EXHIBIT 10.2
EXECUTION COUNTERPART
================================================================================
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 Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
_____________
$2,350,000,000
_____________
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
and
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Bookrunners
_____________
CITIBANK, N.A.,
as Syndication Agent
_____________
BARCLAYS BANK PLC,
DEUTSCHE BANK AG, NEW YORK BRANCH,
WACHOVIA BANK, NATIONAL ASSOCIATION,
CALYON NEW YORK BRANCH,
and
KEYBANK NATIONAL ASSOCIATION,
as Documentation Agents
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I.........................................................................................................1
DEFINITIONS....................................................................................................1
SECTION 1.01. Defined Terms...............................................................................1
SECTION 1.02. Terms Generally............................................................................17
SECTION 1.03. Accounting Terms; GAAP and SAP.............................................................17
ARTICLE II.......................................................................................................17
THE CREDITS...................................................................................................17
SECTION 2.01. Syndicated Letters of Credit...............................................................17
SECTION 2.02. Issuance and Administration................................................................19
SECTION 2.03. Reimbursement of LC Disbursements, Etc.....................................................20
SECTION 2.04. Non-Syndicated Letters of Credit...........................................................22
SECTION 2.05. Participated Letters of Credit.............................................................28
SECTION 2.06. Alternative Currency Letters of Credit.....................................................33
SECTION 2.07. Loans and Borrowings.......................................................................34
SECTION 2.08. Requests for Borrowings....................................................................36
SECTION 2.09. Funding of Borrowings......................................................................37
SECTION 2.10. Interest Elections.........................................................................37
SECTION 2.11. Termination, Reduction and Increase of the Commitments.....................................38
SECTION 2.12. Repayment of Loans; Evidence of Debt.......................................................40
SECTION 2.13. Prepayment of Loans........................................................................41
SECTION 2.14. Fees...................................................................................... 41
SECTION 2.15. Interest...................................................................................43
SECTION 2.16. Alternate Rate of Interest.................................................................44
SECTION 2.17. Increased Costs............................................................................44
SECTION 2.18. Break Funding Payments.....................................................................45
SECTION 2.19. Taxes......................................................................................46
SECTION 2.20. Payments Generally; Pro Rata Treatment; Sharing of Set-offs................................47
SECTION 2.21. Mitigation Obligations; Replacement of Lenders.............................................49
ARTICLE III......................................................................................................50
GUARANTEE.....................................................................................................50
SECTION 3.01. The Guarantee..............................................................................50
SECTION 3.02. Obligations Unconditional..................................................................51
SECTION 3.03. Reinstatement..............................................................................51
SECTION 3.04. Subrogation................................................................................52
SECTION 3.05. Remedies...................................................................................52
SECTION 3.06. Continuing Guarantee.......................................................................52
SECTION 3.07. Rights of Contribution.....................................................................52
SECTION 3.08. General Limitation on Guarantee Obligations................................................53
ARTICLE IV.......................................................................................................53
i
REPRESENTATIONS AND WARRANTIES................................................................................53
SECTION 4.01. Organization; Powers.......................................................................53
SECTION 4.02. Authorization; Enforceability..............................................................53
SECTION 4.03. Governmental Approvals; No Conflicts.......................................................53
SECTION 4.04. Financial Condition; No Material Adverse Change............................................54
SECTION 4.05. Properties.................................................................................54
SECTION 4.06. Litigation and Environmental Matters.......................................................54
SECTION 4.07. Compliance with Laws and Agreements........................................................55
SECTION 4.08. Investment and Holding Company Status......................................................55
SECTION 4.09. Taxes......................................................................................55
SECTION 4.10. ERISA......................................................................................55
SECTION 4.11. Disclosure.................................................................................56
SECTION 4.12. Use of Credit..............................................................................56
SECTION 4.13. Subsidiaries...............................................................................56
SECTION 4.14. Withholding Taxes..........................................................................56
SECTION 4.15. Stamp Taxes................................................................................56
SECTION 4.16. Legal Form.................................................................................57
ARTICLE V........................................................................................................57
CONDITIONS....................................................................................................57
SECTION 5.01. Effective Date.............................................................................57
SECTION 5.02. Each Credit Event..........................................................................59
ARTICLE VI.......................................................................................................59
AFFIRMATIVE COVENANTS.........................................................................................59
SECTION 6.01. Financial Statements and Other Information.................................................59
SECTION 6.02. Notices of Material Events.................................................................61
SECTION 6.03. Preservation of Existence and Franchises...................................................62
SECTION 6.04. Insurance..................................................................................62
SECTION 6.05. Maintenance of Properties..................................................................62
SECTION 6.06. Payment of Taxes and Other Potential Charges and Priority Claims;
Payment of Other Current Liabilities.......................................................62
SECTION 6.07. Financial Accounting Practices.............................................................63
SECTION 6.08. Compliance with Applicable Laws............................................................63
SECTION 6.09. Use of Letters of Credit and Proceeds......................................................63
SECTION 6.10. Continuation of and Change in Businesses...................................................63
SECTION 6.11. Visitation.................................................................................63
ARTICLE VII......................................................................................................64
NEGATIVE COVENANTS............................................................................................64
SECTION 7.01. Mergers....................................................................................64
SECTION 7.02. Dispositions...............................................................................64
SECTION 7.03. Liens......................................................................................65
SECTION 7.04. Transactions with Affiliates...............................................................66
SECTION 7.05. Ratio of Total Funded Debt to Total Capitalization.........................................67
SECTION 7.06. Consolidated Net Worth.....................................................................67
ii
SECTION 7.07. Indebtedness...............................................................................67
SECTION 7.08. Financial Strength Ratings.................................................................67
SECTION 7.09. Private Act................................................................................67
ARTICLE VIII.....................................................................................................68
EVENTS OF DEFAULT.............................................................................................68
ARTICLE IX.......................................................................................................71
THE ADMINISTRATIVE AGENT......................................................................................71
ARTICLE X........................................................................................................73
MISCELLANEOUS.................................................................................................73
SECTION 10.01. Notices...................................................................................73
SECTION 10.02. Waivers; Amendments.......................................................................73
SECTION 10.03. Expenses; Indemnity; Damage Waiver........................................................75
SECTION 10.04. Successors and Assigns....................................................................76
SECTION 10.05. Survival..................................................................................79
SECTION 10.06. Counterparts; Integration; Effectiveness..................................................80
SECTION 10.07. Severability..............................................................................80
SECTION 10.08. Right of Setoff...........................................................................80
SECTION 10.09. Governing Law; Jurisdiction; Etc..........................................................80
SECTION 10.10. WAIVER OF JURY TRIAL......................................................................81
SECTION 10.11. Headings..................................................................................82
SECTION 10.12. Treatment of Certain Information; Confidentiality.........................................82
SECTION 10.13. Judgment Currency.........................................................................83
SECTION 10.14. USA PATRIOT Act...........................................................................83
iii
SCHEDULE I - Commitments
SCHEDULE II - Indebtedness and Liens
SCHEDULE III - Litigation
SCHEDULE IV - Environmental Matters
SCHEDULE V - Subsidiaries
EXHIBIT A - Form of Assignment and Assumption
EXHIBIT B-1 - Form of Opinion of Counsel to XL Capital
EXHIBIT B-2 - Form of Opinion of Counsel to XL America
EXHIBIT B-3 - Form of Opinion of Special U.S. Counsel to the Obligors
EXHIBIT B-4 - Form of Opinion of Special Bermuda Counsel to XL Insurance and
XL Re
EXHIBIT B-5 - Form of Opinion of Special Cayman Islands Counsel to XL Capital
EXHIBIT C - Form of Opinion of Special New York Counsel to JPMCB
EXHIBIT D - Form of Confirming Lender Agreement
iv
CREDIT AGREEMENT dated as of June 22, 2005, between XL CAPITAL LTD, a
Cayman Islands exempted limited liability company ("XL Capital"), X.L. AMERICA,
INC., a Delaware corporation ("XL America"), XL INSURANCE (BERMUDA) LTD, a
Bermuda limited liability company ("XL Insurance") and XL RE LTD, a Bermuda
limited liability company ("XL Re" and, together with XL Capital, XL America and
XL Insurance, each an "Account Party" and each a "Guarantor" and collectively,
the "Account Parties" and the "Guarantors"; the Account Parties and the
Guarantors being collectively referred to as the "Obligors"), the LENDERS party
hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The Account Parties have requested that the Lenders issue letters of credit
for their account and make loans to them in an aggregate face or principal
amount not exceeding $2,350,000,000 at any one time outstanding, and the Lenders
are prepared to issue such letters of credit and make such loans upon the terms
and conditions hereof. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans constituting such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Account Parties" means each of XL Capital, XL America, XL Insurance and XL
Re.
"Account Party Jurisdiction" means (a) Bermuda, (b) the Cayman Islands and
(c) any other country (i) where any Account Party is licensed or qualified to do
business or (ii) from or through which payments hereunder are made by any
Account Party.
"Adjusted LIBO Rate" means, for the Interest Period for any Eurodollar
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied
by (b) the Statutory Reserve Rate for such Interest Period.
"Administrative Agent" means JPMCB, in its capacity as administrative agent
for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"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.
Credit Agreement
-2-
"Aggregate Credit Exposure" means the aggregate amount of the Credit
Exposures of each of the Lenders.
"Aggregate Maximum Loan Amount" means $1,000,000,000, as such amount may be
reduced from time to time pursuant to Section 2.11.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day, and (b) the Federal Funds
Effective Rate for such day plus 1/2 of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, as the case may be.
"Alternative Currency" means any currency other than Dollars (a) that is
freely transferable and convertible into Dollars in the London foreign exchange
market and (b) for which no central bank or other governmental authorization in
the country of issue of such currency is required to permit use of such currency
by any Lender for issuing, renewing, extending or amending letter of credits or
funding or making drawings thereunder and/or to permit any Account Party to pay
the reimbursement obligations and interest thereon, each as contemplated
hereunder, unless such authorization has been obtained and is in full force and
effect.
"Alternative Currency LC Exposure" means, at any time, the sum of (a) the
Dollar Equivalent of the aggregate undrawn amount of all outstanding Alternative
Currency Letters of Credit at such time plus (b) the Dollar Equivalent of the
aggregate amount of all LC Disbursements under Alternative Currency Letters of
Credit that have not been reimbursed by or on behalf of the Account Parties at
such time. The Alternative Currency LC Exposure of any Lender shall at any time
be such Lender's share of the total Alternative Currency LC Exposure at such
time.
"Alternative Currency Letter of Credit" means a letter of credit issued by
a Lender in an Alternative Currency pursuant to Section 2.06.
"Alternative Currency Letter of Credit Report" has the meaning set forth in
Section 2.06(b).
"Applicable Additional Margin" means a rate per annum equal to 0.10% for
any period during which the sum of (a) the aggregate outstanding principal
amount of the Loans and (b) the aggregate outstanding principal amount of the
Loans under (and as defined in) the Other Credit Agreement shall be greater than
50% of the Aggregate Maximum Loan Amount then in effect.
"Applicable Margin" means, with respect to any Eurodollar Loan, the rate
per annum specified under the caption "Applicable Margin" in the table contained
in the definition of "Applicable Rate" in this Section or otherwise determined
in accordance with such definition.
"Applicable Percentage" means (a) with respect to any Lender under the
Letter of Credit Tranche in relation to its obligations to issue or participate
in Letters of Credit (or related matters), the percentage of the Commitments of
all the Lenders under such Tranche represented by such Lender's Letter of Credit
Commitment, (b) with respect to any Lender under the Letter
Credit Agreement
-3-
of Credit Tranche in relation to its obligation to make Loans (or related
matters), the percentage represented by the amount that such Lender's Applicable
Percentage (as determined under clause (a) above) of the RC Sublimit bears to
the Aggregate Maximum Loan Amount, (c) with respect to any Lender under the
Revolving Credit Tranche, the percentage represented by the amount that the
Revolving Credit Commitment of such Lender bears to the Aggregate Maximum Loan
Amount and (d) otherwise, with respect to any Lender, the percentage of the
Commitments of all the Lenders represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to letter of credit fees
payable hereunder, interest margins applicable to Eurodollar Loans or the
facility fees payable hereunder, as the case may be, the applicable rate per
annum set forth below under the caption "Applicable Letter of Credit Fee Rate",
"Applicable Margin " or "Applicable Facility Fee Rate", respectively, based upon
the S&P Rating and/or ▇▇▇▇▇'▇ Rating, on such date:
------------------------- ---------------------- ---------------------- ----------------------
Applicable Letter of Applicable Margin Applicable Facility
S&P/ Moody's Ratings Credit Fee Rate Fee Rate
------------------------- ---------------------- ---------------------- ----------------------
> A+/A1 0.19% 0.19% 0.06%
-
------------------------- ---------------------- ---------------------- ----------------------
A/A2 0.23% 0.23% 0.07%
------------------------- ---------------------- ---------------------- ----------------------
A-/A3 0.27% 0.27% 0.08%
------------------------- ---------------------- ---------------------- ----------------------
< BBB+/Baa1 or unrated 0.40% 0.40% 0.10%
-
------------------------- ---------------------- ---------------------- ----------------------
For purposes of the foregoing, (i) if either Moody's or S&P shall not have
in effect a ▇▇▇▇▇'▇ Rating or a S&P Rating, as the case may be (other than by
reason of the circumstances referred to in the last sentence of this
definition), then the Applicable Rate shall be based upon the remaining rating,
(ii) if the ▇▇▇▇▇'▇ Rating and the S&P Rating shall fall within different
Categories, the Applicable Rate shall be based on the higher of the two ratings
unless one of the two ratings is two or more Categories higher than the other,
in which case the Applicable Rate shall be determined by reference to the
ratings level next above that of the lower of the two ratings, and (iii) if the
▇▇▇▇▇'▇ Rating and the S&P Rating established or deemed to have been established
by Moody's and S&P, respectively, shall be changed (other than as a result of a
change in the rating system of Moody's or S&P), such change shall be effective
as of the date on which it is first announced by the applicable rating agency.
Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If the rating system of Moody's or
S&P shall change, or if either such rating agency shall cease to be
Credit Agreement
-4-
in the business of providing insurance ratings, XL Capital and the Lenders shall
negotiate in good faith to amend this definition to reflect such changed rating
system or the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.
"Approved Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the Effective
Date to and including the Commitment Termination Date.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrowing" means, with respect to any Account Party, (a) all ABR Loans of
such Account Party made, converted or continued on the same date or (b) all
Eurodollar Loans of such Account Party that have the same Interest Period.
"Borrowing Request" means a request by an Account Party for a Borrowing in
accordance with Section 2.08.
"Business Day" means any day (a) that is not a Saturday, Sunday or other
day on which commercial banks in New York City, London, the Cayman Islands or
Bermuda are authorized or required by law to remain closed and (b) if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a continuation or conversion of or into, or the Interest Period for, a
Eurodollar Loan, or to a notice by an Account Party with respect to any such
borrowing, payment, prepayment, continuation, conversion, or Interest Period,
that is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means the occurrence of any of the following events or
conditions: (a) any Person, including any syndicate or group deemed to be a
Person under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, acquires beneficial ownership, directly or indirectly, through a
purchase, merger or other acquisition transaction or
Credit Agreement
-5-
series of transactions, of shares of capital stock of XL Capital entitling such
Person to exercise 40% or more of the total voting power of all shares of
capital stock of XL Capital that is entitled to vote generally in elections of
directors, other than an acquisition by XL Capital, any of its Subsidiaries or
any employee benefit plans of XL Capital; or (b) XL Capital merges or
consolidates with or into any other Person (other than a Subsidiary), another
Person (other than a Subsidiary) merges into XL Capital or XL Capital conveys,
sells, transfers or leases all or substantially all of its assets to another
Person (other than a Subsidiary), other than any transaction: (i) that does not
result in a reclassification, conversion, exchange or cancellation of the
outstanding shares of capital stock of XL Capital (other than the cancellation
of any outstanding shares of capital stock of XL Capital held by the Person with
whom it merges or consolidates) or (ii) which is effected solely to change the
jurisdiction of incorporation of XL Capital and results in a reclassification,
conversion or exchange of outstanding shares of capital stock of XL Capital
solely into shares of capital stock of the surviving entity; or (c) a majority
of the members of XL Capital's board of directors are persons who are then
serving on the board of directors without having been elected by the board of
directors or having been nominated for election by its shareholders.
"Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender (or, for purposes of
Section 2.17(b), 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.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to any Lender, the Letter of Credit
Commitment or the Revolving Credit Commitment of such Lender, as applicable. The
initial aggregate amount of the Lenders' Commitments is $2,350,000,000.
"Commitment Termination Date" means June 22, 2010.
"Confirming Lender" means, with respect to any Lender, any other Person
which is listed on the NAIC Approved Bank List that has agreed, by delivery of
an agreement between such Lender and such other Person in substantially the form
of Exhibit D or any other form satisfactory to the Administrative Agent, to
honor the obligations of such Lender in respect of a draft complying with the
terms of a Syndicated Letter of Credit or a Non-Syndicated Letter of Credit, as
the case may be, as if, and to the extent, such other Person were the "issuing
lender" (in place of such Lender) named in such Syndicated Letter of Credit or
Non-Syndicated Letter of Credit, as the case may be.
"Consolidated Net Worth" means, at any time, the consolidated stockholders'
equity of XL Capital and its Subsidiaries, provided that the calculation of such
consolidated stockholders' equity shall exclude (a) the effect thereon of any
adjustments required under Statement of Financial Accounting Standards No. 115
("Accounting for Certain Investments in Debt and Equity Securities") and (b) any
Exempt Indebtedness (and the assets relating thereto) in
Credit Agreement
-6-
the event such Exempt Indebtedness is consolidated on the consolidated balance
sheet of XL Capital 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.
"Credit Documents" means, collectively, this Agreement and the Letter of
Credit Documents.
"Credit Exposure" means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender's Loans and its LC Exposure at
such time.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Dollar Equivalent" means, as used in each Alternative Currency Letter of
Credit Report and in respect of any Alternative Currency Letter of Credit, the
amount of Dollars obtained by converting the Alternative Currency LC Exposure
with respect to such Alternative Currency Letter of Credit, as specified in such
Alternative Currency Letter of Credit Report, into Dollars at the spot rate for
the purchase of Dollars with such currency as quoted by the Administrative Agent
at approximately 11:00 a.m. (London time) on the second Business Day before the
date of such Alternative Currency Letter of Credit Report (unless another rate
or time is agreed to by XL Capital and the Administrative Agent).
"Dollars" or "$" refers to lawful money of the United States of America.
"Effective Date" means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Laws" means any Law, whether now existing or subsequently
enacted or amended, relating to (a) pollution or protection of the environment,
including natural resources, (b) exposure of Persons, including but not limited
to employees, to Hazardous Materials, (c) protection of the public health or
welfare from the effects of products, by-products, wastes, emissions, discharges
or releases of Hazardous Materials or (d) regulation of the manufacture, use or
introduction into commerce of Hazardous Materials, including their manufacture,
formulation, packaging, labeling, distribution, transportation, handling,
storage or disposal.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of an Account Party or any Subsidiary resulting from
or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract or agreement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
Credit Agreement
-7-
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any shareholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with any Account Party, is treated as a single employer under
Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Account Party or any of such Account Party's
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by any Account Party or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by any Account Party or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by any Account Party or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from any
Account Party or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VIII.
"Excess Funding Guarantor" has the meaning assigned to such term in Section
3.07.
"Excess Payment" has the meaning assigned to such term in Section 3.07.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Account Party hereunder, (a) Taxes imposed on (or measured by)
its net income, net profits or overall gross receipts (including, without
limitation, branch profits or similar taxes) by the United States of America, or
by any jurisdiction under the laws of which such recipient is organized or
resident, in which such recipient has an office or with which such recipient has
any
Credit Agreement
-8-
other connection (other than a connection that is deemed to arise solely by
reason of both (I) the transactions contemplated by this Agreement and (II) an
Account Party being organized in, maintaining an office in, conducting business
in, or having a connection with, such jurisdiction), (b) any Taxes not described
in clause (a) above (other than Other Taxes) that are imposed as a result of a
connection the Administrative Agent or any Lender, as the case may be, has with
the relevant jurisdiction (other than a connection that is deemed to arise
solely by reason of both (I) the transactions contemplated by this Agreement and
(II) an Account Party being organized or resident in, maintaining an office in,
conducting business in, or having a connection with, such jurisdiction) and (c)
any Tax imposed pursuant to a law in effect at the time such Lender first
becomes a party to this Agreement except to the extent that such Lender's
assignor, if any, was entitled at the time of the assignment to receive
additional amounts from the Account Parties with respect to such Tax under
Sections 2.19(a) or 2.19(c) and (d) any Tax that is attributable to such
Lender's failure or inability (other than as a result of a Change in Law
formally announced after such Lender becomes a party to this Agreement) to
comply with Section 2.19(e).
"Exempt Indebtedness" means any Indebtedness of any Person (other than XL
Capital or any of its Affiliates) that is consolidated on the balance sheet of
XL Capital and its consolidated Subsidiaries in accordance with GAAP (whether or
not required to be so consolidated); provided that (a) at the time of the
incurrence of such Indebtedness by such Person, the cash flows from the assets
of such Person shall reasonably be expected by such Person to liquidate such
Indebtedness and all other liabilities (contingent or otherwise) of such Person
and (b) no portion of such Indebtedness of such Person shall be Guaranteed
(other than guarantees of the type referred to in clause (a) or (b) of the
definition of Indebtedness) by, or shall be secured by a Lien on any assets
owned by, XL Capital 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 XL Capital 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
Indebtedness).
"Existing 364-Day Credit Agreement" means the 364-Day Credit Agreement
dated as of June 23, 2004 among the Account Parties, the lenders party thereto
and JPMCB (formerly JPMorgan Chase Bank), as Administrative Agent.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any Obligor, a principal
financial officer of such Obligor.
"GAAP" means generally accepted accounting principles in the United States
of America.
Credit Agreement
-9-
"GIC" means a guaranteed investment contract or funding agreement or other
similar agreement issued by an Account Party or any of its Subsidiaries that
guarantees to a counterparty a rate of return on the invested capital over the
life of such contract or agreement.
"Governmental Authority" means the government of the United States of
America, or of any other nation (including the European Union), or any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Granting Lender" has the meaning assigned to such term in Section 10.04.
"Guarantee" means, with respect to any Person, without duplication, any
obligations of such Person (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing or
intended to guarantee any Indebtedness of any other Person in any manner,
whether direct or indirect, and including any obligation, whether or not
contingent, (i) to purchase any such Indebtedness or any property constituting
security therefor for the purpose of assuring the holder of such Indebtedness,
(ii) to advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including keepwell agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Guarantee hereunder shall (subject to any limitations set forth therein) be
deemed to be an amount equal to the outstanding principal amount of the
Indebtedness in respect of which such Guarantee is made. The terms "Guarantee"
and "Guaranteed" used as a verb shall have a correlative meaning.
"Guaranteed Obligations" has the meaning assigned to such term in Section
3.01.
"Guarantors" means each of XL Capital, XL America, XL Insurance and XL Re.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" means, for any Person, without duplication: (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
Credit Agreement
-10-
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 XL Capital 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.
"Indemnified Taxes" means Taxes imposed on the Administrative Agent or any
Lender on or with respect to any payment hereunder, other than Excluded Taxes
and Other Taxes.
"Insurance Subsidiary" means any Subsidiary which is subject to the
regulation of, and is required to file statutory financial statements with, any
governmental body, agency or official in any State or territory of the United
States or the District of Columbia which regulates insurance companies or the
doing of an insurance business therein.
"Interest Election Request" means a request by an Account Party to convert
or continue a Borrowing in accordance with Section 2.10.
"Interest Payment Date" means (a) with respect to any ABR Loan, each
Quarterly Date and (b) with respect to any Eurodollar Loan, the last day of each
Interest Period therefor and, in the case of any Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at three-month intervals after the first day of such Interest
Period.
"Interest Period" means, for any Eurodollar Loan or Borrowing, the period
commencing on the date of such Loan or Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as specified in the applicable Borrowing Request or Interest
Election Request; provided that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Loan initially shall be the
date on which such Loan is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Loan, and the date of a
Borrowing comprising Loans that
Credit Agreement
-11-
have been converted or continued shall be the effective date of the most recent
conversion or continuation of such Loans.
"ISDA" has the meaning assigned to such term in Section 7.03(f).
"Issuing Lender" means (a) with respect to any Participated Letter of
Credit, JPMCB, in its capacity as the issuer of such Participated Letter of
Credit hereunder, and its successors in such capacity as provided in Section
2.05(j), (b) with respect to any Syndicated Letter of Credit, each Lender, in
its capacity as the issuer of such Syndicated Letter of Credit and (c) with
respect to any Non-Syndicated Letter of Credit, the Lender named therein as the
issuer thereof.
"JPMCB" means JPMorgan Chase Bank, N.A.
"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) with respect to any Participated Letter of
Credit or Non-Syndicated Letter of Credit, a payment made by the Issuing Lender
thereof pursuant thereto and (b) with respect to any Syndicated Letter of Credit
or Alternative Currency Letter of Credit, a payment made by a Lender pursuant
thereto.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements under Letters of Credit that have not yet been
reimbursed by or on behalf of the Account Parties at such time. The LC Exposure
of any Lender at any time shall be the sum of (i) its Applicable Percentage of
the total LC Exposure (excluding any Alternative Currency LC Exposure) plus (ii)
the Alternative Currency LC Exposure (if any) of such Lender at such time.
"Lenders" means the Persons listed on Schedule I and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption or an
agreement pursuant to the terms of Section 2.11(c), other than any such Person
that ceases to be a party hereto pursuant to an Assignment and Assumption. For
the purposes of Sections 2.01, 2.02, 2.03, 2.04, 2.05 and 2.06, any reference to
the term "Lender" or "Lenders" shall mean a Lender or the Lenders under the
Letter of Credit Tranche.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for the rights and obligations
of the parties concerned or at risk with respect to such Letter of Credit.
"Letter of Credit Commitment" means, with respect to any Lender, the
commitment of such Lender, if any, (a) to issue Syndicated Letters of Credit and
Non-Syndicated Letters of Credit and acquire participations in Participated
Letters of Credit and/or (b) to make Loans under Section 2.07(a)(I), in each
case expressed as an amount representing the maximum aggregate amount of such
Lender's Credit Exposure hereunder, as such commitment may be (i) reduced from
time to time pursuant to Section 2.11 and (ii) reduced or increased from time to
Credit Agreement
-12-
time pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender's Letter of Credit Commitment (including such
Lender's allocable portion of the RC Sublimit that may be borrowed under Section
2.07(a)(I)) is set forth on Schedule I or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Letter of Credit
Commitment, as applicable. The initial aggregate amount of the Lenders' Letter
of Credit Commitments is $2,250,000,000.
"Letter of Credit Tranche" means the tranche hereunder relating to the
Letter of Credit Commitments, the Letters of Credit issued and the Loans made
thereunder and the Lenders having Letter of Credit Commitments or Credit
Exposure in respect of such Letters of Credit and Loans.
"Letters of Credit" means each of the Syndicated Letters of Credit, the
Non-Syndicated Letters of Credit, the Participated Letters of Credit and the
Alternative Currency Letters of Credit.
"LIBO Rate" means, for the Interest Period for any Eurodollar Borrowing,
the rate appearing on Page 3750 of the Telerate Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
Dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for the offering of Dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available
at such time for any reason, then the LIBO Rate for such Interest Period shall
be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, any mortgage, deed of trust,
pledge, lien, security interest, charge or other encumbrance or security
arrangement of any nature whatsoever, including but not limited to any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"Loans" means the loans made by the Lenders under any Tranche to the
Account Parties pursuant to Section 2.07.
"Margin Stock" means "margin stock" within the meaning of Regulations T, U
and X of the Board.
"Material Adverse Effect" means a material adverse effect on: (a) the
assets, business, financial condition or operations of an Account Party and its
Subsidiaries taken as a whole; or (b) the ability of an Account Party to perform
any of its payment or other material obligations under this Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
Credit Agreement
-13-
"▇▇▇▇▇'▇ Rating" means, at any time, the rating of XL Capital's long-term
senior unsecured debt (provided that such debt is not supported by any other
Person).
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
"NAIC Approved Bank" means (a) any Person that is a bank listed on the most
current "Bank List" of banks approved by the NAIC (the "NAIC Approved Bank
List") or (b) any Lender as to which its Confirming Lender is a bank listed on
the NAIC Approved Bank List.
"NAIC Approved Bank List" has the meaning assigned to such term in the
definition of "NAIC Approved Bank" in this Section.
"Non-Syndicated Letters of Credit" means letters of credit issued under
Section 2.04.
