Document:

Unassociated Document

    Exhibit
      10.2

     

    EXECUTION
      COPY

     

    AMENDMENT
      NO. 1 TO CREDIT AGREEMENT

     

    AMENDMENT
      NO. 1, dated as of May 5, 2006, to the Credit Agreement (as defined below),
      between XL CAPITAL LTD, a Cayman Islands exempted limited company, X.L. AMERICA,
      INC., a Delaware corporation, XL INSURANCE (BERMUDA) LTD, a Bermuda limited
      liability company, and XL RE LTD, a Bermuda limited liability company, each
      of
      the Lenders party to the Credit Agreement and JPMORGAN CHASE BANK, N.A. as
      administrative agent for the Lenders (in such capacity, together with its
      successors in such capacity, the “Administrative
      Agent”).

     

    The
      Obligors, the Lenders and the Administrative Agent are parties to a Five-Year
      Credit Agreement dated as of June 22, 2005 (the “Credit
      Agreement”),
      providing, subject to the terms and conditions thereof, for extensions of credit
      to be made by or on behalf of said Lenders to the Account Parties in an
      aggregate principal or face amount not exceeding $2,350,000,000. The Obligors,
      the Lenders and the Administrative Agent wish to amend the Credit Agreement
      in
      certain respects and, accordingly, the parties hereto hereby agree as
      follows:

     

    Section
      1.
      Definitions.
      Except
      as otherwise defined in this Amendment No. 1, terms defined in the Credit
      Agreement are used herein as defined therein.

     

    Section
      2.
      Amendments.
      Effective as of the date hereof as provided in Section 5 of this Amendment
      No. 1, the Credit Agreement is hereby amended as follows:

     

    2.01.
      References in the Credit Agreement to “this Agreement” (and indirect references
      such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be
      references to the Credit Agreement as amended hereby.

     

    2.02.
      Section 1.01 of the Credit Agreement is hereby amended by inserting the
      following definitions (or, in the case of any of the following defined terms
      that are already defined in the Credit Agreement, by amending and restating
      in
      its entirety each such term to read as set forth below) in their proper
      respective alphabetical locations:

     

    “SCA”
means
      Security Capital Assurance Ltd, a Bermuda limited liability
      company.

     

    “SCA
      IPO”
means
      the issuance or sale of common shares of SCA to the public pursuant to an
      effective registration statement filed under the Securities Act of 1933, as
      amended, in connection with an underwritten offering.

     

    “Significant
      Subsidiary”
means,
      at any time, each Subsidiary of XL Capital that, as of such time, meets the
      definition of a “significant subsidiary” under Regulation S-X of the SEC;
provided,
      however,
      that
      for purposes of this Agreement, from and after the consummation of the SCA
      IPO,
      neither SCA nor any of its Subsidiaries shall be a “Significant Subsidiary” of
      XL Capital.

     

    
      
         

      

      
         

        
          

        

      

      
        -2-

      

    

    

     

    “Subsidiary”
means,
      with respect to any Person (the “parent”),
      at
      any date, any corporation (or similar entity) of which a majority of the shares
      of outstanding capital stock normally entitled to vote for the election of
      directors (regardless of any contingency which does or may suspend or dilute
      the
      voting rights of such capital stock) is at such time owned directly or
      indirectly by the parent or one or more subsidiaries of the parent;
      provided,
      however,
      that
      for purposes of this Agreement, from and after the consummation of the SCA
      IPO,
      neither SCA nor any of its Subsidiaries shall be a “Subsidiary” of any Account
      Party.
      Unless
      otherwise specified, “Subsidiary” means a Subsidiary of an Account
      Party.

     

    “XL
      Capital Group”
means
      XL Capital Group as determined from time to time by A.M. Best & Co. (or its
      successor).

     

    2.03.
      Section 6.09 of the Credit Agreement is hereby amended by inserting a new
      sentence at the end thereof to read as follows:

     

    “Notwithstanding
      anything in this Section to the contrary, from and after the SCA IPO, no Account
      Party will issue any Letter of Credit, or renew or permit to renew any Letter
      of
      Credit existing as of the SCA IPO, or use the proceeds of any Loan, to support
      the obligations of, or otherwise primarily for the general corporate purposes
      of, SCA and its Subsidiaries”.

     

    2.04.
      Section 7.08 of the Credit Agreement is hereby amended by inserting the
      word “Group” immediately after the reference in the first line thereof to “XL
      Capital”.

     

    2.05.
      Section 10.04(c) of the Credit Agreement is hereby amended by inserting a new
      clause (iii) at the end thereof to read as follows:

    

    “(iii) In
      the
      event that any Lender sells participations in a Loan or Commitment, such Lender,
      acting solely for this purpose as a non-fiduciary agent of the Borrower, shall
      maintain a register on which it enters the name of all participants in the
      Loans
      and Commitments held by it (the “Participant
      Register”).
      The
      entries in the Participant Register shall be conclusive in the absence of
      manifest error, and the participating Lender shall treat each Person whose
      name
      is recorded in the Participant Register as the Participant for all purposes
      of
      this Agreement and the other Loan Documents, notwithstanding any notice to
      the
      contrary.”

     

    Section
      3.
      Waiver.
      Effective as of the date hereof as provided in Section 5 of this Amendment
      No. 1, the Lenders hereby agree that, notwithstanding anything in
      Section 7.02 of the Credit Agreement to the contrary, the issuance or sale
      of shares of SCA pursuant to the SCA IPO shall be permitted and shall not reduce
      the basket under Section 7.02(b) of the Credit Agreement available to the
      Account Parties and their respective Subsidiaries for the calendar year ending
      December 31, 2006.

     

    Section
      4.
      Representations
      and Warranties.
      Each
      Account Party hereby represents and warrants to the Administrative Agent and
      the
      Lenders that (i) the representations 

     

    
      
         

      

      
         

        
          

        

      

      
        -3-

      

    

    and
      warranties of such Account Party set forth in Article IV of the Credit
      Agreement are, on the date hereof, true and complete as if made on the date
      hereof (and after giving effect to this Amendment No. 1) and as if each
      reference in said Article IV to “this Agreement” includes reference to this
      Amendment No. 1 and (ii) both immediately before and after giving effect to
      the amendments under Section 2 hereof, no Default has occurred and is
      continuing.

     

    Section
      5.
      Conditions
      Precedent.
      The
      amendments to the Credit Agreement set forth in Section 2 of this Amendment
      No. 1 and the waiver under Section 3 of this Amendment No. 1 shall become
      effective, as of the date hereof, upon receipt by the Administrative Agent
      of
      one or more counterparts of this Amendment No. 1 duly executed and delivered
      by
      each of the Obligors and the Required Lenders.

     

    Section
      6.
      Miscellaneous.
      Except
      as herein provided, the Credit Agreement shall remain unchanged and in full
      force and effect. This Amendment No. 1 may be executed in any number of
      counterparts, all of which taken together shall constitute one and the same
      agreement and any of the parties hereto may execute this Amendment No. 1 by
      signing any such counterpart. This Amendment No. 1 shall be governed by,
      and construed in accordance with, the laws of the State of New
      York.

     

    
      
         

      

      
         

        
          

        

      

      
        -4-

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
      duly
      executed and delivered as of the day and year first above written.

     

    XL
      CAPITAL LTD,

     

    as
      an
      Account Party and a Guarantor

     

    By:  /s/
      Paul Dowden 

    Name: 
      Paul
      Dowden

    Title: Senior
      Vice President and Chief Risk   Officer

     

    X.L.
      AMERICA, INC.,

    as
      an
      Account Party and a Guarantor

     

    By_____/s/
      Gabriel G. Carino____________

    Name:
      Gabriel G. Carino

    Title:
      Vice President

    

    XL
      INSURANCE (BERMUDA) LTD,

    as
      an
      Account Party and a Guarantor

     

    By:  /s/
      Christopher A. Coelho 

    Name: 
      Christopher A. Coelho

    Title: Senior
      Vice President and Chief     Financial
      Officer 

     

    XL
      RE
      LTD,

    as
      an
      Account Party and a Guarantor

     

    By:  /s/
      Andrew Turnbull 

    Name: Andrew
      Turnbull

    Title: Senior
      Vice President

    
      
         

      

      
         

        
          

        

      

      
        -5-

      

    

    LENDERS

    

    JPMORGAN
      CHASE BANK, N.A.,

    
      	 	 	
              individually
                and as Administrative Agent

            

    

    

    

    By: /s/
      Helen L. Newcomb   

    Name:
      Helen L. Newcomb

    Title:
      Managing Director

    

    

    CITIBANK,
      N.A.

    

    

    By: /s/
      Michael A. Taylor   

    Name:
      Michael A. Taylor

    Title:
      Managing Director

    

    

    BARCLAYS
      BANK PLC

    

    

    By: /s/
      Des Potter   

    Name:
      Des
      Potter

    Title:
      Director

    

    

    DEUTSCHE
      BANK AG NEW YORK BRANCH

    

    

    By: /s/
      Ruth Leung    

    Name:
      Ruth Leung

    Title:
      Director

    

    

    By: /s/
      Richard Herder   

    Name:
      Richard Herder

    Title:
      Managing Director

    

    
      
         

      

      
         

        
          

        

      

      
        -6-

      

    

    

    WACHOVIA
      BANK, NATIONAL ASSOCIATION

    

    

    By: /s/
      Joan Anderson   

    Name:
      Joan Anderson

    Title:
      Director

    

    

    CALYON
      NEW YORK BRANCH

    

    

    By: /s/
      Sebastian Rocco   

    Name:
      Sebastian Rocco

    Title:
      Managing Director

    

    

    By: /s/
      Charles Kornberger  

    Name:
      Charles Kornberger

    Title:
      Managing Director

    

    

    KEYBANK
      NATIONAL ASSOCIATION

    

    

    By: /s/
      Mary K. Young   

    Name:
      Mary K. Young

    Title:
      Senior Vice President

    

    BANK
      OF
      AMERICA, N.A.

    

    

    By: /s/
      Debra Basler   

    Name:
      Debra Basler

    Title:
      Senior Vice President

    

    

    HSBC
      BANK
      USA

    

    

    By: /s/
      Daniel G. Serrao   

    Name:
      Daniel G. Serrao

    Title:
      Senior Vice President

    
      
         

      

      
         

        
          

        

      

      
        -7-

      

    

    

    LLOYDS
      TSB BANK PLC, NEW YORK BRANCH

    

    

    By: /s/
      Jason Eperon   

    Name:
      Jason Eperon

    Title:
      Assistant Vice President

    

    

    By: /s/
      Candi Obrentz   

    Name:
      Candi Obrentz

    Title:
      Assistant Vice President

    

    

    MERRILL
      LYNCH BANK USA

    

    

    By: /s/
      Frank Stepan   

    Name:
      Frank Stepan

    Title:
      Vice President

    

    

    THE
      ROYAL
      BANK OF SCOTLAND PLC

    

    

    By: /s/
      David Howes   

    Name:
      David Howes

    Title:
      Vice President

    

    

    WILLIAM
      STREET CREDIT CORPORATION 

    

    

    By:____/s/
      Mark Walton______________________

    Name:
      Mark Walton

    Title:
      Assistant Vice President

    

    
      
         

      

      
         

        
          

        

      

      
        -8-

      

    

    

    BNP
      PARIBAS, NEW
      YORK
      BRANCH

    

    

    By: /s/
      Marguerite L. Lebon   

    Name:
      Marguerite L. Lebon

    Title:
      Vice President

    

    

    By: /s/
      Laurent Vanderzyppe   

    Name:
      Laurent Vanderzyppe

    Title:
      Managing Director

    

    

    THE
      BANK
      OF NEW YORK

    

    

    By: /s/
      Lizanne T. Eberle   

    Name:
      Lizanne T. Eberle

    Title:
      Vice President

    

    

    THE
      BANK
      OF TOKYO-MITSUBISHI, LTD.

    NEW
      YORK
      BRANCH

    

    

    By: /s/
      Chimie T. Pemba   

    Name:
      Chimie T. Pemba

    Title:
      Authorized Signatory

    

    CREDIT
      SUISSE NEW YORK BRANCH

    

    

    By: /s/
      Jay Chall   

    Name:
      Jay
      Chall

    Title:
      Director

    

    

    By: /s/
      James Neira  

    Name:
      James Neira

    Title:
      Associate

    

    
      
         

      

      
         

        
          

        

      

      
        -9-

      

    

    

    ING
      BANK,
      N.V.

    

    

    By: /s/
      M
      E R Sharman   

    Name:
      M E
      R Sharman

    Title:
      Managing Director

    

    

    By: /s/
      N
      J Marchant   

    Name:
      N J
      Marchant

    Title:
      Director

    

    

    MIZUHO
      CORPORATE BANK (USA)

    

    

    By: /s/
      Robert Gallagher   

    Name:
      Robert Gallagher

    Title:
      Senior Vice President

    

    

    U.S.
      BANK
      NATIONAL ASSOCIATION

    

    

    By: /s/
      Ziad W. Amra    

    Name:
      Ziad W. Amra

    Title:
      Assistant Vice PresidentUnassociated Document

    Exhibit
      10.3

     

    
 

    EXECUTION
      COPY

    
      

      

    

    

    CREDIT
      AGREEMENT

    

    dated
      as
      of

     

    May
      9,
      2006

     

    between

     

    XL
      CAPITAL LTD,

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

    as
      Account Parties and Guarantors,

    

    The
      LENDERS Party Hereto

     

    and

     

    JPMORGAN
      CHASE BANK, N.A.,

    as
      Administrative Agent

     

    _____________

     

    $500,000,000

    _____________

     

    J.P.
      MORGAN SECURITIES INC.

    

    and

    

    WACHOVIA
      CAPITAL MARKETS, LLC,

    as
      Joint
      Lead Arrangers and Joint Bookrunners

     

    _____________

     

    WACHOVIA
      BANK, NATIONAL ASSOCIATION,

    as
      Syndication Agent

    _____________

     

    ABN
      AMRO
      BANK N.V.

    

    and

    

    THE
      ROYAL
      BANK OF SCOTLAND PLC,

    as
      Documentation Agents

    

    

    

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF
      CONTENTS

     

    
      	 	
              Page

            
	
               

              ARTICLE
                I

               

            	
               

              1

               

            
	
              DEFINITIONS

            	
              1

            
	
              SECTION
                1.01. Defined Terms

            	
              1

            
	
              SECTION
                1.02. Terms Generally

            	
              12

            
	
              SECTION
                1.03. Accounting Terms; GAAP and SAP

            	
              13

            
	
               

              ARTICLE
                II

               

            	
               

              13

               

            
	
              THE
                CREDITS

            	
              13

            
	
              SECTION
                2.01. Syndicated Letters of Credit.

            	
              13

            
	
              SECTION
                2.02. Issuance and Administration

            	
              14

            
	
              SECTION
                2.03. Reimbursement of LC Disbursements, Etc.

            	
              15

            
	
              SECTION
                2.04. Non-Syndicated Letters of Credit.

            	
              18

            
	
              SECTION
                2.05. Alternative Currency Letters of Credit.

            	
              23

            
	
              SECTION
                2.06. Termination and Reduction of the Commitments.

            	
              24

            
	
              SECTION
                2.07. Fees.

            	
              25

            
	
              SECTION
                2.08. Interest

            	
              26

            
	
              SECTION
                2.09. Increased Costs.

            	
              26

            
	
              SECTION
                2.10. Taxes.

            	
              27

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

            	
              29

            
	
              SECTION
                2.12. Mitigation Obligations; Replacement of Lenders.

            	
              30

            
	
               

              ARTICLE
                III

               

            	
               

              31

               

            
	
              GUARANTEE

            	
              31

            
	
              SECTION
                3.01. The Guarantee

            	
              31

            
	
              SECTION
                3.02. Obligations Unconditional

            	
              32

            
	
              SECTION
                3.03. Reinstatement

            	
              32

            
	
              SECTION
                3.04. Subrogation

            	
              33

            
	
              SECTION
                3.05. Remedies

            	
              33

            
	
              SECTION
                3.06. Continuing Guarantee

            	
              33

            
	
              SECTION
                3.07. Rights of Contribution

            	
              33

            
	
              SECTION
                3.08. General Limitation on Guarantee Obligations

            	
              34

            
	
               

              ARTICLE
                IV

               

            	
               

              34

               

            
	
              REPRESENTATIONS
                AND WARRANTIES

            	
              34

            
	
              SECTION
                4.01. Organization; Powers

            	
              34

            
	
              SECTION
                4.02. Authorization; Enforceability

            	
              34

            
	
              SECTION
                4.03. Governmental Approvals; No Conflicts

            	
              34

            
	
              SECTION
                4.04. Financial Condition; No Material Adverse Change.

            	
              35

            
	
              SECTION
                4.05. Properties.

            	
              35

            
	
              SECTION
                4.06. Litigation and Environmental Matters.

            	
              35

            
	
              SECTION
                4.07. Compliance with Laws and Agreements

            	
              36

            
	
              SECTION
                4.08. Investment Company Status

            	
              36

            

    

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    

    
      	
              SECTION
                4.09. Taxes

            	
              36

            
	
              SECTION
                4.10. ERISA

            	
              36

            
	
              SECTION
                4.11. Disclosure

            	
              37

            
	
              SECTION
                4.12. Use of Credit

            	
              37

            
	
              SECTION
                4.13. Subsidiaries

            	
              37

            
	
              SECTION
                4.14. Withholding Taxes

            	
              37

            
	
              SECTION
                4.15. Stamp Taxes

            	
              37

            
	
              SECTION
                4.16. Legal Form

            	
              37

            
	
               

              ARTICLE
                V

               

            	
               

              38

               

            
	
              CONDITIONS

            	
              38

            
	
              SECTION
                5.01. Effective Date

            	
              38

            
	
              SECTION
                5.02. Each Credit Event

            	
              39

            
	
               

              ARTICLE
                VI

               

            	
               

              39

               

            
	
              AFFIRMATIVE
                COVENANTS

            	
              39

            
	
              SECTION
                6.01. Financial Statements and Other Information

            	
              39

            
	
              SECTION
                6.02. Notices of Material Events

            	
              42

            
	
              SECTION
                6.03. Preservation of Existence and Franchises

            	
              42

            
	
              SECTION
                6.04. Insurance

            	
              42

            
	
              SECTION
                6.05. Maintenance of Properties

            	
              42

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

            	
              43

            
	
              SECTION
                6.07. Financial Accounting Practices

            	
              43

            
	
              SECTION
                6.08. Compliance with Applicable Laws

            	
              43

            
	
              SECTION
                6.09. Use of Letters of Credit

            	
              43

            
	
              SECTION
                6.10. Continuation of and Change in Businesses

            	
              44

            
	
              SECTION
                6.11. Visitation

            	
              44

            
	
               

              ARTICLE
                VII

               

            	
               

              44

               

            
	
              NEGATIVE
                COVENANTS

            	
              44

            
	
              SECTION
                7.01. Mergers

            	
              44

            
	
              SECTION
                7.02. Dispositions

            	
              44

            
	
              SECTION
                7.03. Liens

            	
              45

            
	
              SECTION
                7.04. Transactions with Affiliates

            	
              47

            
	
              SECTION
                7.05. Ratio of Total Funded Debt to Total Capitalization

            	
              47

            
	
              SECTION
                7.06. Consolidated Net Worth

            	
              48

            
	
              SECTION
                7.07. Indebtedness

            	
              48

            
	
              SECTION
                7.08. Financial Strength Ratings

            	
              48

            
	
              SECTION
                7.09. Private Act

            	
              48

            
	
               

              ARTICLE
                VIII

               

            	
               

              49

               

            
	
              EVENTS
                OF DEFAULT

            	
              49

            
	
               

              ARTICLE
                IX

               

            	
               

              52

               

            
	
              THE
                ADMINISTRATIVE AGENT

            	
              52

            
	
               

              ARTICLE
                X

               

            	
               

              54

               

            

    

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    

     

    
      	
              MISCELLANEOUS

            	
              54

            
	
              SECTION
                10.01. Notices

            	
              54

            
	
              SECTION
                10.02. Waivers; Amendments.

