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364-DAY CREDIT AGREEMENT
dated as of
September 30, 2004
between
XL CAPITAL LTD,
X.L. AMERICA, INC., XL INSURANCE (BERMUDA) LTD and XL RE LTD,
as Account Parties and Guarantors,
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Lender
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$100,000,000
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms....................................................................1
SECTION 1.02. Terms Generally.................................................................12
SECTION 1.03. Accountings Terms; GAAP and SAP.................................................12
ARTICLE II
THE CREDITS
SECTION 2.01. Dollar Letters of Credit........................................................13
SECTION 2.02. Alternative Currency Letters of Credit..........................................14
SECTION 2.03. Reimbursement of LC Disbursements, Etc..........................................14
SECTION 2.04. Loans and Borrowings............................................................16
SECTION 2.05. Requests for Borrowings.........................................................17
SECTION 2.06. Funding of Borrowings...........................................................17
SECTION 2.07. Interest Elections..............................................................17
SECTION 2.08. Termination and Reduction of the Commitment.....................................18
SECTION 2.09. Repayment of Loans; Term-Out Option; Evidence of Debt...........................19
SECTION 2.10. Prepayment of Loans.............................................................20
SECTION 2.11. Fees ...........................................................................20
SECTION 2.12. Interest........................................................................21
SECTION 2.13. Alternate Rate of Interest......................................................22
SECTION 2.14. Increased Costs.................................................................22
SECTION 2.15. Break Funding Payments..........................................................23
SECTION 2.16. Taxes...........................................................................24
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.....................25
SECTION 2.18. Designation of a Different Lending Office.......................................26
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee...................................................................26
SECTION 3.02. Obligations Unconditional.......................................................26
SECTION 3.03. Reinstatement...................................................................27
SECTION 3.04. Subrogation.....................................................................27
SECTION 3.05. Remedies........................................................................27
SECTION 3.06. Continuing Guarantee............................................................28
SECTION 3.07. Rights of Contribution..........................................................28
SECTION 3.08. General Limitation on Guarantee Obligations.....................................28
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PAGE
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Organization; Powers............................................................29
SECTION 4.02. Authorization; Enforceability...................................................29
SECTION 4.03. Governmental Approvals; No Conflicts............................................29
SECTION 4.04. Financial Condition; No Material Adverse Change.................................29
SECTION 4.05. Properties......................................................................30
SECTION 4.06. Litigation and Environmental Matters............................................30
SECTION 4.07. Compliance with Laws and Agreements.............................................30
SECTION 4.08. Investment and Holding Company Status...........................................30
SECTION 4.09. Taxes...........................................................................31
SECTION 4.10. ERISA...........................................................................31
SECTION 4.11. Disclosure......................................................................31
SECTION 4.12. Use of Credit...................................................................31
SECTION 4.13. Subsidiaries....................................................................31
SECTION 4.14. Withholding Taxes...............................................................32
SECTION 4.15. Stamp Taxes.....................................................................32
SECTION 4.16. Legal Form......................................................................32
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date..................................................................32
SECTION 5.02. Each Credit Event...............................................................33
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01. Financial Statements and Other Information......................................34
SECTION 6.02. Notices of Material Events......................................................36
SECTION 6.03. Preservation of Existence and Franchises........................................36
SECTION 6.04. Insurance.......................................................................36
SECTION 6.05. Maintenance of Properties.......................................................36
SECTION 6.06. Payment of Taxes and Other Potential Charges and Priority Claims; Payment
of Other Current Liabilities................................................36
SECTION 6.07. Financial Accounting Practices..................................................37
SECTION 6.08. Compliance with Applicable Laws.................................................37
SECTION 6.09. Use of Letters of Credit and Proceeds...........................................37
SECTION 6.10. Continuation of and Change in Businesses........................................38
SECTION 6.11. Visitation......................................................................38
ARTICLE VII
NEGATIVE COVENANTS
SECTION 7.01. Mergers.........................................................................38
SECTION 7.02. Dispositions....................................................................38
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PAGE
SECTION 7.03. Liens...........................................................................39
SECTION 7.04. Transactions with Affiliates....................................................40
SECTION 7.05. Ratio of Total Funded Debt to Total Capitalization..............................41
SECTION 7.06. Consolidated Net Worth..........................................................41
SECTION 7.07. Indebtedness....................................................................41
SECTION 7.08. Financial Strength Ratings......................................................41
SECTION 7.09. Private Act.....................................................................41
ARTICLE VIII
EVENTS OF DEFAULT
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices.........................................................................44
SECTION 9.02. Waivers; Amendments.............................................................45
SECTION 9.03. Expenses; Indemnity; Damage Waiver..............................................45
SECTION 9.04. Successors and Assigns..........................................................46
SECTION 9.05. Survival........................................................................46
SECTION 9.06. Counterparts; Integration; Effectiveness........................................47
SECTION 9.07. Severability....................................................................47
SECTION 9.08. Right of Setoff.................................................................47
SECTION 9.09. Governing Law; Jurisdiction; Etc................................................47
SECTION 9.10. WAIVER OF JURY TRIAL............................................................48
SECTION 9.11. Headings........................................................................48
SECTION 9.12. Treatment of Certain Information; Confidentiality...............................48
SECTION 9.13. Judgment Currency...............................................................49
SECTION 9.14. USA PATRIOT Act.................................................................50
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364-DAY CREDIT AGREEMENT dated as of September 30, 2004,
between XL CAPITAL LTD, a company incorporated under the laws of the Cayman
Islands ("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"), and DEUTSCHE BANK AG, NEW YORK BRANCH, as the Lender.
The Account Parties have requested that the Lender issue
letters of credit for their account and make loans to them in an aggregate face
or principal amount not exceeding $100,000,000 at any one time outstanding, and
the Lender is prepared to issue such letters of credit and make such loans upon
the terms and conditions hereof. Accordingly, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
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SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans constituting such Borrowing, are
bearing interest at a rate determined by reference to the Alternate
Base Rate.
"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.
"ADJUSTED LIBO RATE" means, for the Interest Period for any
Eurodollar Borrowing, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period MULTIPLIED BY (b) the Statutory Reserve Rate for such
Interest Period.
"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.
"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 the Lender for
issuing, renewing, extending or
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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.
"ALTERNATIVE CURRENCY LETTER OF CREDIT" means a letter of
credit issued by the Lender in an Alternative Currency pursuant to
Section 2.02.
"APPLICABLE FACILITY FEE RATE" means 0.06%.
"APPLICABLE LETTER OF CREDIT FEE RATE" means 0.34%.
"APPLICABLE MARGIN" means a rate per annum equal to, (a) for
the period from and including the date hereof to but not including the
Commitment Termination Date, 0.34% and (b) in the event that the
Term-Out Option has been exercised and is in effect, for the period
from and including the Commitment Termination Date to but not including
the date of payment in full of the Loans, 0.59%.
"APPLICABLE ADDITIONAL MARGIN" means a rate per annum equal to
0.10% (a) for any period during which the aggregate outstanding
principal amount of the Loans shall be greater than 50% of the RC
Sublimit then in effect and (b) from and after the Term-Out Option has
been exercised and is in effect.
"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.
"BORROWING" means, with respect to any Account Party, (a) all
ABR Loans of such Account Party made, converted or continued on the
same date or (b) all Eurodollar Loans of such Account Party that have
the same Interest Period.
"BORROWING REQUEST" means a request by an Account Party for a
Borrowing in accordance with Section 2.05.
"BUSINESS DAY" means any day (a) 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 and (b) if such day relates to a borrowing of, a payment
or prepayment of principal of or interest on, a continuation or
conversion of or into, or the Interest Period for, a Eurodollar Loan,
or to a notice by an Account Party with respect to any such borrowing,
payment, prepayment, continuation, conversion, or Interest Period, that
is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.
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"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 the Lender (or, for purposes of Section 2.14(b), by any
lending office of the Lender or by the 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, the Lender's commitment (a) to issue
Letters of Credit and (b) to make Loans, in each case expressed as an
amount representing the maximum aggregate amount of the Lender's Credit
Exposure hereunder, as such commitment may be reduced from time to time
pursuant to Section 2.08. The initial aggregate amount of the Lender's
Commitment is $100,000,000.
"COMMITMENT TERMINATION DATE" means September 29, 2005.
"CONSOLIDATED NET WORTH" means, at any time, the consolidated
stockholders' equity of XL Capital and its Subsidiaries.
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"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of
a Person, whether through the ability to exercise voting power, by
contract or otherwise. "CONTROLLING" and "CONTROLLED" have meanings
correlative thereto.
"CREDIT DOCUMENTS" means, collectively, this Agreement and the
Letter of Credit Documents.
"CREDIT EXPOSURE" means the sum of the outstanding principal
amount of the Lender's Loans and its LC Exposure at any time.
"DEFAULT" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would,
unless cured or waived, become an Event of Default.
"DOLLAR EQUIVALENT" means, in respect of any Alternative
Currency Letter of Credit, the amount of Dollars obtained by converting
the Alternative Currency LC Exposure with respect to such Alternative
Currency Letter of Credit, into Dollars at the spot rate for the
purchase of Dollars with such currency as quoted by the Lender at
approximately 11:00 a.m. (London time) on the second Business Day
before the date such Dollar Equivalent shall be calculated (unless
another rate or time is agreed to by XL Capital and the Lender).
"DOLLAR LETTER OF CREDIT" means a letter of credit issued by
the Lender in Dollars pursuant to Section 2.01.
"DOLLARS" or "$" 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 9.02).
"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.
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"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 Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans constituting such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted
LIBO Rate.
"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 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
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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 Lender 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), (c) any U.S. federal withholding tax that is imposed on
amounts payable to a Lender under a law that was in effect at the time
such Lender becomes a party to this Agreement (or designates a new
lending office), except to the extent that such Lender (or its
assignor, if any) was entitled, immediately prior to the designation of
a new lending office (or assignment), to receive additional amounts
from Borrower with respect to such withholding tax pursuant to Section
2.16(a) and (d) any Tax that is not imposed solely as a result of a
Change in Law formally announced after the date hereof.
"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 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 Lender 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.
"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
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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.
"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 (it
being understood, for the avoidance of doubt, that insurance payment
liabilities, as such, and liabilities arising in the ordinary course of
such Person's business as an insurance or reinsurance company
(including GICs and Stable Value Instruments and any Specified
Transaction Agreement relating thereto) or 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) (in each case other
than in connection with the provision of financing to such Person or
any of such Person's Affiliates) shall not be deemed to constitute
Indebtedness): (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.
"INDEMNIFIED TAXES" means Taxes imposed on the 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
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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.
"INTEREST ELECTION REQUEST" means a request by an Account
Party to convert or continue a Borrowing in accordance with Section
2.07.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR
Loan, each Quarterly Date and (b) with respect to any Eurodollar Loan,
the last day of each Interest Period therefor and, in the case of any
Interest Period of more than three months' duration, each day prior to
the last day of such Interest Period that occurs at three-month
intervals after the first day of such Interest Period.
"INTEREST PERIOD" means, for any Eurodollar Loan or Borrowing,
the period commencing on the date of such Loan or Borrowing and ending
on the numerically corresponding day in the calendar month that is one,
two, three or six months thereafter, as specified in the applicable
Borrowing Request or Interest Election Request; PROVIDED that (i) if
any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (ii) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof,
the date of a Loan initially shall be the date on which such Loan is
made and thereafter shall be the effective date of the most recent
conversion or continuation of such Loan, and the date of a Borrowing
comprising Loans that have been converted or continued shall be the
effective date of the most recent conversion or continuation of such
Loans.
"ISDA" has the meaning assigned to such term in Section
7.03(f).
"LAW" means any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ,
decree or award of any Governmental Authority.
"LC DISBURSEMENT" means with respect to any Letter of Credit a
payment made by the 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 the Lender at the time shall
be the sum of (i) LC Exposure (excluding any Alternative Currency LC
Exposure) PLUS (ii) the Alternative Currency LC Exposure (if any) at
such time.
"LENDER" means Deutsche Bank AG, New York Branch, or its
successors or assigns.
"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 pro-
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viding 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 Dollar Letters of Credit
and the Alternative Currency Letters of Credit.
"LIBO RATE" means, for the Interest Period for any Eurodollar
Borrowing, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor
to or substitute for such Service, providing rate quotations comparable
to those currently provided on such page of such Service, as determined
by the Lender from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, as the rate for the
offering of Dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for
any reason, then the LIBO Rate for such Interest Period shall be the
rate at which Dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London
office of the Lender in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"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.
"LOANS" means the loans made by the Lender to the Account
Parties pursuant to Section 2.04.
"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.
"MATURITY DATE" means the Commitment Termination Date, as such
date may be extended pursuant to the Term-Out Option.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"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.
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"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.
"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 the Lender 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.
"RC SUBLIMIT" means $60,000,000, as such amount may be reduced
from time to time pursuant to Section 2.08.
"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.
"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.
"SEC" means the Securities and Exchange Commission or any
successor entity.
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"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.
"SPECIFIED ACCOUNT PARTY" has the meaning assigned to such
term in Section 2.03(e).
"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).
"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 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).
"STATUTORY RESERVE RATE" means, for any day (or for the
Interest Period for any Eurodollar Borrowing), a fraction (expressed as
a decimal), the numerator of which is the number one and the
denominator of which is the number one MINUS the aggregate of the
maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the
Board to which the Lender is subject on such day (or, with respect to
an Interest Period, the denominator of which is the number one MINUS
the arithmetic mean of such aggregates for the days in such Interest
Period) with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to the
Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"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. Unless otherwise specified, "Subsidiary"
means a Subsidiary of an Account Party.
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"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"TERM-OUT OPTION" has the meaning assigned to such term in
Section 2.09(b).
"TOTAL FUNDED DEBT" means, at any time, all Indebtedness of XL
Capital and its Subsidiaries which would at such time be classified in
whole or in part as a liability on the consolidated balance sheet of XL
Capital in accordance with GAAP.
"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, the issuance of
Letters of Credit, the borrowing of Loans and the use of the proceeds
thereof.
"TYPE", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans
constituting such Borrowing, is determined by reference to the Adjusted
LIBO Rate or the Alternate Base Rate.
"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.
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
"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. ACCOUNTINGS 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 Lender 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, 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
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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. DOLLAR LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth
herein, at the request of any Account Party the Lender agrees at any time and
from time to time during the Availability Period to issue Dollar Letters of
Credit for the account of such Account Party in an aggregate amount that will
not result in the Credit Exposure exceeding the Commitment (it being understood
that Dollar Letters of Credit may be issued, or be outstanding, for the account
of more than one of the Account Parties at any time). Each Dollar 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 Lender or as otherwise agreed to by the
Lender and XL Capital.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION. To
request the issuance of Dollar Letters of Credit (or the amendment, renewal or
extension of outstanding Dollar 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 Lender) to the Lender (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of Letters of Credit, or identifying the Dollar
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 Dollar Letters of Credit are to expire
(which shall comply with paragraph (d) of this Section), the aggregate amount of
all Dollar 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 Dollar Letters of Credit. If requested by the Lender,
such Account Party also shall submit a letter of credit application on Lender's
standard form in connection with any request for a 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 Lender relating to any Dollar Letter of Credit, the
terms and conditions of this Agreement shall control.
(c) LIMITATIONS ON AMOUNTS. A Dollar Letter of Credit shall be
issued, amended, renewed or extended only if (and upon such issuance, amendment,
renewal or extension of each Dollar 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 Credit Exposure shall not exceed the
aggregate amount of the Commitment.
(d) EXPIRY DATE. Each Dollar 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 Dollar Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension).
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SECTION 2.02. ALTERNATIVE CURRENCY LETTERS OF CREDIT. From
time to time during the Availability Period, an Account Party may request the
Lender to make offers to issue an Alternative Currency Letter of Credit for the
account of such Account Party. The Lender may, but shall have no obligation to,
make such offers on terms and conditions that are satisfactory to the 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 Credit Exposure shall not exceed
the amount of the Commitment. 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 the 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).
SECTION 2.03. REIMBURSEMENT OF LC DISBURSEMENTS, ETC.
(a) REIMBURSEMENT. If the Lender shall make any LC
Disbursement, regardless of the identity of the Account Party of such Letter of
Credit, the Account Parties jointly and severally agree that they shall
reimburse the Lender in respect of such LC Disbursement under (x) a Dollar
Letter of Credit, by paying to the Lender 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 the 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 the Lender and such Account Party shall have separately
agreed pursuant to Section 2.02.
(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 Letter of Credit or any term or provision
therein, (ii) any draft or other document presented under a 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 Letter
of Credit against presentation of a draft or other document that does not comply
strictly with the terms of such 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 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 reimburse-
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ment 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 Lender nor any of its Related Parties shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any 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 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 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 Lender determined in
a final, non-appealable judgment by a court of competent jurisdiction. The
parties hereto expressly agree that:
(i) the Lender may accept documents that appear on their face
to be in substantial compliance with the terms of a 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
Letter of Credit;
(ii) the Lender 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 Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Lender when determining whether drafts and other documents
presented under a 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 Lender shall, within a
reasonable time following its receipt thereof, examine all documents purporting
to represent a demand for payment under any Letter of Credit. The Lender shall
promptly after such examination notify each of the Account Parties by telephone
(confirmed by telecopy) of such demand for payment. The Lender will make any
such LC Disbursement available to the beneficiary of such 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 the Lender in respect of any Letter of
Credit, the Lender 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 Lender with
respect to any such LC Disbursement,
(d) INTERIM INTEREST. If any LC Disbursement with respect to a
Letter of Credit is made, then, unless the Account Parties shall reimburse such
LC Disbursement in full on the date
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such LC Disbursement is made, 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 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 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 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. LOANS AND BORROWINGS.
(a) GENERAL. Subject to the terms and conditions set forth
herein, the Lender agrees to make Loans to an Account Party from time to time
during the Availability Period in an aggregate principal amount that will not
result in (i) the Lender's outstanding Loans exceeding the RC Sublimit and (ii)
the Credit Exposure exceeding the aggregate amount of the Commitment. Loans may
be made, or be outstanding, to more than one of the Account Parties at any time.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Account Parties may borrow, prepay and reborrow Loans.
(b) TYPE OF LOANS. Subject to Section 2.12, each Borrowing
shall be constituted entirely of ABR Loans or of Eurodollar Loans as any Account
Party may request in accordance herewith. The Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of the
Lender to make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of the Account Parties to repay such Loan in accordance
with the terms of this Agreement.
(c) MINIMUM AMOUNTS; LIMITATION ON NUMBER OF BORROWINGS. Each
Eurodollar Borrowing shall be in an aggregate amount of $10,000,000 or a larger
multiple of $1,000,000. Each ABR Borrowing shall be in an aggregate amount equal
to $10,000,000 or a larger multiple of $1,000,000; PROVIDED that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Commitment or that is requested to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.03(a). Borrowings of more than
one Type may be outstanding at the same time; PROVIDED that there shall not at
any time be more than a total of ten Eurodollar Borrowings outstanding.
(d) LIMITATIONS ON INTEREST PERIODS. Notwithstanding any other
provision of this Agreement, no Account Party shall be entitled to request (or
to elect to convert to or continue as
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a Eurodollar Borrowing) any Borrowing if the Interest Period requested therefor
would end after the Maturity Date.
SECTION 2.05. REQUESTS FOR BORROWINGS.
(a) NOTICE BY THE ACCOUNT PARTIES. To request a Borrowing, XL
Capital shall notify the Lender of such request by telephone (i) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (ii) in the case of
an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of
the proposed Borrowing; PROVIDED that any such notice of an ABR Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.03(a) may be given not later than 11:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Lender of a written Borrowing Request in a form approved by the Lender and
signed by XL Capital.
(b) CONTENT OF BORROWING REQUESTS. Each telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.04:
(i) the relevant Account Party;
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the
term "Interest Period" and permitted under Section 2.04(d); and
(vi) the location and number of such Account Party's account
to which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
(c) FAILURE TO ELECT. If no election as to the Type of a
Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.
If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the requested Borrowing shall be made instead as an ABR
Borrowing.
SECTION 2.06. FUNDING OF BORROWINGS. The Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time (or
1:00 p.m., New York City time with respect to ABR Loans requested by XL Capital
no later than 11:00 a.m. on the same day), available to the relevant Account
Party by promptly crediting the amounts so received, in like funds, to an
account of such Account Party maintained with the Lender in New York City and
designated by such Account Party in the applicable Borrowing Request.
SECTION 2.07. INTEREST ELECTIONS.
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(a) ELECTIONS BY THE ACCOUNT PARTIES. The Loans constituting
each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have the
Interest Period specified in such Borrowing Request. Thereafter, the relevant
Account Party may elect to convert such Borrowing to a Borrowing of a different
Type or to continue such Borrowing as a Borrowing of the same Type and, in the
case of a Eurodollar Borrowing, may elect the Interest Period therefor, all as
provided in this Section. The relevant Account Party may elect different options
with respect to different portions of the affected Borrowing, and the Loans
constituting each such portion shall be considered a separate Borrowing.
(b) NOTICE OF ELECTIONS. To make an election pursuant to this
Section, XL Capital shall notify the Lender of such election by telephone by the
time that a Borrowing Request would be required under Section 2.05 if XL Capital
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Lender of a written Interest Election Request in a form approved
by the Lender and signed by XL Capital.
(c) CONTENT OF INTEREST ELECTION REQUESTS. Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.04:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) of this paragraph shall be specified
for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period" and permitted under Section 2.04(d).
(d) FAILURE TO ELECT; EVENTS OF DEFAULT. If XL Capital fails
to deliver a timely and complete Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period therefor, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Lender so notifies XL Capital, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period therefor.
SECTION 2.08. TERMINATION AND REDUCTION OF THE COMMITMENT.
(a) SCHEDULED TERMINATION. Unless previously terminated, the
Commitment shall terminate at the close of business on the Commitment
Termination Date.
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(b) VOLUNTARY TERMINATION OR REDUCTION. The Account Parties
may at any time terminate, or from time to time reduce, the Commitment and/or RC
Sublimit; PROVIDED that (i) each reduction of the Commitment or RC Sublimit
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 Commitment or RC
Sublimit if the Credit Exposure would exceed the Commitment or the outstanding
Loans would exceed the RC Sublimit, as the case may be. XL Capital shall notify
the Lender of any election to terminate or reduce the Commitment or RC Sublimit
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, PROVIDED that no reduction of the RC Sublimit shall
occur in connection with a reduction of the Commitment unless specified in such
notice, except that upon the earlier of (x) the termination of the Commitment
and (y) the Commitment Termination Date, the RC Sublimit shall be reduced to
zero. Each notice delivered by XL Capital pursuant to this paragraph (b) shall
be irrevocable; PROVIDED that a notice of termination of the Commitment
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 Lender on or prior to the specified
effective date) if such condition is not satisfied. Subject to the proviso in
the immediately preceding sentence, any termination or reduction of the
Commitment or the RC Sublimit shall be permanent.
SECTION 2.09. REPAYMENT OF LOANS; TERM-OUT OPTION; EVIDENCE OF
DEBT.
(a) REPAYMENT. Each Account Party hereby unconditionally
promises to pay to the Lender, (i) in the event that the Term-Out Option has not
been exercised, the outstanding principal amount of the Loans made to such
Account Party on the Commitment Termination Date and (ii) in the event that the
Term-Out Option has been exercised and is in effect, the outstanding principal
amount of the Loans made to such Account Party on the Maturity Date.
(b) TERM-OUT OPTION. The Account Parties may, by notice given
by XL Capital to the Lender not less than 15 days prior to the Commitment
Termination Date, extend the Maturity Date for all Loans outstanding at the
close of business New York City time on the Commitment Termination Date to the
first anniversary of the Commitment Termination Date (the "TERM-OUT OPTION");
PROVIDED that such extension shall not be effective with respect to the Lender
unless:
(i) no Default shall have occurred and be continuing on each
of the date of the notice requesting such extension and on the
Commitment Termination Date; and
(ii) the representations and warranties of the Obligors set
forth in this Agreement (other than in Section 4.04(b)) shall be true
and correct on and as of each of the date of the notice requesting such
extension and the Commitment Termination Date (or, if any such
representation or warranty is expressly stated to have been made as of
a specific date, as of such specific date).
Such notice shall be deemed to constitute a representation and warranty by XL
Capital as to the matters specified in clauses (i) and (ii) of the immediately
preceding sentence as of each such date.
Notwithstanding the foregoing, the Commitment of the Lender to
make Loans shall terminate on the Commitment Termination Date.
(c) MANNER OF PAYMENT. Prior to any repayment or prepayment of
any Borrowings hereunder, XL Capital shall select the Borrowing or Borrowings to
be paid and shall notify the
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Lender by telephone (confirmed by telecopy) of such selection not later than
11:00 a.m., New York City time, three Business Days before the scheduled date of
such repayment; PROVIDED that each repayment of Borrowings shall be applied to
repay any outstanding ABR Borrowings before any other Borrowings. If XL Capital
fails to make a timely selection of the Borrowing or Borrowings to be repaid or
prepaid, such payment shall be applied, first, to pay any outstanding ABR
Borrowings and, second, to other Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be repaid first). Each payment of a Borrowing shall
be applied ratably to the Loans included in such Borrowing.
(d) MAINTENANCE OF RECORDS BY LENDER. The Lender shall
maintain in accordance with its usual practice records evidencing the
indebtedness of each Account Party to the Lender resulting from each Loan made
by the Lender to such Account Party, including the amounts of principal and
interest payable and paid to the Lender from time to time hereunder. The entries
made in the records maintained pursuant to paragraph (d) or (e) of this Section
shall be PRIMA FACIE evidence of the existence and amounts of the obligations
recorded therein; PROVIDED that the failure of the Lender to maintain such
records or any error therein shall not in any manner affect the obligation of
the Account Parties to repay the Loans in accordance with the terms of this
Agreement.
(e) PROMISSORY NOTES. The Lender may request that Loans made
by it to any Account Party be evidenced by a promissory note of such Account
Party. In such event, each Account Party shall prepare, execute and deliver to
the Lender a promissory note payable to the Lender (or, if requested by the
Lender, to the Lender and its registered assigns) and in a form approved by the
Lender. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times be represented by one or more promissory notes in
such form payable to the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).
SECTION 2.10. PREPAYMENT OF LOANS.
(a) RIGHT TO PREPAY BORROWINGS. The Account Parties shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) NOTICES, ETC. XL Capital shall notify the Lender by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; PROVIDED that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitment as contemplated by Section 2.08, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.08. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of a Borrowing of the same Type as provided
in Section 2.04. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.12 and shall be made in the
manner specified in Section 2.09(c).
SECTION 2.11. FEES.
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(a) FACILITY FEE. XL Capital agrees to pay to the 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 the 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 the Lender continues to have any Credit Exposure after its Commitment
terminates, on the daily amount of the Lender's Credit Exposure from and
including the date on which the Lender's Commitment terminates to but excluding
the date on which the Lender ceases to have any Credit Exposure. Accrued
facility fees shall be payable on each Quarterly Date and on (i) in the event
the Term-Out Option has not been exercised, the earlier of the date the
Commitment terminates and the Commitment Termination Date or (ii) in the event
the Term-Out Option has been exercised and is in effect, on the Maturity Date;
PROVIDED that any facility fees accruing after such earlier date or the Maturity
Date, as the case may be, shall be payable on demand.
(b) LETTER OF CREDIT FEES. XL Capital agrees to pay to the
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 Letters of Credit during the period from and including
the Effective Date to but excluding the later of the date on which the Lender's
Commitment terminates and the date on which the Lender ceases to have any LC
Exposure. 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 Commitment
terminates and any such fees accruing after the date on which the Commitment
terminates shall be payable on demand.
(c) PAYMENT AND COMPUTATION OF FEES. All fees payable
hereunder shall be paid on the dates due, in immediately available funds, to the
Lender entitled thereto. Fees paid shall not be refundable under any
circumstances. All fees payable under paragraphs (a) and (b) 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 2.12. INTEREST.
(a) ABR LOANS. The Loans constituting each ABR Borrowing shall
bear interest at a rate per annum equal to the Alternate Base Rate PLUS the
Applicable Additional Margin, if any.
(b) EURODOLLAR LOANS. The Loans constituting each Eurodollar
Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period for such Borrowing plus the Applicable Margin PLUS
the Applicable Additional Margin, if any.
(c) DEFAULT INTEREST. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable (other
that in respect of any LC Disbursement under Section 2.03(d)) by the Account
Parties hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% PLUS the rate otherwise applicable to such Loan as
PROVIDED above or (ii) in the case of any other amount, 2% PLUS the rate
applicable to ABR Loans as PROVIDED in paragraph (a) of this Section.
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(d) PAYMENT OF INTEREST. Accrued interest on each Loan shall
be payable by the applicable Account Party in arrears on each Interest Payment
Date for such Loan and upon (i) in the event the Term-Out Option has not been
exercised, the date the Commitment terminates or (ii) in the event the Term-Out
Option has been exercised and is in effect, the Maturity Date; PROVIDED that (x)
interest accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (y) in the event of any repayment or prepayment of any Loan (other than
a prepayment of an ABR Loan prior to the later of the Commitment Termination
Date and the Maturity Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (z) in
the event of any conversion of any Eurodollar Borrowing prior to the end of the
Interest Period therefor, accrued interest on such Borrowing shall be payable on
the effective date of such conversion.
(e) COMPUTATION. 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 or Adjusted LIBO Rate shall be determined by the Lender, and
such determination shall be conclusive absent manifest error.
SECTION 2.13. ALTERNATE RATE OF INTEREST. If prior to the
commencement of the Interest Period for any Eurodollar Borrowing, the Lender
determines in good faith that the Adjusted LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to the Lender of making or
maintaining its respective Loans included in such Borrowing for such Interest
Period, then the Lender shall give notice thereof to XL Capital by telephone or
telecopy as promptly as practicable thereafter and, until the Lender notifies XL
Capital that the circumstances giving rise to such notice no longer exist, (i)
any Interest Election Request that requests the conversion of any Borrowing to,
or the continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective and such Borrowing (unless prepaid) shall be continued as, or
converted to, an ABR Borrowing and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.14. 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, the Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on the Lender or the London interbank market any
other condition affecting this Agreement, any Letter of Credit (or any
participation therein) or any Eurodollar Loan made by the Lender;
and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining, or participating in, any Letter of Credit (or
of maintaining any participation therein) or Eurodollar Loan (or of maintaining
its obligation to make any such Loan) or to reduce the amount of any sum
received or receivable by the Lender hereunder (whether of principal, interest
or otherwise), then the
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Account Parties jointly and severally agree that they will pay to the Lender
such additional amount or amounts as will compensate the Lender for such
additional costs incurred or reduction suffered.
(b) CAPITAL REQUIREMENTS. If the Lender determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on the Lender's capital or on the capital of the
Lender's holding company, if any, as a consequence of this Agreement or the
Letters of Credit issued or participated in, or the Loans made, by the Lender to
a level below that which the Lender or the Lender's holding company could have
achieved but for such Change in Law (taking into consideration the Lender's
policies and the policies of the Lender's holding company with respect to
capital adequacy), then from time to time the Account Parties will pay to the
Lender such additional amount or amounts as will compensate the Lender or the
Lender's holding company for any such reduction suffered.
(c) CERTIFICATES FROM LENDER. A certificate of the Lender
setting forth the Lender's good faith determination of the amount or amounts
necessary to compensate the 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 the 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 the
Lender to demand compensation pursuant to this Section shall not constitute a
waiver of the Lender's right to demand such compensation; PROVIDED that the
Account Parties shall not be required to compensate the Lender pursuant to this
Section for any increased costs or reductions incurred more than 90 days prior
to the date that the Lender notifies XL Capital of the Change in Law giving rise
to such increased costs or reductions and of the 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 2.16.
SECTION 2.15. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of an Interest
Period therefor or (c) the failure to borrow, convert, continue or prepay any
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice is permitted to be revocable under Section 2.10(b) and is
revoked in accordance herewith), then, in any such event, the Account Parties
shall compensate the Lender for the loss attributable to such event. The loss to
the Lender attributable to any such event shall be deemed to be an amount
determined by the Lender to be equal to the excess, if any, of (i) the amount of
interest that the Lender would pay for a deposit equal to the principal amount
of such Loan for the period from the date of such payment, conversion, failure
or assignment to the last day of the then current Interest Period for such Loan
(or, in the case of a failure to borrow, convert or continue, the duration of
the Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate for such Interest Period, OVER (ii) the amount of interest
that the Lender would earn on such principal amount for such period if the
Lender were to invest such principal amount for
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such period at the interest rate that would be bid by the Lender (or an
affiliate of the Lender) for Dollar deposits from other banks in the eurodollar
market at the commencement of such period. A certificate of the Lender setting
forth the Lender's good faith determination of any amount or amounts that the
Lender is entitled to receive pursuant to this Section shall be delivered to XL
Capital and shall be conclusive absent manifest error. The Account Parties shall
pay the Lender the amount shown as due on any such certificate within 10 days
after receipt thereof by XL Capital.
SECTION 2.16. 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 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 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 Lender 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 Lender's good faith determination of the amount of
such payment or liability delivered to XL Capital by the Lender, shall be
conclusive as between the Lender 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 Lender 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
Lender.
(e) EXEMPTIONS. The Lender 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 the Lender 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 the Lender in a reasonably
timely manner copies of such documentation and notice of such requirements
together with ap-
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plicable instructions. Upon the reasonable request of XL Capital in writing, the
Lender 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 the Lender is entitled pursuant to an applicable tax treaty or
the law of the relevant jurisdiction. The Account Parties shall not be required
to pay additional amount to, or to indemnify, the Lender under paragraph (a) or
(c) of this Section for any Indemnified Taxes or Other Taxes to the extent such
Indemnified Taxes or Other Taxes would not have been imposed but for the failure
by the Lender to comply with the foregoing provisions of this paragraph (e).
(f) If the Lender determines, in its reasonable discretion,
that it has received a refund 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 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 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
Lender in the event the Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to any Account Party or any other Person.
SECTION 2.17. 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 principal,
interest, fees or reimbursement of LC Disbursements, interest or fees, or under
Section 2.14, 2.15 or 2.16, 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 2.02. Any amounts received after such time on any
date may, in the discretion of the Lender, 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 Lender at its offices at 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, except payments pursuant to Sections 2.14, 2.15, 2.16
and 9.03, which shall be made directly to the Persons entitled thereto. 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 Lender to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, to pay interest
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and fees then due hereunder, and (ii) second, to pay principal and unreimbursed
LC Disbursements then due hereunder.
SECTION 2.18. DESIGNATION OF A DIFFERENT LENDING OFFICE. If
the Lender requests compensation under Section 2.14, or if any Account Party is
required to pay any additional amount or indemnification payment to the Lender
or any Governmental Authority for account of the Lender pursuant to Section
2.16, then the Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans and/or 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 the Lender,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii)
would not subject the Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to the Lender. Each Account Party hereby agrees to
pay all reasonable costs and expenses incurred by the Lender in connection with
any such designation or assignment.
ARTICLE III
GUARANTEE
---------
SECTION 3.01. THE GUARANTEE. Each Guarantor hereby jointly and
severally guarantees to the Lender and its respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loans and LC Disbursements
(and interest thereon) made by the Lender 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 Lender 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.
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:
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(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 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 Lender on demand for
all reasonable costs and expenses (including reasonable fees of counsel)
incurred by the 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.
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 Commitment 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 Lender, 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.
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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 CONTRIBUTION. The 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 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,
the Lender 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.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Account Party represents and warrants to the Lender 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).
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 Lender the consolidated balance sheet and statements of income,
stockholders' equity and cash flows of such Account Party and its consolidated
Subsidiaries (A) as of and for the fiscal year ended December 31, 2003, 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, 2003), and (B) as of and for the fiscal quarter ended June 30,
2004, as provided in XL Capital's Report on Form 10-Q filed with the SEC for the
fiscal quarter ended June 30, 2004. 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.
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(b) NO MATERIAL ADVERSE CHANGE. Since December 31, 2003, 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 II or contemplated by our SEC reports, or as routinely encountered in
claims activity, there are no actions, suits or proceedings by or before 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 III
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 AND HOLDING COMPANY STATUS. Such
Account Party is not (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
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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 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 Lender
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. No part of the proceeds of any Loan hereunder will be used to buy or
carry any Margin Stock (except for repurchases of the capital stock of XL
Capital and purchases of Margin Stock 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)). The purchase of
any Margin Stock with the proceeds of any Loan will not be in violation of
Regulation U or X of the Board and, after applying the proceeds of such Loan,
not more than 25% of the value of the assets of XL Capital and its Subsidiaries
taken as a whole consists or will consist of Margin Stock.
SECTION 4.13. SUBSIDIARIES. Set forth in Schedule IV is a
complete and correct list of all of the Subsidiaries of XL Capital as of June
30, 2004, 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 own-
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ership interests. Except as disclosed in Schedule IV, (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 IV, (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 the Lender provided as of the date hereof, the payment of the LC
Disbursements and interest thereon, principal of and interest on the Loans, the
fees under Section 2.11 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 or any promissory
notes evidencing Loans made (or to be made), it is not necessary, as of the date
hereof, that this Agreement or such promissory notes 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 such promissory notes 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.
SECTION 4.16. LEGAL FORM. Each of this Agreement and any
promissory notes evidencing Loans made (or to be made) 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 Lender to
issue or continue Letters of Credit and to make Loans hereunder are subject to
the receipt by the Lender of each of the following documents, each of which
shall be satisfactory to the Lender in form and substance (or such condition
shall have been waived in accordance with Section 9.02):
(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 Lender (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) Xxxx X. Xxxxxxxx, Esq., counsel to XL Capital,
substantially in the form of Exhibit A-1, (ii) Xxxxxxx X. Xxxx, Esq., counsel to
XL America, substantially in the form of Exhibit A-2, (iii) Xxxxxx Xxxxxx &
Xxxxxxx LLP, special U.S. counsel for the Obligors, substantially in the form of
Exhibit A-3, (iv) Xxxxxxx, Xxxx & Xxxxxxx, special Bermuda counsel to XL
Insurance and XL Re, substantially in the form of Exhibit A-4, and (v) Xxxxxxx
Xxxxxxxx Xxxxxx, special Cayman Islands counsel to XL Capital, substantially in
the form of Exhibit A-5.
(c) CORPORATE DOCUMENTS. Such documents and certificates as
the Lender or its counsel may reasonably request relating to the organization,
existence and good standing, if appli-
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cable, 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 Lender and its counsel.
(d) 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.
(e) OTHER DOCUMENTS. Such other documents as the Lender may
reasonably request.
The obligation of the 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 the Lender in connection herewith, (to the
extent that reasonably detailed statements for such fees and expenses have been
delivered to XL Capital).
The Lender shall notify the Account Parties of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the obligations of the Lender to issue or continue Letters of Credit
or to make Loans hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or
prior to 5:00 p.m., New York City time, on September 30, 2004 (and, in the event
such conditions are not so satisfied or waived, the Commitment shall terminate
at such time).
SECTION 5.02. EACH CREDIT EVENT. The obligation of the Lender
to issue, continue, amend, renew or extend any Letter of Credit or to make any
Loan 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,
continuation, amendment, renewal or extension of such Letter of Credit or the
date of such Loan, as applicable (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 or such Loan,
as applicable, no Default shall have occurred and be continuing; and
(c) in the case of any Alternative Currency Letter of Credit,
receipt by the Lender of a request for offers as required by Section 2.02.
Each issuance, continuation, amendment, renewal or extension of a Letter of
Credit and each Borrowing 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.
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ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
Until the Commitment has expired or been terminated, the
principal of and interest on each Loan and 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 Lender that:
SECTION 6.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. Each
Account Party will furnish to the Lender:
(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
Lender 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
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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 footnotes (it being
understood that delivery to the Lender of XL Capital's Report on Form 10-Q filed
with the SEC shall satisfy the financial statement delivery requirements of this
paragraph 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,
2004), a statement of a Financial Officer of XL Capital listing,
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as of the end of the immediately preceding fiscal quarter of 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 Lender may reasonably request.
SECTION 6.02. NOTICES OF MATERIAL EVENTS. Each Account Party
will furnish to the 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.
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:
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(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 AND PROCEEDS. No part
of the proceeds of any Loan and 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 Party will
use the Letters of Credit issued for its account hereunder in the ordinary
course of business of, and will use the proceeds of all Loans made to it for the
general corporate purposes 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.
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<
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 the 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 the Lender may
reasonably request. Each Account Party hereby authorizes its financial
management to discuss with the Lender the affairs of such Account Party.
ARTICLE VII
NEGATIVE COVENANTS
------------------
Until the Commitment has expired or terminated, the principal
of and interest on each Loan and all fees 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
Lender 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, 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
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shall not individually, or in the aggregate for the Account Parties and their
respective Subsidiaries, exceed $500,000,000 in any calendar year; or
(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.
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 I;
(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;
(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 as-
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sets 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;
(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, or (ii) 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 I, (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 $5,000,000,000 at any time.
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 I 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,
XL Insurance and XL Re will permit at any time its financial strength ratings to
be less than "A-" from A.M. Best & Co. (or its successor).
SECTION 7.09. PRIVATE ACT. No Account Party will become
subject to a Private Act other than the X.L. Insurance Company, Ltd. Act, 1989.
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 principal of any
Loan or 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;
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(b) any Account Party shall fail to pay any interest on any
Loan or 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 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 (2004 Revision) or any other similar applicable 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 (2004 Revision) 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
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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 Lender,
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 Lender shall, by notice to
the Account Parties, take either or both of the following actions, at the same
or different times: (i) terminate the Commitment, and thereupon the Commitment
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon 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 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 Commitment shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon 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 Lender demanding the deposit of cash collateral
for the aggregate LC Exposure of the Lender pursuant to this paragraph, the
Account Parties shall immediately deposit into an account established and
maintained on the books and records of the Lender, 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 Lender, an amount in cash equal to the total LC
Exposure as of such date plus any accrued and unpaid interest thereon; PROVIDED
that the
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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 Lender as collateral for the LC Exposure under
this Agreement.
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 the Lender which has issued any Alternative Currency Letter of Credit
may, by notice to XL Capital: (a) declare that all fees and other obligations of
the Account Parties accrued in respect of Alternative Currency Letters of Credit
issued by the 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 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 the
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 the 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 Lender,
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.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.01. 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 Xxxx Xxxxxxxx, Esq. at the same address and
telecopy no. (000) 000-0000);
(b) if to the Lender, to Deutsche Bank AG, New York Branch, 00
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Global
Technology & Operations--Loan Division (Telecopy No. (000) 000-0000; Telephone
No. (000) 000-0000), with a copy to Deutsche Bank Securities Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxx Xxxxx (Telecopy No. (212)
000-0000; Telephone No. (000) 000-0000).
Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. 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 Lender hereunder may
be delivered or furnished by electronic communications; PROVIDED that the
foregoing shall not apply to notices pursuant
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to Article II unless otherwise agreed by the Lender. 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 Lender 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.
SECTION 9.02. WAIVERS; AMENDMENTS
(a) NO DEEMED WAIVERS; REMEDIES CUMULATIVE. No failure or
delay by the Lender in exercising any right or power hereunder shall operate as
a 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 Lender 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 making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether the 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 Lender.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) COSTS AND EXPENSES. The Account Parties jointly and
severally agree to pay all out-of-pocket expenses incurred by the Lender,
including the fees, charges and disbursements of one legal counsel for the
Lender, 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 Loans made or 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 Lender and its Related Party
(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 Loan or the use of the proceeds
thereof or any Letter of Credit or the use thereof (including any refusal by the
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 Envi-
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ronmental 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) 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
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(d) PAYMENTS. All amounts due under this Section shall be
payable promptly after written demand therefor.
SECTION 9.04. 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 no party hereto
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the other parties hereto (and any attempted
assignment or transfer by an Account Party without such consent shall be null
and void). 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, and, to the extent expressly
contemplated hereby, the Related Parties of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) CERTAIN PLEDGES. The 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 the 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
the Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for the Lender as a party hereto.
SECTION 9.05. 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
making of any Loans 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 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 the principal of, or any
accrued interest on, any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitment has not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans,
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the expiration or termination of the Letters of Credit and the expiration or
termination of the Commitment or the termination of this Agreement or any
provision hereof.
SECTION 9.06. 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 Lender
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 Lender and when the Lender 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 9.07. 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 9.08. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, the 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 the 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 the Lender, irrespective of whether or not the Lender shall have made
any demand under this Agreement and although such obligations may be unmatured.
The rights of the Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which the Lender may have.
SECTION 9.09. 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 District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agree-
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ment shall affect any right that the 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, XL Insurance and XL Re 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 9.01. 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 9.10. 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.
SECTION 9.11. 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 9.12. 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 of-
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fered or provided to any Account Party or one or more of their Subsidiaries (in
connection with this Agreement or otherwise) by the Lender or by one or more of
its subsidiaries or affiliates and each of the Account Parties hereby authorizes
the Lender to share any information delivered to it by such Account Party and
its Subsidiaries pursuant to this Agreement, or in connection with the decision
of the 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 repayment of the Loans, the expiration or termination of the Letters of
Credit, the expiration or termination of the Commitment or the termination of
this Agreement or any provision hereof.
(b) CONFIDENTIALITY. The Lender 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
Lender, (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 any prospective assignee of, 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 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 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 Person would accord to its own
confidential information. Notwithstanding the foregoing, the Lender agrees that
it will not trade the securities of any of the Account Parties based upon
non-public Information that is received by it.
SECTION 9.13. 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) the 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 the Lender in New York City of the full amount of Dollars payable to
the Lender under this Agreement. If for the purpose of obtaining judgment in any
court
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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 Lender could purchase such Dollars at the principal office of the
Lender 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 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 9.14. USA PATRIOT ACT. The 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)), it 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 the Lender to identify each Account Party in
accordance with said Act.
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.
X.L. AMERICA, INC.,
as an Account Party and a Guarantor
By: /s/ XXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxx X. XxXxxx
Title: Managing Director, Treasury Dept.
U.S. FEDERAL TAX IDENTIFICATION NO.: 00-0000000
XL INSURANCE (BERMUDA) LTD,
as an Account Party and a Guarantor
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
U.S. FEDERAL TAX IDENTIFICATION NO.: 00-0000000
XL RE LTD,
as an Account Party and a Guarantor
By: /s/ XXXXX X'XXXXXXXXXXX
-----------------------------------------
Name: Xxxxx X'Xxxxxxxxxxx
Title: SVP and CFO
U.S. FEDERAL TAX IDENTIFICATION NO.: 00-0000000
IN WITNESS WHEREOF, XL Capital has caused this Agreement to be
duly executed as a Deed by an authorized officer as of the day and year first
above written.
EXECUTED AS A DEED by XL CAPITAL LTD,
as an Account Party and a Guarantor
/s/ XXXX X. XXXXXXXX
------------------------------------------------
witness
By: /s/ XXXXX DE ST PAER
------------------------------------------
Name: Xxxxx de St Paer
Title: Chief Financial Officer
U.S. FEDERAL TAX IDENTIFICATION NO.: 00-0000000
DEUTSCHE BANK AG NEW YORK BRANCH,
as Lender
By: /s/ XXXX XXXXX
------------------------------------------
Name: Xxxx Xxxxx
Title: Director
By: /s/ XXXXXXX XXXXXXX
------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