"Non-U.S. Benefit Plan" means any plan, fund (including any superannuation
fund) or other similar program established or maintained outside the United
States by any Account Party or any of their Subsidiaries, with respect to which
such Account Party or such Subsidiary has an obligation to contribute, for the
benefit of employees of such Account Party or such Subsidiary, which plan, fund
or other similar program provides, or results in, the type of benefits described
in Section 3(1) or 3(2) of ERISA, and which plan is not subject to ERISA or the
Code.
"Obligors" means each of the Account Parties and each of the Guarantors.
"Other Credit Agreement" shall mean the Three-Year Credit Agreement dated
as of June 23, 2004 among the Account Parties, the lenders party thereto and
JPMCB (formerly JPMorgan Chase Bank), as Administrative Agent (as amended and in
effect from time to time, including any renewals, extensions, restatements or
replacements thereof).
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other similar excise or property Taxes, arising from any payment
made hereunder or from the execution, delivery or enforcement of this Agreement,
but excluding property or similar Taxes other than any such Taxes imposed in
such circumstances solely as a result of the Account Party being organized or
resident in, maintaining an office in, conducting business in or maintaining
property located in the taxing jurisdiction in question.
"Participant" has the meaning assigned to such term in Section 10.04.
"Participated Letters of Credit" means letters of credit issued under
Section 2.05.
"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.
Credit Agreement
-14-
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which any Account Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMCB as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
"Private Act" means separate legislation enacted in Bermuda with the
intention that such legislation apply specifically to an Account Party, in whole
or in part.
"Pro Rata Share" has the meaning assigned to such term in Section 3.07.
"Quarterly Date" means the last Business Day of March, June, September and
December in each year, the first of which shall be the first such day after the
date hereof.
"RC Sublimit" means $900,000,000, as such amount shall be ratably reduced
by the amount of any reduction of the Aggregate Maximum Loan Amount pursuant to
Section 2.11.
"Register" has the meaning assigned to such term in Section 10.04.
"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.
"Required Lenders" means, at any time, Lenders having Commitments
representing more than 50% of the aggregate amount of the Commitments at such
time; provided that, if the Commitments have expired or been terminated,
"Required Lenders" means Lenders having more than 50% of the Aggregate Credit
Exposure at such time. The "Required Lenders" of a particular Tranche means
Lenders having Commitments under such Tranche representing more than 50% of the
aggregate Commitments of all the Lenders under such Tranche at such time;
provided that, if the Commitments under such Tranche have expired or been
terminated, "Required Lenders" means Lenders under such Tranche having more than
50% of the aggregate Credit Exposure of the Lenders under such Tranche at such
time.
"Revolving Credit Commitment" means, with respect to any Lender, the
commitment of such Lender, if any, to make Loans under Section 2.07(a)(II), as
such commitment may be (a) reduced from time to time pursuant to Section 2.11
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.04. The initial amount of a Lender's
Revolving Credit Commitment, if any, is set forth on Schedule I or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Revolving Credit Commitment, as applicable. The initial aggregate amount of the
Lenders' aggregate Revolving Credit Commitments is $100,000,000.
Credit Agreement
-15-
"Revolving Credit Tranche" means the tranche hereunder relating to the
Revolving Credit Commitments, the Loans made thereunder and the Lenders having
Revolving Credit Commitments or Credit Exposure in respect of such Loans.
"S&P" means Standard & Poor's Ratings, or any successor thereto.
"S&P Rating" means, at any time, the rating of XL Capital's long-term
senior unsecured debt (provided that such debt is not supported by any other
Person).
"SAP" means, as to each Account Party and each Subsidiary that offers
insurance products, the statutory accounting practices prescribed or permitted
by the relevant Governmental Authority for such Account Party's or such
Subsidiary's domicile for the preparation of its financial statements and other
reports by insurance corporations of the same type as such Account Party or such
Subsidiary in effect on the date such statements or reports are to be prepared,
except if otherwise notified by XL Capital as provided in Section 1.03.
"SEC" means the Securities and Exchange Commission or any successor entity.
"Significant Subsidiary" means, at any time, each Subsidiary of XL Capital
that, as of such time, meets the definition of a "significant subsidiary" under
Regulation S-X of the SEC.
"Specified Account Party" has the meaning assigned to such term in Section
2.05.
"Specified Transaction Agreement" means any agreement, contract or
documentation with respect to the following types of transactions: rate swap
transaction, swap option, basis swap, asset swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, current swap
transaction, cross-currency rate swap transaction, currency option, credit
protection transaction, credit swap, credit default swap, credit default option,
total return swap, credit spread transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending or
borrowing transaction, weather index transaction or forward purchase or sale of
a security, commodity or other financial instrument or interest, and
transactions on any commodity futures or other exchanges, markets and their
associated clearing houses (including any option with respect to any of these
transactions).
"SPV" has the meaning assigned to such term in Section 10.04.
"Stable Value Instrument" means any insurance, derivative or similar
financial contract or instrument designed to mitigate the volatility of returns
during a given period on a specified portfolio of securities held by one party
(the "customer") through the commitment of the other party (the "SVI provider")
to provide the customer with a credited rate of return on the portfolio,
typically determined through an interest-crediting mechanism (and in exchange
for which the SVI provider typically receives a fee).
"Statutory Reserve Rate" means, for any day (or for the Interest Period for
any Eurodollar Borrowing), a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental
Credit Agreement
-16-
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject on such day (or, with respect to an Interest
Period, the denominator of which is the number one minus the arithmetic mean of
such aggregates for the days in such Interest Period) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subsidiary" means, with respect to any Person (the "parent"), at any date,
any corporation (or similar entity) of which a majority of the shares of
outstanding capital stock normally entitled to vote for the election of
directors (regardless of any contingency which does or may suspend or dilute the
voting rights of such capital stock) is at such time owned directly or
indirectly by the parent or one or more subsidiaries of the parent. Unless
otherwise specified, "Subsidiary" means a Subsidiary of an Account Party.
"Supplemental Commitment Date" has the meaning assigned to such term in
Section 2.11(c).
"Supplemental Lender" has the meaning assigned to such term in Section
2.11(c).
"Syndicated Letters of Credit" means letters of credit issued under Section
2.01.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Total Funded Debt" means, at any time, all Indebtedness of XL Capital 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 XL Capital
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).
"Tranche" means the Letter of Credit Tranche or the Revolving Credit
Tranche, as applicable.
"Transactions" means the execution, delivery and performance by the
Obligors of this Agreement and the other Credit Documents to which any Account
Party is intended to be a party, the issuance of Letters of Credit, the
borrowing of Loans and the use of the proceeds thereof.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans constituting such Borrowing,
is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
Credit Agreement
-17-
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP and SAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP or SAP, as the context requires, each as in
effect from time to time; provided that, if XL Capital notifies the
Administrative Agent that the Account Parties request an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or SAP, as the case may be, or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Account
Parties that the Required 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.
ARTICLE II
THE CREDITS
SECTION 2.01. Syndicated Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, at the
request of any Account Party the Lenders agree at any time and from time to time
during the Availability Period to issue Syndicated Letters of Credit for the
account of such Account Party in an aggregate amount that will not result in the
Credit Exposure exceeding the Commitments (it being understood that Syndicated
Letters of Credit may be issued, or be outstanding, for the account of more than
one of the Account Parties at any time). Each Syndicated Letter of Credit
Credit Agreement
-18-
shall be in such form as is consistent with the requirements of the applicable
regulatory authorities in Illinois, California, Wisconsin or New York, as
reasonably determined by the Administrative Agent or as otherwise agreed to by
the Administrative Agent and XL Capital; provided that, without the prior
consent of each Lender, no Syndicated Letter of Credit may be issued that would
vary the several and not joint nature of the obligations of the Lenders
thereunder as provided in the next succeeding sentence. Each Syndicated Letter
of Credit shall be issued by all of the Lenders, acting through the
Administrative Agent, at the time of issuance as a single multi-bank letter of
credit, but the obligation of each Lender thereunder shall be several and not
joint, based upon its Applicable Percentage of the aggregate undrawn amount of
such Syndicated Letter of Credit.
(b) Notice of Issuance, Amendment, Renewal or Extension. To request the
issuance of a Syndicated Letter of Credit (or the amendment, renewal or
extension of an outstanding Syndicated Letter of Credit), an Account Party shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Administrative Agent) to the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a
Syndicated Letter of Credit, or identifying the Syndicated Letter of Credit to
be amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension, as the case may be (which shall be a Business Day), the
date on which such Syndicated Letter of Credit is to expire (which shall comply
with paragraph (d) of this Section), the amount of such Syndicated Letter of
Credit, the name and address of the beneficiary thereof and the terms and
conditions of (and such other information as shall be necessary to prepare,
amend, renew or extend, as the case may be) such Syndicated Letter of Credit. If
any Syndicated Letter of Credit shall provide for the automatic extension of the
expiry date thereof unless the Administrative Agent gives notice that such
expiry date shall not be extended, then the Administrative Agent will give such
notice if requested to do so by the Required Lenders of the Letter of Credit
Tranche in a notice given to the Administrative Agent not more than 60 days, but
not less than 45 days, prior to the current expiry date of such Syndicated
Letter of Credit. If requested by the Administrative Agent, such Account Party
also shall submit a letter of credit application on JPMCB's standard form in
connection with any request for a Syndicated Letter of Credit. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by any Account Party to, or entered into by any Account
Party with, the Administrative Agent relating to any Syndicated Letter of
Credit, the terms and conditions of this Agreement shall control.
(c) Limitations on Amounts. A Syndicated Letter of Credit shall be issued,
amended, renewed or extended only if (and upon such issuance, amendment, renewal
or extension of each Syndicated Letter of Credit the Account Parties shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension, (i) the Aggregate Credit Exposure of the
Lenders under the Letter of Credit Tranche shall not exceed the aggregate amount
of the Letter of Credit Commitments and (ii) the Credit Exposure (excluding any
Alternative Currency LC Exposure) of each Lender under the Letter of Credit
Tranche shall not exceed the Letter of Credit Commitment of such Lender.
(d) Expiry Date. Each Syndicated Letter of Credit shall expire at or prior
to the close of business on the date one year after the date of the issuance of
such Syndicated Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension).
Credit Agreement
-19-
(e) Obligation of Lenders. The obligation of any Lender under any
Syndicated Letter of Credit shall be several and not joint and shall at any time
be in an amount equal to such Lender's Applicable Percentage of the aggregate
undrawn amount of such Syndicated Letter of Credit, and each Syndicated Letter
of Credit shall expressly so provide.
(f) Continuation of Existing Syndicated Letters of Credit. Subject to the
terms and conditions hereof, each Syndicated Letter of Credit under (and as
defined in) the Existing 364-Day Credit Agreement which is outstanding on the
Effective Date and is designated to be continued hereunder in the notice
provided by XL Capital to the Administrative Agent pursuant to Section 5.01(f)
shall automatically be continued hereunder by all of the Lenders having
Commitments on the Effective Date. The obligation of each such Lender in respect
of each such continued Syndicated Letter of Credit shall be several and not
joint, based upon its Applicable Percentage and the aggregate undrawn amount
thereof, and each such Syndicated Letter of Credit shall be deemed a Syndicated
Letter of Credit for all purposes of this Agreement as of the Effective Date.
The Administrative Agent shall, on the Effective Date or as promptly as
practicable thereafter, notify the beneficiary of each such Syndicated Letter of
Credit that is being continued hereunder as to the names of the Lenders that, as
of the Effective Date, will be issuing lenders under, and party to, such
Syndicated Letter of Credit and the Lenders' respective Applicable Percentages
thereunder as of the Effective Date.
(g) Adjustment of Applicable Percentages. Upon (i) each increase of the
Commitments pursuant to Section 2.11(c) or (ii) the assignment by a Lender of
all or a portion of its Commitment and its interests in the Syndicated Letters
of Credit pursuant to an Assignment and Assumption, the Administrative Agent
shall promptly notify each beneficiary under an outstanding Syndicated Letter of
Credit of the Lenders that are parties to such Syndicated Letter of Credit and
their respective Applicable Percentages as of the effective date of, and after
giving effect to, such increase or assignment, as the case may be.
SECTION 2.02. Issuance and Administration. Each Syndicated Letter of Credit
shall be executed and delivered by the Administrative Agent in the name and on
behalf of, and as attorney-in-fact for, each Lender party to such Syndicated
Letter of Credit, and the Administrative Agent shall act under each Syndicated
Letter of Credit, and each Syndicated Letter of Credit shall expressly provide
that the Administrative Agent shall act, as the agent of each Lender to (a)
receive drafts, other demands for payment and other documents presented by the
beneficiary under such Syndicated Letter of Credit, (b) determine whether such
drafts, demands and documents are in compliance with the terms and conditions of
such Syndicated Letter of Credit and (c) notify such Lender and the Account
Parties that a valid drawing has been made and the date that the related LC
Disbursement is to be made; provided that the Administrative Agent shall have no
obligation or liability for any LC Disbursement under such Syndicated Letter of
Credit, and each Syndicated Letter of Credit shall expressly so provide. Each
Lender hereby irrevocably appoints and designates the Administrative Agent as
its attorney-in-fact, acting through any duly authorized officer of JPMCB, to
execute and deliver in the name and on behalf of such Lender each Syndicated
Letter of Credit to be issued by such Lender hereunder. Promptly upon the
request of the Administrative Agent, each Lender will furnish to the
Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Syndicated Letter of Credit may reasonably request in order
to demonstrate that the
Credit Agreement
-20-
Administrative Agent has the power to act as attorney-in-fact for such Lender to
execute and deliver such Syndicated Letter of Credit. Notwithstanding anything
in this Agreement to the contrary, the Administrative Agent has no
responsibility hereunder with respect to the issuance, renewal, extension,
amendment or other administration of any Alternative Currency Letter of Credit,
except as expressly set forth in Section 2.06.
SECTION 2.03. Reimbursement of LC Disbursements, Etc.
(a) Reimbursement. If any Lender shall make any LC Disbursement in respect
of any Syndicated Letter of Credit or Alternative Currency Letter of Credit,
regardless of the identity of the Account Party of such Syndicated Letter of
Credit or Alternative Currency Letter of Credit, as the case may be, the Account
Parties jointly and severally agree that they shall reimburse such Lender in
respect of such LC Disbursement under (x) a Syndicated Letter of Credit by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than noon, New York City time, on (i) the Business Day that the Account
Parties receive notice of such LC Disbursement, if such notice is received prior
to 10:00 a.m., New York City time, or (ii) the Business Day immediately
following the day that the Account Parties receive such notice, if such notice
is not received prior to such time and (y) an Alternative Currency Letter of
Credit, by paying such Lender on the date, in the currency and amount thereof,
together with interest thereon (if any), and in the manner (including the place
of payment) as such Lender and such Account Party shall have separately agreed
pursuant to Section 2.06.
(b) Reimbursement Obligations Absolute. The Account Parties' joint and
several obligations to reimburse LC Disbursements as provided in paragraph (a)
of this Section shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Syndicated Letter of Credit or any term or provision
therein, (ii) any draft or other document presented under a Syndicated Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment under
a Syndicated Letter of Credit against presentation of a draft or other document
that does not comply strictly with the terms of such Syndicated Letter of Credit
(provided that the Account Parties shall not be obligated to reimburse such LC
Disbursements unless payment is made against presentation of a draft or other
document that at least substantially complies with the terms of such Syndicated
Letter of Credit), (iv) at any time or from time to time, without notice to any
Account Party, the time for any performance of or compliance with any of such
reimbursement obligations of any other Account Party shall be waived, extended
or renewed, (v) any of such reimbursement obligations of any other Account Party
being amended or otherwise modified in any respect, or any guarantee of any of
such reimbursement obligations being released, substituted or exchanged in whole
or in part or otherwise dealt with, (vi) the occurrence of any Default, (vii)
the existence of any proceedings of the type described in clause (g) or (h) of
Article VIII with respect to any other Account Party or any guarantor of any of
such reimbursement obligations, (viii) any lack of validity or enforceability of
any of such reimbursement obligations against any other Account Party or any
guarantor of any of such reimbursement obligations, or (ix) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of the obligations of any Account Party hereunder.
Credit Agreement
-21-
Neither the Administrative 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 Syndicated 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 Syndicated 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
Administrative Agent or a Lender from liability to any Account Party to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Account Parties to the extent
permitted by applicable law) suffered by any Account Party that are caused by
the gross negligence or willful misconduct of the Administrative Agent or a
Lender. The parties hereto expressly agree that:
(i) the Administrative Agent may accept documents that appear on their
face to be in substantial compliance with the terms of a Syndicated 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 Syndicated Letter of Credit;
(ii) the Administrative 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
Syndicated Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Administrative Agent when determining whether drafts and
other documents presented under a Syndicated Letter of Credit comply with
the terms thereof (and the parties hereto hereby waive, to the extent
permitted by applicable law, any standard of care inconsistent with the
foregoing).
(c) Disbursement Procedures. The Administrative Agent shall, within a
reasonable time following its receipt thereof, examine all documents purporting
to represent a demand for payment under any Syndicated Letter of Credit. The
Administrative Agent shall promptly after such examination (i) notify each of
the Lenders and the Account Parties by telephone (confirmed by telecopy) of such
demand for payment and (ii) deliver to each Lender a copy of each document
purporting to represent a demand for payment under such Syndicated Letter of
Credit. With respect to any drawing properly made under a Syndicated Letter of
Credit, each Lender will make an LC Disbursement in respect of such Syndicated
Letter of Credit in accordance with its liability under such Syndicated Letter
of Credit and this Agreement, such LC Disbursement to be made to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make any such LC
Disbursement available to the beneficiary of such Syndicated Letter of Credit by
promptly crediting the amounts so received, in like funds, to the account
identified by such beneficiary in connection with such demand for payment.
Promptly following any LC Disbursement by any Lender in respect of any
Syndicated Letter of Credit, the Administrative Agent will notify the Account
Parties of such LC Disbursement; provided that any failure to give or delay in
giving
Credit Agreement
-22-
such notice shall not relieve the Account Parties of their obligation to
reimburse the Lenders with respect to any such LC Disbursement.
(d) Interim Interest. If any LC Disbursement with respect to a Syndicated
Letter of Credit is made, then, unless the Account Parties shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Account Parties
reimburse such LC Disbursement, at the rate per annum equal to (i) 1% plus the
Alternate Base Rate to but excluding the date three Business Days after such LC
Disbursement is made and (ii) from and including the date three Business Days
after such LC Disbursement is made, 3% plus the Alternate Base Rate.
(e) Right of Contribution. The Account Parties hereby agree, as between
themselves, that if any Account Party shall pay any reimbursement obligation in
respect of any LC Disbursement with respect to a Syndicated Letter of Credit
issued to support the obligations of another Account Party (the "Specified
Account Party"), the Specified Account Party shall, on demand (but subject to
the next sentence), pay to such first Account Party an amount equal to the
amount of such reimbursement. The payment obligation of a Specified Account
Party to another Account Party under this paragraph (e) shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
the Specified Account Party under this Agreement and each other Credit Document,
and such other Account Party shall not exercise any right or remedy with respect
to such reimbursement until payment and satisfaction in full of all of such
obligations of the Specified Account Party.