            	
              54

            
	
              SECTION
                10.03. Expenses; Indemnity; Damage Waiver.

            	
              56

            
	
              SECTION
                10.04. Successors and Assigns.

            	
              57

            
	
              SECTION
                10.05. Survival

            	
              60

            
	
              SECTION
                10.06. Counterparts; Integration; Effectiveness

            	
              61

            
	
              SECTION
                10.07. Severability

            	
              61

            
	
              SECTION
                10.08. Right of Setoff

            	
              61

            
	
              SECTION
                10.09. Governing Law; Jurisdiction; Etc.

            	
              61

            
	
              SECTION
                10.10. WAIVER OF JURY TRIAL

            	
              62

            
	
              SECTION
                10.11. Headings

            	
              63

            
	
              SECTION
                10.12. Treatment of Certain Information; Confidentiality.

            	
              63

            
	
              SECTION
                10.13. Judgment Currency

            	
              64

            
	
              SECTION
                10.14. USA PATRIOT Act

            	
              64

            

    

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    

    
      	
              SCHEDULE
                I 

            	
              -
                

            	
              Commitments

            
	
              SCHEDULE
                II 

            	
              -
                

            	
              Indebtedness
                and Liens

            
	
              SCHEDULE
                III

            	
              -

            	
              Litigation

            
	
              SCHEDULE
                IV 

            	
              -

            	
              Environmental
                Matters

            
	
              SCHEDULE
                V 

            	
              -
                

            	
              Subsidiaries

            

    

    

     

    
      	
              EXHIBIT
                A

            	
              -

            	
              Form
                of Assignment and Assumption

            
	
              EXHIBIT
                B-1

            	
              -

            	
              Form
                of Opinion of Counsel to XL Capital

            
	
              EXHIBIT
                B-2

            	
              -

            	
              Form
                of Opinion of Counsel to XL America

            
	
              EXHIBIT
                B-3

            	
              -

            	
              Form
                of Opinion of Special U.S. Counsel to the Obligors

            
	
              EXHIBIT
                B-4

            	
              -

            	
              Form
                of Opinion of Special Bermuda Counsel to XL Insurance and XL
                Re

            
	
              EXHIBIT
                B-5

            	
              -

            	
              Form
                of Opinion of Special Cayman Islands Counsel to XL
                Capital

            
	
              EXHIBIT
                C

            	
              -

            	
              Form
                of Opinion of Special New York Counsel to JPMCB

            
	
              EXHIBIT
                D

            	
              -

            	
              Form
                of Confirming Lender Agreement

            

    

    

    

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    CREDIT
      AGREEMENT dated as of May 9 2006, between XL CAPITAL LTD, a Cayman Islands
      exempted limited liability company (“XL
      Capital”),
      X.L.
      AMERICA, INC., a Delaware corporation (“XL
      America”),
      XL
      INSURANCE (BERMUDA) LTD, a Bermuda limited liability company (“XL
      Insurance”)
      and XL
      RE LTD, a Bermuda limited liability company (“XL
      Re”
and,
      together with XL Capital, XL America and XL Insurance, each an “Account
      Party”
and
      each a “Guarantor”
and
      collectively, the “Account
      Parties”
and
      the
“Guarantors”;
      the
      Account Parties and the Guarantors being collectively referred to as the
“Obligors”),
      the
      LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative
      Agent.

    

    The
      Account Parties have requested that the Lenders issue letters of credit for
      their account in an aggregate face amount not exceeding $500,000,000 at any
      one
      time outstanding, and the Lenders are prepared to issue such letters of credit
      upon the terms and conditions hereof. Accordingly, the parties hereto agree
      as
      follows:

    

    

    ARTICLE
      I

     

    DEFINITIONS

     

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

     

    “Account
      Parties”
means
      each of XL Capital, XL America, XL Insurance and XL Re.

     

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

     

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

     

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

     

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

     

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

     

    “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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

    “Alternative
      Currency Letter of Credit”
means
      a
      letter of credit issued by a Lender in an Alternative Currency pursuant to
      Section 2.05.

     

    “Alternative
      Currency Letter of Credit Report”
has
      the
      meaning set forth in Section 2.05(b).

     

    “Applicable
      Facility Fee Rate”
means
      0.05%.

    

    “Applicable
      Letter of Credit Fee Rate”
means
      0.25%.

    

    “Applicable
      Percentage”
means,
      with respect to any Lender, the percentage of the Commitments of all the Lenders
      represented by such Lender’s Commitment. If the Commitments have terminated or
      expired, the Applicable Percentages shall be determined based upon the
      Commitments most recently in effect, giving effect to any
      assignments.

     

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

    

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

     

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

     

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

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

     

    “Business
      Day”
means
      any day that is not a Saturday, Sunday or other day on which commercial banks
      in
      New York City, London, the Cayman Islands or Bermuda are authorized or required
      by law to remain closed.

     

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

     

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

     

    “Change
      in Law”
means
      (a) the adoption of any law, rule or regulation after the date of this
      Agreement, (b) any change in any law, rule or regulation or in the
      interpretation or application thereof by any Governmental Authority after the
      date of this Agreement or (c) compliance by any Lender (or, for purposes of
      Section 2.09(b), by any lending office of such Lender or by such Lender’s
      holding company, if any) with any request, guideline or directive (whether
      or
      not having the force of law) of any Governmental Authority made or issued after
      the date of this Agreement.

     

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

     

    “Commitment”
means,
      with respect to any Lender, the commitment of such Lender, if any, to issue
      Syndicated Letters of Credit and Non-Syndicated Letters of Credit (and/or to
      acquire participations therein, as applicable, in each case expressed as an
      amount representing the maximum aggregate amount of such Lender’s LC Exposure
      hereunder, as such commitment may be (i) reduced from time to time pursuant
      to Section 2.06 and (ii) reduced from time to time pursuant to
      assignments by or to such Lender pursuant to Section 10.04. The initial

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    amount
      of
      each Lender’s Commitment is set forth on Schedule I or in the Assignment
      and Assumption pursuant to which such Lender shall have assumed its Commitment,
      as applicable. The initial aggregate amount of the Lenders’ Commitments is
      $500,000,000.

     

    “Commitment
      Termination Date”
means
      May 8, 2007.

     

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

     

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

     

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

     

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

     

    “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.

     

    “Dollar
      Equivalent”
means,
      as used in each Alternative Currency Letter of Credit Report and in respect
      of
      any Alternative Currency Letter of Credit, the amount of Dollars obtained by
      converting the Alternative Currency LC Exposure with respect to such Alternative
      Currency Letter of Credit, as specified in such Alternative Currency Letter
      of
      Credit Report, into Dollars at the spot rate for the purchase of Dollars with
      such currency as quoted by the Administrative Agent at approximately 11:00
      a.m.
      (London time) on the second Business Day before the date of such Alternative
      Currency Letter of Credit Report (unless another rate or time is agreed to
      by XL
      Capital and the Administrative Agent).

     

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

     

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

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    Multiemployer
      Plan is, or is expected to be, insolvent or in reorganization, within the
      meaning of Title IV of ERISA.

     

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

     

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

     

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

     

    “Excluded
      Taxes”
means,
      with respect to the Administrative Agent, any Lender or any other recipient
      of
      any payment to be made by or on account of any obligation of any Account Party
      hereunder, (a) Taxes imposed on (or measured by) its net income, net
      profits or overall gross receipts (including, without limitation, branch profits
      or similar taxes) by the United States of America, or by any jurisdiction under
      the laws of which such recipient is organized or resident, in which such
      recipient has an office or with which such recipient has any other connection
      (other than a connection that is deemed to arise solely by reason of both (I)
      the transactions contemplated by this Agreement and (II) an Account Party being
      organized in, maintaining an office in, conducting business in, or having a
      connection with, such jurisdiction), (b) any Taxes not described in clause
      (a) above (other than Other Taxes) that are imposed as a result of a connection
      the Administrative Agent or any Lender, as the case may be, has with the
      relevant jurisdiction (other than a connection that is deemed to arise solely
      by
      reason of both (I) the transactions contemplated by this Agreement and (II)
      an
      Account Party being organized or resident in, maintaining an office in,
      conducting business in, or having a connection with, such jurisdiction) and
      (c) any Tax imposed pursuant to a law in effect at the time such Lender
      first becomes a party to this Agreement except to the extent that such Lender’s
      assignor, if any, was entitled at the time of the assignment to receive
      additional amounts from the Account Parties with respect to such Tax under
      Sections 2.10(a) or 2.10(c) and (d) any Tax that is attributable to such
      Lender’s failure or inability (other than as a result of a Change in Law
      formally announced after such Lender becomes a party to this Agreement) to
      comply with Section 2.10(e).

     

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

     

    “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

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    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,
      with respect to any Obligor, a principal financial officer of such
      Obligor.

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Guarantors”
means
      each of XL Capital, XL America, XL Insurance and XL Re.

     

    “Hazardous
      Materials”
means
      all explosive or radioactive substances or wastes and all hazardous or toxic
      substances, wastes or other pollutants, including petroleum or petroleum
      distillates, asbestos or asbestos containing materials, polychlorinated
      biphenyls, radon gas, infectious or medical wastes and all other substances
      or
      wastes of any nature regulated pursuant to any Environmental Law.

     

    
      
        
        

      

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

     

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

    

    “Indemnified
      Taxes”
means
      Taxes imposed on the Administrative Agent or any Lender on or with respect
      to
      any payment hereunder, other than Excluded Taxes and Other Taxes.

     

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

     

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

     

    “Issuing
      Lender”
means
      (a) with respect to any Syndicated Letter of Credit, each Lender, in its
      capacity as the issuer of such Syndicated Letter of Credit and (b) with respect
      to any Non-Syndicated Letter of Credit, the Lender named therein as the issuer
      thereof.

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    “Lenders”
means
      the Persons listed on Schedule I and any other Person that shall have
      become a party hereto pursuant to an Assignment and Assumption, other than
      any
      such Person that ceases to be a party hereto pursuant to an Assignment and
      Assumption.

     

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

     

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

     

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

     

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

     

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

     

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

     

    “NAIC”
means
      the National Association of Insurance Commissioners.

     

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

     

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

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

    “Obligors”
means
      each of the Account Parties and each of the Guarantors.

     

    “Other
      Taxes”
means
      any and all present or future stamp or documentary taxes or any other similar
      excise or property Taxes, arising from any payment made hereunder or from the
      execution, delivery or enforcement of this Agreement, but excluding property
      or
      similar Taxes other than any such Taxes imposed in such circumstances solely
      as
      a result of the Account Party being organized or resident in, maintaining an
      office in, conducting business in or maintaining property located in the taxing
      jurisdiction in question.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

    “SCA”
means
      Security Capital Assurance Ltd, a Bermuda limited liability
      company.

     

    “SCA
      IPO”
means
      the issuance or sale of common shares of SCA to the public pursuant to an
      effective registration statement filed under the Securities Act of 1933, as
      amended, in connection with an underwritten offering.

     

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

     

    “Significant
      Subsidiary”
means,
      at any time, each Subsidiary of XL Capital that, as of such time, meets the
      definition of a “significant subsidiary” under Regulation S-X of the SEC;
provided,
      however,
      that
      for purposes of this Agreement, from and after the consummation of the SCA
      IPO,
      neither SCA nor any of its Subsidiaries shall be a “Significant Subsidiary” of
      XL Capital.

     

    “Specified
      Account Party”
has
      the
      meaning assigned to such term in Section 2.05.

     

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

     

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

     

    “Stable
      Value Instrument”
means
      any insurance, derivative or similar financial contract or instrument designed
      to mitigate the volatility of returns during a given period on a 

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    specified
      portfolio of securities held by one party (the “customer”)
      through the commitment of the other party (the “SVI
      provider”)
      to
      provide the customer with a credited rate of return on the portfolio, typically
      determined through an interest-crediting mechanism (and in exchange for which
      the SVI provider typically receives a fee).

     

    “Subsidiary”
means,
      with respect to any Person (the “parent”),
      at
      any date, any corporation (or similar entity) of which a majority of the shares
      of outstanding capital stock normally entitled to vote for the election of
      directors (regardless of any contingency which does or may suspend or dilute
      the
      voting rights of such capital stock) is at such time owned directly or
      indirectly by the parent or one or more subsidiaries of the parent;
      provided,
      however,
      that
      for purposes of this Agreement, from and after the consummation of the SCA
      IPO,
      neither SCA nor any of its Subsidiaries shall be a “Subsidiary” of any Account
      Party.
      Unless
      otherwise specified, “Subsidiary” means a Subsidiary of an Account
      Party.

     

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

     

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

    

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

     

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

     

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

     

    “XL
      Capital Group”
means
      XL Capital Group as determined from time to time by A.M. Best & Co. (or its
      successor).

     

    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 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    “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.
      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
      XL Capital notifies the Administrative Agent that the Account Parties request
      an
      amendment to any provision hereof to eliminate the effect of any change
      occurring after the date hereof in GAAP or SAP, as the case may be, or in the
      application thereof on the operation of such provision (or if the Administrative
      Agent notifies the Account Parties that the Required Lenders request an
      amendment to any provision hereof for such purpose), regardless of whether
      any
      such notice is given before or after such change in GAAP or SAP, as the case
      may
      be, or in the application thereof, then such provision shall be interpreted
      on
      the basis of GAAP or SAP, as the case may be, as in effect and applied
      immediately before such change shall have become effective until such notice
      shall have been withdrawn or such provision amended in accordance herewith.
      

    

    ARTICLE
      II

     

    THE
      CREDITS

     

    SECTION
      2.01. Syndicated
      Letters of Credit.

     

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

     

    (b)
      Notice
      of Issuance, Amendment, Renewal or Extension.
      To
      request the issuance of a Syndicated Letter of Credit (or the amendment, renewal
      or extension of an outstanding Syndicated Letter of Credit), an Account Party
      shall hand deliver or telecopy (or transmit by electronic communication, if
      arrangements for doing so have been approved by the 

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    Administrative
      Agent) to the Administrative Agent (reasonably in advance of the requested
      date
      of issuance, amendment, renewal or extension) a notice requesting the issuance
      of a Syndicated Letter of Credit, or identifying the Syndicated Letter of Credit
      to be amended, renewed or extended, and specifying the date of issuance,
      amendment, renewal or extension, as the case may be (which shall be a Business
      Day), the date on which such Syndicated Letter of Credit is to expire (which
      shall comply with paragraph (d) of this Section), the amount of such
      Syndicated Letter of Credit, the name and address of the beneficiary thereof
      and
      the terms and conditions of (and such other information as shall be necessary
      to
      prepare, amend, renew or extend, as the case may be) such Syndicated Letter
      of
      Credit. If any Syndicated Letter of Credit shall provide for the automatic
      extension of the expiry date thereof unless the Administrative Agent gives
      notice that such expiry date shall not be extended, then the Administrative
      Agent will give such notice if requested to do so by the Required Lenders in
      a
      notice given to the Administrative Agent not more than 60 days, but not less
      than 45 days, prior to the current expiry date of such Syndicated Letter of
      Credit. If requested by the Administrative Agent, such Account Party also shall
      submit a letter of credit application on JPMCB’s standard form in connection
      with any request for a Syndicated Letter of Credit. In the event of any
      inconsistency between the terms and conditions of this Agreement and the terms
      and conditions of any form of letter of credit application or other agreement
      submitted by any Account Party to, or entered into by any 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 Account Parties shall be deemed to represent and warrant
      that), after giving effect to such issuance, amendment, renewal or extension,
      (i) the Aggregate Credit Exposure shall not exceed the aggregate amount of
      the Commitments and (ii) the LC Exposure (excluding any Alternative
      Currency LC Exposure) of each Lender shall not exceed the Commitment of such
      Lender.

    

    (d)
      Expiry
      Date.
      Each
      Syndicated Letter of Credit shall expire at or prior to the close of business
      on
      the date one year after the date of the issuance of such Syndicated Letter
      of
      Credit (or, in the case of any renewal or extension thereof, one year after
      such
      renewal or extension); provided
      that in
      no event shall any Syndicated Letter of Credit have an expiry date 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
      the assignment by a Lender of all or a portion of its Commitment and its
      interests in the Syndicated Letters of Credit pursuant to an Assignment and
      Assumption, the Administrative Agent shall promptly notify each beneficiary
      under an outstanding Syndicated Letter of Credit of the Lenders that are parties
      to such Syndicated Letter of Credit and their respective Applicable Percentages
      as of the effective date of, and after giving effect to, such
      assignment.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

     

    SECTION
      2.02. Issuance
      and Administration.
      Each
      Syndicated Letter of Credit shall be executed and delivered by the
      Administrative Agent in the name and on behalf of, and as attorney-in-fact
      for,
      each Lender party to such Syndicated Letter of Credit, and the Administrative
      Agent shall act under each Syndicated Letter of Credit, and each Syndicated
      Letter of Credit shall expressly provide that the Administrative Agent shall
      act, as the agent of each Lender to (a) receive drafts, other demands for
      payment and other documents presented by the beneficiary under such Syndicated
      Letter of Credit, (b) determine whether such drafts, demands and documents
      are
      in compliance with the terms and conditions of such Syndicated Letter of Credit
      and (c) notify such Lender and the Account Parties that a valid drawing has
      been
      made and the date that the related LC Disbursement is to be made; provided
      that the
      Administrative Agent shall have no obligation or liability for any LC
      Disbursement under such Syndicated Letter of Credit, and each Syndicated Letter
      of Credit shall expressly so provide. Each Lender hereby irrevocably appoints
      and designates the Administrative Agent as its attorney-in-fact, acting through
      any duly authorized officer of JPMCB, to execute and deliver in the name and
      on
      behalf of such Lender each Syndicated Letter of Credit to be issued by such
      Lender hereunder. Promptly upon the request of the Administrative Agent, each
      Lender will furnish to the Administrative Agent such powers of attorney or
      other
      evidence as any beneficiary of any Syndicated Letter of Credit may reasonably
      request in order to demonstrate that the Administrative Agent has the power
      to
      act as attorney-in-fact for such Lender to execute and deliver such Syndicated
      Letter of Credit. Notwithstanding anything in this Agreement to the contrary,
      the Administrative Agent has no responsibility hereunder with respect to the
      issuance, renewal, extension, amendment or other administration of any
      Alternative Currency Letter of Credit, except as expressly set forth in Section
      2.05.

    

    SECTION
      2.03. Reimbursement
      of LC Disbursements, Etc.

     

    (a)
      Reimbursement.
      If any
      Lender shall make any LC Disbursement in respect of any Syndicated Letter of
      Credit or Alternative Currency Letter of Credit, regardless of the identity
      of
      the Account Party of such Syndicated Letter of Credit or Alternative Currency
      Letter of Credit, as the case may be, the Account Parties jointly and severally
      agree that they shall reimburse such Lender in respect of such LC Disbursement
      under (x) a Syndicated Letter of Credit by paying to the Administrative Agent
      an
      amount equal to such LC Disbursement not later than noon, New York City time,
      on
      (i) the Business Day that the Account Parties receive notice of such LC
      Disbursement, if such notice is received prior to 10:00 a.m., New York City
      time, or (ii) the Business Day immediately following the day that the
      Account Parties receive such notice, if such notice is not received prior to
      such time and (y) an Alternative Currency Letter of Credit, by paying such
      Lender on the date, in the currency and amount thereof, together with interest
      thereon (if any), and in the manner (including the place of payment) as such
      Lender and such Account Party shall have separately agreed pursuant to Section
      2.05.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

    

    (b)
      Reimbursement
      Obligations Absolute.
      The
      Account Parties’ joint and several 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 with the terms
      of
      this Agreement under any and all circumstances whatsoever and irrespective
      of
      (i) any lack of validity or enforceability of any Syndicated Letter of
      Credit or any term or provision therein, (ii) any draft or other document
      presented under a Syndicated Letter of Credit proving to be forged, fraudulent
      or invalid in any respect or any statement therein being untrue or inaccurate
      in
      any respect, (iii) payment under a Syndicated Letter of Credit against
      presentation of a draft or other document that does not comply strictly with
      the
      terms of such Syndicated Letter of Credit (provided
      that the
      Account Parties shall not be obligated to reimburse such LC Disbursements unless
      payment is made against presentation of a draft or other document that at least
      substantially complies with the terms of such Syndicated Letter of Credit),
      (iv)
      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 being released, substituted or exchanged in whole or in part or
      otherwise dealt with, (vi) the occurrence of any Default, (vii) the existence
      of
      any proceedings of the type described in clause (g) or (h) of Article VIII
      with
      respect to any other Account Party or any guarantor of any of such reimbursement
      obligations, (viii) any lack of validity or enforceability of any of such
      reimbursement obligations against any other Account Party or any guarantor
      of
      any of such reimbursement obligations, or (ix) 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, 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 any Account Party 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
      any Account Party that are caused by the gross negligence or willful misconduct
      of the Administrative Agent or a Lender. The parties hereto expressly agree
      that:

    

    (i)
      the
      Administrative Agent may accept documents that appear on their face to be in
      substantial compliance with the terms of a 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;

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

    

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

    

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

    

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

    

    (d)
      Interim
      Interest.
      If any
      LC Disbursement with respect to a Syndicated Letter of Credit is made, then,
      unless the Account Parties shall reimburse such LC Disbursement in full on
      the
      date such LC Disbursement is made, the unpaid amount thereof shall bear
      interest, payable upon demand, for each day from and including the date such
      LC
      Disbursement is made to but excluding the date that the Account Parties
      reimburse such LC Disbursement, at the rate per annum equal to (i) 1%
plus
      the
      Alternate Base Rate to but excluding the date three Business Days after such
      LC
      Disbursement is made and (ii) from and including the date three Business Days
      after such LC Disbursement is made, 3% plus
      the
      Alternate Base Rate.

    

    (e)
      Right
      of Contribution.
      The
      Account Parties hereby agree, as between themselves, that if any Account Party
      shall pay any reimbursement obligation in respect of any LC Disbursement with
      respect to a Syndicated Letter of Credit issued to support the obligations
      of
      another Account Party (the “Specified
      Account Party”),
      the
      Specified Account Party shall, on demand (but subject to the next sentence),
      pay
      to such first Account Party an amount equal to the amount of such reimbursement.
      The payment obligation of a Specified Account Party to another Account Party
      under this paragraph (e) shall be subordinate and subject in right of payment
      to
      the prior payment in full of the obligations of the Specified Account Party
      under this Agreement and each other Credit Document, and such other Account
      Party shall not exercise any right or 

     

    
      
        
        

      

      
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    remedy
      with respect to such reimbursement until payment and satisfaction in full of
      all
      of such obligations of the Specified Account Party.

     

    SECTION
      2.04. Non-Syndicated
      Letters of Credit.

     

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

     

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

     

    
      
        
        

      

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

     

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

    
      
        
        

      

      
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    rights
      and powers under this Section through its Related Parties.

    

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

    

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

    

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

     

    (g)
      Reimbursement.
      If any
      Issuing Lender shall make any LC Disbursement in respect of any Non-Syndicated
      Letter of Credit, regardless of the identity of the Account Party of such
      Non-Syndicated Letter of Credit, the Account Parties jointly and severally
      agree
      that they shall reimburse such Issuing Lender in respect of such LC Disbursement
      by paying to the Administrative Agent an amount equal to such LC Disbursement
      not later than noon, New York 

     

    
      
        
        

      

      
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    City
      time, on (i) the Business Day that the Account Parties receive notice of
      such LC Disbursement, if such notice is received prior to 10:00 a.m., New
      York City time, or (ii) the Business Day immediately following the day that
      the Account Parties receive such notice, if such notice is not received prior
      to
      such time. 

     

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

     

    (h)
      Obligations
      Absolute.
      The
      Account Parties’ joint and several obligations to reimburse LC Disbursements in
      respect of any Non-Syndicated Letter of Credit as provided in paragraph (g)
      of this Section shall be absolute, unconditional and irrevocable, and shall
      be
      performed strictly in accordance with the terms of this Agreement under any
      and
      all circumstances whatsoever and irrespective of (i) any lack of validity
      or enforceability of any Non-Syndicated Letter of Credit, or any term or
      provision therein, (ii) any draft or other document presented under a
      Non-Syndicated Letter of Credit proving to be forged, fraudulent or invalid
      in
      any respect or any statement therein being untrue or inaccurate in any respect,
      (iii) payment by the Issuing Lender under a Non-Syndicated Letter of Credit
      against presentation of a draft or other document that does not comply strictly
      with the terms of such Non-Syndicated Letter of Credit (provided
      that the
      Account Parties shall not be obligated to reimburse such LC Disbursements unless
      payment is made against presentation of a draft or other document that at least
      substantially complies with the terms of such Non-Syndicated Letter of Credit),
      (iv) 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 being 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 being released, substituted or exchanged in whole
      or
      in part or otherwise dealt with, (vi) the occurrence of any Default, (vii)
      the
      existence of any proceedings of the type described in clause (g) or (h) of
      Article VIII with respect to any other Account Party or any guarantor of any
      of
      such reimbursement obligations, (viii) any lack of validity or enforceability
      of
      any of such reimbursement obligations against any other Account Party or any
      guarantor of any of such reimbursement obligations, or (ix) 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
      respective Related Parties, shall have any liability or responsibility by reason
      of or in connection with the payment or failure to make any payment under a
      Non-Syndicated Letter of Credit (irrespective of any of the circumstances
      referred to in the preceding sentence) as a result of determining whether drafts
      or other documents presented under a Non-Syndicated Letter of Credit comply
      with
      the terms thereof, or any error, omission, interruption, loss or delay in
      transmission or delivery of any draft, notice or other communication under
      or
      relating to any Non-Syndicated Letter of Credit (including any document required
      to make a drawing thereunder), any error in interpretation of technical terms
      or
      any consequence arising from causes beyond the control of an Issuing Lender;
      provided
      that the
      foregoing shall not be construed to excuse the Administrative Agent or a Lender
      from liability to the Account Parties to the extent of any direct damages (as
      opposed to consequential damages, claims in respect of which are hereby

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    waived
      by
      the Account Parties to the extent permitted by applicable law) suffered by
      the
      Account Parties that are caused by the gross negligence or willful misconduct
      of
      the Administrative Agent or a Lender when determining whether drafts and other
      documents presented under a Non-Syndicated Letter of Credit comply with the
      terms thereof. The parties hereto expressly agree that:

     

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

     

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

     

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

     

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

    

    (j)
      Interim
      Interest.
      If any
      LC Disbursement with respect to a Non-Syndicated Letter of Credit is made,
      then,
      unless the Account Parties shall reimburse such LC Disbursement in full on
      the
      date such LC Disbursement is made, the unpaid amount thereof shall bear
      interest, payable upon demand, for each day from and including the date such
      LC
      Disbursement is made to but excluding the date that the Account Parties
      reimburse such LC Disbursement, at the rate 

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    per
      annum
      equal to (i) 1% plus
      the
      Alternate Base Rate to but excluding the date three Business Days after such
      LC
      Disbursement is made and (ii) from and including the date three Business Days
      after such LC Disbursement is made, 3% plus
      the
      Alternate Base Rate.

    

    (k)
      Right
      of Contribution.
      The
      Account Parties hereby agree, as between themselves, that if any Account Party
      shall pay any reimbursement obligation in respect of any LC Disbursement with
      respect to a Non-Syndicated Letter of Credit issued to support the obligations
      of another Account Party (the “Specified
      Account Party”),
      the
      Specified Account Party shall, on demand (but subject to the next sentence),
      pay
      to such first Account Party an amount equal to the amount of such reimbursement.
      The payment obligation of a Specified Account Party to another Account Party
      under this paragraph (k) shall be subordinate and subject in right of payment
      to
      the prior payment in full of the obligations of the Specified Account Party
      under this Agreement and each other Credit Document, and such other Account
      Party shall not exercise any right or remedy with respect to such reimbursement
      until payment and satisfaction in full of all of such obligations of the
      Specified Account Party.

     

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

     

    SECTION
      2.05. Alternative
      Currency Letters of Credit.

     

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

    
      
        
        

      

      
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    (b) Reports
      to Administrative Agent.
      The
      Account Parties shall deliver to the Administrative Agent and each of the
      Lenders a report in respect of each Alternative Currency Letter of Credit (an
      “Alternative
      Currency Letter of Credit Report”)
      on and
      as of the date (i) on which such Alternative Currency Letter of Credit is
      issued, (ii) of the issuance, renewal, extension or amendment of a
      Syndicated Letter of Credit or a Non-Syndicated Letter of Credit, if any
      Alternative Currency Letter of Credit is then outstanding and (iii) on
      which the Commitments are to be reduced pursuant to Section 2.06, specifying
      for
      each such Alternative Currency Letter of Credit (after giving effect to issuance
      thereof, as applicable): 

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    SECTION
      2.06. Termination
      and Reduction of the Commitments.

     

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

     

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

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    preceding
      sentence, any termination or reduction of the Commitments shall be permanent.
      Each reduction of the Commitments shall be made ratably among the Lenders in
      accordance with their respective Commitments.

     

    SECTION
      2.07. Fees.

     

    (a)
      Facility
      Fee.
      XL
      Capital agrees to pay to the Administrative Agent for account of each Lender
      a
      facility fee which shall accrue at a rate per annum equal to the Applicable
      Facility Fee Rate (i) prior to the termination of such Lender’s Commitment, on
      the daily amount of such Commitment (whether used or unused) during the period
      from and including the Effective Date to but excluding the earlier of the date
      on which such Commitment terminates and the Commitment Termination Date and
      (ii)
      if such Lender continues to have any LC Exposure after its Commitment
      terminates, on the daily amount of such Lender’s LC Exposure from and including
      the date on which such Lender’s Commitment terminates to but excluding the date
      on which such Lender ceases to have any LC Exposure. Accrued facility fees
      shall
      be payable on each Quarterly Date and on the earlier of the date the Commitments
      terminate and the Commitment Termination Date; provided
      that any
      facility fees accruing after such earlier date shall be payable on
      demand.

     

    (b)
      Syndicated
      Letter of Credit Fees.
      XL
      Capital agrees to pay to the Administrative Agent for account of each Lender
      a
      letter of credit fee which shall accrue at a rate per annum equal to the
      Applicable Letter of Credit Fee Rate on the average daily aggregate undrawn
      amount of all outstanding Syndicated Letters of Credit 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. Syndicated Letter of Credit fees accrued through and
      including each Quarterly Date shall be payable on the third Business Day
      following such Quarterly Date, commencing on the first such date to occur after
      the Effective Date; provided
      that all
      such fees shall be payable on the date on which the Commitments terminate and
      any such fees accruing after the date on which the Commitments terminate shall
      be payable on demand.

     

    (c)
      Non-Syndicated
      Letter of Credit Fees.
      XL
      Capital agrees to pay to the Administrative Agent for account of each Lender
      a
      letter of credit fee which shall accrue at a rate per annum equal to the
      Applicable Letter of Credit Fee Rate on the average daily aggregate undrawn
      amount of all outstanding Non-Syndicated Letters of Credit 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. Non-Syndicated Letter of Credit fees accrued
      through and including each Quarterly Date shall be payable on the third Business
      Day following such Quarterly Date, commencing on the first such date to occur
      after the Effective Date; provided
      that all
      such fees shall be payable on the date on which the Commitments terminate and
      any such fees accruing after the date on which the Commitments terminate shall
      be payable on demand.

     

    (d)
      LC
      Administrative Fees.
      XL
      Capital agrees to pay to the Administrative Agent, for its own account, within
      10 Business Days after demand the Administrative Agent’s standard administrative
      fees with respect to the issuance, amendment, renewal or extension of any Letter
      of Credit or processing of drawings thereunder.

     

    
      
        
        

      

      
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    (e)
      Administrative
      Agent Fee.
      XL
      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 XL
      Capital and the Administrative Agent.

     

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

     

    SECTION
      2.08. Interest.
      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 shall be determined
      by the Administrative Agent, and such determination shall be conclusive absent
      manifest error.

     

    SECTION
      2.09. 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; or

     

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

     

    and
      the
      result of any of the foregoing shall be to increase the cost to such Lender
      of
      making or maintaining, or participating in, any Letter of Credit (or of
      maintaining any participation therein) or to reduce the amount of any sum
      received or receivable by such Lender hereunder (whether of interest or
      otherwise), then the Account Parties jointly and severally agree that they
      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 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 the Account Parties 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.

     

    
      
        
        

      

      
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    (c)
      Certificates
      from Lenders.
      A
      certificate of a Lender setting forth such Lender’s good faith determination of
      the amount or amounts necessary to compensate such Lender or its holding
      company, as the case may be, as specified in paragraph (a) or (b) of
      this Section shall be delivered to XL Capital and shall be conclusive absent
      manifest error. The Account Parties shall pay such Lender the amount shown
      as
      due on any such certificate within 10 days after receipt thereof by XL
      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 the
      Account Parties shall not be required to compensate a Lender pursuant to this
      Section for any increased costs or reductions incurred more than 90 days prior
      to the date that such Lender notifies XL 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 90 day period referred to above shall be extended to
      include the period of retroactive effect thereof.

     

    (e)
      Application
      to Taxes.
      Notwithstanding anything in this Section to the contrary, this Section shall
      not
      apply to Taxes, which shall be governed solely by Section 2.10.

     

    SECTION
      2.10. Taxes.

     

    (a)
      Payments
      Free of Taxes.
      Any and
      all payments by or on account of any obligation of the Account Parties hereunder
      shall be made free and clear of and without deduction for any Indemnified Taxes;
      provided
      that if
      any Account Party shall be required to deduct any Indemnified 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 Account Party shall make such
      deductions and (iii) such Account Party shall pay the full amount deducted
      to the relevant Governmental Authority in accordance with applicable
      law.

     

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

     

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

     

    
      
        
        

      

      
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    behalf
      of
      a Lender, shall be conclusive as between such Lender or the Administrative
      Agent, as the case may be, and the Account Parties absent manifest
      error.

     

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

     

    (e)
      Exemptions.
      Each
      Lender and the Administrative Agent shall, at the written request of XL Capital,
      provide to any Account Party such form, certification or similar documentation,
      if any (each duly completed, accurate and signed) as is currently required
      by
      any Account Party Jurisdiction or any other jurisdiction, or comply with such
      other requirements, if any, as is currently applicable in such Account 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 such Account Party Jurisdiction or any
      other jurisdiction; provided
      that XL
      Capital 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. Upon the reasonable request
      of XL Capital in writing, each Lender and the Administrative Agent will provide
      to XL Capital such form, certification or similar documentation (each duly
      completed, accurate and signed) as may in the future be required by any Account
      Party Jurisdiction or any other jurisdiction, or comply with such other
      requirements, if any, as may be applicable in such Account 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. In addition, each Lender
      agrees from time to time when a lapse in time or change in circumstances renders
      the previous documentation obsolete or inaccurate in any material respect,
      it
      will deliver to the Account Parties such properly completed and executed
      documentation as will permit such payments to continue to be made without
      withholding or at a reduced rate, or notify the Account Parties that it is
      unable to do so.

     

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

     

    
      
        
        

      

      
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    not
      be
      construed to require the Administrative Agent or any Lender to make available
      its tax returns (or any other information relating to its taxes not expressly
      required to be made available hereunder which it reasonably deems confidential)
      to any Account Party or any other Person.

     

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

     

    (a)
      Payments
      by the Account Parties.
      The
      Account Parties shall make each payment required to be made by them hereunder
      (whether of interest, fees or reimbursement of LC Disbursements, under
      Section 2.09 or 2.10, or otherwise) or under any other Credit Document
      (except to the extent otherwise provided therein) prior to 12:00 noon, New
      York City time, on the date when due, in immediately available funds, without
      set-off or counterclaim; provided
      that any
      payments in respect of Alternative Currency Letters of Credit shall be made
      in
      the manner (including the time and place of payment) as shall have been
      separately agreed between the relevant Account Party and Lender pursuant to
      Section 2.05. Any amounts received after such time on any date may, in the
      discretion of the Administrative Agent, be deemed to have been received on
      the
      next succeeding Business Day for purposes of calculating interest thereon.
      All
      such payments shall be made to the Administrative Agent at its offices at 270
      Park Avenue, New York, New York, except payments pursuant to Sections 2.09,
      2.10 and 10.03, which shall be made directly to the Persons entitled thereto.
      The Administrative Agent shall distribute any such payments received by it
      for
      account of any other Person to the appropriate recipient promptly following
      receipt thereof. If any payment hereunder shall be due on a day that is not
      a
      Business Day, the date for payment shall be extended to the next succeeding
      Business Day and, in the case of any payment accruing interest, interest thereon
      shall be payable for the period of such extension. All payments hereunder shall
      be made in Dollars.

     

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

     

    (c)
      Pro
      Rata Treatment.
      Except
      to the extent otherwise provided herein, each reimbursement of LC Disbursements
      (other than in respect of Alternative Currency Letters of Credit) shall be
      made
      to the relevant Lenders, each payment of fees under Section 2.07 shall be
      made for account of the relevant Lenders, and each termination or reduction
      of
      the amount of the Commitments under Section 2.06 shall be applied to the
      respective Commitments of the Lenders, in each case pro rata according to the
      amounts of their respective Commitments (or, in the case of any such
      reimbursement or payment after the termination of the Commitments, pro rata
      according to the Aggregate Credit Exposure).

     

    (d)
      Sharing
      of Payments by Lenders.
      If any
      Lender shall, by exercising any right of set-off or counterclaim or otherwise,
      obtain payment in respect of any of its LC Disbursements or interest thereon
      (other than with respect to Alternative Currency Letters of Credit) resulting
      in
      such Lender receiving payment of a greater proportion of the aggregate amount
      of
      its LC Disbursements (other than with respect to Alternative Currency Letters
      of
      Credit) and accrued interest thereon then due than the proportion received
      by
      any other relevant 

     

    
      
        
        

      

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

     

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

     

    (f)
      Certain
      Deductions by the Administrative Agent.
      If any
      Lender shall fail to make any payment required to be made by it pursuant to
      Section 2.11(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.

     

    SECTION
      2.12. Mitigation
      Obligations; Replacement of Lenders.

     

    (a)
      Designation
      of a Different Lending Office.
      If any
      Lender requests compensation under Section 2.09, or if any Account Party is
      required to pay any additional amount or indemnification payment to any Lender
      or any Governmental Authority for account of any Lender pursuant to
      Section 2.10, then such Lender shall use reasonable efforts to designate a
      different lending office for funding or booking its Letters of Credit hereunder
      or to assign its rights and obligations hereunder to another of its offices,
      branches or Affiliates, if, in the reasonable judgment of such Lender, such
      designation or assignment (i) would eliminate or reduce amounts payable
      pursuant to Section 2.09 or 2.10, 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 

     

    
      
        
        

      

      
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    be
      disadvantageous to such Lender. Each Account Party 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 2.09, or if any Account Party is
      required to pay any additional amount to any Lender or any Governmental
      Authority for account of any Lender pursuant to Section 2.10, or if any
      Lender defaults in its obligation to make LC Disbursements hereunder, or if
      any
      Lender ceases to be a NAIC Approved Bank, then XL 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 selected
      by XL Capital that shall assume such obligations (which assignee may be another
      Lender, if a Lender accepts such assignment); provided
      that
      (i) XL 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 its
      outstanding LC Disbursements, accrued interest thereon, accrued fees and all
      other amounts payable to it hereunder, from the assignee (to the extent of
      such
      outstanding LC Disbursements, accrued interest and fees) or the relevant Account
      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 2.09 or
      payments required to be made pursuant to Section 2.10, such assignment will
      result in a reduction in such compensation or payments. A Lender shall not
      be
      required to make any such assignment and delegation if, prior thereto, as a
      result of a waiver by such Lender or otherwise, the circumstances entitling
      the
      relevant Account Party to require such assignment and delegation cease to
      apply.

    

    

    ARTICLE
      III

     

    GUARANTEE

     

    

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

    
      
        
        

      

      
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    SECTION
      3.02. Obligations
      Unconditional.
      The
      obligations of the Guarantors under Section 3.01 are absolute and
      unconditional, joint and several, irrespective of the value, genuineness,
      validity, regularity or enforceability of the obligations of the Account Parties
      under this Agreement or any other agreement or instrument referred to herein
      or
      therein, or any substitution, release or exchange of any other guarantee of
      or
      security for any of the Guaranteed Obligations, and, to the fullest extent
      permitted by applicable law, irrespective of any other circumstance whatsoever
      that might otherwise constitute a legal or equitable discharge or defense of
      a
      surety or guarantor, it being the intent of this Article that the obligations
      of
      the Guarantors hereunder shall be absolute and unconditional, joint and several,
      under any and all circumstances. Without limiting the generality of the
      foregoing, it is agreed that the occurrence of any one or more of the following
      shall not alter or impair the liability of the Guarantors hereunder, which
      shall
      remain absolute and unconditional as described above:

    

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

    

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

    

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

    

    The
      Guarantors hereby expressly waive 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
      Account Party under this Agreement or any other agreement or instrument referred
      to herein, or against any other Person under any other guarantee of, or security
      for, any of the Guaranteed Obligations.

    

    SECTION
      3.03. Reinstatement.
      The
      obligations of the Guarantors under this Article shall be automatically
      reinstated if and to the extent that for any reason any payment by or on behalf
      of any Account Party in respect of the Guaranteed Obligations is rescinded
      or
      must be otherwise restored by any holder of any of the Guaranteed Obligations,
      whether as a result of any proceedings in bankruptcy or reorganization or
      otherwise, and the Guarantors jointly and severally agree that they will
      indemnify the Administrative Agent and each Lender on demand for all reasonable
      costs and expenses (including reasonable 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.

    
      
        
        

      

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

    

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

    

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

    

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

    

    For
      purposes of this Section, (i) “Excess
      Funding Guarantor”
means,
      in respect of any Guaranteed Obligations, a Guarantor that has paid an amount
      in
      excess of its Pro Rata Share of such Guaranteed Obligations,
      (ii) “Excess
      Payment”
means,
      in respect of any Guaranteed Obligations, the amount paid by an Excess Funding
      Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and
      (iii) “Pro
      Rata Share”
means,
      for any Guarantor, the ratio (expressed as a percentage) of (x) the amount
      by which the aggregate present fair saleable value of all properties of such
      Guarantor (excluding any shares of stock of any other Guarantor) exceeds the
      amount of all the debts and liabilities of such Guarantor (including contingent,
      subordinated, unmatured and unliquidated liabilities, but excluding the
      obligations of such 

    
      
        
        

      

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

    

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

    

    

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Each
      Account Party represents and warrants to the Lenders that:

     

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

     

    SECTION
      4.02. Authorization;
      Enforceability.
      The
      Transactions are within such Account Parties’ 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
      Account Party and constitutes a legal, valid and binding obligation of such
      Account Party, enforceable against such Account Party in accordance with its
      terms, except as such enforceability may be limited by (a) bankruptcy,
      insolvency, reorganization, moratorium, examination or similar laws of general
      applicability affecting the enforcement of creditors’ rights and (b) the
      application of general principles of equity (regardless of whether such
      enforceability is considered in a proceeding in equity or at law).

     

    
      
        
        

      

      
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    SECTION
      4.03. 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, except such as have been obtained or made and are
      in
      full force and effect, (b) will not violate any applicable law or
      regulation or the charter, by-laws or other organizational documents of such
      Account Party or any of its Significant Subsidiaries or any order of any
      Governmental Authority, (c) will not violate or result in a default under
      any material indenture, agreement or other instrument binding upon such Account
      Party or any of its Significant Subsidiaries or assets, or give rise to a right
      thereunder to require any payment to be made by any such Person, and
      (d) will not result in the creation or imposition of any Lien on any asset
      of such Account Party or any of its Significant Subsidiaries.

    

    SECTION
      4.04. Financial
      Condition; No Material Adverse Change.

     

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

     

    (b)
      No
      Material Adverse Change.
      Since
      December 31, 2005, there has been no material adverse change in the assets,
      business, financial condition or operations of such Account Party and its
      Subsidiaries, taken as a whole.

     

    SECTION
      4.05. Properties.

     

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

     

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

     

    SECTION
      4.06. Litigation
      and Environmental Matters.

     

    (a)
      Actions,
      Suits and Proceedings.
      Except
      as disclosed in Schedule III or as routinely encountered in claims activity,
      there are no actions, suits or proceedings by or before 

     

    
      
        
        

      

      
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    any
      arbitrator or Governmental Authority now pending against or, to the knowledge
      of
      such Account Party, threatened against or affecting such Account Party or any
      of
      its Subsidiaries (i) as to which there is a reasonable possibility of an
      adverse determination and that could reasonably be expected, individually or
      in
      the aggregate, to result in a Material Adverse Effect or (ii) that involve
      this Agreement or the Transactions.

     

    (b)
      Environmental
      Matters.
      Except
      as disclosed in Schedule IV and except with respect to any other matters that,
      individually or in the aggregate, could not reasonably be expected to result
      in
      a Material Adverse Effect, neither such Account Party nor any of its
      Subsidiaries (i) has failed to comply with any Environmental Law or to
      obtain, maintain or comply with any permit, license or other approval required
      for its business under any Environmental Law, (ii) has incurred any
      Environmental Liability, (iii) has received notice of any claim with
      respect to any Environmental Liability or (iv) knows of any basis for any
      Environmental Liability.

     

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

     

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

     

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

     

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

     

    Except
      as
      could not reasonably be expected to result in a Material Adverse Effect, (i)
      all
      contributions required to be made by any Account Party or any of their
      Subsidiaries with respect to a Non-U.S. Benefit Plan have been timely made,
      (ii)
      each Non-U.S. Benefit Plan has been maintained in compliance with its terms
      and
      with the requirements of any and all applicable laws and has been maintained,
      where required, in good standing with the applicable 

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

    Governmental
      Authority and (iii) neither any Account Party nor any of their Subsidiaries
      has
      incurred any obligation in connection with the termination or withdrawal from
      any Non-U.S. Benefit Plan.

     

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

     

    SECTION
      4.12. Use
      of
      Credit.
      Neither
      such Account Party nor any of its Subsidiaries is engaged principally, or as
      one
      of its important activities, in the business of extending credit for the
      purpose, whether immediate, incidental or ultimate, of buying or carrying Margin
      Stock, and no Letter of Credit will be used in connection with buying or
      carrying any Margin Stock.

     

    SECTION
      4.13. Subsidiaries.
      Set
      forth in Schedule V is a complete and correct list of all of the
      Subsidiaries of XL Capital as of March 31, 2006, together with, for each such
      Subsidiary, (i) the jurisdiction of organization of such Subsidiary,
      (ii) each Person holding ownership interests in such Subsidiary and
      (iii) the percentage of ownership of such Subsidiary represented by such
      ownership interests. Except as disclosed in Schedule V, (x) each of XL
      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 V, (y) all of the issued and
      outstanding capital stock of each such Person organized as a corporation is
      validly issued, fully paid and nonassessable and (z) except as disclosed in
      filings of XL Capital with the SEC prior to the date hereof, there are no
      outstanding Equity Rights with respect to any Account Party.

     

    SECTION
      4.14. Withholding
      Taxes.
      Based
      upon information with respect to each Lender provided by each Lender to the
      Administrative Agent, as of the date hereof, the payment of the LC Disbursements
      and interest thereon, the fees under Section 2.07 and all other amounts payable
      hereunder will not be subject, by withholding or deduction, to any Indemnified
      Taxes imposed by Bermuda or the Cayman Islands.

     

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

     

    
      
        
        

      

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

     

    

    ARTICLE
      V

     

    CONDITIONS

     

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

     

    (a)
      Executed
      Counterparts.
      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 the Obligors.
      Opinions, each dated the Effective Date, of (i) Charles F. Barr, Esq., counsel
      to XL Capital, substantially in the form of Exhibit B-1, (ii) Richard G.
      McCarty, Esq., counsel to XL America, substantially in the form of
      Exhibit B-2, (iii) Cahill Gordon & Reindel llp,
      special
      U.S. counsel for the Obligors, substantially in the form of Exhibit B-3,
      (iv) Conyers, Dill & Pearman, special Bermuda counsel to XL Insurance and XL
      Re, substantially in the form of Exhibit B-4 and (v) Appleby Spurling
      Hunter, special Cayman Islands counsel to XL Capital, substantially in the
      form
      of Exhibit B-5.

     

    (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 C
      (and JPMCB hereby instructs such counsel to deliver such opinion to the
      Lenders).

     

    (d)
      Corporate
      Documents.
      Such
      documents and certificates as the Administrative Agent or its counsel may
      reasonably request relating to the organization, existence and good standing,
      if
      applicable, of the Obligors, the authorization of the Transactions and any
      other
      legal matters relating to the Obligors, this Agreement or the Transactions,
      all
      in form and substance reasonably satisfactory to the Administrative Agent and
      its counsel.

     

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

     

    (f)
      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 XL Capital of such fees as XL Capital shall
      have
      agreed to pay to 

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

    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 XL
      Capital).

     

    The
      Administrative Agent shall notify the Account Parties and the Lenders of the
      Effective Date, and such notice shall be conclusive and binding. Notwithstanding
      the foregoing, the obligations of the Lenders (or the Issuing Lender, as the
      case may be) to issue Letters of Credit hereunder shall not become effective
      unless each of the foregoing conditions is satisfied (or waived pursuant to
      Section 10.02) at or prior to 5:00 p.m., New York City time, on May
      19, 2006 (and, in the event such conditions are not so satisfied or waived,
      the
      Commitments shall terminate at such time).

     

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

     

    (a)
      the
      representations and warranties of the Obligors set forth in this Agreement
      (other than, at any time after the Effective Date, in Section 4.04(b)) shall
      be
      true and correct on and as of the date of issuance, amendment, renewal or
      extension of such Letter of Credit (or, if any such representation or warranty
      is expressly stated to have been made as of a specific date, as of such specific
      date);

     

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

     

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

     

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

    

    

    ARTICLE
      VI

     

    AFFIRMATIVE
      COVENANTS

     

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

     

    SECTION
      6.01. Financial
      Statements and Other Information.
      Each
      Account Party will furnish to the Administrative Agent and each
      Lender:

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

    

     

    (a)
      within 135 days after the end of each fiscal year of each Account Party except
      for XL America (but in the case of XL Capital, within 100 days after the end
      of
      each fiscal year of XL Capital), the audited consolidated balance sheet and
      related statements of operations, stockholders’ equity and cash flows of such
      Account Party and its consolidated Subsidiaries as of the end of and for such
      year, setting forth in each case in comparative form the figures for the
      previous fiscal year (if such figures were already produced for such
      corresponding period or periods) (it being understood that delivery to the
      Lenders of XL Capital’s Report on Form 10-K filed with the SEC shall satisfy the
      financial statement delivery requirements of this paragraph (a) to deliver
      the
      annual financial statements of XL Capital so long as the financial information
      required to be contained in such Report is substantially the same as the
      financial information required under this paragraph (a)), all reported on by
      independent public accountants of 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 such Account Party and its consolidated
      Subsidiaries on a consolidated basis in accordance with GAAP or (in the case
      of
      XL Insurance and XL Re) SAP, as the case may be, consistently
      applied;

     

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

     

    (c)
      within 60 days after the end of each of the first three fiscal quarters of
      each
      fiscal year of such Account Party, the consolidated balance sheet and related
      statements of operations, stockholders’ equity and cash flows of such Account
      Party and its consolidated Subsidiaries as of the end of and for such fiscal
      quarter and the then elapsed portion of the fiscal year, setting forth in each
      case in comparative form the figures for (or, in the case of the balance sheet,
      as of the end of) the corresponding period or periods of the previous fiscal
      year (if such figures were already produced for such corresponding period or
      periods), all certified by a Financial Officer of such Account Party as
      presenting fairly in all material respects the financial condition and results
      of operations of such Account Party and its consolidated Subsidiaries on a
      consolidated basis in accordance with GAAP or (in the case of XL Insurance
      and
      XL Re) SAP, as the case may be, consistently applied, subject to normal year-end
      audit adjustments and the absence of 

     

    
      
        
        

      

      
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    footnotes
      (it being understood that delivery to the Lenders of XL Capital’s Report on Form
      10-Q filed with the SEC shall satisfy the financial statement delivery
      requirements of this paragraph (c) to deliver the quarterly financial statements
      of XL Capital so long as the financial information required to be contained
      in
      such Report is substantially the same as the financial information required
      under this paragraph (c));

     

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

     

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

     

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

     

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

     

    (h)
      within 90 days after the end of each of the first three fiscal quarters of
      each
      fiscal year and within 135 days after the end of each fiscal year of XL Capital
      (commencing with the fiscal year ending December 31, 2006), a statement of
      a
      Financial Officer of XL Capital listing, as of the end of the immediately
      preceding fiscal quarter of 

     

    
      
        
        

      

      
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    XL
      Capital, the amount of cash and the securities of the Account Parties and their
      Subsidiaries that have been posted as collateral under Section 7.03(f);
      and

     

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

     

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

     

    (a)
      the
      occurrence of any Default; and

     

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

     

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

     

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

    

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

    

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

    
      
        
        

      

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

    .
      Each
      Account Party will, and will cause each of its Subsidiaries to, pay or
      discharge:

    

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

     

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

     

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

     

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

    

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

    

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

    

    SECTION
      6.09. Use
      of
      Letters of Credit.
      No
      Letter of Credit will be used, whether directly or indirectly, for any purpose
      that entails a violation of any of the Regulations of the Board, including
      Regulations U and X. Each Account 

    
      
        
        

      

      
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    Party
      will use the Letters of Credit issued for its account hereunder in the ordinary
      course of business of such Account Party and its Affiliates. For the avoidance
      of doubt, the parties agree that any Account Party may apply for a Letter of
      Credit hereunder to support the obligations of any Affiliate of XL Capital,
      it
      being understood that such Account Party shall nonetheless remain the account
      party and as such be liable with respect to such Letter of Credit.
      Notwithstanding anything in this Section to the contrary, from and after the
      SCA
      IPO, no Account Party will issue any Letter of Credit, or renew or permit to
      renew any Letter of Credit existing as of the SCA IPO, to support the
      obligations of SCA and its Subsidiaries.

    

    SECTION
      6.10. Continuation
      of and Change in Businesses.
      Each
      Account Party and its Significant Subsidiaries will continue to engage in
      substantially the same business or businesses it engaged in (or proposes to
      engage in) on the date of this Agreement and businesses related or incidental
      thereto.

    

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

    

    

    ARTICLE
      VII

     

    NEGATIVE
      COVENANTS

     

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

     

    SECTION
      7.01. Mergers.
      No
      Account Party will merge with or into or consolidate with any other Person,
      except that if no Default shall occur and be continuing or shall exist at the
      time of such merger or consolidation or immediately thereafter and after giving
      effect thereto (a) any Account Party may merge or consolidate with any other
      corporation, including a Subsidiary, if such Account Party shall be the
      surviving corporation, (b) XL Capital may merge with or into or consolidate
      with
      any other Person in a transaction that does not result in a reclassification,
      conversion, exchange or cancellation of the outstanding shares of capital stock
      of XL Capital (other than the cancellation of any outstanding shares of capital
      stock of XL Capital held by the Person with whom it merges or consolidates)
      and
      (c) any Account Party may enter into a merger or consolidation which is effected
      solely to change the jurisdiction of incorporation of such Account Party and
      results in a reclassification, conversion or exchange of outstanding shares
      of
      capital stock of such Account Party solely into shares of capital stock of
      the
      surviving entity.

    

    SECTION
      7.02. Dispositions.
      No
      Account Party will, nor will it permit any of its Significant Subsidiaries
      to,
      sell, convey, 

    
      
        
        

      

      
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    assign,
      lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily
      (any of the foregoing being referred to in this Section as a “Disposition”
and
      any
      series of related Dispositions constituting but a single Disposition), any
      of
      its properties or assets, tangible or intangible (including but not limited
      to
      sale, assignment, discount or other disposition of accounts, contract rights,
      chattel paper or general intangibles with or without recourse),
      except:

    

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

     

    (b)
      sales, conveyances, assignments or other transfers or dispositions in immediate
      exchange for cash or tangible assets, provided
      that any
      such sales, conveyances or transfers shall not individually, or in the aggregate
      for the Account Parties and their respective Subsidiaries, exceed $500,000,000
      in any calendar year (provided
      that the
      issuance or sale of SCA pursuant to the SCA IPO shall be permitted and shall
      not
      reduce the foregoing amount available to the Account Parties and their
      respective subsidiaries for the calendar year ending December 31,
      2006);

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

    

    (g)
      Liens
      on cash and securities not to exceed $500,000,000 in the aggregate securing
      obligations of an Account Party or any of its Subsidiaries arising under any
      ISDA documentation or any other Specified Transaction Agreement (it being
      understood that in no event shall this clause (g) preclude any Person (other
      than any Subsidiary of XL Capital) in which XL Capital or any of its
      Subsidiaries shall invest (each an “investee”)
      from
      granting Liens on such Person’s assets to secure hedging obligations of such
      Person, so long as such obligations are non-recourse to XL Capital or any of
      its
      Subsidiaries (other than any investees)), provided
      that,
      for purposes of determining the aggregate amount of cash and/or securities
      subject to such Liens under this clause (g), the aggregate amount of cash and/or
      securities on which any Account Party or any Subsidiary shall have granted
      a
      Lien in favor of a counterparty at any time shall be netted against the
      aggregate amount of cash and/or securities on which such counterparty shall
      have
      granted a Lien in favor of such Account Party or such Subsidiary, as the case
      may be, at such time, so long as the relevant agreement between such Account
      Party or such Subsidiary, as the case may be, provides for the netting of their
      respective obligations thereunder;

    
      
        
        

      

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

    

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

    

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

     

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

     

    
      
        
        

      

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

     

    SECTION
      7.06. Consolidated
      Net Worth.
      XL
      Capital will not permit its Consolidated Net Worth to be less than the sum
      of
      (a) $5,034,000,000 plus (b) 25% of consolidated net income (if positive) of
      XL
      Capital and its Subsidiaries for each fiscal quarter ending on or after June
      30,
      2006.

     

    SECTION
      7.07. Indebtedness.
      No
      Account Party will, nor will it permit any of its Subsidiaries to, at any time
      create, incur, assume or permit to exist any Indebtedness, or agree, become
      or
      remain liable (contingent or otherwise) to do any of the foregoing,
      except:

     

    (a)
      Indebtedness created hereunder;

     

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

     

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

     

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

     

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

     

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

     

    SECTION
      7.08. Financial
      Strength Ratings.
      None of
      XL Capital Group, XL Insurance and XL Re will permit at any time its financial
      strength ratings to be less than “A-” from A.M. Best & Co. (or its
      successor).

     

    SECTION
      7.09. Private
      Act.
      No
      Account Party will become subject to a Private Act other than the X.L. Insurance
      Company, Ltd. Act, 1989.

    
      
        
        

      

      
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    ARTICLE
      VIII

     

    EVENTS
      OF DEFAULT

     

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

     

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

     

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

     

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

     

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

     

    (e)
      any
      Obligor shall fail to observe or perform any covenant, condition or agreement
      contained in this Agreement (other than those specified in clause (a), (b)
      or (d) of this Article or the reporting requirement pursuant to Section
      6.01(h)) and such failure shall continue unremedied for a period of 20 or more
      days after notice thereof from the Administrative Agent (given at the request
      of
      any Lender) to such Obligor;

     

    (f)
      any
      Account Party or any of its Subsidiaries shall default (i) in any payment
      of principal of or interest on any other obligation for borrowed money in
      principal amount of $50,000,000 or more, or any payment of any principal amount
      of $50,000,000 or more under Hedging Agreements, in each case beyond any period
      of grace provided with respect thereto, or (ii) in the performance of any
      other agreement, term or condition contained in any such agreement (other than
      Hedging Agreements) under which any such obligation in principal amount of
      $50,000,000 or more is created, if the effect
      of
      such
      default is to cause or permit the holder or holders of such obligation (or
      trustee on behalf of such holder or holders) to cause such obligation to become
      due prior to its stated maturity or to terminate its commitment under such
      agreement, provided
      that
      this clause (f) shall not apply to secured Indebtedness that becomes due as
      a
      result of the voluntary sale or transfer of the property or assets securing
      such
      Indebtedness;

     

    (g)
      a
      decree or order by a court having jurisdiction in the premises shall have been
      entered adjudging any Account Party a bankrupt or insolvent, or approving as
      properly filed a petition seeking reorganization of such Account Party under
      the
      Bermuda Companies Law or the Cayman Islands Companies Law or any other similar
      applicable 

     

    
      
        
        

      

      
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    Law,
      and
      such decree or order shall have continued undischarged or unstayed for a period
      of 60 days; or a decree or order of a court having jurisdiction in the premises
      for the appointment of an examiner, receiver or liquidator or trustee or
      assignee in bankruptcy or insolvency of such Account Party or a substantial
      part
      of its property, or for the winding up or liquidation of its affairs, shall
      have
      been entered, and such decree or order shall have continued undischarged and
      unstayed for a period of 60 days;

     

    (h)
      any
      Account Party shall institute proceedings to be adjudicated a voluntary
      bankrupt, or shall consent to the filing of a bankruptcy proceeding against
      it,
      or shall file a petition or answer or consent seeking reorganization under
      the
      Bermuda Companies Law or the Cayman Islands 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 such Account Party in furtherance
      of
      any of the aforesaid purposes;

     

    (i)
      one
      or more judgments for the payment of money in an aggregate amount in excess
      of
      $100,000,000 shall be rendered against any Account Party or any of its
      Subsidiaries or any combination thereof and the same shall not have been
      vacated, discharged, stayed (whether by appeal or otherwise) or bonded pending
      appeal within 45 days from the entry thereof;

     

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

     

    (k)
      a
      Change in Control shall occur;

     

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

     

    (m)
      the
      guarantee contained in Article III shall terminate or cease, in whole or
      material part, to be a legally valid and binding obligation of each Guarantor
      or
      any Guarantor or any Person acting for or on behalf of any of such parties
      shall
      contest such validity or binding nature of such guarantee itself or the
      Transactions, or any other Person shall assert any of the
      foregoing;

     

    then,
      and
      in every such event (other than an event with respect to any Account Party
      described in clause (g) or (h) of this Article), and at any time
      thereafter during the continuance of such event, the Administrative Agent may,
      and at the request of the Required Lenders shall, by notice to the Account
      Parties, terminate the Commitments, and thereupon the Commitments shall
      terminate immediately and all fees and other obligations of the Account Parties
      accrued hereunder shall become due and payable immediately, without presentment,
      demand, protest or other notice of 

    
      
        
        

      

      
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    any
      kind,
      all of which are hereby waived by the Account Parties; and in case of any event
      with respect to any Account Party described in clause (g) or (h) of
      this Article, the Commitments shall automatically terminate and all fees and
      other obligations of the Account 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 the Account Parties.

    

    If
      an
      Event of Default shall occur and be continuing and XL 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, the Account Parties 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 Uniform Commercial Code as in effect in the State of
      New York (the “Uniform
      Commercial Code”)),
      in
      the name of the Administrative Agent and for the benefit of the Lenders, an
      amount in cash equal to the total LC Exposure as of such date plus
      any
      accrued and unpaid interest thereon; 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 with
      respect to any Account Party described in clause (g) or (h) of this
      Article. Such deposit shall be held by the Administrative Agent as collateral
      for the LC Exposure under this Agreement, and for this purpose each of the
      Account Parties hereby grant 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.

    

    In
      addition to the provisions of this Article, each Account Party agrees that
      upon
      the occurrence and during the continuance of any Event of Default any Lender
      which has issued any Alternative Currency Letter of Credit may, by notice to
      XL
      Capital and the Administrative Agent: (a) declare that all fees and other
      obligations of the Account Parties accrued in respect of Alternative Currency
      Letters of Credit issued by such Lender shall become due and payable
      immediately, without presentment, demand, protest or other notice of any kind,
      all of which are hereby waived by each Account Party and (b) demand the
      deposit (without duplication of any amounts deposited with the Administrative
      Agent under the preceding paragraph) of cash collateral from the Account Parties
      in immediately available funds in the currency of such Alternative Currency
      Letter of Credit or, at the option of such Lender, in Dollars in an amount
      equal
      to the then aggregate undrawn face amount of all such Alternative Currency
      Letters of Credit and in such manner as previously agreed to by the Account
      Parties and such Lender; provided
      that, in
      the case of any of the Events of Default specified in clause (g) or (h) of
      this Article, without any notice to any Account Party or any other act by the
      Administrative Agent or the Lenders, all fees and other obligations of the
      Account Parties accrued in respect of all Alternative Currency Letters of Credit
      shall become due and payable immediately, without presentment, demand, protest
      or other notice of any kind, all of which are hereby waived by each Account
      Party. If the Administrative Agent receives any notice from a Lender pursuant
      to
      the previous sentence, then it will promptly give notice thereof to the other
      Lenders.

    
      
        
        

      

      
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    ARTICLE
      IX

     

    THE
      ADMINISTRATIVE AGENT

     

    Each
      of
      the Lenders hereby irrevocably appoints the Administrative Agent as its agent
      and authorizes the Administrative Agent to take such actions on its behalf
      and
      to exercise such powers as are delegated to the Administrative Agent by the
      terms hereof, together with such actions and powers as are reasonably incidental
      thereto.

     

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

     

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

     

    The
      Administrative Agent shall be entitled to rely upon, and shall not incur any
      liability for relying upon, any notice, request, certificate, consent,
      statement, instrument, document or other writing believed by it to be genuine
      and to have been signed or sent by the proper Person. The Administrative Agent
      also may rely upon any statement made to it orally or by telephone and believed
      by it to be made by the proper Person, and shall not incur any liability for
      relying thereon. The Administrative Agent may consult with legal counsel (who
      may be 

     

    
      
        
        

      

      
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    counsel
      for any Account Party), independent accountants and other experts selected
      by
      it, and shall not be liable for any action taken or not taken by it in
      accordance with the advice of any such counsel, accountants or
      experts.

     

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

     

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

    

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

    
      
        
        

      

      
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    ARTICLE
      X

     

    MISCELLANEOUS

     

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

     

    (a)
      if to
      any Account Party, to XL Capital at XL House, One Bermudiana Road, Hamilton
      HM
      11 Bermuda, Attention of Roderick Gray (Telecopy No. (441) 296-6399);
with
      a copy
      to
      Kirstin Romann Gould, Esq. at the same address and telecopy number (441)
      295-2840);

     

    (b)
      if to
      the Administrative Agent, to JPMorgan Chase Bank, N.A., 1111 Fannin Street,
      10th
      Floor,
      Houston, Texas 77002-6925, 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 Helen Newcomb (Telecopy No.
      (212) 270-1511; Telephone No. (212) 270-6260); and

     

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

     

    Any
      party
      hereto may change its address 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 the Account Parties and the
      Administrative Agent). All notices and other communications given to any party
      hereto in accordance with the provisions of this Agreement shall be deemed
      to
      have been given on the date of receipt.

     

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

    

    SECTION
      10.02. Waivers;
      Amendments.

     

    (a)
      No
      Deemed Waivers; Remedies Cumulative.
      No
      failure or delay by the Administrative Agent or any Lender in exercising any
      right or power hereunder shall operate as a 

     

    
      
        
        

      

      
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    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 the Account Parties therefrom shall in any event
      be
      effective unless the same shall be permitted by paragraph (b) of this
      Section, and then such waiver or consent shall be effective only in the specific
      instance and for the purpose for which given. Without limiting the generality
      of
      the foregoing, the issuance of a Letter of Credit shall not be construed as
      a
      waiver of any Default, regardless of whether the Administrative Agent 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
      Obligors and the Required Lenders or by the Obligors 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,

     

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

     

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

     

    (iv)
      change Section 2.11(c) or 2.11(d) without the consent of each Lender
      directly affected thereby,

     

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

     

    (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.

     

    
      
        
        

      

      
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    SECTION
      10.03. Expenses;
      Indemnity; Damage Waiver.

     

    (a)
      Costs
      and Expenses.
      The
      Account Parties jointly and severally agree to 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 or any amendments, modifications or waivers of the provisions hereof
      (whether or not the transactions contemplated hereby or thereby shall be
      consummated), and (ii) all out-of-pocket expenses incurred by the
      Administrative Agent or any Lender, including the fees, charges and
      disbursements of one legal counsel for the Administrative Agent and one legal
      counsel for the Lenders, in connection with the enforcement or protection of
      its
      rights in connection with this Agreement, including its rights under this
      Section, or in connection with the Letters of Credit issued hereunder, including
      in connection with any workout, restructuring or negotiations in respect
      thereof.

     

    (b)
      Indemnification
      by the Account Parties.
      The
      Account Parties shall jointly and severally 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 to hold each Indemnitee harmless from, any and all losses, claims,
      damages, liabilities and related expenses, including the fees, charges and
      disbursements of any counsel for any Indemnitee (but not including Excluded
      Taxes), incurred by or asserted against any Indemnitee arising out of, in
      connection with, or as a result of (i) the execution or delivery of this
      Agreement or any agreement or instrument contemplated hereby, the performance
      by
      the parties hereto of their respective obligations hereunder or the consummation
      of the Transactions or any other transactions contemplated hereby, (ii) any
      Letter of Credit or the use thereof (including any refusal by any Lender to
      honor a demand for payment under a Letter of Credit if the documents presented
      in connection with such demand do not strictly comply with the terms of such
      Letter of Credit), (iii) any actual or alleged presence or release of
      Hazardous Materials on or from any property owned or operated by any Account
      Party or any of its Subsidiaries, or any Environmental Liability related in
      any
      way to any Account Party or any of its Subsidiaries, or (iv) any actual or
      prospective claim, litigation, investigation or proceeding relating to any
      of
      the foregoing, whether based on contract, tort or any other theory and
      regardless of whether any Indemnitee is a party thereto; provided
      that
      such indemnity shall not, as to any Indemnitee, be available to the extent
      that
      such losses, claims, damages, liabilities or related expenses result from or
      arise out of the gross negligence or willful misconduct of such
      Indemnitee.

     

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

     

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

     

    
      
        
        

      

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

    

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

    

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

    

    (B) the
      Administrative Agent.

    

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

    

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

    

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

    
      
        
        

      

      
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    Agreement;

    

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

    

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

    

    (iii)
      Subject to acceptance and recording thereof pursuant to paragraph (b)(v) of
      this Section, from and after the effective date specified in each Assignment
      and
      Assumption, the assignee thereunder shall be a party hereto and, to the extent
      of the interest assigned by such Assignment and Assumption, have the rights
      and
      obligations of a Lender under this Agreement, and the assigning Lender
      thereunder shall, to the extent of the interest assigned by such Assignment
      and
      Assumption, be released from its obliga-tions under this Agreement (and, in
      the
      case of an Assignment and Assumption covering all of the assigning Lender’s
      rights and obligations under this Agreement, such Lender shall cease to be
      a
      party hereto but shall continue to be entitled to the benefits of
      Sections 2.09, 2.10 and 10.03). Any assignment or transfer by a Lender of
      rights or obligations under this Agreement that does not comply with this
      Section 10.04 shall be treated for purposes of this Agreement as a sale by
      such
      Lender of a participation in such rights and obligations in accordance with
      paragraph (c) of this Section.

    

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

    
      
        
        

      

      
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    Granting
      Lender or to any financial institutions (consented to by the Account Parties
      and
      the Administrative Agent) providing liquidity and/or credit support (if any)
      with respect to commercial paper issued by such SPV to issue such Letters of
      Credit and such SPV may disclose, on a confidential basis, confidential
      information with respect to any Account Party and its Subsidiaries to any rating
      agency, commercial paper dealer or provider of a surety, guarantee or credit
      liquidity enhancement to such SPV. Notwithstanding anything to the contrary
      in
      this Agreement, no SPV shall be entitled to any greater rights under Section
      2.09 or Section 2.10 than its Granting Lender would have been entitled to absent
      the use of such SPV. This paragraph may not be amended without the consent
      of
      any SPV at the time holding LC Disbursements under this Agreement.

    

    (v)
      The
      Administrative Agent, acting for this purpose as an agent of the Account
      Parties, shall maintain at one of its offices in New York City a copy of each
      Assignment and Assumption delivered to it and a register for the recordation
      of
      the names and addresses of the Lenders, the Commitment of, and the LC
      Disbursements owing to, each Lender pursuant to the terms hereof from time
      to
      time (the “Register”).
      The
      entries in the Register shall be conclusive, and the Account Parties, the
      Administrative Agent and the Lenders shall treat each Person whose name is
      recorded in the Register pursuant to the terms hereof as a Lender hereunder
      for
      all purposes of this Agreement, notwithstanding notice to the contrary. The
      Register shall be available for inspection by any Account Party and any Lender,
      at any reasonable time and from time to time upon reasonable prior
      notice.

    

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

    

    (c)
      Participations.
      (i) Any
      Lender may, without the consent of the Account Parties, the Administrative
      Agent
      or any Issuing Lender, sell participations to one or more banks or other
      entities (a “Participant”)
      in all
      or a portion of such Lender’s rights and obligations under this Agreement and
      the other Credit Documents (including all or a portion of its Commitment and
      the
      LC Disbursements owing to it); provided
      that
      (A) any such participation sold to a Participant which is not a Lender, an
      Approved Fund or a Federal Reserve Bank shall be made only with the consent
      (which in each case shall not be unreasonably withheld) of XL Capital and the
      Administrative Agent, unless a Default has occurred and is continuing, in which
      case the consent of XL Capital shall not be required, (B) such Lender’s
      obligations under this Agreement and the other Credit Documents shall remain
      unchanged, (C) such Lender shall remain solely responsible to the other
      parties hereto for the performance of such obligations and (D) the Account
      Parties, the Administrative Agent and the other Lenders shall continue to deal
      solely and directly with such Lender in connection with such Lender’s rights and
      obligations under this Agreement and the other Credit Documents. Any agreement
      or instrument pursuant to which a Lender sells such a participation shall
      provide that such Lender shall retain the sole right to enforce this Agreement
      and the other Credit Documents and to approve any amendment, 

    
      
        
        

      

      
        -59-

        
          

        

      

      
        
        

      

    

    modification
      or waiver of any provision of this Agreement or the other Credit Documents;
      provided
      that
      such agreement or instrument may provide that such Lender will not, without
      the
      consent of the Participant, agree to any amendment, modification or waiver
      described in the first proviso to Section 10.02(b) that affects such
      Participant. Subject to paragraph (c)(ii) of this Section, the Account Parties
      agree that each Participant shall be entitled to the benefits of Sections 2.09
      and 2.10 (subject to the requirements of such Sections) to the same extent
      as if
      it were a Lender and had acquired its interest by assignment pursuant to
      paragraph (b) of this Section. To the extent permitted by law, each Participant
      also shall be entitled to the benefits of Section 10.08 as though it were a
      Lender, provided such Participant agrees to be subject to Section 2.11(d) as
      though it were a Lender.

    

    (ii)
      A
      Participant shall not be entitled to receive any greater payment under Section
      2.09 or 2.10 than the applicable Lender would have been entitled to receive
      with
      respect to the participation sold to such Participant or the Lender interest
      assigned, unless (A) the sale of the participation to such Participant is made
      with the Account Parties’ prior written consent and (B) in the case of Section
      2.09 or 2.10, the entitlement to greater payment results solely from a Change
      in
      Law formally announced after such Participant became a Participant.

    

    (iii) In
      the
      event that any Lender sells participations in a Commitment, such Lender, acting
      solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain
      a register on which it enters the name of all participants in the Commitments
      held by it (the “Participant
      Register”).
      The
      entries in the Participant Register shall be conclusive in the absence of
      manifest error, and the participating Lender shall treat each Person whose
      name
      is recorded in the Participant Register as the Participant for all purposes
      of
      this Agreement and the other Credit Documents, notwithstanding any notice to
      the
      contrary.

    

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

     

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

     

    SECTION
      10.05. Survival.
      All
      covenants, agreements, representations and warranties made by the Account
      Parties herein and in the certificates or other instruments delivered in
      connection with or pursuant to this Agreement shall be considered to have been
      relied upon by the other parties hereto and shall survive the execution and
      delivery of this Agreement and the 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 any fee or any other amount payable under this 

     

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

    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 2.09, 2.10 and 10.03 and Article IX shall survive and remain
      in full force and effect regardless of the consummation of the transactions
      contemplated hereby, the expiration or termination of the Letters of Credit
      and
      the expiration or termination of the Commitments or the termination of this
      Agreement or any provision hereof.

     

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

     

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

     

    SECTION
      10.08. Right
      of Setoff.
      If an
      Event of Default shall have occurred and be continuing, each Lender 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 Account
      Party against any of and all the obligations of such Account Party now or
      hereafter existing under this Agreement held by such Lender, irrespective of
      whether or not such Lender shall have made any demand under this Agreement
      and
      although such obligations may be unmatured. The rights of each Lender under
      this
      Section are in addition to other rights and remedies (including other rights
      of
      setoff) which such Lender may have.

     

    SECTION
      10.09. Governing
      Law; Jurisdiction; Etc.

     

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

     

    (b)
      Submission
      to Jurisdiction.
      Each
      Obligor hereby irrevocably and unconditionally submits, for itself and its
      property, to the nonexclusive jurisdiction of the Supreme Court of the State
      of
      New York sitting in New York County and of the United States 

     

    
      
        
        

      

      
        -61-

        
          

        

      

      
        
        

      

    

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

     

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

     

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

    

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

     

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

     

    
      
        
        

      

      
        -62-

        
          

        

      

      
        
        

      

    

    

     

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

     

    SECTION
      10.12. Treatment
      of Certain Information; Confidentiality.

     

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

     

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

    
      
        
        

      

      
        -63-

        
          

        

      

      
        
        

      

    

    Person
      would accord to its own confidential information. Notwithstanding the foregoing,
      each of the Administrative Agent and the Lenders agree that they will not trade
      the securities of any of the Account Parties based upon non-public Information
      that is received by them.

    

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

    

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

    
      
        
        

      

      
        -64-

        
          

        

      

      
        
        

      

    

    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.

    

    XL
      CAPITAL LTD., 

    
      	 	
              as
                an Account Party and a Guarantor

            

    

    

    

    By____/s/
      Henry T. French_________________

    Name:
      Henry T. French

    Title:
      Senior Vice President

    

    U.S.
      Federal Tax Identification No.:
      98-0191089

    

    
      	 	
              X.L.
                AMERICA, INC., 

            

    

    
      	 	
              as
                an Account Party and a Guarantor

            

    

    

    

    By_____/s/
      Gabriel G. Carino____________

    Name:
      Gabriel G. Carino

    Title:
      Vice President

    

    U.S.
      Federal Tax Identification No.:
      06-1516268

    

    

    
      	 	
              XL
                INSURANCE (BERMUDA) LTD, 

            

    

    
      	 	
              as
                an Account Party and a Guarantor

            

    

    

    

    By_____/s/
      Christopher A. Coelho________

    Name:
      Christopher A. Coelho

    Title:
      Senior Vice President & Chief Financial Officer

    

    U.S.
      Federal Tax Identification No.:
      98-0354869

    

    

    
      	 	
              XL
                RE LTD, 

            

    

    
      	 	
              as
                an Account Party and a Guarantor

            

    

    

    

    By____/s/
      Gregory S. Hendrick____________

    Name:
      Gregory S. Hendrick

    Title:
      President & Chief Underwriting Officer

    

    U.S.
      Federal Tax Identification No.:
      98-0351953

    

    

    
      
        
        

      

      
        -65-

        
          

        

      

      
        
        

      

    

    

    LENDERS

    

    JPMORGAN
      CHASE BANK, N.A.,

    
      	 	 	
              individually
                and as Administrative Agent

            

    

    

    

    By: /s/
      Helen L. Newcomb 

    Name:
      Helen L. Newcomb

    Title:
      Managing Director

    

    

    WACHOVIA
      BANK, NATIONAL ASSOCIATION

    

    

    By: /s/
      Joan Anderson  

    Name:
      Joan Anderson

    Title:
      Director

    

    

    ABN
      AMRO
      BANK N.V.

    

    

    By: /s/
      Neil R. Stein  

    Name:
      Neil R. Stein

    Title:
      Director

    

    By: /s/
      Michael DeMarco  

    Name:
      Michael DeMarco

    Title:
      Vice President

    

    

    THE
      ROYAL
      BANK OF SCOTLAND PLC

    

    By: /s/
      Maria Amaral-LeBlanc 

    Name:
      Maria Amaral-LeBlanc

    Title:
      Senior Vice President

    

    

    
      
        
        

      

      
        -66-

        
          

        

      

      
        
        

      

    

    
 

    

    BAYERISCHE
      HYPO-UND VEREINSBANK, 
NEW YORK BRANCH

    

    

    By: /s/
      Michael Imperiale  

    Name:
      Michael Imperiale

    Title:
      Director

    

    By: /s/
      Paul Dolan   

    Name:
      Paul Dolan

    Title:
      Director

    

    

    BAYERISCHE
      LANDESBANK, NEW YORK 
BRANCH

    

    

    By: /s/
      Patricia M. Healy  

    Name:
      Patricia M. Healy

    Title:
      First Vice President

    

    By: /s/
      Norman McClave  

    Name:
      Norman McClave

    Title:
      First Vice President

    

    

    ING
      BANK
      N.V., LONDON BRANCH

    

    

    By: /s/
      I.
      Taylor   

    Name:
      I.
      Taylor

    Title:
      Managing Director

    

    By: /s/
      P.
      Galpin   

    Name:
      P.
      Galpin

    Title:
      Director

    

    

    MIZUHO
      CORPORATE BANK (USA)

    

    

    By: /s/
      Robert Gallagher  

    Name:
      Robert Gallagher

    Title:
      Senior Vice President

    

    

    
      
        
        

      

      
        -67-

        
          

        

      

      
        
        

      

    

    

    

    SCHEDULE
      I

     

    Commitments

     

    
      	
              Name
                of Lender

            	
              Commitment
                ($)

            
	
              JPMorgan
                Chase Bank, N.A.

            	
              $80,000,000

            
	
              Wachovia
                Bank, National Association

            	
              $80,000,000

            
	
              ABN
                AMRO Bank N.V.

            	
              $70,000,000

            
	
              The
                Royal Bank of Scotland plc

            	
              $70,000,000

            
	
              Bayerische
                Hypo-und Vereinsbank, New York Branch

            	
              $50,000,000

            
	
              Bayerische
                Landesbank, New York Branch

            	
              $50,000,000

            
	
              ING
                Bank N.V., London Branch

            	
              $50,000,000

            
	
              Mizuho
                Corporate Bank (USA)

            	
              $50,000,000

            
	 	 
	
              Total

            	
              $500,000,000

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      II

    

    Indebtedness
      and Liens

    

    [See
      Section 7.07(f) and Section 7.03(a)]

    

    Part
      A -
      Indebtedness

    

    
      	1.  	
              Five-Year
                Credit Agreement dated as of June 22, 2005, between XL Capital Ltd,
                X.L.
                America, Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as account
                parties and guarantors, the lenders party thereto and JPMorgan Chase
                Bank,
                as administrative agent.

            

    

    

    
      	2.  	
              Three-Year
                Credit Agreement, dated as of June 23, 2004, between XL Capital Ltd,
                X.L.
                America, Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as account
                parties and guarantors, the lenders party thereto, and JPMorgan Chase
                Bank, as administrative agent.

            

    

    

    
      	3.  	
              Amendment
                No. 1 dated as of June 22, 2005 to the Three-Year Credit Agreement
                dated
                as of June 23, 2004 between XL Capital Ltd, X.L. America, Inc., XL
                Insurance (Bermuda) Ltd and XL Re Ltd, as account parties and guarantors,
                the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
                agent.

            

    

    

    
      	4.  	
              Credit
                Agreement dated as of August 3, 2005 between XL Capital Ltd, X.L.
                America,
                Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as borrowers and
                guarantors, and Bear Stearns Corporate Lending Inc., as
                lender.

            

    

    

    
      	5.  	
              Pledge
                Agreement dated as of December 18, 2001, made by XL Investments Ltd,
                XL Re
                Ltd, XL Insurance (Bermuda) Ltd and XL Europe Ltd as grantors and
                in
                favour of Citibank, N.A.

            

    

    

    
      	6.  	
              Amendment
                No. 1 dated as of July 1, 2003, to the Pledge Agreement dated as
                of
                December 18, 2001, made by XL Investments Ltd, XL Re Ltd, XL Insurance
                (Bermuda) Ltd and XL Europe Ltd as grantors and in favour of Citibank,
                N.A.

            

    

    

    
      	7.  	
              Insurance
                Letters of Credit - Master Agreement dated May 19, 1993, between
                XL Re Ltd
                and Citibank, N.A. 

            

    

    

    
      	8.  	
              Letter
                of Credit Facility and Reimbursement Agreement dated March 14, 2006,
                between XL Capital Ltd, as account party and XL Capital Ltd, X.L.
                America,
                Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as guarantors and
                Citibank
                International plc, as agent and trustee for the lenders party thereto.
                

            

    

    

    
      	9.  	
              6.58%
                guaranteed senior notes due April 12, 2011, under the Note Purchase
                Agreement dated as of April 12, 2001, issued by X.L. America, Inc.
                and
                guaranteed by XL Capital Ltd, XL Insurance (Bermuda) Ltd, and XL
                Re Ltd.
                

            

    

    

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

            

    

    

    
      	11.  	
              Reinsurance
                Standby Letter of Credit Agreement dated October 7, 1999, between
                Le Mans
                Re and Paribas.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

    
 

    
      	12.  	
              First
                Renewal dated November 27, 2000, to the Reinsurance Standby Letter
                of
                Credit Agreement dated October 7, 1999, between Le Mans Re and
                Paribas.

            

    

    

    
      	13.  	
              Service
                Agreement Relative to Sureties, Letters of Guarantees and International
                Stand-by L/Cs dated April 25, 2003, between Le Mans Re and Credit
                Lyonnais.

            

    

    

    
      	14.  	
              Master
                Standby Letter of Credit and Reimbursement Agreement dated as of
                September
                30, 2005, among National Australia Bank Limited, New York Branch
                and XL
                Capital Ltd, XL America, Inc, XL Insurance (Bermuda) Ltd and XL Re
                Ltd, as
                account parties.

            

    

    

    
      	15.  	
              Amendment
                Agreement, dated as of December 30, 2005 to Master Standby Letter
                of
                Credit and Reimbursement Agreement dated as of September 30, 2005,
                among
                National Australia Bank Limited, New York Branch and XL Capital Ltd,
                XL
                America, Inc, XL Insurance (Bermuda) Ltd and XL Re Ltd, as account
                parties.

            

    

    

    
      	16.  	
              Customer
                Agreement dated May 7, 2002, between XL Trading Partners Ltd and
                Banc One
                Capital Markets, Inc. 

            

    

    

    
      	17.  	
              International
                Uniform Brokerage Execution Services ("Give-Up") Agreement dated
                February
                6, 2002, among Banc One Capital Markets, Inc., as Executing Broker,
                and
                GNI Incorporated, as Clearing Broker and XL Trading Partners Ltd.
                

            

    

    

    
      	18.  	
              Revolving
                Credit and Security Agreement dated as of February 25, 2003, between
                XL Re
                Ltd as borrower, Corporate Asset Funding Company, Inc., Corporate
                Receivables Corporation, Charta Corporation, Ciesco, L.P., and Citibank,
                N.A., as lenders thereto and Citicorp North America, Inc. as
                agent.

            

    

    

    
      	19.  	
              Agreement
                of Amendment, dated as of February 23, 2004, to the Revolving Credit
                and
                Security Agreement, dated as of February 25, 2003, among XL Re Ltd,
                as
                Borrower, CAFCO, LLC (formerly Corporate Asset Funding Company, Inc.),
                CRC
                Funding, LLC (formerly Corporate Receivables Corporation), CHARTA,
                LLC
                (formerly CHARTA Corporation) and CIESCO, LLC (formerly CIESCO, L.P.),
                as
                Lenders, Citibank, N.A. and the other Secondary Lenders from time
                to time
                parties thereto, as Secondary Lenders, and Citicorp North America,
                Inc.,
                as Agent.

            

    

    

    
      	20.  	
              Amendment
                dated as of May 10, 2004, to the Revolving Credit and Security Agreement
                dated as of February 25, 2003, among XL Re Ltd as the borrower, CAFCO,
                LLC, CRC Funding, LLC, CHARTA, LLC, CIESCO, LLC, Citibank, N.A. and
                Citicorp North America, Inc., as the agent.

            

    

    

    
      	21.  	
              Agreement
                of Amendment, dated as of February 18, 2005, to the Revolving Credit
                and
                Security Agreement, dated as of February 25, 2003, among XL Re Ltd,
                as
                Borrower, CAFCO, LLC (formerly Corporate Asset Funding Company, Inc.),
                CRC
                Funding, LLC (formerly Corporate Receivables Corporation), CHARTA,
                LLC
                (formerly CHARTA Corporation) and CIESCO, LLC (formerly CIESCO, L.P.),
                as
                Lenders, Citibank, N.A. and the other Secondary Lenders from time
                to time
                parties thereto, as Secondary Lenders, and Citicorp North America,
                Inc.,
                as Agent. 

            

    

    

    
      	22.  	
              Amendment
                dated as of May 10, 2004, to the Control Agreement dated as of February
                25, 2003, among XL Re Ltd as the borrower, Citibank North America,
                Inc. as
                the Agent and Mellon Bank, N.A., as the securities
                intermediary.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    
 

    
      	23.  	
              Agreement
                of Amendment, dated as of February 16, 2006, to the Revolving Credit
                and
                Security Agreement, dated as of February 25, 2003, among XL Re Ltd,
                as
                Borrower, CAFCO, LLC, CRC Funding, LLC, CHARTA, LLC and CIESCO, LLC,
                as
                Lenders, Citibank, N.A. and the other Secondary Lenders from time
                to time
                parties thereto, as Secondary Lenders, and Citicorp North America,
                Inc.,
                as Agent.

            

    

    

    
      	24.  	
              Agreement
                of Amendment, dated as of February 16, 2006 to the Control Agreement
                dated
                as of February 25, 2003, among XL Re Ltd as the borrower, Citibank
                North
                America, Inc. as the Agent and Mellon Bank, N.A., as the securities
                intermediary.

            

    

    

    
      	25.  	
              Senior
                Debt Securities Indenture, dated as of January 23, 2003, between
                XL
                Capital Ltd and U.S. Bank National Association, as
                Trustee.

            

    

    

    
      	26.  	
              2.53%
                Senior Notes due May 15, 2009, under the First Supplemental Indenture,
                dated as of March 23, 2004, to the Senior Debt Securities, dated
                January
                23, 2003, between XL Capital Ltd and U.S. Bank National Association,
                as
                Trustee.

            

    

    

    
      	27.  	
              Indenture,
                dated as of June 2, 2004, between XL Capital Ltd and The Bank of
                New York,
                as Trustee.

            

    

    

    
      	28.  	
              5.25%
                Senior Notes due 2014, under the First Supplemental Indenture, dated
                as of
                August 23, 2004, to the Indenture dated as of June 2, 2004 between
                XL
                Capital Ltd and the Bank of New York, as
                Trustee.

            

    

    

    
      	29.  	
              6.375%
                Senior Notes due 2024, under the Second Supplemental Indenture, dated
                as
                of November 12, 2004, to the Indenture, dated as of June 2, 2004,
                between
                XL Capital Ltd and The Bank of New York, as
                Trustee.

            

    

    

    
      	30.  	
              5.25%
                Senior Notes due February 15, 2011, under the Third Supplemental
                Indenture, dated as of December 9, 2005, to the Indenture, dated
                as of
                June 2, 2004, between XL Capital Ltd and The Bank of New York, as
                trustee.

            

    

    

    
      	31.  	
              364-day
                Credit Agreement dated as of December
                23, 2005 between XL Capital Ltd, X.L. America, Inc., XL Insurance
                (Bermuda) Ltd and XL Re Ltd, as Account Parties and Guarantors, and
                Deutsche Bank AG, New York Branch, as Lender.

            

    

    

    Part
      B -
      Liens

    

    

    
      	1.  	
              Insurance
                Letters of Credit - Master Agreement dated May 19, 1993, between
                XL Re Ltd
                and Citibank, N.A. 

            

    

    

    
      	2.  	
              Pledge
                Agreement dated as of December 18, 2001, made by XL Investments Ltd,
                XL Re
                Ltd, XL Insurance (Bermuda) Ltd and XL Europe Ltd as grantors and
                in
                favour of Citibank, N.A. 

            

    

    

    
      	3.  	
              Amendment
                No. 1 dated as of July 1, 2003, to the Pledge Agreement dated as
                of
                December 18, 2001, made by XL Investments Ltd, XL Re Ltd, XL Insurance
                (Bermuda) Ltd and XL Europe Ltd as grantors and in favour of Citibank,
                N.A. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -4-

      

    

     

    
 

    
      	4.  	
              Reinsurance
                Standby Letter of Credit Agreement dated October 7, 1999, between
                Le Mans
                Re and Paribas. 

            

    

    

    
      	5.  	
              First
                Renewal dated November 27, 2000, to the Reinsurance Standby Letter
                of
                Credit Agreement dated October 7, 1999, between Le Mans Re and Paribas.
                

            

    

    

    
      	6.  	
              Service
                Agreement Relative to Sureties, Letters of Guarantees and International
                Stand-by L/Cs dated April 25, 2003, between Le Mans Re and Credit
                Lyonnais. 

            

    

    

    
      	7.  	
              Addendum,
                dated October 9, 2002, to Futures Institutional Client Account Agreement,
                dated March 4, 2002, between ABN AMRO Incorporated and XL Trading
                Partners
                Ltd. 

            

    

    

    
      	8.  	
              Customer
                Agreement dated May 7, 2002, between XL Trading Partners Ltd and
                Banc One
                Capital Markets, Inc.

            

    

    

    
      	9.  	
              International
                Uniform Brokerage Execution Services ("Give-Up") Agreement dated
                February
                6, 2002, among Banc One Capital Markets, Inc., as Executing Broker,
                and
                GNI Incorporated, as Clearing Broker and XL Trading Partners Ltd.
                

            

    

    

    
      	10.  	
              Assignment
                Agreement dated July 11, 2003, among XL Re Ltd, Mangrove Bay Trust
                and The
                Bank of New York.

            

    

    

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      III

     

    Litigation

    

    [See
      Section 4.06(a)]

    

    None.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      IV

     

    Environmental
      Matters

    

    [See
      Section 4.06(b)]

    

    None.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      V

     

    Subsidiaries

    

    [See
      Section 4.13]

    

    

    [See
      Attached]

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    

    ASSIGNMENT
      AND ASSUMPTION

    

    

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

    

    For
      an
      agreed consideration, the Assignor hereby irrevocably sells and assigns to
      the
      Assignee, and the Assignee hereby irrevocably purchases and assumes from the
      Assignor, subject to and in accordance with the Standard Terms and Conditions
      and the Credit Agreement, as of the Effective Date inserted by the
      Administrative Agent as contemplated below (i) all of the Assignor’s rights and
      obligations in its capacity as a Lender under the Credit Agreement and any
      other
      documents or instruments delivered pursuant thereto to the extent related to
      the
      amount and percentage interest identified below of all of such outstanding
      rights and obligations of the Assignor under the 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]1 
      [and is
      a NAIC Approved Bank]2 
      ]

    

    3.
      Account Parties:   XL
      Capital Ltd, X.L. America, Inc., XL Insurance (Bermuda) Ltd and XL Re
      Ltd

     

     

     

      
        

      

       

      1
        Select as applicable.

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

       

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

    
 

    4. Administrative
      Agent: JPMorgan
      Chase Bank, N.A., as the administrative agent under the Credit
      Agreement

    

    5. Credit
      Agreement:       Credit
      Agreement dated as of May 9, 2006 (as amended and in effect from time to time,
      the “Credit
      Agreement”),  between
      XL Capital Ltd, X.L. America, Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd,
      the Lenders named therein and JPMorgan Chase Bank, N.A., as Administrative
      Agent

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    

    6. 
      Assigned
      Interest:

     

    
      	
              Aggregate
                Amount of Commitment/

              LC
                Disbursements for all Lenders

            	
              Amount
                of Commitment/

              LC
                Disbursements Assigned

            	
              Percentage
                Assigned of Commitment/

              LC
                Disbursements3 

            
	
              $

            	
              $

            	
              %

            
	
              $

            	
              $

            	
              %

            
	
              $

            	
              $

            	
              %

            

    

    

    

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

    

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

    

    ASSIGNOR

    

    
      	 	 	 	 	 	 	
              [NAME
                OF ASSIGNOR]

            

    

    

    

    By:______________________________

    Title:

    

    

    ASSIGNEE

    

    [NAME
      OF
      ASSIGNEE]

    

    

    By:______________________________

    Title:

     

     

      
        

      

    

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        -4-

      

    

    Consented
      to and Accepted:

    

    JPMORGAN
      CHASE BANK, N.A.,

    as
      Administrative Agent

    

    

    By_________________________________

    Title:

    

    

    [Consented
      to:]4  

    

    XL
      CAPITAL LTD

    

    

    By:_________________________

    Name:

    Title:

    

    

    X.L.
      AMERICA, INC.

    

    

    By_________________________

    Name:

    Title:

    

    

    XL
      INSURANCE (BERMUDA) LTD

    

    

    By_________________________

    Name:

    Title:

    

    

    XL
      RE
      LTD

    

    

    By_________________________

    Name:

    Title:]

    

    

    
      
        

      

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
      1

    

    CREDIT
      AGREEMENT DATED AS OF MAY 9, 2006, BETWEEN XL CAPITAL LTD, CERTAIN OF ITS
      SUBSIDIARIES, THE LENDERS NAMED THEREIN AND JPMORGAN CHASE BANK, N.A., AS
      ADMINISTRATIVE AGENT

    

    

    STANDARD
      TERMS AND CONDITIONS FOR

    ASSIGNMENT
      AND ASSUMPTION

    

    1.
      Representations
      and Warranties.
      

    

    1.1
      Assignor.
      The
      Assignor (a) represents and warrants that (i) it is the legal and beneficial
      owner of the Assigned Interest, (ii) the Assigned Interest is free and clear
      of
      any lien, encumbrance or other adverse claim and (iii) it has full power and
      authority, and has taken all action necessary, to execute and deliver this
      Assignment and Assumption and to consummate the transactions contemplated
      hereby; and (b) assumes no responsibility with respect to (i) any statements,
      warranties or representations made in or in connection with the Credit Agreement
      or any other Loan Document5 ,
      (ii)
      the execution, legality, validity, enforceability, genuineness, sufficiency
      or
      value of the Loan Documents or any collateral thereunder, (iii) the financial
      condition of any Account Party, any of its Subsidiaries or Affiliates or any
      other Person obligated in respect of any Loan Document or (iv) the performance
      or observance by any Account Party, any of its Subsidiaries or Affiliates or
      any
      other Person of any of their respective obligations under any Loan
      Document.

    

    1.2.
      Assignee.
      The
      Assignee (a) represents and warrants that (i) it has full power and authority,
      and has taken all action necessary, to execute and deliver this Assignment
      and
      Assumption and to consummate the transactions contemplated hereby and to become
      a Lender under the Credit Agreement, (ii) it satisfies the requirements, if
      any,
      specified in the Credit Agreement that are required to be satisfied by it in
      order to acquire the Assigned Interest and become a Lender, (iii) from and
      after
      the Effective Date, it shall be bound by the provisions of the Credit Agreement
      as a Lender thereunder and, to the extent of the Assigned Interest, shall have
      the obligations of a Lender thereunder, (iv) it has received a copy of the
      Credit Agreement, together with copies of the most recent financial statements
      delivered pursuant to Section 6.01 thereof, as applicable, and such other
      documents and information as it has deemed appropriate to make its own credit
      analysis and decision to enter into this Assignment and Assumption and to
      purchase the Assigned Interest on the basis of which it has made such analysis
      and decision independently and without reliance on the Administrative Agent
      or
      any other Lender, and (v) if it is a Foreign Lender6 ,
      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 

     

    
      

        

        
          5
            The term
“Loan Document” should be conformed to that used in the Credit
            Agreement.

        

        
          6
            The
            concept of “Foreign Lender” should be conformed to the section in the Credit
            Agreement governing withholding taxes and
            gross-up.

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

     

    by
      the
      Assignee; and (b) agrees that (i) it will, independently and without reliance
      on
      the Administrative Agent, the Assignor or any other Lender, and based on such
      documents and information as it shall deem appropriate at the time, continue
      to
      make its own credit decisions in taking or not taking action under the Loan
      Documents, and (ii) it will perform in accordance with their terms all of the
      obligations which by the terms of the Loan 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 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.

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B-1

    

    [Form
      of
      Opinion of Counsel to XL Capital]

    

    May
      9,
      2006

    

    To
      the
      Lenders party to the Credit Agreement 

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

    as
      Administrative Agent,

    270
      Park
      Avenue

    New
      York,
      New York 10017

    U.S.A.

    

    Dear
      Sirs,

    

    I
      am
      Executive Vice President and General Counsel of XL Capital Ltd and I am familiar
      with the affairs of XL Insurance (Bermuda) Ltd and XL Re Ltd (collectively,
      the
“Account Parties” and each an “Account Party”). I am furnishing this opinion to
      you pursuant to Section 5.01(b)(i) of the Credit Agreement dated as of May
      9,
      2006, between X.L. America, Inc. and the Account Parties, as account parties
      and
      guarantors, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as
      Administrative Agent (the “Agreement”). Unless otherwise defined herein,
      capitalized terms used herein have the meanings assigned to those terms in
      the
      Agreement.

    

    In
      this
      connection, I have examined the Agreement.

    

    For
      purposes of this opinion I have been informed that you are receiving an opinion
      of Richard G. McCarty, Executive Vice President and General Counsel of X.L.
      America, Inc., and opinions of Cahill Gordon & Reindel llp,
      Conyers, Dill & Pearman and Appleby Spurling Hunter, special New York,
      Bermuda and Cayman Islands legal counsel, respectively, for the Account Parties,
      as to, among other things, the Account Parties each having all the requisite
      power and authority and having taken all necessary corporate or other action
      to
      execute and deliver (and having duly authorized, executed and delivered) the
      Agreement. I have not independently verified any of the matters contained in
      such opinions or made any investigations in connection with any such
      matters.

    

    I
      have
      examined and relied upon the representations, warranties and covenants contained
      in the Agreement, certificates of public officials and of other officers of
      each
      of the Account Parties and such other documents and records as I deemed relevant
      and necessary as a basis for the opinions hereinafter expressed.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

     

    

    In
      rendering the opinions set forth below, I have assumed that the signatures
      on
      documents and instruments examined by me as originals are authentic and that
      all
      documents submitted to me as copies conform with the originals, which facts
      I
      have not independently verified.

    

    Based
      upon the foregoing, and subject to the assumptions, exceptions and
      qualifications set forth herein, I am of the opinion that:

    

    1. To
      my
      knowledge after due inquiry, except as disclosed in XL Capital Ltd’s annual
      report on Form 10-K filed with the SEC for the fiscal year ended December 31,
      2005 and as routinely encountered in claims activity, there is no litigation
      or
      governmental proceeding by or against any Account Party or any Subsidiary of
      any
      Account Party pending or threatened which could reasonably be expected (in
      light
      of reserves and total shareholder equity of such Account Party and after taking
      into account such Account Party’s business and activities) to have a Material
      Adverse Effect if adversely determined.

    

    2. Neither
      the execution and delivery of the Agreement or any other documents or
      instruments executed or delivered in connection with the Agreement, the
      consummation of the transactions therein contemplated, nor compliance with
      the
      terms and provisions thereof will conflict with or result in a breach of any
      of
      the terms, conditions or provisions of the articles of incorporation or by-laws
      or other organizational documents of any Account Party or of any applicable
      law
      or of any material agreement or instrument of which I have knowledge after
      due
      inquiry to which any Account Party is a party or by which it is bound or to
      which it is subject, or constitute a default thereunder or result in the
      creation or imposition of any Lien of any nature whatsoever upon any of the
      property of any Account Party pursuant to the terms of any such agreement or
      instrument, in each case, which conflict, default or Lien could reasonably
      be
      expected to have a Material Adverse Effect if adversely determined.

    

    3. To
      my
      knowledge, no Account Party is in violation of any charter document, corporate
      minute or resolution or any instrument or agreement of which I have knowledge
      after due inquiry, in each case binding on it or affecting its property in
      any
      manner which could have a Material Adverse Effect.

    

    4. To
      my
      knowledge after due inquiry, each Account Party is qualified to do business
      in
      those jurisdictions in which its ownership of property or the nature of its
      business activities is such that failure to be so qualified would have a
      Material Adverse Effect.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    
 

    In
      rendering this opinion, I express no opinions as to the laws of any
      jurisdictions other than the laws of the State of New York and the Federal
      laws
      of the United States of America.

    

    Neither
      this opinion nor any part hereof may be delivered to or used or relied upon
      by
      any person other than you and the Lenders without my prior written
      consent.

    

    Very
      truly yours,

    

    

    Charles
      F. Barr

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B-2

    

    [Form
      of
      Opinion of Counsel to XL America]

    

    

    May
      9,
      2006

    

    To
      the
      Lenders party to the Credit Agreement 

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

    as
      Administrative Agent,

    270
      Park
      Avenue

    New
      York,
      New York 10017

    U.S.A.

    

    Dear
      Sirs,

    

    I
      am
      Senior Vice President and General Counsel of X.L. America, Inc. (“XL America”).
      I am furnishing this opinion to you pursuant to Section 5.01(b)(ii) of the
      Credit Agreement dated as of May 9, 2006, between XL America, XL Capital Ltd
      (“XL Capital”), XL Insurance (Bermuda) Ltd and XL Re Ltd (collectively, the “XL
      Entities”), as account parties and guarantors (collectively, the “Account
      Parties”) , the Lenders parties thereto and JPMorgan Chase Bank, N.A., as
      Administrative Agent (the “Agreement”). Unless otherwise defined herein,
      capitalized terms used herein have the meanings assigned to those terms in
      the
      Agreement.

    

    In
      this
      connection, I have examined the Agreement.

    

    For
      purposes of this opinion I have been informed that you are receiving an opinion
      of Charles F. Barr, Executive Vice President and General Counsel of XL Capital
      and who is familiar with each of the XL Entities, and opinions of Cahill Gordon
      & Reindel llp,
      Conyers, Dill & Pearman and Appleby Spurling Hunter, special New York,
      Bermuda and Cayman Islands legal counsel, respectively, for the Account Parties,
      as to, among other things, the Account Parties each having all the requisite
      power and authority and having taken all necessary corporate or other action
      to
      execute and deliver (and having duly authorized, executed and delivered) the
      Agreement. I have not independently verified any of the matters contained in
      such opinions or made any investigations in connection with any such
      matters.

    

    I
      have
      examined and relied upon the representations, warranties and covenants contained
      in the Agreement, certificates of public officials and of other officers of
      each
      of the Account Parties and such other documents and records as I deemed relevant
      and necessary as a basis for the opinions hereinafter expressed.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

    
 

    In
      rendering the opinions set forth below, I have assumed that the signatures
      on
      documents and instruments examined by me as originals are authentic and that
      all
      documents submitted to me as copies conform with the originals, which facts
      I
      have not independently verified.

    

    Based
      upon the foregoing, and subject to the assumptions, exceptions and
      qualifications set forth herein, I am of the opinion that:

    

    1.
      XL
      America is duly incorporated under the laws of the State of
      Delaware.

    

    2.
      To my
      knowledge after due inquiry, except as routinely encountered in claims activity,
      there is no litigation or governmental proceeding by or against XL America
      or
      any Subsidiary of XL America pending or threatened which could reasonably be
      expected (in light of reserves and total shareholder equity of XL America and
      after taking into account XL America’s business and activities) to have a
      Material Adverse Effect if adversely determined.

    

    3.
      Neither the execution and delivery of the Agreement nor any other documents
      or
      instruments executed or delivered in connection with the Agreement, the
      consummation of the transactions therein contemplated nor compliance with the
      terms and provisions thereof will conflict with or result in a breach of any
      of
      the terms, conditions or provisions of the articles of incorporation or by-laws
      of XL America or of any applicable law or of any material agreement or
      instrument of which I have knowledge after due inquiry to which XL America
      is a
      party or by which it is bound or to which it is subject, or constitute a default
      thereunder or result in the creation or imposition of any Lien of any nature
      whatsoever upon any of the property of XL America pursuant to the terms of
      any
      such agreement or instrument.

    

    4.
      To my
      knowledge, XL America is not in violation of any charter document, corporate
      minute or resolution or any instrument or agreement of which I have knowledge
      after due inquiry, in each case binding on it or affecting its property in
      any
      manner which could have a Material Adverse Effect.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    
 

    5.
      To my
      knowledge after due inquiry, XL America is qualified to do business in those
      jurisdictions in which its ownership of property or the nature of its business
      activities is such that failure to be so qualified would have a Material Adverse
      Effect.

    

    In
      rendering this opinion, I express no opinions as to the laws of any
      jurisdictions other than the laws of the State of New York, the General
      Corporation Law of the State of Delaware and the Federal laws of the United
      States of America.

    

    Neither
      this opinion nor any part hereof may be delivered to or used or relied upon
      by
      any person other than you and the Lenders without my prior written
      consent.

    

    Very
      truly yours,

    

    

    Richard
      G. McCarty

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B-3

    

    [Form
      of
      Opinion of Special U.S. Counsel to the Obligors]

    

    

    May
      9,
      2006

    

    

    Re:              
      Credit
      Agreement (the “Agreement”) dated as of May 9, 2006, between XL Capital Ltd,
      X.L. America, Inc. (“XL America”), XL Insurance (Bermuda) Ltd and XL Re Ltd, as
      Account Parties and Guarantors (collectively, the “Loan Parties”), the Lenders
      party thereto and JPMorgan Chase Bank, N.A., as Administrative
      Agent.

    

    The
      Lenders party to the Agreement

    and
      JPMorgan Chase Bank, N.A.,

    as
      Administrative Agent

    270
      Park
      Avenue

    New
      York,
      New York 10017

    USA

    

    Ladies
      and Gentlemen:

    

    We
      have
      acted as special New York counsel to the Loan Parties in connection with the
      Agreement. This opinion is furnished to you at the request of the Loan Parties
      pursuant to section 5.01(b)(iii) of the Agreement. Unless otherwise defined
      herein, capitalized terms used herein have the meanings assigned to those terms
      in the Agreement.

    

    In
      this
      connection, we have examined the Agreement to be executed as of the date
      hereof.

    

    We
      have
      examined and relied upon the representations, warranties and covenants contained
      in the Agreement, certificates of public officials and of officers of the Loan
      Parties and such other documents and records as we deemed relevant and necessary
      as a basis for the opinions hereinafter expressed.

    

    In
      rendering the opinions set forth below, we have assumed that the signatures
      on
      documents and instruments examined by us as originals are authentic and that
      all
      documents submitted to us as copies conform with the originals, which facts
      we
      have not independently verified.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

    
 

    For
      purposes of this opinion, we have assumed that you have all requisite power
      and
      authority and have taken all necessary corporate or other action to execute
      and
      deliver (and have duly authorized, executed and delivered) the
      Agreement.

    

    No
      opinion is expressed herein with respect to (i) the enforceability of the
      set-off provisions of the Agreement, (ii) the enforceability of any waiver
      by
      any Loan Party of demand, (iii) the effect of the laws of any jurisdiction
      other than New York that limit rates of interest that may be charged or
      collected by the Lenders and (iv) the enforceability of any provision in
      the Agreement purporting to establish evidentiary standards.

    

    We
      express no opinion as to (i) whether a court would give effect to the
      choice of law provided for in the Agreement, (ii) Section 10.09 of the
      Agreement, insofar as such Section relates to the subject matter jurisdiction
      of
      any court to adjudicate any controversy related to the Agreement and
      (iii) the waiver of trial by jury set forth in Section 10.10 of the
      Agreement.

    

    Based
      upon the foregoing, and subject to the assumptions, exceptions and
      qualifications set forth herein, we are of the opinion that:

    

    1.
      XL
      America is validly existing as a corporation in good standing under the laws
      of
      the State of Delaware. XL America has the corporate power and authority to
      execute and deliver the Agreement and to perform its obligations
      thereunder.

    

    2.
      No
      authorization, consent, approval, license, exemption or other action by, and
      no
      registration, qualification, designation, declaration or filing with, any
      Governmental Authority is required in connection with (i) the execution and
      delivery by the Loan Parties of the Agreement, (ii) the consummation by the
      Loan Parties of the transactions contemplated by the Agreement or (iii) the
      performance by the Loan Parties of or compliance by the Loan Parties with the
      terms and conditions of the Agreement.

    

    3.
      The
      Agreement has been duly and validly authorized by XL America. The Agreement
      has
      been duly executed and delivered by the Loan Parties, and constitutes the legal,
      valid and binding obligation of the Loan Parties, enforceable in accordance
      with
      the terms thereof.

    

    4.
      None
      of the Loan Parties is an Investment Company as defined in the Investment
      Company Act of 1940.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    
 

    5.
      The
      execution and delivery by each Loan Party of, and the performance and incurrence
      by each Loan Party of its obligations and liabilities under, the Agreement
      does
      not and will not violate any applicable law presently existing or any published
      rule or regulation of the United States of America (including, without
      limitation, Regulations U or X of the Board) or the State of New
      York.

    

    The
      enforceability of the Agreement is subject to (i) bankruptcy, insolvency,
      reorganization, moratorium, fraudulent conveyance or transfer and similar laws
      affecting the enforcement of creditors’ rights generally and (ii) general
      principles of equity (regardless of whether such enforceability is considered
      in
      a proceeding at law or equity), including the principles of commercial
      reasonableness or conscienability.

    

    In
      rendering this opinion we express no opinions as to the laws of any
      jurisdictions other than the laws of the State of New York, the General
      Corporation Law of the State of Delaware and the federal laws of the United
      States of America.

    

    Neither
      this opinion nor any part hereof may be delivered to or used or relied upon
      by
      any person other than you and each of your successors and permitted assigns
      without our written consent.

    

    Very
      truly yours,

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B-4

    

    [Form
      of
      Opinion of Special Bermuda Counsel to XL Insurance and XL Re]

    

    May
      9,
      2006

    

    

      The
        Lenders party to the Agreement

      Referred
        to below and

      

      JP
        Morgan
        Chase Bank, N.A.,

      as
        administrative agent for such Lenders

      270
        Park
        Avenue

      New
        York,
        New York 10017 

      USA

    

    

    

    Dear
      Sirs

    

    XL
      Insurance (Bermuda) Ltd and XL Re Ltd (the “Companies”)

    

    We
      have
      acted as special legal counsel in Bermuda to the Companies in connection with
      a
      five-year credit agreement.

    

    For
      the
      purposes of giving this opinion, we have examined an executed copy of a Credit
      Agreement dated as of May 9, 2006, by and between XL Capital Ltd, X.L. America,
      Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, Lenders parties thereto and JP
      Morgan Chase Bank, N.A., as Administrative Agent (the “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 the memorandum of association and the bye-laws of each Company,
      each certified by the Secretary of the respective Company on May 9, 2006,
      certified copies of resolutions adopted by unanimous written resolution on
      April
      18, 2006 by XL Insurance (Bermuda) Ltd and April 6, 2006 by XL Re Ltd (the
      “Minutes”), and 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 each of the parties to the Credit Agreement, other than the
      Companies, to enter into and perform its respective obligations under the Credit
      Agreement, (d) the due execution of the Credit Agreement by each of the parties
      thereto, other than the Companies, and the delivery thereof by 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

     

    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 contained in the Minutes 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 laws in
      accordance with their respective terms, (i) the validity and binding effect
      under the Foreign Laws of the submission by each Company pursuant to the Credit
      Agreement to the Supreme Court of the State of New York sitting in New York
      County and the United States District Court of the Southern District 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 within Bermuda and that none of the parties
      to
      the Credit Agreement, other than the Companies, will perform its obligations
      under the Credit Agreement in or from within Bermuda.

    

    We
      have
      also assumed that at all material times each Company will comply with the
      conditions attached to its registration as an insurer the Insurance Act 1978
      and
      the regulations promulgated thereunder.

    

    The
      obligations of the Companies 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, (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
      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 the Companies.

    

    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.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    
 

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

    

    
      	
              1.

            	
              Each
                of the Companies 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 governmental 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.

            	
              The
                Companies have the necessary corporate power and authority to enter
                into
                and perform their respective obligations under the Credit Agreement.
                The
                execution and delivery of the Credit Agreement, as applicable, by
                each
                Company and the performance by each Company of its respective obligations
                thereunder will not violate the memorandum of association or bye-laws
                of
                the respective Company nor any applicable law, regulation, order
                or decree
                in Bermuda.

            

    

    

    
      	
              3.

            	
              The
                Companies have 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
                Company and constitutes the valid and binding obligations of each
                Company
                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.

            	
              It
                is not necessary or desirable to ensure the enforceability in Bermuda
                of
                the Credit Agreement that it be registered in any register kept by,
                or
                filed with, any governmental authority or regulatory body in
                Bermuda.

            

    

    

    
      	
              6.

            	
              There
                is no income or other tax of Bermuda imposed by withholding or otherwise
                on any payment to or by any Company pursuant to the Credit Agreement.
                The
                Credit Agreement will not be subject to ad valorem stamp duty in
                Bermuda.

            

    

    

    
      	
              7.

            	
              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 Company.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -4-

      

    

    
 

    
      	
              8.

            	
              The
                courts of Bermuda would recognise as a valid judgment a final and
                conclusive judgment in personam obtained in the Foreign Courts against
                the
                Company 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.

            

    

     

    
      	
              9.

            	
              The
                Companies are not 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 themselves
                or
                their property.

            

    

    

    
      	
              10.

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

            

    

    

    
      	
              11.

            	
              Based
                solely upon a search of the Cause Book of the Supreme Court of Bermuda
                conducted at 10:00 a.m. on May 9, 2006 (which would not reveal details
                of
                proceedings which have been filed but not actually entered in the
                Cause
                Book at the time of our search), there are no judgments against any
                of the
                Companies, nor any legal or governmental proceedings pending in Bermuda
                to
                which any of the Companies is
                subject.

            

    

    

    
      	
              Yours
                faithfully

            
	 
	 
	 
	
              CONYERS
                DILL & PEARMAN

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B-5

    [Form
      of
      Opinion of Special Cayman Islands Counsel to XL Capital]

     

     

    
      	
              JPMorgan
                Chase Bank, N.A.

              270
                Park Avenue

              New
                York, NY 10017

              USA

               

              (as
                administrative agent for the Lenders (as defined below))

              and
                to the Lenders

            	 
	 
	 
	 
	 
	 

    

    

    May
      9,
      2006 

     

    Dear
      Sirs,

    

    XL
      Capital Ltd

    

    We
      have
      acted as Cayman Islands counsel to XL Capital Ltd. (the “Company”).

    

    We
      have
      examined the following:

    

    
      	(1)  	
              a
                copy as executed of the Credit Agreement dated as of May 9, 2006
                (the
                “Document”) between the Company, X.L. America, Inc., XL Insurance
                (Bermuda) Ltd, and XL Re Ltd as account parties and guarantors, the
                lenders party thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as
                Administrative Agent (the “Agent”);

            

    

    

    
      	(2)  	
              a
                copy of the Certificate of Incorporation and Memorandum and Articles
                of
                Association of the Company as issued or registered with the Registrar
                of
                Companies in the Cayman Islands;
                and

            

    

    

    
      	(3)  	
              a
                certified copy (by the secretary of the Company) of an extract of
                the
                minutes of the meeting of the board of directors of the Company held
                on
                [_____], 2006 and the statutory corporate records of the Company
                maintained at its registered office in the Cayman
                Islands.

            

    

    

    In
      giving
      this opinion, we have relied upon the accuracy of a certificate of the secretary
      of the Company dated [____], 2006 without further verification. We have assumed
      without independent verification:

    

    
      	(a)  	
              the
                genuineness of all signatures, authenticity of all documents submitted
                to
                us as originals and the conformity with original documents of all
                documents submitted to us by telefax or as copies or conformed
                copies;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

    
 

    
      	(b)  	
              the
                Document is, or will be, legal, valid, binding and enforceable against
                all
                relevant parties in accordance with its terms under the laws of the
                State
                of New York (by which it is expressly governed) and all other relevant
                laws (other than the laws of the Cayman Islands) and the choice of
                the
                laws of the State of New York as the governing law of the Document
                is
                valid and binding under the laws the State of New York and all other
                relevant laws (other than the laws of the Cayman
                Islands);

            

    

    

    
      	(c)  	
              the
                power, authority and legal right of all parties to the Document (other
                than the Company) under all relevant laws and regulations (other
                than the
                laws of the Cayman Islands) to enter into, execute and perform their
                respective obligations under the Document and that the Document has
                been,
                or, as the case may be, will be duly authorised, executed and delivered
                by
                or on behalf of all relevant parties (other than the Company);
                and

            

    

    

    
      	(d)  	
              that
                the entry by the Company into the Document and the transactions
                contemplated therein are bona fide in the best interests of the
                Company.

            

    

    

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

    

    
      	1.  	
              The
                Company is duly incorporated and validly existing in good standing
                as a
                limited liability company under the laws of the Cayman Islands and
                has
                full power to enter into and perform its obligations under the Document
                and to carry on its business as contemplated in the
                Document.

            

    

    

    
      	2.  	
              The
                Company has taken all necessary corporate action to authorise the
                execution, delivery and performance of the Document and the transactions
                contemplated thereby.

            

    

    

    
      	3.  	
              Neither
                the execution nor delivery of the Document nor the transactions
                contemplated therein nor compliance with the terms and provisions
                thereof
                will (i) contravene any provision of any law, statute, decree, rule
                or
                regulation of the Cayman Islands or (ii) violate any provisions of
                the
                Memorandum and Articles of Association of the
                Company.

            

    

    

    
      	4.  	
              The
                Document has been duly executed by the
                Company.

            

    

    

    
      	5.  	
              The
                Document constitutes legal, valid and binding obligations of the
                Company
                enforceable in accordance with its
                terms.

            

    

    

    

    
      	6.  	
              The
                obligations of the Company under the Document are direct, general
                and
                unconditional obligations of the Company and rank at least pari passu
                with
                all other present or future unsecured and unsubordinated indebtedness
                of
                the Company.

            

    

    

    
      	7.  	
              No
                consents or approvals of or exemptions by any governmental or public
                bodies and/or authorities in the Cayman Islands are required in connection
                with the entry into, execution, delivery and performance by the Company
                of, or the validity, enforceability or admissibility in evidence
                of the
                Document. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    
 

    
      	8.  	
              It
                is not necessary or desirable to ensure the enforceability of the
                Document
                that it or any other instrument relating thereto be filed or registered
                in
                any court, public office or register in the Cayman Islands. Assuming
                that
                the arrangements with regard to the cash collateral to be placed
                with and
                held by the Administrative Agent following a default pursuant to
                Article
                VIII of the Document constitute a charge created by the Company as
                a
                matter of New York law (by which the Document is governed), the details
                of
                charges by Cayman Islands companies over their assets, wherever situated,
                are capable of being entered on the register of mortgages and charges
                required to be kept by the Company at its registered office in the
                Cayman
                Islands pursuant to the Companies Law (2004 Revision) (the “Companies
                Law”). Registration in such register is the only method of registration
                of
                charges over the assets of Cayman Islands companies in the Cayman
                Islands
                except charges over real property in the Cayman Islands or ships
                or
                aircraft registered in the Cayman Islands. Failure by the Company
                to enter
                in such register the details of any charge as required by the Companies
                Law does not affect the validity or enforceability of a charge and
                there
                is no time limit within which registration of a charge must be effected.
                However, in the event that questions of priority fall to be determined
                by
                reference to Cayman Islands law, such entry may, in our opinion,
                assist in
                establishing the priority of such charge, as a matter of common law,
                over
                any subsequent mortgage or charge which is registered subsequently
                in
                regard to the same assets.

            

    

    

    
      	9.  	
              There
                are no taxes or other governmental charges payable under the laws
                of the
                Cayman Islands or to any governmental authority of or in the Cayman
                Islands in respect of any amount payable under the
                Document.

            

    

    

    
      	10.  	
              Under
                Cayman Islands law there is no requirement for any of the parties
                to the
                Document to make any deduction from or any withholding of any part
                of any
                payment under the Document. Subject to the qualification below concerning
                stamp duty, there are no stamp or registration or similar taxes or
                charges
                payable in the Cayman Islands in respect of the Document or the
                enforcement thereof in the Courts of the Cayman
                Islands.

            

    

    

    
      	11.  	
              The
                Courts of the Cayman Islands will observe and give effect to the
                choice of
                the laws of the State of New York as the governing law of the Document.
                The express submission by the Company to the non-exclusive jurisdiction
                of
                the United States District Court for the Southern District of New
                York,
                and any court of the State of New York with respect to the Document
                is
                valid and binding upon the Company.

            

    

    

    
      	12.  	
              Under
                Cayman Islands law, neither the Company nor any of its properties
                or
                assets is immune on the ground of sovereignty or otherwise from
                institution of legal proceedings or the obtaining or execution of
                a
                judgment in the Cayman Islands.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -4-

      

    

    
 

    
      	13.  	
              It
                is not necessary under the laws of the Cayman Islands that the Agent
                or
                the Lenders be authorised or qualified to carry on business in the
                Cayman
                Islands for their entry into, execution, delivery, performance or
                enforcement of the Document. The foregoing opinion and the opinion
                in
                paragraph 14 below is subject to any statutory or regulatory obligation
                imposed under the laws of the Cayman Islands if a Cayman Islands
                branch or
                company carrying on business in or from the Cayman Islands enters
                into the
                Document as one of the bank parties
                thereto.

            

    

    

    
      	14.  	
              Neither
                the Agent nor any of the Lenders will be deemed to be resident, domiciled,
                carrying on business or subject to taxation in the Cayman islands
                by
                reason only of their entry into, execution, delivery, performance
                or
                enforcement of the Document.

            

    

    

    
      	15.  	
              So
                far as we are aware based solely on a review of the Cause Book and
                the
                Register of Writs and Other Originating Process maintained at the
                Clerk of
                Courts Office of the Grand Court of the Cayman Islands on [__], 2006
                in
                respect of proceedings filed with the Court during the period of
                twelve
                months prior to that date, (and assuming that such Cause Books are
                a
                complete record of proceedings filed with the Grand Court for that
                period), no steps have been, or are being taken, in the Cayman Islands
                for
                the appointment by the Grand Court of the Cayman Islands of a receiver
                or
                liquidator to, or for the liquidation or dissolution of the Company
                by
                order of the Grand Court.

            

    

    

    The
      opinions expressed above concerning, in particular, enforceability of the
      Document are, to the extent that Cayman Islands law might apply, subject to
      the
      following qualifications:

    

    
      	(a)  	
              The
                enforcement of the Document may be limited by applicable bankruptcy,
                insolvency, reorganisation, moratorium, limitation of actions, fraudulent
                dispositions or other similar laws relating to the enforcement of
                creditors rights generally and claims may become subject to the defence
                of
                set off or to counter claims.

            

    

    

    
      	(b)  	
              Obligations
                or liabilities of the Company otherwise than for the payment of money
                may
                not be enforceable in a Cayman Islands court by way of such equitable
                remedies as injunction or specific performance which remedies are
                in the
                discretion of such court. 

            

    

    

    
      	(c)  	
              Any
                provisions requiring any party to pay interest on overdue amounts
                in
                excess of the rate (if any) payable on such amounts before they become
                overdue or to pay any additional amounts on prepayment of any sums
                due or
                to pay sums on breach of any agreement other than such as represent
                a
                genuine pre-estimate of loss may be unenforceable if held by a Cayman
                Islands court to be a penalty.

            

    

    

    
      	(d)  	
              If
                any party to the Document is vested with a discretion or may determine
                a
                matter in its opinion, the courts of the Cayman Islands may require
                that
                such discretion is exercised reasonably or that such opinion is based
                on
                reasonable grounds.

            

    

    

    
      	(e)  	
              Any
                provision in the Document that certain calculations or certificates
                will
                be conclusive and binding will not necessarily prevent judicial
                enquiry.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -5-

      

    

    
 

    
      	(f)  	
              If
                any of the provisions of the Document is held to be illegal, invalid
                or
                unenforceable, the severance of such provisions from the remaining
                provisions of the Document will be subject to the exercise of the
                discretion of a Cayman Islands
                court.

            

    

    

    
      	(g)  	
              The
                Grand Court Rules 1995 of the Cayman Islands expressly contemplate
                that
                judgments may be granted by the Grand Court of the Cayman Islands
                in
                currencies other than Cayman Islands dollars or United States dollars.
                Such Rules provide for various specific rates of interest payable
                upon
                judgment debts according to the currency of the judgment. In the
                event the
                Company is placed into liquidation, the Grand Court is likely to
                require
                that all debts are converted (at the official exchange rate at the
                date of
                conversion) into and paid in a common currency which is likely to
                be
                Cayman Islands or United States
                dollars.

            

    

    

    
      	(h)  	
              The
                courts of the Cayman Islands are likely to award costs and disbursements
                in litigation in accordance with the relevant contractual provisions
                in
                the Document. There is some uncertainty, however, with regard to
                the
                recoverability of post-judgement costs which, if recoverable at all,
                are
                likely to be limited to an amount determined upon taxation or assessment
                of those costs pursuant to the Grand Court Rules 1995. In the absence
                of
                contractual provisions as to costs, the reasonable costs (as determined
                by
                taxation as aforesaid) of the successful party will normally be
                recoverable, subject to the limits laid down in guidelines made under
                such
                Rules as to the type and amount of fees and expenses that may be
                recovered. Such orders are in the discretion of the court and may
                be made
                to reflect particular circumstances of the case and the conduct of
                the
                parties.

            

    

    

    
      	(i)  	
              To
                be enforceable in the courts of the Cayman Islands, stamp duty will
                be
                chargeable as follows:

            

    

    

    
      	(i)  	
              on
                deeds such as the Document in the sum of
                CI$25.00;

            

    

    

    
      	(ii)  	
              on
                any promissory note issued pursuant to the Document at the ad valorem
                rate
                of CI$0.25 (US$0.30) for each CI$100 (US$121.95) covenanted to be
                paid
                thereunder with a maximum duty on each of the promissory notes of
                CI$250
                (US$304.88).

            

    

    

    Ad
      valorem stamp duty is payable within 45 days of execution or, if executed
      outside of the Cayman Islands, within 45 days of an executed, completed and
      delivered original of such document being brought into the Cayman Islands,
      for
      example, for enforcement. Otherwise stamp duty is payable on execution in order
      to avoid penalties if such document is to be admitted in evidence in a Cayman
      Islands court.

    

    
      	(j)  	
              We
                express no opinion as to any provision in the Document that it may
                only be
                varied by written instrument or
                agreement.

            

    

    

    
      	(k)  	
              Any
                provisions purporting to create rights in favour of, or obligations
                on,
                persons who are not party to the Document may not be enforceable
                by or
                against such persons. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -6-

      

    

    
 

    
      	(l)  	
              We
                express no opinion as to the effectiveness of the date of the Document
                if
                it is dated as of or with effect from a date prior to that on which
                it is
                authorised, executed and delivered by all parties
                thereto.

            

    

    

    
      	(m)  	
              The
                entry by the Company into the Document and the transactions contemplated
                therein should be of commercial benefit to the Company and determination
                of such benefit is a question of fact on which we express no opinion.
                The
                objects of the Company in its Memorandum of Association and pursuant
                to
                the Companies Law of the Cayman Islands are unrestricted and the
                transactions contemplated are therefore strictly speaking within
                the
                powers of the Company. It is possible that a Cayman Islands court
                would
                determine that a transaction which was of no commercial benefit to
                the
                Company was an abuse of the powers of the Directors of the Company
                and
                therefore voidable by the shareholders or a liquidator of the
                Company.

            

    

    

    We
      are
      practising in the Cayman Islands and do not purport to be experts on the laws
      of
      any other jurisdiction and we therefore express no opinion as to the laws of
      any
      jurisdiction other than Cayman Islands law. This opinion is also based upon
      the
      laws of the Cayman Islands in effect at the date hereof and is given only as
      to
      the circumstances existing on the date hereof and known to us.

    

    Except
      as
      specifically stated herein, we make no comment with regard to any
      representations or warranties which may be made by the Company in any of the
      documents referred to above or otherwise.

    

    This
      opinion is addressed to you and is solely for your benefit and the benefit
      of
      the Lenders. It may not be relied upon by any other person (other than any
      person which may become a Lender party to the Document after the date hereof)
      without our prior written consent.

    

    Yours
      faithfully,

     

     

    APPLEBY
      SPURLING HUNTER

    

    

    ___________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

     

     

    [Form
      of
      Opinion of Special New York Counsel to JPMCB]

     

    

     

    May
      9,
      2006

     

    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 (“JPMCB”)
      in
      connection with the Credit Agreement (the “Credit
      Agreement”)
      dated
      as of May 9, 2006, between XL Capital Ltd, X.L. America, Inc., XL Insurance
      (Bermuda) Ltd and XL Re Ltd, the lenders party thereto and JPMCB, as
      Administrative Agent, providing for letters of credit to be issued, or loans
      to
      be made, by said lenders to the Account Parties in an aggregate face amount
      not
      exceeding $500,000,000. Terms defined in the Credit Agreement are used herein
      as
      defined therein. This opinion letter is being delivered pursuant to
      Section 5.01(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 the Credit Agreement has been duly authorized, executed and
      delivered by, and (except, to the extent set forth below, as to the Obligors)
      constitutes a legal, valid, binding and enforceable obligation of, all of the
      parties thereto, that all signatories thereto have been duly authorized, that
      all such parties are duly organized and validly existing and have the power
      and
      authority (corporate or other) to execute, deliver and perform the same, and
      that all authorizations, approvals or consents of (including all foreign
      exchange control approvals), all filings or registrations with, any governmental
      or regulatory authority or agency of Bermuda or the Cayman Islands required
      for
      the making and performance by any Obligor of the Credit Agreement have been
      obtained or made and are in effect.

     

    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 Obligor party thereto, enforceable against such Obligor
      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, and subject
      to
      the possible 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

     

    judicial
      application of foreign laws or governmental action, 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 Sections 3.03 and 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 from, 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)
      Clause (iii) of the second sentence of Section 3.02 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 for the loan or use
      of
      money or other credit, (ii) the last sentence of Section 2.11(d),
      (iii) Section 3.08 of the Credit Agreement, (iv) Section 10.08 of the
      Credit Agreement, (v) 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,
      (vi) 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, (vii) Section 10.09(e) of the Credit
      Agreement to the extent it relates to immunity acquired after the date of
      execution and delivery of the Credit Agreement and (viii) Section 10.13 of
      the Credit Agreement.

     

    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 5.01(c)
      of the Credit Agreement, provided to you by us in our capacity as special New
      York counsel to JPMCB and may not be relied upon by any Person for any purpose
      other than in connection with the transactions contemplated by the Credit
      Agreement (other than your successors and assigns 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

     

     

    as
      Lenders and Persons that acquire participations in your extensions of credit
      under the Credit Agreement) without, in each instance, our prior written
      consent.

     

    Very
      truly yours,

     

    WJM/RJW

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    

    [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 May 9, 2006 (as amended and in
      effect, the “Credit
      Agreement”),
      among
      between XL Capital Ltd, X.L. America, Inc., XL Insurance (Bermuda) Ltd and
      XL Re
      Ltd, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative
      Agent. Terms defined in the Credit Agreement are used herein with the same
      meanings.

    

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

    

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

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

    
 

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

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    
 

    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 77002-6925, 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 Helen Newcomb (Telecopy No. (212)
      270-1511; Telephone No. (212) 270-6260).

    

    [NAME
      OF
      ISSUING LENDER]

    

    

    By____________________________

    Title:
      

    

    

    AGREED
      AS
      AFORESAID:

    

    [NAME
      OF
      CONFIRMING LENDER]

    

    

    By____________________________

    Title:

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