14 NOVEMBER 2007 XL CAPITAL LTD as Account Party THE GUARANTORS (as defined herein) THE LENDERS PARTY HERETO (as defined herein) CITIBANK INTERNATIONAL PLC as Agent and Security Trustee CITIGROUP GLOBAL MARKETS LIMITED and LLOYDS TSB BANK PLC and THE...
Exhibit
10.1
14
NOVEMBER 2007
as
Account Party
THE
GUARANTORS
(as
defined herein)
THE
LENDERS PARTY HERETO
(as
defined herein)
CITIBANK
INTERNATIONAL PLC
as
Agent and Security Trustee
CITIGROUP
GLOBAL MARKETS LIMITED and LLOYDS TSB BANK PLC and
THE
ROYAL BANK OF SCOTLAND PLC
as
Arrangers
__________________________________
LETTER
OF CREDIT FACILITY AND
REIMBURSEMENT
AGREEMENT
___________________________________
CONTENTS
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Clause
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Page
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1
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DEFINITIONS
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1
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2
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THE
FACILITY
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13
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3
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UTILISATION
OF THE FACILITY
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14
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4
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TERMINATION
OF LETTERS OF CREDIT
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15
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5
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PAYMENT
OF DEMANDS
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18
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6
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THE
ACCOUNT PARTY’S LIABILITIES IN RELATION TO LETTERS OF CREDIT
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19
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7
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DEFAULT
INTEREST
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20
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8
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TERMINATION
AND REDUCTION OF THE COMMITMENTS
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20
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9
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FEES
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21
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10
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TAXES
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23
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11
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TAX
RECEIPTS
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24
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12
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INCREASED
COSTS
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25
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13
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ILLEGALITY
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26
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14
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MITIGATION
OBLIGATIONS; REPLACEMENT OF LENDERS
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26
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15
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PAYMENTS
GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS
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27
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16
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GUARANTEE
AND INDEMNITY
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29
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17
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REPRESENTATIONS
AND WARRANTIES
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32
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18
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AFFIRMATIVE
COVENANTS
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00
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00
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XXXXXXXX
XXXXXXXXX
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00
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00
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EVENTS
OF DEFAULT
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43
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21
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THE
AGENT, THE ARRANGERS AND THE LENDERS
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45
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22
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NOTICES
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51
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23
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WAIVERS
AND AMENDMENTS
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52
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24
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COSTS
AND EXPENSES
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52
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25
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INDEMNITIES
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53
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|
26
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ALTERATION
TO THE PARTIES
|
54
|
|
27
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SET
OFF
|
58
|
|
28
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MISCELLANEOUS
PROVISIONS
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59
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29
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GOVERNING
LAW AND JURISDICTION
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59
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30
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TREATMENT
OF CERTAIN INFORMATION; CONFIDENTIALITY
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60
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31
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THIRD
PARTY RIGHTS
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62
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32
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WAIVER
OF TRIAL BY JURY
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62
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-i-
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SCHEDULE 1
COMMITMENTS
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SCHEDULE 2
INDEBTEDNESS AND
LIENS
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Part A
Indebtedness
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Part B
Liens
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SCHEDULE 3
SUBSIDIARIES
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SCHEDULE 4
MANDATORY COSTS
RATE
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SCHEDULE 5
CONDITIONS
PRECEDENT
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SCHEDULE 6
UTILISATION
REQUEST
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SCHEDULE 7
FORM OF LETTER OF
CREDIT
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SCHEDULE 8
FORM OF TRANSFER
CERTIFICATE
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SCHEDULE 9
FORM OF CHARGE
AGREEMENT
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-ii-
LETTER
OF CREDIT FACILITY AND REIMBURSEMENT AGREEMENT dated 14 November 2007 (this
Agreement)
Between:
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(1)
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XL
CAPITAL LTD, a company incorporated under the laws of the Cayman
Islands (the Account
Party);
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(2)
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The
GUARANTORS as defined
below;
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(3)
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The
LENDERS as defined
below;
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(4)
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CITIBANK
INTERNATIONAL PLC, as agent and trustee for the Lenders (and when
acting in such capacities the Agent and
Security Trustee respectively);
and
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(5)
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CITIGROUP
GLOBAL MARKETS LIMITED, LLOYDS TSB BANK PLC and THE ROYAL
BANK OF SCOTLAND PLC as mandated lead
arrangers (the
Arrangers).
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1.
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DEFINITIONS
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1.1 As
used in this Agreement, the following terms have the meanings specified
below:
Acceleration
Event means the provision by the Agent to the Account Party of an
Acceleration Notice and/or the occurrence of any event with respect to any
Obligor described in Clause 20(e) or20(f);
Acceleration
Notice has the meaning assigned to such term in Clause
20;
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;
AMBCash
Collateral has the meaning assigned to such term in Clause
19.8;
AMB
Rating Undertaking has the meaning assigned to such term in Clause
19.8;
Applicable
Percentage means, with respect to any Lender, the percentage of
the Total Commitments represented by such Lender’s Commitment. If the Total
Commitments or Commitment of a Lender have terminated or expired, the Applicable
Percentage shall be determined based upon the Total Commitments or Commitment
of
such Lender (as the case may be) most recently in effect, giving effect to
any
permitted assignments or transfers;
Applicant
means each of Mid Ocean, Stonebridge Underwriting, NAC
Reinsurance, Dornoch, County Down, XL London Market and XL Re and any other
Affiliate of the Account Party as may be agreed by the Agent and the Account
Party from time to time;
Approved
Credit Institution means a credit institution within the meaning
of the First Council Directive on the co-ordination of laws, regulations and
administrative provisions relating to the taking up and pursuit of the business
of credit institutions (No 77/780/EEC) which has been approved by Lloyd’s
for the purpose of providing guarantees and issuing or confirming letters of
credit comprising a member’s Funds at Lloyd’s;
Authorised
Signatory means, in relation to an Obligor, any person who is duly
authorised (in such manner as may be reasonably acceptable to the Agent) and
in
respect of whom the Agent has received a certificate signed by a director or
another Authorised Signatory of such Obligor setting out the name and signature
of such person and confirming such person’s authority to act;
Available
Commitment means in relation to a Lender at any time and save as
otherwise provided herein its Commitment less the amount of its participation
in
the LC Exposures at such time PROVIDED THAT such amount
shall not be less than zero;
Available
Facility means, at any time, the aggregate of the Available
Commitments adjusted, in the case of a proposed utilisation pursuant to a
Utilisation Request, so as to take into account:
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(a)
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any
reduction in the Commitment of a Lender pursuant to the terms hereof;
and
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(b)
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any
Letter of Credit which pursuant to any other Utilisation Request
is to be
issued;
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on
or
before the proposed Utilisation Date relating to such utilisation;
Availability
Period means the period from (and including) the Closing Date to
(and including) the Commitment Termination Date;
Bilateral
Letter of Credit has the meaning given to it in
Clause 4.5(b);
BIS
Qualifying Assets means fixed income securities issued or
guaranteed by US Government Agencies or by the Central Governments of any OECD
country having a financial strength rating of at least “A+” from Standard &
Poor’s Rating Services (or its successor);
Board
means the Board of Governors of the Federal Reserve System of the United States
of America;
Business
Day means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City, London or Bermuda are authorised or
required by Law to remain closed;
Capital
Lease Obligations of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalised amount thereof determined in accordance
with GAAP;
Central
Government means, without limitation, government departments,
ministries and central banks;
Change
in
Control
means the occurrence of any of the following events or
conditions:
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(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 the Account Party entitling such Person
to
exercise 40% or more of the total voting power of all shares of capital
stock of the Account Party that is entitled to vote generally in
elections
of directors, other than an acquisition by the Account Party, any
of its
subsidiaries or any employee benefit plans of the Account Party;
or
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(b)
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the
Account Party merges or consolidates with or into any other Person
(other
than a Subsidiary), another person (other than a subsidiary) merges
into
the Account Party or the Account Party 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 the Account Party (other than the cancellation
of any outstanding shares of capital stock of the Account Party held
by
the Person with whom it merges or consolidates) or (ii) which is
effected
solely to change the jurisdiction of incorporation of the Account
Party
and results in a reclassification, conversion or exchange of outstanding
shares of capital stock of the Account Party solely into shares of
capital
stock of the surviving entity; or
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-2-
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(c)
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a
majority of the members of the Account Party’s board of directors are
persons who are then serving on the board of directors without having
been
elected by the board of directors or having been nominated for election
by
its shareholders.
|
Change
in Law means (a) the adoption of any Law, rule or regulation after
the date of this Agreement, (b) any change in any Law, rule or regulation or
in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender (or, for purposes
of
Clause 0 and 0, by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline or directive (whether
or
not having the force of Law) of any Governmental Authority made or issued after
the date of this Agreement;
Charge
Agreement means the charge agreement, in substantially the form
set out in 9 that may be required to be entered into by the Account Party as
chargor pursuant to the terms hereof and pursuant to which the Account Party
will grant cash cover in favour of the Security Trustee;
Closing
Date means the later of 3 Business Days from the date hereof and
the date on which the conditions set out in Schedule 5 (Conditions
Precedent) have, in the reasonable opinion of the Agent, been
satisfied;
Code
means the Internal Revenue Code of 1986 of the United States of America, as
amended from time to time;
Commencement
Date means, in respect of a Letter of Credit, the date upon which
a Letter of Credit shall become effective being any date from (and including)
the Closing Date to (and including) the Commitment Termination
Date;
Commitment
means, with respect to each Lender, the commitment of such Lender to participate
in the issue of Letters of Credit hereunder. The initial amount of each Lender’s
Commitment is set forth on Schedule 1, or in the Transfer Certificate pursuant
to which such Lender shall have assumed its Commitment, as applicable, but
in
each case as such Commitment may be:
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(a)
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reduced
from time to time pursuant to Clause 8 (Termination and Reduction
of the Commitments) or Clause 4.5(b) (Replacement Letters of
Credit); and
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(b)
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reduced
or increased from time to time pursuant to assignments by or to such
Lender pursuant to Clause 26.3 (Transfers by
Lenders);
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Commitment
Letter means the letters so titled from the Arrangers to the
Account Party dated 28 September 2007;
Commitment
Termination Date means 30 November 2008;
Consolidated
Net Worth means, at any time, the consolidated shareholders’
equity of the Account Party and its Subsidiaries, provided that
the calculation
of such consolidated shareholders’ equity shall exclude (a) the effect thereon
of any adjustments required under Statement of Financial Accounting Standard
No.
115 (Accounting for Certain Investments in Debt and Equity Securities) and
(b)
any Exempt Indebtedness (and the assets relating thereto) in the event such
Exempt Indebtedness is consolidated on the balance sheet of the Account Party
and its consolidated Subsidiaries in accordance with GAAP;
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;
County
Down means County Down Limited, a company incorporated under the
laws of England and Wales;
Default
means any event or condition which constitutes an Event of Default or a
Potential Event of Default;
-3-
Default
Period means the period from and including the date on which the
Agent makes payment of a Demand Amount to but excluding the date on which the
Account Party makes a corresponding reimbursement under Clause 6.1(a) and
(b) (The Account Party’s Indemnity to Lenders);
Demand
Amount means a principal amount to be paid by the Account Party
pursuant to Clause 6.1(a) and (b) (The Account Party’s Indemnity to
Lenders);
Dollars
or $ refers to the lawful money of the United States
of America from time to time;
Dornoch
means Dornoch Limited, a company incorporated under the laws
of
England and Wales;
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, labelling, 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 Obligor or any Subsidiary resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c)
exposure to any Hazardous Materials, (d) the release or threatened release
of
any Hazardous Materials into the environment or (e) any contract or agreement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing;
Equity
Rights means, with respect to any Person, any subscriptions,
options, warrants, commitments, pre-emptive 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 of the United States
of America, as amended from time to time;
ERISA
Affiliate means any trade or business (whether or not
incorporated) that, together with the Account Party, is treated as a single
employer under Clause 414(b) or (c) of the Code, or, solely for purposes of
Clause 302 of ERISA and Clause 412 of the Code, is treated as a single employer
under Clause 414 of the Code;
ERISA
Event means (a) any reportable event, as
defined in Clause 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 Clause
412 of the Code or Clause 302 of ERISA), whether or not waived; (c) the filing
pursuant to Clause 412(d) of the Code or Clause 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 Obligor or any of such Obligor’s ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by an Obligor 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 Obligor 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 Obligor or any ERISA Affiliate
of
any notice, or the receipt by any Multiemployer Plan from any Obligor 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 reorganisation, within the meaning of Title IV of ERISA;
Event
of Default has the meaning assigned to such term in Clause
20;
Exempt
Indebtedness means any Indebtedness of any Person (other than the
Account Party or any of its Affiliates) that is consolidated on the balance
sheet of the Account Party and its consolidated Subsidiaries in accordance
with
-4-
GAAP
(whether or not required to be so consolidated); provided that (a) at the time
of the incurrence of such Indebtedness by such Person, the cash flows from
the
assets of such Person shall reasonably be expected by such Person to liquidate
such Indebtedness and all other liabilities (contingent or otherwise) of such
Person and (b) no portion of such Indebtedness of such Person shall be
Guaranteed (other than by guarantees of the type referred to in clause (a)
or
(b) of the definition of the term Indebtedness) by, or shall be secured by
a
Lien on any assets owned by, the Account Party or any of its Subsidiaries and
neither such Person nor any of the holders of such Indebtedness shall have
any
direct or indirect recourse to the Account Party or any of its Subsidiaries
(other than in respect of liabilities and guarantees of the type referred to
in
clause (a) or (b) of the definition of the term
Indebtedness);
Facility
means the letter of credit facility granted to the Account Party pursuant to
this Agreement;
Facility
Office means the office or offices notified by a Lender to the
Agent in writing on or before the date it becomes a Lender (or, following that
date, by not less than five Business Days’ written notice) as the office or
offices through which it will perform its obligations under this
Agreement;
Fee
Letter means the letter from the Arrangers to the Account Party
dated 28 September 2007, relating to the payment of certain fees;
Finance
Documents means this Agreement, the Charge Agreement, the
Commitment Letter, the Fee Letter, any Letter of Credit and any other document
or documents as may be agreed by the Agent and the Account Party;
Final
Expiration Date means the date on which a Letter of Credit
terminates in accordance with its terms;
Finance
Parties means the Lenders, the Agent, the Arrangers and the
Security Trustee;
Financial
Officer means, with respect to any Obligor, a principal financial
officer of such Obligor;
Financial
Strength Rating has the meaning assigned to such term in Clause
9.3.
Funds
at Lloyd’s has the meaning given to it in paragraph 4 of the
Membership Bylaw (No. 17 of 1993);
Funds
at Lloyd’s Requirements means, in respect of any member, the
amount required to be maintained by that member as Funds at
Lloyd’s;
Funds
Date means the date notified by Lloyd’s each year as being the
latest date in that year by which Funds at Lloyd’s can be placed with Lloyd’s in
order to satisfy Funds at Lloyd’s Requirements in respect of the immediately
succeeding calendar year;
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 Obligor 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 Kingdom, or of any
other nation, 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 without limitation 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, so
-5-
vency
or
other balance sheet condition of such other Person (including without limitation
keepwell agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of Indebtedness of
such other Person, (iii) to lease or purchase property, securities or services
primarily for the purpose of assuring the holder of such Indebtedness, or (iv)
to otherwise assure or hold harmless the holder of such Indebtedness against
loss in respect thereof. The amount of any Guarantee hereunder shall (subject
to
any limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount of the Indebtedness in respect of which such
Guarantee is made. The terms Guarantee and
Guaranteed used as a verb shall
have a correlative
meaning;
Guarantors
means each of the Account Party, 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: (i) all indebtedness
or liability for or on account of money borrowed by, or for or on account of
deposits with or advances to (but not including accrued pension costs, deferred
income taxes or accounts payable of) such Person; (ii) all obligations
(including contingent liabilities) of such Person evidenced by bonds,
debentures, notes, banker’s acceptances or similar instruments; (iii) all
indebtedness or liability for or on account of property or services purchased
or
acquired by such Person; (iv) any amount secured by a Lien on property owned
by
such Person (whether or not assumed) and Capital Lease Obligations of such
Person (without regard to any limitation of the rights and remedies of the
holder of such Lien or the lessor under such capital lease to repossession
or
sale of such property); (v) the maximum available amount of all standby letters
of credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed); and (vi) all Guarantees
of
such Person; provided that the following shall be excluded from Indebtedness
of
the Account Party and any of its Subsidiaries for purposes of this Agreement:
(a) all payment liabilities of any such Person under insurance and reinsurance
policies from time to time issued by such Person, including guarantees of any
such payment liabilities; (b) all other liabilities (or guarantees thereof)
arising in the ordinary course of any such Person’s business as an insurance or
reinsurance company (including GICs and Stable Value Instruments and any
Specified Transaction Agreement relating thereto), or as a corporate member
of
The Council of Lloyd’s, or as a provider of financial or investment services or
contracts (including GICs and Stable Value Instruments and any Specified
Transaction Agreement relating thereto); and (c) any Exempt
Indebtedness;
Insurance
Subsidiary means any Subsidiary which is subject to the regulation
of, and is required to file statutory financial statements with, any
governmental body, agency or official in any State or territory of the United
States or the District of Columbia which regulates insurance companies or the
doing of an insurance business therein;
ISDA
has the meaning assigned to such term in Clause 19.3(f);
Issuing
Lender means any Lender in its capacity as an issuer of one or
more Letters of Credit hereunder;
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 a payment made by a Lender pursuant to a Letter
of Credit;
LC
Exposure means the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of
all
Demand Amounts. The LC Exposure of any Lender at any time shall be the sum
of
its participation in the outstanding Letters of Credit at such time and the
Demand Amounts owed to it at such time;
-6-
LC
Proportion means, in relation to the Lender in respect of any
Letter of Credit and save as otherwise provided herein, the proportion
(expressed as a percentage) of such Lender’s Available Commitment to the
Available Facility immediately prior to the issue of such Letter of
Credit;
Lender
Affiliate means with respect to any Lender, (a) an Affiliate of
such Lender or (b) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender;
Lenders
means any of the Persons listed in Schedule 1 (Commitments) or any
other Person that shall have become a party hereto pursuant to Clause 26.3
(Transfers by Lenders), and which has not ceased to be a party hereto
in accordance with the terms hereof;
Letters
of Credit means Letters of Credit issued pursuant to the terms of
this Agreement (including, for the avoidance of doubt, any New Letter of Credit,
Reduced Letter of Credit or Bilateral Letter of Credit referred to in Clause
4.5
(Replacement Letters of Credit));
Letter
of Credit Fees means the fees payable by the Account Party
pursuant to Clause 9.2 (Letter of Credit Fees) (as adjusted from
time to time in accordance with the provisions of Clause 9.3) (Adjustment of
Letter of Credit Fee);
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;
LIBOR
means, in relation to any unpaid sum:
(a) the
rate appearing on Reuters Page LIBOR0l at or about 11:00 a.m. on any relevant
day; or
(b) if
the display rate cannot be determined under paragraph (a) above, the rate
determined by the Agent to be the arithmetic mean (rounded if necessary, to
the
nearest five decimal places with the midpoint rounded upwards) of the rates
notified to the Agent by each of the Reference Banks quoting (provided that
at
least two Reference Banks are quoting) as the rate at which such Reference
Bank
is offering overnight deposits in the required currency in an amount comparable
to that amount to prime banks in the London Interbank Market at or about 11.00
a.m. on any relevant day; and
for
the
purposes of this definition: Reuters Page LIBOR0l
means the display designated as Reuters Page LIBOR0l on the Reuters service or
such other service as may be nominated by the British Bankers’ Association as
the information vendor for the purposes of displaying British Bankers’
Association Interest Settlement Rates for deposits in the currency
concerned);
Lloyd’s
means the society incorporated by Lloyd’s Xxx 0000 by the name of
Lloyd’s;
Majority
Lenders means, at any time, Lenders having Commitments
representing more than 50% of the sum of the total Commitments at such time;
PROVIDED THAT, if the Commitments have expired or been
terminated, Majority Lenders means Lenders having more
than 50% of the aggregate LC Exposure of the Lenders;
Mandatory
Costs means, in relation to any unpaid sum for any period, a rate
per annum calculated in accordance with Schedule 4;
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 Obligor and its Subsidiaries
taken as a whole; or (b) the ability of an Obligor to perform any of its payment
or other material obligations under this Agreement;
-7-
Mid
Ocean means Mid Ocean Limited, a company incorporated under the
laws of the Cayman Islands;
Multiemployer
Plan means a multiemployer plan as defined in Clause 4001(a)(3) of
ERISA;
NAC
Reinsurance means NAC Reinsurance International Ltd, a company
incorporated under the laws of England and Wales;
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 Obligor or any of its Subsidiaries, with respect to which such
Obligor or the Subsidiary has an obligation to contribute, for the benefit
of
employees of such Obligor or such Subsidiary, which plan, fund or other similar
program provides, or results in, the type of benefits described in Clause 3(1)
or 3(2) of ERISA, and which plan is not subject to ERISA or the
Code;
Obligor
Jurisdiction means (a) Bermuda, (b) the Cayman Islands, (c) United
States, and (d) any other country (i) where any Obligor is licensed or qualified
to do business or (ii) from or through which payments hereunder are made by
any
Obligor;
Obligors
means each of the Account Party and the Guarantors;
OECD
Country means any member of the Organisation for Economic
Co-operation and Development;
Original
Agreement means the letter of credit and reimbursement agreement
dated 14 March 2006, as amended, between, inter alios, the Account Party, the
Agent and the lenders thereto;
Original
Letters of Credit means the letters of credit issued under the
Original Agreement;
Original
Parties means the parties to the Original Agreement;
Participating
Member State means any member state of the European Communities
that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Union relating to European Monetary
Union;
Party
means any party to this Agreement;
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 Clause 412 of the Code or
Clause 302 of ERISA, and in respect of which any Obligor or any ERISA Affiliate
is (or, if such plan were terminated, would under Clause 4069 of ERISA be deemed
to be) an employer as defined in Clause 3(5) of
ERISA;
Potential
Event of Default means an event or condition which upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default;
Private
Act means separate legislation enacted in Bermuda with the
intention that such legislation apply specifically to an Obligor, in whole
or in
part;
Process
Agent has the meaning assigned to such term in Clause
29.3.
Quarterly
Dates 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;
-8-
Reference
Banks means, subject to Clause 26.6 (Reference
Banks), the principal London offices of Citigroup Global Markets Limited,
Lloyds TSB Bank plc and The Royal Bank of Scotland plc;
Register
has the meaning given to it in Clause 26.11 (Maintenance of Register by
Agent);
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;
Representations
means each of the representations and warranties set out in
Clause 17 (Representations and Warranties);
SAP
means, as to each Obligor and each Subsidiary that offers insurance products,
the statutory accounting practices prescribed or permitted by the relevant
Governmental Authority for such Obligor’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 Obligor or such Subsidiary in effect
on
the date such statements or reports are to be prepared, except if otherwise
notified by the Account Party as provided in Clause 1.3;
SEC
means the Securities and Exchange Commission of the United States of America
or
any successor entity;
Significant
Subsidiary means, at any time, each Subsidiary of the Account
Party that, as of such time, meets the definition of a “significant subsidiary”
under Regulation S-X of the SEC;
Specified
Transaction Agreement means any agreement, contract or
documentation with respect to the following types of transactions: cash pooling
arrangements, 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
basket swap, credit default option, total return swap, credit spread
transaction, hedge fund structured products or transactions, resettable strike
swap or other products written on or with respect to a fund, fund of funds
or
indices of funds, 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) or any transactions similar
to
the foregoing;
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; in exchange, the SVI Provider typically receives
a
fee;
Sterling
or £ refers to the lawful currency of
the United Kingdom from time to time;
Stonebridge
Underwriting means Stonebridge Underwriting Limited, a company
incorporated under the laws of England and Wales;
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 Obligor;
Substitute
Lender has the meaning give to it in
Clause 4.4(a);
-9-
Taxes
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental
Authority. Taxation and
Tax shall be construed
accordingly;
Total
Commitments means, at any time, the aggregate of the Lenders’
Commitments (being on the date hereof £450,000,000);
Total
Funded Debt means, at any time, all Indebtedness of the Account
Party and its Subsidiaries and any other Person which would at such time be
classified in whole or in part as a liability on the consolidated balance sheet
of the Account Party and its consolidated Subsidiaries in accordance with GAAP
(it being understood for avoidance of doubt that any liability or obligation
excluded from the definition of Indebtedness shall not constitute Indebtedness
for purposes of this definition);
Total
LC Exposures means, at any time, the aggregate of the Lenders’ LC
Exposures;
Transactions
means the execution, delivery and performance by the Obligors of this Agreement
and the other Finance Documents to which any Obligor is intended to be a party
and the issuance of Letters of Credit hereunder;
Transfer
Certificate means a certificate in the form of Schedule 8
(Form of Transfer Certificate) delivered pursuant to Clause 26.4
(Transfer Procedure);
Transferee
means a Person to which a Lender seeks to transfer by novation all or part
of
such Lender’s rights, benefits and obligations under the Finance
Documents;
USA
Patriot Act has the meaning given to such term as set out in
Clause 28.6;
US
Government Agencies means US government agencies whose debt
obligations are fully and explicitly guaranteed as to the timely repayment
of
principal and interest by the full faith and credit of the US federal
government;
Utilisation
Date means the date on which a Letter of Credit is to be
issued;
Utilisation
Request means a notice substantially in the form set out in
Schedule 6 (Form of Utilisation Request);
Withdrawal
Liability means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms
are
defined in Part I of Subtitle E of Title IV of ERISA;
XL
America means X.L. America, Inc., a company incorporated under the
laws of Delaware, USA;
XL
Capital Group means the XL Capital Group as determined from time
to time by A.M. Best & Co;
XL
Insurance means XL Insurance (Bermuda) Ltd, a company organised
under the laws of Bermuda;
XL
London Market means XL London Market Ltd (formerly known as
Xxxxxxxxx), a company incorporated under the laws of England and
Wales;
XL
Re means XL Re Ltd, a company organised under the laws of
Bermuda.
1.2 Any
reference in this Agreement to:
|
(a)
|
the
Agent, Security Trustee,
Arrangers,Lender or any other
Person shall be construed so as to include its and any subsequent
successors and permitted transferees in accordance with their respective
interests;
|
|
(b)
|
continuing,
in the context of an Event of Default shall be construed as a reference
to
an Event of Default which has not been remedied or waived in accordance
with the terms hereof and in relation to a
Potential
|
-10-
|
|
Event
of Default, one which has not been remedied within the
relevant grace period or waived in accordance with the terms
hereof;
|
|
(c)
|
a
holding company of a company or corporation
shall be construed as a reference to any company or corporation of
which
the first-mentioned company or corporation is a
subsidiary;
|
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(d)
|
the
equivalent on any date in one currency (the
first currency) of an amount denominated in
another currency (the second currency) is a
reference to the amount of the first currency which could be purchased
with the amount of the second currency at the spot rate quoted by
the
Agent at or about 11.00 a.m. on such date for the purchase of the
first
currency with the second currency;
|
|
(e)
|
a
member shall be construed (as the context may
require) as a reference to an underwriting member of
Lloyd’s;
|
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(f)
|
a
month is a reference to a period starting
on one
day in a calendar month and ending on the numerically corresponding
day in
the next succeeding calendar month save that, where any such period
would
otherwise end on a day which is not a Business Day, it shall end
on the
next succeeding Business Day, unless that day falls in the calendar
month
succeeding that in which it would otherwise have ended, in which
case it
shall end on the immediately preceding Business Day, PROVIDED
THAT, if a period starts on the last Business Day in a calendar
month or if there is no numerically corresponding day in the month
in
which that period ends, that period shall end on the last Business
Day in
that later month (and references to months shall
be construed accordingly);
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(g)
|
a
Lender’s participation, in relation to a Letter
of Credit, shall be construed as a reference to the rights and obligations
of such Lender in relation to such Letter of Credit as are expressly
set
out in this Agreement;
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(h)
|
a
successor shall be construed so as to include
an
assignee or successor in title of such party and any person who under
the
laws of its jurisdiction of incorporation or domicile has assumed
the
rights and obligations of such party under this Agreement or to which,
under such laws, such rights and obligations have been
transferred;
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(i)
|
an
asset or 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;
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(j)
|
tax
shall be construed so as to include any and all present or future
stamp or
documentary taxes or any other excise or property taxes, charges,
interest, penalties or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement;
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(k)
|
VAT
shall be construed as a reference to value added tax including any
similar
tax which may be imposed in place thereof from time to
time;
|
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(l)
|
the
winding-up,
dissolution or
administration of a company or corporation shall
be construed so as to include any equivalent or analogous proceedings
under the Law of the jurisdiction in which such company or corporation
is
incorporated or any jurisdiction in which such company or corporation
carries on business including the seeking of liquidation, winding-up,
reorganisation, dissolution, administration, arrangement, adjustment,
protection or relief of debtors;
and
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(m)
|
unless
the contrary intention appears:
|
|
|
(i)
|
a
Letter of Credit is cancelled,
repaid or prepaid
by:
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|
|
(A)
|
providing
the Issuing Lender(s) with cash cover (as defined below);
or
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-11-
|
|
(B)
|
reducing
(in accordance with the terms of this Agreement and the Letter of
Credit)
the amount that may be demanded under the Letter of Credit (or by
that
amount automatically reducing in accordance with the terms of the
Letter
of Credit); or
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(C)
|
cancelling
the Letter of Credit by (x) providing written confirmation (in form
and substance satisfactory to the Agent or the Issuing Lender) from
Lloyd’s that the Issuing Lender(s) has no further liability under the
Letter of Credit (including by way of a notice specifying that Lloyd’s
does not accept or unconditionally rejects a Letter of Credit (unless
the
Agent or the Issuing Lender as the case may be, acting reasonably,
considers that Lloyd’s remains entitled to make a claim under such Letter
of Credit)), and (y) if Lloyd’s agrees, by procuring the return of
the original to the Agent;
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(ii)
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cash
cover is provided, pursuant to the terms of the Charge
Agreement, in respect of a Lender’s participation in a Letter of Credit at
any time by paying an amount in Sterling equal to the outstanding
amount
of that participation at that time to such account or accounts as
the
Agent may specify and creating effective security over such amount
in
favour of the Security Trustee on behalf of the Finance Parties in
form
and substance satisfactory to the Security Trustee (together with
legal
opinions, evidence of corporate authorisation, and similar documentation
reasonably required by the Security Trustee), in the name of the
Account
Party from which the only withdrawals which may be made are withdrawals
made with the prior written consent of the Security Trustee in accordance
with the terms of the Charge Agreement;
and
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(iii)
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a
reference to principal amount in respect of a
Letter of Credit means the maximum amount which is expressed to be
capable
of being demanded under a Letter of Credit ignoring the aggregate
amount
of any cash cover held in relation to that Letter of
Credit.
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1.3 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 the Account
Party notifies the Agent that the Obligors request an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof
in
GAAP or SAP, as the case may be, or in the application thereof on the operation
of such provision (or if the Agent notifies the Obligors that the Majority
Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change
in
GAAP or SAP, as the case may be, or in the application thereof, then such
provision shall be interpreted on the basis of GAAP or SAP, as the case may
be,
as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
Agreements
and Statutes
1.4 Any
reference in this Agreement to:
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(a)
|
this
Agreement or any other agreement or document shall be construed as
a
reference to this Agreement or, as the case may be, such other agreement
or document as the same may have been, or may from time to time be,
amended, varied, novated or
supplemented;
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(b)
|
a
statute or treaty shall be construed as a reference to such statute
or
treaty as the same may have been, or may from time to time be, amended
or,
in the case of a statute, re-enacted;
and
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(c)
|
a
bylaw shall be construed as a reference to a bylaw made under Lloyd’s Acts
1871 to 1982 as the same may have been, or may from time to time
be,
amended or replaced.
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-12-
1.5 Clause
and Schedule headings are for ease of reference only.
1.6 Any
reference in this Agreement to a time of day shall, unless a contrary indication
appears, be a reference to London time.
2. THE
FACILITY
2.1 The
Lenders, upon the terms and subject to other conditions hereof, grant to the
Account Party a letter of credit facility in an aggregate amount of
£450,000,000.
Purpose
and Application
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2.2
(a)
|
The
Facility is intended to support Funds at Lloyd’s for the underwriting
business of the Applicants, and, accordingly, the Account Party shall
apply all Letters of Credit issued hereunder in or towards satisfaction
of
such purpose.
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(b)
|
Without
prejudice to the Account Party’s obligations under Clause 2.2(a) and
the remaining provisions of this Agreement, none of the Finance Parties
shall be bound to enquire as to, nor shall any of them be responsible
for,
the purpose of, or application of the proceeds of any Letter of Credit
issued hereunder.
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2.3 Save
as the Lenders may otherwise agree, the Account Party may not deliver any
Utilisation Request unless the Agent has confirmed to the Account Party and
the
Lenders that it has waived and/or received all of the documents and other
evidence listed in Schedule 5 (Conditions Precedent) and that each is,
in form and substance, reasonably satisfactory to the Agent.
Several
Obligations
2.4 The
obligations of each Lender are several and the failure by a Lender to perform
its obligations hereunder and/or under any Letter of Credit issued hereunder
shall not affect the obligations of either Obligor towards any other party
hereto nor shall any other party be liable for the failure by such Lender to
perform its obligations hereunder and/or under such Letter of
Credit.
2.5 The
rights of each Finance Party are several and any debt arising hereunder at
any
time from an Obligor to any Finance Party shall be a separate and independent
debt. Each such party shall be entitled to protect and enforce its
individual rights arising out of this Agreement independently of any other
party
(so that it shall not be necessary for any party hereto to be joined as an
additional party in any proceedings for this purpose).
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2.6
(a)
|
If,
after the date of this Agreement, more than one currency or currency
unit
denomination are at the same time recognised by the central bank
of any
country as the lawful currency of that country,
then:
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-13-
|
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(i) any
reference in the Finance Documents to, and any obligations arising
under
the Finance Documents in, the currency of that country shall be
translated
into, or paid in, the currency or currency unit of that country
designated
by the Agent; and
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(ii)
|
any
translation from one currency or currency unit to another shall be
at the
official rate of exchange or conversion rate recognised by the central
bank for the conversion of that currency or currency unit into the
other,
rounded up or down by the Agent acting
reasonably.
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|
(b)
|
If
a change in any currency of a country occurs, this Agreement will
be
amended in the manner determined by the Agent (acting reasonably)
so as to
reflect the change in currency and to place the parties in the same
position, so far as possible, that they would have been in if no
change in
currency had occurred.
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2.7
(a)
|
From
the date of this Agreement the Account Party shall not deliver any
Utilisation Request (as defined in the Original Agreement) under
the
Original Agreement.
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|
(b)
|
The
Original Parties hereby agree that the Original Agreement shall be
automatically terminated and the Total Commitments thereunder cancelled
upon cancellation of all the Original Letters of Credit in accordance
with
the terms of the Original
Agreement.
|
|
(c)
|
The
letter of credit fees payable by the Account Party in respect of
any
Original Letter of Credit shall, from the date hereof until any such
Original Letter of Credit is cancelled, accrue at the rate set out
in
clause 9.2(a) (Letter of Credit
Fee).
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3. UTILISATION
OF THE FACILITY
Utilisation
Conditions for the Facility
3.1 Save
as otherwise provided herein, a Letter of Credit will be issued at the request
of the Account Party on behalf of an Applicant if:
|
(a)
|
no
later than 10.00 a.m. two Business Days before the proposed Utilisation
Date, the Agent has received a duly completed Utilisation Request
from the
Account Party;
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|
(b)
|
the
proposed Utilisation Date is a Business Day falling within the
Availability Period;
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|
(c)
|
the
proposed amount of such Letter of Credit is less than or equal to
the
Available Facility;
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|
(d)
|
the
Letter of Credit is substantially in the form set out in Schedule
7
(Form of Letter of Credit) or in such other form requested by the
Account Party which is approved by Lloyd’s and the Lenders (such approval
by the Lenders not to be unreasonably withheld or delayed and shall
not be
required unless the other form requested differs materially from
the form
set out in Schedule 7);
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(e)
|
the
beneficiary of such Letter of Credit is Lloyd’s;
and
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|
(f)
|
on
and as of the proposed Utilisation Date (a) no Default has occurred
and is
continuing and (b) the Representations are true in all material
respects.
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3.2 The
Account Party may request the issue by the Lenders hereunder of a total of
up to
thirty Letters of Credit in respect of the Applicants. A single
Utilisation Request may be issued in respect of more than one Letter of
Credit.
-14-
Completion
of Letters of Credit
3.3 The
Agent is authorised to arrange for the issue of any Letter of Credit pursuant
to
Clause 3.1 (Utilisation Conditions for the Facility)
by:
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(a)
|
completing
the Commencement Date of such Letter of
Credit;
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|
(b)
|
completing
the schedule to such Letter of Credit with the percentage participation
of
each Lender as allocated pursuant to the terms hereof;
and
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|
(c)
|
executing
such Letter of Credit on behalf of each Lender and following such
execution delivering such Letter of Credit to Lloyd’s on the Utilisation
Date.
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Final
Expiration Date
3.4 Each
Letter of Credit shall expire on its Final Expiration Date.
Each
Lender’s Participation in Letters of Credit
|
3.5
(a)
|
Save
as otherwise provided herein, each Lender will participate in each
Letter
of Credit issued pursuant to this Clause 3 in the proportion borne
by its
Available Commitment to the Available Facility immediately prior
to the
issue of such Letter of Credit.
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(b)
|
No
Lender shall participate in or issue any Letter of Credit to the
extent
that its LC Exposure would exceed its Commitment following the issue
of
that Letter of Credit.
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3.6 On
or before each Utilisation Date the Agent shall notify each Lender of the Letter
of Credit that is to be issued by the Agent on behalf of the Lenders, the name
of the Applicant in respect of whom the Letter of Credit is being issued and
the
aggregate principal amount of the relevant Letter of Credit allocated to such
Lender pursuant to this Agreement.
3.7 On
the expiry of the Availability Period, the Available Facility and each Lender’s
Available Commitment shall be reduced to zero and accordingly the remaining
Commitments of each Lender shall be equal to their respective LC Exposure under
any issued Letters of Credit.
4. TERMINATION
OF LETTERS OF CREDIT
Continuation
until Lloyd’s Termination Date
4.1 Each
Party acknowledges that, subject to the terms of this Agreement:
|
(a)
|
each
issued Letter of Credit shall continue in force unless Lloyd’s receives a
notice from the Agent (or any Finance Party, if pursuant to Clause
4.6(b))
giving Lloyd’s not less than four years’ notice in writing, terminating
such Letter of Credit pursuant to Clause 3 of the Letter of Credit
(a
Lloyd’s Termination
Notice):
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(i)
|
on
the later of (x) 31 December 2012 and (y) any subsequent date as
specified
in such notice (a Xxxxx’sTermination
Date); or
|
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|
(ii)
|
at
any time after the occurrence of an Acceleration Event or whilst
any
Continuation CP Event (as defined in Clause 4.6(b)) is
continuing;
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|
(b)
|
|
no
Party, other than the Agent (or any Lender, if pursuant to Clause
4.6(b)),
may deliver a Lloyd’s Termination Notice (and the Agent may only deliver a
Lloyd’s Termination Notice pursuant to Clause 3 of the Letter of Credit
and this Clause 4);
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(c)
|
if
the Account Party or any Lender (a Relevant
Party) so requests (a Termination
Request), the Agent shall deliver a Lloyd’s Termination
Notice as required by this Clause 4, on the later
of:
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|
|
(i)
|
the
expiration of the period ending on the day three weeks after the
corresponding Termination Request Receipt Date, as defined in Clause
4.2(b); and
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|
(ii)
|
the
expiration of any Declining Lender Notice Period, as defined in
Clause 4.3(a);
|
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(d)
|
the
Agent shall, promptly after delivery by the Agent of a Lloyd’s Termination
Notice, provide a copy of such Lloyd’s Termination Notice to each Lender
(and shall inform the Account Party of the Lloyd’s Termination Date);
and
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(e)
|
a
Letter of Credit will terminate on the Lloyd’s Termination
Date.
|
4.2 A
Termination Request may be delivered by a Relevant Party to the Agent in
accordance with the following:
|
(a)
|
no
Termination Request may be delivered before 1 January
2008;
|
|
(b)
|
any
Termination Request delivered on a date (a Termination Request
Delivery Date) from 1 January 2008 to and including 30
November 2008 will be deemed to have been received by the Agent on
(a
Termination Request Receipt Date) 30 November
2008 and the corresponding Lloyd’s Termination Date shall be 31 December
2012; and
|
|
(c)
|
from
1 December 2008, any Termination Request Receipt Date will be the
later of
(i) 1 January 2009 and (ii) the corresponding Termination Request
Delivery
Date.
|
Declining
Lender Mechanics (on Delivery by a Lender of a Termination
Request)
|
4.3
(a)
|
If
a Lender (a Declining Lender) delivers a
Termination Request to the Agent:
|
|
|
(i)
|
the
Agent shall notify the Account Party accordingly within two Business
Days
thereafter; and
|
|
|
(ii)
|
during
the period ending on the day three weeks after the corresponding
Termination Request Receipt Date (a Declining Lender Notice
Period) the Account Party may designate a Substitute Lender
as contemplated in Clause 4.4.
|
|
(b)
|
Unless
a Substitute Lender has
been designated pursuant to Clause 4.4 (in which case the provisions
of
Clause 4.5(a) shall apply) upon expiry of the Declining Lender Notice
Period the Agent shall issue a Lloyd’s Termination
Notice (in accordance with Clause 3 of the Letter of Credit)
specifying a Lloyd’s Termination Date of the later of (i) 31 December
2011 and (ii) the fourth anniversary of the date of that notice,
whereupon the Letter of Credit will terminate on such Lloyd’s
Termination Date.
|
|
(c)
|
Unless
notice is given to the Agent as aforesaid each Lender will be deemed
automatically to have agreed to continue its participation in each
Letter
of Credit.
|
-00-
4.4
(a) If any Declining Lender delivers a Termination
Request, the Account Party may designate by the date which falls no later than
two Business Days before the end of the corresponding Declining Lender Notice
Period an Approved Credit Institution (which may be an existing Lender or
Lenders) (the Substitute Lender) which is willing to assume all of the
rights and obligations of the Declining Lender in respect of its participation
in the relevant Letter of Credit (the Old Letter of
Credit).
|
(b)
|
If
the Account Party has found a Substitute Lender it shall promptly
notify
the Agent and the Declining Lender thereof and shall use its best
efforts
to procure the release by Lloyd’s of the Old Letter of Credit (an
Old Letter of Credit Release) from the Funds at
Lloyd’s of the relevant Applicant.
|
|
(c)
|
The
Declining Lender shall as soon as reasonably practicable after receipt
of
notice from the Account Party transfer its rights and obligations
hereunder to the Substitute Lender in accordance with the provisions
of
Clause 26.3 (Transfers by
Lenders).
|
|
(d)
|
The
Substitute Lender shall pay to the Declining Lender all amounts then
due
and owing (and all fees accrued to but excluding the date of such
transfer) to the Declining Lender in respect of its participation
in the
Old Letter of Credit.
|
|
4.5
(a)
|
If
a Substitute Lender has become party hereto pursuant to Clause 4.4
(Substitute Lender), then subject to the provisions of Clause 4.6
(Continuation Conditions Precedent) the Lenders who are deemed to
have agreed to the continuation of the Old Letter of Credit (the
Extending Lenders) shall, together with the
Substitute Lender, participate in, and issue as soon as reasonably
practicable (on or immediately after the Old Letter of Credit Release),
a
new Letter of Credit (the New Letter of Credit)
which shall (i) replace the Old Letter of Credit and (ii) be in
an amount equal to the Old Letter of Credit. If the New Letter of
Credit
has not been issued by the end of the Declining Lender Notice Period,
Clause 4.5(b) shall apply (on the assumption, if not the case, that
a
Substitute Lender has not been found by the time specified in
Clause 4.4(a)) and the Agent shall promptly deliver a Lloyd’s
Termination Notice (in accordance with Clause 4.3 (Declining Lender
Mechanics)).
|
|
(b)
|
If
a Substitute Lender has not been found by the time specified in
Clause 4.4(a), then the Account Party shall use its best efforts to
procure an Old Letter of Credit Release, and on or immediately after
such
Old Letter of Credit Release (i) subject to the provisions of Clause
4.6
(Continuation Conditions Precedent), the Extending Lenders shall
participate in, and issue as soon as reasonably practicable, a new
Letter
of Credit (the Reduced Letter of Credit) which
shall (x) replace their participation in the Old Letter of Credit
and (y)
be in an amount equal to the Old Letter of Credit less
the amount of the Declining Lender’s participation and (ii) the Declining
Lender shall participate in a separate Letter of Credit (a
Bilateral Letter of Credit) which shall (x)
replace its participation in the Old Letter of Credit, (y) be in
an amount
equal to the Declining Lender’s participation in the Old Letter of Credit
and (z) have a Final Expiration Date which is the Lloyd’s Termination Date
designated pursuant to Clause 4.3 (Declining Lender
Mechanics).
|
Continuation
Conditions Precedent
|
4.6
(a)
|
On
or prior to close of business on 1 September of each year (each,
a
Continuation CP Date), the Account Party shall
promptly notify the Agent if (as of such Continuation CP
Date):
|
|
|
(i)
|
an
Event of Default or Potential Event of Default occurs which is
continuing;
|
|
|
(ii)
|
any
of the Representations cease to be correct in all material respects,
or
become misleading in any material respect;
or
|
|
|
(iii)
|
any
Letter of Credit ceases solely to be used to support the relevant
Applicant’s underwriting business at Lloyd’s which has been provided in
accordance with the requirements of Lloyd’s applicable to
it.
|
-17-
|
|
(b)
|
If
on any Continuation CP Date any of the events specified in
Clause 4.6(a) (each, a Continuation CP
Event) has occurred and is continuing, then at any time
thereafter (so long as any Continuation CP Event is
continuing):
|
|
|
(i)
|
the
Agent may, and at the request of the Majority Lenders shall, issue
a
Lloyd’s Termination Notice (containing the earliest possible Lloyd’s
Termination Date); and
|
|
|
(ii)
|
any
Lender shall be entitled to issue a Lloyd’s Termination Notice (containing
the earliest possible Lloyd’s Termination Date) and such Lender shall
promptly provide a copy of such Lloyd’s Termination Notice to the
Agent,
|
and
the
Agent shall, in each case, provide a copy of the Lloyd’s Termination Notice to
the Account Party (and each other Lender) within two Business Days of the Agent
(x) issuing a Lloyd’s Termination Notice (in the case of paragraph (i) above) or
(y) receiving a copy of a Lloyd’s Termination Notice from a Lender (in the case
of paragraph (ii) above).
4.7 At
any time after the issue of a Bilateral Letter of Credit by a Declining Lender
the Account Party may give the Agent and the Declining Lender not less than
fourteen days’ prior written notice of its intention to procure that the
liability of the Declining Lender under such Letter of Credit is reduced to
zero
(whereupon it shall do so).
4.8 In
the event that the Funds at Lloyd’s Requirements of an Applicant changes at or
around the time of any given Funds Date in terms of amount and/or the identity
of the Applicant, subject to the approval of Lloyd’s and subject to each
Lender’s LC Exposures under the Letters of Credit issued hereunder not being
increased, the Lenders shall co-operate with the Account Party to ensure to
the
extent reasonably possible that the Letters of Credit provide for the revised
Funds at Lloyd’s Requirements of the Applicants.
4.9 If
at any time a Bilateral Letter of Credit is outstanding, the Account Party
shall
have the right to increase the size of the Facility by up to the principal
amount of the Bilateral Letter of Credit(s) outstanding by introducing a new
lender (which may be an existing Lender) and on terms that one or more
outstanding Bilateral Letters of Credit having an aggregate principal amount
at
least equal to the increase are cancelled at the time the increase takes
effect. Each Lender agrees to execute any documentation giving effect
to this increase and new lender provided that no such documentation may increase
the Commitment of any Lender without the express consent of that Lender at
the
time such documentation is executed.
5. PAYMENT
OF DEMANDS
|
5.1
(a)
|
The
Agent 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 Agent shall promptly after such examination
(and
in any event by 12 noon on the Business Day immediately following
receipt
of such demand) (i) notify each of the Lenders and the Account Party
by
facsimile of such demand for payment and (ii) deliver to each Lender
and
the Account Party a copy of each document purporting to represent
a demand
for payment under such Letter of
Credit.
|
|
(b)
|
With
respect to any drawing properly made under a Letter of Credit, each
Lender
will make an LC Disbursement in respect of such Letter of Credit
in
accordance with its liability under such Letter of Credit and this
Agreement, such LC Disbursement to be made to the account of the
Agent
most recently designated by
|
-18-
|
|
it
for such purpose by notice to the Lenders within two Business Days
of
receipt of a demand for payment under such Letter of Credit by the
Agent;
|
|
(c)
|
The
Agent will and undertakes to each Lender that it
will:
|
|
|
(i)
|
make
any such LC Disbursement available to Lloyd’s as the beneficiary of such
Letter of Credit by promptly crediting the amounts so received from
the
Lenders, in like funds, to the account identified by Lloyd’s in connection
with such demand for payment on the date following two Business Days
after
the receipt by the Agent of such demand;
and
|
|
|
(ii)
|
notify
each Lender on the third Business Day after the receipt by the Agent
of
such demand for payment that it has credited such amounts to the
account
identified by Lloyd’s.
|
|
(d)
|
Promptly
following any LC Disbursement by any Lender in respect of any Letter
of
Credit, the Agent will notify the Account Party of such LC Disbursement
provided that any failure to give or delay in giving such notice
shall not
relieve the Account Party of their obligation to reimburse the Lenders
with respect to any such LC
Disbursement.
|
Right
to make Payments under Letters of Credit
5.2 Each
Lender shall be entitled to make any payment in accordance with the terms of
the
relevant Letter of Credit without any reference to or further authority from
the
Account Party or any other investigation or enquiry.
5.3 Neither
the Agent, nor any Lender nor any of their Related Parties shall have any
liability or responsibility by reason of or in connection with the issuance
or
transfer of any 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 Agent or a Lender from liability
to any Obligor to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Obligors to the
extent permitted by applicable Law) suffered by any Obligor that are caused
by
the gross negligence or wilful misconduct of the Agent or a Lender. The parties
hereto expressly agree that:
|
(a)
|
the
Agent 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;
|
|
(b)
|
the
Agent shall have the right, in its sole discretion, to decline to
accept
such documents and to make such payment if such documents are not
in
strict compliance with the terms of such Letter of Credit;
and
|
|
(c)
|
this
Clause shall establish the standard of care to be exercised by the
Agent
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).
|
6. THE
ACCOUNT PARTY’S LIABILITIES IN RELATION TO LETTERS OF
CREDIT
The
Account Party’s Indemnity to Lenders
6.1 The
Account Party shall irrevocably and unconditionally as a primary obligation
indemnify (on demand by the Agent (and any Lender may require the Agent to
make
such demand)) each Lender against:
-19-
(a) any
LC Disbursement paid or payable by such Lender in accordance with the terms
of
any Letter of Credit requested by the Account Party; and
|
(b)
|
all
liabilities, reasonable costs (including, without limitation, any
costs
incurred in funding any amount which falls due from such Lender in
connection with such Letter of Credit), claims, losses and reasonable
expenses which such Lender may at any time properly incur or sustain
in
connection with any Letter of
Credit.
|
6.2 Neither
the obligations of the Account Party set out in this Clause 6 nor the
rights, powers and remedies conferred on any Lender by this Agreement or by
Law
shall be discharged, impaired or otherwise affected by:
|
(a)
|
the
winding-up, dissolution, administration or re-organisation of any
Lender
or any other person or any change in its status, function, control
or
ownership;
|
|
(b)
|
any
of the obligations of any Lender or any other person hereunder or
under
any Letter of Credit or under any other security taken in respect
of the
Account Party’s obligations hereunder or otherwise in connection with any
Letter of Credit being or becoming illegal, invalid, unenforceable
or
ineffective in any respect;
|
|
(c)
|
time
or other indulgence being granted or agreed to be granted to any
Lender or
any other person in respect of its obligations hereunder or under
or in
connection with any Letter of Credit or under any such other
security;
|
|
(d)
|
any
amendment to, or any variation, waiver or release of, any obligation
of
any Lender or any other person under any Letter of Credit or this
Agreement;
|
|
(e)
|
any
other act, event or omission which, but for this Clause 6 might
operate to discharge, impair or otherwise affect any of the obligations
of
the Account Party set out in this Clause 6 or any of the rights,
powers or remedies conferred upon any Lender by this Agreement or
by
Law.
|
The
obligations of the Account Party set out in this Clause 6 shall be in
addition to and independent of every other security which any Lender may at
any
time hold in respect of the Account Party’s obligations hereunder.
6.3 Any
settlement or discharge between the Account Party and a Lender shall be
conditional upon no security or payment to such Lender by the Account Party
or
any other person on behalf of the Account Party, being avoided or reduced by
virtue of any Laws relating to bankruptcy, insolvency, liquidation or similar
Laws of general application and, if any such security or payment is so avoided
or reduced, such Lender shall be entitled to recover the value or amount of
such
security or payment from the Account Party subsequently as if such settlement
or
discharge had not occurred.
7. DEFAULT
INTEREST
A
Demand
Amount shall bear interest during each Default Period in respect thereof, and
any other amount unpaid when due hereunder shall bear interest for so long
as it
remains outstanding at rate of the sum of (i) two per cent. per annum
(ii) the Mandatory Costs in respect thereof at such time, and
(iii) LIBOR on each day whilst such amount remains
outstanding. Such interest shall be payable by the Account Party on
the date on which it reimburses the Lenders under Clause 6.1(a) and (b) (The
Account Party’s Indemnity to Lenders).
8. TERMINATION
AND REDUCTION OF THE COMMITMENTS
Scheduled
Termination
-20-
8.1 Unless
previously terminated, the unutilised Commitments shall terminate at the close
of business on the Commitment Termination Date.
8.2 The
Account Party may at any time cancel, or from time to time reduce, the Total
Commitments; provided that (a) each reduction of the Total Commitments shall
be
in an amount of £5,000,000 or a larger multiple of £1,000,000 and (b) the
Account Party shall not cancel or reduce the Commitments if the Total LC
Exposures would exceed the Total Commitments.
8.3 The
Account Party shall notify the Agent of any election to cancel or reduce the
Total Commitments under Clause 8.2 at least three Business Days prior to
the effective date of such cancellation or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any notice, the
Agent shall advise the Lenders of the contents thereof. Each notice delivered
by
the Account Party pursuant to this Clause shall be irrevocable; provided that
a
notice of cancellation of the Commitments delivered by the Account Party may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Account Party (by
notice to the Agent on or prior to the specified effective date) if such
condition is not satisfied.
8.4 The
Account Party shall not repay or cancel all or any part of the LC Exposures
except at the times and in the manner expressly provided for in this
Agreement.
8.5 Any
cancellation or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made rateably among the Lenders in accordance with
their respective Commitments.
9. FEES
9.1 The
Account Party shall pay to the Agent for the account of the Lenders the
participation fees specified in the Fee Letter.
|
9.2
(a)
|
The
Account Party shall pay to the Agent for the account of each Lender
pro
rata according to their respective LC Exposures hereunder a letter
of
credit fee computed at the rate of 0.50 per cent. per annum (as such
rate
may be adjusted from time to time in accordance with the provisions
of
Clause 9.3) on the principal amount of each issued Letter of Credit
payable from the Utilisation Date until the Final Expiration Date
(as
extended) of that Letter of Credit or any earlier cancellation, repayment
or prepayment of the Letter of Credit in accordance with Clause 8
(Termination and Reduction of the Commitments) of this
Agreement;
|
|
(b)
|
the
Letter of Credit Fees shall be payable quarterly in arrears on each
Quarterly Date and on the date on which the Lenders cease to have
any LC
Exposure. Letter of Credit Fees accrued through and including
each Quarterly Date shall be payable on the fifth Business Day following
such Quarterly Date, commencing on the first such date to occur after
the
Commencement Date; and
|
|
(c)
|
the
Agent shall notify the Account Party in writing at least ten Business
Days
prior to each Quarterly Date of (i) the letter of credit fee payable
in respect of each Letter of Credit issued and (ii) the aggregate
letter of credit fee payable in respect of all Letters of Credit
issued.
|
-21-
Adjustment
of Letter of Credit Fee
|
9.3(a)
|
Notwithstanding
Clause 9.2(a) above, when the Financial Strength Rating (as defined
below)
corresponds to a rating set out in Column 1 or Column 2 below of
the fee
chart (the Fee Chart), the Letter of Credit Fee
payable in accordance with Clause 9.2 shall be the amount set out
in the
corresponding row in Column 3 of the Fee Chart; provided however,
that
whilst AMB Cash Collateral is posted in compliance with the provisions
of
Clause 19.8 (Ratings Downgrade) the Letter of Credit Fee shall be
0.30 per cent. per annum. Upon any AMB Cash Collateral which has
been
posted being fully released, in each case in compliance with Clause
19.8
(Ratings Downgrade), then the Letter of Credit Fee shall once
again be payable in accordance with the Fee
Chart.
|
|
(b)
|
Any
change to the Letter of Credit Fee described above shall take effect
on
the day on which the Financial Strength Rating change is publicly
announced by the applicable rating agency; or, in the event either
of the
conditions set forth in Clause 19.8(a) or (b) are not satisfied,
the day
on which the provisions of Clause 19.8 (Ratings Downgrade) have
been complied with.
|
Fee
Chart
|
A.M.
Best & Co.
Financial-Strength
Rating
Column
1
|
Standard
& Poor’s
Rating
Services
Financial-Strength
Rating
Column
2
|
Letter
of Credit Fee
Column
3
|
|
A++
|
Greater
than or equal to AA+
|
0.30
per cent. per annum
|
|
A+
|
AA
|
0.40
per cent. per annum
|
|
A
|
AA-
|
0.45
per cent. per annum
|
|
A-
|
A+
|
0.50
per cent. per annum
|
|
B++
and below
|
A
and below
|
0.65
per cent. per annum
|
|
(c)
|
In
this Clause 9.3and in Clause19.8, Financial Strength
Rating means the lower
of:
|
|
|
(i)
|
the
financial-strength rating of the XL Capital Group from A.M. Best
& Co.
(or its successor); and
|
|
|
(ii)
|
the
lower of the financial-strength rating from Standard & Poor’s Rating
Services (or its successor) of XL Insurance and XL
Re.
|
In
the
event that either A.M. Best & Co. or Standard & Poor’s Ratings Services
changes the designation of its ratings (including without limitation by
increasing the number of ratings available or notches within ratings), then
the
Agent and all the Lenders shall negotiate in good faith such amendments
to this Clause 9.3 as are necessary to ensure that (in the
opinion of the Lenders, acting reasonably) the Letter of Credit Fees payable
relative to the strength of the relevant rating are the same as they are on
the
date hereof.
Commitment
fee
|
9.4
(a)
|
The
Account Party shall pay to the Agent for the account of each Lender
a fee
computed at the rate of 33 per cent. per annum of the applicable
Letter of
Credit Fee from time to time on that Lender’s Available Commitment for the
Availability Period.
|
-22-
|
(b)
|
The
accrued commitment fee is payable quarterly in arrears on each Quarterly
Date during the Availability Period, on the last day of the Availability
Period and, if cancelled in full, on the cancelled amount of the
relevant
Lender’s Commitment at the time the cancellation is
effective.
|
9.5 The
Account Party agrees to pay to the Agent, for its own account, the agency fees
payable in the amounts and at the times specified in the Fee
Letter.
9.6 All
fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Agent for distribution, in the case of the Letter of Credit Fees
referred to in Clause 9.2 and the commitment fee referred in Clause9.4, to
the Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances absent manifest error in the calculation or payment of fees due
and payable.
Basis
of Calculation
The
fees
payable pursuant to Clauses 9.1, 9.2 and 9.4shall be calculated on the
basis of actual days elapsed and a 365 day year.
10. TAXES
10.1 All
payments to be made by an Obligor to any Finance Party hereunder, whether in
respect of principal, interest, fees or any other item, shall be made free
and
clear of and without deduction for or on account of tax unless such Obligor
is
required to make such a payment subject to the deduction or withholding of
tax,
in which case the sum payable by such Obligor (in respect of which such
deduction or withholding is required to be made) shall be increased to the
extent necessary to ensure that such Finance Party receives a sum net of any
deduction or withholding equal to the sum which it would have received had
no
such deduction or withholding been made or required to be made.
Tax
Indemnity
10.2 Without
prejudice to Clause 10.1 (Tax Gross-up), if any Finance Party is
required to make any payment of or on account of tax on or in relation to any
sum received or receivable hereunder (including any sum deemed for purposes
of
tax to be received or receivable by such Finance Party whether or not actually
received or receivable) or if any liability in respect of any such payment
is
asserted, imposed, levied or assessed against any Finance Party, the Account
Party shall, upon demand of the Agent, promptly indemnify the Finance Party
which suffers a loss or liability as a result against such payment or liability,
together with any interest, penalties, costs and expenses payable or incurred
in
connection therewith, PROVIDED THAT this Clause 10.2 shall not
apply to:
|
(a)
|
any
tax imposed on and calculated by reference to the net income actually
received or receivable by such Finance Party by the jurisdiction
in which
such Finance Party is incorporated;
or
|
|
(b)
|
any
tax imposed on and calculated by reference to the net income of the
Facility Office of such Finance Party actually received or receivable
by
such Finance Party by the jurisdiction in which its Facility Office
is
located; or
|
|
(c)
|
the
extent a loss, liability or cost is compensated for by an increased
payment under Clause 10.1 (Tax
Gross-up).
|
-23-
10.3 A
Lender intending to make a claim pursuant to Clause 10.2 (Tax
Indemnity) shall promptly notify the Agent of the event giving rise to the
claim, whereupon the Agent shall promptly notify the Account Party
thereof.
11. TAX
RECEIPTS
11.1 If,
at any time, an Obligor is required by Law to make any deduction or withholding
from any sum payable by it hereunder (or if thereafter there is any change
in
the rates at which or the manner in which such deductions or withholdings are
calculated), such Obligor shall promptly, upon becoming aware of the same,
notify the Agent.
11.2 If
an Obligor makes any payment hereunder in respect of which it is required to
make any deduction or withholding, it shall pay the full amount required to
be
deducted or withheld to the relevant taxation or other authority within the
time
allowed for such payment under applicable Law and shall deliver to the Agent
for
each Lender, within thirty days after it has made such payment to the applicable
authority, an original receipt (or a certified copy thereof) issued by such
authority evidencing the payment to such authority of all amounts so required
to
be deducted or withheld in respect of that Lender’s share of such
payment.
11.3 If
an additional payment is made under Clause 10 (Taxes) by an
Obligor for the benefit of any Finance Party and such Finance Party, in its
sole
discretion, determines that it has obtained (and has derived full use and
benefit from) a credit against, a relief or remission for, or repayment of,
any
tax, then, if and to the extent that such Finance Party, in its sole opinion,
determines that:
|
(a)
|
such
credit, relief, remission or repayment is in respect of or calculated
with
reference to the additional payment made pursuant to Clause 10
(Taxes); and
|
|
(b)
|
its
tax affairs for its tax year in respect of which such credit, relief,
remission or repayment was obtained have been finally
settled,
|
such
Finance Party shall, to the extent that it can do so without prejudice to the
retention of the amount of such credit, relief, remission or repayment, pay
to
such Obligor such amount as such Finance Party shall, in its sole opinion,
determine to be the amount which will leave such Finance Party (after such
payment) in no worse after-tax position than it would have been in had the
additional payment in question not been required to be made by such
Obligor.
11.4 If
any Finance Party makes any payment to an Obligor pursuant to Clause 11.3
(Tax Credit Payment) and such Finance Party subsequently determines, in
its sole opinion, that the credit, relief, remission or repayment in respect
of
which such payment was made was not available or has been withdrawn or that
it
was unable to use such credit, relief, remission or repayment in full, the
Obligor shall reimburse such Finance Party such amount as such Finance Party
determines, in its sole opinion, is necessary to place it in the same after-tax
position as it would have been in if such credit, relief, remission or repayment
had been obtained and fully used and retained by such Finance
Party.
11.5 No
provision of this Agreement shall interfere with the right of any Finance Party
to arrange its tax or any other affairs in whatever manner it thinks fit, oblige
any Finance Party to claim any credit, relief, remission or repayment in respect
of any payment under Clause 10.1 (Tax Gross-up) in priority to any
other credit, relief, remission
-24-
or
repayment available to it nor oblige any Finance Party to disclose any
information relating to its tax or other affairs or any computations in respect
thereof.
12. INCREASED
COSTS
12.1 Subject
to Clause 12.2 (Exceptions), if after the date of this Agreement,
the result of:
|
(a)
|
the
introduction of or any change in the official or judicial interpretation
or application of any Law (having the force of law or if not having
the
force of law, generally complied with by a Lender in relation to
any
relevant jurisdiction); and/or
|
|
(b)
|
compliance
(without adopting materially less prudent policies or standards than
those
previously adopted by it) by any Lender or by the holding company
of any
Lender with any of the matters mentioned in paragraph (a)
above,
|
including
in each case, without limitation, those Laws relating to Taxation, any change
in
currency, any reserve, special deposit, cash ratio, liquidity or capital
adequacy requirement or any other form of banking or monetary controls, is
that:
|
|
(i)
|
a
Lender or its holding company incurs an additional cost as a result
of
that Finance Party having entered into, or performing, maintaining
or
funding its obligations under this Agreement;
or
|
|
|
(ii)
|
a
Lender or its holding company incurs an additional cost in making,
funding
or maintaining any Letters of Credit made or to be made by it under
this
Agreement; or
|
|
|
(iii)
|
any
amount payable to a Lender or the effective return to a Lender under
this
Agreement or the effective return to a Lender or its holding company
on
its capital is reduced as a result of any change in the amount or
nature
of the capital resources required to be allocated in respect of a
Lender’s
participation under this Agreement;
or
|
|
|
(iv)
|
a
Lender makes any payment or foregoes any interest or other return
on or
calculated by reference to any amount received or receivable by it
from
the Account Party or the Agent under this
Agreement;
|
then
and
in each such case:
|
|
(A)
|
the
Lender shall notify the Account Party through the Agent of the relevant
event promptly upon becoming aware of the event giving details of
any
costs or amount likely to be demanded under paragraph
(B);
|
|
|
(B)
|
promptly
following any demand from time to time by that Lender through the
Agent,
the Account Party shall pay to the Agent for the account of that
Finance
Party (or, as the case may be, its holding company) such amount as
shall
compensate such Finance Party or its holding company for the additional
cost, reduction, payment or foregone interest or other
return.
|
12.2 Clause 12.1
shall not apply to or in respect of:
|
(a)
|
any
circumstances referred to in Clause 10.2 (Tax
Indemnity);
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-25-
|
(b)
|
any
circumstances for which a relevant Lender has been compensated for
under
Clause 0 (Tax Credit
Payment).
|
13. ILLEGALITY
If,
after
the date of this Agreement, any Change in Law or in the official or judicial
interpretation or application thereof shall make it unlawful or contrary to
an
official directive in any jurisdiction for any Lender to make available or
fund
or maintain or to give effect to its obligations as contemplated by this
Agreement or the Letters of Credit (or, by reason only of a Change of Law,
the
Lender ceases to be an Approved Credit Institution), the Lender shall promptly
on becoming aware of the same give notice thereof to the Account Party through
the Agent, whereupon:
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(a)
|
where
such change makes it unlawful or contrary to an official directive
to
maintain or give effect to its obligations under this Agreement,
if the
Agent on behalf of such Lender so requires, the Account Party shall
by no
later than the last day of any applicable grace period specified
by the
applicable Law ensure that the liabilities of such Lender under or
in
respect of each Letter of Credit are cancelled within the meaning
of
Clause 1.2(m)(i)(A) (or use its best efforts to ensure that such
liabilities are cancelled within the meaning of Clause 1.2(m)(i)(C)),
the Commitment of that Lender shall forthwith be cancelled and the
Account
Party shall prepay forthwith fees, costs and expenses due to that
Lender
hereunder;
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|
(b)
|
where
such change only makes it unlawful or contrary to an official directive
to
participate in further Letters of Credit under this Agreement, then
upon
receipt by the Agent of that notice, the Available Commitment of
that
Lender shall be reduced to zero, and upon the expiry of each Letter
of
Credit in which it is participating at such time, its resulting Available
Commitment shall also be cancelled, provided that if the Lender
subsequently transfers or assigns its rights and obligations under
this
Agreement to a new lender pursuant to Clause 26.5 (Rights to
substitute a single Bank), the Account Party may by notice to the
Agent increase the Commitment of such new lender by the amount of
the
Available Commitment that was previously
cancelled.
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14. MITIGATION
OBLIGATIONS; REPLACEMENT OF LENDERS.
14.1 If
any Lender requests compensation under Clause 12 (Increased
Costs), or if the Account Party is required to pay any additional amount to
any Lender or any Governmental Authority for account of any Lender pursuant
to
Clause 10 (Taxes), then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Letters
of
Credit hereunder or to transfer its rights and obligations hereunder to another
of its offices, branches or Affiliates, if, in the reasonable judgment of such
Lender, such designation or assignment (a) would eliminate or reduce amounts
payable pursuant to Clause 12 (Increased Costs) or 10 (Taxes),
as the case may be, in the future and (b) would not subject such Lender to
any
unreimbursed cost or expense and would not otherwise be disadvantageous to
such
Lender. The Account Party hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or
assignment.
14.2 If
any Lender requests compensation under Clause 12 (Increased
Costs), or if any Account Party is required to pay any additional amount to
any Lender or any Governmental Authority for account of any Lender pursuant
to
Clause 10 (Taxes), or if any Lender defaults in its
obligation to make LC Disbursements hereunder, or if any Lender ceases to be
an
Approved Credit Institution, then the Account Party may, at its sole expense
and
effort, upon notice to such Lender and the Agent, require such Lender to assign
and delegate, without recourse (in accordance with and subject to the
restrictions contained in Clause 26.5 (Right to substitute single
Lender)), all its interests, rights and obligations under this Agreement to
an Approved Credit Institution that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that:
|
(a)
|
the
Account Party shall have received the prior written consent of the
Agent,
which consent shall not unreasonably be
withheld;
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-26-
|
(b)
|
such
Lender shall have received payment of an amount equal to the outstanding
amount of its LC Disbursements, accrued interest thereon, accrued
fees and
all other amounts payable to it hereunder, from the assignee (to
the
extent of such outstanding principal and accrued interest and fees)
or the
relevant Account Party (in the case of all other amounts);
and
|
|
(c)
|
in
the case of any such assignment resulting from a claim for compensation
under Clause 12 (Increased Costs) or payments required to be
made pursuant to Clause 10 (Taxes), such assignment will
result in a reduction in such compensation or
payments.
|
A
Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the relevant Account Party to require such assignment and delegation
cease to apply.
15. PAYMENTS
GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.
Payments
by the Account Party
|
15.1
(a)
|
The
Account Party shall make each payment required to be made by them
hereunder or under any other Finance Document (except to the extent
otherwise provided therein) in Sterling on the date when due, in
immediately available cleared funds, without set-off or counterclaim
(and
in the case of payments required pursuant to Clause 6, by 11.00 a.m.
on the due date). Any amounts received after such time on any
date may, in the discretion of the Agent, be deemed to have been
received
on the next succeeding Business Day for the purposes of calculating
interest thereon. All such payments shall be made to the Agent
at the account most recently notified by it, except payments pursuant
to
Clauses 12 (Increased Costs), 10 (Taxes),
24 (Costs and Expenses) and 25 (Indemnities), which
shall be made directly to the Persons entitled thereto. The Agent
shall
distribute any such payments received by it for account of any other
Person to the appropriate recipient promptly following receipt
thereof.
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|
(b)
|
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.
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15.2 All
amounts payable under this Agreement in respect of any Letter of Credit shall
be
payable in Sterling.
15.3 If
at any time insufficient funds are received by and available to the Agent to
pay
fully all Demand Amounts, interest, fees and expenses then due hereunder, such
funds shall be applied:
|
(a)
|
first,
in or towards payment pro rata of any unpaid fees, costs, expenses,
indemnity payments and other amounts due to the Agent and the Security
Trustee under the Finance
Documents;
|
|
(b)
|
secondly,
in or towards payment pro rata of any unpaid costs and expenses of
the
Lenders under the Finance
Documents;
|
|
(c)
|
thirdly,
in or towards payment pro rata of any outstanding fees (other than
Letter
of Credit Fees) payable to the Lenders under the Finance
Documents;
|
|
(d)
|
fourthly,
in or towards payment pro rata of all accrued Letter of Credit Fees
due to
Issuing Lenders but unsatisfied under this
Agreement;
|
|
(e)
|
fifthly,
in or towards payment pro rata of any interest on Demand
Amounts;
|
-27-
|
(f)
|
sixthly,
in or towards payment pro rata of Demand
Amounts;
|
|
(g)
|
seventhly,
in or towards payment pro rata of any principal (other than a Demand
Amount) due but unsatisfied under this Agreement (including, for
the
avoidance of doubt, any cash cover to be provided under a Letter
of
Credit); and
|
|
(h)
|
eighthly,
in or towards payment pro rata of any other sum due but unsatisfied
under
this Agreement.
|
Pro
Rata Treatment
15.4 Except
to the extent otherwise provided herein:
|
(a)
|
each
reimbursement of LC Disbursements shall be made to the Lenders, each
payment of fees under Clause 9 (Fees) shall be made for
account of the Lenders, and each termination or reduction of the
Commitments under Clause 8 (Termination and Reduction of the
Commitments) shall be applied to the respective Commitments of the
Lenders, pro rata according to their respective Commitments;
and
|
|
(b)
|
each
payment of interest shall be made for account of the Lenders pro
rata in
accordance with the amounts of interest then due and payable to the
respective Lenders.
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15.5 If
any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any LC Exposures resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of
its
LC Exposures and accrued interest thereon then due than the proportion received
by any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the LC Exposures of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders rateably in accordance with the aggregate amount of
LC
Exposures; provided that:
|
(a)
|
if
any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall
be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and
|
|
(b)
|
the
provisions of this Clause shall not be construed to apply to any
payment
made by any Obligor pursuant to and in accordance with the express
terms
of this Agreement or any payment obtained by a Lender as consideration
for
the assignment of or sale of a participation in LC Disbursements
to any
assignee or participant, other than to the Account Party or any Subsidiary
or Affiliate thereof (as to which the provisions of this paragraph
shall
apply).
|
Each
Obligor consents to the foregoing and agrees, to the extent it may effectively
do so under applicable Law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Account Party rights
of
set-off and counterclaim with respect to such participation as fully as if
such
Lender were a direct creditor of the Account Party in the amount of such
participation and the Obligors authorise the Lenders to exchange Transfer
Certificates and any other documentation to give effect to those purchases
of
participations.
15.6 Unless
the Agent shall have received notice from any party prior to the date on which
any payment is due to the Agent hereunder that the payor will not make such
payment, the Agent may assume that the payor has made such payment on such
date
in accordance herewith and may, in reliance upon such assumption, distribute
to
the relevant payee the amount due. In such event, if the payor has not in fact
made such payment, then each of the payees severally agrees to repay to the
Agent forthwith on demand the amount so distributed to that payee with interest
thereon, for each day from and including the date such amount is distributed
to
it to but excluding the date of payment to the Agent, at the Agent’s cost of
funds from such sources as the Agent may reasonably select.
-28-
Certain
Deductions by the Agent
15.7 If
any Lender shall fail to make any payment required to be made by it pursuant
to
Clause 15.5 (Sharing of Payments by Lenders), then the Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Agent for account of such Lender to satisfy
such Lender’s obligations under such Clauses until all such unsatisfied
obligations are fully paid.
16. GUARANTEE
AND INDEMNITY
16.1 The
Guarantors, jointly and severally, irrevocably and unconditionally:
|
(a)
|
guarantee
to each Finance Party the due and punctual payment from time to time
on
demand any and every sum or sums of money which the Account Party
is at
any time liable to pay to any Finance Party under or pursuant to
the
Finance Documents and which has become due and payable but has not
been
paid at the time such demand is made (the Guaranteed
Obligations); and
|
|
(b)
|
agree
as a primary obligation to indemnify each Finance Party from time
to time
on demand from and against any loss incurred by any Finance Party
as a
result of any of the obligations of the Account Party under or pursuant
to
the Finance Documents being or becoming void, voidable, unenforceable
or
ineffective as against the Account Party for any reason whatsoever,
whether or not known to any Finance Party or any other person, the
amount
of such loss being the amount which the person or persons suffering
it
would otherwise have been entitled to recover from the Account
Party.
|
16.2 The
obligations of each Guarantor herein contained shall be in addition to and
independent of every other security which any Finance Party may at any time
hold
in respect of any of the Account Party’s obligations under the Finance
Documents.
16.3 The
obligations of each Guarantor herein contained shall constitute and be
continuing obligations notwithstanding any settlement of account or other matter
or thing whatsoever and shall not be considered satisfied by any intermediate
payment or satisfaction of all or any of the obligations of the Account Party
under the Finance Documents and shall continue in full force and effect until
final payment in full of all amounts owing by the Account Party under this
Agreement and total satisfaction of all the Account Party’s actual and
contingent obligations under the Finance Documents.
16.4 Neither
the obligations of the Guarantors herein contained nor the rights, powers and
remedies conferred in respect of the Guarantors upon any Finance Party by the
Finance Documents or by Law shall be discharged, impaired or otherwise affected
by:
|
(a)
|
the
winding-up, dissolution, administration or re-organisation of the
Account
Party or any other person or any change in its status, function,
control
or ownership;
|
|
(b)
|
any
of the obligations of the Account Party or any other person under
the
Finance Documents or under any other security taken in respect of
any of
its obligations under the Finance Documents being or becoming illegal,
invalid, unenforceable or ineffective in any
respect;
|
|
(c)
|
time
or other indulgence being granted or agreed to be granted to any
Obligor
in respect of its obligations under the Finance Documents or under
any
such other security;
|
-29-
|
(d)
|
any
amendment to, or any variation, waiver or release of, any obligation
of
any Obligor under the Finance Documents or under any such other
security;
|
|
(e)
|
any
failure to take, or fully to take, any security contemplated hereby
or
otherwise agreed to be taken in respect of the Obligors’ obligations under
the Finance Documents;
|
|
(f)
|
any
failure to realise or fully to realise the value of, or any release,
discharge, exchange or substitution of, any security taken in respect
of
the Obligors’ obligations under the Finance Documents;
or
|
|
(g)
|
any
other act, event or omission which, but for this Clause 16.4, might
operate to discharge, impair or otherwise affect any of the obligations
of
any Guarantor herein contained or any of the rights, powers or remedies
conferred upon any of the Finance Parties by the Finance
Documents or by
Law.
|
16.5 Any
settlement or discharge between any Obligor and any of the Finance Parties
shall
be conditional upon no security or payment to any Finance Party by the Account
Party or any other person on behalf of the Account Party being avoided or
reduced by virtue of any Laws relating to bankruptcy, insolvency, liquidation
or
similar Laws of general application and, if any such security or payment is
so
avoided or reduced, each Finance Party shall be entitled to recover the value
or
amount of such security or payment from the Account Party subsequently as if
such settlement or discharge had not occurred.
16.6 No
Finance Party shall be obliged before exercising any of the rights, powers
or
remedies conferred upon them in respect of any Guarantor by the Finance
Documents or by Law to:
|
(a)
|
make
any demand of the Account Party or any other
Obligor;
|
|
(b)
|
take
any action or obtain judgment in any court against the Account Party
or
any other Obligor;
|
|
(c)
|
make
or file any claim or proof in a winding-up or dissolution of the
Account
Party or any other Obligor; or
|
|
(d)
|
enforce
or seek to enforce any other security taken in respect of any of
the
obligations of the Account Party or any other Obligor under the Finance
Documents.
|
16.7 Each
Guarantor agrees that, so long as any amounts are or may be owed by the Account
Party under the Finance Documents or the Account Party is under any actual
or
contingent obligations under the Finance Documents, it shall not exercise any
rights which it may at any time have by reason of performance by it of its
obligations under the Finance Documents:
|
(a)
|
to
be indemnified by the Account Party;
and/or
|
|
(b)
|
to
claim any contribution from any other Guarantor of the Account Party’s
obligations under the Finance Documents;
and/or
|
|
(c)
|
to
take the benefit (in whole or in part and whether by way of subrogation
or
otherwise) of any rights of the Finance Parties under the Finance
Documents or of any other security taken pursuant to, or in connection
with, this Agreement by all or any of the Finance
Documents.
|
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16.8 The
Guarantors (other than the Account Party) 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 the Account Party) 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 Clause
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
Clause 16 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 Clause, (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 the Account Party)
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 Clause16) of all of the Guarantors
(other than the Account Party), 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.
16.9 In
any action or proceeding involving any state corporate Law, or any state or
Federal bankruptcy, insolvency, reorganisation or other Law in any other
jurisdiction affecting the rights of creditors generally, if the obligations
of
any Guarantor under Clause 16.1 (Guarantee and Indemnity) would
otherwise, taking into account the provisions of Clause 16.8, 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
Clause 16.1 (Guarantee and Indemnity), then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Guarantor, any Lender, the Agent or any
other
Person, be automatically limited and reduced to the highest amount that is
valid
and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
16.10 Until
all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full, each
Finance Party (or any trustee or agent on its behalf) may:
|
(a)
|
refrain
from applying or enforcing any other moneys, security or rights held
or
received by that Finance Party (or any trustee or agent on its behalf)
in
respect of those amounts, or apply and enforce the same in such manner
and
order as it sees fit (whether against those amounts or otherwise)
and,
until all such amounts have been irrevocably paid in full, no Guarantor
shall be entitled to the benefit of the same;
and
|
|
(b)
|
hold
in an interest-bearing suspense account any money received from any
Guarantor or on account of any Guarantor’s liability under this Clause 16
until all such amounts have been irrevocably paid in full, after
which
time any balance left in such account (including accrued interest,
if any)
shall be deemed the property of and will be repaid to the relevant
Guarantor.
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17. REPRESENTATIONS
AND
WARRANTIES
17.1 Each
Obligor represents and warrants to the Lenders on the date of this Agreement,
the Closing Date and on 1 September of each year unless all of the Letters
of
Credit will terminate on or before the fourth anniversary of such date (with
reference to the facts and circumstances subsisting on each such date) as
follows.
17.2 It
and each of its Significant Subsidiaries is duly organised, validly existing
and
in good standing under the Laws of the jurisdiction of its organisation, 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.
Authorisation;
Enforceability
17.3 The
Transactions are within such Obligor’s corporate powers and have been duly
authorised by all necessary corporate and, if required, by all necessary
shareholder action. Each Finance Document to which such Obligor is party has
been duly executed and delivered by such Obligor and constitutes a legal, valid
and binding obligation of such Obligor, enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by
(a)
bankruptcy, insolvency, reorganisation, moratorium 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).
17.4 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 organisational documents of such Obligor 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 Obligor 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 Obligor or any of its Significant
Subsidiaries.
|
17.5
(a)
|
Financial
Condition. The Account Party has heretofore furnished to the
Lenders the consolidated balance sheet and statements of income,
stockholders’ equity and cash flows of the Account Party and its
consolidated Subsidiaries (A) as of and for the fiscal year ended
December
31, 2006, reported on by PricewaterhouseCoopers LLP, independent
public
accountants (as provided in the Account Party’s Report on Form 10-K filed
with the SEC for the fiscal year ended December 31, 2006, and (B)
as of
and for the fiscal quarter ended September 30, 2007, as provided
in the
Account Party’s Report on Form 10-Q filed with the SEC for the fiscal
quarter ended September 30, 2007. Such financial statements
present fairly, in all material respects, the financial position
and
results of operations and cash flows of the Account Party and its
respective consolidated Subsidiaries as of such dates and for such
periods
in accordance with GAAP or (in the case of XL 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)
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No
Material Adverse Change. Since December 31, 2006, there has been
no material adverse change in the assets, business, financial condition
or
operations of such Obligor and its Subsidiaries, taken as a whole,
except
as disclosed in the Account Party’s filings with the
SEC.
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Properties
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17.6
(a)
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Property
Generally. Such Obligor 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
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by
Clause 19.3 (Liens) and except for minor defects in title that do
not interfere with its ability to conduct its business as currently
conducted or to utilise such properties for their intended
purposes.
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(b)
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Intellectual
Property. Such Obligor 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 Obligor and its Significant 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.
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Litigation
and Environmental Matters
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17.7
(a)
|
Actions,
Suits and Proceedings. Except as disclosed in 2 or as disclosed
in the Account Party’s filings with the SEC, 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 Obligor, threatened against or affecting such
Obligor or any of its Subsidiaries (x) 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 (y) that involve the Finance Documents or the
Transactions.