SECTION 2.04. Non-Syndicated Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, at the
request of any Account Party the Lenders agree at any time and from time to time
during the Availability Period to issue Non-Syndicated Letters of Credit for the
account of such Account Party in an aggregate amount that will not result in the
Credit Exposure exceeding the Commitments (it being understood that
Non-Syndicated Letters of Credit may be issued, or be outstanding, for the
account of more than one of the Account Parties at any time). Each
Non-Syndicated Letter of Credit shall be in such form as is consistent with the
requirements of the applicable regulatory authorities in the jurisdiction of
issue as reasonably determined by the Administrative Agent or as otherwise
agreed to by the Administrative Agent and XL Capital. Each Non-Syndicated Letter
of Credit shall be issued by the respective Issuing Lender thereof, through the
Administrative Agent as provided in Section 2.04(c), in the amount of such
Issuing Lender's Applicable Percentage of the aggregate amount of Non-Syndicated
Letters of Credit being requested by such Account Party at such time, and
(notwithstanding anything herein or in any other Letter of Credit Document to
the contrary) such Non-Syndicated Letter of Credit shall be the sole
responsibility of such Issuing Lender (and of no other Person, including any
other Lender or the Administrative Agent). Notwithstanding anything to the
contrary in this Agreement, no Non-Syndicated Letter of Credit may be requested
hereunder for any jurisdiction unless XL Capital provides evidence reasonably
satisfactory to the Administrative Agent that Syndicated Letters of Credit do
not comply with the insurance laws of such jurisdiction.
(b) Notice of Issuance, Amendment, Renewal or Extension. To request the
issuance of Non-Syndicated Letters of Credit (or the amendment, renewal or
extension of
Credit Agreement
-23-
outstanding Non-Syndicated Letters of Credit), an Account Party shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Administrative Agent) to the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of
Non-Syndicated Letters of Credit, or identifying the Non-Syndicated Letters of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension, as the case may be (which shall be a Business
Day), the date on which such Non-Syndicated Letters of Credit are to expire
(which shall comply with paragraph (e) of this Section), the aggregate amount of
all Non-Syndicated Letters of Credit to be issued in connection with such
request, the name and address of the beneficiary thereof and the terms and
conditions of (and such other information as shall be necessary to prepare,
amend, renew or extend, as the case may be) such Non-Syndicated Letters of
Credit. If Non-Syndicated Letters of Credit issued in connection with the same
request shall provide for the automatic extension of the expiry date thereof
unless the Issuing Lender thereof or the Administrative Agent gives notice that
such expiry date shall not be extended, then the Administrative Agent (acting on
behalf of the relevant Issuing Lenders) will give such notice for all such
Non-Syndicated Letters of Credit if requested to do so by the Required Lenders
of the Letter of Credit Tranche in a notice given to the Administrative Agent
not more than 60 days, but not less than 45 days, prior to the current expiry
date of such Non-Syndicated Letter of Credit. If requested by the Administrative
Agent, such Account Party also shall submit a letter of credit application on
JPMCB's standard form in connection with any request for a Non-Syndicated Letter
of Credit. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by any Account Party to, or entered
into by any Account Party with, the Administrative Agent (acting on behalf of
the relevant Issuing Lenders) relating to any Non-Syndicated Letter of Credit,
the terms and conditions of this Agreement shall control.
(c) Issuance and Administration. Each Non-Syndicated Letter of Credit shall
be executed and delivered by the Administrative Agent (which term, for purposes
of this Section 2.04 and any other provisions of this Agreement, including
Article IX and Section 10.03, relating to Non-Syndicated Letters of Credit,
shall be deemed to refer to, unless the context otherwise requires, JPMCB acting
in its capacity as the Administrative Agent or in its individual capacity, in
either case as attorney-in-fact for the respective Issuing Lender), acting
through any duly authorized officer of JPMCB, in the name and on behalf of, and
as attorney-in-fact for, the Issuing Lender party to such Non-Syndicated Letter
of Credit. With respect to each Non-Syndicated Letter of Credit, the
Administrative Agent shall act in the name and on behalf of, and as
attorney-in-fact for, the Lender issuing such Non-Syndicated Letter of Credit
and in that capacity shall, and each Lender hereby irrevocably appoints and
designates the Administrative Agent, acting through any duly authorized officer
of JPMCB, to so act in the name and on behalf of, and as attorney-in-fact for,
each Lender with respect to each Non-Syndicated Letter of Credit to be issued by
such Lender hereunder and, without limiting any other provision of this
Agreement, to, (i) execute and deliver in the name and on behalf of such Lender
each Non-Syndicated Letter of Credit to be issued by such Lender hereunder, (ii)
receive drafts, other demands for payment and/or other documents presented by
the beneficiary thereunder, (iii) determine whether such drafts, demands and/or
documents are in compliance with the terms and conditions thereof, (iv) notify
the beneficiary of any such Non-Syndicated Letter of Credit of the expiration or
non-renewal thereof in accordance with the terms thereof, (v) advise such
beneficiary of any change in the office for presentation of drafts under any
such Non-Syndicated
Credit Agreement
-24-
Letter of Credit, (vi) enter into with the Account Parties any such letter of
credit application or similar agreement with respect to any such Non-Syndicated
Letter of Credit as the Administrative Agent shall require, (vii) remit to the
beneficiary of any such Non-Syndicated Letter of Credit any payment made by such
Lender and received by the Administrative Agent in connection with a drawing
thereunder, (viii) perform any and all other acts which in the sole opinion of
the Administrative Agent may be necessary or incidental to the performance of
the powers herein granted with respect to such Non-Syndicated Letter of Credit,
(ix) notify such Lender and the Account Parties that a valid drawing has been
made and the date that the related LC Disbursement is to be made; provided that
the Administrative Agent shall have no obligation or liability for any LC
Disbursement under such Non-Syndicated Letter of Credit and (x) delegate to any
agent of JPMCB and such agent's Related Parties, or any of them, the performance
of any of such powers. Each Lender hereby ratifies and confirms (and undertakes
to ratify and confirm from time to time upon the request of the Administrative
Agent) whatsoever the Administrative Agent (or any Related Party thereof) shall
do or purport to do by virtue of the power herein granted. Promptly upon the
request of the Administrative Agent, each Lender will furnish to the
Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Non-Syndicated Letter of Credit may reasonably request in
order to demonstrate that the Administrative Agent has the power to act as
attorney-in-fact for such Lender with respect to such Non-Syndicated Letter of
Credit (together with such evidence of the due authorization, execution,
delivery and validity of such power of attorney as the Administrative Agent may
reasonably request). Without limiting any provision of Article IX, the
Administrative Agent may perform any and all of its duties and exercise any and
all of its rights and powers under this Section through its Related Parties.
(d) Limitations on Amounts. Non-Syndicated Letters of Credit shall be
issued, amended, renewed or extended only if (and upon such issuance, amendment,
renewal or extension of each Non-Syndicated Letter of Credit the Account Parties
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension, (i) the aggregate Credit Exposure of
the Lenders under the Letter of Credit Tranche shall not exceed the aggregate
amount of the Letter of Credit Commitments and (ii) the Credit Exposure
(excluding any Alternative Currency LC Exposure) of each Lender under the Letter
of Credit Tranche shall not exceed the Letter of Credit Commitment of such
Lender.
(e) Expiry Date. Each Non-Syndicated Letter of Credit shall expire at or
prior to the close of business on the date one year after the date of the
issuance of such Non-Syndicated Letter of Credit (or, in the case of any renewal
or extension thereof, one year after such renewal or extension).
(f) Participations. By the issuance of a Non-Syndicated Letter of Credit
(or an amendment to a Non-Syndicated Letter of Credit increasing the amount
thereof) by the respective Issuing Lender, and without any further action on the
part of such Issuing Lender or the Lenders, such Issuing Lender hereby grants to
each Lender (other than the Issuing Lender itself), and each such Lender hereby
acquires from such Issuing Lender, a participation in such Non-Syndicated Letter
of Credit equal to such Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Non-Syndicated Letter of Credit. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Non-Syndicated Letter of Credit is absolute and
unconditional and shall not be
Credit Agreement
-25-
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Non-Syndicated Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for account of
the respective Issuing Lender, such Lender's Applicable Percentage of each LC
Disbursement made by an Issuing Lender in respect of any Non-Syndicated Letter
of Credit promptly upon the request of the Administrative Agent at any time from
the time such LC Disbursement is made until such LC Disbursement is reimbursed
by the Account Parties or at any time after any reimbursement payment is
required to be refunded to the Account Parties for any reason. Such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Promptly following receipt by the Administrative Agent of any
payment from the Account Parties pursuant to the next following paragraph, the
Administrative Agent shall distribute such payment to the respective Issuing
Lender or, to the extent that the Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Lender, then to such Lenders and such
Issuing Lender as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse an Issuing Lender for any LC
Disbursement shall not relieve the Account Parties of their obligation to
reimburse such LC Disbursement.
(g) Reimbursement. If any Issuing Lender shall make any LC Disbursement in
respect of any Non-Syndicated Letter of Credit, regardless of the identity of
the Account Party of such Non-Syndicated Letter of Credit, the Account Parties
jointly and severally agree that they shall reimburse such Issuing Lender in
respect of such LC Disbursement by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than noon, New York City time, on (i)
the Business Day that the Account Parties receive notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Account
Parties receive such notice, if such notice is not received prior to such time.
If the Account Parties fail to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Account Parties in respect thereof and such
Lender's Applicable Percentage thereof.
(h) Obligations Absolute. The Account Parties' joint and several
obligations to reimburse LC Disbursements in respect of any Non-Syndicated
Letter of Credit as provided in paragraph (g) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Non-Syndicated
Letter of Credit, or any term or provision therein, (ii) any draft or other
document presented under a Non-Syndicated Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Lender under a
Non-Syndicated Letter of Credit against presentation of a draft or other
document that does not comply strictly with the terms of such Non-Syndicated
Letter of Credit (provided that the Account Parties shall not be obligated to
reimburse such LC Disbursements unless payment is made against presentation of a
draft or other document that at least substantially complies with the terms of
such Non-Syndicated Letter of Credit), (iv) at any time or from time to time,
without notice to any Account Party, the time for any performance of or
compliance with any of such reimbursement obligations of any other Account Party
being waived, extended or renewed, (v) any of such reimbursement obligations of
any other Account
Credit Agreement
-26-
Party being amended or otherwise modified in any respect, or any guarantee of
any of such reimbursement obligations being released, substituted or exchanged
in whole or in part or otherwise dealt with, (vi) the occurrence of any Default,
(vii) the existence of any proceedings of the type described in clause (g) or
(h) of Article VIII with respect to any other Account Party or any guarantor of
any of such reimbursement obligations, (viii) any lack of validity or
enforceability of any of such reimbursement obligations against any other
Account Party or any guarantor of any of such reimbursement obligations, or (ix)
any other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the obligations of any Account Party hereunder.
Neither the Administrative Agent, the Lenders nor any Issuing Lender, nor
any of their respective Related Parties, shall have any liability or
responsibility by reason of or in connection with the payment or failure to make
any payment under a Non-Syndicated Letter of Credit (irrespective of any of the
circumstances referred to in the preceding sentence) as a result of determining
whether drafts or other documents presented under a Non-Syndicated Letter of
Credit comply with the terms thereof, or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Non-Syndicated 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 the control of an Issuing
Lender; provided that the foregoing shall not be construed to excuse the
Administrative Agent or a Lender from liability to the Account Parties to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Account Parties to the extent
permitted by applicable law) suffered by the Account Parties that are caused by
the gross negligence or willful misconduct of the Administrative Agent or a
Lender when determining whether drafts and other documents presented under a
Non-Syndicated Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that:
(i) the Administrative Agent may accept documents that appear on their
face to be in substantial compliance with the terms of a Non-Syndicated
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 Non-Syndicated Letter of
Credit;
(ii) the Administrative 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
Non-Syndicated Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Administrative Agent when determining whether drafts and
other documents presented under a Non-Syndicated 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).
(i) Disbursement Procedures. The Administrative Agent shall, within a
reasonable time following its receipt thereof, examine all documents purporting
to represent a
Credit Agreement
-27-
demand for payment under any Non-Syndicated Letter of Credit. The Administrative
Agent shall promptly after such examination (i) notify each of the Lenders and
the Account Parties by telephone (confirmed by telecopy) of such demand for
payment and (ii) deliver to each Lender (including the Issuing Lender) a copy of
each document purporting to represent a demand for payment under such
Non-Syndicated Letter of Credit. With respect to any drawing properly made under
a Non-Syndicated Letter of Credit, the Issuing Lender thereof will make an LC
Disbursement in respect of such Non-Syndicated Letter of Credit in accordance
with its liability under such Non-Syndicated Letter of Credit and this
Agreement, such LC Disbursement to be made to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make any such LC Disbursement available to the
beneficiary of such Non-Syndicated Letter of Credit by promptly crediting the
amounts so received, in like funds, to the account identified by such
beneficiary in connection with such demand for payment. Promptly following any
LC Disbursement by any Issuing Lender in respect of any Non-Syndicated Letter of
Credit, the Administrative Agent will notify the Account Parties of such LC
Disbursement; provided that any failure to give or delay in giving such notice
shall not relieve the Account Parties of their obligation to reimburse such
Issuing Lender with respect to any such LC Disbursement.
(j) Interim Interest. If any LC Disbursement with respect to a
Non-Syndicated Letter of Credit is made, then, unless the Account Parties shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the Account
Parties reimburse such LC Disbursement, at the rate per annum equal to (i) 1%
plus the Alternate Base Rate to but excluding the date three Business Days after
such LC Disbursement is made and (ii) from and including the date three Business
Days after such LC Disbursement is made, 3% plus the Alternate Base Rate.
(k) Right of Contribution. The Account Parties hereby agree, as between
themselves, that if any Account Party shall pay any reimbursement obligation in
respect of any LC Disbursement with respect to a Non-Syndicated Letter of Credit
issued to support the obligations of another Account Party (the "Specified
Account Party"), the Specified Account Party shall, on demand (but subject to
the next sentence), pay to such first Account Party an amount equal to the
amount of such reimbursement. The payment obligation of a Specified Account
Party to another Account Party under this paragraph (k) shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
the Specified Account Party under this Agreement and each other Credit Document,
and such other Account Party shall not exercise any right or remedy with respect
to such reimbursement until payment and satisfaction in full of all of such
obligations of the Specified Account Party.
(l) Continuation of Existing Non-Syndicated Letters of Credit. Subject to
the terms and conditions hereof, each Non-Syndicated Letter of Credit under (and
as defined in) the Existing 364-Day Credit Agreement which is outstanding on the
Effective Date and is designated to be continued hereunder in the notice
provided by XL Capital to the Administrative Agent pursuant to Section 5.01(f)
shall, effective as of the Effective Date, be amended by the respective Issuing
Lender (through the Administrative Agent) to reflect the Lenders under the
Letter of Credit Tranche as of the Effective Date and, with respect to each such
Non-Syndicated Letter of Credit issued by a Lender that is party to the Existing
364-Day Credit Agreement, a face amount based upon the respective Lender's
Applicable Percentage of the Letter of Credit Commitments
Credit Agreement
-28-
as in effect on the Effective Date, and each such Non-Syndicated Letter of
Credit, as so amended, shall be deemed continued hereunder as a Non-Syndicated
Letter of Credit issued by such Lender for all purposes of this Agreement as of
the Effective Date.
(m) Adjustments to Non-Syndicated Letters of Credit. Upon each increase of
the Commitments pursuant to Section 2.11(c), (i) each Non-Syndicated Letter of
Credit then outstanding hereunder shall, as of the effective date of such
increase, be amended by the respective Issuing Lenders thereof (through the
Administrative Agent) to reflect the Lenders having Commitments after giving
effect to such increase and having, with respect to each such Non-Syndicated
Letter of Credit issued by an existing Lender, a face amount based upon such
Lender's Applicable Percentage of such Commitments and/or (ii) as applicable,
new Non-Syndicated Letters of Credit shall be issued hereunder as of such
effective date by each Supplemental Lender which has undertaken a new or
incremental Commitment in connection with such increase in a face amount based
upon such Supplemental Lender's Applicable Percentage of such Commitments. Upon
the assignment by a Lender of all or a portion of its Commitment and its
interests in the Non-Syndicated Letters of Credit pursuant to an Assignment and
Assumption, (i) XL Capital shall, at the reasonable request of the
Administrative Agent, execute such documents as may be necessary in connection
with amendments to each Non-Syndicated Letter of Credit issued by such assigning
Lender then outstanding hereunder (or to replace each such Non-Syndicated Letter
of Credit with a new Non-Syndicated Letter of Credit of such assigning Lender)
to reflect such assigning Lender's Commitment and with a face amount based upon
such Lender's Applicable Percentage after giving effect to such assignment
and/or (ii) as applicable, a new Non-Syndicated Letter of Credit shall be issued
hereunder as of the effective date of such assignment by the assignee Lender
which has undertaken a new or incremental Commitment in connection with such
assignment in a face amount based upon such assignee Lender's Applicable
Percentage of the Commitments after giving effect to such assignment.
SECTION 2.05. Participated Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, any
Account Party may request the Issuing Lender to issue, at any time and from time
to time during the Availability Period, Participated Letters of Credit for its
own account. Each Participated Letter of Credit shall be in such form as is
consistent with the requirements of the applicable regulatory authorities in
Illinois, California, Wisconsin or New York as reasonably determined by the
Administrative Agent or as otherwise agreed to by the Administrative Agent and
XL Capital. Participated Letters of Credit issued hereunder shall constitute
utilization of the Commitments.
(b) Notice of Issuance, Amendment, Renewal or Extension. To request the
issuance of a Participated Letter of Credit (or the amendment, renewal or
extension of an outstanding Participated Letter of Credit), an Account Party
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Lender) to the
Issuing Lender and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Participated Letter of Credit, or identifying the Participated
Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Participated Letter of Credit is to expire (which shall
comply with paragraph (d) of this Section), the amount of such
Credit Agreement
-29-
Participated Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Participated Letter of Credit. If requested by the Issuing Lender,
such Account Party also shall submit a letter of credit application on the
Issuing Lender's standard form in connection with any request for a Participated
Letter of Credit. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by such Account Party to, or
entered into by any Account Party with, the Issuing Lender relating to any
Participated Letter of Credit, the terms and conditions of this Agreement shall
control.
(c) Limitations on Amounts. A Participated Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Participated Letter of Credit each Account Party
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the sum of (A) the LC Exposure of
the Issuing Lender with respect to Participated Letters of Credit (determined
for these purposes without giving effect to the participations therein of the
Lenders pursuant to paragraph (e) of this Section) and (B) with respect to the
Other Credit Agreement, the LC Exposure of the Issuing Lender with respect to
Participated Letters of Credit (determined for these purposes without giving
effect to the participations therein of the Lenders pursuant to Section 2.05(e)
of the Other Credit Agreement) (the terms used in this clause (B) having the
definitions assigned to them in the Other Credit Agreement) shall not exceed
$100,000,000 and (ii) the Aggregate Credit Exposure of the Lenders under the
Letter of Credit Tranche shall not exceed the aggregate amount of the Letter of
Credit Commitments.
