AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT
NO. 1, dated as of May 31, 2006 (this “Amendment No. 1”), to the Note Purchase
Agreement dated as of April 12, 2001 (the “Note Purchase Agreement”), among X.L.
AMERICA, INC., a Delaware corporation (the “Company”), XL CAPITAL LTD, a Cayman
Islands exempted limited company, XL INSURANCE (BERMUDA) LTD, a Bermuda limited
liability company, XL RE LTD, a Bermuda limited liability company, (XL Capital
Ltd, XL Insurance (Bermuda) Ltd. and XL Re Ltd., collectively, the “Guarantors”)
and the holders of the notes issued thereunder (the “Noteholders”).
WHEREAS,
The Company issued $255 million of its 6.58% Guaranteed Senior Notes due
April 12, 2011, and the Guarantors provided Guarantees of such notes,
pursuant to the Note Purchase Agreement; and
WHEREAS,
Article 17 of the Note Purchase Agreement provides for amendments and waivers
in
respect of the Note Purchase Agreement, the Notes and the Guarantees with the
written consent of the Company, the Guarantors and the Required Holders (being
the holders of at least 66 2/3% in principal amount of the Notes at such time
outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates));
NOW,
THEREFORE, in consideration of payment of a fee to the Noteholders in accordance
with Section 17.2(b) of the Note Purchase Agreement, as specified by that
certain consent solicitation statement of the Company and the Guarantors dated
as of May 4, 2006 (as supplemented by those certain letters of X.L. America
dated May 19, 2006 and May 24, 2006, the “Solicitation Statement”), the Company,
the Guarantors and the Noteholders signatory hereto hereby agree as
follows:
Section
1. Definitions.
Except
as otherwise defined in this Amendment No. 1, terms defined in the Note Purchase
Agreement are used herein as defined therein.
Section
2. Amendments.
Effective as of the date hereof upon the satisfaction of the conditions
precedent set forth in Section 5 of this Amendment No. 1, the Note Purchase
Agreement is hereby amended as follows:
2.01. References
in the Note Purchase Agreement to “this Agreement” (and indirect references such
as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be
references to the Note Purchase Agreement as amended hereby.
2.02. Schedule
B of the Note Purchase Agreement is hereby amended by inserting the following
definitions (or, in the case of any of the following defined terms that are
already defined in the Note Purchase Agreement, by amending and restating in
its
entirety each such term to read as set forth below) in their proper respective
alphabetical locations:
“Consolidated
Net Worth” means, at any date, the consolidated stockholders’ equity of XL
Capital and its Subsidiaries determined in accordance with GAAP, provided that
no interest of XL Capital and its Subsidiaries in SCA or any of its Subsidiaries
shall be taken into account in determining such consolidated stockholders’
equity.
“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, as described in the SCA
IPO Registration Statement.
“SCA
IPO
Registration Statement” means the registration statement on Form S-1 filed with
the SEC by SCA (Registration No. 333-133066).
“Significant
Subsidiary” means, as to any Person, a Subsidiary of such Person 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.
“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 the Company or any
Guarantor.
2.03. Article
10 of the Note Purchase Agreement is hereby amended by inserting the following
new Section 10.5(d):
(d)
Asset
Dispositions by the Company and/or the Guarantors (together, the “Account
Parties”) or any of their respective Subsidiaries to any other Account Party or
their respective Subsidiaries; provided, however that, prior to the consummation
of the SCA IPO, neither the Company nor any Guarantor nor any of their
respective Subsidiaries will make any Asset Disposition to SCA or any Person
that is or will become a Subsidiary of SCA other than as described and
cross-referenced under the caption “Formation Transactions” in Amendment
No. 1 to the SCA IPO Registration Statement filed on Form S-1/A with the
SEC as of May 24, 2006.
Section
3. Waiver.
Effective as of the date hereof upon satisfaction of the conditions precedent
set forth in Section 5 of this Amendment No. 1, notwithstanding anything in
the
Note Purchase Agreement to the contrary, the issuance or sale of shares of
SCA
pursuant to the SCA IPO shall be permitted and shall not be included as an
“Asset Disposition” for the purposes of calculating the basket under Section
10.5(b) of the Note Purchase Agreement available to the Company, the Guarantors
and their respective Subsidiaries for the calendar year ending December 31,
2006.
Section
4. Representations
and Warranties of the Company and the Guarantors.
To
induce the Noteholders to execute and deliver this Amendment No. 1 (which
representations and warranties shall survive the execution and delivery of
this
Amendment No. 1), the Company and the Guarantors jointly and severally represent
and warrant to the Noteholders (on the date hereof and on the date this
Amendment No. 1 becomes effective) that:
(a) this
Amendment No. 1 has been duly authorized, executed and delivered by the Company
and each Guarantor and this Agreement (and the Note Purchase Agreement, as
amended by this Agreement) constitutes the legal, valid and binding obligation,
contract and
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agreement
of the Company and each Guarantor enforceable against each of them in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating
to
or limiting creditors' rights generally;
(b) the
execution, delivery and performance by the Company and each Guarantor of this
Amendment No. 1 (i) does not require the consent or approval of any governmental
or regulatory body or agency, and (ii) will not (A) violate (1) any provision
of
law, statute, rule or regulation or the certificate of incorporation, bylaws
or
other constitutive document of the Company or any Guarantor, (2) any order
of
any court or any rule, regulation or order of any other agency or government
binding upon the Company or any Guarantor, or (3) any provision of any material
indenture, agreement or other instrument to which the Company or any Guarantor
is a party or by which its properties or assets are or may be bound, including,
without limitation, the agreements described in clause (f) (including the
agreements that have been amended as described therein) and clause (g) below,
or
(B) result in a breach or constitute (alone or with due notice or lapse of
time
or both) a default under any indenture, agreement or other instrument referred
to in clause (ii)(A)(3) of this Section 4(b);
(c) no
Default or Event of Default has occurred and is continuing;
(d) this
Agreement, the Solicitation Statement and the documents and other writings
delivered by or on behalf of the Company and the Guarantors to the Noteholders
and their counsel in connection with the transactions contemplated hereby,
taken
as a whole, do not contain any untrue statement of a material fact or omit
to
state any material fact necessary to make the statements therein not misleading
in light of the circumstances under which they were made;
(e) none
of
the equity interests of any Guarantor is owned, directly or indirectly by SCA
or
any of its Subsidiaries;
(f) the
Company and the Guarantors have entered into the following amendments of their
credit facilities with the financial institutions party thereto in connection
with the SCA IPO, as more fully set forth in the Forms 8-K filed by XL Capital
with the Securities and Exchange Commission on May 11, 2006, May 19, 2006 and
May 30, 2006: (a) Amendment No. 2 to Credit Agreement, dated as of May 5, 2006,
amending the Three-Year Credit Agreement, dated as of June 23, 2004, with
JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party
thereto, (b) Amendment No. 1 to Credit Agreement, dated as of May 5, 2006,
amending the Five-Year Credit Agreement, dated as of June 22, 2005, with
JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party
thereto, (c) Amendment No. 1 to Credit Agreement, dated as of May 9, 2006,
amending the Five-Year Credit Agreement, dated as of June 22, 2005, with Bear
Xxxxxxx Corporate Lending Inc. and the lenders party thereto, (d) Amendment
No.
1, dated as of May 15, 2006, to the 364-Day Credit Agreement, dated as of
December 23, 2005, with Deutsche Bank AG New York Branch, as the Lender, (e)
the
Letter of Amendment, dated as of May 16, 2006, to the Letter of Credit Facility
and Reimbursement Agreement, dated as of March 14, 2006, with Citibank
International plc, as Agent and Security Trustee and the lenders party thereto
and (f) the Amendment Agreement, dated as of May 26, 2006, amending the Master
Standby Letter of Credit and Reimbursement Agreement, dated as of September
30,
2006, with National Australia Bank Limited, New York Branch; each of such
amendments are in full force and effect and no fee of any kind has been or
will
be paid to any of such institutions in connection with such amendments and
no
amendment of any other agreement relating to Indebtedness of the Company or
any
Guarantor has been executed in connection with the SCA IPO; and
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(g) the
Company and the Guarantors have also entered into a Credit Agreement, dated
as
of May 9, 2006, with JPMorgan Chase Bank, N.A., as Administrative Agent, and
the
lenders party thereto; no fees of any kind were paid to the Administrative
Agent
or such lenders in connection therewith other than customary fees for a credit
facility of the type described in such agreement.
Section
5. Conditions
Precedent.
Subject
to Section 6 hereof, the amendments to the Note Purchase Agreement set forth
in
Section 2 of this Amendment No. 1 and the waiver set forth in Section 3 of
this
Amendment No. 1 shall become effective in accordance with Article 17 of the
Note
Purchase Agreement, as of the date hereof, upon (i) delivery to the Company
of
counterparts hereof executed by the Required Holders, (ii) delivery to the
Noteholders on or prior to May 31, 2006 of counterparts hereof executed by
the
Company and the Guarantors, (iii) payment by the Company and the Guarantors
of
an amendment fee to each Noteholder by wire transfer of immediately available
funds (in accordance with the wiring instructions for payments under the Note
Purchase Agreement previously provided by the Noteholders to the Company) in
an
aggregate amount equal to 0.125% (12.5 basis points) of the aggregate principal
amount of the Notes held by such Noteholder on the date hereof; provided that
the representations and warranties set forth in Section 5 were true and correct
on the date hereof and are true and correct immediately after the satisfaction
of the last to be completed of the conditions set forth in clauses (i), (ii)
and
(iii) of this Section 5.
Section
6. Termination
of Effectiveness.
The
amendments set forth in Section 2 hereof and the waiver set forth in Section
3
hereof shall cease to be effective on March 31, 2007 if the SCA IPO has not
been
consummated on or prior to such date.
Section
7. Miscellaneous.
Except
as herein provided, the Note Purchase Agreement shall remain unchanged and
in
full force and effect. This Amendment No. 1 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement. This Amendment No. 1 shall be governed by, and construed in
accordance with, the laws of the State of New York.
[signatures
follow]
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IN
WITNESS WHEREOF, the Company, the Guarantors and the Noteholders have caused
this instrument to be executed, all as of the day and year first above
written.
X.L.
AMERICA, INC.
By:
/s/
Xxxxx X. X’Xxxx
Name: Xxxxx
X.
X’Xxxx
Title: Director
By: /s/
Xxxxx X. X’Xxxx
Name:
Xxxxx
X.
X’Xxxx
Title:
President
& Chief Executive Officer
XL
INSURANCE (BERMUDA) LTD
By: /s/
Xxxxx X. Luck
Name:
Xxxxx
X.
Luck
Title:
Director
XL
RE LTD
By: /s/
Xxxxx X. Luck
Name:
Xxxxx
X.
Luck
Title:
Director
ING
USA
ANNUITY AND LIFE INSURANCE
COMPANY (successor by merger to each of Golden
American Life Insurance Company and Equitable
Life Insurance Company of Iowa)
COMPANY (successor by merger to each of Golden
American Life Insurance Company and Equitable
Life Insurance Company of Iowa)
ING
LIFE
INSURANCE & ANNUITY COMPANY
(fka Aetna Life Insurance & Annuity Company)
(fka Aetna Life Insurance & Annuity Company)
By: ING
Investment Management LLC, as Agent
By: /s/
Xxxx Xxxxxxx
Name: Xxxx
Xxxxxxx
Title: Vice
President
THE
NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
INSURANCE COMPANY
By: /s/
Xxxx X. Xxxxxxx
Name: Xxxx
X.
Xxxxxxx
Title:
Its
Authorized Representative
TEACHERS
INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
ASSOCIATION OF AMERICA
By: /s/
Xxxxx X. Xxxxxxxxx
Name: Xxxxx
X.
Xxxxxxxxx
Title:
Managing
Director
NEW
YORK
LIFE INSURANCE COMPANY
By: /s/
A.
Post Xxxxxxx
Name: A.
Post
Xxxxxxx
Title: Investment
Vice President
NEW
YORK
LIFE INSURANCE AND ANNUITY
CORPORATION
CORPORATION
By: New
York
Life Investment Management LLC,
Its
Investment Manager
By:
/s/
A.
Post Xxxxxxx
Name: A.
Post
Xxxxxxx
Title: Director
NATIONWIDE
LIFE INSURANCE COMPANY
NATIONWIDE
MUTUAL FIRE INSURANCE
COMPANY
COMPANY
NATIONWIDE
LIFE AND ANNUITY INSURANCE
COMPANY
COMPANY
NATIONWIDE
LIFE INSURANCE COMPANY
SEPARATE ACCOUNT NPPVA
SEPARATE ACCOUNT NPPVA
NATIONWIDE
INDEMNITY COMPANY
By:
/s/
Xxxxxx X. Xxxxx
Name: Xxxxxx
X.
Xxxxx
Title: Authorized
Signatory
MINNESOTA
LIFE INSURANCE COMPANY
By: Advantus
Capital Management, Inc.
By: /s/
Xxxxxx X. Xxxxxxxx
Name:
Xxxxxx
X.
Xxxxxxxx
Title: Vice
President
AMERICAN
REPUBLIC INSURANCE COMPANY
By: Advantus
Capital Management, Inc.
By: /s/
Xxxxxx X. Xxxxxxxx
Name: Xxxxxx
X.
Xxxxxxxx
Title: Vice
President
GREAT
WESTERN INSURANCE COMPANY
By: Advantus
Capital Management, Inc.
By: /s/
Xxxxxx X. Xxxxxxxx
Name: Xxxxxx
X.
Xxxxxxxx
Title:
Vice
President
THRIVENT
FINANCIAL FOR LUTHERANS
By: /s/
Xxxx X. Xxxxxx
Title: Associate
Portfolio Manager