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(b)
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Environmental
Matters. Except as disclosed in 2 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
Obligor
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.
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(c)
|
This
Clause 17.7 and Schedule 2 (in relation to this Clause 17.7 only)
shall be
deemed automatically updated from time to time to include disclosures
included in filings made by the Account Party with the SEC pursuant
to the
Securities Exchange Act of 1934, as amended, after the Closing Date,
it
being understood, however, that any such updates shall not affect
or limit
in any manner any of the obligations of the Obligors under this Agreement
in effect immediately prior to such disclosure and shall not be taken
into
account for purposes of clauses 4.6(a)(ii) and
20(b).
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17.8 Such
Obligor 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.
Investment
and Holding Company Status
17.9 Such
Obligor is not an investment
company as defined in, or subject to
regulation under, the Investment Company Act of 1940.
Taxes
17.10 Such
Obligor 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 do so could not reasonably be expected to result in a Material Adverse
Effect.
ERISA
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17.11 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 Obligor 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 Obligor nor any of their Subsidiaries has incurred any obligation
in
connection with the termination or withdrawal from any Non-U.S. Benefit
Plan.
Disclosure
17.12 The
reports, financial statements, certificates or other information furnished
by
such Obligor to the Lenders in connection with the negotiation of this Agreement
or any other Finance Document 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 Obligor represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
Use
of Credit
17.13 Neither
such Obligor 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.
Subsidiaries
17.14 Set
forth in Schedule 3 is a complete and correct list of all of the Subsidiaries
of
the Account Party as of September 30, 2007, together with, for each such
Subsidiary, (i) the jurisdiction of organisation of such Subsidiary, (ii) each
Person holding ownership interests in such Subsidiary and (iii) the percentage
of ownership of such Subsidiary represented by such ownership interests. Except
as disclosed in Schedule 3, (x) each of the Account Party 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 3, (y) all of the issued and outstanding capital stock of each such
Person organised as a corporation is validly issued, fully paid and
nonassessable and (z) except as disclosed in filings of the Account Party with
the SEC prior to the date hereof, there are no outstanding Equity Rights with
respect to any Obligor.
Withholding
Taxes
17.15 Based
upon information with respect to each Lender provided by each Lender to the
Agent, as of the date hereof, the payment of the LC Disbursements and interest
thereon, the fees under Clause 0 (Fees) and all other amounts
payable hereunder will not be subject, by withholding or deduction, to any
Taxes
imposed by any Obligor Jurisdiction.
Stamp
Taxes
17.16 To
ensure the legality, validity, enforceability or admissibility in evidence
of
the Finance Documents, it is not necessary that the Finance Documents or any
other document be filed or recorded with any Governmental Authority or that
any
stamp or similar tax be paid on or in respect of any of the Finance Documents,
or any other document other than such filings and recordations that have already
been made and such stamp or similar taxes that have already been
paid.
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Legal
Form
17.17 The
Finance Documents are in proper legal form under the Laws of any Obligor
Jurisdiction for the admissibility thereof in the courts of such Obligor
Jurisdiction.
Claims
Pari Passu
17.18 Under
the Laws of its jurisdiction of incorporation in force at the date hereof,
the
claims of the Finance Parties against it under this Agreement or any other
Finance Document will rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors save (i) those whose claims are preferred
solely by any bankruptcy, insolvency, liquidation or other similar Laws of
general application; and (ii) with respect to XL Re only, those claims required
to be preferred by and under the Bermuda Insurance Xxx 0000.
18. AFFIRMATIVE
COVENANTS
Until
the
Commitments have expired or been terminated and all fees payable hereunder
shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Obligors
covenant and agree with the Lenders that:
18.1 Each
Obligor will furnish to the Agent and each Lender:
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(a)
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(i)
by April 10 of each year, the audited balance sheet and related statements
of operations, stockholders’ equity and cash flows of the Account Party
and its consolidated Subsidiaries as of the end of and for the immediately
preceding fiscal year, setting forth in comparative form the figures
for
(or, in the case of the balance sheet, as of the end of) the previous
fiscal year (if such figures were already produced for such corresponding
period), 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 financial statements present
fairly in
all material respects the financial condition and results of operations
of
the Account Party and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied (it being understood
that delivery to the Lenders of the Account Party’s Report on Form 10-K
filed with the SEC shall satisfy the financial statement delivery
requirements under this clause (i) so long as the financial information
required to be contained in such report is substantially the same
as the
financial information required under this clause (i)); and (ii) by
May 15
of each year, the audited balance sheet and related statements of
operations, stockholders’ equity and cash flows of each of XL Insurance
and XL Re as of the end of and for the immediately preceding year,
setting
forth in each case in comparative form the figures for (or, in the
case of
the balance sheet, as of the end of) the previous fiscal year (if
such
figures were already produced for such corresponding period), in
each case
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 financial statements present fairly in all material
respects the financial condition and results of operations of XL
Insurance
or XL Re, as the case may be, in accordance with SAP consistently
applied;
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(b)
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by
June 15 of each year, (i) the 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 (or, in the case of the balance
sheet, as
of the end of) the previous fiscal year (if such figures were already
produced for such corresponding period), 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 as of the end of and for the
immediately preceding fiscal year, in each case reported on by independent
public accountants of recognized national standing (without a “going
co
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cern”
or like qualification or exception and without any qualification
or
exception as to the scope of such audit) to the effect that such
audited
financial statements present fairly in all material respects the
financial
condition and results of operations of such Insurance Subsidiary
in
accordance with SAP consistently
applied;
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(c)
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within
60 days after the end of each of the first three fiscal quarters
of each
fiscal year of the Account Party, (i) the unaudited consolidated
balance
sheet and related statements of operations, stockholders’ equity and cash
flows of the Account Party and its consolidated Subsidiaries as of
the end
of and for such fiscal quarter and the then elapsed portion of the
fiscal
year, setting forth in each case in comparative form the figures
for (or,
in the case of the balance sheet, as of the end of) the corresponding
period or periods of the previous fiscal year (if such figures were
already produced for such corresponding period or periods), all certified
by a Financial Officer of the Account Party as presenting fairly
in all
material respects the financial condition and results of operations
of the
Account Party 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 (it being understood
that
delivery to the Lenders of the Account Party’s Report on Form 10-Q filed
with the SEC shall satisfy the financial statement delivery requirements
under this paragraph (i) 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 (i)); and (ii) an unaudited
consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows of each of XL America, XL Insurance
and XL Re and its consolidated Subsidiaries as of the end of and
for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for (or, in the
case of
the balance sheet, as of the end of) the corresponding period or
periods
of the previous fiscal year (if such figures were already produced
for
such corresponding period or periods), all certified by a Financial
Officer of the respective Obligor as presenting fairly in all material
respects the financial condition and results of operations of such
Obligor
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;
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(d)
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concurrently
with any delivery of financial statements under Clause18.1(a), (b)
or (c),
a certificate signed on behalf of each Obligor 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
Clauses 19.3 (Liens), 19.5 (Ratio of Total Funded Debt
to Total Capitalisation), 19.6 (Consolidated Net Worth) and
19.7 (Indebtedness) 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 Clause 17.5(a) and,
if any
such change has occurred, specifying any material effect of such
change on
the financial statements accompanying such
certificate;
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(e)
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concurrently
with any delivery of financial statements under Clause 18.1(a) and
(b)(ii), 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);
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(f)
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promptly
after the same become publicly available, copies of all periodic
and other
reports, proxy statements and other materials filed by such Obligor
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 Obligor
to its
shareholders generally, as the case may
be;
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(g)
|
concurrently
with any delivery of financial statements under Clause18.1(a), (b)
or (c)
a certificate of a Financial Officer of the Account Party, setting
forth
on a consolidated basis for the Account Party 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 Clause 19.3(g) (Liens) and the
aggregate book value of liabilities which are subject to Liens permitted
under Clause 19.3(g) (it being understood that the reports required
by
paragraphs (a), (b) and (c) of this Clause shall satisfy the requirement
of this Clause (i) of this Clause 18.1(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
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such
aggregate amounts which portion is attributable to transactions among
wholly-owned Subsidiaries of the Account
Party;
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(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 the
Account Party (commencing with the fiscal year ending December 31,
2007) a
statement of a Financial Officer of the Account Party listing, as
of the
end of the immediately preceding fiscal quarter of the Account Party,
the
amount of cash and the securities of the Obligors and their Subsidiaries
that have been posted as collateral under Clause19.3(f);
and
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(i)
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promptly
following any request therefor, such other information regarding
the
operations, business affairs and financial condition of the Account
Party
or any of its Subsidiaries, or compliance with the terms of this
Agreement, as the Agent or any Lender may reasonably
request.
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“Know
your customer” checks
|
18.2(a)
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If:
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(i)
|
the
introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this
Agreement;
|
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(ii)
|
any
change in the status of an Obligor after the date of this Agreement;
or
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(iii)
|
a
proposed assignment or transfer by a Lender of any of its rights
and
obligations under this Agreement to a party that is not a Lender
prior to
such assignment or transfer,
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obliges
the Agent or any Lender (or, in the case of paragraph (iii) above, any
prospective new Lender) to comply with “know your customer” or similar
identification procedures in circumstances where the necessary information
is
not already available to it, each Obligor shall promptly upon the request of
the
Agent or any Lender supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Agent (for itself or on behalf
of any Lender) or any Lender (for itself or, in the case of the event described
in paragraph (iii) above, on behalf of any prospective new Lender) in order
for
the Agent, such Lender or, in the case of the event described in paragraph
(iii)
above, any prospective new Lender to carry out and be satisfied it has complied
with all necessary “know your customer” or other similar checks under all
applicable laws and regulations pursuant to the transactions contemplated in
the
Finance Documents.
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(b)
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Each
Lender shall promptly upon the request of the Agent supply, or procure
the
supply of, such documentation and other evidence as is reasonably
requested by the Agent (for itself) in order for the Agent to carry
out
and be satisfied it has complied with all necessary “know your customer”
or other similar checks under all applicable laws and regulations
pursuant
to the transactions contemplated in the Finance
Documents.
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18.3 Each
Obligor will furnish to the Agent and each Lender prompt written notice of
the
following:
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(a)
|
the
occurrence of any Default; and
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(b)
|
any
event or condition constituting, or which could reasonably be expected
to
have a Material Adverse Effect.
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Each
notice delivered under this Clause shall be accompanied by a statement of a
Financial Officer or other executive officer of the relevant Obligor setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken by such Obligor with respect
thereto.
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18.4 Each
Obligor 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 except where the failure to maintain
such corporate existence and material rights and franchises would not reasonably
be expected to have, either individually or in the aggregate, a Material
Adverse
Effect; provided that the foregoing shall not prohibit any merger or
consolidation permitted under Clause 19.1 (Mergers) or 19.2
(Dispositions). Each Obligor will, and will cause each of its
Significant 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.
18.5 Each
Obligor 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.
18.6 Each
Obligor will, and will cause each of its Significant 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 Obligor or any Subsidiary
of such Obligor any obligation in respect of any property leased by such Obligor
or such Subsidiary in addition to such Obligor’s obligations under the
applicable document creating such Obligor’s or such Subsidiary’s lease or
tenancy.
Payment
of Taxes and Other Potential Charges and Priority Claims Payment of Other
Current Liabilities
18.7 Each
Obligor will, and will cause each of its Subsidiaries to, pay or
discharge:
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(a)
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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;
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(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
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(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 Clause 19.3 (Liens)) or which, if unpaid,
might give rise to a claim entitled to priority over general creditors
of
such Obligor 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 Obligor or such
Subsidiary;
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provided that,
unless and until foreclosure, distraint, levy, sale or similar proceedings
shall
have been commenced, such Obligor or such Subsidiary need not pay or discharge
any such tax, assessment, charge, levy or claim so long as (i) the validity
thereof is contested in good faith and by appropriate proceedings diligently
conducted or (ii) such reserves or other appropriate provisions as may be
required by GAAP or SAP, as the case may be, shall have been made therefor
and
so long as such failure to pay or discharge would not have a Material Adverse
Effect.
18.8 Such
Obligor 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
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are
recorded as necessary to permit preparation of financial statements required
under Clause 18.1 (Financial Statements and Other Information) in
conformity with GAAP and SAP, as applicable, and to maintain accountability
for
assets.
18.9 Each
Obligor will, and will cause each of its Subsidiaries to, comply with all
applicable Laws (including but not limited to the Bermuda Companies Law or
Bermuda Insurance Laws) in all respects; provided that such Obligor or any
Subsidiary of such Obligor will not be deemed to be in violation of this Clause
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 Obligor to perform its obligations
under this Agreement.
18.10 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 Applicant will use the Letters of Credit
issued for its account hereunder in the ordinary course of business of such
Applicant and its Affiliates. For the avoidance of doubt, the Parties agree
that
the Account Party may apply for a Letter of Credit hereunder to support the
obligations of any Affiliate of an Applicant, it being understood that the
Account Party shall nonetheless remain the Obligor and as such be liable with
respect to such Letter of Credit.
18.11 Each
Obligor and its Significant Subsidiaries will continue to engage in
substantially the same business or businesses that they engaged in (or propose
to engage in) on the date of this Agreement and businesses related or incidental
thereto.
18.12 Each
Obligor will permit such Persons as any Lender may reasonably designate to
visit
and inspect any of the properties of such Obligor, to discuss its affairs with
its financial management, and provide such other information relating to the
business and financial condition of such Obligor at such times as such Lender
may reasonably request. Each Obligor hereby authorises its financial management
to discuss with any Lender the affairs of such Obligor.
19. NEGATIVE
COVENANTS
Until
the
Total Commitments have expired or terminated and all fees payable hereunder
have
been paid in full and all Letters of Credit have expired or terminated and
all
LC Disbursements have been reimbursed, each of the Obligors covenants and agrees
with the Lenders that:
19.1 No
Obligor 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:
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(a)
|
any
Obligor may merge or consolidate with any other corporation, including
a
Subsidiary, if such Obligor shall be the surviving
corporation;
|
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(b)
|
the
Account Party 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 the
Account Party (other than the cancellation of any outstanding shares
of
capital stock of the Account Party held by the Person with whom it
merges
or consolidates); and
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(c)
|
any
Obligor may enter into a merger or consolidation which is effected
solely
to change the jurisdiction of incorporation of such Obligor and results
in
a reclassification, conversion or exchange of outstanding shares
of
capital stock of such Obligor solely into shares of capital stock
of the
surviving entity.
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Dispositions
19.2 No
Obligor 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 Clause 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:
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(a)
|
Dispositions
in the ordinary course of business involving current assets or other
invested assets classified on such Obligor’s or its respective
Subsidiaries balance sheet as available for sale or as a trading
account;
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|
(b)
|
sales,
conveyances, assignments or other transfers or dispositions in immediate
exchange for cash or tangible assets, provided that any such sales,
conveyances or transfers shall not individually, or in the aggregate
for
the Obligor and their respective Subsidiaries, exceed $500,000,000
in any
calendar year;
|
|
(c)
|
Dispositions
of equipment or other property which is obsolete or no longer used
or
useful in the conduct of the business of such Obligor or its
Subsidiaries;
|
|
(d)
|
Dispositions
between or among the Obligors and their wholly owned Subsidiaries;
or
|
|
(e)
|
Dispositions
with Affiliates in accordance with Clause 19.4(c) (Transactions
with Affiliates).
|
Liens
19.3 No
Obligor 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
listed in Part B of Schedule 2 (and extension, renewal and replacement
Liens upon the same property, provided that the amount secured by
each
Lien constituting such an extension, renewal or replacement Lien
shall not
exceed the amount secured by the Liens listed in Part B of Schedule
2);
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|
(b)
|
Liens
arising from taxes, assessments, charges, levies or claims described
in
Clause 18.7 (Payment of Taxes and other potential charges and priority
claims, payments of other current liabilities) that are not yet due
or that remain payable without penalty or to the extent permitted
to
remain unpaid under the provision of Clause
18.7;
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|
(c)
|
Liens
on property securing all or part of the purchase price thereof to
such
Obligor and Liens (whether or not assumed) existing on property at
the
time of purchase thereof by such Obligor (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
Obligor, as applicable, shall not exceed 100% of the lesser of the
fair
market value of such property at such time or the actual purchase
price of
such property;
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|
(d)
|
zoning
restrictions, easements, minor restrictions on the use of real property,
minor irregularities in title thereto and other minor Liens that
do not in
the aggregate materially detract from the value of a property or
asset to,
or materially impair its use in the business of, such Obligor or
any such
Subsidiary;
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(e)
|
Liens
securing Indebtedness permitted by Clause 19.7(b) (Indebtedness)
covering assets whose market value is not materially greater than
the
amount of the Indebtedness secured thereby plus a commercially reasonable
margin;
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|
(f)
|
Liens
on cash and securities of an Obligor 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 the Account Party’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 resolution
duly adopted by the board of directors of the Account Party (or any
committee thereof);
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|
(g)
|
Liens
on cash and securities not to exceed $500,000,000 in the aggregate
securing obligations of an Obligor 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 paragraph (g) preclude
any Person (other than any Subsidiary of the Account Party) in which
the
Account Party or any of its Subsidiaries shall invest (each an
investee) from granting Liens on such Person’s
assets to secure hedging obligations of such Person, so long as such
obligations are non-recourse to the Account Party 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 paragraph (g) the aggregate amount of cash and/or
securities on which any Obligor or any Subsidiary shall have granted
a
Lien in favour 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 favour of such Obligor or Subsidiary,
as the
case may be, at such time, so long as the relevant agreement between
such
Obligor or such Subsidiary, as the case may be, provides for the
netting
of their respective obligations
thereunder;
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|
(h)
|
Liens
on (i) assets received, and on actual or imputed investment income
on such
assets received incurred as part of its business including activities
utilizing ISDA documentation or any Specified Transaction Agreement
relating and identified to specific insurance payment liabilities
or to
liabilities arising in the ordinary course of any Obligors’ or any of
their Subsidiary’s business as an insurance or reinsurance company
(including GICs and Stable Value Instruments) or corporate member
of
Lloyd’s or as a provider of financial or investment services or contracts,
or the proceeds thereof (including GICs and Stable Value Instruments),
in
each case held in a segregated trust, trust or other account and
securing
such liabilities, (ii) assets securing Exempt Indebtedness of any
Person
(other than the Account Party or any of its Affiliates) in the event
such
Exempt Indebtedness is consolidated on the consolidated balance sheet
of
the Account Party and its consolidated Subsidiaries in accordance
with
GAAP or (iii) any other assets subject to any trust or other account
arising out of or as a result of contractual, regulatory or any other
requirements; provided that in no case shall any such Lien secure
Indebtedness and any Lien which secures Indebtedness shall not be
permitted under this clause (h);
|
|
(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 Obligor or any of their Subsidiaries
or its becoming a Subsidiary, and Liens existing on any property
acquired
by any Obligor 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.
|
Transactions
with Affiliates
19.4 No
Obligor will, nor will it permit any of its Significant Subsidiaries to, enter
into or carry out any transaction with (including, without limitation, purchase
or lease property or services to, loan or advance to or enter into,
-41-
suffer
to
remain in existence or amend any contract, agreement or arrangement with) any
Affiliate of such Obligor, or directly or indirectly agree to do any of the
foregoing, except:
|
(a)
|
transactions
involving guarantees or co-obligors with respect to any Indebtedness
described in Part A of Schedule 2;
|
|
(b)
|
transactions
between any Obligor and its wholly-owned Subsidiaries;
and
|
|
(c)
|
transactions
with Affiliates in good faith in the ordinary course of such Obligor’s
business consistent with past practice and on terms no less favourable
to
such Obligor or any Subsidiary than those that could have been obtained
in
a comparable transaction on an arm’s length basis from an unrelated
Person.
|
19.5 The
Account Party 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.
Consolidated
Net Worth
19.6 The
Account Party will not permit its Consolidated Net Worth to be less than the
sum
of (a) $6,000,000,000 plus (b) 25% of consolidated net income (if positive)
of
the Account Party and its Subsidiaries for each fiscal quarter ending on or
after 30 June, 2007.
Indebtedness
19.7 No
Obligor 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 and under any other Finance
Document;
|
|
(b)
|
secured
Indebtedness (including secured reimbursement obligations with respect
to
letters of credit) of any Obligor or any Subsidiary in an aggregate
principal amount (for all Obligors 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 Obligor or any
Subsidiary;
|
|
(e)
|
Indebtedness
incurred in transactions described in Clauses 19.3(f) and 19.3(g);
and
|
|
(f)
|
Indebtedness
described in Part A of Schedule 2 and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof.
|
Ratings
Downgrade
19.8 The
Account Party will not permit the financial-strength rating from A.M. Best
&
Co. or its successor (such rating, an AMB Rating) each
of the XL Capital Group, XL Insurance and XL Re to fall below “A-” (the
AMB Rating Undertaking). The Agent may (and if so
instructed by the Majority Lenders shall) require the Account Party within
5
Business Days of a failure to comply with the AMB Rating Undertaking,
either:
|
(a)
|
to
provide cash cover in an amount equal to the aggregate LC Exposures
for
the time being; or
|
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|
(b)
|
to
deposit BIS Qualifying Assets with a custodian acceptable to the
Agent,
and enter into custodian and other relevant documentation, together
with
documentation required by the Security Trustee to give the Security
Trustee (for the benefit of itself and the other Finance Parties)
an
effective and perfected security interest in respect of those BIS
Qualifying Assets, in an aggregate amount equal to 105% of the aggregate
LC Exposures for the time being.
|
(each
of
(a) and (b), AMBCash
Collateral).
Notwithstanding
any of the foregoing provisions of this Clause 19.9, if at any time subsequent
to the Account Party posting AMB Cash Collateral, any of the XL Capital Group,
XL Insurance and XL Re has an AMB Rating of at least “A”, the Security Trustee
will instruct a bank holding any cash cover or otherwise take all necessary
actions to release and return any AMB Cash Collateral to the Account Party
and
the Letter of Credit Fee shall be determined by reference to
Clause 9.3.
19.9 No
Obligor will become subject to a Private Act other than the X.L. Insurance
Company, Ltd. Xxx, 0000.
20. EVENTS
OF DEFAULT
If
any of
the following events (Events of Default) shall occur:
|
(a)
|
Failure
to Pay:
|
|
|
(i)
|
any
Obligor shall fail to pay any Demand Amount when and as the same
shall
become due and payable; or
|
|
|
(ii)
|
any
Obligor shall fail to pay any interest or any fee payable under this
Agreement or any other Finance Document or any other amount (other
than an
amount referred to in Clause 20(a)(i)) payable under this Agreement
or any other Finance Document, when and as the same shall become
due and
payable, and such failure shall continue unremedied for a period
of 3 or
more days;
|
|
(b)
|
Misrepresentation: any
representation or warranty made or deemed made by any Obligor in
or in
connection with this Agreement or any other Finance Document 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;
|
|
(c)
|
Breach
of Obligations:
|
|
|
(i)
|
any
Obligor shall fail to observe or perform any covenant, condition
or
agreement contained in Clause 19 (Negative Covenants) provided
that any failure by the Account Party to comply with the AMB Rating
Undertaking shall not constitute an Event of Default unless the Agent
requires the Account Party to post and maintain AMB Cash Collateral
in
accordance with Clause 19.8 (Ratings Downgrade) and the Account
Party fails to do so within 5 Business Days of such failure to comply
with
such AMB Rating Undertaking; or
|
|
|
(ii)
|
any
Obligor shall fail to observe or perform any covenant, condition
or
agreement contained in this Agreement or any other Finance Document
(other
than those specified in Clause 20(a) or (c)(i)) and such failure
shall
continue unremedied for a period of 20 or more days after notice
thereof
from the Agent (given at the request of any Lender) to such
Obligor;
|
|
(d)
|
Cross
Default: any Obligor 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
|
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|
|
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 20(d) 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;
|
|
(e)
|
Winding-up: a
decree or order by a court having jurisdiction in the premises shall
have
been entered adjudging any Obligor a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganisation of such Obligor
under
the Bermuda Companies Law or the Cayman Islands Companies Law (2007
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 a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of such Obligor 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;
|
|
(f)
|
Insolvency
and Rescheduling: any Obligor 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 reorganisation under the Bermuda Companies
Law or the Cayman Islands Companies Law (2007 Revision) or any other
similar applicable Law, or shall consent to the filing of any such
petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or a substantial
part of its property, or shall make an assignment for the benefit
of
creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or corporate or other action shall
be taken
by such Obligor in furtherance of any of the aforesaid
purposes;
|
|
(g)
|
Material
unsatisfied judgment or order: one or more judgments for the
payment of money in an aggregate amount in excess of $100,000,000
shall be
rendered against any Obligor 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;
|
|
(h)
|
ERISA
Event: an ERISA Event (or similar event with respect
to any Non-U.S. Benefit Plan) shall have occurred that, in the opinion
of
the Majority Lenders, when taken together with all other ERISA Events
and
such similar events that have occurred, could reasonably be expected
to
result in liability of the Obligors and their Subsidiaries in an
aggregate
amount exceeding $100,000,000;
|
|
(i)
|
Change
of Control: a Change in Control shall
occur;
|
|
(j)
|
Change
in Ownership: the Account Party 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
|
|
(k)
|
Illegality: at
any time it is or becomes unlawful for any Obligor to perform or
comply
with any or all of its obligations hereunder or any court or arbitrator
or
any governmental body, agency or official which has jurisdiction
in the
matter shall decide, rule or order that any provision of the Finance
Documents is invalid or unenforceable in any material respect, or
any
Obligor shall so assert in writing;
|
|
(l)
|
Default
under Guarantee: the guarantee contained in Clause 16
(Guarantee and Indemnity) 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 Obligor described
in Clause 20(e) or 20(f)), and at any time thereafter during the continuance
of
such event, the Agent may, and at the request of the Majority Lenders shall,
by
notice to the Account Party (an Acceleration Notice),
take any of the following actions, at the same or different times:
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(i) terminate
the Total Commitments, and thereupon the Total Commitments shall terminate
immediately;
|
|
(ii)
|
require
the Account Party forthwith to provide cash cover in respect of any
LC
Exposure pursuant to a Letter of Credit;
and
|
|
|
(iii)
|
declare
all fees and other obligations of the Account Party accrued hereunder
to
be due and payable in whole (or in part, in which case any fees and
other
obligations not so declared to be due and payable may thereafter
be
declared to be due and payable) and thereupon such fees and other
obligations, 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 Party,
|
and
in
case of any event with respect to any Obligor described in Clause 20(e) or
20(f):
|
|
(A)
|
the
Commitments shall automatically terminate;
and
|
|
|
(B)
|
the
Account Party shall automatically be required to provide cash cover
in
respect of any LC Exposure pursuant to a Letter of Credit;
and
|
|
|
(C)
|
all
fees and other obligations of the Account Party 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
Party.
|
21. THE
AGENT, THE ARRANGERS AND THE LENDERS
Appointment
of the Agent
21.1 The
Arrangers and each of the Lenders hereby appoints the Agent to act as its agent
in connection herewith and authorises the Agent to exercise such rights, powers,
authorities and discretions as are specifically delegated to the Agent by the
terms hereof together with all such rights, powers, authorities and discretions
as are reasonably incidental thereto.
Agent’s
Discretions
21.2 The
Agent may:
|
(a)
|
assume,
unless it has, in its capacity as agent for the Lenders, received
notice
to the contrary from any other party hereto, that (a) any representation
made or deemed to be made by an Obligor in connection with the Finance
Documents is true, (b) no Event of Default or Potential Event of
Default
has occurred, (c) no Obligor is in breach of or default under its
obligations under the Finance Documents and (d) any right, power,
authority or discretion vested therein upon the Majority Lenders,
the
Lenders or any other person or group of persons has not been
exercised;
|
|
(b)
|
assume
that the Facility Office of each Lender is that notified to it by
such
Lender in writing prior to the date hereof (or, in the case of a
Transferee, at the end of the Transfer Certificate to which it is
a party
as Transferee) until it has received from such Lender a notice designating
some other office of such Lender to replace its Facility Office and
act
upon any such notice until the same is superseded by a further such
notice;
|
|
(c)
|
engage
and pay for the advice or services of any lawyers, accountants, surveyors
or other experts whose advice or services may to it seem necessary,
expedient or desirable and rely upon any advice so
obtained;
|
|
(d)
|
rely
as to any matters of fact which might reasonably be expected to be
within
the knowledge of an Obligor upon a certificate signed by or on behalf
of
such Obligor;
|
|
(e)
|
rely
upon any communication or document believed by it to be
genuine;
|
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|
(f)
|
refrain
from exercising any right, power or discretion vested in it as agent
hereunder unless and until instructed by the Majority Lenders as
to
whether or not such right, power or discretion is to be exercised
and, if
it is to be exercised, as to the manner in which it should be
exercised;
|
|
(g)
|
refrain
from acting in accordance with any instructions of the Majority Lenders
to
begin any legal action or proceeding arising out of or in connection
with
the Finance Documents until it shall have received such security
as it may
require (whether by way of payment in advance or otherwise) for all
costs,
claims, losses, expenses (including legal fees) and liabilities together
with any VAT thereon which it will or may expend or incur in complying
with such instructions; and
|
|
(h)
|
assume
(unless it has specific notice to the contrary) that any notice or
request
made by the Account Party is made on behalf of the
Obligors.
|
Agent’s
Obligations
21.3 The
Agent shall:
|
(a)
|
promptly
inform each Lender of the contents of any notice or document received
by
it in its capacity as Agent from an Obligor under the Finance Documents
and shall promptly deliver to each Lender a copy of each Letter of
Credit
delivered to Lloyd’s pursuant to Clause 3.3 (Completion of Letters of
Credit);
|
|
(b)
|
promptly
notify each Lender of the occurrence of any Event of Default or any
default by an Obligor in the due performance of or compliance with
its
obligations under the Finance Documents of which the Agent has notice
from
any other party hereto;
|
|
(c)
|
save
as otherwise provided herein, act as agent under the Finance Documents
in
accordance with any instructions given to it by an Majority Lenders,
which
instructions shall be binding on the Arrangers and the
Lenders; and
|
|
(d)
|
if
so instructed by the Majority Lenders, refrain from exercising any
right,
power or discretion vested in it as agent under the Finance
Documents.
|
The
Agent’s duties under the Finance Documents are solely mechanical and
administrative in nature.
Excluded
Obligations
21.4 Notwithstanding
anything to the contrary expressed or implied herein, neither the Agent nor
the
Arrangers shall:
|
(a)
|
be
bound to enquire as to (i) whether or not any representation made
or
deemed to be made by an Obligor in connection with the Finance Documents
is true, (ii) the occurrence of any Default, (iii) the performance
by an
Obligor of its obligations under the Finance Documents or (iv) any
breach
of or default by an Obligor of or under its obligations under the
Finance
Documents;
|
|
(b)
|
be
bound to account to any Lender for any sum or the profit element
of any
sum received by it for its own
account;
|
|
(c)
|
be
bound to disclose to any other person any information relating to
any
Obligor or any Related Party if (i) such person, on providing such
information, expressly stated to the Agent or, as the case may be,
the
Arrangers, that such information was confidential or (ii) such disclosure
would or might in its opinion constitute a breach of any Law or be
otherwise actionable at the suit of any
person;
|
|
(d)
|
be
under any obligations other than those for which express provision
is made
herein;
|
|
(e)
|
be
or be deemed to be a fiduciary for any other party hereto;
or
|
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|
(f)
|
be
obliged to carry out any “know your customer” or other checks in relation
to any person on behalf of any Lender and each Lender confirms to
the
Agent and the Arranger that it is solely responsible for any such
checks
it is required to carry out and that it may not rely on any statement
in
relation to such checks made by the Agent or the
Arranger.
|
21.5 Each
Lender shall, pro rata according to its Applicable Percentage (determined as
of
the time that the applicable cost, claim, loss, expense and/or liability is
sought), from time to time on demand by the Agent, indemnify the Agent against
any and all costs, claims, losses, expenses (including legal fees) and
liabilities together with any value added tax thereon (or equivalent) which
the
Agent may incur, otherwise than by reason of its own gross negligence or wilful
misconduct, in acting in its capacity as agent hereunder (unless the Agent
has
been reimbursed by an Obligor pursuant to a Finance Document).
21.6 Except
in the case of gross negligence or wilful default, neither the Agent nor the
Arrangers accept any responsibility:
|
(a)
|
for
the adequacy, accuracy and/or completeness of any information supplied
by
the Agent or the Arrangers, by an Obligor or by any other person
in
connection with the Finance Documents or any other agreement, arrangement
or document entered into, made or executed in anticipation of, pursuant
to
or in connection with the Finance
Documents;
|
|
(b)
|
for
the legality, validity, effectiveness, adequacy or enforceability
of the
Finance Documents or any other agreement, arrangement or document
entered
into, made or executed in anticipation of, pursuant to or in connection
with the Finance Documents; or
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|
(c)
|
for
the exercise of, or the failure to exercise, any judgement, discretion
or
power given to any of them by or in connection with the Finance Documents
or any other agreement, arrangement or document entered into, made
or
executed in anticipation of, pursuant to or in connection with the
Finance
Documents.
|
Accordingly,
neither the Agent nor the Arrangers shall be under any liability (whether in
negligence or otherwise) in respect of such matters, save in the case of gross
negligence or wilful misconduct.
21.7 Each
of the Lenders agree that it will not assert or seek to assert against any
director, officer or employee of the Agent or the Arrangers any claim it might
have against any of them in respect of the matters referred to in
Clause 21.6 (Exclusion of Liabilities).
Business
with the Group
21.8 The
Agent and the Arrangers may accept deposits from, lend money to and generally
engage in any kind of banking or other business with any of the Obligors or
their Subsidiaries.
21.9 The
Agent may resign its appointment hereunder at any time without assigning any
reason therefor by giving not less than thirty days’ prior notice to that effect
to each of the other parties hereto, PROVIDED THAT no such
resignation shall be effective until a successor for the Agent is appointed
in
accordance with the succeeding provisions of this Clause 21.
21.10 If
the Agent gives notice of its resignation pursuant to Clause 0
(Resignation) then any reputable and experienced Lender or other
financial institution may be appointed as a successor to the Agent by the
Majority Lenders (with the approval of the Account Party, not to be unreasonably
withheld or delayed,) during the period of such notice (with the co-operation
of
the Agent) but, if no such successor is so appointed, the Agent may appoint
such
a successor itself.
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21.11 If
a successor to the Agent is appointed under the provisions of Clause 21.10
(Successor Agent), then (a) the retiring Agent shall be discharged
from any further obligation hereunder but shall remain entitled to the benefit
of the provisions of this Clause 21 and (b) its successor and each of
the other parties hereto shall have the same rights and obligations amongst
themselves as they would have had if such successor had been a party
hereto.
21.12 It
is understood and agreed by each Lender that at all times it has itself been,
and will continue to be, solely responsible for making its own independent
appraisal of and investigation into all risks arising under or in connection
with this Agreement including, but not limited to:
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(a)
|
the
financial condition, creditworthiness, condition, affairs, status
and
nature of each member of the Group;
|
|
(b)
|
the
legality, validity, effectiveness, adequacy and enforceability of
the
Finance Documents and any other agreement, arrangement or document
entered
into, made or executed in anticipation of, pursuant to or in connection
with the Finance Documents;
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|
(c)
|
whether
such Lender has recourse, and the nature and extent of that recourse,
against an Obligor or any other person or any of its assets under
or in
connection with the Finance Documents, the Transactions or any other
agreement, arrangement or document entered into, made or executed
in
anticipation of, pursuant to or in connection with the Finance
Documents; and
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|
(d)
|
the
adequacy, accuracy and/or completeness of any information provided
by the
Agent or the Arrangers, an Obligor or by any other person in connection
with the Finance Documents, the Transactions or any other agreement,
arrangement or document entered into, made or executed in anticipation
of,
pursuant to or in connection with the Finance
Documents.
|
Accordingly,
each Lender acknowledges to the Agent and the Arrangers that it has not relied
on and will not hereafter rely on the Agent and the Arrangers or any of them
in
respect of any of these matters.
21.13 In
acting as agent hereunder for the Lenders, the Agent shall be regarded as acting
through its agency division which shall be treated as a separate entity from
any
other of its divisions or departments and, notwithstanding the foregoing
provisions of this Clause 21, any information received by some other division
or
department of the Agent may be treated as confidential and shall not be regarded
as having been given to the Agent’s agency division.
Declaration
of Agent as Security Trustee
21.14 The
Agent
hereby declares that it shall hold:
|
(a)
|
all
rights, titles and interests that may hereafter be mortgaged, charged,
assigned or otherwise secured in favour of the Agent by or pursuant
to the
Finance Documents;
|
|
(b)
|
the
benefit of all representations, covenants, guarantees, indemnities
and
other contractual provisions given in favour of the Agent (other
than any
such benefits given to the Agent solely for its own benefit) by or
pursuant to the Finance Documents (other than this Agreement);
and
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|
(c)
|
all
proceeds of the security referred to in paragraph (a) above and of
the enforcement of the benefits referred to in paragraph (b)
above,
|
on
trust
for itself and the other Finance Parties from time to time.
Such
declaration shall remain valid notwithstanding that the Agent may on the date
hereof or at any other time be the sole Finance Party; for the avoidance of
doubt, however, such declaration shall, in such case, be deemed repeated on
each
date on which the Agent ceases to be the sole Finance Party.
Each
of
the parties hereto agrees that the obligations, rights and benefits vested
or to
be vested in the Agent as trustee as aforesaid by the Finance Documents or
any
document entered into pursuant thereto shall (as well before as after
enforcement) be performed and (as the case may be) exercised by the Agent in
accordance with the provisions of this Clause 21.
21.15 The
Agent shall have all the powers and discretions conferred upon trustees by
the
Trustee Xxx 0000 (to the extent not inconsistent herewith) and by way of
supplement it is expressly declared as follows:
|
(a)
|
the
Agent shall be at liberty to place any of the Finance Documents and
any
other instruments, documents or deeds delivered to it pursuant thereto
or
in connection therewith for the time being in its possession in any
safe
deposit, safe or receptacle selected by the Agent or with any Lender,
any
company whose business includes undertaking the safe custody of documents
or any firm of lawyers of good
repute;
|
|
(b)
|
the
Agent may, whenever it thinks fit, delegate by power of attorney
or
otherwise to any person or persons or fluctuating body of persons
all or
any of the rights, trusts, powers, authorities and discretions vested
in
it by any of the Finance Documents and such delegation may be made
upon
such terms and subject to such conditions (including the power to
sub-delegate) and subject to such regulations as the Agent may think
fit
and the Agent shall not be bound to supervise, or be in any way
responsible for any loss incurred by reason of any misconduct or
default
on the part of, any such delegate (or
sub-delegate);
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|
(c)
|
notwithstanding
anything else herein contained, the Agent may refrain from doing
anything
which would or might in its opinion be contrary to any Law of any
jurisdiction or any directive or regulation of any agency of any
state or
which would or might otherwise render it liable to any person and
may do
anything which is, in its opinion, necessary to comply with any such
Law,
directive or regulation;
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|
(d)
|
save
in the case of gross negligence or wilful misconduct, the Agent and
every
attorney, agent, delegate, sub-delegate and any other person appointed
by
any of them under any of the Finance Documents may indemnify itself
or
himself out of the security held by the Agent against all liabilities,
costs, fees, charges, losses and expenses incurred by any of them
in
relation to or arising out of the taking or holding of any of the
security
constituted by, or any of the benefits provided by, any of the Finance
Documents, in the exercise or purported exercise of the rights, trusts,
powers and discretions vested in any of them or in respect of any
other
matter or thing done or omitted to be done in any way relating to
any of
the Finance Documents or pursuant to any Law or regulation;
and
|
|
(e)
|
without
prejudice to the provisions of any of the Finance Documents, the
Agent
shall not be under any obligation to insure any property or to require
any
other person to maintain any such insurance and shall not be responsible
for any loss which may be suffered by any person as a result of the
lack
of or inadequacy or insufficiency of any such
insurance.
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21.16 The
Agent shall not be liable for any failure:
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(a) to
require the deposit with it of any deed or document certifying, representing
or
constituting the title of the Account Party to any of the property mortgaged,
charged, assigned or otherwise encumbered by or pursuant to any of the Finance
Documents;
|
(b)
|
to
obtain any licence, consent or other authority for the execution,
delivery, validity, legality, adequacy, performance, enforceability
or
admissibility in evidence of any of the Finance
Documents;
|
|
(c)
|
to
register or notify any deed or document mentioned at paragraph (a)
above in accordance with the provisions of any of the documents of
title
of the Account Party;
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|
(d)
|
to
effect or procure registration of or otherwise protect any of the
security
created by any of the Finance Documents by registering the same under
any
applicable registration Laws in any territory or otherwise by registering
any notice, caution or other entry prescribed by or pursuant to the
provisions of relevant Laws;
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|
(e)
|
to
take or to require the Account Party to take any steps to render
the
security created or purported to be created by or pursuant to any
of the
Finance Documents effective or to secure the creation of any ancillary
charge under the Laws of any jurisdiction;
or
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|
(f)
|
to
require any further assurances in relation to any of the Finance
Documents.
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21.17 The
Agent may accept without enquiry, requisition or objection such right and title
as the Account Party may have to the property belonging (or purportedly
belonging) to it (or any part thereof) which is the subject matter of any of
the
Finance Documents and shall not be bound or concerned to investigate or make
any
enquiry into the right or title of the Account Party to such property (or any
part thereof) or, without prejudice to the foregoing, to require the Account
Party to remedy any defect in the Account Party’s right or title as
aforesaid.
New
Security Trustee
21.18 The
Agent may at any time appoint any person (whether or not a trust corporation)
to
act either as a separate trustee or as a co-trustee jointly with the
Agent:
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(a)
|
if
the Agent considers such appointment to be in the interests of the
Lenders; or
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|
(b)
|
for
the purposes of conforming to any legal requirements, restrictions
or
conditions which the Agent deems relevant for the purposes of the
Finance
Documents and the Agent shall give prior notice to the Account Party
and
the Lenders of any such
appointment.
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Any
person so appointed shall (subject to the provisions of the Finance Documents)
have such powers, authorities and discretions and such duties and obligations
as
shall be conferred or imposed or such person by the instrument of appointment
and shall have the same benefits under this Clause 21 as the
Agent.
The
Agent
shall have power in like manner to remove any person so appointed.
Such
reasonable remuneration as the Agent may pay to any person so appointed, and
any
costs, charges and expenses incurred by such person in performing its functions
pursuant to such appointment, shall for the purposes hereof be treated as costs,
charges and expenses incurred by the Agent under the Finance
Documents.
Perpetuity
Period
21.19 The
perpetuity period under the rule against perpetuities if applicable to the
trusts constituted in this Clause 21 and the other Finance Documents shall
be the period of eighty years from the date of this Agreement and, subject
thereto, if the Agent determines that all of the obligations of the Account
Party under any of the Finance Documents have been fully and unconditionally
discharged, such trusts shall be wound up.
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Lender
Representations
21.20 Each
Lender represents to the Agent on the date of issue of each Letter of Credit
that:
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(a)
|
the
execution and delivery of each Letter of Credit by the Agent on the
Lender’s behalf has been duly authorised by all necessary action on the
part of the Lender; and
|
|
(b)
|
the
obligations of the Lender under each Letter of Credit constitute
its
legal, valid and binding
obligations.
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Letters
of Credit
21.21 Each
Lender shall, (a) pro rata according to its respective Commitment, indemnify
the
Agent against any and all liabilities, costs and expenses which the Agent may
incur otherwise than by reason of its own gross negligence or wilful misconduct
(in its capacity as Agent) as a result of the execution and delivery of any
Letter of Credit and any documents executed and delivered by the Agent in
connection therewith; and (b) inform the Agent promptly if at any time the
collateral securing the repayment of any amounts payable under any Letter of
Credit comprises directly or indirectly a security interest over a principal
private residence.
22. 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 facsimile, as follows:
|
(a)
|
if
to any Obligor, to:
|
XX
Xxxxx
Xxx
Xxxxxxxxxx Xxxx
Xxxxxxxx
XX 00
Bermuda
Fax: 1
441 295 4867
Attention: Executive
Vice President, General Counsel and Secretary
|
(b)
|
if
to the Agent:
|
Citigroup
Centre
00
Xxxxxx
Xxxxxx
Xxxxxx
X00 0XX
Fax: 44
20 8636 3824
Attention: Loans
Agency
|
(c)
|
if
to a Lender, to it at its address (or facsimile number) on the signature
pages of this Agreement, or such other address as it shall notify
to the
Agents and the Account Party.
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Any
party
hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto (or, in the
case
of any such change by a Lender, by notice to the Account Party and the Agent).
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on
the
date of receipt.
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23. WAIVERS
AND AMENDMENTS
23.1 No
failure or delay by any Finance Party 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. No waiver of any provision of this
Agreement or consent to any departure by an Obligor therefrom shall in any
event
be effective unless the same shall be permitted by Clause 23.3
(Amendments), and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. Without limiting
the generality of the foregoing, the issuance of a Letter of Credit shall not
be
construed as a waiver of any Default, regardless of whether the Agent or any
Lender may have had notice or knowledge of such Default at the
time.
23.2 The
rights and remedies of the Finance Parties hereunder are cumulative and are
not
exclusive of any rights or remedies that they would otherwise have.
23.3 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 Majority Lenders or by the Obligors and the Agent with the
consent of the Majority Lenders; PROVIDED that no such
agreement shall:
|
(a)
|
increase
the Commitment of any Lender without the written consent of such
Lender,
|
|
(b)
|
reduce
the amount of any reimbursement obligation of the Account Party in
respect
of any LC Disbursement or reduce the rate of interest thereon, or
reduce
any fees payable hereunder, without the written consent of each Lender
affected thereby,
|
|
(c)
|
postpone
the scheduled date for reimbursement of any LC Disbursement, or any
interest thereon, or any fees payable hereunder, or reduce the amount
of,
waive or excuse any such payment, or postpone the scheduled date
of
expiration of any Commitment or any Letter of Credit (other than
an
extension thereof pursuant to Clause 4), without the written consent
of each Lender affected thereby,
|
|
(d)
|
change
Clause 15.4 (Pro Rata Treatment) or 15.5 (Sharing of Payments
By Lenders) without the consent of each Lender affected
thereby,
|
|
(e)
|
release
any of the Guarantors from any of their guarantee obligations under
Clause 16 (Guarantee and Indemnity) without the written
consent of each Lender,
|
|
(f)
|
release
any security granted by the Account Party pursuant to Clause 19.8
(Ratings Downgrade) or 20 (Events of Default) without
the written consent of each Lender,
and
|
|
(g)
|
change
any of the provisions of this Clause or the percentage in the definition
of the term Majority Lenders or any other
provision hereof specifying the number or percentage of Lenders required
to waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each
Lender;
|
and
PROVIDED FURTHER that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Agent hereunder without the prior
written consent of the Agent.
24. COSTS
AND EXPENSES
24.1 The
Account Party shall pay:
|
(a)
|
all
reasonable out-of-pocket expenses and charges incurred by the Agent
and/or
the Arrangers (together with VAT or any similar tax thereon and including
the reasonable fees, charges and disbursements of
cou
|
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|
|
sel
for the Agent) in connection with the syndication of the credit facilities
provided for herein, the negotiation, preparation, execution and
administration of the Finance Documents (subject to the terms of
the
Commitment Letter) or any amendments, modifications or waivers of
the
provisions hereof (whether or not the transactions contemplated hereby
or
thereby shall be consummated);
|
|
(b)
|
all
reasonable out-of-pocket expenses incurred by the Agent, the Security
Trustee or any Lender, (together with VAT or any similar tax thereon
and
including the reasonable fees, charges and disbursements of one legal
counsel for the Agent and one legal counsel for the Lenders), in
connection with the preservation and/or enforcement or protection
of its
rights in connection with the Finance Documents, including its rights
under this Clause, or in connection with Letters of Credit issued
hereunder, including in connection with any workout, restructuring
or
negotiations in respect thereof.
|
24.2 The
Account Party shall pay all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein.
25. INDEMNITIES
Currency
Indemnity
|
25.1
(a)
|
If:
|
|
|
(i)
|
any
amount payable by the Account Party under or in connection with this
Agreement is received by any Finance Party in a currency (the
Payment Currency) other than that agreed in this
Agreement (the Agreed Currency) whether as a
result of any judgement or order or the enforcement thereof, the
liquidation of the payer or otherwise;
and
|
|
|
(ii)
|
the
amount produced by converting the Payment Currency so received into
the
Agreed Currency is less than the relevant amount of the Agreed
Currency.
|
then
the
Account Party shall, as an independent obligation, indemnify such Finance Party
for the deficiency and any loss sustained as a result. Such
conversion shall be made at such prevailing rate of exchange, on such date
and
in such market as is determined by such Finance Party (acting reasonably) as
being most appropriate for the conversion. The Account Party shall in
addition pay the costs of the conversion.
|
(b)
|
The
Account Party waives any right it may have in any jurisdiction to
pay any
amount under this Agreement in a currency other than that in which
it is
expressed to be payable in this
Agreement.
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25.2 The
Obligors shall indemnify the Agent and each Lender, and each Related Party
of
any of the foregoing Persons (each such Person being called an
Indemnitee) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for
any
Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in
connection with, or as a result of:
|
(a)
|
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;
|
|
(b)
|
any
Letter of Credit or the use of any thereof (including any refusal
by any
Lender to honour 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);
|
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|
(c)
|
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 wilful
misconduct of such Indemnitee.
|
Reimbursement
by Lenders
25.3 To
the extent that the Obligors fail to pay any amount required to be paid by
them
to the Agent under Clauses 24.1 (Costs and Expenses) or 25.1
(Currency Indemnity) and 25.2 (Other Indemnities), each Lender
severally agrees to pay to the Agent such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; PROVIDED that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Agent
in
its capacity as such.
26. ALTERATION
TO THE PARTIES
26.1 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.
Assignments
and Transfers by the Account Party
26.2 The
Account
Party shall not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Account Party without such consent shall be null
and void).
|
26.3
(a)
|
Any
Lender (the Transferor) may at any time transfer
to another Approved Credit Institution (the
Transferee) all or a portion of its rights and
obligations under this Agreement (including all or a portion of its
Commitment) and under any Letter of Credit to which it is a party;
PROVIDED THAT:
|
|
|
(i)
|
except
in the case of an transfer to a Lender or a Lender Affiliate, each
of the
Account Party and the Agent must give their prior written consent
to such
assignment (which consent shall not be unreasonably withheld or
delayed);
|
|
|
(ii)
|
except
in the case of an transfer to a Lender or a Lender Affiliate or a
transfer
of the entire remaining amount of the Transferor’s Commitment, the amount
of the Commitment of the Transferor subject to each such transfer
(determined as of the date of the Transfer Certificate) shall not
be less
than £3,000,000 unless each of the Account Party and the Agent otherwise
consent;
|
|
|
(iii)
|
a
transfer of obligations shall only be effective if the
Transferee:
|
|
|
(A)
|
if
it shall not be a Lender, has delivered relevant contact, notice
and
account details to the Agent (with a copy to the Account Party) as
well as
any information required by the Agent to perform “know your customer” or
other checks relating to any person that it is required to carry
out in
relation to the Transferee, the completion of which the Agent shall
promptly notify to the Transferor and the Transferee;
and
|
|
|
(B)
|
has
confirmed to the Agent and the Account Party prior to the transfer
taking
effect that it undertakes to be bound by the terms of this Agreement
as
Lender in form and substance reasonably satisfactory to the Agent
and the
Account Party; and on any such transfer
being
|
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|
|
made
the Transferor shall be relieved of its obligations to the extent
they are
transferred to the Transferee.
|
PROVIDED
FURTHER that any consent of the Account Party otherwise required under
this paragraph shall not be required if an Event of Default under
Clause 20(a), (e) or (f) has occurred and is continuing. Upon
transfer pursuant to Clause 26.4, from and after the last to occur of
(i) the effective date specified in each Transfer Certificate; and
(ii) the cancellation of a Letter of Credit and the issue of a new Letter
of Credit with the Transferee identified as an Issuing Lender (the
Issuing Lender Transfer), the Transferee thereunder
shall be a party hereto and, to the extent of the lesser of the interest
assigned by such Transfer Certificate and the Transferee’s participation as an
Issuing Lender of a re-issued Letter of Credit (the Transferred
Interest), have the rights and obligations of a Lender under this
Agreement, and the Transferor thereunder shall, to the extent of the Transferred
Interest, be released from its obligations under this Agreement (and, in the
case of Transfer Certificate covering all of the Transferor’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Clauses 12 (Increased
Costs), 10 (Taxes) 24 (Costs and Expenses) and 25
(Indemnities)). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Clause 26.7
(Participations).
Notwithstanding
anything to the contrary contained herein, any Lender (a Granting
Lender) may grant to a special purpose vehicle (an
SPV) of such Granting Lender, identified
as such in
writing from time to time by the Granting Lender to the Agent and the Account
Party, the option to provide to the Account Party all or any part of any LC
Disbursement that such Granting Lender would otherwise be obligated to make
to
the Account Party pursuant to Clause 2.1, PROVIDED that (i)
nothing herein shall constitute a commitment by any SPV to make any LC
Disbursement, (ii) if an SPV elects not to exercise such option or otherwise
fails to provide all or any part of such LC Disbursement, the Granting Lender
shall be obligated to make such LC Disbursement pursuant to the terms hereof
and
(iii) the Account Party may bring any proceeding against either or both the
Granting Lender or the SPV in order to enforce any rights of the Account Party
hereunder; and (iv) the SPV shall agree to the terms of Clause 30.2
(Confidentiality). The making of an LC Disbursement by an SPV hereunder
shall utilise the Commitment of the Granting Lender to the same extent, and
as
if, such LC Disbursement were made by the Granting Lender. Each party hereto
hereby agrees that no SPV shall be liable for any payment under this Agreement
for which a Lender would otherwise be liable, for so long as, and to the extent,
the related Granting Lender makes such payment. In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPV, it will not institute against, or join any other person
in instituting against, such SPV any bankruptcy, reorganisation, arrangement,
insolvency or liquidation proceedings or similar proceedings under the Laws
of
the United States or any State thereof arising out of any claim against such
SPV
under this Agreement. In addition, notwithstanding anything to the contrary
contained in this Clause, any SPV may with notice to, but without the prior
written consent of, the Account Party or the Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Letter
of Credit to its Granting Lender or to any financial institutions (consented
to
by the Account Party and the Agent) providing liquidity and/or credit support
(if any) with respect to commercial paper issued by such SPV to issue such
Letters of Credit and such SPV may disclose, on a confidential basis,
confidential information with respect to any Account Party and its Subsidiaries
to any rating agency, commercial paper dealer or provider of a surety, guarantee
or credit liquidity enhancement to such SPV. This paragraph may not be amended
without the consent of any SPV at the time holding LC Disbursements under this
Agreement.
|
(b)
|
On
each occasion a Transferor assigns, transfers or novates any of its
rights
and/or obligations under this Agreement, the Transferee (unless it
is
already a Lender or a Lender Affiliate immediately prior to the transfer)
shall ensure that the Agent has notice of the same and shall, on
the date
the assignment, transfer and/or novation takes effect, pay to the
Agent
for its own account a fee of
£1,000.
|
|
(c)
|
Neither
a Transferor nor any other Finance Party is responsible to a Transferee
for:
|
-55-
|
(i)
|
the
execution, genuineness, validity, enforceability or sufficiency of
any
Finance Documents or any other
document;
|
|
|
(ii)
|
the
collectability of amounts payable under any Finance Documents or
the
financial condition of or the performance of its obligations under
the
Finance Documents by any Obligor;
or
|
|
|
(iii)
|
the
accuracy of any statements or information (whether written or oral)
made
in or in connection with or supplied in connection with any Finance
Documents.
|
|
(d)
|
Each
Transferee confirms to the Transferor and the other Finance Parties
that
it:
|
|
|
(i)
|
has
made its own independent investigation and assessment of the financial
condition and affairs of each Obligor and its related entities in
connection with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Transferor or
any
other Finance Party in connection with any Finance Documents;
and
|
|
|
(ii)
|
will
continue to make its own independent appraisal of the creditworthiness
of
each Obligor and its related entities for so long as there are any
Commitments or LC Exposures under this
Agreement.
|
|
(e)
|
Nothing
in any Finance Document obliges a Transferor
to:
|
|
|
(i)
|
accept
a re-transfer from a Transferee of any of the rights and/or obligations
assigned, transferred or novated under this Clause;
or
|
|
|
(ii)
|
support
any losses incurred by the Transferee by reason of the non-performance
by
any Obligor of its obligations under any Finance Document or
otherwise.
|
26.4 Transfer
Procedure:
|
(a)
|
A
novation is effected if:
|
|
|
(i)
|
the
Transferor and the Transferee deliver to the Agent a duly completed
Transfer Certificate executed by the Transferor and the Transferee;
and
|
|
|
(ii)
|
the
Agent executes it
|
PROVIDED
THAT the Agent shall only be obliged to execute a Transfer Certificate
delivered to it by the Transferor and the Transferee once it is satisfied it
has
complied with all necessary “know your customer” or similar other checks under
all applicable laws and regulations in relation to the transfer to such
Transferee.
|
(b)
|
Each
Party (other than the Transferor and the Transferee) irrevocably
authorises the Agent to execute any duly completed Transfer Certificate
on
its behalf.
|
|
(c)
|
To
the extent that they are expressed to be the subject of the novation
in
the Transfer Certificate:
|
|
|
(i)
|
the
Transferor and the other Parties (the existing
Parties) will be released from their obligations to each
other under the Finance Documents (the discharged
obligations);
|
|
|
(ii)
|
the
Transferee and the existing Parties will assume obligations towards
each
other under the Finance Documents which differ from the discharged
obligations only insofar as they are owed to or assumed by the Transferee
instead of the Transferor;
|
-56-
|
|
(iii)
|
the
rights of the Transferor against the existing Parties under the Finance
Documents and vice versa (the discharged rights)
will be cancelled; and
|
|
|
(iv)
|
the
Transferee and the existing Parties will acquire rights against each
other
under the Finance Documents which differ from the discharged rights
only
insofar as they are exercisable by or against the Transferee instead
of
the Transferor,
|
|
|
all
on the date specified in the proviso to
Clause 26.3(a).
|
Right
to substitute single Lender
26.5 If:
|
(a)
|
any
sum payable to any Finance Party by the Account Party is required
to be
increased under Clause 10 (Taxes);
or
|
|
(b)
|
any
Lender claims indemnification from the Account Party under
Clause 12.1 (Increased Costs);
or
|
|
|
a
Lender’s Available Commitment has been reduced to zero pursuant to
Clause 13(b)
(Illegality),
|
the
Account Party may give the Agent notice of its intention to arrange the
substitution of that Lender with a new bank or financial
institution.
On
receipt of a notice from the Account Party referred to above, the Lender shall
use its best endeavours to promptly assign or transfer all of its rights and
obligations under this Agreement to an Approved Credit Institution nominated
by
the Account Party. Such transfer will be effected in accordance with
Clause 0 (Transfer Procedure) and the consideration for such
transfer shall be an amount equal to the sum of all amounts accrued and owing
by
the Account Party to the transferring Lender as calculated on the date of
transfer.
26.6 If
a Reference Bank ceases to be one of the Lenders, the Agent shall (in
consultation with the Account Party) appoint another Lender or an affiliate
of a
Lender to replace that Reference Bank.
Participations
26.7 Any
Lender may sell participations to one or more Lenders or other entities (a
Participant) in all or a portion of such Lender’s rights and
obligations under this Agreement and the other Credit Documents (including
all
or a portion of its Commitment); PROVIDED that:
|
(a)
|
any
such participation sold to a Participant which is not a Lender or
a Lender
Affiliate shall be made only with the consent (which in each case
shall
not be unreasonably withheld) of the Account Party and the Agent,
unless
an Event of Default under Clause 20(a), (e) or (f) has occurred and
is continuing, in which case the consent of the Account Party shall
not be
required;
|
|
(b)
|
such
Lender’s obligations under this Agreement and the other Finance Documents
shall remain unchanged;
|
|
(c)
|
such
Lender shall remain solely responsible to the other parties hereto
for the
performance of such obligations;
|
|
(d)
|
the
Account Party, the Agent, the Security Trustee and the other Lenders
shall
continue to deal solely and directly with such Lender in connection
with
such Lender’s rights and obligations under this Agreement and the other
Finance Documents; and
|
|
(e)
|
the
Participant shall agree to the terms of Clause 30.2
(Confidentiality).
|
-57-
|
|
Any
agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole
right
to enforce this Agreement and the other Finance Documents and to
approve
any amendment, modification or waiver of any provision of this Agreement
or the other Finance Documents; PROVIDED that such
agreement or instrument may provide that such Lender will not, without
the
consent of the Participant, agree to any amendment, modification
or waiver
described in the first proviso to Clause 23.3 (Amendments)
that affects such Participant. Subject to Clause 26.8 (No
Increased Costs), the Obligors agree that each Participant
shall be entitled to the benefits of Clauses 12 (Increased
Costs) and 10 (Taxes) to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant
to
Clause 26.3 (Transfers by
Lenders).
|
26.8 No
Participant or Transferee shall be entitled to receive any greater payment
under
Clause 12 (Increased Costs) and 10 (Taxes) than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant or the Lender interest transferred.
26.9 Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
and this Clause shall not apply to any such pledge or assignment of a security
interest; PROVIDED that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
No
Transfers to any Account Party or Affiliates
26.9 Anything
in this Clause 26 to the contrary notwithstanding, no Lender may assign or
participate any interest in any LC Exposure held by it hereunder to any Obligor
or any of its Affiliates or Subsidiaries without the prior consent of each
Lender.
26.10 The
Agent, acting for this purpose as an agent of the Account Party, shall maintain
at one of its offices in London a copy of each Transfer Certificate delivered
to
it and a register of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the LC Disbursements owing to, each Lender pursuant
to the terms hereof from time to time (the Register).
The entries in the Register shall be conclusive, and the Account Party, the
Agent, the Security Trustee and the Lenders may treat each Person whose name
is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by any Account Party and any Lender,
at any reasonable time and from time to time upon reasonable prior
notice.
27. SET
OFF
If
an
Event of Default shall have occurred and be continuing, each Finance Party
is
hereby authorised at any time and from time to time, to the fullest extent
permitted by Law, to set off and apply any and all deposits in any currency
(general or special, time or demand, provisional or final) at any time held
and
other indebtedness in any currency at any time owing by such Finance Party
to or
for the credit or the account of any Obligor against any of and all the
obligations of such Obligor now or hereafter existing under this Agreement
held
by such Finance Party, irrespective of whether or not such Finance Party shall
have made any demand under this Agreement and although such obligations may
be
unmatured. The rights of each Finance Party under this Clause are in
addition to other rights and remedies (including other rights of set-off) which
such Finance Party may have. The relevant Finance Party may effect
any appropriate currency exchanges to implement such set-off.
-58-
28. MISCELLANEOUS
PROVISIONS
Certificates
28.1 Any
determination or notification by the Agent or any other Finance Party concerning
any rate or amount under the Finance Documents shall, in the absence of manifest
error, be conclusive evidence as to that matter.
Survival
28.2 All
covenants, agreements, representations and warranties made by the Account Party
herein and in the certificates or other instruments delivered in connection
with
or pursuant to this Agreement shall be considered to have been relied upon
by
the other parties hereto and shall survive the execution and delivery of this
Agreement and the issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Agent or any Lender may have had notice or knowledge of any Default
or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as any fee or
any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Clauses 12 (Increased
Costs), 10 (Taxes), 24 (Costs and Expenses), 25
(Indemnities) and 21 (Agent) shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision
hereof.
28.3 This
Agreement may be executed in counterparts (and by different parties hereto
on
separate counterparts), each of which shall constitute an original, but all
of
which when taken together shall constitute one and the same
instrument.
28.4 This
Agreement and the other Finance Documents constitute the entire contract between
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.
28.5 Any
provision of this Agreement or any other Finance Document 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. The invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction. To the extent permitted by applicable Law, each Obligor
hereby waives any provision of Law which renders any provision of the Finance
Documents prohibited or unenforceable in any respect.
USA
Patriot Act Notification
28.6 Each
Lender hereby notifies each Obligor that pursuant to the requirements of the
USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law on October 26, 2001))
(the Act) it is required to obtain, verify and record
information that identifies each Obligor which information includes the name
and
address of such Obligor and other information that will allow such Lender to
identify the Obligor in accordance with the Act. Each Obligor agrees
to promptly upon the request of such Lender supply, or procure the supply of,
such information as is reasonably requested by such Lender in order for such
Lender to be satisfied that it has complied with the Act.
29. GOVERNING
LAW AND JURISDICTION
29.1 This
Agreement shall be construed in accordance with and governed by English
law.
-59-
Jurisdiction
|
29.2
(a)
|
All
the Parties agree that the courts of England are, subject to
Clause 29.2(b) and (c) below, to have jurisdiction to settle any
disputes which may arise in connection with the creation, validity,
effect, interpretation or performance of, or the legal relationships
established by, this Agreement (including, without limitation, claims
for
set-off or counterclaim) or otherwise arising in connection with
this
Agreement and for such purposes irrevocably submit to the jurisdiction
of
the English courts;
|
|
(b)
|
notwithstanding
the agreement in paragraph (a) above, each of the Finance Parties
shall
retain the right to bring proceedings in any other court which has
jurisdiction whether by virtue of the Convention on Jurisdiction
and the
Enforcement of Judgments signed on 27 September 1968 (as from time to
time amended and extended) or by virtue of the Convention on Jurisdiction
and the Enforcement of Judgments signed on 16 September 1988 (from
time to time amended and extended) or Council Regulations (EC) No
44/2001
of 22 December 2000 on jurisdiction and the enforcement of judgements
in
civil and commercial matters which came into force on 1 March
2002;
|
|
(c)
|
with
respect to the courts agreed in paragraphs (a) and (b) above, each
of the
Parties irrevocably waives any objections on the ground of venue
or forum
non conveniens or any similar
ground;
|
|
(d)
|
each
of the Parties irrevocably agrees that a judgment or order of any
court
referred to in this Clause in connection with this Agreement is conclusive
and binding on it and may be enforced against it in the courts of
any
other jurisdiction; and
|
|
(e)
|
each
of the Parties irrevocably consents to service of process by mail
or in
any other manner permitted by the relevant
Law.
|
Agent
for Service of Process
29.3 Each
Obligor shall at all times maintain an agent for service of process and any
other documents in proceedings in England or any other proceedings in connection
with this Agreement (a Process Agent). The
Process Agent shall be XL Services UK Limited, XX Xxxxx, 00 Xxxxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX (Attn: Company Secretary) and any writ, judgment or other notice
of legal process shall be sufficiently served on the relevant Obligor if
delivered to the Process Agent marked for the attention of the Company Secretary
at its address for the time being. Each Obligor undertakes not to
revoke the authority of the Process Agent without promptly appointing a
successor and notifying the Agent thereof.
29.4 To
the extent that any Obligor 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 the Finance
Documents.
30. TREATMENT
OF CERTAIN INFORMATION; CONFIDENTIALITY
30.1 Each
of the Obligors acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to any Obligor
or one or more of their Subsidiaries (in connection with this Agreement or
otherwise) by any Lender or by one or more subsidiaries or affiliates of such
Lender and each of the Obligors hereby authorises each Lender to share any
information delivered to such Lender by such Obligor and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Lender
to
enter into this Agreement, to any such subsidiary or affiliate, it being
understood that (a) any such information shall be used only for the purpose
of
advising the Obligor or preparing presentation materials for the benefit of
the
Obligor and (b) any such
-60-
subsidiary
or affiliate receiving such information shall be bound by Clause 30.2
(Confidentiality) as if it were a Lender hereunder. Such authorisation
shall survive the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision
hereof.
30.2 Each
of the Finance Parties agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed:
|
(a)
|
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);
|
|
(b)
|
to
the extent requested by any regulatory authority having jurisdiction
over
the Agent or any Lender;
|
|
(c)
|
to
the extent required by applicable Laws or regulations or by any subpoena
or similar legal process;
|
|
(d)
|
to
any other Party;
|
|
(e)
|
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;
|
|
(f)
|
subject
to an agreement in writing containing provisions substantially the
same as
those of this paragraph and for the benefit of the Obligor, to
(i) any assignee or transferee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction
relating to any Obligor and its
obligations;
|
|
(g)
|
with
the consent of the Obligor; or
|
|
(h)
|
to
the extent such Information (i) becomes publicly available other than
as a result of a breach of this Clause 30.2 or (ii) becomes available
to the Agent or any Lender on a non-confidential basis from a source
other
than an Obligor.
|
For
the
purposes of this Clause, Information means all
information received from an Obligor relating to an Obligor or its business,
other than any such information that is available to the Finance Parties on
a
non-confidential basis prior to disclosure by such Obligor;
PROVIDED that, in the case of information received from an
Obligor 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 Clause 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, each of the Finance Parties agree that they will not trade the
securities of any of the Obligors based upon non-public Information that is
received by them.
Notwithstanding
anything in this Agreement to the contrary, the Agent, the Lenders and the
Account Party (and each of their respective employees, representatives or other
agents) may disclose to any and all persons, without limitation of any kind,
the
U.S. tax treatment and U.S. tax structure of the transactions contemplated
by
this Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to such person relating to such tax treatment or
tax
structure, other than any information for which nondisclosure is reasonably
necessary in order to comply with applicable securities laws, and except that,
with respect to any document or similar item that in either case contains
information concerning the U.S. tax treatment or U.S. tax structure of such
transactions as well as other information, this paragraph shall only apply
to
such portions of the document or similar item that relate to such tax treatment
or tax structure
-61-
31. THIRD
PARTY RIGHTS
A
person
who is not a Party shall have no rights under the Contracts (Rights of Third
Parties) Xxx 0000 to enforce any of its terms.
32. WAIVER
OF TRIAL BY JURY
EACH
PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED ON OR ARISING FROM ANY FINANCE DOCUMENT OR ANY TRANSACTION
CONTEMPLATED BY ANY FINANCE DOCUMENT.
In
witness whereof the parties hereto have caused this Agreement to be
duly executed on the date first written above.
-62-
SCHEDULE
1
COMMITMENTS
|
Name
of Lender
|
Commitment
(£)
|
|
Citibank,
N.A.
|
65,000,000
|
|
Lloyds
TSB Bank PLC
|
65,000,000
|
|
The
Royal Bank of Scotland PLC
|
65,000,000
|
|
ING
Bank N.V.
|
60,000,000
|
|
The
Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
|
50,000,000
|
|
Calyon
|
45,000,000
|
|
Bayerische
Hypo-und Vereinsbank AG
|
25,000,000
|
|
Commerzbank
Aktiengesellschaft
|
25,000,000
|
|
Landesbank
Hessen-Thüringen Girozentrale
|
25,000,000
|
|
Mizuho
Corporate Bank, Ltd.
|
25,000,000
|
|
TOTAL
|
450,000,000
|
SCHEDULE
2
INDEBTEDNESS
AND LIENS
Part
A
|
1.
|
Credit
Agreement dated as of June 22, 2005 between XL Capital Ltd, X.L.
America,
Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as account parties
and
guarantors, the lenders party thereto and JPMorgan Chase Bank, as
administrative agent.
|
|
2.
|
Amendment
No. 1 dated May 5, 2006 to JPMorgan Chase Bank Credit Agreement dated
as
of June 22, 2005.
|
|
3.
|
Credit
Agreement dated as of June 21, 2007 between XL Capital Ltd, X.L.
America,
Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as account parties
and
guarantors, the lenders party thereto and JPMorgan Chase Bank, as
administrative agent.
|
|
4.
|
Credit
Agreement dated as of August 3, 2005 between XL Capital Ltd, X.L.
America,
Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as borrowers and
guarantors, and Bear Xxxxxxx Corporate Lending Inc., as
lender.
|
|
5.
|
Amendment
No. 1 dated as of May 9, 2006 to the Bear Xxxxxxx Corporate Lending
Inc.
Credit Agreement dated as of August 3,
2005.
|
|
6.
|
Letter
of Credit Facility and Reimbursement Agreement dated March 14, 2006,
between XL Capital Ltd, as account party and XL Capital Ltd, X.L.
America,
Inc., XL Insurance (Bermuda) Ltd and XL Re Ltd, as guarantors and
Citibank
International plc, as agent and trustee for the lenders party
thereto.
|
|
7.
|
Letter
of Amendment dated May 16, 2006 to Letter of Credit and Reimbursement
Agreement dated March 16, 2006 between XL Capital Ltd, as account
party
and XL Capital Ltd, X.L. America, Inc., XL Insurance (Bermuda) Ltd
and XL
Re Ltd, as guarantors and Citibank International plc, as agent and
trustee
for the lenders party thereto.
|
|
8.
|
6.58%
guaranteed senior notes due April 12, 2011, under the Note Purchase
Agreement dated as of April 12, 2001, issued by X.L. America, Inc.
and
guaranteed by XL Capital Ltd, XL Insurance (Bermuda) Ltd, and XL
Re
Ltd.
|
|
9.
|
Amendment
No. 1 to Note Purchase Agreement dated as of May 31, 2006 to the
Note
Purchase Agreement dated as of April 12, 2001 among X.L. America
Inc., XL
Capital Ltd, XL Insurance (Bermuda) Ltd and XL Re
Ltd.
|
|
10.
|
6.50%
guaranteed senior notes due January 15, 2012, issued by XL Capital
Finance
(Europe) plc and guaranteed by XL Capital Ltd, under the Indenture
dated
January 10, 2002, by and among XL Capital Finance (Europe) plc, XL
Capital
Ltd and State Street Bank and Trust
Company.
|
|
11.
|
Master
Standby Letter of Credit and Reimbursement Agreement dated as of
September
30, 2005, among National Australia Bank Limited, New York Branch
and XL
Capital Ltd, XL America, Inc, XL Insurance (Bermuda) Ltd and XL Re
Ltd, as
account parties.
|
|
12.
|
Amendment
Agreement, dated as of December 30, 2005 to Master Standby Letter
of
Credit and Reimbursement Agreement dated as of September 30, 2005,
among
National Australia Bank Limited, New York Branch and XL Capital Ltd,
XL
America, Inc, XL Insurance (Bermuda) Ltd and XL Re Ltd, as account
parties.
|
|
13.
|
Second
Amendment Agreement dated as of May 26, 2006 to National Australia
Bank
Limited, New York Branch Master Standby Letter of Credit and
Reimbursement Agreement dated as of September 30,
2005.
|
|
14.
|
Third
Amendment Agreement dated as of December 19, 2006 to National Australia
Bank Limited, New York Branch Master Standby Letter of Credit and
Reimbursement Agreement dated as of September 30,
2005.
|
|
15.
|
|
16.
|
5.25%
Senior Notes due 2014, under the First Supplemental Indenture, dated
as of
August 23, 2004, to the Indenture dated as of June 2, 2004 between
XL
Capital Ltd and the Bank of New York, as
Trustee.
|
|
17.
|
6.375%
Senior Notes due 2024, under the Second Supplemental Indenture, dated
as
of November 12, 2004, to the Indenture, dated as of June 2, 2004,
between
XL Capital Ltd and The Bank of New York, as
Trustee.
|
|
18.
|
5.25%
Senior Notes due February 15, 2011, under the Third Supplemental
Indenture, dated as of December 9, 2005, to the Indenture, dated
as of
June 2, 2004, between XL Capital Ltd and The Bank of New York, as
trustee.
|
|
19.
|
6.25%
Senior Notes due May 15, 2027, under the Fourth Supplemental Indenture,
dated May 7, 2007, to the Indenture, dated as of June 2, 2004, between
XL
Capital Ltd and The Bank of New York, as
trustee.
|
|
20.
|
Replacement
Capital Covenant, dated March 15,
2007.
|
|
21.
|
Facility
Letter dated August 18, 2006 between XL Insurance (Bermuda) Ltd,
XL Re
Ltd, XL Capital Ltd and The Bank of
Bermuda.
|
|
22.
|
Amendment
Letter Agreement dated August 1, 2007 to Facility Letter dated August
18,
2006 between XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Capital Ltd
and The
Bank of Bermuda.
|
|
23.
|
Pledge
Agreement dated as of December 18, 2001, made by XL Investments Ltd,
XL Re
Ltd, XL Insurance (Bermuda) Ltd and XL Europe Ltd as grantors and
in
favour of Citibank, N.A.
|
|
24.
|
Amendment
No. 1 dated as of July 1, 2003, to the Pledge Agreement dated as
of
December 18, 2001, made by XL Investments Ltd, XL Re Ltd, XL Insurance
(Bermuda) Ltd and XL Europe Ltd as grantors and in favour of Citibank,
N.A.
|
|
25.
|
Insurance
Letters of Credit – Master Agreement dated May 19, 1993, between XL Re Ltd
and Citibank, N.A.
|
|
26.
|
Reinsurance
Standby Letter of Credit Agreement dated October 7, 1999, between
XL Re
Europe Limited (formerly known as Le Mans Re) and BNP
Paribas.
|
|
27.
|
First
Renewal dated November 27, 2000, to the Reinsurance Standby Letter
of
Credit Agreement dated October 7, 1999, between XL Re Europe Limited
(formerly known as Le Mans Re) and BNP
Paribas.
|
|
28.
|
Service
Agreement Relative to Sureties, Letters of Guarantees and International
Stand-by L/Cs dated April 25, 2003, between XL Re Europe Limited
(formerly
known as Le Mans Re) and Calyon (formerly known as Credit
Lyonnais).
|
|
29.
|
Customer
Agreement dated May 7, 2002, between XL Trading Partners Ltd and
XX Xxxxxx
Xxxxx Futures, Inc. (formerly known as Banc One Capital Markets,
Inc.).
|
-2-
|
30.
|
International
Uniform Brokerage Execution Services (“Give-Up”) Agreement dated February
6, 2002, among XX Xxxxxx Chase Futures, Inc. (formerly known as Banc
One
Capital Markets, Inc.), as Executing Broker, and GNI Incorporated,
as
Clearing Broker and XL Trading Partners
Ltd.
|
|
31.
|
Revolving
Credit and Security Agreement dated as of February 25, 2003, between
XL Re
Ltd as borrower, Corporate Asset Funding Company, Inc., Corporate
Receivables Corporation, Charta Corporation, Xxxxxx, X.X., and Citibank,
N.A., as lenders thereto and Citicorp North America, Inc. as
agent.
|
|
32.
|
Agreement
of Amendment, dated as of February 23, 2004, to the Revolving Credit
and
Security Agreement, dated as of February 25, 2003, among XL Re Ltd,
as
Borrower, CAFCO, LLC (formerly Corporate Asset Funding Company, Inc.),
CRC
Funding, LLC (formerly Corporate Receivables Corporation), CHARTA,
LLC
(formerly CHARTA Corporation) and XXXXXX, LLC (formerly XXXXXX, X.X.),
as
Lenders, Citibank, N.A. and the other Secondary Lenders from time
to time
parties thereto, as Secondary Lenders, and Citicorp North America,
Inc.,
as Agent.
|
|
33.
|
Amendment
dated as of May 10, 2004, to the Revolving Credit and Security Agreement
dated as of February 25, 2003, among XL Re Ltd as the borrower, CAFCO,
LLC, CRC Funding, LLC, CHARTA, LLC, XXXXXX, LLC, Citibank, N.A. and
Citicorp North America, Inc., as the
agent.
|
|
34.
|
Agreement
of Amendment, dated as of February 18, 2005, to the Revolving Credit
and
Security Agreement, dated as of February 25, 2003, among XL Re Ltd,
as
Borrower, CAFCO, LLC (formerly Corporate Asset Funding Company, Inc.),
CRC
Funding, LLC (formerly Corporate Receivables Corporation), CHARTA,
LLC
(formerly CHARTA Corporation) and XXXXXX, LLC (formerly XXXXXX, X.X.),
as
Lenders, Citibank, N.A. and the other Secondary Lenders from time
to time
parties thereto, as Secondary Lenders, and Citicorp North America,
Inc.,
as Agent.
|
|
35.
|
Agreement
of Amendment, dated as of February 16, 2006, to the Revolving Credit
and
Security Agreement, dated as of February 25, 2003, among XL Re Ltd,
as
Borrower, CAFCO, LLC (formerly Corporate Asset Funding Company, Inc.),
CRC
Funding, LLC (formerly Corporate Receivables Corporation), CHARTA,
LLC
(formerly CHARTA Corporation) and XXXXXX, LLC (formerly XXXXXX, X.X.),
as
Lenders, Citibank, N.A. and the other Secondary Lenders from time
to time
parties thereto, as Secondary Lenders, and Citicorp North America,
Inc.,
as Agent.
|
|
36.
|
Agreement
of Amendment dated as of September 29, 2006, to the Revolving Credit
and
Security Agreement dated as of February 25, 2003, among XL Re Ltd
as the
borrower, CAFCO, LLC, CRC Funding, LLC, CHARTA, LLC, XXXXXX, LLC,
Citibank, N.A. and Citicorp North America, Inc., as the
agent.
|
|
37.
|
Agreement
of Amendment dated as of February 14, 2007, to the Revolving Credit
and
Security Agreement dated as of February 25, 2003, among XL Re Ltd
as the
borrower, CAFCO, LLC, CRC Funding, LLC, CHARTA, LLC, XXXXXX, LLC,
Citibank, N.A. and Citicorp North America, Inc., as the
agent.
|
|
38.
|
Control
Agreement dated as of February 25, 2003, among XL Re Ltd as the borrower,
Citibank North America, Inc. as the Agent and Mellon Bank, N.A.,
as the
securities intermediary.
|
|
39.
|
Amendment
dated as of May 10, 2004, to the Control Agreement dated as of February
25, 2003, among XL Re Ltd as the borrower, Citibank North America,
Inc. as
the Agent and Mellon Bank, N.A., as the securities
intermediary.
|
|
40.
|
Agreement
of Amendment, dated as of February 16, 2006 to the Control Agreement
dated
as of February 25, 2003, among XL Re Ltd as the borrower, Citibank
North
America, Inc. as the Agent and Mellon Bank, N.A., as the securities
intermediary.
|
|
41.
|
Assignment
Agreement dated July 11, 2003, among XL Re Ltd, Mangrove Bay Trust
and The
Bank of New York.
|
-3-
|
|
Part
B
|
|
|
Liens
|
|
1.
|
Insurance
Letters of Credit – Master Agreement dated May 19, 1993, between XL Re Ltd
and Citibank, N.A.
|
|
2.
|
Pledge
Agreement dated as of December 18, 2001, made by XL Investments Ltd,
XL Re
Ltd, XL Insurance (Bermuda) Ltd and XL Europe Ltd as grantors and
in
favour of Citibank, N.A.
|
|
3.
|
Amendment
No. 1 dated as of July 1, 2003, to the Pledge Agreement dated as
of
December 18, 2001, made by XL Investments Ltd, XL Re Ltd, XL Insurance
(Bermuda) Ltd and XL Europe Ltd as grantors and in favour of Citibank,
N.A.
|
|
4.
|
Reinsurance
Standby Letter of Credit Agreement dated October 7, 1999,
between XL Re Europe Limited (formerly known as Le Mans Re) and
BNP Paribas.
|
|
5.
|
First
Renewal dated November 27, 2000, to the Reinsurance Standby Letter
of
Credit Agreement dated October 7, 1999, between XL Re Europe Limited
(formerly known as Le Mans Re) and BNP
Paribas.
|
|
6.
|
Service
Agreement Relative to Sureties, Letters of Guarantees and International
Stand-by L/Cs dated April 25, 2003, between XL Re Europe Limited
(formerly
known as Le Mans Re) and Calyon (formerly known as Credit
Lyonnais).
|
|
7.
|
Customer
Agreement dated May 7, 2002, between XL Trading Partners Ltd and
XX Xxxxxx
Xxxxx Futures, Inc. (formerly known as Banc One Capital Markets,
Inc.).
|
|
8.
|
International
Uniform Brokerage Execution Services (“Give-Up”) Agreement dated February
6, 2002, among XX Xxxxxx Chase Futures, Inc. (formerly known as Banc
One
Capital Markets, Inc.), as Executing Broker, and GNI Incorporated,
as
Clearing Broker and XL Trading Partners
Ltd.
|
|
9.
|
Assignment
Agreement dated July 11, 2003, among XL Re Ltd, Mangrove Bay Trust
and The
Bank of New York.
|
Part
C - Actions, Suits and Proceedings
None.
Part
D - Environmental Matters
None.
-4-
SCHEDULE
3
SUBSIDIARIES
3rd
Quarter 2007
|
%
|
JURISDICTION
|
|||||||||||||||||||||||
|
XL
Capital Ltd
|
Cayman
|
|||||||||||||||||||||||
|
EXEL
Holdings Limited
|
Cayman
|
|||||||||||||||||||||||
|
EXEL
Acquisition Ltd.
|
Cayman
|
|||||||||||||||||||||||
|
GCR
Holdings Limited (in liquidaton)
|
Cayman
|
|||||||||||||||||||||||
|
Xxxxx
Court Holdings Ltd.
|
Bermuda
|
|||||||||||||||||||||||
|
X.L.
Property Holdings Limited
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Insurance (Bermuda) Ltd.
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Weather & Energy Ltd (formerly Element Reinsurance
Ltd)
|
Bermuda
|
|||||||||||||||||||||||
|
XL
PP Limited
|
UK
|
|||||||||||||||||||||||
|
InQuisCapital
Holdings (Bermuda) Limited
|
Bermuda
|
|||||||||||||||||||||||
|
RiskConnect
Limited
|
Bermuda
|
|||||||||||||||||||||||
|
XL
International (Bermuda) Ltd (formerly XL Winterthur International
(Bermuda) Ltd)
|
91
|
Bermuda
|
||||||||||||||||||||||
|
XL
International Services Ltd (formerly XL Winterthur International
Services)
|
Bermuda
|
|||||||||||||||||||||||
|
International
Insurance Consulting Services Limited
|
Bermuda
|
|||||||||||||||||||||||
|
XL
(Brazil) Holdings Ltda (formerly Winterthur Administracao e
Participacoes Ltda)
|
Brazil
|
|||||||||||||||||||||||
|
XL
Capital Products Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Financial Solutions Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Services (Bermuda) Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Swiss Holdings Ltd
|
24
|
Switzerland
|
||||||||||||||||||||||
|
XL
Life Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
Xxxxx
Court General Partner Limited
|
Bermuda
|
|||||||||||||||||||||||
|
Xxxxx
Court 4 Limited Partnership
|
Bermuda
|
|||||||||||||||||||||||
|
Xxxxx
Court 6 Limited Partnership
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Gracechurch Limited
|
UK
|
|||||||||||||||||||||||
|
XL
Insurance (UK) Holdings Limited (formerly XL Winterthur (UK)
Holdings
Limited
|
42.33
|
UK
|
||||||||||||||||||||||
|
XL
Financial Holdings (Ireland) Limited
|
R
of Ireland
|
|||||||||||||||||||||||
|
XL
Europe Limited
|
R
of Ireland
|
|||||||||||||||||||||||
|
XL
Re Europe Services AG
|
Germany
|
|||||||||||||||||||||||
|
XL
Services Canada Ltd. (Formerly XL Re Europe Management Company
Ltd.)
|
Canada
|
|||||||||||||||||||||||
|
XL
Re Europe Limited
|
R
of Ireland
|
|||||||||||||||||||||||
|
X.L.
America, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
XL
Financial Solutions, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
XL
Capital Investment Partners Inc.
|
Delaware
|
|||||||||||||||||||||||
|
XL
Weather & Energy Inc. (formerly Element Re Capital Products
Inc.)
|
Delaware
|
|||||||||||||||||||||||
|
XLA
Xxxxxxxx X.X.
|
Delaware
|
|||||||||||||||||||||||
|
Global
Credit Analytics, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
NAC
Re Corporation
|
Delaware
|
|||||||||||||||||||||||
|
XL
Reinsurance America Inc. *(A-65%) - NY
|
New
York
|
|||||||||||||||||||||||
|
Greenwich
Insurance Company *(A-12%)
|
Delaware
|
|||||||||||||||||||||||
|
Warranty
Support Services LLC
|
Delaware
|
|||||||||||||||||||||||
|
XL
Insurance America, Inc. *(A-10%) (formerly Winterthur
International America Insurance Company)
|
Delaware
|
|||||||||||||||||||||||
|
XL
Select Insurance Company *(formerly Winterthur International America
Underwriters Insurance Co.)
|
Oklahoma
|
|||||||||||||||||||||||
|
XL
Insurance Company of New York, Inc. (A-3%)
|
New
York
|
|||||||||||||||||||||||
|
XL
Specialty Insurance Company *(A-6%)
|
Delaware
|
|||||||||||||||||||||||
|
Indian
Harbor Insurance Company *(A-2%)
|
North
Dakota
|
|||||||||||||||||||||||
|
XL
Management Services, LLC
|
Texas
|
|||||||||||||||||||||||
|
XL
Lloyds Insurance Company
|
Texas
|
|||||||||||||||||||||||
|
00
Xxxxxxx Xxxx LLC
|
Delaware
|
|||||||||||||||||||||||
|
XL
Global, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
XL
Insurance, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
XL
Global Services, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
XL
Investment Management (USA) LLC
|
Delaware
|
|||||||||||||||||||||||
|
Eagleview
Insurance Brokerage Services, LLC
|
Delaware
|
|||||||||||||||||||||||
|
XL
Life and Annuity Holding Company
|
Delaware
|
|||||||||||||||||||||||
|
XL
Life Insurance and Annuity Company (formerly Xxxxxx Life Insurance
Company)
|
Illinois
|
|||||||||||||||||||||||
|
XL
Asset Funding Company I LLC
|
Delaware
|
|||||||||||||||||||||||
|
XL
Re Life America Inc
|
Delaware
|
|||||||||||||||||||||||
|
ECS,
Inc. (In Liquidation)
|
Pennsylvania
|
|||||||||||||||||||||||
|
ECS
Risk & Insurance Services, Inc.
|
Pennsylvania
|
|||||||||||||||||||||||
|
ECS
Child Care Center, Inc.
|
Barbados
|
|||||||||||||||||||||||
|
XL
Environmental Ltd
|
UK
|
|||||||||||||||||||||||
|
XL
Investments Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
XL
SGS Holdings Inc.
|
Delaware
|
|||||||||||||||||||||||
|
Xxxxxxxx
Investments Inc. (**)
|
Barbados
|
|||||||||||||||||||||||
|
InQuisLogic
Ltd.
|
Barbados
|
|||||||||||||||||||||||
|
Kensington
Investments Inc.
|
Barbados
|
|||||||||||||||||||||||
|
XLB
Partners Inc.
|
Barbados
|
|||||||||||||||||||||||
|
Cumberland
Holdings, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
Cumberland
California, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
Cumberland
New York, Inc.
|
Delaware
|
|||||||||||||||||||||||
|
RiskConnect
Ltd
|
Barbados
|
|||||||||||||||||||||||
|
X.L.
Investment Private Trustee Ltd.
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Investments (Barbados) Inc.
|
Barbados
|
|||||||||||||||||||||||
|
Cybersettle,
Inc.
|
56
|
Delaware
|
||||||||||||||||||||||
|
Cybersettle
Insurance Brokerage Services LLC
|
Delaware
|
|||||||||||||||||||||||
|
Cybersettle
Financial Services LLC
|
Delaware
|
|||||||||||||||||||||||
|
ClearWater
Opportunity Fund Ltd.
|
Cayman
|
|||||||||||||||||||||||
|
XL
(LUXEMBOURG) S.a.r.l.
|
Luxembourg
|
|||||||||||||||||||||||
|
XL
(FINANCE) S.a.r.l.
|
Luxembourg
|
|||||||||||||||||||||||
|
XL
(INTERNATIONAL) S.a.r.l.
|
Luxembourg
|
|||||||||||||||||||||||
|
XL
(SERVICES) S.a.r.l.
|
Luxembourg
|
|||||||||||||||||||||||
|
XL
(SPECIALTY) S.a.r.l.
|
Luxembourg
|
|||||||||||||||||||||||
|
XL
(WESTERN EUROPE) S.a.r.l.
|
Luxembourg
|
|||||||||||||||||||||||
|
XL
Insurance UK Holdings Limited
|
57.67%
|
UK
|
||||||||||||||||||||||
|
ITAU
XL Seguros Corporativos S.A.
|
49%
|
Brazil
|
||||||||||||||||||||||
|
XL
Re Latin America (Argentina SA)
|
20%
|
Switzerland
|
||||||||||||||||||||||
|
XL
Re Latin America Ltd
|
Switzerland
|
|||||||||||||||||||||||
|
XL
Latin America Investments Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Re Latin America (Argentina SA)
|
80%
|
Argentina
|
||||||||||||||||||||||
|
XL
Re Latin America Servicos Ltda
|
Brazil
|
|||||||||||||||||||||||
|
XL
Insurance Switzerland (formerly XL Winterthur International Insurance
Switzerland)
|
Switzerland
|
|||||||||||||||||||||||
|
Vitodurum
Reinsurance Company (Formerly XL Winterthur International
Re)
|
Switzerland
|
|||||||||||||||||||||||
|
XL
Services Switzerland
|
Switzerland
|
|||||||||||||||||||||||
|
XL
India Business Services Private Limited
|
India
|
|||||||||||||||||||||||
|
XL
Insurance Mexico
|
Mexico
|
|||||||||||||||||||||||
|
XL
Insurance (UK) Holdings Limited (formerly XL Winterthur (UK) Holdings
Limited)
|
57.67
|
UK
|
||||||||||||||||||||||
|
XL
Insurance Argentina S.A. Compañia de Seguros (formerly Winterthur
International Argentina SA)
|
00
|
Xxxxxxxxx
|
||||||||||||||||||||||
|
XL
Insurance Company Limited (formerly XL Winterthur International
Insurance Company Limited)
|
UK
|
|||||||||||||||||||||||
|
XL
Magyarorszag Biztosito Reszvenytarsasag
|
Hungary
|
|||||||||||||||||||||||
|
XL
Insurance Argentina S.A. Compañia de Seguros (formerly Winterthur
International Argentina SA Co)
|
00
|
Xxxxxxxxx
|
||||||||||||||||||||||
|
XL
Holdings (Proprietary) Limited (formerly XL Winterthur Holdings
(Proprietary) Limited)
|
South
Africa
|
|||||||||||||||||||||||
|
XL
Winterthur Properties (Proprietary) Limited
|
South
Africa
|
|||||||||||||||||||||||
|
XL
Insurance Company Limited (formerly XL Winterthur International
Insurance Company Limited)
|
South
Africa
|
|||||||||||||||||||||||
|
XL
Services UK Limited
|
UK
|
|||||||||||||||||||||||
|
XL
Trading Partners Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Europe Holdings Ltd (formerly X.L. Two Ltd.)
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Europe Ltd
|
R
of Ireland
|
|||||||||||||||||||||||
|
XL
Financial Services (Ireland) Ltd.
|
R
of Ireland
|
|||||||||||||||||||||||
|
Mid
Ocean Limited
|
Cayman
|
|||||||||||||||||||||||
|
Mid
Ocean Holdings Limited
|
Bermuda
|
|||||||||||||||||||||||
|
Ridgewood
Holdings Limited
|
Bermuda
|
|||||||||||||||||||||||
|
XL
London Market Group Ltd
|
UK
|
|||||||||||||||||||||||
|
Xxxxxxxxx
Holdings Limited
|
UK
|
|||||||||||||||||||||||
|
Baltusorl
Holdings Limited
|
Bermuda
|
|||||||||||||||||||||||
|
County
Down Limited
|
UK
|
|||||||||||||||||||||||
|
Dornoch
Limited
|
UK
|
|||||||||||||||||||||||
|
Stonebridge
Underwriting Limited
|
UK
|
|||||||||||||||||||||||
|
XL
London market Services Ltd
|
UK
|
|||||||||||||||||||||||
|
Xxxxxxxxx
Personal Lines Limited - (Dormant)
|
UK
|
|||||||||||||||||||||||
|
Xxxxxxx
Xxxxxxxxx Limited - (Dormant)
|
UK
|
|||||||||||||||||||||||
|
Xxxxxx
Syndicate Management Limited
|
UK
|
|||||||||||||||||||||||
|
Denham
Direct Underwriters Ltd.
|
UK
|
|||||||||||||||||||||||
|
Xxxxxx
Legal and Professional Risks Ltd.
|
UK
|
|||||||||||||||||||||||
|
Xxxxxx
Tower Underwriting Agents (PTY) Limited
|
South
Africa
|
|||||||||||||||||||||||
|
XL
London Market Ltd - Syndicates 588/861/990/1209
|
UK
|
|||||||||||||||||||||||
|
Xxxxxxxxx
Syndicate Services Limited
|
UK
|
|||||||||||||||||||||||
|
XL
Capital International Limited
|
UK
|
|||||||||||||||||||||||
|
Xl
Capital Finance (Europe) plc
|
UK
|
|||||||||||||||||||||||
|
XL
Financial Products Ltd.
|
UK
|
|||||||||||||||||||||||
|
XL
Re Ltd
|
Bermuda
|
|||||||||||||||||||||||
|
XL
BCM Limited
|
UK
|
|||||||||||||||||||||||
|
XL
CCM Ltd
|
UK
|
|||||||||||||||||||||||
|
ECS
Reinsurance Company Inc.
|
Barbados
|
|||||||||||||||||||||||
|
XL
FC Limited
|
UK
|
|||||||||||||||||||||||
|
Global
Capital Underwriting Ltd.
|
UK
|
|||||||||||||||||||||||
|
XL
BCM Limited
|
UK
|
|||||||||||||||||||||||
|
XL
Mid Ocean Re Limited
|
UK
|
|||||||||||||||||||||||
|
XL
Investment Management Ltd.
|
Bermuda
|
|||||||||||||||||||||||
|
XL
Capital Partners Corporation
|
Cayman
|
|||||||||||||||||||||||
|
XL
Capital Partners I, L.P.
|
Cayman
|
|||||||||||||||||||||||
|
XL
Capital Principal Partners I, L.L.C.
|
50
|
Delaware
|
||||||||||||||||||||||
|
XL
Principal Partners I, L.P.
|
Cayman
|
|||||||||||||||||||||||
|
XL
Capital Principal Partners I, L.L.C.
|
50
|
Delaware
|
||||||||||||||||||||||
*A
=
Company is a member of NAC Reinsurance, Intercargo Pooling Agreement with
individual company pooling % noted
(**)
-
Limited Partner of XLA Xxxxxxxx X.X.
Significant
Subsidiaries as at 31 December 2006
XL
Re
Ltd
XL
Insurance America
XL
Insurance (Bermuda) Ltd
XL
Re
America
XL
Life
Ltd
SCHEDULE
4
MANDATORY COSTS
RATE
|
1.
|
The
Mandatory Cost is an addition to the interest rate on a Demand Amount
to
compensate Lenders for the cost of compliance with (a) the requirements
of
the Bank of England and/or the Financial Services Authority (or,
in either
case, any other authority which replaces all or any of its functions)
or
(b) the requirements of the European Central
Bank.
|
|
2.
|
On
the first day of a Default Period (or as soon as possible thereafter)
the
Agent shall calculate, as a percentage rate, a rate (the
Additional Cost Rate) for each Lender, in
accordance with the paragraphs set out below. The Mandatory
Cost will be calculated by the Agent as a weighted average of the
Lenders’
Additional Cost Rates (weighted in proportion to the percentage
participation of each Lender in the relevant Letter of Credit) and
will be
expressed as a percentage rate per
annum.
|
|
3.
|
The
Additional Cost Rate for any Lender funding or booking from a Facility
Office in a Participating Member State will be the percentage notified
by
that Lender to the Agent. This percentage will be certified by
that Lender in its notice to the Agent to be its reasonable determination
of the cost (expressed as a percentage of that Lender’s participation in
all Letters of Credit funded or booked from that Facility Office)
of
complying with the minimum reserve requirements of the European Central
Bank in respect of loans made from that Facility
Office.
|
|
4.
|
The
Additional Cost Rate for any Lender funding or booking from a Facility
Office in the United Kingdom will be calculated by the Agent as
follows:
|
|
[
|
AB
+ C(B - D) + E x 0.01
|
per cent. per annum
|
]
|
|
100
- (A + C)
|
Where:
|
|
A
|
is
the percentage of Eligible Liabilities (assuming these to be in excess
of
any stated minimum) which that Lender is from time to time required
to
maintain as an interest free cash ratio deposit with the Bank of
England
to comply with cash ratio
requirements.
|
|
|
B
|
is
the percentage rate of interest (excluding the Mandatory Cost and
the
additional rate of interest specified in item (i) of Clause 7 (Default
Interest)) payable for the relevant Default Period on the
Loan.
|
|
|
C
|
is
the percentage (if any) of Eligible Liabilities which that Lender
is
required from time to time to maintain as interest bearing Special
Deposits with the Bank of England.
|
|
|
D
|
is
the percentage rate per annum payable by the Bank of England to the
Agent
on interest bearing Special
Deposits.
|
|
|
E
|
is
designed to compensate Lenders for amounts payable under the Fees
Rules
and is calculated by the Agent as being the average of the most recent
rates of charge supplied by the Reference Banks to the Agent pursuant
to
paragraph 7 and expressed in pounds per
£1,000,000.
|
|
5.
|
For
the purposes of this Schedule:
|
|
|
(a)
|
Eligible
Liabilities and Special Deposits have the
meanings given to them from time to time under or pursuant to the
Bank of
England Act 1998 or (as may be appropriate) by the Bank of
England;
|
|
|
(b)
|
Fees
Rules means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force
from
time to time in respect of the payment of fees for the acceptance
of
deposits;
|
|
|
(c)
|
Fee
Tariffs means the fee tariffs specified in the Fees Rules under
the activity group A.1 Deposit acceptors (ignoring any minimum fee
or zero
rated fee required pursuant to the Fees Rules but taking into account
any
applicable discount rate); and
|
|
|
(d)
|
Tariff
Base has the meaning given to it in, and will be calculated
in
accordance with, the Fees Rules.
|
|
6.
|
In
application of the above formula, A, B, C and D will be included
in the
formula as percentages (i.e. 5 per cent. will be included in the
formula
as 5 and not as 0.05). A negative result obtained by
subtracting D from B shall be taken as zero. The resulting
figures shall be rounded to four decimal
places.
|
|
7.
|
If
requested by the Agent, each Reference Bank shall, as soon as practicable
after publication by the Financial Services Authority, supply to
the
Agent, the rate of charge payable by that Reference Bank to the Financial
Services Authority pursuant to the Fees Rules in respect of the relevant
financial year of the Financial Services Authority (calculated for
this
purpose by that Reference Bank as being the average of the Fee Tariffs
applicable to that Reference Bank for that financial year) and expressed
in pounds per £1,000,000 of the Tariff Base of that Reference
Bank.
|
|
8.
|
Each
Lender shall supply any information required by the Agent for the
purpose
of calculating its Additional Cost Rate. In particular, but without
limitation, each Lender shall supply the following information on
or prior
to the date on which it becomes a
Lender:
|
|
|
(a)
|
the
jurisdiction of its Facility Office;
and
|
|
|
(b)
|
any
other information that the Agent may reasonably require for such
purpose.
|
Each
Lender shall promptly notify the Agent of any change to the information provided
by it pursuant to this paragraph.
|
9.
|
The
percentages of each Lender for the purpose of A and C above and the
rates
of charge of each Reference Bank for the purpose of E above shall
be
determined by the Agent based upon the information supplied to it
pursuant
to paragraphs 7 and 8 and on the assumption that, unless a Lender
notifies the Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those
of a
typical bank from its jurisdiction of incorporation with a Facility
Office
in the same jurisdiction as its Facility
Office.
|
|
10.
|
The
Agent shall have no liability to any person if such determination
results
in an Additional Cost Rate which over or under compensates any Lender
and
shall be entitled to assume that the information provided by any
Lender or
Reference Bank pursuant to paragraphs 3, 7 and 8is true and correct
in all
respects.
|
|
11.
|
The
Agent shall distribute the additional amounts received as a result
of the
Mandatory Cost to the Lenders on the basis of the Additional Cost
Rate for
each Lender based on the information provided by each Lender and
each
Reference Bank pursuant to paragraphs 3, 7 and
8.
|
|
12.
|
Any
determination by the Agent pursuant to this Schedule in relation
to a
formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable
to a Lender shall, in the absence of manifest error, be conclusive
and
binding on all Parties.
|
|
13.
|
The
Agent may from time to time, after consultation with the Account
Party and
the Lenders, determine and notify to all parties any amendments which
are
required to be made to this Schedule in order to comply with any
change in
law, regulation or any requirements from time to time imposed by
the Bank
of England, the
|
-2-
|
|
Financial
Services Authority or the European Central Bank (or, in any case,
any
other authority which replaces all or any of its functions) and any
such
determination shall, in the absence of manifest error, be conclusive
and
binding on all Parties.
|
-3-
SCHEDULE
5
CONDITIONS
PRECEDENT
|
1.
|
In
relation to each Obligor:
|
|
(a)
|
a
copy, certified on or about the date of this Agreement a true and
up-to-date copy by an Authorised Signatory of such Obligor, of the
constitutional documents of such
Obligor;
|
|
(b)
|
a
copy, certified as at the date of this Agreement a true and up-to-date
copy by an Authorised Signatory of such Obligor, of a board resolution
of
such Obligor approving the execution, delivery and performance of
the
Finance Documents to which it is party and the terms and conditions
hereof
and thereof and authorising a named person or persons to sign the
Finance
Documents and any documents to be delivered by such Obligor pursuant
thereto; and
|
|
(c)
|
a
certificate of an Authorised Signatory of such Obligor setting out
the
names and signatures of the persons authorised to sign, on behalf
of such
Obligor, the Finance Documents to which it is party and any documents
to
be delivered by such Obligor pursuant
thereto.
|
|
2.
|
The
following opinions, each in form satisfactory to the
Agent:
|
|
(a)
|
opinion
of Freshfields Bruckhaus Xxxxxxxx, solicitors to the
Agent;
|
|
(b)
|
opinion
of Xxxxxxx X. XxXxxxx, Esq., General Counsel to XL
America;
|
|
(c)
|
opinion
of Xxxxxxx, Xxxx & Xxxxxxx, special Bermuda counsel to XL Insurance
and XL Re; and
|
|
(d)
|
opinion
of Xxxxxxx, special Cayman Islands counsel to XL
Capital.
|
|
3.
|
Evidence
satisfactory to the Agent that:
|
|
(a)
|
the
Process Agent has accepted its
appointment;
|
|
(b)
|
the
Agent’s “know your customer” requirements in relation to the Facility have
been complied with; and
|
|
(c)
|
Lloyd’s
will (i) with reference to Clause 2.7, return all Original Letters
of
Credit upon the initial issue of any Letters of Credit hereunder;
(ii)
with reference to Clauses 4.4 and 4.5, accept Old Letter of Credit
Releases upon the issue of any corresponding New Letters of Credit
or
Reduced Letters of Credit and (iii) with reference to the proviso
in
Clause 26.3, accept deeds of substitution to effect any Issuing Lender
Transfers.
|
|
4.
|
The
Agent being satisfied that all fees payable pursuant to the Fee Letter
have been paid.
|
SCHEDULE
6
UTILISATION
REQUEST
From: XL
Capital Ltd
To: Citibank
International plc
Dated:
Dear
Sirs,
We
refer
to the £450,000,000 letter of credit agreement (the Facility
Agreement) dated 14 November 2007 and made between inter
alia, XL Capital Ltd as account party, Citibank International plc as agent
and
the financial institutions named therein as Lenders. Terms defined in
the Credit Agreement shall have the same meaning in this notice. This
notice is irrevocable.
We
hereby
give you notice that, pursuant to the Credit Agreement we wish the Lenders
to
issue the following Letters of Credit:
|
Amount
|
Commencement
Date
|
Beneficiary
|
Applicant
|
|
£
|
Society
of Lloyd’s
|
||
|
£
|
Society
of Lloyd’s
|
||
|
£
|
Society
of Lloyd’s
|
||
|
£
|
Society
of Lloyd’s
|
||
|
£
|
Society
of Lloyd’s
|
||
|
£
|
Society
of Lloyd’s
|
Utilisation
Date: [ ].
We
confirm that, at the date hereof, the Representations are true in all material
respects and no Default is continuing.
The
Letters of Credit should be issued in the form attached and delivered to the
recipient at [address of recipient]. The purpose of their
issue is to support Funds at Lloyd’s in respect of the Applicants.
Yours
faithfully
.............................
Authorised
Signatory
for
and
on behalf of
XL
CAPITAL LTD
SCHEDULE
7
FORM
OF LETTER OF CREDIT
Letter
of Credit to be issued by the Agent on behalf of the Banks
|
To:
|
The
Society and the Council of Lloyd’s
c/o
General Manager, Market Services
Xxxxxxxx
Xxxxx, Xxxxxxx,
Xxxxxxxx
Xxxxxxx, Xxxx XX0 0XX
|
Dated:1
Dear
Sirs
Irrevocable
Standby Letter of Credit No. [
]
Re:
[name of corporate member of Lloyd’s] (the
Applicant)
This
Clean Irrevocable Standby Letter of Credit (the
Credit) is issued by the banks whose names are set out
in Appendix 1 hereto (the Issuing Banks, and each
an Issuing Bank) in favour of the Society of Lloyd’s
(Lloyd’s) on the following terms:
|
1.
|
Subject
to the terms hereof, the Issuing Banks shall make payments within
two
business days of demand on Citibank International plc (the
Agent) in accordance with paragraph 4
below.
|
|
2.
|
Upon
a demand being made by Lloyd’s pursuant to paragraph 4 below each Issuing
Bank shall pay that proportion of the amount demanded which is equal
to
the proportion which its Commitment set out in Appendix 1 hereto
bears to the aggregate Commitments of all the Issuing Banks set out
in
Appendix 1 hereto, PROVIDEDTHAT the
obligations of the Issuing Banks under this Credit shall be several
and no
Issuing Bank shall be required to pay an amount exceeding its Commitment
set out in Appendix 1 hereto and the Issuing Banks shall not be
obliged to make payments hereunder in aggregate exceeding a maximum
amount
of [amount in approved currency]. Any payment by an
Issuing Bank hereunder shall be made in [approved currency] to
Lloyd’s account specified in the demand made by Lloyd’s pursuant to
paragraph 4 below.´
|
|
3.
|
This
Credit is effective from
[ ]
(the Commencement Date) and will expire on the
Final Expiration Date. This Credit shall remain in force until we
give you
not less than four years’ notice in writing terminating the same on the
fourth anniversary of the Commencement Date or on any date subsequent
thereto as specified in such notice (the Final Expiration
Date), our notice to be sent by registered mail for the
attention of the General Manager, Members’ Financial Services, at the
above address.
|
|
4.
|
Subject
to paragraph 3 above, the Issuing Banks shall pay to Lloyd’s under this
Credit upon presentation of a demand by Lloyd’s on Citibank International
plc at 0xx Xxxxx,
Xxxxxxxxx Xxxxxx, Xxxxxx Square, Xxxxxx Xxxxx, Xxxxxx, X00 0XX marked
for
the attention of Xxxxxxxx Xxxxxx, Loans Agency in the form set out
in
Appendix 2 hereto the amount specified therein (which amount shall
not,
when aggregated with all other amounts paid by the Issuing Banks
to
Lloyd’s under this Credit, exceed the maximum amount referred to in
paragraph 2 above).
|
|
5.
|
The
Agent has signed this Credit as agent for disclosed principals and
accordingly shall be under no obligation to Lloyd’s hereunder other than
in its capacity as an Issuing Bank.
|
|
6.
|
All
charges are for the Applicant’s
account.
|
|
7.
|
Subject
to any contrary indication herein, this Credit is subject to the
International Standby Practices – ISP98 (1998 publication – International
Chamber of Commerce Publication No.
590).
|
|
8.
|
This
Credit shall be governed by and interpreted in accordance with English
law
and the Issuing Banks hereby irrevocably submit to the jurisdiction
of the
High Court of Justice in England.
|
|
9.
|
Each
of the Issuing Banks engages with Lloyd’s that demands made under and in
compliance with the terms of this Credit shall be duly honored on
presentation.
|
Yours
faithfully
CITIBANK
INTERNATIONAL plc
for
and
on behalf of
[Names
of all Issuing Banks including Agent]
Appendix
1
Issuing
Banks’ Commitments
Name
and
Address of Issuing
Bank Commitment
Appendix
2
Form
of Demand (Pounds Sterling)
[on
Lloyd’s letterhead]
Dear
Sir/Madam
THE
SOCIETY OF LLOYD’S
TRUSTEE
OF
LETTER
OF CREDIT NO.
With
reference to the above, we enclose for your attention a Xxxx of Exchange,
together with the respective Letter of Credit. Payment should
be made by way of CHAPS. The account details are as
follows:
|
National
Westminster Bank Plc
|
Sort
Xxxx 00-00-00
|
|
Xxxx
xx Xxxxxx Xxxxxx
X.X.
Xxx 00000
0
Xxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
|
Account
00000000
|
Please
quote Member Code:
Yours
faithfully
for
Manager
Members’
Funds Department
Members’
Services Unit
By: ___________________
Name:
Title:
Your
ref:
Our
ref: MEM/ / / /C911f
Extn:
XXXX
OF EXCHANGE
The
Society of Lloyd’s
Trustee
of
Letter
of
Credit No.
Please
pay in accordance with the terms of the Letter of Credit to our order the amount
of £_____ _____ .
For
and
on behalf of
Authorised
Signatory
Members’
Funds Department
|
To:
|
Citibank
International plc
as
Agent
|
-2-
SCHEDULE
8
FORM
OF TRANSFER CERTIFICATE
|
To:
|
Citibank
International plc
as
agent for and on behalf of itself and the other Finance Parties
(as
defined in the Facility Agreement referred to
below)
|
TRANSFER CERTIFICATE
relating
to a facility agreement (the Facility Agreement) dated
14 November 2007 and made between, inter alia, XL Capital Ltd and the Guarantors
and the Lenders named therein. Terms defined in the Facility
Agreement have the same meanings herein.
|
1.
|
[Transferor
Bank] (the Transferor):
|
|
(a)
|
confirms
that to the extent that details appear in the Schedule hereto against,
as
the case may be, the heading Transferor’s Commitment
and/or Transferor’s L/C Participation, such details
accurately summarise, as the case may be, its participation in the
Facility (as defined in the Facility Agreement);
and
|
|
(b)
|
requests
[Transferee Bank] (the Transferee) to accept and
procure the transfer to the Transferee of the portion specified in
the
Schedule of, as the case may be, its participation in the Facility
by
counter-signing and delivering this Transfer Certificate to the Agent
at
its address for the service of notices specified in the Facility
Agreement.
|
|
2.
|
The
Transferee hereby requests the Agent to accept this Transfer Certificate
as being delivered to the Agent pursuant to and for the purposes
of
Clause 26.4 of the Facility Agreement so as to take effect in
accordance with the terms thereof.
|
|
3.
|
The
Facility Office and address for notices of the Transferee for the
purposes
of the Finance Documents are set out in the
Schedule.
|
|
4.
|
The
Transferor and the Transferee acknowledge and agree that
Clauses 26.3(c) to 26.3(e) apply to this Transfer Certificate as if
set out in full herein, mutatis
mutandis.
|
|
5.
|
The
Transferee hereby undertakes with the Transferor and each of the
other
parties to the Facility Agreement that it will perform in accordance
with
their terms all those obligations which by the terms of the Facility
Agreement will be assumed by it after delivery of this Transfer
Certificate to the Agent and satisfaction of the conditions (if any)
subject to which this Transfer Certificate is expressed to take
effect.
|
|
6.
|
This
Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
|
THE
SCHEDULE
|
|
Transfer
Date:
|
|
Transferor’s
Commitment
|
Portion
transferred
|
|
Letters
of Credit
|
Letters
of Credit under which Lender is Issuing
Lender
|
|
Utilisation
Date, LC Exposure and Final
Expiration
Date (if applicable) under
each
Letter of Credit
|
Portion
transferred
|
|
|
|
|
|
|
|
[Transferor]
|
[Transferee]
|
|
By:
|
By:
|
|
Date:
|
Date:
|
|
|
[Transferee]
|
|
Facility
Office
|
Address(es)
for notices
|
|
[
|
[
|
|
]
|
]
|
|
|
Telex
no:
|
[_____
_____]
|
|
|
Contact
for credit and documentation:
|
|
|
Contact
for administration:
|
Citibank
International plc
as
agent
for and on behalf of itself
and
the
other Finance Parties
By:
Date:
-2-
SCHEDULE
9
FORM
OF CHARGE AGREEMENT
A
DEED OF CHARGE made on [_____ _____]
|
(1)
|
XL
CAPITAL LTD, a limited liability company incorporated under the
laws of the Cayman Islands with its registered office at PO Box 1350
GT,
Xxxxxxx House, Fort Street, Grand Cayman, Cayman Islands (the
Chargor);
and
|
|
(2)
|
CITIBANK
INTERNATIONAL PLC, of Citigroup Centre, 5th floor - CGC2, 00,
Xxxxxx Xxxxxx, Xxxxxx, X00 0XX as assignee and security trustee for
the
Secured Parties (the Security
Trustee).
|
It
is agreed as follows:
|
1.
|
INTERPRETATION
|
1.1 In
this Deed: (a) words and expressions defined in the Facility Agreement shall
bear the same respective meanings; and (b) the following words and expressions
have the meanings respectively shown opposite below, in each case unless the
context otherwise requires:
Bank
means [_____ _____ _____], being a bank in London at which the Deposit is
held;
Charged
Account means a separate Sterling account in the name of the
Chargor with the Bank, entitled
[“ ”]
(account number [_____]) payments to which may be made by making the following
payment instructions:
[_____
_____ _____]
and
into
which the Deposit is credited, or such other account as the Security Trustee
may
from time to time notify in writing to the Chargor;
Deposit
means all sums from time to time standing to the credit of the Charged Account
in any currency together with all interest credited thereto;
Facility
Agreement means the letter of credit and reimbursement agreement
dated 14 November 2007 between, inter alios, the Lenders, the Security
Trustee and the Chargor;
Secured
Obligations means all moneys, liabilities and obligations which
are now or at any time hereafter may be due, owing or payable by the Chargor
to
the Secured Parties in any currency, actually or contingently, solely or jointly
and/or severally with another or others, as principal or surety, on any account
whatsoever pursuant to the Facility Agreement, this Deed or any other Finance
Document, or as a consequence of any Event of Default or repudiation by the
Chargor (or by any liquidator, receiver, administrative receiver, administrator
or any similar officer of the Chargor) of any of its obligations under the
Facility Agreement, this Deed or any other Finance Document;
Secured
Parties means all and each of the Security Trustee, the Facility
Agent, the Lenders and each of their respective successors and permitted
transferees and assignees and Secured Party means any
of them;
1.2 In
this Deed, except where the context otherwise requires:
(a) references
to the Security Trustee and to the Chargor include reference to the persons
deriving title under or through them respectively and to their respective
successors in title and assigns;
|
(b)
|
references
to any deed, instrument, account (including the Charged Account),
certificate, agreement or contract (including this Deed) or a provision
thereof shall be construed as a reference to that deed, instrument,
account, certificate, agreement or contract or a provision as from
time to
time varied, novated, amended, supplemented or replaced;
and
|
|
(c)
|
references
to any statute or other legislative provision shall include any statutory
or legislative modification or re-enactment thereof, or any substitution
therefor.
|
1.3 The
headings in this Deed are inserted for convenience only and shall not affect
its
interpretation.
Deed
1.4 It
is intended that this Deed take effect as a deed notwithstanding the Security
Trustee may have executed it under hand only.
2. OPERATION
OF CHARGED ACCOUNT
2.1 The
Chargor shall give notice to the Bank in the form of Appendix 1 upon the
date of execution of this Deed.
2.2 The
Chargor shall not request any repayment of the Deposit without the consent
of
the Security Trustee.
2.3 The
Security Trustee may at any time instruct the Bank to pay all or part of the
Deposit to the Agent on account of amounts then due and payable (whether by
way
of acceleration, demand or otherwise) under the Facility Agreement.
2.4 Unless
an Event of Default is continuing, at the request of the Chargor the Security
Trustee will instruct the Bank to pay to the Chargor any amount standing to
the
credit of the Account which exceeds the amount required to be so credited under
the Facility Agreement at that time.
3. CHARGE
3.1 The
Chargor with full title guarantee hereby charges by way of first fixed charge
in
favour of the Secured Parties all its right, title and interest in and to the
Deposit (and all and any rights and benefits accruing to or arising in
connection therewith) as a continuing security for the payment and discharge
of
the Secured Obligations.
3.2 If
at any time the Secured Obligations shall have been paid and discharged in
full
and the Chargor shall be under no commitment, obligation or liability of any
kind (present or future, actual or contingent) in relation to the Finance
Documents, the Security Trustee will at the request and cost of the Chargor
discharge the security hereby created.
4. ENFORCEMENT
4.1 The
security created under Clause 3 shall become enforceable immediately following
an Event of Default in relation to all and any part of the Secured Obligations
and, at any time thereafter, the Security Trustee may call for payment to it
of
the Deposit and thereafter apply all and any part of the Deposit together with
any interest thereon in respect of any period after the security has become
enforceable towards the discharge of the Secured Obligations in such manner
as
it deems fit.
-2-
4.2 The
Security Trustee is hereby irrevocably authorised and empowered to give a valid
discharge in relation to the Deposit (or any part of it) to the
Bank.
5. PRIMARY SECURITY
The
Deposit shall be deemed to
constitute primary and not collateral security and the security shall not be
discharged or impaired by:
|
(a)
|
the
dealing with, existence or validity of any other security taken by
the
Security Trustee in relation to the Finance Documents or the Secured
Obligations or any enforcement of or failure to take, perfect or
enforce
any such security;
|
|
(b)
|
any
amendment to or variation of the Finance Documents or any security
relating to the Finance Documents or the Secured
Obligations;
|
|
(c)
|
any
release of, or granting of time or any other indulgence to the Chargor
or
any third party; or
|
|
(d)
|
any
other act, event or omission which would or might but for this Clause
operate to impair or discharge the security constituted by, or the
Chargor’s liability under, this Deed including any act, omission or thing
which would or might afford an equitable defence to a
security.
|
6. OTHER SECURITY
The
security hereby created is a continuing security notwithstanding any
intermediate payment or settlement of account for the payment and discharge
of
the Secured Obligations and is in addition to and shall neither be merged in,
nor in any way exclude or prejudice any other Security Interest, right of
recourse, set off, combination or other right or interest whatsoever which
the
Secured Parties may now have or at any time hereafter hold or have (or would
apart from this Deed hold or have) as regards the Chargor or any other person
in
respect of the Secured Obligations and the Secured Parties may at any time
take,
give up, deal with, vary, exchange, or abstain from perfecting or enforcing
any
other Security Interest without affecting or prejudicing the security hereby
created.
7. WARRANTY
AND COVENANT
Entitlement
7.1 From
the date of this Deed and until the Secured Obligations have been satisfied
and
discharged in full, and the Chargor shall have no further actual or contingent
liability to the Secured Parties under the Finance Documents, the Chargor
warrants that:
|
(a)
|
it
is the sole absolute legal and beneficial owner of the amounts from
time
to time credited to the Charged Account free from all Liens, trusts,
assignments and claims; and
|
|
(b)
|
it
is the sole absolute legal and beneficial owner of the right to repayment
of moneys credited to the Charged
Account.
|
|
7.2
|
(a)
The Chargor undertakes that it shall not (without the Security Trustee’s
prior written consent) create, agree to create or permit to subsist
any
Lien (however ranking in point of priority) of any nature whatsoever
(including such as arises by operation of law or any enactment) in,
over
or affecting the Deposit or over its right to call for a discharge
of the
security hereby constituted nor deal with such right in any
manner.
|
-3-
Non-disposal
(b) The
Chargor undertakes that it shall not (without the Security Trustee’s prior
written consent) transfer, assign, convey, declare a trust over or otherwise
dispose of the Deposit or any part thereof or its right to repayment of the
Deposit or any part thereof or its right to call for a discharge of the security
hereby constituted nor deal with such right in any manner.
8. WAIVER
AND APPROPRIATION
8.1 The
Security Trustee may at any time after the security created hereunder has become
enforceable without further notice and without any right of redemption
appropriate the Deposit or any part thereof in such manner as the Security
Trustee may in its absolute discretion think fit in or towards the reduction
of
the Secured Obligations.
8.2 If
any appropriation of the Deposit (or any part thereof) takes place hereunder
the
Chargor hereby expressly waives all or any formalities prescribed by law in
relation to any such appropriation.
9. INTEREST
Interest
on the Deposit shall accrue at such rates as may be agreed from time to time
between the Bank and the Chargor. Interest which has accrued on the
Deposit shall be credited to the Charged Account at such times as shall be
agreed by the parties.
10. FURTHER
PROVISIONS
|
10.1
|
(a)
The Chargor shall on demand pay to or reimburse the Security Trustee
(on
the basis of a full indemnity on an after tax basis) the amount of
all
commissions, reasonable costs (including legal costs), charges and
expenses incurred by the Security Trustee in connection with the
preservation, enforcement or the attempted preservation or enforcement
of
any of the Secured Parties’ rights under this Deed whether incurred as a
result of any act or omission by, or proceedings involving, the
Chargor.
|
|
(b)
|
The
Chargor shall on demand fully indemnify the Security Trustee (on
an
after-tax basis) against all losses, actions, claims, reasonable
costs
(including legal costs), expenses, proceedings, liabilities and
expenditure which the Security Trustee may suffer, pay or incur in
connection with any payment or discharge in respect of the Secured
Obligations (and which are made by the Chargor) being impeached or
declared void for any reason
whatsoever.
|
|
(c)
|
Where,
pursuant to Clauses 10.1(a) or (b) above, a sum is paid to the
Security Trustee the Chargor shall, in addition, pay to the Security
Trustee in respect of value added
tax:
|
|
|
(i)
|
(except
where the payment falls within (ii) below), such amount as equals
any
valued added tax charged to the Security Trustee in respect of the
matter
which gives rise to the payment and which the Security Trustee certifies
is not recoverable by it by repayment or credit (such certificate
to be
conclusive in the absence of manifest error);
and
|
|
|
(ii)
|
on
any reimbursement of or indemnification for any commissions, costs,
charges, expenses or other items incurred by the Security Trustee
as agent
for the Chargor, such amount as equals the amount included in the
commissions, costs, charges, expenses or other items in respect of
value
added tax (and in such a case the Security Trustee shall provide
the
Chargor with an appropriate tax invoice in respect of such item,
naming
the Chargor as recipient of the relevant
supply).
|
10.2 The
Chargor shall on demand execute any document and do any other act or thing
(in
either case at the expense of the Chargor) which the Security Trustee may
reasonably specify for protecting, preserving or perfecting any security created
or intended to be created by this Deed or for facilitating the realisation
thereof or otherwise e
-4-
forcing
the same or exercising any of the powers, rights and discretions of the Security
Trustee under this Deed, including the execution of all releases, transfers,
assignments and other documents and the giving of all notices, orders,
instructions and directions which the Security Trustee may request.
Rights
cumulative
10.3 The
rights and powers which this Deed confers on the Secured Parties are cumulative,
may be exercised as often as it considers appropriate and are in addition to
its
rights and powers under the general law, and the rights of the Secured Parties
(whether arising under this Deed or under the general law) shall not be capable
of being waived or varied otherwise than by express waiver or variation in
writing; and, in particular, any failure to exercise or any delay in exercising
any such rights shall not operate as a variation or waiver of that or any other
such right; any defective or partial exercise of such right shall not preclude
any other or further exercise of that or any other such right; and no act or
course of conduct or negotiation on their part or on their behalf shall in
any
way preclude them from exercising any such right or constitute a suspension
or
variation of any such right.
10.4 If
any one of the provisions of this Deed is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Deed shall not in any way be affected or impaired
thereby.
10.5 Save
as may otherwise be agreed in writing between the Security Trustee and the
Chargor, the Security Trustee shall not, prior to discharging the security
hereby constituted, have any duty to account to the Chargor in respect of the
Deposit or any part thereof.
10.6 In
any proceedings relating to this Deed, any determination or notification by
the
Security Trustee or any other Finance Party as to any amount of the Secured
Obligations or as to any amount due to the Secured Parties under this Deed
shall, in the absence of manifest error, be conclusive evidence as to that
matter.
Entire
Agreement
10.7 This
Deed constitutes the entire agreement between the parties hereto in relation
to
the Deposit and supersedes all previous proposals, arrangements, agreements
and
other written and oral communications in relation thereto.
10.8 Sections
93 and 103 of the Law of Property Act 1925 shall not apply to this
Deed.
10.9 If
the Security Trustee receives notice of any subsequent Security Interest
affecting the Deposit:
|
(a)
|
the
Security Trustee may open a new account or accounts with the Chargor
and
if the Security Trustee does not open a new account, it shall nevertheless
be treated as if it had done so at the time when it received notice;
and
|
|
(b)
|
all
payments made by the Chargor to the Security Trustee after the Security
Trustee receives such notice shall be credited or be treated as having
been credited to the new account and in no circumstances whatsoever
shall
operate to reduce the amount due from the Chargor to the Secured
Parties
at the time when it received the
notice.
|
-5-
|
|
Successors
in Title
|
10.10
(a)This Deed shall be binding upon and inure to the benefit of each of the
parties hereto and their successors and assigns.
|
(b)
|
The
Chargor shall not be entitled to assign or transfer any of its rights,
benefits or obligations hereunder without the prior written consent
of the
Security Trustee.
|
|
(c)
|
The
Security Trustee may assign or transfer all or any part of its rights,
benefits or obligations under this Deed to any person to whom it
assigns
and/or transfers its rights, benefits or obligations in accordance
with
the provisions of the Facility Agreement. Where the Security
Trustee assigns or transfers its obligations or any part thereof,
the
Chargor shall execute such documents as the Security Trustee may
specify
to release the Security Trustee to the extent of the transfer or
with a
view to perfecting such document or transfer, or where necessary,
shall
execute further security documentation in favour of the assignee
or
transferee in like form to this
Deed.
|
11. NOTICES
AND COMMUNICATIONS
The
provisions relating to notices are set forth in Clause 22 of the Facility
Agreement.
12. GOVERNING
LAW AND JURISDICTION
12.1 This
Deed shall be governed by, and interpreted and construed in accordance with,
the
laws of England.
Jurisdiction
|
12.2
|
(a)
All the parties agree that the courts of England are, subject to
Clause 12.2 (a) and (b) below, to have jurisdiction to settle any
disputes which may arise in connection with the creation, validity,
effect, interpretation or performance of, or the legal relationships
established by, this Agreement (including, without limitation, claims
for
set-off or counterclaim) or otherwise arising in connection with
this
Agreement and for such purposes irrevocably submit to the jurisdiction
of
the English courts;
|
|
(b)
|
notwithstanding
the agreement in paragraph 12.2(a) above, each of the Secured Parties
shall retain the right to bring proceedings in any other court which
has
jurisdiction whether by virtue of the Convention on Jurisdiction
and the
Enforcement of Judgments signed on 27 September 1968 (as from time to
time amended and extended) or by virtue of the Convention on Jurisdiction
and the Enforcement of Judgments signed on 16 September 1988 (from
time to time amended and extended) or Council Regulations (EC) No
44/2001
of 22 December 2000 on jurisdiction and the enforcement of judgements
in
civil and commercial matters which came into force on 1 March
2002;
|
|
(c)
|
with
respect to the courts agreed in paragraphs 12.2(a) and 12.2(b) above,
each
of the parties irrevocably waives any objections on the ground of
venue or
forum non conveniens or any similar
ground;
|
|
(d)
|
each
of the parties hereto irrevocably agrees that a judgment or order
of any
court referred to in this Clause in connection with this Deed is
conclusive and binding on it and may be enforced against it in the
courts
of any other jurisdiction; and
|
|
(e)
|
each
of the parties hereto irrevocably consents to service of process
by mail
or in any other manner permitted by the relevant
law.
|
12.3 The
Chargor shall at all times maintain an agent for service of process and any
other documents in proceedings in England or any other proceedings in connection
with this Deed. Such agent shall be XL Services UK Limited, XX Xxxxx,
00 Xxxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (Attn: Company Secretary) and any writ,
judgment or
-6-
other
notice of legal process shall be sufficiently served on the Chargor if delivered
to such agent marked for the attention of the Company Secretary at its address
for the time being. The Chargor undertakes not to revoke the
authority of the above agent without promptly appointing a successor and
notifying the Security Trustee thereof.
13. CONTRACTS
(RIGHTS OF THIRD PARTIES) ACT 1999
A
person
who is not a party to this Deed shall have no right under the Contracts (Rights
of Third Parties) Xxx 0000 to enforce any of its terms.
-7-
Appendix
1
Form
of Notice to Bank
To: [Bank]
And
to: Citibank
International plc (the Security Trustee)
Dear
Sirs
Re:
Account [_____ _____] (the Account)
We
hereby
give you notice that pursuant to a Deed of Charge dated [_____ _____], a copy
of
which is attached, we have charged all of our right, title and interest in
and
to the Account to the Security Trustee.
Please
execute and return to the Security Trustee the attached acknowledgement attached
as Schedule A to this notice.
This
notice shall be governed by English law.
Yours
truly,
XL
Capital Ltd
Schedule
A
Form
of Acknowledgement of Bank
|
To:
|
XX
Xxxxxxx Xxx
X X Xxx 0000 XX Xxxxxxx
House
Fort
Street
Grand
Cayman
Cayman
Islands
|
And to: Citibank International plc (the Security Trustee)
Dear
Sirs
Re:
Account [_____ _____] (the Account)
We
acknowledge receipt of your notice dated [_____ _____] and the deed of charge
to
which it refers (the Deed of Charge).
We
hereby
confirm that:
|
(a)
|
we
have received no notice of any other charge, mortgage, pledge, lien,
assignment or security interest in respect of the Account, other
than the
security interest described in the Deed of
Charge;
|
|
(b)
|
we
hereby waive any rights of set off or combination of accounts we
may now
or at any time in the future have in respect of the
Account;
|
|
(c)
|
we
undertake not to repay to the Chargor any amount standing to the
credit of
the Account except on the instructions of the Security
Trustee;
|
|
(d)
|
we
shall deliver to the Security Trustee and the Chargor, on written
request,
an up-to-date statement of the amount standing to the credit of the
Account; and
|
|
(e)
|
unless
the Security Trustee otherwise directs, we shall comply with the
instructions of the Security Trustee with respect to the Account,
and
payments to and from the Account and shall not make any payments
from the
Account without the consent of the Security
Trustee.
|
This
acknowledgment shall be governed by English law.
Yours
truly,
[Bank]
DULY
DELIVERED AS A DEED by the Chargor on the date inserted
above.
EXECUTED
as a
DEED )
for
and
on behalf
of )
XL
CAPITAL
LTD )
In
the
presence
of: )
SIGNED )
for
and
on behalf
of )
CITIBANK
INTERNATIONAL PLC )
In
witness whereof, XL CAPITAL LTD has caused this Agreement to be
duly executed by an authorised officer on the day and year first above
written.
Account
Party
SIGNED
for
and
on behalf of XL CAPITAL LTD
By: /s/
FIONA LUCK
Title: EVP
Guarantors
SIGNED
for
and
on behalf of XL CAPITAL LTD
By: /s/
FIONA LUCK
Title: EVP
SIGNED
for and on behalf of X.L. AMERICA, INC.
By: /s/
XXXXXXX X. XXXXXX, VICE PRESIDENT
Title:
VICE PRESIDENT
SIGNED
for and on behalf of XL INSURANCE (BERMUDA) LTD
By: /s/
XXXXXX XXXXX
Title:
EVP
SIGNED
for and on behalf of XL RE LTD
By: /s/
XXXXXXX X. XXXX
Title: SVP
& CHIEF FINANCIAL OFFICER
Agent
SIGNED
for and on behalf of CITIBANK INTERNATIONAL
PLC
By: /s/
XXXX XXXXX
Address:
Citigroup Centre
33
Canada
Square
Xxxxxx
Xxxxx
Xxxxxx
X00 0XX
-2-
Fax: x00
00 0000 0000
Tel: x00
00 0000 0000
Attention: Loans
Agency
Arrangers
SIGNED
for and on behalf of CITIGROUP GLOBAL MARKETS
LIMITED
By: /s/
XXXX XXXXX
Address:
Citigroup Centre
33
Canada
Square
Xxxxxx
Xxxxx
Xxxxxx
X00 0XX
Fax:
x00
00
0000 0000
Tel: x00
00 0000 0000
Attention: Xxxx
Xxxxx
SIGNED
for and on behalf of LLOYDS TSB BANK PLC
By: /s/
X X XXXXXX
|
Address:
|
00
Xxxxxxx Xxxxxx
|
|
|
Xxxxxx XX0X
0XX
|
Fax: x00
(0) 000 000 0000
Attention: Xxxxxxx
Xxxxx
SIGNED
for and on behalf of THE ROYAL BANK OF SCOTLAND
PLC
By: /s/
XXXX XXXXX
|
Address:
|
000
Xxxxxxxxxxx
Xxxxxx, XX0X
0XX
|
Fax: x00
(0)000 000 0000
Attention: Xxxx
Xxxxx
-3-
Security
Trustee
SIGNED
for and on behalf of CITIBANK INTERNATIONAL PLC
By: /s/
XXXX XXXXX
Address Citigroup
Centre
33
Canada
Square
Xxxxxx
Xxxxx
Xxxxxx
X00 0XX
Fax:
x00 00 0000 0000
Tel: x00
00 0000 0000
Attention: Loans
Agency
Lenders
SIGNED
for and on behalf of
BAYERISCHE
HYPO-UND VEREINSBANK AG
By:
/s/ XXXXXXX X. XXXXXX (DIRECTOR)
/s/
XXXXXXX X. XXXXXX (DIRECTOR)
|
Address:
|
000
Xxxx 00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
|
Fax: x0
(000) 000-0000
Attention: Xxxxx
Xxxxxx, Financial Institutions Group
|
Copy:
|
Credit
Group
000
Xxxx 00xx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
|
Fax:
x0 (000) 000-0000
Attention: Xxxxxxx
Xxxxx
SIGNED
for and on behalf of
CALYON
By: /s/
XXXXXXXXX XXXXX (MANAGING DIRECTOR)
/s/ XXXXXXX XXXXXX (MANAGING DIRECTOT)
Address:
Calyon Building
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Fax: x0
(000) 000 0000
Attention: Xxxxxxx
Xxxxxxxxxx
-4-
SIGNED
for and on behalf of
CITIBANK,
N.A.
By: /s/
XXXX XXXXX
|
Address:
|
Citigroup
Centre
00
Xxxxxx Xxxxxx
Xxxxxx
Xxxxx
Xxxxxx X00
0XX
|
Fax: x00
(0) 000 000 0000
Attention: Loans
Processing Unit
SIGNED
for and on behalf of
COMMERZBANK
AKTIENGESELLSCHAFT,
NEW
YORK AND GRAND CAYMAN BRANCHES
By: /s/
XXXXXX X XXXXX (VICE PRESIDENT)
By: /s/
XXXXXXX X. XXXXXX (SENIOR VICE PRESIDENT)
|
Address:
|
Two
World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000-0000
|
Fax: x0
(000) 000-0000
Attention: Xxxxx
Xxxxx
SIGNED
for and on behalf of
ING
BANK N.V., LONDON BRANCH
By: N
J XXXXXXXX
By: /s/
M E R SHARMAN
|
Address:
|
00
Xxxxxx Xxxx
Xxxxxx,
XX0X 0XX
|
Fax: x00
(0)000 000 0000
Attention: Xxxxxx
Xxxxxxx
SIGNED
for and on behalf of
-5-
LANDESBANK
HESSEN-THÜRINGEN GIROZENTRALE, LONDON BRANCH
By: /s/
SIMON DE XXXXX
/s/
XXXXX XXXX
Address: 0xx
Xxxxx, 00 Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx,
XX0X 0XX
Fax: x00
(0)000 000 0000
Attention: Xxxx
Xxxxxxx
SIGNED
for and on behalf of
LLOYDS
TSB BANK PLC
By: /s/
X X XXXXXX
|
Address
|
:
|
00
Xxxxxxx Xxxxxx
Xxxxxx XX0X
0XX
|
Fax:
x00 (0) 000 000 0000
Attention:
Xxxxxxx Xxxxx
SIGNED
for and on behalf of
MIZUHO
CORPORATE BANK, LTD
By: /s/
HIDEKATSU TAKE (DEPUTY GENERAL MANAGER)
Address: 0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 00000-0000
XXX
Fax:
x0 (000) 000-0000
Attention: Li
Zha / AVP
Copy: Xxxxxx
Xxxxxxxxx / SVP
Fax:
x0 (000) 000-0000
-6-
SIGNED
for and on behalf of
THE
BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH
By:
/s/ CHIMIE T. PEMBA
Address: 0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention:
Chimie T. Pemba
Fax: x0
(000) 000-0000
SIGNED
for and on behalf of
THE
ROYAL BANK OF SCOTLAND PLC
By: /s/
XXXX XXXXX
Address: 000
Xxxxxxxxxxx
Xxxxxx, XX0X 0XX
Fax: x00
(0)000 000 0000
Attention: Xxxx
Xxxxx
-7-