EXHIBIT 10.1
AMENDMENT NO. 1 TO LETTER OF CREDIT FACILITY AND REIMBURSEMENT
AGREEMENT
AMENDMENT NO. 1 dated as of December 23, 2005, between XL CAPITAL LTD,
a company incorporated under the laws of the Cayman Islands (the "Account
Party"), 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 the Account
Party in its capacity as a Guarantor, XL America, and XL Insurance, each a
"Guarantor" and collectively, the "Guarantors"; the Guarantors and the Account
Party being collectively referred to as the "Obligors"), CITIBANK INTERNATIONAL
PLC, as agent and trustee for the Lenders, the "Agent" and "Security Trustee".
The Obligors, the Lenders, the Agent and the Arrangers are parties to a
Letter of Credit and Reimbursement Facility Agreement dated November 17, 2004
(the "Credit Agreement"), providing, subject to the terms and conditions
thereof, for the issuance of letters of credit for the account of the Account
Party in an aggregate face amount not exceeding (pound sterling)450,000,000. The
Obligors, the Lenders and the Agent wish to amend the Credit Agreement in
certain respects. Each of the Lenders has provided to the Agent its written
consent to the amendments set out herein and accordingly the Agent (for itself
and for and on behalf of each of the Lenders), and the Obligors hereby agree as
follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. Amendments. Effective as provided in Section 4 below, the
Credit Agreement is hereby amended as follows:
2.01. References in the Credit Agreement (including references to the
Credit Agreement as amended hereby) to "this Agreement" (and indirect references
such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be
references to the Credit Agreement as amended hereby.
2.02. Clause 1.1 (Defined Terms) of the Credit Agreement is hereby
amended by inserting the following definitions (or, in the case of any of the
following defined terms that are already defined in the Credit Agreement, by
amending and restating in its entirety each such term as set forth below) in
their proper respective alphabetical locations:
(a) a new definition shall be included after the definition of the
term AMB Rating Undertaking as follows:
"Amendment No.1 means the letter agreement dated on or about 23 December
2005 relating to the Credit Agreement between, amongst others, the Account
Party, the Agent and the Security Trustee;"
(b) the definition of the term Commitment Termination Date shall be
deleted and replaced in its entirety with the following:
"Commitment Termination Date means 31 August 2006;"
(c) the definition of the term Consolidated Net Worth shall be deleted and
replaced in its entirety with the following:
"Consolidated Net Worth means, at any time, the consolidated
shareholders' equity of the Account Party and its Subsidiaries, provided
that the calculation of such consolidated shareholders' equity shall
exclude (a) the effect thereon of any adjustments required under Statement
of Financial Accounting Standard No. 115 ("Accounting for Certain
Investments in Debt and Equity Securities") (b) any Exempt Indebtedness
(and the assets relating thereto) in the event such Exempt Indebtedness is
consolidated on the balance sheet of the Account Party and its consolidated
Subsidiaries in accordance with GAAP;"
(d) the definition of the term Exempt Indebtedness shall be deleted and
replaced in its entirety with the following:
"Exempt Indebtedness means any Indebtedness of any Person (other than
the Account Party or any of its Affiliates) that is consolidated on the
balance sheet of the Account Party 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 by
guarantees of the type referred to in clause (a) or (b) of the definition
of the term Indebtedness) by, or shall be secured by a Lien on any assets
owned by, the Account Party 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 the Account Party 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 the term Indebtedness);"
(e) the definition of the term Indebtedness shall be deleted and replaced
in its entirety with the following:
"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
the Account Party 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;".
(f) the definition of the term Total Funded Debt shall be deleted and
replaced in its entirety with the following:
"Total Funded Debt means, at any time, all Indebtedness of the Account
Party 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 the Account Party 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)."
2.03. Clause 17.5 (Financial Condition: No Material Adverse Change) of the
Credit Agreement is hereby amended and restated in its entirety as follows:
"(a) Financial Condition. The Account Party has heretofore furnished to the
Lenders the consolidated balance sheet and statements of income,
stockholders' equity and cash flows of the Account Party and its
consolidated Subsidiaries (A) as of and for the fiscal year ended December
31, 2004, reported on by PricewaterhouseCoopers LLP, independent public
accountants (as provided in the Account Party's Report on Form 10-K filed
with the SEC for the fiscal year ended December 31, 2004), and (B) as of
and for the fiscal quarter ended September 30, 2005, as provided in the
Account Party's Report on Form 10-Q filed with the SEC for the fiscal
quarter ended September 30, 2005. Such financial statements present fairly,
in all material respects, the financial position and results of operations
and cash flows of the 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 Bermuda 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, 2004, there has been no
material adverse change in the assets, business, financial condition or
operations of such Obligor and its Subsidiaries, taken as a whole, except
as disclosed in the Account Party's filings with the SEC."
