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 J.P....
Exhibit
10.3
dated
as
of
May
9,
2006
between
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
_____________
X.X.
XXXXXX 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
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Page
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ARTICLE
I
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1
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DEFINITIONS
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1
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SECTION
1.01. Defined Terms
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1
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SECTION
1.02. Terms Generally
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12
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SECTION
1.03. Accounting Terms; GAAP and SAP
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13
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ARTICLE
II
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13
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THE
CREDITS
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13
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SECTION
2.01. Syndicated Letters of Credit.
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13
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SECTION
2.02. Issuance and Administration
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14
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SECTION
2.03. Reimbursement of LC Disbursements, Etc.
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15
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SECTION
2.04. Non-Syndicated Letters of Credit.
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18
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SECTION
2.05. Alternative Currency Letters of Credit.
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23
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SECTION
2.06. Termination and Reduction of the Commitments.
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24
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SECTION
2.07. Fees.
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25
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SECTION
2.08. Interest
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26
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SECTION
2.09. Increased Costs.
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26
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SECTION
2.10. Taxes.
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27
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SECTION
2.11. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
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29
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SECTION
2.12. Mitigation Obligations; Replacement of Lenders.
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30
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ARTICLE
III
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31
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GUARANTEE
|
31
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SECTION
3.01. The Guarantee
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31
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SECTION
3.02. Obligations Unconditional
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32
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SECTION
3.03. Reinstatement
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32
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SECTION
3.04. Subrogation
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33
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SECTION
3.05. Remedies
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33
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SECTION
3.06. Continuing Guarantee
|
33
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SECTION
3.07. Rights of Contribution
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33
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SECTION
3.08. General Limitation on Guarantee Obligations
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34
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ARTICLE
IV
|
34
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REPRESENTATIONS
AND WARRANTIES
|
34
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SECTION
4.01. Organization; Powers
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34
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SECTION
4.02. Authorization; Enforceability
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34
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SECTION
4.03. Governmental Approvals; No Conflicts
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34
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SECTION
4.04. Financial Condition; No Material Adverse Change.
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35
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SECTION
4.05. Properties.
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35
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SECTION
4.06. Litigation and Environmental Matters.
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35
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SECTION
4.07. Compliance with Laws and Agreements
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36
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SECTION
4.08. Investment Company Status
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36
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i
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SECTION
4.09. Taxes
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36
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SECTION
4.10. ERISA
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36
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SECTION
4.11. Disclosure
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37
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SECTION
4.12. Use of Credit
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37
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SECTION
4.13. Subsidiaries
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37
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SECTION
4.14. Withholding Taxes
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37
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SECTION
4.15. Stamp Taxes
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37
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SECTION
4.16. Legal Form
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37
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ARTICLE
V
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38
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CONDITIONS
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38
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SECTION
5.01. Effective Date
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38
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SECTION
5.02. Each Credit Event
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39
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ARTICLE
VI
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39
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AFFIRMATIVE
COVENANTS
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39
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SECTION
6.01. Financial Statements and Other Information
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39
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SECTION
6.02. Notices of Material Events
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42
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SECTION
6.03. Preservation of Existence and Franchises
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42
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SECTION
6.04. Insurance
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42
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SECTION
6.05. Maintenance of Properties
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42
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SECTION
6.06. Payment of Taxes and Other Potential Charges and Priority Claims;
Payment of Other Current Liabilities
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43
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SECTION
6.07. Financial Accounting Practices
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43
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SECTION
6.08. Compliance with Applicable Laws
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43
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SECTION
6.09. Use of Letters of Credit
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43
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SECTION
6.10. Continuation of and Change in Businesses
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44
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SECTION
6.11. Visitation
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44
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ARTICLE
VII
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44
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NEGATIVE
COVENANTS
|
44
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SECTION
7.01. Mergers
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44
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SECTION
7.02. Dispositions
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44
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SECTION
7.03. Liens
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45
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SECTION
7.04. Transactions with Affiliates
|
47
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SECTION
7.05. Ratio of Total Funded Debt to Total Capitalization
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47
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|
SECTION
7.06. Consolidated Net Worth
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48
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|
SECTION
7.07. Indebtedness
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48
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SECTION
7.08. Financial Strength Ratings
|
48
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SECTION
7.09. Private Act
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48
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ARTICLE
VIII
|
49
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EVENTS
OF DEFAULT
|
49
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ARTICLE
IX
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52
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THE
ADMINISTRATIVE AGENT
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52
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ARTICLE
X
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54
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ii
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MISCELLANEOUS
|
54
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SECTION
10.01. Notices
|
54
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SECTION
10.02. Waivers; Amendments.
|
54
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SECTION
10.03. Expenses; Indemnity; Damage Waiver.
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56
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|
SECTION
10.04. Successors and Assigns.
|
57
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SECTION
10.05. Survival
|
60
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|
SECTION
10.06. Counterparts; Integration; Effectiveness
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61
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|
SECTION
10.07. Severability
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61
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SECTION
10.08. Right of Setoff
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61
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SECTION
10.09. Governing Law; Jurisdiction; Etc.
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61
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SECTION
10.10. WAIVER OF JURY TRIAL
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62
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SECTION
10.11. Headings
|
63
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SECTION
10.12. Treatment of Certain Information; Confidentiality.
|
63
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SECTION
10.13. Judgment Currency
|
64
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SECTION
10.14. USA PATRIOT Act
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64
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iii
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SCHEDULE
I
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-
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Commitments
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SCHEDULE
II
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Indebtedness
and Liens
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SCHEDULE
III
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Litigation
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SCHEDULE
IV
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-
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Environmental
Matters
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SCHEDULE
V
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-
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Subsidiaries
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EXHIBIT
A
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Form
of Assignment and Assumption
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EXHIBIT
B-1
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-
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Form
of Opinion of Counsel to XL Capital
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EXHIBIT
B-2
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-
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Form
of Opinion of Counsel to XL America
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EXHIBIT
B-3
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-
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Form
of Opinion of Special U.S. Counsel to the Obligors
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EXHIBIT
B-4
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-
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Form
of Opinion of Special Bermuda Counsel to XL Insurance and XL
Re
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EXHIBIT
B-5
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-
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Form
of Opinion of Special Cayman Islands Counsel to XL
Capital
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|
EXHIBIT
C
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-
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Form
of Opinion of Special New York Counsel to JPMCB
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EXHIBIT
D
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-
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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
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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.
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“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.
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“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
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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
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“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
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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.
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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.
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(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;
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(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
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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
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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 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 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
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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) Xxxxxxx X. Xxxx, Esq., counsel
to XL Capital, substantially in the form of Exhibit B-1, (ii) Xxxxxxx X.
XxXxxxx, Esq., counsel to XL America, substantially in the form of
Exhibit B-2, (iii) Xxxxxx Xxxxxx & Xxxxxxx llp,
special
U.S. counsel for the Obligors, substantially in the form of Exhibit B-3,
(iv) Xxxxxxx, Xxxx & Xxxxxxx, special Bermuda counsel to XL Insurance and XL
Re, substantially in the form of Exhibit B-4 and (v) Xxxxxxx Xxxxxxxx
Xxxxxx, 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, Xxxxxx & XxXxxx 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
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any
Lender or the Administrative Agent in connection herewith, including the
reasonable fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx 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:
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(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. Xxx, 0000.
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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 XX Xxxxx, Xxx Xxxxxxxxxx Xxxx, Xxxxxxxx
XX
00 Xxxxxxx, Xxxxxxxxx of Xxxxxxxx Xxxx (Telecopy No. (000) 000-0000);
with
a copy
to
Xxxxxxx Xxxxxx Xxxxx, Esq. at the same address and telecopy number (000)
000-0000);
(b)
if to
the Administrative Agent, to JPMorgan Chase Bank, N.A., 0000 Xxxxxx Xxxxxx,
00xx
Xxxxx,
Xxxxxxx, Xxxxx 00000-0000, Attention of Loan and Agency Services Group (Telecopy
No. (000) 000-0000; Telephone No. (000) 000-0000), with
a copy to
JPMorgan Chase Bank, N.A., 000 Xxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxx (Telecopy No.
(000) 000-0000; Telephone No. (000) 000-0000); 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,
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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
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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
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Xxxxxxxx
Xxxxx 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, 000 Xxxxxx Xxxxxx,
00xx
xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (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.
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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.
|
as
an Account Party and a Guarantor
|
By____/s/
Xxxxx X. French_________________
Name:
Xxxxx X. Xxxxxx
Title:
Senior Vice President
U.S.
Federal Tax Identification No.:
00-0000000
|
X.L.
AMERICA, INC.,
|
|
as
an Account Party and a Guarantor
|
By_____/s/
Xxxxxxx X. Carino____________
Name:
Xxxxxxx X. Xxxxxx
Title:
Vice President
U.S.
Federal Tax Identification No.:
00-0000000
|
XL
INSURANCE (BERMUDA) LTD,
|
|
as
an Account Party and a Guarantor
|
By_____/s/
Xxxxxxxxxxx X. Coelho________
Name:
Xxxxxxxxxxx X. Xxxxxx
Title:
Senior Vice President & Chief Financial Officer
U.S.
Federal Tax Identification No.:
00-0000000
|
XL
RE LTD,
|
|
as
an Account Party and a Guarantor
|
By____/s/
Xxxxxxx X. Hendrick____________
Name:
Xxxxxxx X. Xxxxxxxx
Title:
President & Chief Underwriting Officer
U.S.
Federal Tax Identification No.:
00-0000000
-65-
LENDERS
JPMORGAN
CHASE BANK, N.A.,
|
individually
and as Administrative Agent
|
By: /s/
Xxxxx X. Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
Managing Director
WACHOVIA
BANK, NATIONAL ASSOCIATION
By: /s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Director
ABN
AMRO
BANK N.V.
By: /s/
Xxxx X. Xxxxx
Name:
Xxxx X. Xxxxx
Title:
Director
By: /s/
Xxxxxxx XxXxxxx
Name:
Xxxxxxx XxXxxxx
Title:
Vice President
THE
ROYAL
BANK OF SCOTLAND PLC
By: /s/
Xxxxx Xxxxxx-XxXxxxx
Name:
Xxxxx Xxxxxx-XxXxxxx
Title:
Senior Vice President
-00-
XXXXXXXXXX
XXXX-XXX XXXXXXXXXXX,
XXX XXXX BRANCH
XXX XXXX BRANCH
By: /s/
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
Director
By: /s/
Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title:
Director
BAYERISCHE
LANDESBANK, NEW YORK
BRANCH
BRANCH
By: /s/
Xxxxxxxx X. Xxxxx
Name:
Xxxxxxxx X. Xxxxx
Title:
First Vice President
By: /s/
Xxxxxx XxXxxxx
Name:
Xxxxxx XxXxxxx
Title:
First Vice President
ING
BANK
N.V., LONDON BRANCH
By: /s/
X.
Xxxxxx
Name:
X.
Xxxxxx
Title:
Managing Director
By: /s/
X.
Xxxxxx
Name:
X.
Xxxxxx
Title:
Director
MIZUHO
CORPORATE BANK (USA)
By: /s/
Xxxxxx Xxxxxxxxx
Name:
Xxxxxx Xxxxxxxxx
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 Xxxxxxx 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, Xxxxxx, X.X., 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 XXXXXX, LLC (formerly XXXXXX, X.X.),
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, XXXXXX, 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 XXXXXX, LLC (formerly XXXXXX, X.X.),
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 XXXXXX, 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
referred
to below and JPMorgan Chase Bank, N.A.,
as
Administrative Agent,
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
X.X.X.
In
this
connection, I have examined the Agreement.
For
purposes of this opinion I have been informed that you are receiving an opinion
of Xxxxxxx X. XxXxxxx, Executive Vice President and General Counsel of X.L.
America, Inc., and opinions of Xxxxxx Xxxxxx & Xxxxxxx llp,
Xxxxxxx, Xxxx & Xxxxxxx and Xxxxxxx Xxxxxxxx Xxxxxx, 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,
Xxxxxxx
X. Xxxx
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,
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
X.X.X.
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 Xxxxxxx X. Xxxx, Executive Vice President and General Counsel of XL Capital
and who is familiar with each of the XL Entities, and opinions of Xxxxxx Xxxxxx
& Xxxxxxx llp,
Xxxxxxx, Xxxx & Xxxxxxx and Xxxxxxx Xxxxxxxx Xxxxxx, 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,
Xxxxxxx
X. XxXxxxx
EXHIBIT
B-3
[Form
of
Opinion of Special U.S. Counsel to the Obligors]
May
9,
2006
The
Lenders party to the Agreement
and
JPMorgan Chase Bank, N.A.,
as
Administrative Agent
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
XXX
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
XX
Xxxxxx
Xxxxx Bank, N.A.,
as
administrative agent for such Lenders
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
XXX
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 XX
Xxxxxx 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 Xxx 0000
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 xxxxxx
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
|
|
XXXXXXX
XXXX & XXXXXXX
|
EXHIBIT
B-5
[Form
of
Opinion of Special Cayman Islands Counsel to XL Capital]
|
JPMorgan
Chase Bank, N.A.
000
Xxxx Xxxxxx
Xxx
Xxxx, XX 00000
XXX
(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,
XXXXXXX
XXXXXXXX XXXXXX
___________________________
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 Xxxxxx, 00xx
Xxxxx,
Xxxxxxx, Xxxxx 00000-0000, Attention of Loan and Agency Services Group (Telecopy
No. (000) 000-0000; Telephone No. (000) 000-0000), with a copy thereof to
JPMorgan Chase Bank, N.A., 000 Xxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxx (Telecopy No. (000)
000-0000; Telephone No. (000) 000-0000).
[NAME
OF
ISSUING LENDER]
By____________________________
Title:
AGREED
AS
AFORESAID:
[NAME
OF
CONFIRMING LENDER]
By____________________________
Title:
