AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT
NO. 1 TO CREDIT AGREEMENT
AMENDMENT
NO. 1, dated as of May 15, 2006, to the Credit Agreement (as defined
below), between XL CAPITAL LTD, a Cayman Islands exempted limited company,
X.L.
AMERICA, INC., a Delaware corporation, XL INSURANCE (BERMUDA) LTD, a Bermuda
limited liability company, and XL RE LTD, a Bermuda limited liability company,
and DEUTSCHE BANK AG NEW YORK BRANCH, as the Lender.
The
Obligors and the Lender are parties to a 364-day Credit Agreement dated as
of
December 23, 2005 (the “Credit
Agreement”),
providing, subject to the terms and conditions thereof, for extensions of credit
to be made by or on behalf of the Lender to the Account Parties in an aggregate
principal or face amount not exceeding $100,000,000. The Obligors and the Lender
wish to amend the Credit Agreement in certain respects and, accordingly, the
parties hereto hereby agree as follows:
Section
1.
Definitions.
Except
as otherwise defined in this Amendment No. 1, terms defined in the Credit
Agreement are used herein as defined therein.
Section
2.
Amendments.
Effective as of the date hereof as provided in Section 5 of this Amendment
No. 1, the Credit Agreement is hereby amended as follows:
2.01.
References in the Credit Agreement to “this Agreement” (and indirect references
such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be
references to the Credit Agreement as amended hereby.
2.02.
Section 1.01 of the Credit Agreement is hereby amended by inserting the
following definitions (or, in the case of any of the following defined terms
that are already defined in the Credit Agreement, by amending and restating
in
its entirety each such term to read as set forth below) in their proper
respective alphabetical locations:
“SCA”
means
Security Capital Assurance Ltd, a Bermuda limited liability
company.
“SCA
IPO”
means
the issuance or sale of common shares of SCA to the public pursuant to an
effective registration statement filed under the Securities Act of 1933, as
amended, in connection with an underwritten offering.
“Significant
Subsidiary”
means,
at any time, each Subsidiary of XL Capital that, as of such time, meets the
definition of a “significant subsidiary” under Regulation S-X of the SEC;
provided,
however,
that
for purposes of this Agreement, from and after the consummation of the SCA
IPO,
neither SCA nor any of its Subsidiaries shall be a “Significant Subsidiary” of
XL Capital.
“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
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of
the
SCA IPO, neither SCA nor any of its Subsidiaries shall be a “Subsidiary” of any
Account Party.
Unless
otherwise specified, “Subsidiary” means a Subsidiary of an Account
Party.
“XL
Capital Group”
means
XL Capital Group as determined from time to time by A.M. Best & Co. (or its
successor).
2.03.
Section 6.09 of the Credit Agreement is hereby amended by inserting a new
sentence at the end thereof to read as follows:
“Notwithstanding
anything in this Section to the contrary, from and after the SCA IPO, no Account
Party will issue any Letter of Credit, or renew or permit to renew any Letter
of
Credit existing as of the SCA IPO, or use the proceeds of any Loan, to support
the obligations of, or otherwise primarily for the general corporate purposes
of, SCA and its Subsidiaries”.
2.04.
Section 7.07 and 7.08 of the Credit Agreement entitled “Financial Strength
Ratings” and “Private Act”, respectively, are hereby amended by re-numbering
such sections as Sections 7.08 and 7.09, respectively.
2.05
Section 7.08 of the Credit Agreement is hereby amended by inserting the
word “Group” immediately after the reference in the first line thereof to “XL
Capital”.
Section
3.
Waiver.
Effective as of the date hereof as provided in Section 5 of this Amendment
No. 1, the Lender hereby agrees that, notwithstanding anything in
Section 7.02 of the Credit Agreement to the contrary, the issuance or sale
of shares of SCA pursuant to the SCA IPO shall be permitted and shall not reduce
the basket under Section 7.02(b) of the Credit Agreement available to the
Account Parties and their respective Subsidiaries for the calendar year ending
December 31, 2006.
Section
4.
Representations
and Warranties.
Each
Account Party hereby represents and warrants to the Lender that (i) the
representations and warranties of such Account Party set forth in
Article IV of the Credit Agreement are, on the date hereof, true and
complete as if made on the date hereof (and after giving effect to this
Amendment No. 1) and as if each reference in said Article IV to “this Agreement”
includes reference to this Amendment No. 1 and (ii) both immediately before
and after giving effect to the amendments under Section 2 hereof, no Default
has
occurred and is continuing.
Section
5.
Conditions
Precedent.
The
amendments to the Credit Agreement set forth in Section 2 of this Amendment
No. 1 and the waiver under Section 3 of this Amendment No. 1 shall become
effective, as of the date hereof, upon receipt by the Lender of one or more
counterparts of this Amendment No. 1 duly executed and delivered by each of
the
Obligors and the Lender.
Section
6.
Miscellaneous.
Except
as herein provided, the Credit Agreement shall remain unchanged and in full
force and effect. This Amendment No. 1 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Amendment No. 1 by
signing any such
-3-
counterpart.
This Amendment No. 1 shall be governed by, and construed in accordance
with, the laws of the State of New York.
-4-
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
duly
executed and delivered as of the day and year first above written.
as
an
Account Party and a Guarantor
By: /s/
Xxxxx X’Xxxx
Name:
Xxxxx
X’Xxxx
Title:
President
and Chief Executive
Officer
X.L.
AMERICA, INC.,
as
an
Account Party and a Guarantor
By:
/s/
Xxxxxxx Xxxxxx
Name:
Xxxxxxx
Xxxxxx
Title:
Senior
Vice President &
Treasurer
(XLGS)
XL
INSURANCE (BERMUDA) LTD,
as
an
Account Party and a Guarantor
By:
/s/
Xxxxx X’Xxxx
Name:
Xxxxx
X’Xxxx
Title:
Director
XL
RE
LTD,
as
an
Account Party and a Guarantor
By:
/s/
Xxxxx X’Xxxx
Name:
Xxxxx
X’Xxxx
Title:
Director
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DEUTSCHE
BANK AG NEW YORK BRANCH
By:
/s/
Xxxxxxx Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title: Managing Director
By:
/s/
Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Director