2.04. The reference to "30 September 2004" in the second sentence of
Clause 17.14 (Subsidiaries) of the Credit Agreement is hereby amended to read
"30 September 2005".
2.05. Clause 19.3(a) (Liens) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
"(a) Liens existing on the date of Amendment No.1 and listed in Part B of
Schedule 2 (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 Liens listed in Part B of Schedule 2);"
2.06. Clause 19.3(h) (Liens) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(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 Obligors' or
any of their Subsidiary's business as an insurance or reinsurance company
(including GICs and Stable Value Instruments) or corporate member 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 the Account Party or any of its Affiliates) in the event such
Exempt Indebtedness is consolidated on the consolidated balance sheet of
the Account Party 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);"
2.07. Clause 19.7(f) (Indebtedness) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
"(f) Indebtedness existing at the date of Amendment No.1 and described in
Part A of Schedule 2 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof."
2.08. Part A of Schedule 2 to the Credit Agreement is hereby
deleted and replaced in its entirety with Part A of Schedule 2 attached at Annex
1 to this Amendment No. 1.
2.9. Part B of Schedule 2 to the Credit Agreement is hereby deleted and
replaced in its entirety with Part B of Schedule 2 attached at Annex 1 to this
Amendment No. 1.
2.10. Schedule 3 to the Credit Agreement is hereby deleted and replaced in
its entirety with Schedule 3 attached at Annex 2 to this Amendment No. 1.
Section 3. Representations and Warranties. Each Obligor hereby
represents and warrants to the Agent and the Lenders that (i) the
representations and warranties set forth in Clause 17 of the Credit Agreement
are, on the date hereof, true and complete as if made on the date hereof (and
after giving effect to this Amendment No. 1) and as if each reference in said
Clause 17 to "this Agreement"
includes reference to this Amendment No. 1 and (ii) both immediately prior to
and as of the date hereof, no Default has occurred and is continuing.
Section 4. Conditions Precedent. The amendments to the Credit
Agreement set forth in Section 2 above shall become effective, as of the date
hereof, upon the satisfaction of the following condition precedent:
4.01. Execution. This Amendment No. 1 shall have been executed and
delivered by each of the Obligors and Agent acting for itself and on behalf of
each of the Lenders (each of the Lenders having provided to the Agent its
written consent to the amendments set out herein) in accordance with Clause 23.3
(Amendments) of the Credit Agreement.
Section 5. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. Nothing in this
Amendment No. 1 shall constitute a waiver of any rights and/or remedies that the
Lenders and/or the Agent may have under the Credit Agreement and nothing
contained herein shall obligate the Lenders to grant any future waiver of any
provision of the Credit Agreement. This Amendment No.1 shall be designated as a
Finance Document. The Account Party shall pay all reasonable expenses incurred
by the Agent, including the reasonable fees, charges and disbursements of
Freshfields Bruckhaus Xxxxxxxx, special United Kingdom counsel to the Agent, in
connection with the preparation, negotiation, execution and delivery of this
Amendment No. 1. This Amendment No. 1 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
amendatory instrument and any of the parties hereto may execute this Amendment
No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed
by, and construed in accordance with, the laws of England and Wales. Clause 29.2
(Jurisdiction) and Clause 31 (Third Party Rights) of the Credit Agreement shall
be deemed incorporated in this Amendment No. 1 (with such conforming changes as
the context requires) as if set out herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
duly executed and delivered as a Deed as of the day and year first above
written.
The Account Party
EXECUTED as a DEED
for and on behalf of XL CAPITAL LTD
By /s/ Xxxxx X. X'Xxxx
---------------------------------
Name: Xxxxx X. X'Xxxx
Title: President and Chief Executive
Officer
Witness Name: Fiona Luck
---------------------
Signature: /s/ Fiona Luck
---------------------
Guarantors
EXECUTED as a DEED
for and on behalf of XL CAPITAL LTD
By /s/ Xxxxx X. X'Xxxx
--------------------------------
Name: Xxxxx X. X'Xxxx
Title: President and Chief Executive
Officer
Witness Name: Fiona Luck
---------------------
Signature: /s/ Fiona Luck
---------------------
SIGNED for and on behalf of
X.L. AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
SIGNED for and on behalf of
XL INSURANCE (BERMUDA) LTD
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Senior Vice President &
Chief Financial Officer
SIGNED for and on behalf of
XL RE LTD
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President & Chief
Underwriting Officer
Agent
SIGNED for and on behalf of
CITIBANK INTERNATIONAL PLC
By: /s/ Xxxxx Xxxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxxx
Title:
Security Trustee
SIGNED for and on behalf of
CITIBANK INTERNATIONAL PLC
By: /s/ Xxxxx Xxxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxxx
Title:
