hereby grants a security interest to the
Administrative Agent for the benefit of the Lenders in such collateral account
and in any financial assets (as defined in the Uniform Commercial Code) or
other property held therein.

 

SECTION 2.04.  Participated Letters of Credit.

 

(a)  General.  Subject to the terms and conditions set forth
herein, any Account Party may request an Issuing Lender to issue, at any time
and from time to time during the Availability Period, Participated Letters of
Credit denominated in U.S. Dollars or in any Agreed Foreign Currency for its
own account.  Each Participated Letter of
Credit shall be in such form as such Account Party shall request and, if
applicable, 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
AXIS Capital, provided that no Participated Letter of Credit may be
requested hereunder for any jurisdiction unless AXIS Capital provides evidence
reasonably satisfactory to the Administrative Agent that Syndicated Letters of
Credit do not comply with the laws of such jurisdiction.  Participated Letters of Credit issued
hereunder shall constitute utilization of the Commitments.

 

(b)  Notice of
Issuance, Amendment, Renewal or Extension. 
To request the issuance of a Participated Letter of Credit (or the
amendment, renewal or extension of an outstanding Participated Letter of
Credit), an Account Party shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by
the applicable Issuing Lender) to the applicable 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, as the case may be (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 and Currency 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 requested by such Issuing Lender, such
Account Party also shall submit a letter of credit application on such 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 such

 

25

 

Account Party to, or
entered into by any Account Party with, such Issuing Lender relating to any
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
each Account Party 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 Issuing Lenders with respect to Participated Letters of
Credit (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 Participated Letter of Credit Sublimit, (ii) the
aggregate Credit Exposure of the Lenders shall not exceed the aggregate amount
of the Commitments and (iii) the aggregate LC Exposure in respect of
Letters of Credit denominated in the Agreed Foreign Currencies shall not exceed
the Foreign Currency Sublimit.

 

(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 each such renewal or extension); provided
that in no event shall any Participated Letter of Credit have an expiry date
after 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 an 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, and each Lender hereby acquires from such Issuing Lender, a participation
in such Participated Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such
Participated Letter of Credit.  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 applicable Issuing Lender, (i) in the case of each
Participated Letter of Credit denominated in U.S. Dollars, Pounds Sterling,
Euro, Australian Dollars, Canadian Dollars or Japanese Yen, an amount in the
relevant Currency equal to such Lender’s Applicable Percentage of each LC
Disbursement made by such Issuing Lender in respect of such Participated Letter
of Credit and (ii) in the case of each Participated Letter of Credit
denominated in any other Currency (other than U.S. Dollars, Pounds Sterling,
Euro, Australian Dollars, Canadian Dollars, Japanese Yen), an amount in U.S. Dollars
equal to such Lender’s Applicable Percentage of the U.S. Dollar Amount of each
LC Disbursement made by such Issuing Lender in respect of such Participated
Letter of Credit, in each case promptly upon the request of such Issuing Lender
at any time from the time such LC Disbursement is made until such LC
Disbursement is reimbursed by the Account Parties or at any time after any
reimbursement payment is required to be refunded to the Account Parties 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 Account Parties pursuant to the following
paragraph, the Administrative Agent shall distribute such

 

26

 

payment to such Issuing
Lender or, to the extent that the Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Lender, then to such Lenders and such
Issuing Lender as their interests may appear. 
Any payment made by a Lender pursuant to this paragraph to reimburse
such Issuing Lender for any LC Disbursement shall not relieve the Account
Parties of their obligation to reimburse such LC Disbursement.  Notwithstanding anything herein to the
contrary, effective upon the increase of the Commitments pursuant to Section 2.09(c),
each Lender’s participation in any Participated Letter of Credit outstanding on
such date shall be adjusted to reflect its Applicable Percentage after giving
effect to such increase.

 

(f)  Reimbursement.  If any Lender shall make any LC Disbursement
in respect of any Participated Letter of Credit denominated in U.S. Dollars,
the applicable Account Party agrees that it shall reimburse such Lender in
respect of such LC Disbursement by paying to the Administrative Agent an amount
in U.S. Dollars equal to the amount of such LC Disbursement not later than
noon, New York City time, on (i) the Business Day that such Account Party
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 such Account Party receives such notice, if such notice
is not received prior to such time.

 

If any Lender shall make
any LC Disbursement in respect of any Participated Letter of Credit denominated
in an Agreed Foreign Currency, the applicable Account Party agrees that it
shall reimburse such Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount in U.S. Dollars equal to the U.S. Dollar Amount of
such LC Disbursement not later than noon, Local Time, on (i) two Business
Days following the day that such Account Party receives notice of such LC Disbursement,
if such notice is received prior to 10:00 a.m., Local Time, or (ii) three
Business Days following the day that such Account Party receives such notice,
if such notice is not received prior to 10:00 a.m., Local Time.

 

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

 

Without limiting any
other obligations of any of the Account Parties hereunder, the applicable Account
Party hereby agrees (severally and not jointly) to indemnify the applicable Issuing
Lender in respect of any Participated Letter of Credit denominated in a Foreign
Currency for any and all costs, expenses and losses incurred by it as a result
of receiving payment or reimbursement for any LC Disbursement thereunder from
any Person in a Currency other than U.S. Dollars.  Any such amount payable to such Issuing
Lender shall be payable within 10 days after demand by such Issuing Lender.

 

(g)  Obligations
Absolute.  Each of the applicable
Account Parties’ obligations 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

 

27

 

presented under a
Participated Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect,
(iii) payment by an 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, (iv) at any time or
from time to time, without notice to any Account Party, the time for any
performance of or compliance with any of such reimbursement obligations of any
other Account Party shall be waived, extended or renewed, (v) any of such
reimbursement obligations of any other Account Party being amended or otherwise
modified in any respect, or any guarantee of any of such reimbursement
obligations or any security therefor being released, substituted or exchanged
in whole or in part or otherwise dealt with, (vi) any lien or security
interest granted to, or in favor of, the Administrative Agent or any of the
Lenders as security for any of such reimbursement obligations failing to be
perfected, (vii) the occurrence of any Default, (viii) the existence
of any proceedings of the type described in clause (h) or (i) of Article VII
with respect to any other Account Party, AXIS Capital, (if it is not an Account
Party) or any guarantor of any of such reimbursement obligations, (ix) any
lack of validity or enforceability of any of such reimbursement obligations
against any other Account Party, AXIS Capital (if it is not an Account Party)
or any guarantor of any of such reimbursement obligations, or (x) 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 any Account Party hereunder.

 

Neither the
Administrative Agent, the Lenders nor any Issuing Lender, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Participated Letter of Credit
or any 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), 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 applicable Issuing
Lender; provided that the foregoing shall not be construed to excuse such
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 such 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 thereof.  The parties hereto
expressly agree that:

 

(i)  each
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)  each 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

 

28

 

(iii)  this
sentence shall establish the standard of care to be exercised by each 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 applicable Issuing
Lender shall, within a reasonable time following its receipt thereof, examine
all documents purporting to represent a demand for payment under a Participated
Letter of Credit.  Such Issuing Lender
shall promptly after such examination notify the Administrative Agent and the
applicable Account Party by telephone (confirmed by telecopy) of such demand
for payment and whether such Issuing Lender has made or will make a LC
Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve such Account Party of its obligation to
reimburse such 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 the
applicable Account Party shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, 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 that such Account Party reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided
that if such Account Party fails to reimburse such LC Disbursement when due
pursuant to paragraph (f) of this Section, then Section 2.14(c) shall
apply.

 

(j)  Cash Collateralization.  If either (i) an Event of Default shall
occur and be continuing and AXIS Capital receives notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral for the aggregate LC Exposure of all the Lenders pursuant to this
paragraph or (ii) AXIS Capital shall be required to provide cover for LC
Exposure pursuant to Section 2.11, AXIS Capital shall immediately deposit
into an account established and maintained on the books and records of the
Administrative Agent, which account may be a “securities account” (within the
meaning of Section 8-501 of the UCC, in the name of the Administrative
Agent and for the benefit of the Lenders, an amount in cash in U.S. Dollars
equal to (x) in the case of clause (i) above, the total LC Exposure as of
such date plus any accrued and unpaid interest thereon and (y) in the
case of cover pursuant to Section 2.11, the amount required under Section 2.11;
provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default described in clause (h) or (i) of Article VII.  Such deposit shall be held by the
Administrative Agent as collateral for the LC Exposure under this Agreement,
and for this purpose AXIS Capital hereby grants a security interest to the
Administrative Agent for the benefit of the Lenders in such collateral account
and in any financial assets (as defined in the Uniform Commercial Code) or
other property held therein.

 

(k)  Additional Issuing Lenders; Termination of
Issuing Lenders.  An Issuing Lender
may be added, or an existing Issuing Lender may be terminated, under this
Agreement at

 

29

 

any time by written
agreement between AXIS Capital, the Administrative Agent and the relevant
Issuing Lender.  The Administrative Agent
shall notify the Lenders of any such addition or termination.  At the time any such termination shall become
effective, the Account Parties shall pay all unpaid fees accrued for account of
the Issuing Lender being terminated pursuant to Section 2.13(c).  From and after the effective date of any such
addition, (i) the new Issuing Lender shall have all the rights and
obligations of an Issuing Lender under this Agreement with respect to
Participated Letters of Credit to be issued thereafter.  After the termination of an Issuing Lender
hereunder, the terminated 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 termination, but shall not be required to issue additional Participated
Letters of Credit.

 

(l)  Continuation of Existing Participated
Letters of Credit.  Subject to the
terms and conditions hereof, each outstanding Participated Letter of Credit
under (and as defined in) the Existing Credit Agreement that was issued for the
account of any of the Account Parties hereunder shall be deemed to be continued
as a Participated Letter of Credit hereunder by the Issuing Lender of such
Participated Letter of Credit, and as of the Effective Date, the Lenders shall
acquire a participation interest therein as if such Participated Letter of
Credit were issued hereunder, and each such Participated Letter of Credit shall
be deemed a Participated Letter of Credit for all purposes of this Agreement
and the other Credit Documents as of the Effective Date.

 

SECTION 2.05.  Loans and Borrowings.

 

(a) 
General.  Subject to the terms and
conditions set forth herein, in addition to the Syndicated Letters of Credit
provided for in Section 2.01 and the Participated Letters of Credit
provided for in Section 2.04, any Borrower may request each Lender, and
each Lender hereby agrees, to make Loans in U.S. Dollars to such Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (i) such Lender’s Credit Exposure exceeding such Lender’s
Commitment, (ii) the total Credit Exposures exceeding the total
Commitments or (iii) the aggregate principal amount of all outstanding
Loans exceeding the Revolving Credit Sublimit. 
Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrowers may borrow, prepay and reborrow Loans.

 

(b) 
Obligations of Lenders.  Each Loan
shall be made as part of a Borrowing of a Borrower consisting of Loans of the
same Type made by the Lenders ratably in accordance with their respective
Commitments.  The failure of any Lender
to make any Loan required to be made by it shall not relieve any other Lender
of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s
failure to make Loans as required.

 

(c) 
Type of Loans.  Subject to Section 2.15,
each Borrowing shall be constituted entirely of ABR Loans or of Eurodollar
Loans as the applicable Borrower may request in accordance herewith.  Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any

 

30

 

exercise
of such option shall not affect the obligation of the applicable Borrower to
repay such Loan in accordance with the terms of this Agreement.

 

(d) 
Minimum Amounts; Limitation on Number of Borrowings.  Each Eurodollar Borrowing shall be in an
aggregate amount of $5,000,000 or a larger multiple of $1,000,000.  Each ABR Borrowing shall be in an
aggregate amount equal to $5,000,000 or a larger multiple of $1,000,000; provided
that an ABR Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.03(a).  Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time
be more than a total of ten Eurodollar Borrowings for all Borrowers
outstanding.

 

(e) 
Limitations on Interest Periods. 
Notwithstanding any other provision of this Agreement, none of the
Borrowers shall be entitled to request (or to elect to convert to or continue
as a Eurodollar Borrowing) any Borrowing if the Interest Period requested
therefor would end after the Commitment Termination Date.

 

SECTION 2.06.  Requests for Borrowings.

 

(a) 
Notice by the Borrowers.  To
request a Borrowing, a Borrower shall notify the Administrative Agent of such
request by telephone (i) in the case of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date
of the proposed Borrowing or (ii) in the case of an ABR Borrowing,
not later than 11:00 a.m., New York City time, one Business Day before the
date of the proposed Borrowing.  Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
such Borrower.

 

(b) 
Content of Borrowing Requests. 
Each telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.05:

 

(i)  the aggregate amount of the requested Borrowing;

 

(ii)  the date of such Borrowing, which shall be a Business Day;

 

(iii)  whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;

 

(iv)  in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the term “Interest
Period” and permitted under Section 2.05(e); and

 

(v)  the location and number of the applicable Borrower’s account
to which funds are to be disbursed.

 

31

 

(c) 
Notice by the Administrative Agent to the Lenders.  Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender’s Loan to
be made as part of the requested Borrowing.

 

(d) 
Failure to Elect.  If no election
as to the Type of a Borrowing is specified in the applicable Borrowing Request,
then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified in the
applicable Borrowing Request with respect to any requested Eurodollar
Borrowing, then the requested Borrowing shall be made instead as an ABR
Borrowing.

 

SECTION 2.07.  Funding of Borrowings.

 

(a) 
Funding by Lenders.  Each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds by 12:00 noon, New York City
time, 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 such Loans available to the
applicable Borrower by promptly crediting the amounts so received, in like
funds, to an account of such Borrower (if any) maintained with the
Administrative Agent in New York City and designated by such Borrower (or such
other account of such Borrower designated by it) in the applicable Borrowing
Request; provided that ABR Borrowings made to finance the
reimbursement of an LC Disbursement as provided in Section 2.03(a) shall
be remitted by the Administrative Agent to the Lenders in accordance with Section 2.19.

 

(b) 
Presumption by the Administrative Agent. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing,
the Administrative Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section and
may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then such Lender and such Borrower
severally agree to pay, without duplication, to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to such Borrower
to but excluding the date of payment to the Administrative Agent, at (i) in
the case of such Lender, the Federal Funds Effective Rate or (ii) in the
case of such Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

 

SECTION 2.08.  Interest Elections.

 

(a) 
Elections by the Borrowers.  The
Loans constituting each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have the Interest Period specified in such Borrowing Request.  Thereafter, the applicable Borrower may elect
to convert such Borrowing to a Borrowing of a different Type or to continue
such Borrowing as a Borrowing of the same Type and, in the case of a Eurodollar
Borrowing, may elect the Interest Period therefor, all as provided in this
Section.

 

32

 

A
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans constituting such Borrowing, and the Loans
constituting each such portion shall be considered a separate Borrowing.

 

(b) 
Notice of Elections.  To make an
election pursuant to this Section, the applicable Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.06 if such Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. 
Each such telephonic Interest Election Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by such Borrower.

 

(c) 
Content of Interest Election Requests. 
Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.05:

 

(i)  the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv) of
this paragraph shall be specified for each resulting Borrowing);

 

(ii)  the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;

 

(iii)  whether the resulting Borrowing is to be an
ABR Borrowing or a Eurodollar Borrowing; and

 

(iv)  if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period” and
permitted under Section 2.05(e).

 

(d) 
Notice by the Administrative Agent to the Lenders.  Promptly following receipt of an Interest
Election Request, the Administrative Agent shall advise each Lender of the
details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e) 
Failure to Elect; Events of Default. 
If the applicable Borrower fails to deliver a timely and complete
Interest Election Request with respect to a Eurodollar Borrowing prior to the
end of the Interest Period therefor, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. 
Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies AXIS Capital, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each

 

33

 

Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period therefor.

 

SECTION 2.09.  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.  AXIS
Capital may at any time, without premium or penalty, terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of
the Commitments shall be in an amount that is $10,000,000 or a larger multiple
of $5,000,000, (ii) AXIS Capital shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans
in accordance with Section 2.11, the total Credit Exposures would exceed
the total Commitments and (iii) each reduction of the Commitments shall
result in a proportionate reduction in the Revolving Credit Sublimit.  AXIS Capital shall notify the Administrative
Agent of any election to terminate or reduce the Commitments under
paragraph (b) of this Section 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 notice, the Administrative Agent shall
advise the Lenders of the contents thereof. 
Each notice delivered by AXIS Capital pursuant to this paragraph shall
be irrevocable.  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.  AXIS Capital shall have
the right at any time prior to the date that is 30 days prior to the Commitment
Termination Date to increase the aggregate Commitments hereunder up to an
aggregate amount not exceeding $2,000,000,000 by adding to this Agreement one
or more other NAIC Approved Lenders (which may include any existing Lender,
with the consent of such Lender in its sole discretion) (each such bank, a “Supplemental Lender”)) with the approval of the
Administrative Agent (which approval shall not be unreasonably withheld), provided
that (i) each Supplemental Lender shall have entered into an agreement
pursuant to which such Supplemental Lender shall undertake a Commitment (or, if
such Supplemental Lender is an existing Lender, pursuant to which its
Commitment shall be increased), (ii) such Commitment of any Supplemental
Lender that is not an existing Lender shall be in an amount of at least
$25,000,000 and (iii) such Commitment (together with the increased
Commitment(s) of all other Supplemental Lenders being provided at such time)
shall be in an aggregate amount of at least $25,000,000.  Each such Supplemental Lender shall enter
into an agreement in form and substance satisfactory to AXIS Capital and the
Administrative Agent pursuant to which such Supplemental Lender shall, as of
the effective date of such increase in the Commitments (which shall be a
Business Day and, unless the Administrative Agent otherwise agrees, on which no
issuance, amendment, renewal or extension of any Letter of Credit is scheduled
to occur or no Borrowing is scheduled to be made, each a “Supplemental Commitment Date”), undertake a Commitment (or, if any
such Supplemental Lender is an existing Lender, its Commitment shall be in
addition to such Lender’s Commitment hereunder on such date) and such
Supplemental Lender shall thereupon become (or continue to be) a “Lender” for
all purposes hereof.  Notwithstanding the
foregoing, no increase in the aggregate Commitments hereunder pursuant to this Section shall
be effective unless:

 

34

 

(i)  AXIS
Capital shall have given the Administrative Agent notice of any such increase
at least three Business Days prior to the applicable Supplemental Commitment
Date;

 

(ii)  no
Default shall have occurred and be continuing on the applicable Supplemental
Commitment Date; and

 

(iii)  each
of the representations and warranties of the Credit Parties contained in this
Agreement and the other Credit Documents shall be true in all material respects
on and as of the applicable Supplemental Commitment Date with the same force
and effect as if made 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 notice under clause (i) above
shall be deemed to constitute a representation and warranty by AXIS Capital and
the other Credit Parties as to the matters specified in clauses (ii) and (iii) above.

 

On
each Supplemental Commitment Date, each Borrower shall (A) prepay the then
outstanding Loans (if any) to such Borrower in full held by the Lenders
immediately prior to giving effect to such increase in the Commitments, (B) if
it shall so request, borrow new Loans from all Lenders (including any
Supplemental Lender) in an aggregate amount at least equal to such prepayment,
so that, after giving effect thereto, the Loans are held ratably by the Lenders
in accordance with their respective Commitments (after giving effect to such
increase) and (C) pay to the Lenders the amounts, if any, payable under Section 2.17.

 

SECTION 2.10.  Repayment of Loans; Evidence of Debt.

 

(a) 
Repayment.  Each Borrower hereby
unconditionally promises to pay to the Administrative Agent for account of the
Lenders the unpaid principal amount of the Loans made to such Borrower on the
Commitment Termination Date.

 

(b) 
Manner of Payment.  Prior to any
repayment of any Borrowings hereunder, the applicable Borrower shall select the
Borrowing or Borrowings of such Borrower to be paid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such selection not
later than 11:00 a.m., New York City time, three Business Days before the
scheduled date of such repayment; provided that each repayment of
Borrowings shall be applied to repay any outstanding ABR Borrowings before
any other Borrowings.  If the applicable
Borrower fails to make a timely selection of the Borrowing or Borrowings to be
repaid (in accordance with the immediately preceding sentence) or prepaid (in
accordance with Section 2.11(b)), such payment shall be applied, first, to
pay any outstanding ABR Borrowings and, second, to other Borrowings in the
order of the remaining duration of their respective Interest Periods (the
Borrowing with the shortest remaining Interest Period to be repaid first).  Each payment of a Borrowing shall be applied
ratably to the Loans included in such Borrowing.

 

(c) 
Maintenance of Records by Lenders. 
Each Lender shall maintain in accordance with its usual practice records
evidencing the indebtedness of the Borrowers to such

 

35

 

Lender
resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

 

(d) 
Maintenance of Records by the Administrative Agent.  The Administrative Agent shall maintain
records in which it shall record (i) the amount of each Loan made
hereunder, the Borrower to which such Loan was made, the Type thereof and each
Interest Period therefor, (ii) the amount of any principal or interest due
and payable or to become due and payable from a Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for account of the Lenders and each Lender’s share thereof.

 

(e) 
Effect of Entries.  The entries
made in the records maintained pursuant to paragraph (c) or (d) of
this Section shall be prima  facie evidence of the existence
and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such records or
any error therein shall not in any manner affect the obligation of the
Borrowers to repay the Loans in accordance with the terms of this Agreement.

 

(f) 
Promissory Notes.  Any Lender may
request that Loans made by it to any Borrower be evidenced by a promissory note
of such Borrower.  In such event, such
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent and the
applicable Borrower.  Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by
one or more promissory notes in such form payable to the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).

 

SECTION 2.11.  Prepayment of Loans.

 

(a) 
Right to Prepay Borrowings.  Each
Borrower shall have the right at any time and from time to time to prepay any
Borrowing of such Borrower in whole or in part, subject to the requirements of
paragraph (c) of this Section.

 

(b) 
Mandatory Prepayments in respect of Currency Fluctuations.

 

(i)  Determination
of Amount Outstanding.  On each Currency
Valuation Date and promptly upon the receipt by the Administrative Agent of a
Currency Valuation Notice, the Administrative Agent shall determine (A) the
sum of the total Credit Exposures and (B) the aggregate LC Exposure in
respect of Letters of Credit denominated in Agreed Foreign Currencies.  Upon making such determination, the
Administrative Agent shall promptly notify the Lenders and AXIS Capital
thereof.

 

(ii)  Prepayment.  If, on the date of such determination, (A) the
sum of the total Credit Exposures (minus the amount of cash collateral
deposited by AXIS Capital and then held by the Administrative Agent pursuant to
Sections 2.03(e) and/or 2.04(j)) exceeds 105% of the total Commitments as
then in effect or (B) the aggregate LC Exposure in respect of Letters of
Credit denominated in Agreed Foreign Currencies (minus the amount of cash
collateral deposited by AXIS Capital and then held by the Administrative Agent pursuant
to Sections 2.03(e) and/or

 

36

 

2.04(j)) exceeds the
Foreign Currency Sublimit, AXIS Capital shall, within three Business Days of
receipt of notice thereof from the Administrative Agent, prepay the Loans and/or
provide cover for LC Exposure by depositing cash collateral pursuant to
the terms of this Agreement in such amounts as shall be necessary so that after
giving effect thereto (x) the sum of the total Credit Exposures does not exceed
the Commitments and (y) the aggregate LC Exposure in respect of Letters of
Credit denominated in Agreed Foreign Currencies does not exceed the Foreign
Currency Sublimit.

 

For purposes hereof, “Currency
Valuation Notice” means a notice given by the Required Lenders or by any
Issuing Lender to the Administrative Agent stating that such notice is a “Currency
Valuation Notice” and requesting that the Administrative Agent determine (A) the
sum of the total Credit Exposures and (B) the aggregate LC Exposure in
respect of Letters of Credit denominated in Agreed Foreign Currencies.  Unless an Event of Default shall have
occurred and be continuing, the Administrative Agent shall not be required to
make more than one valuation determination pursuant to Currency Valuation
Notices within any three month period (excluding the required monthly valuation
determination pursuant to each Currency Valuation Date).

 

(c) 
Notices, Etc.  The applicable
Borrower shall notify the Administrative Agent by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York
City time, one Business Day before the date of prepayment.  Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid.  Promptly
following receipt of any such notice relating to a Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Borrowing under
paragraph (a) of this Section 2.11 shall be in an amount that would
be permitted in the case of a Borrowing of the same Type as provided in Section 2.05(d).  Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.14 and shall be made in the
manner specified in Section 2.10(b).

 

SECTION 2.12.  Addition and Termination of Subsidiary
Credit Parties.

 

(a)  Addition of
Subsidiary Credit Party.  AXIS
Capital may from time to time after the Effective Date designate one or more
direct or indirect, wholly-owned Subsidiaries as a party to this Agreement as
an Account Party and/or a Borrower if, on or prior to the date of designation,
each such Subsidiary shall have delivered to the Administrative Agent a
Subsidiary Joinder Agreement executed by such Subsidiary and AXIS Capital
(together with a copy of the Investment Guidelines of such Subsidiary as in
effect on the date of such Subsidiary Joinder Agreement (the “Designation
Date”), a process agent acceptance letter in respect of such Subsidiary
substantially in the form of Exhibit C and such other documents (including
legal opinions) as the Administrative Agent shall reasonably request, which may
include other documents that are consistent with conditions set forth in Section 4.01,
each in form and substance reasonably satisfactory to the Administrative Agent and
(x) the Administrative Agent shall promptly notify the Lenders thereof and (y)
such Subsidiary shall become a party to this

 

37

 

Agreement, effective as
of such Designation Date, as an Account Party and/or a Borrower, as applicable.

 

(b)  Termination
of Subsidiary Credit Party.  AXIS
Capital may at any time at which (i) any Subsidiary party hereto as an
Account Party shall not be an Account Party with respect to any outstanding
Letter of Credit and shall not have any unpaid LC Disbursements terminate such
Subsidiary as an Account Party hereunder or (ii) any Subsidiary party
hereto as a Borrower shall not have any unpaid Loans or unpaid interest thereon
terminate such Subsidiary as a Borrower hereunder, in each case by delivering
an executed notice thereof, substantially in the form of Exhibit D hereto,
to the Administrative Agent (which shall promptly notify the Lenders).  Immediately upon the receipt by the
Administrative Agent of such notice, (in the case of a termination of a
Subsidiary Account Party) all Commitments of the Lenders to issue Syndicated
Letters of Credit, or to participate in Participated Letters of Credit issued,
for account of such Subsidiary Account Party and (in the case of a termination
of a Subsidiary Borrower) to make Loans to such Subsidiary Borrower, and all
related rights of such Subsidiary hereunder, shall terminate and, as
applicable, such Subsidiary Account Party shall immediately cease to be an
Account Party and/or such Subsidiary Borrower shall immediately cease to be a
Borrower hereunder; provided that all obligations of such Subsidiary as
an Account Party and/or a Borrower, as applicable, hereunder arising in respect
of any period in which such Subsidiary was, or on account of any action or
inaction by such Subsidiary as, an Account Party and/or a Borrower hereunder,
as applicable, shall survive such termination.

 

SECTION 2.13. 
Fees.

 

(a)  Commitment
Fee.  AXIS Capital agrees to pay to
the Administrative Agent for account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of the
Commitment of such Lender during the period from and including the Effective
Date to but excluding the earlier of the date such Commitment terminates and
the Commitment Termination Date.  Accrued
commitment fees shall be payable in U.S. Dollars on the third Business Day
following each Quarterly Date and on the earlier of the date the Commitments
terminate and the Commitment Termination Date, commencing on the first such
date to occur after the date hereof.  All
commitment fees 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).

 

(b)  Letter of
Credit Fee.  AXIS Capital agrees to
pay to the Administrative Agent for account of each Lender a letter of credit
fee, which shall accrue at the Applicable Rate on the average daily aggregate
undrawn amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Commitment terminates and the date on which such Lender ceases to
have any LC Exposure.  Accrued letter of
credit fees shall be payable in U.S. Dollars on the third Business Day
following each Quarterly Date and on the earlier of the date the Commitments
terminate and the Commitment Termination Date, commencing on the first such
date to occur after the date hereof; provided that after the termination
of the Commitments, letter of credit fees shall be payable on demand.  Letter of credit fees 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).

 

38

 

(c)  Participated
Letter of Credit Fees.  AXIS Capital
agrees to pay to the applicable Issuing Lender with respect to Participated
Letters of Credit a fronting fee at a rate per annum agreed between AXIS
Capital and such Issuing Lender and in U.S. Dollars on the average daily amount
of the LC Exposure in respect of Participated Letters of Credit (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the
date of termination of the Commitments and the date on which there ceases to be
any such LC Exposure.  Fronting fees
accrued through and including each Quarterly Date shall be payable in U.S.
Dollars on the third Business Day following such Quarterly Date and on the
earlier of the date the Commitments terminate and the Commitment Termination
Date, commencing on the first such date to occur after the Effective Date; provided
that after the termination of the Commitments, fronting fees shall be payable
on demand.  Fronting fees 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).

 

(d)  Letter of
Credit Commissions, Etc.  AXIS
Capital agrees to pay, on demand, to the Administrative Agent for its own
account or the account of the applicable Issuing Lender with respect to
Participated Letters of Credit, as applicable, all commissions, charges, costs
and expenses with respect to the issuance, amendment, renewal and extension of
each Letter of Credit and drawings and other transactions relating thereto in
amounts customarily charged from time to time in like circumstances by the
Person serving as the Administrative Agent and/or such Issuing Lender, as applicable,
and notified to AXIS Capital in writing by the Administrative Agent and/or such
Issuing Lender, in each case in U.S. Dollars.

 

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

 

(f)  Payment of
Fees.  All fees payable hereunder
shall be paid on the dates due, in U.S. Dollars and immediately available
funds, to the Administrative Agent for distribution, in the case of the
commitment fees, letter of credit fees and fronting fees referred to in
paragraphs (a), (b) and (c), respectively, of this Section, to the Lenders
entitled thereto.  Fees paid shall not be
refundable under any circumstances.

 

SECTION 2.14. 
Interest.

 

(a) 
ABR Loans.  The Loans
constituting each ABR Borrowing shall bear interest at a rate per annum
equal to the Alternate Base Rate.

 

(b) 
Eurodollar Loans.  The Loans
constituting each Eurodollar Borrowing shall bear interest at a rate per annum
equal to the Adjusted LIBO Rate for the Interest Period for such Borrowing plus
the Applicable Margin plus, for any Commitment Utilization Day,
the Additional Margin.

 

(c) 
Default Interest.  Notwithstanding
the foregoing, if any reimbursement of an LC Disbursement or any principal of
or interest on any Loan or any fee or other amount payable by a Credit Party
hereunder is not paid when due, whether at stated maturity, upon acceleration

 

39

 

or
otherwise, 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 overdue
reimbursement of an LC Disbursement or overdue principal of any Loan, 2% plus
the rate otherwise applicable to such LC Disbursement or such Loan as provided
above or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this
Section.

 

(d) 
Payment of Interest.  Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments prior to the Commitment
Termination Date; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment
of an ABR Loan prior to the Commitment Termination Date), accrued interest
on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Borrowing prior to the end of the Interest Period therefor, accrued
interest on such Borrowing shall be payable on the effective date of such
conversion.

 

(e) 
Computation.  All interest
hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is based on the Prime Rate shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable
Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.

 

SECTION 2.15.  Alternate Rate of Interest.  If prior to the commencement of the Interest Period for any Eurodollar
Borrowing:

 

(a)  the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period;
or

 

(b)  the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
respective Loans included in such Borrowing for such Interest Period;

 

then
the Administrative Agent shall give notice thereof to AXIS Capital and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies AXIS Capital and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or the
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing (unless prepaid) shall be continued as, or converted to, an
ABR Borrowing and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

40

 

SECTION 2.16.  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 account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate); or

 

(ii)  impose
on any Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender or any Letter of Credit;

 

and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any
such Loan) or to increase the cost to such Lender of issuing, maintaining or
participating in any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise), then, upon written demand to the respective Account Party by
such Lender (with a copy to the Administrative Agent), AXIS Capital will pay to such Lender
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

 

(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 Loans made by, or 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 AXIS Capital will pay to such Lender
such additional amount or amounts as will compensate such Lender or such Lender’s
holding company for any such reduction suffered.

 

(c)  Certificates
from Lenders.  A certificate of a
Lender setting forth 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 AXIS Capital and shall be conclusive absent manifest error.  AXIS Capital shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof by AXIS Capital.

 

(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 AXIS Capital shall
not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender notifies AXIS Capital 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 six-month period referred to above shall be extended to
include the period of retroactive effect thereof.

 

SECTION 2.17.  Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period therefor

 

41

 

(including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than
on the last day of an Interest Period therefor, (c) the failure to borrow,
convert, continue or prepay any Loan on the date specified in any notice
delivered pursuant hereto or (d) the assignment as a result of a request
by AXIS Capital pursuant
to Section 2.20(b) of any Eurodollar Loan other than on the last day
of an Interest Period therefor, then, in any such event, AXIS Capital shall compensate each
Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, the loss to
any Lender attributable to any such event shall be deemed to include an amount
determined by such Lender to be equal to the excess, if any, of (i) the
amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from
such borrowing, conversion or continuation) if the interest rate payable on
such deposit were equal to the Adjusted LIBO Rate for such Interest Period, over
(ii) the amount of interest that such Lender would earn on such principal
amount for such period if such Lender were to invest such principal amount for
such period at the interest rate that would be bid by such Lender (or an
affiliate of such Lender) for U.S. Dollar deposits from other banks in the
eurodollar market at the commencement of such period.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to AXIS Capital and
shall be conclusive absent manifest error. 
AXIS Capital shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

SECTION 2.18. 
Taxes.

 

(a)  Payments
Free of Taxes.  Any and all payments
by or on account of any obligation of a Credit Party hereunder or under any
other Credit Document shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if a Credit Party
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable 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 deductions been made, (ii) such Credit Party shall make such
deductions and (iii) such Credit Party shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.

 

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

 

(c)  Indemnification
by the Credit Parties.  Each Credit
Party shall indemnify the Administrative Agent and each Lender, within 10 days
after written demand to such Credit Party therefor, for the full amount of any
Indemnified Taxes or Other Taxes in respect of such Credit Party (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative 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 were correctly or legally

 

42

 

imposed or asserted by
the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to a Credit
Party by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

(d)  Evidence of
Payments.  As soon as practicable
after any payment of Indemnified Taxes or Other Taxes by a Credit Party to a
Governmental Authority, such Credit 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.

 

(e)  Exemptions.  Each Lender and the Administrative Agent
shall, at the written request of a Credit Party, provide to such Credit Party
such form, certification or similar documentation, if any (each duly completed,
accurate and signed) as is currently required by any Credit Party Jurisdiction
or any other jurisdiction, or comply with such other requirements, if any, as
is currently applicable in any Credit Party Jurisdiction or any other
jurisdiction, in order to obtain an exemption from, or reduced rate of,
deduction, payment or withholding of Indemnified Taxes or Other Taxes to which
such Lender or the Administrative Agent is entitled pursuant to an applicable
tax treaty or the law of any Credit Party Jurisdiction or any other
jurisdiction; provided that such Credit Party shall have furnished to
such Lender or the Administrative Agent in a reasonably timely manner copies of
such documentation and notice of such requirements together with applicable
instructions.  No Credit Party shall be
required to indemnify any Lender or the Administrative Agent under clauses (a) or
(c) of this Section for any Indemnified Taxes or Other Taxes to the
extent such Indemnified Taxes or Other Taxes would not be imposed but for the
failure by such Lender or the Administrative Agent, as the case may be, to
comply with the provisions of the preceding sentence.  Upon the written request of a Credit Party,
each Lender and the Administrative Agent will provide to such Credit Party such
form, certification or similar documentation (each duly completed, accurate and
signed) as may in the future be required by any Credit Party Jurisdiction or
any other jurisdiction, or comply with such other requirements, if any, as may
be applicable in any Credit Party Jurisdiction or any other jurisdiction in
order to obtain an exemption from, or reduced rate of, deduction, payment or
withholding of Indemnified Taxes or Other Taxes to which such Lender or the
Administrative Agent is entitled pursuant to an applicable tax treaty or the
law of the relevant jurisdiction; provided that neither such Lender nor
the Administrative Agent shall have any obligation to provide such form,
certification or similar document if it would be unduly burdensome, would
require such Lender or the Administrative Agent to disclose any confidential
information or would otherwise be materially disadvantageous to such Lender or
the Administrative Agent; and provided further
that such Credit Party shall have furnished to such Lender or the
Administrative Agent in a reasonably timely manner copies of such documentation
and notice of such requirements together with applicable instructions.

 

SECTION 2.19.  Payments Generally; Pro Rata Treatment;
Sharing of Set-offs.

 

(a)  Payments by
the Credit Parties.  Each Credit
Party shall make each payment required to be made by it hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or under
Sections 2.16, 2.17 or 2.18, or otherwise) or under any other Credit
Document (except to the extent otherwise provided therein) prior to 12:00 noon,
Local Time, on the date when due, in immediately available funds, without set-off
or counterclaim.  Any

 

43

 

amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received either on such date or on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments shall be made to the
Administrative Agent to the Administrative Agent’s Account, except payments
pursuant to Sections 2.16, 2.17, 2.18 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 or under any other Credit Document shall be made in U.S. 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 principal, 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 principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.

 

(c)  Pro Rata
Treatment.  Except to the extent
otherwise provided herein: (i) each reimbursement of LC Disbursements
shall be made to the Lenders, each Borrowing shall be made from the Lenders,
each payment of fees under Section 2.13 shall be made for account of the
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.09 shall be applied to the respective Commitments of the
Lenders, 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 respective Credit Exposures of the
Lenders); (ii) each
Borrowing shall be allocated pro rata among the Lenders according to the
amounts of their respective Commitments (in the case of the making of Loans) or
their respective Loans that are to be included in such Borrowing (in the case
of conversions and continuations of Loans); (iii) each payment or prepayment of principal of
Loans by a Borrower shall be made for account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans held by
them; and (iv) each payment of interest on Loans by a Borrower shall be made for account of
the Lenders pro rata in accordance with the amounts of interest on such Loans
then due and payable to the respective Lenders.

 

(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 principal of or interest on any of its Loans or any
LC Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and LC Disbursements and
accrued interest thereon then due than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans and LC Disbursements of 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
principal of and accrued interest on their respective Loans and LC
Disbursements; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise

 

44

 

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 a Credit 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 Loans or LC Disbursements to any assignee or
participant, other than to a Credit Party or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply).  Each Credit Party consents to the foregoing
and agrees, to the extent it may effectively do so under applicable law, that
any Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against such Credit Party rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor
of such Credit Party in the amount of such participation.

 

(e)  Presumptions
of Payment.  Unless the
Administrative Agent shall have received notice from a Credit Party prior to
the date on which any payment is due from such Credit Party to the
Administrative Agent for account of the Lenders hereunder that such Credit
Party will not make such payment, the Administrative Agent may assume that such
Credit Party has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount
due.  In such event, if such Credit 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 Section 2.07(b) or 2.19(e), 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.

 

(g)  Payments in
Foreign Currencies.  With respect to
the payment by the Administrative Agent of any amount denominated in any
Foreign Currency, the Administrative Agent shall not be liable to any Account
Party, any Lender or any Issuing Lender in any way whatsoever for any delay, or
the consequences of any delay, in the crediting to any account of any amount
required by this Agreement to be paid by the Administrative Agent if the
Administrative Agent shall have taken all relevant steps to achieve, on the
date required by this Agreement, the payment of such amount in immediately
available, freely transferable, cleared funds (in such Foreign Currency) to the
account of any Lender or any Issuing Lender in the Principal Financial Center
with respect to such Foreign Currency which the relevant Account Party, such
Lender or such Issuing Lender, as the case may be, shall have specified for
such purpose.  For the purposes of this
paragraph, “all relevant steps” means all such steps as may be prescribed from
time to time by the regulations or operating procedures of such clearing or
settlement system as the Administrative Agent may from time to time determine
for the purpose of clearing or settling payments in such Foreign Currency.

 

45

 

SECTION 2.20.  Mitigation Obligations; Replacement of
Lenders.

 

(a)  Designation
of a Different Lending Office.  If
any Lender requests compensation under Section 2.16, or if a Credit Party
is required to pay any additional amount to any Lender or any Governmental
Authority for account of any Lender pursuant to Section 2.18, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans and Letters of Credit hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.16 or 2.18,
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.  AXIS Capital hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

(b)  Replacement
of Lenders.  If any Lender requests
compensation under Section 2.16, or if a Credit Party is required to pay
any additional amount to any Lender or any Governmental Authority for account
of any Lender pursuant to Section 2.18 or if any Lender ceases to be an
NAIC Approved Lender, then AXIS Capital 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 that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) AXIS Capital 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 the outstanding principal of its Loans and the amount of its
LC Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the applicable Credit Party (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.16 or payments
required to be made pursuant to Section 2.18, 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 AXIS Capital to require
such assignment and delegation cease to apply.

 

ARTICLE III

 

REPRESENTATIONS AND
WARRANTIES

 

Each of AXIS Capital and
(except with respect to Section 3.04, 3.12 and 3.13) the other Credit
Parties severally represents and warrants to the Lenders that:

 

SECTION 3.01.  Organization; Powers.  Such Credit Party and each of its
Subsidiaries is duly organized, validly existing and (in the case of any Credit
Party organized under the laws of the United States of America or any State
thereof, or any other jurisdiction where the concept of “good standing” of a corporation or
company is applicable) 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

 

46

 

Effect, is qualified to
do business in, and (in the case of any Credit Party organized under the laws
of the United States of America or any State thereof, or any other jurisdiction
where the concept of “good
standing” of a corporation or company is applicable) is in good standing
in, every jurisdiction where such qualification is required.

 

SECTION 3.02.  Authorization; Enforceability.  The Transactions are within such Credit Party’s
corporate powers and have been duly authorized by all necessary corporate and,
if required, by all necessary shareholder action.  This Agreement has been duly executed and
delivered by such Credit Party and constitutes, and each of the other Credit
Documents to which any Credit Party is to be a party, when executed and
delivered by such Credit Party will constitute, a legal, valid and binding
obligation of such Credit Party, enforceable against such Credit Party in
accordance with its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, examination or similar laws of general
applicability affecting the enforcement of creditors’ rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) do not require any
consent or approval of (including any exchange control approval), registration
or filing with, or any other action by, any Governmental Authority (including
the Bermuda Monetary 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 (including regulations of the Bermuda Monetary Authority) or the
charter, by-laws or other organizational documents of such Credit Party or any
of its Subsidiaries or any order of any Governmental Authority, (c) will
not violate or result in a default under any indenture, agreement or other
instrument binding upon such Credit Party or any of its Subsidiaries or assets,
or give rise to a right thereunder to require any payment to be made by any
such Person, and (d) will not result in the creation or imposition of any
Lien on any asset of such Credit Party or any of its Subsidiaries, except to
the extent that, in the case of each of the immediately preceding clauses (c) and
(d), such violation, default, right or Lien would not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.

 

SECTION 3.04.  Financial Condition; No Material Adverse
Change.

 

(a)  Financial
Condition.  AXIS Capital has
heretofore furnished to the Lenders the consolidated balance sheet and
statements of income, shareholders’ equity and cash flows of AXIS Capital and
its Subsidiaries (i) as of and for the fiscal year ended December 31,
2004, audited by Deloitte & Touche LLP, independent public
accountants, and (ii) as of and for the fiscal quarter ended June 30,
2005, certified by a Financial Officer. 
Such financial statements present fairly, in all material respects, the
financial condition and results of operations and cash flows of AXIS Capital
and its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause (ii) of
the first sentence of this paragraph.  None of AXIS Capital and its Subsidiaries has
on the date of this Agreement any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except (i) as
referred to or reflected or provided for in such balance sheet as of December 31,
2004, (ii) for insurance

 

47

 

payment
liabilities or liabilities arising in the ordinary course of AXIS Capital’s or
any of its Subsidiary’s business as an insurance or reinsurance company and (iii) as
disclosed pursuant to this Agreement and the other Credit Documents.

 

(b)  No Material
Adverse Change.  Since December 31,
2004, there has been no event, development or circumstance that has had or would
reasonably be expected to result, either individually or in the aggregate, in a
material adverse effect on the business, operations, property or condition
(financial or otherwise) of AXIS Capital and its Subsidiaries taken as a whole.

 

SECTION 3.05. 
Litigation.

 

(a)  Actions,
Suits and Proceedings.  Except as
disclosed in Schedule 3.05(a) or as routinely encountered in claims
activity, there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority now pending against or, to the knowledge
of such Credit Party, threatened in writing against or affecting such Credit
Party or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) that involve this Agreement or the
Transactions.

 

(b)  Disclosed
Matters.  Since the date hereof,
there has been no change in the status of the matters disclosed in Schedule 3.05(a) that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

 

SECTION 3.06.  Compliance with Laws and Agreements.  Such Credit 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 3.07.  Investment and Holding Company Status.  Neither such Credit Party nor any of its
Subsidiaries is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.

 

SECTION 3.08.  Taxes. 
Such Credit Party and each of its Subsidiaries has timely filed or
caused to be filed (taking into account any applicable extension within which
to file) all Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
such Person has set aside on its books adequate reserves or (b) to the
extent that the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.

 

SECTION 3.09.  Pension-Related Matters.  Except as could not reasonably be expected to
result in a Material Adverse Effect, (i) all contributions required to be
made by such Credit Party or any of its Subsidiaries with respect to a Benefit
Plan have been timely made, (ii) each Benefit Plan has been maintained in
compliance with its terms and with the requirements of

 

48

 

any and all applicable
laws and has been maintained, where required, in good standing with the
applicable Governmental Authority and (iii) neither such Credit Party nor
any of its Subsidiaries has incurred any obligation in connection with the
termination or withdrawal from any Benefit Plan.

 

SECTION 3.10.  Disclosure.  None of the reports, financial statements,
certificates or other written information furnished by or on behalf of AXIS
Capital or any other Credit Party to the Lenders in connection with the
negotiation of this Agreement and the other Credit Documents or delivered
hereunder or thereunder as modified or supplemented by other information so
furnished (taken as a whole with all such written information theretofore or
contemporaneously furnished) contains any material misstatement of fact or
omits 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, AXIS Capital represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time, it being recognized by the Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from such projected results.

 

SECTION 3.11.  Use of Credit.  Neither such Credit 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 part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin
Stock.

 

SECTION 3.12.  Indebtedness.  Schedule 6.05 is a complete and correct
list of each credit agreement, loan agreement, indenture, purchase agreement,
guarantee, letter of credit or other arrangement providing for or otherwise
relating to any Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or guarantee by, AXIS Capital or any of its
Subsidiaries outstanding on the Effective Date (other than Indebtedness of AXIS
Capital to any Subsidiary and of any Subsidiary to AXIS Capital or any other
Subsidiary), and the aggregate principal or face amount outstanding or that may
become outstanding under each such arrangement is correctly described in Schedule 6.05.

 

SECTION 3.13.  Subsidiaries.  Set forth in Schedule 3.13 is a complete
and correct list of all of the Subsidiaries of AXIS Capital as of the date of
this Agreement, together with, for each such Subsidiary, the jurisdiction of
organization of such Subsidiary.  Except
as disclosed in Schedule 3.13, (i) each such Subsidiary is a directly
or indirectly wholly-owned Subsidiary, (ii) each of AXIS Capital and its
Subsidiaries owns, free and clear of Liens, and has the unencumbered right to
vote, all outstanding ownership interests in each Person shown to be held by it
in Schedule 3.13, (iii) all of the issued and outstanding capital
stock of each such Person organized as a corporation is validly issued, fully
paid and nonassessable and (iv) there are no outstanding Equity Rights
with respect to such Person.

 

SECTION 3.14.  Withholding Taxes.  Based upon information with respect to each
Lender provided by each Lender to the Administrative Agent, as of the Effective
Date, the payment of the Loans and LC Disbursements and interest thereon, the
fees under Section 2.13

 

49

 

and all other amounts
payable hereunder will not be subject, by withholding or deduction, to any
Taxes imposed by any Credit Party Jurisdiction.

 

SECTION 3.15.  Stamp Taxes.  To ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement, it is not
necessary that this Agreement or any other document be filed or recorded with
any Governmental Authority or that any stamp or similar tax be paid on or in
respect of this Agreement, or any other document other than (i) such
filings and recordations that have already been made, (ii) such stamp or
similar taxes that have already been paid and (iii) nominal stamp taxes on
any promissory note of any Subsidiary Borrower organized under the laws of
Ireland payable prior to the execution thereof.

 

SECTION 3.16.  Legal Form.  Each of the Credit Documents is in proper
legal form under the law of the jurisdiction of organization of each Credit
Party for the enforcement thereof against each Credit Party under such law, and
if each of the Credit Documents were stated to be governed by such law, they
would constitute legal, valid and binding obligations of each Credit Party
under such law, enforceable in accordance with their respective terms.  All formalities required in the jurisdiction
of organization of each Credit Party for the validity and enforceability of
each of the Credit Documents (including any necessary registration, recording
or filing with any court or other authority in such jurisdiction) have been
accomplished, and no Indemnified Taxes or Other Taxes are required to be paid
to such jurisdiction, or any political subdivision thereof or therein, and no
notarization is required, for the validity and enforceability thereof (except
as provided in Section 3.15).

 

ARTICLE IV

 

CONDITIONS

 

SECTION 4.01.  Effective Date.  The obligations of the Lenders (or the
Issuing Lenders, as the case may be) to issue or continue Letters of Credit and
to make Loans hereunder 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.  From each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) 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.

 

(b)  Opinions
of Counsel to Credit Parties. 
Opinions, each addressed to the Administrative Agent and the Lenders and
dated the Effective Date, of (i) Conyers Dill & Pearman, Bermuda
counsel to AXIS Capital and AXIS Specialty, substantially in the form of Exhibit E-1,
(ii) Skadden, Arps, Slate, Meagher & Flom LLP, New York counsel
to the Credit Parties, substantially in the form of Exhibit E-2, and (iii) William
Fry, Irish counsel to AXIS Re and AXIS Specialty Europe, substantially in the
form of Exhibit E-3.

 

50

 

(c)  Opinion
of Special New York Counsel to JPMCB. 
An opinion, dated the Effective Date, of Milbank, Tweed, Hadley &
McCloy LLP, special New York counsel to JPMCB, substantially in the form of Exhibit F
(and JPMCB hereby instructs such counsel to deliver such opinion to the
Lenders).

 

(d)  Organizational
Documents.  Such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Credit
Parties, the authorization of the Transactions and any other legal matters
relating to the Credit Parties, 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 AXIS Capital, confirming that (i) the representations and
warranties of AXIS Capital set forth in this Agreement are true and correct 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) and (ii) no
Default has occurred and is continuing on such date.

 

(f)  Existing
Credit Agreements.  Evidence that (i) AXIS
Capital shall have paid in full (or is paying from the proceeds of Borrowings
on the Effective Date) all principal of and interest accrued on the outstanding
loans under the Existing Credit Agreement and all fees, expenses and other
amounts owing by it thereunder (to the extent that reasonably detailed
statements for such fees, expenses and other amounts have been delivered to it
prior to the Effective Date), (ii) the commitments of the lenders
thereunder shall have terminated and (iii) any letters of credit issued
and outstanding thereunder (x) shall have expired or been terminated or
(y) shall be continued hereunder as Letters of Credit as contemplated by Section 2.01(g) or
Section 2.04(l), as the case may be.

 

(g)  Process
Agent Acceptance Letters.  A process
agent acceptance letter in respect of each Credit Party substantially in the
form of Exhibit C.

 

(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 extension of credit hereunder is also subject to the
payment by AXIS Capital of such fees as AXIS Capital shall have agreed to pay
to any Lender or the Administrative Agent in connection herewith, including the
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy 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 AXIS
Capital prior to the Effective Date).

 

The Administrative Agent
shall notify AXIS Capital 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 Lenders, as the case may be) to issue or continue

 

51

 

Letters of Credit and
make Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.02) on or prior
to 5:00 p.m., New York City time, on August 25, 2005 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

 

SECTION 4.02.  Each Credit Event.  The obligation of each Lender (or each Issuing
Lender, as the case may be) to make any Loan or issue, 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 Credit Parties set forth in this Agreement
and in the other Credit Documents shall be true and correct on and as of the
date of issuance, amendment, renewal or extension of such Letter of Credit or
the date of such Loan, as applicable (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of
such specific date); and

 

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

 

Each Borrowing and each
issuance, amendment, renewal or extension of a Letter of Credit shall be deemed
to constitute a representation and warranty by AXIS Capital and (if different)
the applicable Credit Party on the date thereof as to the matters specified in
the preceding sentence.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Until the Commitments
have expired or been terminated and the principal of and interest on each Loan
and all fees payable hereunder shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have
been reimbursed, AXIS Capital covenants and agrees with the Lenders that:

 

SECTION 5.01.  Financial Statements and Other Information.  AXIS Capital will furnish to the
Administrative Agent and each Lender:

 

(a)  within
90 days after the end of each fiscal year of AXIS Capital, the audited
consolidated balance sheet and related consolidated statements of operations,
stockholders’ equity and cash flows of AXIS Capital and its Subsidiaries as of
the end of and for such 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 or periods), all reported on by Deloitte & Touche LLP or other
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 consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of AXIS Capital and its Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;

 

52

 

(b)  within
45 days after the end of each of the first three fiscal quarters of each fiscal
year of AXIS Capital, the consolidated balance sheet and related consolidated
statements of operations, stockholders’ equity and cash flows of AXIS Capital
and its Subsidiaries as of the end of and for such fiscal quarter and the then
elapsed portion of such 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 as presenting fairly in all material respects
the financial condition and results of operations of AXIS Capital 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;

 

(c) 
concurrently with any delivery of financial statements under clause (a) or (b) of
this Section, a certificate signed 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 6.04, 6.05, 6.06 and 6.07, (iii) stating whether
any material change in GAAP or in the application thereof has occurred since
the date of the financial statements most recently delivered pursuant to this Section 5.01
and, if any such material change has occurred, specifying the effect of such
material change on the financial statements accompanying such certificate and (iv) with
respect to the financial statements delivered pursuant to clause (a) of
this Section 5.01, setting forth for each of its Subsidiaries the maximum
amount of dividends that such Subsidiary may make without requiring regulatory
approval or consent;

 

(d)  within
15 days after the filing of Statutory Statements by any Insurance Company, a
copy of such Statutory Statements of such Insurance Company for the relevant
fiscal year;

 

(e)  promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by AXIS Capital or any of
its Subsidiaries with the SEC, or any Governmental Authority succeeding to any
or all of the functions of said Commission, or with any U.S., Bermuda, Irish or
other securities exchange, or distributed by AXIS Capital to its shareholders
generally, as the case may be, provided that any such materials shall be
deemed delivered to the extent that the same are publicly available on the SEC’s
“EDGAR” filing system and written notification thereof has been delivered to
the Administrative Agent;

 

(f)  promptly
after any amendment or modification of the Investment Guidelines of any Credit
Party by the board of directors of such Credit Party, but in any case not more
than once per calendar quarter, a copy of such Investment Guidelines as so
amended or modified; and

 

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

 

53

 

SECTION 5.02.  Notices of Material Events.  AXIS Capital will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

 

(a)  the
occurrence of any Default;

 

(b)  the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting AXIS Capital or any
of its Subsidiaries that, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect; and

 

(c)  any
other development that results in, or could reasonably be expected to result
in, 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 AXIS Capital setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken by AXIS Capital with respect thereto.

 

SECTION 5.03.  Existence; Conduct of Business.  AXIS Capital will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges and franchises material to the conduct of its business; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or Disposition permitted under Section 6.01.  AXIS Capital will, and will cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which failure to receive or retain such qualification could
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.04.  Insurance.  AXIS Capital will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its directors, officers and physical plant in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations.

 

SECTION 5.05.  Maintenance of Properties.  AXIS Capital will, and will cause each of its
Subsidiaries to, keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
except where the failure to maintain the same would not reasonably be expected
to have a Material Adverse Effect.

 

SECTION 5.06.  Payment of Obligations.  AXIS Capital 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;

 

54

 

(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;

 

(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
prohibited by Section 6.02) or which, if unpaid, might give rise to a
claim entitled to priority over general creditors of AXIS Capital or such
Subsidiary in any proceeding under the Bermuda Companies Law or Bermuda Insurance
Law or the applicable Laws of such Subsidiary’s jurisdiction of organization,
or any insolvency proceeding, liquidation, receivership, rehabilitation,
dissolution or winding-up involving AXIS Capital or such Subsidiary; and

 

(d)  on or
prior to the date when the same shall become delinquent or be in default, all
other obligations that, if not paid, could reasonably be expected to result in
a Material Adverse Effect;

 

provided
that, unless and until foreclosure, distraint, levy, sale or similar proceedings
shall have been commenced, neither AXIS Capital nor any of its Subsidiaries
shall be required to pay or discharge any such tax, assessment, charge, levy or
claim so long as (i) the validity thereof is contested in good faith and
by appropriate proceedings diligently conducted, (ii) such reserves or
other appropriate provisions as may be required by GAAP or SAP, as the case may
be, shall have been made therefor and (iii) such failure to pay or
discharge (individually in the aggregate) could not reasonably be expected to
result in a Material Adverse Effect.

 

SECTION 5.07.  Financial Accounting Practices.  AXIS Capital will, and will cause each of its
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 5.01 in
conformity with GAAP and SAP, as applicable, and to maintain accountability for
assets.

 

SECTION 5.08.  Compliance with Applicable Laws.  AXIS Capital will, and will cause each of its
Subsidiaries to, comply with all applicable Laws (including but not limited to
the Bermuda Companies Law, Bermuda Insurance Laws and environmental laws) in
all respects, except where failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.09.  Use of Letters of Credit and Proceeds of
Loans.  The proceeds of the Loans
will be used only for general corporate purposes of AXIS Capital and its
Subsidiaries and the Letters of Credit will be issued only in the ordinary
course of business of AXIS Capital and its Subsidiaries.  No part of the proceeds of any Loan and 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 T, U and X of the Board.

 

55

 

SECTION 5.10.  Inspection Rights.  Subject to Section 10.12, AXIS Capital
will, and will cause each of its Subsidiaries to, permit such Persons as the
Administrative Agent or any Lender may designate, at such Lender’s expense
prior to the occurrence and continuance of an Event of Default and at the
expense of AXIS Capital after the occurrence and during the continuance of an
Event of Default, upon reasonable prior notice, to visit and inspect any of its
properties, to examine and make extracts from its books and records, to discuss
its affairs, finances and condition with its officers and independent
accountants, and provide such other information relating to its business,
financial condition and prospects at such times as the Administrative Agent or
such Lender, as the case may be, may reasonably request.

 

SECTION 5.11.  Financial Strength Rating.  AXIS Capital will cause each of the
Subsidiary Credit Parties to maintain a financial strength rating of at least “B++”
from A.M. Best & Co. (or its successor) at all times.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Until the Commitments
have expired or terminated and the principal of and interest on each Loan and
all fees payable hereunder have been paid in full and all Letters of Credit
have expired or terminated and all LC Disbursements have been reimbursed, AXIS
Capital covenants and agrees with the Lenders that:

 

SECTION 6.01.  Fundamental
Changes.

 

(a)  Mergers, Consolidations, Etc.  AXIS Capital will not, nor will it
permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution).

 

(b)  Acquisitions.  AXIS Capital will not, nor will it permit any
of its Subsidiaries to, acquire any business or property from, or capital stock
of, or be a party to any acquisition of, any Person except for purchases of
property to be sold or used in the ordinary course of business and Investments
permitted under Section 6.06.

 

(c)  Dispositions.  AXIS Capital will not, nor will it permit any
of its Subsidiaries to, convey, sell, assign, lease, abandon, transfer or
otherwise dispose of, voluntarily or involuntarily, in one transaction or a series
of transactions, all or substantially all of its assets, or all or
substantially all of the stock of any of its Subsidiaries, whether now owned or
hereafter acquired (any of the foregoing being referred to in this Section as
a “Disposition”).

 

(d)  Permitted Mergers, Acquisitions, Dispositions, Etc.  Notwithstanding the foregoing
provisions of this Section:

 

(i)  any
Subsidiary of AXIS Capital may be merged or consolidated with or into any other
such Subsidiary; provided that if any such transaction shall be between
a

 

56

 

Subsidiary and a wholly
owned Subsidiary, the wholly owned Subsidiary shall be the continuing or
surviving corporation;

 

(ii)  any
Subsidiary of AXIS Capital may make a Disposition of any or all of its property
to AXIS Capital or any wholly owned Subsidiary of AXIS Capital;

 

(iii)  a
Disposition of the capital stock of any Subsidiary of AXIS Capital may be made
to AXIS Capital or any wholly owned Subsidiary of AXIS Capital;

 

(iv)  AXIS
Capital or any of its Subsidiaries may make a Disposition in the ordinary
course of business and on ordinary business terms;

 

(v)  Any
non-operating Subsidiary may liquidate, wind up or dissolve itself;

 

(vi)  AXIS
Capital and its Subsidiaries may make any Permitted Investments; and

 

(vii)  AXIS
Capital and any of its Subsidiaries may merge with or into or consolidate with
any other Person; provided that (a) immediately prior and after
giving effect to such merger or consolidation, no Default shall have occurred
and be continuing and (b) after giving effect thereto AXIS Capital or such
Subsidiary shall be the continuing or surviving corporation.

 

SECTION 6.02.  Liens. 
AXIS Capital will not, 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
existing on the date hereof (and extension, renewal and replacement Liens upon
the same property); provided that (i) no such Lien shall extend to
any other property or asset of AXIS Capital or any of its Subsidiaries and (ii) any
such Lien shall secure only those obligations which it secures on the date
hereof and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;

 

(b)  Liens
arising from taxes, assessments, charges, levies or claims described in Section 5.06
that are not yet due or that remain payable without penalty or to the extent
permitted to remain unpaid under Section 5.06;

 

(c)  Liens on
fixed or capital assets acquired, constructed or improved by AXIS Capital or
any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by Section 6.05(g), (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100%
of the cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such security interests shall not apply to any other
property or assets of AXIS Capital or any Subsidiary;

 

(d)  zoning
restrictions, easements, minor restrictions on the use of real property, minor
irregularities in title thereto and other minor Liens that do not in the
aggregate

 

57

 

materially detract from
the value of a property or asset to, or materially impair its use in the
business of, AXIS Capital or any such Subsidiary;

 

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

 

(f)  Liens on
cash and securities of AXIS Capital or its Subsidiaries incurred as part of the
management of an investment portfolio of a Credit Party or any Subsidiary in
accordance with the Investment Guidelines of such Credit Party or Subsidiary;

 

(g)  Liens on
(i) assets received, and on actual or imputed investment income on such
assets received, relating and identified to specific insurance payment
liabilities or to liabilities arising in the ordinary course of AXIS Capital’s
or any of its Subsidiary’s business as an insurance or reinsurance company, or
the proceeds thereof, in each case held in a segregated trust or other account
and securing such liabilities or (ii) 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 in the ordinary course of business on operating accounts (including any
related securities accounts) maintained by AXIS Capital or any of its
Subsidiaries in the ordinary course of business;

 

(i)  Liens in
favor of the Administrative Agent for the benefit of the Lenders arising
pursuant to any of the Credit Documents;

 

(j)  Liens securing repurchase agreements constituting
a borrowing of funds by AXIS Capital or any Subsidiary in the ordinary course
of business for liquidity purposes and in no event for a period exceeding 90
days in each case; provided that such Liens are limited to the
securities that are the subject of such repurchase agreements;

 

(k)  Liens on any assets of any Person existing at
the time such Person is merged or consolidated with or into or acquired by AXIS
Capital or any of its Subsidiaries and not created in contemplation of such
event;

 

(l)  Liens securing obligations owed by AXIS
Capital to any of its Subsidiaries or owed by any Subsidiary to AXIS Capital or
any Subsidiary, in each case solely to the extent that such Liens are required
by an Applicable Insurance Regulatory Authority for such Person to maintain
such obligations;

 

(m) Liens arising
in connection with securities lending arrangements with financial institutions
in the ordinary course of business; and

 

58

 

(n) Liens not
otherwise permitted by the foregoing clauses of this Section 6.02 securing
Indebtedness in an aggregate principal amount outstanding at any time that does
not exceed $50,000,000.

 

SECTION 6.03.  Transactions with Affiliates.  AXIS Capital will not, nor will it permit any
of its Subsidiaries to, enter into or carry out any transaction with
(including, without limitation, sell, lease or otherwise transfer any property
or assets or services to, purchase, lease or otherwise acquire any property or
assets or services from, loan or advance to or enter into, suffer to remain in
existence or amend any contract, agreement or arrangement with) any Affiliate
of AXIS Capital, or directly or indirectly agree to do any of the foregoing,
except (i) transactions between or among AXIS Capital and its wholly-owned
Subsidiaries not involving any other Affiliate, (ii) transactions with
Affiliates in good faith in the ordinary course of AXIS Capital’s business and
at prices and on terms and conditions no less favorable to AXIS Capital or such
Subsidiary than those that could have been obtained in a comparable transaction
on an arm’s length basis from an unrelated Person and (iii) any Restricted
Payment permitted by Section 6.07.

 

SECTION 6.04.  Financial Covenants.

 

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

 

(b)  Consolidated
Net Worth.  AXIS Capital will not
permit its Consolidated Net Worth to be less than at any time the sum of (i) $2,000,000,000
plus (ii) 25% of consolidated net income (if positive) of AXIS
Capital for each semi-annual fiscal period ending on or after December 31,
2005 plus (iii) an amount equal to 25% of the net cash proceeds received
by AXIS Capital from the issuance of its capital stock during each such
semi-annual fiscal period.

 

SECTION 6.05.  Indebtedness.  AXIS Capital will not, nor will it permit any
of its Subsidiaries to, at any time create, incur, assume or permit to exist
any Indebtedness, or agree, become or remain liable (contingent or otherwise)
to do any of the foregoing, except:

 

(a) 
Indebtedness created hereunder;

 

(b) 
Indebtedness existing on the date hereof and described in Schedule 6.05
and extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;

 

(c) 
Indebtedness incurred by AXIS Capital or any Subsidiary pursuant to a credit
facility or facilities providing for the making of loans and/or the issuance of
letters of credit in an aggregate principal or face amount not exceeding $250,000,000
at any time outstanding;

 

(d) 
Indebtedness incurred in transactions described in Sections 6.02(f), (k) and
(n);

 

59

 

(e) 
Indebtedness of AXIS Capital to any Subsidiary and of any Subsidiary to AXIS
Capital or any other Subsidiary;

 

(f) 
Guarantees by AXIS Capital of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of AXIS Capital or any other Subsidiary;

 

(g) 
Indebtedness of AXIS Capital or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations, and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to
or within 90 days after such acquisition or the completion of such construction
or improvement and (ii) the aggregate principal amount of Indebtedness
permitted by this clause (g) shall not exceed $100,000,000 at any
time outstanding;

 

(h) 
Subordinated Indebtedness;

 

(i)  other
unsecured Indebtedness; provided that (i) such Indebtedness does
not contain any measures of financial performance (however expressed and
whether stated as a covenant, as a ratio, as a fixed threshold, as an event of
default, as a mandatory prepayment provision, or otherwise) which, taken as a
whole, are materially more restrictive on AXIS Capital or its Subsidiaries than
those measures of financial performance contained in this Agreement, as
determined in good faith by senior management of AXIS Capital and (ii) upon
the incurrence thereof no Default would occur or exist; and

 

(j)  Indebtedness of AXIS Capital or any
Subsidiary in connection with securities lending arrangements with financial
institutions in the ordinary course of business.

 

SECTION 6.06.  Investments.  AXIS Capital will not, nor will it permit any
of its Subsidiaries to, make or permit to remain outstanding any Investments
except:

 

(a) 
Investments outstanding on the date hereof;

 

(b) 
operating accounts (including any related securities accounts) maintained by
AXIS Capital or any of its Subsidiaries in the ordinary course of business;

 

(c) 
Permitted Investments of any Credit Party and any Subsidiary;

 

(d) 
Investments by AXIS Capital and its Subsidiaries in Subsidiaries;

 

(e)  Swap
Agreements entered into in the ordinary course of AXIS Capital’s or any
Subsidiary’s financial planning and not for speculative purposes;

 

(f) 
Investments consisting of security deposits with utilities and other like
Persons made in the ordinary course of business;

 

60

 

(g) 
Guarantees by AXIS Capital of obligations of any of its Subsidiaries with
respect to operating leases of office space not exceeding $50,000,000 in the
aggregate;

 

(h)  AXIS
Capital and its Subsidiaries may (directly, or indirectly through one or more
Subsidiaries) make Acquisitions that are not otherwise already permitted under
any other provision of this Section; provided that (i) immediately
prior and after giving effect to each such Acquisition, no Default shall have
occurred and be continuing and AXIS Capital shall have delivered to the
Administrative Agent a certificate of a Financial Officer to such effect; (ii) at
the time of each such Acquisition and after giving effect thereto, AXIS Capital
or a Subsidiary may not enter into such Acquisition if the aggregate
consideration to be paid by AXIS Capital and its Subsidiaries in connection
therewith, when added to the aggregate consideration paid by AXIS Capital and
its Subsidiaries in connection with each other Acquisition permitted by this
clause (h) and consummated prior thereto but after the Effective Date,
shall exceed $500,000,000, (iii) in the case of an Acquisition of a
Person, such Acquisition has been approved by the board of directors of such
Person prior to the commencement of any tender offer, proxy contest or the like
in respect thereof and (iv) any Person or assets acquired pursuant hereto
shall be in the insurance or reinsurance business;

 

(i) 
Investments received by AXIS Capital or any Subsidiary in connection with the
bankruptcy or reorganization of, or settlement of, delinquent accounts and
disputes with any Person in the ordinary course of business;

 

(j)  Investments by AXIS Capital consisting of
Guarantees by AXIS Capital of Indebtedness permitted under Section 6.05;
and

 

(k)  usual and customary loans and advances to any
employees, officers and directors of the Credit Parties and Subsidiaries in an
aggregate principal amount not to exceed $10,000,000 at any one time
outstanding; provided that such loans and advances are approved by the
board of directors or a committee thereof of the relevant Credit Party or
Subsidiary.

 

SECTION 6.07.  Restricted Payments.  AXIS Capital will not, nor will it permit any
of its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except that (a) AXIS Capital may
declare and pay dividends with respect to its capital stock consisting solely
of additional shares of its common stock, (b) AXIS Capital may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of AXIS Capital and its Subsidiaries
and (c) AXIS Capital may make Restricted Payments if at the time of and after
giving effect to such Restricted Payment, no Default shall have occurred and be
continuing.  Nothing herein shall be
deemed to prohibit the payment of dividends by any Subsidiary of AXIS Capital
to AXIS Capital or to any other Subsidiary of AXIS Capital.

 

SECTION 6.08.  Continuation of and Change in Businesses.  AXIS Capital will not, nor will it permit any
of its Subsidiaries to, engage to any material extent in any business or

 

61

 

businesses other than the
business or businesses engaged in (or which AXIS Capital or any of its
Subsidiaries, as the case may be, proposes to engage in) on the date hereof and
businesses related or incidental thereto.

 

SECTION 6.09.  Private Act.  AXIS Capital will not become subject to a
Private Act.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

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

 

(a)  any
Credit Party shall fail to pay any principal of any Loan or 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
Credit Party shall fail to pay any interest on any Loan or 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 or under any other Credit Document, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period of
three or more days;

 

(c)  any
representation or warranty made or deemed made by any Credit Party in or in
connection with this Agreement or any other Credit Document or any amendment or
modification hereof or thereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with the
provisions hereof or any other Credit Document or any amendment or modification
hereof or thereof, shall prove to have been incorrect in any material respect
as of the time made (or deemed made) or furnished;

 

(d)  AXIS
Capital shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02(a), 5.03 (with respect to any Credit Party’s
existence), 5.09, 5.11 or in Article VI;

 

(e)  any
Credit Party 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 any other Credit
Document 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 AXIS Capital;

 

(f)  AXIS
Capital or any of its Subsidiaries shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable (after taking
account of any applicable grace period);

 

62

 

(g)  any
event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without
the giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided
that this clause (g) 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;

 

(h)  an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect
of any Credit Party or its debts, or of a substantial part of its assets, under
the Bermuda Companies Law or any other similar applicable Law or (ii) the
appointment of a receiver, examiner, trustee, custodian, sequestrator,
conservator or similar official for any Credit Party or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for a period of 60 or more days or an order or decree
approving or ordering any of the foregoing shall be entered;

 

(i)  any
Credit 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 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 any Credit Party in furtherance of any of the
aforesaid purposes;

 

(j)  one or more judgments for the payment of
money in an aggregate amount in excess of $75,000,000 shall be rendered against
AXIS Capital or any of its Subsidiaries or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of AXIS Capital or any
of its Subsidiaries to enforce any such judgment;

 

(k)  an ERISA Event (or any event similar to an
ERISA 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 such similar events that have occurred, could reasonably be expected to
result in liability of AXIS Capital and its Subsidiaries in an aggregate amount
exceeding $75,000,000;

 

(l)  the Guarantee of AXIS Capital under Article IX
shall for whatever reason be terminated or cease to be in full force and
effect, or the validity or enforceability thereof shall be contested by AXIS
Capital; or

 

(m)  a Change in Control shall occur;

 

63

 

then, and in every such
event (other than an event with respect to any Credit Party described in
clause (h) or (i) 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, by notice to AXIS Capital,
take either or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding and all fees and other obligations
of the Credit Parties accrued hereunder to be due and payable in whole (or in
part, in which case any principal and any fees and other obligations not so
declared to be due and payable may thereafter be declared to be due and
payable) and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon, and such fees and other
obligations shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Credit Party; and in case of any event with respect to any Credit Party
described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Credit Parties accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Credit Party.

 

If an Event of Default
shall occur and be continuing, the Administrative Agent or the Required Lenders
may require AXIS Capital (or, in case of any Event of Default described in
clause (h) or (i) of this Article, AXIS Capital shall become
immediately obligated) to deposit cash collateral pursuant to Sections 2.03(e) and
2.04(j).

 

ARTICLE VIII

 

THE ADMINISTRATIVE AGENT

 

Each of the Lenders
hereby irrevocably appoints the Administrative Agent as its agent hereunder and
under the other Credit Documents and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof or thereof, 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 AXIS Capital 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 and in the other Credit Documents. 
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 or by the other Credit Documents that the
Administrative Agent is required to exercise in writing by the

 

64

 

Required Lenders, and (c) except
as expressly set forth herein and in the other Credit Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to AXIS Capital or
any of its 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, to the extent required by this Agreement, all of the
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 AXIS Capital 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 or any other Credit
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Credit Document or
any other agreement, instrument or document, or (v) the satisfaction of
any condition set forth in Article IV or elsewhere herein or therein, 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 AXIS Capital), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

 

The Administrative Agent
may perform any and all its duties and exercise its rights and powers by or
through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties.  The
exculpatory 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 AXIS Capital.  Upon any such resignation, the Required
Lenders shall have the right, with the consent of AXIS Capital (which consent
shall not be unreasonably withheld), 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

 

65

 

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, with the consent of AXIS Capital (which
consent shall not be unreasonably withheld), 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 AXIS Capital to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between AXIS Capital 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 other Credit Document or any related agreement or any document
furnished hereunder or thereunder.

 

Except as otherwise
provided in Section 10.02(b) with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Required Lenders (but
not otherwise), consent to any modification, supplement or waiver under any of
the Credit Documents.

 

Notwithstanding anything
herein to the contrary, the Joint Lead Arrangers and Joint Bookrunners,
Syndication Agent and Co-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 IX

 

GUARANTEE

 

SECTION 9.01.  The Guarantee.  AXIS Capital hereby guarantees to each Lender
and the Administrative Agent and their respective successors and assigns the
prompt payment in full when due (whether by acceleration or otherwise) of all
principal of and interest on the Loans made by the Lenders to each Subsidiary
Borrower pursuant to this Agreement, all reimbursement obligations in respect
of LC Disbursements and all interest thereon payable by each Subsidiary Account
Party pursuant to this Agreement and all other amounts from time to time owing
to the Lenders or the Administrative Agent by each Subsidiary Credit Party
under this Agreement or under any of the other Credit Documents, in each case
strictly in accordance with the terms

 

66

 

thereof (such obligations
being herein collectively called the “Guaranteed Obligations”).  AXIS Capital hereby further agrees that if
any Subsidiary Credit Party shall fail to pay in full when due (whether by
acceleration or otherwise) any of the Guaranteed Obligations, AXIS Capital 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 by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.

 

SECTION 9.02.  Obligations Unconditional.  The obligations of AXIS Capital under Section 9.01
are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of the Subsidiary
Credit Parties under this Agreement or any other agreement or instrument
referred to herein, or any substitution, release 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 Section that
the obligations of AXIS Capital hereunder shall be absolute and unconditional
under any and all circumstances.  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
AXIS Capital hereunder, which shall remain absolute and unconditional as
described above:

 

(i)  at any
time or from time to time, without notice to AXIS Capital, 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;

 

(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; or

 

(iv)  any
lien or security interest granted to, or in favor of, the Administrative Agent
or any Lender or Lenders as security for any of the Guaranteed Obligations
shall fail to be perfected.

 

With respect to its
obligations under this Article, AXIS Capital hereby expressly waives diligence,
presentment, demand of payment, protest and all notices whatsoever, and any
requirement that the Administrative Agent or any Lender exhaust any right,
power or remedy or proceed against any Subsidiary Credit 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.

 

67

 

SECTION 9.03.  Reinstatement.  The obligations of AXIS Capital under this Article shall
be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Subsidiary Credit 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 AXIS Capital agrees that it will
indemnify the Administrative Agent and each Lender on demand for all reasonable
costs and expenses (including fees of counsel) incurred by the Administrative
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.

 

SECTION 9.04.  Subrogation.  AXIS Capital hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations and the
expiration and termination of the Commitments of the Lenders under this
Agreement it shall not exercise any right or remedy arising by reason of any
performance by it of its guarantee in Section 9.01, whether by subrogation
or otherwise, against any Subsidiary Credit Party or any other guarantor of any
of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.

 

SECTION 9.05.  Remedies.  AXIS Capital agrees that, as between AXIS
Capital on the one hand and the Administrative Agent and the Lenders on the
other, the obligations of each Subsidiary Credit Party under this Agreement may
be declared to be forthwith due and payable as provided in Article VII
(and shall be deemed to have become automatically due and payable in the
circumstances provided in Article VII) for purposes of Section 9.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable)
as against such Subsidiary Credit 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 such
Subsidiary Credit Party) shall forthwith become due and payable by AXIS Capital
for purposes of Section 9.01.

 

SECTION 9.06.  Instrument for the Payment of Money.  AXIS Capital hereby acknowledges that the
guarantee in this Article constitutes an instrument for the payment of
money, and consents and agrees that any Lender or the Administrative Agent, at
its sole option, in the event of a dispute by AXIS Capital in the payment of
any moneys due hereunder, shall have the right to bring motion-action under New
York CPLR Section 3213.

 

SECTION 9.06.  Continuing Guarantee.  The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01.  Notices.  (a) Except in the case of notices and
other communications expressly permitted to be given by telephone (and subject
to paragraph (b) below), all notices and other communications provided for
herein shall be in writing and shall be

 

68

 

delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

 

(i)  if to
AXIS Capital, to it at 106 Pitts Bay Road, Pembroke HM 08, Bermuda, Attention
of Andrew Cook (Telecopy No. (441) 296-3140);

 

(ii)  if to a
Subsidiary Credit Party listed below, to it at the address (or telecopy number)
set forth below for such Subsidiary Credit Party:

 

AXIS Specialty Limited

106 Pitts Bay Road

Pembroke, Bermuda

HM 08

Attention:  Andrew Cook

Telecopy No.:  (441) 296-3140

Telephone No.:  (441) 296-2600

 

AXIS Re Limited and AXIS
Specialty Europe Limited

Mount Herbert Court

34 Upper Mount Street

Dublin 2

Ireland

Attention: Tim Hennessy

Telecopy No.:  (011) 353 1 664 1862

Telephone No.:  (011) 353 1 664 1611

 

(iii)  if to
a Subsidiary Credit Party not listed in clause (ii) above, to it at the
address (or telecopy number) set forth in the Subsidiary Joinder Agreement to
which it is a party or (if such Subsidiary Credit Party is not a party to any
Subsidiary Joinder Agreement or if no such address is set forth in such
Subsidiary Joinder Agreement) to it at the address set forth in clause (i) above;

 

(iv)  if to
the Administrative Agent, to JPMorgan Chase Bank, N.A., 1111 Fannin, 10th
Floor, Houston, Texas 77002-8069, Attention of Loan and Agency Services Group
(Telecopy No. (713) 750-2782; Telephone No. (713) 750-2102), with a copy to JPMorgan Chase Bank, N.A., 270 Park
Avenue, 22nd Floor, New York, New York 10017, Attention of Heather
Lindstrom (Telecopy No. (212) 270-1511; Telephone No. (212) 270-9839);
and

 

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

 

(b)  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 to any
Lender pursuant to Article II unless otherwise agreed by the
Administrative Agent and such Lender. 
The Administrative Agent or any Credit Party may, in its discretion,
agree to accept notices and

 

69

 

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.

 

(c)  Any party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to AXIS Capital and the
Administrative Agent, or, in the case of any such change by the Administrative
Agent, by notice to AXIS Capital and the Lenders).  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.

 

SECTION 10.02.  Waivers; Amendments.

 

(a)  No Deemed
Waivers; Remedies Cumulative.  No
failure or delay by the Administrative 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 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 a Credit Party 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 making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent or any Lender may have had notice or knowledge of such Default at the
time.

 

(b)  Amendments.  Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Credit Parties and the Required
Lenders or by the Credit Parties and the Administrative Agent with 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 or
increase the Revolving Credit Sublimit without the consent of each Lender
affected thereby,

 

(ii)  reduce
the principal amount of any Loan or 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 payable hereunder, without the written
consent of each Lender affected thereby,

 

(iii) 
postpone the scheduled date for payment of the principal amount of any Loan or
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

 

70

 

(other than an extension
thereof pursuant to an “evergreen” provision with respect to any Letter of
Credit), without the written consent of each Lender affected thereby,

 

(iv)  change Section 2.19(c) or
2.19(d) without the consent of each Lender affected thereby,

 

(v)  change
or terminate the obligations of AXIS Capital pursuant to Article IX
without the written consent of each Lender or

 

(vi)  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;

 

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

 

SECTION 10.03.  Expenses; Indemnity; Damage Waiver.

 

(a)  Costs and Expenses.  AXIS Capital shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Credit Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
expenses incurred by the Administrative Agent or any Lender, including the
fees, charges and disbursements of any counsel for the Administrative Agent or
any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Credit Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including in connection with any workout,
restructuring or negotiations in respect thereof and (iii) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any other
Credit Document or any other document referred to herein or therein.

 

(b)  Indemnification
by AXIS Capital.  AXIS Capital shall
indemnify the Administrative Agent and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”),
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (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 Loan or the use of
the proceeds thereof, or any Letter of Credit or the use thereof (including any

 

71

 

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), or (iii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is
a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee.

 

(c)  Reimbursement
by Lenders.  To the extent that AXIS
Capital fails to pay any amount required to be paid by it 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 Credit Party shall assert, and each
Credit 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 Loan or the use of the proceeds thereof, or any Letter of
Credit or the use 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 no
Credit 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 such Credit Party without such consent shall be null
and void).  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
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.  Any Lender may assign to
one or more NAIC Approved Lenders all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) and under any Letter of Credit to which
it is a party (if such Letter of Credit permits such assignment or the
beneficiary consents thereto); provided that

 

72

 

(i)  except
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, AXIS Capital must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld, it being
understood that AXIS Capital shall not be deemed to be unreasonably withholding
its consent if, as a result of any such assignment, any Credit Party would
incur an obligation to make an increased payment pursuant to Section 2.18
which it would not otherwise have been obligated to make to the Lender prior to
such assignment),

 

(ii)  each of
the Administrative Agent and each Issuing Lender with respect to Participated
Letters of Credit must give its prior written consent to such assignment (which
consent, in each case, shall not be unreasonably withheld),

 

(iii)  except
in the case of an assignment to a Lender 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 AXIS Capital and the Administrative
Agent otherwise consent,

 

(iv)  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,

 

(v)  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

 

(vi)  the
assignee, if it shall not be a Lender, shall deliver an Administrative
Questionnaire to the Administrative Agent;

 

provided,
however, that no Lender will assign, sell participations, syndicate all
or a portion of such Letters of Credit or Loans, and its rights and obligations
thereunder, to any Person who is (i) listed on the Specially Designated
Nationals and Blocked Persons List maintained by the U.S. Department of
Treasury Office of Foreign Assets Control (“OFAC”)  and/or on any other similar list maintained
by the OFAC pursuant to any authorizing statute, Executive Order or regulation;
or (ii) either (A) included within the term “designated national” as
defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (B) designated
under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224,
66 Fed. Reg. 49079 (published September 25, 2001) or similarly designated
under any related enabling legislation or any other similar Executive Orders;

 

provided
further that any consent of AXIS Capital otherwise required under this
paragraph shall not be required if an Event of Default under clause (a),
(b), (h) or (i) of Article VII has occurred and is
continuing.  Upon acceptance and
recording pursuant to paragraph (d) 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

 

73

 

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 of Sections 2.16, 2.17, 2.18 and 10.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.

 

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 AXIS Capital, the option to provide to the Credit
Parties all or any part of any Loan or LC Disbursement that such Granting
Lender would otherwise be obligated to make to the Credit Parties pursuant to Section 2.05
or Section 2.01, respectively; provided that (i) nothing
herein shall constitute a commitment by any SPV to make any Loan or LC
Disbursement, (ii) if an SPV elects not to exercise such option or
otherwise fails to provide all or any part of such Loan or LC Disbursement, the
Granting Lender shall be obligated to make such Loan or LC Disbursement
pursuant to the terms hereof and (iii) any Credit Party may bring any
proceeding against the Granting Lender or the SPV in order to enforce any
rights of such Credit Party under any of the Credit Documents.  The making of a Loan or LC Disbursement by an
SPV hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan or 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, AXIS Capital or the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loan or Letter of Credit to its Granting Lender or to any financial
institutions (consented to by AXIS Capital and the Administrative Agent)
providing liquidity and/or credit support (if any) with respect to commercial
paper issued by such SPV to fund such Loans or issue such Letters of Credit and
such SPV may disclose, on a confidential basis, confidential information with
respect to AXIS Capital and its Subsidiaries to any rating agency, commercial
paper dealer or provider of a surety, guarantee or credit liquidity enhancement
to such SPV.  This paragraph may not be
amended without the consent of any SPV at the time holding Loans or LC
Disbursements under this Agreement.

 

(c)  Maintenance
of Register by the Administrative Agent. 
The Administrative Agent, acting for this purpose as an agent of each
Credit Party, 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, and the Commitment of,
and principal amount of the Loans and 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 Credit

 

74

 

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

 

(d)  Effectiveness
of Assignments.  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) of this Section and any written
consent to such assignment required by paragraph (b) 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.

 

(e)  Participations.  Any Lender may, without the consent of any
Credit Party or the Administrative Agent, 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 Loans owing to
it); provided that (i) such Lender’s obligations under this
Agreement and the other Credit Documents shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Credit 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 (f) of this
Section, each Credit Party agrees that each Participant shall be entitled to
the benefits of Sections 2.16, 2.17 and 2.18 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.

 

(f)  Limitations
on Rights of Participants.  A
Participant shall not be entitled to receive any greater payment under Sections 2.16,
2.17 or 2.18 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with AXIS Capital’s prior written
consent.

 

(g)  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 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 assignee for such
Lender as a party hereto.

 

75

 

(h)  No
Assignments to AXIS Capital or Affiliates. 
Anything in this Section to the contrary notwithstanding, no Lender
may assign or participate any interest in any Loan or LC Exposure held by it
hereunder to AXIS Capital 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 Credit 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
any Loans and 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 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 Loan or 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 2.16, 2.17, 2.18, 10.03 and 10.13 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and 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 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 4.01, 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 is 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 Credit Party against any of and all the
obligations of such Credit Party now or hereafter existing under this Agreement
held by such

 

76

 

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 Credit Party
hereby agrees that any suit, action or proceeding with respect to this
Agreement, the other Credit Documents or any judgment entered by any court in
respect thereof may be brought in the United States District Court for the
Southern District of New York, in the Supreme Court of the State of New York
sitting in New York County (including its Appellate Division), or in any other
appellate court in the State of New York, as the party commencing such suit,
action or proceeding may elect in its sole discretion; and each Credit Party
hereby irrevocably submits to the jurisdiction of such courts for the purpose
of any such suit, action, proceeding or judgment.  Each Credit Party further submits, for the
purpose of any such suit, action, proceeding or judgment brought or rendered
against it, to the appropriate courts of the jurisdiction of its domicile.

 

(c)  Waiver of
Venue.  Each Credit Party 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 or any other Credit Document 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)  Appointment
of Agent for Service of Process. 
Each Credit Party irrevocably designates and appoints CT Corporation
System, at its office in New York City, New York, U.S.A., as its authorized
agent, to accept and acknowledge on its behalf, service of any and all process
which may be served in any suit, action or proceeding of the nature referred to
in Section 10.09(b) in any federal or New York State court sitting in
New York City.  Each Credit Party
represents and warrants that such agent has agreed in writing to accept such
appointment and that a true copy of such designation and acceptance has been
delivered to the Administrative Agent. 
Said designation and appointment shall be irrevocable by each such
Credit Party until all reimbursement obligations, Loans, interest thereon and
all other amounts payable hereunder and under the other Credit Documents shall
have been paid in full in accordance with the provisions hereof and thereof or,
if earlier, in the case of any Subsidiary Credit Party, when such Subsidiary
Credit Party is terminated as an Account Party and a Borrower hereunder
pursuant to Section 2.12(b).  If
such agent shall cease so to act, each Credit Party covenants and agrees to
designate irrevocably and appoint without delay another such agent satisfactory
to the Administrative Agent and to deliver promptly to the Administrative Agent
evidence in writing of such other agent’s acceptance of such appointment.

 

77

 

(e)  Service of
Process.  Each party to this
Agreement (other than the Credit Parties) irrevocably consents to service of
process in the manner provided for notices in Section 10.01.  Each Credit Party hereby consents to process
being served in any suit, action or proceeding of the nature referred to in Section 10.09(b) in
any federal or New York State court sitting in New York City by service of
process upon its agent appointed as provided in Section 10.09(d); provided
that, to the extent lawful and possible, notice of said service upon such agent
shall be mailed by registered or certified air mail, postage prepaid, return
receipt requested, to such Credit Party at its address for notices set forth or
referred to in clause (i) or (ii), as applicable, of Section 10.01(a) or
to any other address of which such Credit Party shall have given written notice
to the applicable Lender.  Each Credit
Party irrevocably waives, to the fullest extent permitted by law, all claim of
error by reason of any such service in such manner and agrees that such service
shall be deemed in every respect effective service of process upon such Credit
Party in any such suit, action or proceeding and shall, to the fullest extent
permitted by law, be taken and held to be valid and personal service upon and
personal delivery to such Credit Party. 
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

 

(f)  No Immunity.  To the extent that a Credit Party may be or
become entitled, in any jurisdiction in which judicial proceedings may at any
time be commenced with respect to this Agreement or any other Credit Document,
to claim for itself or its properties or revenues any immunity from suit, court
jurisdiction, attachment prior to judgment, attachment in aid of execution of a
judgment, execution of a judgment or from any other legal process or remedy
relating to its obligations under this Agreement or any other Credit Document,
and to the extent that in any such jurisdiction there may be attributed such an
immunity (whether or not claimed), such Credit Party hereby irrevocably agrees
not to claim and hereby irrevocably waives such immunity to the fullest extent
permitted by the laws of such jurisdiction.

 

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

 

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

 

78

 

SECTION 10.12.  Treatment of Certain Information;
Confidentiality.

 

(a)  Treatment of
Certain Information.  AXIS Capital
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to AXIS Capital or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by any Lender or
by one or more subsidiaries or affiliates of such Lender and AXIS Capital
hereby authorizes each Lender to share any information delivered to such Lender
by AXIS Capital 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 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 repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof.

 

(b)  Confidentiality.  Each of the Administrative Agent and the
Lenders 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 or self-regulatory body; provided
that unless specifically prohibited by applicable law or court order, each
Lender shall make reasonable efforts to notify AXIS Capital of any request by
any governmental agency or representative thereof (other than such request in
connection with any examination of the financial condition or other routine
examination of such Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information, (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 under any other
Credit Document or any suit, action or proceeding relating to this Agreement or
any other Credit Document or the enforcement of rights hereunder or thereunder,
(vi) subject to an agreement in writing containing provisions
substantially the same as those of this paragraph and for the benefit of AXIS
Capital, 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 or (b) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to AXIS Capital and its
obligations, (vii) with the consent of AXIS Capital 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 or any Lender on a nonconfidential basis from a source
other than AXIS Capital.  For the
purposes of this paragraph, “Information” means all information received
from AXIS Capital relating to AXIS Capital or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by AXIS Capital; provided
that, in the case of information received from AXIS Capital 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.

 

SECTION 10.13.  Judgment Currency.  This is an international loan transaction in
which the specification of U.S. Dollars or any Foreign Currency, as the case
may be (the

 

79

 

“Specified Currency”)
and payment in New York City or the country of the Specified Currency, as the
case may be (the “Specified Place”), is of the essence, and the
obligations of the Credit Party under this Agreement to make payment to (or for
account of) a Lender in the Specified Currency and in the Specified Place 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 the Specified Place of the full amount of the
Specified Currency 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 the Specified
Currency 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 Specified Currency with the judgment currency on the
Business Day next preceding the day on which such judgment is rendered.  The obligation of the Credit Parties in
respect of any such sum due from it to the Administrative Agent or any Lender
hereunder or under any other Credit Document (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 such Specified Currency to such
Specified Place with the amount of the judgment currency so adjudged to be due;
and each Credit Party 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 the Specified Currency, the amount (if any)
by which the sum originally due to such Entitled Person in the Specified
Currency hereunder exceeds the amount of the Specified Currency so purchased
and transferred.

 

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

 

80

 

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.

 

 

	
   

  	
  AXIS CAPITAL HOLDINGS
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Andrew Cook

  	
   

  
	
   

  	
   

  	
  Name: Andrew Cook

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  U.S. Federal Tax Identification No:  98-0395986

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBSIDIARY CREDIT
  PARTIES

  
	
   

  	
   

  
	
   

  	
  AXIS SPECIALTY LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Andrew Cook

  	
   

  
	
   

  	
   

  	
  Name: Andrew Cook

  
	
   

  	
   

  	
  Title: Executive Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. Federal Tax
  Identification No:  98-0364977

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AXIS RE LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Adrian Ryan

  	
   

  
	
   

  	
   

  	
  Name:Adrian Ryan

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  U.S. Federal Tax Identification No:  98-0395688

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AXIS SPECIALTY EUROPE
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Adrian Ryan

  	
   

  
	
   

  	
   

  	
  Name: Adrian Ryan

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  U.S. Federal Tax Identification No:  98-0395686

  

 

81

 

	
   

  	
  LENDERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,
  N.A.,

  
	
   

  	
  individually and as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Heather Lindstrom

  	
   

  
	
   

  	
   

  	
  Name: Heather Lindstrom

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jonathan R. Burn

  	
   

  
	
   

  	
   

  	
  Name: Jonathan R. Burn

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  CITIBANK,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Michael A. Taylor

  	
   

  
	
   

  	
   

  	
  Name: Michael Taylor

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
  ING
  BANK N.V., LONDON BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Paul Galpin

  	
   

  
	
   

  	
   

  	
  Name: Paul Galpin

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mike Sharman

  	
   

  
	
   

  	
   

  	
  Name: Mike Sharman

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL

  
	
   

  	
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Karen Hanke

  	
   

  
	
   

  	
   

  	
  Name: Karen Hanke

  
	
   

  	
   

  	
  Title: Director

  

 

82

 

	
   

  	
  CALYON
  NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Sebastian Rocco

  	
   

  
	
   

  	
   

  	
  Name: Sebastian Rocco

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Peter Rasmussen

  	
   

  
	
   

  	
   

  	
  Name: Peter Rasmussen

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
  HSBC
  BANK USA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Lawrence Karp

  	
   

  
	
   

  	
   

  	
  Name: Lawrence Karp

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

83

 

	
   

  	
  LLOYDS
  TSB BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jason Eperon

  	
   

  
	
   

  	
   

  	
  Name: Jason Eperon

  
	
   

  	
   

  	
  Title: Assistant Vice
  President

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Candi Obrentz

  	
   

  
	
   

  	
   

  	
  Name: Candi Obrentz

  
	
   

  	
   

  	
  Title: Assistant Vice
  President

  
	
   

  	
   

  
	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John Mallett

  	
   

  
	
   

  	
   

  	
  Name: John Mallett

  
	
   

  	
   

  	
  Title: Head of
  Insurance Financial Institutions Group

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Lizanne T. Eberle

  	
   

  
	
   

  	
   

  	
  Name: Lizanne T. Eberle

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Richard Herder

  	
   

  
	
   

  	
   

  	
  Name: Richard Herder

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John S. McGill

  	
   

  
	
   

  	
   

  	
  Name: John S. McGill

  
	
   

  	
   

  	
  Title: Director

  

 

84

 

	
   

  	
  MORGAN
  STANLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Daniel Twenge

  	
   

  
	
   

  	
   

  	
  Name: Daniel Twenge

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Debra Basler

  	
   

  
	
   

  	
   

  	
  Name: Debra Basler

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  AUSTRALIA BANK LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Clinton M. Johnson

  	
   

  
	
   

  	
   

  	
  Name: Clinton M.
  Johnson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
  COMERICA
  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Martin G. Ellis

  	
   

  
	
   

  	
   

  	
  Name: Martin G. Ellis

  
	
   

  	
   

  	
  Title: First Vice
  President

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE FIRST BOSTON, NEW YORK

  
	
   

  	
  BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Karl Studer

  	
   

  
	
   

  	
   

  	
  Name: Karl Studer

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Cassandra Droogan

  	
   

  
	
   

  	
   

  	
  Name: Cassandra Droogan

  
	
   

  	
   

  	
  Title: Associate

  

 

85

 

	
   

  	
  MERRILL
  LYNCH BANK USA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Derek Befus

  	
   

  
	
   

  	
   

  	
  Name: Derek Befus

  
	
   

  	
   

  	
  Title: Vice President

  

 

86

 

SCHEDULE 1.01

 

Commitments

 

	
  Name
  of Lender

  	
   

  	
  Commitment ($)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase
  Bank, N.A.

  	
   

  	
  $

  	
  142,500,000

  	
   

  
	
  Barclays Bank
  PLC

  	
   

  	
  142,500,000

  	
   

  
	
  Citibank, N.A.

  	
   

  	
  110,000,000

  	
   

  
	
  ING Bank N.V.,
  London Branch

  	
   

  	
  110,000,000

  	
   

  
	
  Wachovia Bank,
  National Association

  	
   

  	
  110,000,000

  	
   

  
	
  Calyon New York
  Branch

  	
   

  	
  110,000,000

  	
   

  
	
  HSBC Bank USA, N.A.

  	
   

  	
  110,000,000

  	
   

  
	
  Lloyds TSB Bank
  plc

  	
   

  	
  110,000,000

  	
   

  
	
  The Royal Bank
  of Scotland Plc

  	
   

  	
  110,000,000

  	
   

  
	
  The Bank of New
  York

  	
   

  	
  75,000,000

  	
   

  
	
  Deutsche Bank AG New York Branch

  	
   

  	
  75,000,000

  	
   

  
	
  Morgan Stanley
  Bank

  	
   

  	
  75,000,000

  	
   

  
	
  Bank of America,
  N.A.

  	
   

  	
  65,000,000

  	
   

  
	
  National
  Australia Bank Limited

  	
   

  	
  65,000,000

  	
   

  
	
  Comerica Bank

  	
   

  	
  30,000,000

  	
   

  
	
  Credit Suisse
  First Boston, New York Branch

  	
   

  	
  30,000,000

  	
   

  
	
  Merrill Lynch
  Bank USA

  	
   

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
  $

  	
  1,500,000,000

  	
   

  

 

 

SCHEDULE 3.05(a)

 

Litigation

 

In re AXIS Capital
Holdings Ltd. Securities Litigation pending in the United States District
Court, Southern District of New York. 
Amended, consolidated complaint filed May 13, 2005.  Defendants include AXIS Capital Holdings
Limited, Michael Butt, John Chairman and Andrew Cook.

 

In re Insurance Brokerage
Antitrust Litigation pending in the United States District Court, District of
New Jersey.  Consolidated, amended
commercial class action complaint filed August 1, 2005.  Defendants include AXIS Specialty Insurance
Company, AXIS Surplus Insurance Company and AXIS Reinsurance Company.

 

 

SCHEDULE 3.13

 

Subsidiaries

 

	
  Company
  Name

  	
   

  	
  Country of Domicile

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty Limited

  	
   

  	
  Bermuda

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty U.S.
  Services, Inc.

  	
   

  	
  U.S.A. (Delaware)

  
	
   

  	
   

  	
   

  
	
  AXIS Surplus Insurance
  Company

  	
   

  	
  U.S.A. (Illinois)

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty U.S.
  Holdings, Inc.

  	
   

  	
  U.S.A. (Delaware)

  
	
   

  	
   

  	
   

  
	
  AXIS Reinsurance Company

  	
   

  	
  U.S.A. (New York)

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty
  Insurance Company

  	
   

  	
  U.S.A. (Connecticut)

  
	
   

  	
   

  	
   

  
	
  Combined Specialty
  Group, Inc. (dormant)

  	
   

  	
  U.S.A. (Delaware)

  
	
   

  	
   

  	
   

  
	
  Fireman’s Fund
  Insurance Company of Wisconsin

  	
   

  	
  U.S.A. (Wisconsin)

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty Holdings
  Ireland Limited

  	
   

  	
  Ireland

  
	
   

  	
   

  	
   

  
	
  AXIS Re Limited

  	
   

  	
  Ireland

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty Europe
  Limited

  	
   

  	
  Ireland

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty UK
  Limited(1)

  	
   

  	
  United Kingdom

  
	
   

  	
   

  	
   

  
	
  AXIS Specialty UK
  Holdings Limited

  	
   

  	
  United Kingdom

  

 

The
organizational documents of AXIS Capital and certain of its Subsidiaries
require such entity to seek direction from its shareholders as to how to vote
ownership interests in each Person shown to be held by it in this Schedule.

 

(1) AXIS Specialty UK
Limited is in the course of dissolution.

 

 

SCHEDULE 6.05

 

Indebtedness

 

1. AXIS Capital Holdings
Limited Senior Unsecured Notes dated November 15, 2004 in the amount of
$500 million. The notes bear interest at 5.75%, payable semi-annually and,
unless previously redeemed, will mature on December 1, 2014.

 

2. Guarantee by AXIS
Capital of loans to employees under a Bank of Bermuda facility not to exceed US
$10 million in connection with stock purchases.

 

3.  Letter or Credit in the amount of $3.5
million issued to secure a lease for office space in Alpharetta, Georgia.

 

4.  Obligations with respect to bank guarantees
for the benefit of certain European Union fiscal representatives appointed by
AXIS Specialty Europe Limited.

 

5.  Obligations with respect to appeal bonds
issued to secure judgments against insureds under policies issued in the
ordinary course of business.

 

 

EXHIBIT A

 

[Form of
Assignment and Assumption]

 

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 the Assignor
identified below (the “Assignor”) and the Assignee identified below (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 (the “Standard Terms and Conditions”) 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 respective facilities 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]]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Credit Parties:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative Agent:

  	
   

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

  

 

 

	
  5.

  	
   

  	
  Credit Agreement:

  	
   

  	
  The Credit Agreement
  dated as of August 25, 2005 among AXIS Capital Holdings Limited, the
  Subsidiary Credit Parties party thereto, the Lenders party thereto and
  JPMorgan Chases Bank, N.A., as Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Assigned Interest:

  	
   

  	
   

  

 

	
  Aggregate
  Amount of

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage Assigned

  of

  Commitment/Loans/

  Letters of Credit(1)

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  

 

Effective Date:                        
       , 200    [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:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

(1) Set forth, to at
least 9 decimals, as a percentage of the Commitment/Loans/Syndicated Letters of
Credit of all Lenders thereunder.

 

2

 

[Consented to and](2)
Accepted:

 

	
  JPMORGAN CHASE BANK,
  N.A., as

  
	
  Administrative
  Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  [NAME OF ISSUING
  LENDER[S]], as

  
	
  Issuing Lender
  with respect to

  
	
  Participated
  Letters of Credit

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  Consented to:

  
	
   

  
	
  AXIS CAPITAL HOLDINGS
  LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

(2) To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.

 

3

 

ANNEX 1

 

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 Credit Party, any
Subsidiaries or Affiliates of any Credit Party or any other Person obligated in
respect of any Credit Document or (iv) the performance or observance by
any Credit Party, any Subsidiaries or Affiliates of any Credit Party 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 5.01(a) or 5.01(b) 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, (v) 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 (vi) it is not (A) listed on the Specially
Designated Nationals and Blocked Persons List maintained by the U.S. Department
of Treasury Office of Foreign Assets Control (“OFAC”)  and/or on any other similar list maintained
by the OFAC pursuant to any authorizing statute, Executive Order or regulation;
or (B) either (x) included within the term “designated national” as
defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or
(y) designated under Sections 1(a), 1(b), 1(c) or 1(d) of Executive
Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or
similarly designated under any related enabling legislation or any other
similar Executive Orders; 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.

 

2

 

EXHIBIT B

 

[Form of Subsidiary Joinder Agreement]

 

SUBSIDIARY JOINDER AGREEMENT

 

                          ,
200

 

To JPMorgan Chase Bank,
N.A.,

as
Administrative Agent

1111 Fannin, 10th
Floor

Houston, Texas 77002-8069

 

Each of the Lenders party to
the

Credit Agreement referred to
below

 

Re:  Subsidiary Joinder
Agreement

 

Ladies and Gentlemen:

 

Reference
is made to the Credit Agreement (the “Credit Agreement”) dated as of
August 25, 2005 between AXIS Capital Holdings Limited (“AXIS Capital”),
the Subsidiary Credit Parties party thereto, the Lenders party thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative
Agent”).  Capitalized terms used but
not defined herein shall have the respective meanings assigned to such terms in
the Credit Agreement.

 

AXIS
Capital and the “Subsidiary Credit Party” (as identified on the signature
pages below) (the “Subsidiary Credit Party”) have executed and
hereby deliver this Subsidiary Joinder Agreement pursuant to
Section 2.12(a) of the Credit Agreement, in order to designate the
Subsidiary Credit Party as [a Subsidiary Account Party] [a Subsidiary Borrower]
[a Subsidiary Account Party and a Subsidiary Borrower] under the Credit
Agreement.

 

Accordingly,
AXIS Capital and the Subsidiary Credit Party hereby represent and warrant and
agree that as of the “Effective Date” (as defined below):

 

1.             The Subsidiary
Credit Party is a wholly-owned Subsidiary of AXIS Capital;

 

2.             The Subsidiary
Credit Party is subject to and bound by each of the obligations of [an Account
Party (including a Subsidiary Account Party)] [a Borrower (including a
Subsidiary Borrower)] [an Account Party (including Subsidiary Account Party and
a Borrower (including a Subsidiary Borrower)] contained in the Credit Agreement
as if the Subsidiary Credit Party were an original signatory to such Credit
Agreement;

 

3.             Each of the
representations and warranties contained in the Credit Agreement and in the
other Credit Documents (to the extent the same relate to a

 

 

Subsidiary
of AXIS Capital) is true and correct as to the Subsidiary Credit Party on and
as of the Effective Date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date);

 

4.             The Subsidiary
Credit Party’s addresses for notices, other communications and service of
process provided for in the Credit Agreement shall be given in the manner, and
with the effect, specified in Section 10.01 of the Credit Agreement to it
at its “Address for Notices” specified on the signature pages below or (if
no such address is so specified) to it at the address set forth in clause
(i) of Section 10.01(a) of the Credit Agreement; and

 

5.             As of the Effective
Date, the payment of the Loans and LC Disbursements and interest thereon and
all other amounts under the Credit Agreement will not be subject, by
withholding or deduction, to any Taxes imposed by the Credit Party
Jurisdiction(s) for the Subsidiary Credit Party.

 

In
addition to the foregoing, AXIS Capital hereby represents and warrants and
agrees that as of the Effective Date:

 

1.             Each of the
representations and warranties contained in the Credit Agreement and in the
other Credit Documents is true and correct in all material respects on and as
of the Effective Date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date);

 

2.             No Default has
occurred and is continuing; and

 

3.             The Guarantee of
AXIS Capital contained in Article IX of the Credit Agreement applies to all
of the obligations of the Subsidiary Credit Party under the Credit Documents.

 

This
Subsidiary Joinder Agreement shall become effective as of the date (the “Effective
Date”) on which the Administrative Agent accepts this Subsidiary Joinder
Agreement as provided on the signature pages below.  As of the Effective Date, the Subsidiary
Credit Party shall be entitled to the rights, and subject to the obligations,
of [an Account Party (including a Subsidiary Account Party)] [a Borrower
(including Subsidiary Borrower)] [an Account Party (including a Subsidiary
Account Party) and a Borrower (including a Subsidiary Borrower)] contained in
the Credit Agreement.  Except as
expressly herein agreed with respect to the joinder of the Subsidiary Credit
Party as a party to the Credit Agreement, the Credit Agreement shall remain
unchanged and in full force and effect.

 

This
Subsidiary Joinder Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same agreement.  This Subsidiary Joinder Agreement shall be
governed by, and construed in accordance with, the law of the State of New
York.

 

2

 

	
   

  	
  AXIS CAPITAL HOLDINGS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBSIDIARY CREDIT PARTY

  
	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  	
   [

  	
   

  	
  ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  U.S. Federal Tax Identification No:

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Tel:

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
																		

 

3

 

	
  Accepted:

  
	
   

  
	
  this
          day of

  
	
                              ,
  200

  
	
   

  
	
  JPMORGAN CHASE BANK, N.A.,

  
	
  as
  Administrative Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

4

 

EXHIBIT C

 

[Form of Process Agent Acceptance Letter]

 

CT Corporation System

 

                     ,
200   

 

To:          JPMorgan Chase Bank, N.A.,

as
administrative agent under the

Credit
Agreement referred to below

(the
“Administrative Agent”)

 

Re:  [                 ]
(the “Credit Party”)

 

Ladies and Gentlemen:

 

In
respect of the Credit Agreement (the “Credit Agreement”) dated as of
August 25, 2005 among AXIS Capital Holdings Limited (“AXIS Capital”),
certain subsidiaries of AXIS Capital party thereto, the lenders party thereto
and the Administrative Agent, the undersigned hereby accepts the irrevocable
designation and appointment of it as of the date hereof as agent for the Credit
Party to accept and acknowledge service of any and all process, as contemplated
by Section 10.09(e) of the Credit Agreement and otherwise as provided
thereby, such acceptance to remain in effect until the Credit Agreement shall
have been terminated and all obligations thereunder of the Credit Party shall
have been paid in full.

 

The
undersigned agrees to give the Administrative Agent or AXIS Capital, as
applicable, immediate notice by telephone, fax, telex, cable or any other means
of instant communication upon receipt of all papers served upon the undersigned
pursuant to such appointment and to forward promptly to the Administrative
Agent or AXIS Capital, as applicable, all such papers served pursuant to such
appointment by reputable overnight carrier.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CT CORPORATION SYSTEM

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

EXHIBIT D

 

[Form of Subsidiary Credit Party Termination Notice]

 

SUBSIDIARY CREDIT PARTY TERMINATION NOTICE

 

                           ,
200    

 

To JPMorgan Chase Bank,
N.A.,

as
Administrative Agent

1111 Fannin, 10th
Floor

Houston, Texas 77002-8069

 

Each of the Lenders party to
the

Credit Agreement referred to
below

 

Re:  Termination of [                 ]
(the “Subsidiary Credit Party”)

 

AXIS
Capital Holdings Limited (“AXIS Capital”) hereby gives notice pursuant
to Section 2.12(b) of the Credit Agreement dated as of
August 25, 2005 between AXIS Capital, the Subsidiary Account Parties party
thereto, the Lenders party thereto (the “Lenders”) and the
Administrative Agent (the “Credit Agreement”) that, effective as of the
date hereof, the Subsidiary Credit Party is terminated as [an Account Party] [
a Borrower][an Account Party and a Borrower] under the Credit Agreement and all
commitments by the Lenders [to issue Syndicated Letters of Credit and/ or
participate in Participated Letters of Credit for account of [[and] to make
Loans to] the Subsidiary Credit Party under the Credit Agreement are hereby
terminated.

 

Pursuant
to Section 2.12(b) of the Credit Agreement, AXIS Capital hereby
certifies that there is no Credit Exposure outstanding with respect to [any
Letter of Credit for which the Subsidiary Credit Party is an Account Party]
[[or] any Loans made to the Subsidiary Credit Party].

 

All
obligations of the Subsidiary Credit Party arising in respect of any period in
which the Subsidiary Credit Party was, or on account of any action or inaction
taken by the Subsidiary Credit Party as, [an Account Party] [[or] a Borrower]
under the Credit Agreement shall survive the termination effected by this
notice.

 

Terms
used herein have the meanings assigned to them in the Credit Agreement.

 

	
   

  	
  AXIS CAPITAL HOLDINGS
  LIMITED

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

 

EXHIBIT E-1

 

Form of Opinion of
Bermuda Counsel to AXIS Capital and AXIS Specialty

 

August 25, 2005

 

	
  The
  Lenders party to the Credit Agreement referred to below and

  	
   

  	
  DIRECT LINE:

  	
  441 299 4965

  
	
   

  	
   

  	
  E-MAIL:

  	
  gcollis@cdp.bm

  
	
   

  	
   

  	
  OUR REF:

  	
  GBC/dhm/376022/104526/CDs

  
	
   

  	
   

  	
  YOUR REF:

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMorgan
  Chase Bank, N.A., as administrative agent for such lenders

  	
   

  	
   

  
	
  1111
  Fannin, 10th Floor

  	
   

  	
   

  
	
  Houston,
  Texas 77002-8069

  	
   

  	
   

  

 

Dear
Sirs:

 

AXIS Capital Holdings Limited

 

We
have acted as special legal counsel in Bermuda to AXIS Capital Holdings Limited
(“AXIS Capital”) in connection with a $1,500,000,000 credit agreement
dated as of 25 August, 2005 (the “Credit Agreement”) among AXIS Capital,
the subsidiary credit parties party thereto, the lenders party thereto and
JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent
(the “Administrative Agent”).

 

For
the purposes of giving this opinion, we have examined facsimile copies of the
executed Credit Agreement (which term does not include any other instrument or
agreement whether or not specifically referred to therein or attached as an
exhibit or schedule thereto).

 

We
have also reviewed (a) the memorandum of association and the bye-laws of
AXIS Capital, each certified by the Assistant Secretary of AXIS Capital on 25
August, 2005, (b) resolutions of the directors of AXIS Capital dated     
August, 2005 certified by the Assistant Secretary of AXIS Capital on     
August, 2005 (the “AXIS Capital Resolutions”), (c) the memorandum
of association and the bye-laws of AXIS Specialty Limited (“AXIS Specialty”
and, together with AXIS Capital, the “Bermuda Credit Parties”), each
certified by the Secretary of AXIS Specialty on     
August, 2005, (d) resolutions of the directors of AXIS Specialty dated     
August, 2005 certified by the Secretary of AXIS Specialty on     
August, 2005 (together with the AXIS Capital Resolutions, the “Resolutions”)
and (e) such other documents and made such enquiries as to questions of
law as we have deemed necessary in order to render the opinion set forth below.

 

We
have assumed (a) the genuineness and authenticity of all signatures and
the conformity to the originals of all copies (whether or not certified)
examined by us and the authenticity and completeness of the originals from
which such copies were taken, (b) that where a document has been examined
by us in draft form, it will be or has been executed in the form of that draft,
and where a number of drafts of a document have been examined by us all changes
thereto have been marked or otherwise drawn to our attention, (c) the
capacity, power and authority of the Lenders

 

 

and
the Administrative Agent to enter into and perform their respective obligations
under the Credit Agreement, (d) the due execution of the Credit Agreement
by the Lenders and the Administrative Agent and the delivery thereof by each of
the parties thereto, (e) the accuracy and completeness of all factual
representations made in the Credit Agreement and other documents reviewed by
us, (f) that the Resolutions remain in full force and effect and have not
been rescinded or amended, (g) that there is no provision of the law of
any jurisdiction, other than Bermuda, which would have any implication in
relation to the opinions expressed herein, (h) the validity and binding
effect under the laws of the State of New York (the “Foreign Laws”) of
the Credit Agreement which is expressed to be governed by such Foreign Laws in
accordance with their respective terms, (i) the validity and binding
effect under the Foreign Laws of the submission by the Bermuda Credit Parties
pursuant to the Credit Agreement to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York, in the
Supreme Court of the State of New York sitting in New York County (including
its appellate division), or in any other appellate court in the State of New
York (the “Foreign Courts”), (j) that none of the parties to the Credit
Agreement has carried on or will carry on activities, other than the
performance of its obligations under the Credit Agreement, which would
constitute the carrying on of investment business in or from Bermuda and that
none of the parties to the Credit Agreement, other than each of the Bermuda
Credit Parties, will perform its obligations under the Credit Agreement in or
from Bermuda, and (k) that on the date of entering into the Credit Agreement
each of the Bermuda Credit Parties is and after entering into the Credit
Agreement will be able to pay its liabilities as they become due.

 

The
obligations of the Bermuda Credit Parties under the Credit Agreement
(a) will be subject to the laws from time to time in effect relating to
bankruptcy, insolvency, liquidation, possessory liens, rights of set off,
reorganisation, amalgamation, moratorium or any other laws or legal procedures,
whether of a similar nature or otherwise, generally affecting the rights of
creditors, (b) will be subject to statutory limitation of the time within
which proceedings may be brought, (c) will be subject to general
principles of equity and, as such, specific performance and injunctive relief,
being equitable remedies, may not be available, and (d) may not be given
effect to by a Bermuda court, whether or not it was applying the Foreign Laws,
if and to the extent they constitute the payment of an amount which is in the
nature of a penalty and not in the nature of liquidated damages.
Notwithstanding any contractual submission to the jurisdiction of specific
courts, a Bermuda court has inherent discretion to stay or allow proceedings in
the Bermuda courts.

 

We
have assumed that at all material times AXIS Specialty will comply with the
conditions attached to its registration as an insurer under the Insurance Act
1978 (the “Insurance Act”) and the regulations promulgated thereunder.
In addition, the ability of AXIS Specialty to fulfill its obligations pursuant
to the Credit Agreement will be subject to any directions which may be issued
in respect of AXIS Specialty by the Bermuda Monetary Authority (the “BMA”)
under section 32 of the Insurance Act (“Section 32”). Such
directions may be issued if it appears to the BMA that the business of AXIS
Specialty is being conducted so that there is a significant risk of AXIS
Specialty becoming insolvent or that AXIS Specialty is in breach of a provision
of the Insurance Act or of the regulations promulgated thereunder or any
condition imposed on its registration. In such circumstances, the BMA may
direct AXIS Specialty to take or refrain from taking any of the steps listed in
Section 32, including, inter alia,
that AXIS Specialty cease or

 

2

 

limit
its underwriting or that there be a prohibition or restriction on the payment
of dividends or other distributions by AXIS Specialty, and/or the BMA may
direct AXIS Specialty to maintain in, or transfer to and keep in the custody
of, a specified bank, assets of AXIS Specialty of such value and description as
are specified in the direction. It should be noted that the documents of public
record maintained by the Registrar of Companies do not reveal whether a
direction under Section 32 has been issued.

 

We
express no opinion as to the enforceability of any provision of the Credit
Agreement which provides for the payment of a specified rate of interest on the
amount of a judgment after the date of judgment or which purports to fetter the
statutory powers of either or both of the Bermuda Credit Parties.

 

We
have made no investigation of and express no opinion in relation to the laws of
any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and the benefit of the Lenders and is not to be relied
upon by any other person, firm or entity or in respect of any other matter.

 

On
the basis of and subject to the foregoing, we are of the opinion that:

 

1.                                       Each of
the Bermuda Credit Parties is duly incorporated and existing under the laws of
Bermuda in good standing (meaning solely that it has not failed to make any
filing with any Bermuda government authority or to pay any Bermuda government
fee or tax which would make it liable to be struck off the Register of
Companies and thereby cease to exist under the laws of Bermuda).

 

2.                                       Each of
the Bermuda Credit Parties has the necessary corporate power and authority to
enter into and perform its obligations under the Credit Agreement. The
execution and delivery of the Credit Agreement by each of the Bermuda Credit
Parties and the performance by each of the Bermuda Credit Parties of its
obligations thereunder will not violate (i) the memorandum of association
or bye-laws of such Bermuda Credit Party or (ii) any applicable law,
regulation, order or decree in Bermuda.

 

3.                                       Each of
the Bermuda Credit Parties has taken all corporate action required to authorise
its execution, delivery and performance of the Credit Agreement. The Credit
Agreement has been duly executed and delivered by or on behalf of each of the
Bermuda Credit Parties, and constitutes the valid and binding obligations of
each of the Bermuda Credit Parties in accordance with the terms thereof.

 

4.                                       No order,
consent, approval, licence, authorisation or validation of or exemption by any
government or public body or authority of Bermuda or any sub-division thereof
is required to authorise or is required in connection with the execution,
delivery, performance and enforcement of the Credit Agreement.

 

5.                                       Based
solely upon a search of the Cause Book of the Supreme Court of Bermuda
conducted at 10:05 am on      August, 2005 (which would not
reveal details of

 

3

 

proceedings which
have been filed but not actually entered in the Cause Book at the time of our
search), there are no judgments against either Bermuda Credit Party, nor any
legal or governmental proceedings pending in Bermuda to which either Bermuda
Credit Party is subject.

 

6.                                       It is not
necessary or desirable to ensure the enforceability in Bermuda of the Credit
Agreement that they be registered in any register kept by, or filed with, any
governmental authority or regulatory body in Bermuda. However, to the extent
that the Credit Agreement creates a charge over assets of either Bermuda Credit
Party, it may be desirable to ensure the priority in Bermuda of the charge that
it be registered in the Register of Charges in accordance with Section 55
of the Companies Act 1981. On registration, to the extent that Bermuda law
governs the priority of a charge, such charge will have priority in Bermuda
over any unregistered charges created after 11 July 1984, and over any
subsequently registered charges, in respect of the assets which are the subject
of the charge. A registration fee of $468 will be payable in respect of the
registration.

 

While there is no exhaustive definition of a
charge under Bermuda law, a charge normally has the following characteristics:

 

(i)                                             it is a
proprietary interest granted by way of security which entitles the chargee to
resort to the charged property only for the purposes of satisfying some
liability due to the chargee (whether from the chargor or a third party); and

 

(ii)                                          the chargor retains an equity of redemption to have the
property restored to him when the liability has been discharged.

 

However, as the Credit Agreement is governed by
the Foreign Laws, the question of whether they would possess these particular
characteristics would be determined under the Foreign Laws.

 

7.                                       There is
no income or other tax of Bermuda imposed by withholding or otherwise on any
payment to be made to or by either Bermuda Credit Party pursuant to the Credit
Agreement. The Credit Agreement will not be subject to ad valorem stamp duty in
Bermuda and no registration, documentary, recording, transfer or other similar
tax, fee or charge is payable in Bermuda in connection with the execution,
delivery, filing, registration or performance of the Credit Agreement other
than as stated in paragraph 6 hereof.

 

8.                                       The Credit
Agreement is in acceptable legal form under the laws of Bermuda for enforcement
thereof in Bermuda.

 

9.                                       The
Lenders and the Administrative Agent have standing to bring an action or
proceedings before the appropriate courts in Bermuda for the enforcement of the
Credit Agreement. It is not necessary or advisable in order for the Lenders or
the Administrative

 

4

 

Agent to enforce their rights under the Credit
Agreement, including the exercise of remedies thereunder, that it be licensed,
qualified or otherwise entitled to carry on business in Bermuda.

 

10.                                 Neither
Bermuda Credit Party is entitled to any immunity under the laws of Bermuda,
whether characterised as sovereign immunity or otherwise, from any legal
proceedings to enforce the Credit Agreement in respect of itself or its
property.

 

11.                                 The
Lenders or the Administrative Agent will not be deemed to be resident,
domiciled or carrying on business in Bermuda by reason only of the execution,
performance and/or enforcement of the Credit Agreement by the Lenders or the
Administrative Agent.

 

12.                                 The choice
of the Foreign Laws as the governing law of the Credit Agreement is a valid
choice of law and would be recognised and given effect to in any action brought
before a court of competent jurisdiction in Bermuda, except for those laws
(i) which such court considers to be procedural in nature, (ii) which
are revenue or penal laws or (iii) the application of which would be
inconsistent with public policy, as such term is interpreted under the laws of
Bermuda. The submission in the Credit Agreement to the non-exclusive
jurisdiction of the Foreign Courts is valid and binding upon each of the
Bermuda Credit Parties.

 

13.                                 The courts
of Bermuda would recognise as a valid judgment, a final and conclusive judgment
in personam obtained in the Foreign Courts against either of the Bermuda Credit
Parties based upon the Credit Agreement under which a sum of money is payable
(other than a sum of money payable in respect of multiple damages, taxes or
other charges of a like nature or in respect of a fine or other penalty) and
would give a judgment based thereon provided that (a) such courts had
proper jurisdiction over the parties subject to such judgment, (b) such
courts did not contravene the rules of natural justice of Bermuda,
(c) such judgment was not obtained by fraud, (d) the enforcement of
the judgment would not be contrary to the public policy of Bermuda, (e) no
new admissible evidence relevant to the action is submitted prior to the
rendering of the judgment by the courts of Bermuda and (f) there is due
compliance with the correct procedures under the laws of Bermuda.

 

	
  Yours faithfully,

  
	
   

  
	
   

  
	
  CONYERS DILL & PEARMAN

  

 

5

 

EXHIBIT E-2

 

Form of
Opinion of New York Counsel to Credit Parties

 

[see attached]

 

 

EXHIBIT E-3

 

Form of Opinion of Irish Counsel to AXIS Re and AXIS Specialty
Europe

 

	
  Our Ref

  	
  016984.0007.EH/PJC

  	
  25 August 2005

  

 

JP Morgan Chase Bank

as Administrative Agent

1111 Fannin

10th Floor

Houston

Texas 77002-8069

(the
“Administrative Agent”)

 

- and
-

 

The Parties set out in the
Schedule hereto

 

AXIS Re
Limited (“AXIS Re”)

AXIS Specialty Europe Limited (“AXIS Specialty”) -

Credit Agreement (as hereinafter defined)

 

Dear Sirs,

 

1.                             Capacity and Basis

 

We
have acted as Irish Solicitors to AXIS Re and AXIS Specialty (together the
“Companies” and individually a “Company”) in connection with a credit agreement
dated as of 25 August 2005 between (1) AXIS Capital Holdings Limited, (2) the Subsidiary
Credit Parties party thereto (including the Companies), (3) the Lenders
and (4) the Administrative Agent whereby the Lenders agreed to make
available, through the Administrative Agent, a syndicated letter of credit and
revolving credit facility of up to US$1,500,000,000 (the “Credit Agreement”).

 

This
Opinion Letter is issued for the purposes of the Credit Agreement and is based
on the assumptions and subject to the reservations and qualifications set out
below.

 

 

2.                             Documents

 

For the purpose of issuing this Opinion Letter
we have reviewed and relied upon each of the following documents (each a
“Document” and collectively, the “Documents”):

 

(a)                        A
certificate from Timothy Hennessy a Director of each Company dated     
August 2005 as to certain matters to be relied on by us (together the
“Company Certificates” and individually a “Company Certificate”), copies of
which are annexed hereto marked “A”.

 

(b)                       A copy of
the signed Credit Agreement in the form annexed hereto marked “B”.

 

(c)                        The report
of searches made against the Companies by Rochford Brady, independent law
searchers, on our behalf on      August 2005 in the
Irish Companies Registration Office and the Central Office of the High Court,
Dublin (together the “Searches”).

 

(d)                       A copy of
the Memorandum and Articles of Association of each Company annexed as Appendix
I to each Company Certificate (each a 
“Memorandum and Articles of Association” and together the “Memoranda and
Articles of Association”).

 

(e)                        A copy of
the resolutions passed at a meeting of each of the Board of Directors of the
Companies (each the “Board” and together the “Boards”) held on     
August 2005 and a copy of the resolutions of a committee of the Board of
Directors of each of the Companies (each a “Committee” and together the
“Committees”) dated      August 2005 each as annexed
as Appendix II to the respective Company Certificate.

 

(f)                          A copy of
the forms of notification of AXIS Re pursuant to Section 22 (inserted by
Section 5 of the Insurance Act, 2000) of the Insurance Act 1989 filed with
the Department of Enterprise, Trade and Employment (“DETE”) and with the Irish
Financial Services Regulatory Authority (“IFSRA”), copies of which are annexed
hereto marked “C” (the “ AXIS Re Notification”).

 

(g)                       A copy of
the certificate of authorisation issued to AXIS Specialty by the DETE on 23
May 2002 in accordance with the provisions of the Insurance Acts and
Regulations as defined in the European Communities (Non-Life Insurance)
Framework Regulations, 1994 (the “AXIS Specialty Authorisation”), a copy of
which is annexed hereto marked “D”.

 

(h)                       A copy of
a letter dated      August 2005 addressed by William
Fry, Solicitors to the IFSRA on behalf of AXIS Specialty, notifying IFSRA
pursuant to Article 15 of the European Communities (Non-Life Insurance)
Framework Regulations 1994 of the terms of the Credit Agreement (the “IFSRA
Notification”), a copy of which is annexed hereto marked “E”.

 

(i)                           An opinion
of Denis McDonald S.C. dated      August 2005
addressed to William Fry, Solicitors, in relation to, inter alia, Sections 9
and 10 (2) of the Insurance Act,

 

2

 

1936 (as amended) a copy of
which is annexed hereto marked “F” (“Counsel’s Opinion”).

 

3.                             Opinions

 

Based on our review of the Documents and upon
the assumptions listed at Clause 4, and subject to all applicable bankruptcy,
insolvency, liquidation, examinership, re-organisation, moratorium and other
laws relating to the enforcement of creditors’ rights generally and to the
reservations and qualifications set out in Clauses 5 and 6, we express the
following opinions:-

 

(a)                        The
Companies are both single member private companies limited by shares duly
incorporated and validly existing as legal entities under the laws of Ireland.

 

(b)                       The
Companies have the corporate power and authority to enter into and perform
their obligations under the Credit Agreement. 
All necessary corporate action has been taken by each Company to
authorise the signature or execution of the Credit Agreement and performance by
each of the Companies of their respective obligations thereunder.  The Credit Agreement has been duly signed by
each of the Companies.

 

(c)                        The
obligations of each Company under the Credit Agreement, assuming it to be
legal, valid, binding and enforceable according to the laws of the State of New
York by which it is expressed to be governed, constitute legal, valid, binding
and enforceable obligations of each Company.

 

(d)                       The
execution or signature and delivery of the Credit Agreement by each Company and
the performance by it of its obligations thereunder in accordance with its
terms (i) do not violate A. any applicable law or regulation of Ireland,
or B. any provision of the Memorandum and Articles of Association of such
Company and (ii) save for the IFSRA Notification, do not require it to
obtain any authorisations, approvals, licenses, exemptions or consents from any
governmental or regulatory authorities.

 

(e)                        It is not
necessary under the laws of Ireland in order to ensure the validity,
effectiveness or enforceability of the Credit Agreement in accordance with its
respective terms that it be filed, registered or recorded in Ireland in any
court or with any administrative or governmental body, save (i) for the
IFSRA Notification; (ii) that court offices may impose fees or charges
established by law in connection with the issue and conduct of legal
proceedings; and (iii) that €0.15 is payable on any promissory note issued
by any of the Companies pursuant to Section 2.09 (f) of the Credit
Agreement.

 

(f)                          A judgment
obtained in the courts of the State of New York or any federal court in New York
in respect of the Credit Agreement expressed to be governed by New York law (a
“New York Judgment”) would not automatically be enforced by the courts of
Ireland.  In order to enforce a New York
Judgment in Ireland, legal process must be initiated before a court of
competent jurisdiction in Ireland.  An
Irish court

 

3

 

will normally
recognise and enforce a New York Judgment without retrial or examination of the
merits of the case provided that:

 

(i)                          the New York Judgment was not obtained or alleged to have
been obtained by fraud;

 

(ii)                       the
process and decision of the New York court were not contrary to natural or
constitutional justice under the laws of Ireland and the enforcement of the New
York Judgment would not be contrary to public policy as understood by the Irish
courts or constitute the enforcement of a judgment of a penal or taxation
nature;

 

(iii)                    the New York Judgment is final and conclusive and is for
a debt or a definite sum of money;

 

(iv)                   the jurisdiction of the New York court has been exercised
in circumstances which, as a matter of Irish law, an Irish court will recognise
as justifying enforcement of the New York Judgment;

 

(v)                      the procedural rules of the New York court in
relation to the obtaining of the New York Judgment have been observed; and

 

(vi)                   the New York Judgment is not inconsistent with a judgment
of an Irish court in respect of the same matter.

 

(g)                       The
Companies are generally subject to suit under the laws of Ireland and neither Company
has, nor does any of their properties have, any
immunity from jurisdiction of any Irish court or from any legal process under
Irish law.

 

(h)                       Under the
laws of Ireland in force at the date hereof the claims of the Lenders against
the Companies will rank at least pari passu with the claims of all other
unsecured creditors except claims which are preferred by law and, in addition,
in the case of AXIS Specialty claims provided for pursuant to Article 9 of
the European Communities (Re-organisation and Winding-up of Insurance
Undertakings) Regulations 2003 (a copy of which is annexed hereto marked “G”).

 

(i)                           Under the
laws of Ireland in force at the date hereof none of the Companies will be
required to make any deduction or withholding for or on account of any taxes
from any payment it may make under the Credit Agreement.

 

(j)                           The Rome
Convention on the Law Applicable to Contractual Obligations 1980, as amended
and extended (the “Rome Convention”), other than
Article 7(1) thereof, has force of law in Ireland by virtue of the
Contractual Obligations (Applicable Law) Act 1991.  The Credit Agreement provides that it will be
governed by and construed in accordance with the law of New York (the “Selected
Law”).  Subject to:-

 

4

 

(i)                          the choice
of the Selected Law not being contrary to any mandatory provision of Irish law
applicable to the Credit Agreement; and

 

(ii)                       the choice
of the Selected Law not being at variance with Irish public policy in a
sufficiently fundamental manner as to make an Irish court disregard such choice
(for example, where the choice of such law is made with the intention of
evading the laws of Ireland);

 

the
choice of the Selected Law as the governing law of the Credit Agreement is
valid in accordance with the Rome Convention and, accordingly subject to and in
accordance with the Rome Convention, the Selected Law will, be recognised and
applied by the courts of Ireland in respect of the Credit Agreement upon it
being duly pleaded that the Credit Agreement is expressed to be governed by and
construed in accordance with the Selected Law and proof being given to such
courts of the relevant provisions of the Selected Law.  Notwithstanding the foregoing, it should be
noted that the Rome Convention does not apply to negotiable instruments.

 

(k)                        It is not
necessary under the laws of Ireland (i) in order to enable the Lenders or
the Administrative Agent to enforce their or its respective rights under the
Credit Agreement or (ii) by reason of the execution of the Credit
Agreement that the Lenders or the Administrative Agent, as the case may be,
should be licensed, qualified or otherwise entitled to carry on business in
Ireland.

 

(l)                           The
Administrative Agent or the Lender will not be deemed to be resident, domiciled
or carrying on business in Ireland by reason only of the execution, delivery
and performance of the Credit Agreement by the Lenders or the Administrative
Agent.

 

4.                             Assumptions

 

For the purpose of issuing this Opinion Letter
we have made the following assumptions, without independent verification:

 

(a)                        That the
copies of each Document referred to herein as being reviewed by us are true,
complete and accurate copies of the originals thereof as in effect on the date
hereof without any amendment or modification thereto.

 

(b)                       The
authenticity of all signatures and/or corporate seals on, and the capacity of
all individuals who signed, the Credit Agreement
and/or any of the Documents.

 

(c)                        That the
Company Certificates fully and accurately state the position as to the matters
of fact or opinion referred to therein and that the position as stated therein
in relation to any factual matter or opinion pertains as of the date hereof.

 

(d)                       That the
copies produced to us of minutes of the meetings of each Board and each
Committee are true copies and correctly record the proceedings at such meetings
and the resolutions approved thereat; that such meetings were quorate and duly
convened

 

5

 

and held, that those present at such meetings
acted bona fide in the interests of the respective Companies throughout, that
the provisions contained in the Companies Acts 1963-2003 and/or the Articles of
Association of each Company relating to the declaration of the interests of the
Directors and the powers of interested Directors to vote were duly observed,
that all resolutions set out in such copies were duly passed and that no
further resolutions of either Board or any committee thereof have been passed,
or corporate or other action taken, which would or might alter the
effectiveness thereof.

 

(e)                        That it is
in the interests of (and will commercially benefit) the Companies to enter into
the Credit Agreement.

 

(f)                          That the
Companies are not and were not, at the date of execution or signature, or the
effective date of the Credit Agreement, and will not, as a result of the
transactions contemplated by the Credit Agreement, become insolvent or unable
to pay their debts, or be deemed to be so under any applicable statutory
provision, regulation or law.

 

(g)                       That, in
so far as the laws of any other jurisdiction other than Ireland are relevant,
such laws do not prohibit and are not inconsistent with any of the rights or
obligations expressed in the Credit Agreement or the transactions contemplated
by the Credit Agreement and that there is no provision of the laws of any
jurisdiction (other than Ireland) that would have a bearing on any of the
matters opined upon herein and, to the extent that the Companies require any
authorisation, consent or approval from any public, administrative or
governmental body in any jurisdiction outside of Ireland in relation to all or
any of such matters, that they have obtained each such authorisation, consent
or approval and have complied, and will continue to comply, with any conditions
attaching thereto.

 

(h)                       That the
obligations expressed to be assumed by all the parties, other than the
Companies, pursuant to the Credit Agreement have been validly assumed and are
legal, valid, binding and enforceable obligations of each of them under all
applicable laws and that the Credit Agreement has been duly authorised,
executed and delivered by the parties thereto other than the Companies.

 

(i)                           That there
are no agreements or arrangements in existence or contemplated between the
parties (or any of them) to the Credit Agreement which in any way amend, add to
or vary the terms or conditions of the Credit Agreement or the respective
rights and interests of the parties thereto.

 

(j)                           That there
are no contractual or similar restrictions or other arrangements binding on
either Company which could affect the conclusions in this Opinion Letter.

 

(k)                        That
neither Company was induced by fraud, misrepresentation or by any similar
circumstance to enter into the Credit Agreement.

 

6

 

(l)                           That the
Companies are and will remain resident in Ireland for Irish tax purposes and
for the purposes of all validly existing double taxation agreements entered
into by Ireland.

 

(m)                     That any
debt incurred by the Companies under the Credit Agreement, and payments made by
the Companies under such, will be incurred and paid in the ordinary course of a
trade or business carried on by the Companies.

 

(n)                       The
Lenders are and will remain corporate entities and will be the beneficial
recipients of any payments made to them or for their benefit under the Credit
Agreement.

 

(o)                       That the
Lenders are and will remain resident either in an EU member state or a
country with which Ireland has entered into a double taxation agreement.

 

(p)                       That
payments received or beneficially received by the Lenders under the Credit
Agreement will not be connected with or attributable to any branch, agency or
permanent establishment in Ireland through which the Lenders carry on business.

 

(q)                       That the
Lenders and the Companies deal with each other on an arm’s length basis and
that the terms in the Credit Agreement are not as a result of any special
relationship which exists between the Lenders and the Companies other than
arm’s length terms.

 

(r)                          The
Lenders will have complied with such procedural formalities as are necessary to
qualify payments made under the Credit Agreement for exemption from withholding
tax in Ireland under the terms of any applicable double taxation agreement, or
otherwise.

 

5.                             Reservations and Qualifications

 

This Opinion Letter is given subject to the
following reservations and qualifications:

 

(a)                        The
opinions in this Opinion Letter are given solely on the basis of a review of
the Documents and the applicable law with regard to the matters specified
herein.  The opinions are given only in
respect of the laws of Ireland in effect as of the date of this Opinion Letter
and as to the facts and circumstances as stated herein in existence at such
date and this Opinion Letter is not to be taken as expressing any opinion with
regard to any matter governed by the laws of any jurisdiction other than
Ireland.

 

(b)                       For the
purpose of the opinions given in Clause 3 (a) that the Companies are duly
incorporated and validly existing under the laws of Ireland, we have relied
solely upon the Searches which did not disclose that any steps have been taken
to appoint a receiver or examiner of any of the Companies or over any of their
assets or to liquidate any of them or wind any of them up or in any other
manner to terminate their legal existence. 
It should be noted that the records held by the Companies

 

7

 

Registration Office may not necessarily be up
to date or relevant filings may not have been made and, as a consequence, this
may affect the results or accuracy of any searches in those offices.

 

(c)                        The terms
“binding” and/or “enforceable” as used in this Opinion Letter (whether
separately or in conjunction with one another) mean that the obligations are of
a type which the Irish courts generally enforce.  It does not mean that those obligations will
necessarily be enforced in all circumstances in accordance with their terms or
that any particular remedy will be available. 
In particular (without limitation):

 

(i)                          enforcement
may be limited by laws from time to time relating to bankruptcy, insolvency,
liquidation, receivership, re-organisation, moratoria, court schemes, court
protection, (including, without limitation, the provisions of the Companies
Acts 1963-2003 relating to the appointment of an examiner), preferential
creditors, fraudulent preference, limitation of action and laws of general
application relating to or affecting the rights of creditors;

 

(ii)                       claims may be or become the subject of set-off or
counterclaim;

 

(iii)                    enforcement
may be limited by the doctrines of good faith and fair dealings and by general
principles of equity - for example specific performance and other equitable
remedies are discretionary and may not be available where damages are
considered by the court to be an adequate remedy;

 

(iv)                   provisions (including provisions for default interest) imposing
additional obligations in the event of breach or default or late payment may be
unenforceable to the extent that they are adjudicated to be a penalty;

 

(v)                      where obligations are to be performed in a jurisdiction
outside Ireland, they may not be enforceable in Ireland to the extent that
performance would be illegal under the laws of that other jurisdiction;

 

(vi)                   claims may become barred under relevant statutes of
limitation if not pursued within the time limited by such statutes;

 

(vii)                enforcement
may also be limited as a result of (A) the provisions of Irish law
applicable to contracts held to have become frustrated by events happening
after their execution or signature, or (B) any breach of the terms of an
agreement by the party seeking to enforce the same;

 

(viii)             any
calculation, determination, certificate, acknowledgement or opinion, and the
exercise of any discretion, under or in relation to the Credit Agreement may be
the subject of judicial enquiry and review (including enquiry into the manner
in which any of the foregoing was arrived at and the grounds on which it is
based), and accordingly may not be final, conclusive, binding or

 

8

 

enforceable,
notwithstanding any provision in the Credit Agreement to that effect; and

 

(ix)                     a waiver of any defences to any proceedings may not be
enforceable.

 

(d)                       Any
judgment of the Irish courts for monies due under the Credit Agreement may be
expressed in a currency other than euro but the order may issue out of the
Central Office of the Irish High Court expressed in euro by reference to the
official rate of exchange prevailing on the date of issue.  In addition, in a winding-up in Ireland of an
Irish-incorporated company, all foreign currency claims must be converted into
euro for the purposes of proof.  The rate
of exchange to be used to convert foreign currency debts into euro for the
purpose of proof in a winding-up is the spot rate (in the case of a compulsory
winding-up) on the date of the winding-up order and (in the case of a voluntary
winding-up) on the date of the relevant winding-up resolution.

 

(e)                        Any term
of an agreement may be amended orally by the parties notwithstanding any
provision to the contrary in such agreement, and documents may be impliedly
amended by later agreements or a course of dealing between the parties thereto,
notwithstanding any provision to the contrary therein contained.

 

(f)                          Any
provision in the Credit Agreement providing for severance of provisions in the
event of illegality, invalidity or unenforceability may not be effective,
depending on the nature of the illegality, invalidity or unenforceability in
question.

 

(g)                       An Irish
Court may refuse to give effect to any provision of an agreement which amounts
to an indemnity in respect of the costs of unsuccessful litigation brought
before an Irish court or where the court has itself made an order for costs.

 

(h)                       Section 131
of the Stamp Duties Consolidation Act, 1999 renders void every contract,
arrangement or undertaking for assuming the liability on account of “absence or
insufficiency of stamp” upon an instrument or indemnifying a person against
such liability, absence or insufficiency.

 

(i)                           The
effectiveness of any provision in the Credit Agreement purporting to exculpate
a party from a liability, obligation or duty otherwise owed is limited by Irish
law.

 

(j)                           An Irish
court has power to stay an action if concurrent proceedings are being brought
elsewhere.

 

(k)                        In giving
this opinion we have assumed the accuracy of and have relied upon Counsel’s
Opinion.

 

(l)                           The Credit
Agreement may not be valid or enforceable under Irish law to the extent that
any obligation thereunder is unenforceable on account of illegality,
misrepresentation or fraud or is overridden by considerations of public policy.

 

9

 

6.                             General

 

This Opinion Letter may not be relied upon for
any other purpose or furnished to, used by or circulated to any other person
other than its addressees and any other person which becomes a Lender under the
Credit Agreement without our prior written consent in each instance.

 

Save where otherwise specified, a reference in
this Opinion Letter to a Clause, is to a Clause of this Opinion Letter.

 

This Opinion Letter speaks only as of the date
hereof and we disclaim any obligation to advise you or anyone else of changes
of law or fact that occur after the date hereof.  This Opinion Letter is given on the basis
that it will be construed in accordance with, and governed in all respects by,
the laws of Ireland which shall apply between us and all persons interested.

 

 

	
  Yours faithfully,

  	
   

  	
  Yours faithfully,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Partner

  	
   

  	
  Partner

  
	
  WILLIAM FRY

  	
   

  	
  WILLIAM FRY

  
	
  Solicitors

  	
   

  	
  Solicitors

  
					

 

10

 

SCHEDULE

 

JPMorgan Chase Bank, N.A.

 

Barclays Bank PLC

 

[Other Lenders to be
specified]

 

WF-265312-v5.exv:dm

 

11

 

EXHIBIT F

 

Form of Opinion of Special New York Counsel to JPMorgan Chase

 

August 25, 2005

 

To the Lenders party to the
Credit Agreement

referred to below and JPMorgan Chase Bank, N.A.,

as Administrative Agent

 

Ladies and Gentlemen:

 

We
have acted as special New York counsel to JPMorgan Chase Bank, N.A. (“JPMorgan
Chase”) in connection with the Credit Agreement (the “Credit Agreement”)
dated as of August 25, 2005 among AXIS Capital Holdings Limited (“AXIS
Capital”), the subsidiary account parties party thereto (collectively,
together with AXIS Capital, the “Credit Parties”), the lenders party
thereto and JPMorgan Chase, N.A., as Administrative Agent, providing for
extensions of credit to be made by said lenders to the Credit Parties in an
original aggregate principal or face amount not exceeding $1,500,000,000.  Terms defined in the Credit Agreement are
used herein as defined therein.  This
opinion letter is being delivered pursuant to Section 4.01(c) of the
Credit Agreement.

 

In
rendering the opinions expressed below, we have examined the Credit
Agreement.  In our examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity with authentic original
documents of all documents submitted to us as copies.  When relevant facts were not independently
established, we have relied upon representations made in or pursuant to the
Credit Agreement.  We have also assumed
that all authorizations, approvals or consents of (including any exchange
control approval), and all filings or registrations with, any governmental or
regulatory authority or agency of Bermuda (including of the Bermuda Monetary
Authority) or Ireland or any other jurisdiction of organization of any Credit
Party have been obtained and are in effect.

 

In
rendering the opinions expressed below, we have assumed, with respect to all of
the documents referred to in this opinion letter, that:

 

(i)                                     such documents have been duly authorized by,
have been duly executed and delivered by, and (except to the extent set forth
in the opinions expressed below as to each Credit Party) constitute legal,
valid, binding and enforceable obligations of, all of the parties to such
documents;

 

(ii)                                  all signatories to such documents have been duly
authorized; and

 

 

(iii)                               all of the parties to such documents are duly
organized and validly existing and have the power and authority (corporate or
other) to execute, deliver and perform such documents.

 

Based
upon and subject to the foregoing and subject also to the comments and
qualifications set forth below, and having considered such questions of law as
we have deemed necessary as a basis for the opinions expressed below, we are of
the opinion that the Credit Agreement constitutes the legal, valid and binding
obligation of each Credit Party, enforceable against each Credit Party in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or other similar
laws relating to or affecting the rights of creditors generally (including the
possible judicial application of foreign laws or governmental action affecting
the enforcement of creditors’ rights) and except as the enforceability of the
Credit Agreement is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including (a) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing.

 

The
foregoing opinions are subject to the following comments and qualifications:

 

(A)  The enforceability of Section 10.03 of the Credit
Agreement may be limited by (i) laws rendering unenforceable
indemnification contrary to Federal or state securities laws and the public
policy underlying such laws and (ii) laws limiting the enforceability of
provisions exculpating or exempting a party, or requiring indemnification of a
party for, liability for its own action or inaction, to the extent the action
or inaction involves gross negligence, recklessness, willful misconduct or
unlawful conduct.

 

(B)  The enforceability of provisions in the Credit Agreement to
the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances.

 

(C)  Paragraph (iii) of Section 9.02 of the Credit
Agreement may not be enforceable to the extent that the Guaranteed Obligations
are materially modified.

 

(D)  We express no opinion as to (i) the effect of the laws
of any jurisdiction in which any Lender is located (other than the State of New
York) that limit the interest, fees or other charges such Lender may impose,
(ii) the last sentence of Section 2.19(d), (iii) the first
sentence of Section 10.09(b) of the Credit Agreement, insofar as such
sentence relates to the subject matter jurisdiction of the United States
District Court for the Southern District of New York to adjudicate any
controversy related to the Credit Agreement, (iv) the waiver of
inconvenient forum set forth in Section 10.09(c) of the Credit
Agreement with respect to proceedings in the United States District Court for
the Southern District of New York, (v) Section 10.09(e) of the
Credit Agreement to the extent it purports to be a waiver of immunity acquired
after the execution and delivery of the Credit Agreement and
(vi) Section 10.13 of the Credit Agreement.

 

2

 

The
foregoing opinions are limited to matters involving the Federal laws of the
United States of America and the law of the State of New York, and we do not
express any opinion as to the laws of any other jurisdiction.

 

At
the request of our client, this opinion letter is, pursuant to Section 4.01(c) of
the Credit Agreement, provided to you by us in our capacity as special New York
counsel to JPMorgan Chase and may not be relied upon by any Person for any
purpose other than in connection with the transactions contemplated by the Credit
Agreement without, in each instance, our prior written consent.

 

	
   

  	
  Very truly yours,

  

 

WJM/WFC

 

3

 

EXHIBIT G

 

[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 August 25, 2005 (as amended
and in effect, the “Credit Agreement”), among AXIS Capital Holdings
Limited (“AXIS Capital”), certain of its Subsidiaries as Account Parties
or Borrowers party thereto (collectively, together with AXIS Capital, the “Credit
Parties”), 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 a bank listed on the most current Bank
List of banks approved by the NAIC. 
Accordingly, in order to be an “NAIC Approved Lender” 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 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 Letter of Credit issued or continued under the Credit
Agreement as if, and to the extent, you were the Issuing Lender under the
relevant Letter of Credit. 
Notwithstanding the foregoing, your liability under all 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 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 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 Letter of Credit.

 

In
consideration of the foregoing, the Issuing Lender agrees that if you shall
make any LC Disbursement in respect of any Letter of Credit, regardless of the
identity of the account party of such Letter of Credit, 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) 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.

 

2

 

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 at
JPMorgan Chase Bank, N.A., 1111 Fannin, 10th Floor, Houston, Texas
77002-8069, Attention of Loan and Agency Services Group (Telecopy No. (713) 750-2782; Telephone No. (713) 750-2102), with a
copy thereof to JPMorgan Chase Bank, N.A., 270 Park Avenue, 22nd
Floor, New York, New York 10017, Attention of Heather Lindstrom (Telecopy
No. (212) 270-1511; Telephone No. (212)
270-9839).

 

	
   

  	
  [NAME OF ISSUING LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED AS AFORESAID:

  	
   

  
	
   

  	
   

  
	
  [NAME OF CONFIRMING LENDER]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  
						

 

3

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