(d) Expiry Date. Each Participated Letter of Credit shall expire at or
prior to the close of business on the date one year after the date of the
issuance of such Participated Letter of Credit (or, in the case of any renewal
or extension thereof, one year after such renewal or extension).
(e) Participations. By the issuance of a Participated Letter of Credit (or
an amendment to a Participated Letter of Credit increasing the amount thereof)
by the Issuing Lender, and without any further action on the part of the Issuing
Lender or the Lenders, the Issuing Lender hereby grants to each Lender, and each
Lender hereby acquires from the Issuing Lender, a participation in such
Participated Letter of Credit equal to such Lender's Applicable Percentage of
the aggregate amount available to be drawn under such Participated Letter of
Credit. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Participated Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Participated Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments. In consideration and in furtherance
of the foregoing, each Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for account of the Issuing Lender, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing
Lender in respect of any Participated Letter of Credit promptly upon the request
of the Issuing Lender at any time from the time such LC Disbursement is made
until such LC Disbursement is reimbursed by the Account Parties or at any time
after any reimbursement payment is required to be refunded to the Account
Parties for any reason. Such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Promptly following receipt by
the Administrative Agent of any payment
Credit Agreement
-30-
from the Account Parties pursuant to the next following paragraph, the
Administrative Agent shall distribute such payment to the Issuing Lender or, to
the extent that the Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as
their interests may appear. Any payment made by a Lender pursuant to this
paragraph to reimburse the Issuing Lender for any LC Disbursement shall not
relieve the Account Parties of their obligation to reimburse such LC
Disbursement.
(f) Reimbursement. If any Lender shall make any LC Disbursement in respect
of any Participated Letter of Credit, regardless of the identity of the Account
Party of such Participated Letter of Credit, the Account Parties jointly and
severally agree that they shall reimburse such Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than noon, New York City time, on (i) the Business Day
that the Account Parties receive notice of such LC Disbursement, if such notice
is received prior to 10:00 a.m., New York City time, or (ii) the Business Day
immediately following the day that the Account Parties receive such notice, if
such notice is not received prior to such time.
If the Account Parties fail to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Account Parties in respect thereof and such
Lender's Applicable Percentage thereof.
(g) Obligations Absolute. The Account Parties' joint and several
obligations to reimburse LC Disbursements in respect of any Participated Letter
of Credit as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Participated
Letter of Credit, or any term or provision therein, (ii) any draft or other
document presented under a Participated Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Lender under a
Participated Letter of Credit against presentation of a draft or other document
that does not comply strictly with the terms of such Participated Letter of
Credit (provided that the Account Parties shall not be obligated to reimburse
such LC Disbursements unless payment is made against presentation of a draft or
other document that at least substantially complies with the terms of such
Participated Letter of Credit), (iv) at any time or from time to time, without
notice to any Account Party, the time for any performance of or compliance with
any of such reimbursement obligations of any other Account Party shall be
waived, extended or renewed, (v) any of such reimbursement obligations of any
other Account Party shall be amended or otherwise modified in any respect, or
any guarantee of any of such reimbursement obligations shall be released,
substituted or exchanged in whole or in part or otherwise dealt with, (vi) the
occurrence of any Default, (vii) the existence of any proceedings of the type
described in clause (g) or (h) of Article VIII with respect to any other Account
Party or any guarantor of any of such reimbursement obligations, (viii) any lack
of validity or enforceability of any of such reimbursement obligations against
any other Account Party or any guarantor of any of such reimbursement
obligations, or (ix) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of the obligations of any
Account Party hereunder.
Credit Agreement
-31-
Neither the Administrative Agent, the Lenders nor the Issuing Lender, nor
any of their respective Related Parties, shall have any liability or
responsibility by reason of or in connection with the payment or failure to make
any payment under a Participated Letter of Credit (irrespective of any of the
circumstances referred to in the preceding sentence) as a result of determining
whether drafts or other documents presented under a Participated Letter of
Credit comply with the terms thereof, or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Participated 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 the control of the Issuing
Lender; provided that the foregoing shall not be construed to excuse the Issuing
Lender from liability to the Account Parties to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Account Parties to the extent permitted by applicable law)
suffered by the Account Parties that are caused by the Issuing Lender's gross
negligence or willful misconduct when determining whether drafts and other
documents presented under a Participated Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on their face
to be in substantial compliance with the terms of a Participated 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 Participated Letter of Credit;
(ii) the Issuing Lender shall have the right, in its sole discretion,
to decline to accept such documents and to make such payment if such
documents are not in strict compliance with the terms of such Participated
Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Issuing Lender when determining whether drafts and other
documents presented under a Participated 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).
(h) Disbursement Procedures. The Issuing Lender shall, within a reasonable
time following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Participated Letter of Credit. The
Issuing Lender shall promptly after such examination notify the Administrative
Agent and XL Capital by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Lender has made or will make a LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Account Parties of their obligation to reimburse the
Issuing Lender and the Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If any LC Disbursement is made with respect to a
Participated Letter of Credit, then, unless the Account Parties shall reimburse
such LC Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the Account
Parties reimburse such LC Disbursement, at the rate per annum equal to (i) 1%
plus the Alternate Base Rate to but excluding the date three Business
Credit Agreement
-32-
Days after such LC Disbursement is made and (ii) from and including the date
three Business Days after such LC Disbursement is made, 3% plus the Alternate
Base Rate. Interest accrued pursuant to this paragraph shall be for account of
the Issuing Lender, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (f) of this Section to reimburse the
Issuing Lender shall be for account of such Lender to the extent of such
payment.
(j) Replacement of the Issuing Lender. The Issuing Lender may be replaced
at any time by written agreement between XL Capital, the Administrative Agent,
the replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender. At
the time any such replacement shall become effective, the Account Parties shall
pay all unpaid fees accrued for account of the replaced Issuing Lender pursuant
to Section 2.14(d). From and after the effective date of any such replacement,
(i) the successor Issuing Lender shall have all the rights and obligations of
the replaced Issuing Lender under this Agreement with respect to Participated
Letters of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Lender" shall be deemed to refer to such successor or to any previous
Issuing Lender, or to such successor and all previous Issuing Lenders, as the
context shall require. After the replacement of an Issuing Lender hereunder, the
replaced Issuing Lender shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Lender under this Agreement with
respect to Participated Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Participated Letters
of Credit.
(k) Right of Contribution. The Account Parties hereby agree, as between
themselves, that if any Account Party shall pay any reimbursement obligation in
respect of any LC Disbursement with respect to a Participated Letter of Credit
issued to support the obligations of another Account Party (the "Specified
Account Party"), the Specified Account Party shall, on demand (but subject to
the next sentence), pay to such first Account Party an amount equal to the
amount of such reimbursement. The payment obligation of a Specified Account
Party to another Account Party under this paragraph (k) shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
the Specified Account Party under this Agreement and each other Credit Document,
and such other Account Party shall not exercise any right or remedy with respect
to such reimbursement until payment and satisfaction in full of all of such
obligations of the Specified Account Party.
(l) Continuation of Existing Participated Letters of Credit. Subject to the
terms and conditions hereof, each Participated Letter of Credit under (and as
defined in) the Existing 364-Day Credit Agreement which is outstanding on the
Effective Date and is designated to be continued hereunder in the notice
provided by XL Capital to the Administrative Agent pursuant to Section 5.01(f)
shall automatically be continued hereunder on the Effective Date by the Issuing
Lender of such Participated Letter of Credit, and as of the Effective Date the
Lenders shall acquire a participation therein as if such Participated Letter of
Credit were issued hereunder, and each such Participated Letter of Credit shall
be deemed a Participated Letter of Credit for all purposes of this Agreement as
of the Effective Date.
(m) Adjustment of Applicable Percentages. Notwithstanding anything herein
to the contrary, upon (i) each increase of the Commitments pursuant to Section
2.11(c), each Lender's participation in each Participated Letter of Credit then
outstanding shall automatically be adjusted to reflect its Applicable Percentage
after giving effect to such increase and (ii) the
Credit Agreement
-33-
assignment by a Lender of all or a portion of its Commitment and its interests
in the Participated Letters of Credit pursuant to an Assignment and Assumption,
the respective assigning Lender's participation in each Participated Letter of
Credit then outstanding shall automatically be adjusted to reflect, and the
respective assignee Lender shall be deemed to acquire a participation in each
such Participated Letter of Credit in an amount equal to, its Applicable
Percentage after giving effect to such assignment.
SECTION 2.06. Alternative Currency Letters of Credit.
(a) Requests for Offers. From time to time during the Availability Period,
an Account Party may request any or all of the Lenders to make offers to issue
an Alternative Currency Letter of Credit for account of such Account Party. Each
Lender may, but shall have no obligation to, make such offers on terms and
conditions that are satisfactory to such Lender, and such Account Party may, but
shall have no obligation to, accept any such offers. An Alternative Currency
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
such issuance, amendment, renewal or extension of each Alternative Currency
Letter of Credit the Account Parties shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension,
the Aggregate Credit Exposure shall not exceed the aggregate amount of the
Commitments. Each such Alternative Currency Letter of Credit shall be issued,
and subsequently, renewed, extended, amended and confirmed, on such terms as XL
Capital, the applicable Account Party and such Lender shall agree, including
expiry, drawing conditions, reimbursement, interest, fees and provision of
cover; provided that the expiry of any Alternative Currency Letter of Credit
shall not be later than the one-year anniversary from the date of issuance
thereof (or, in the case of any renewal or extension thereof, one-year after
such renewal or extension).
(b) Reports to Administrative Agent. The Account Parties shall deliver to
the Administrative Agent and each of the Lenders a report in respect of each
Alternative Currency Letter of Credit (an "Alternative Currency Letter of Credit
Report") on and as of the date (i) on which such Alternative Currency Letter of
Credit is issued, (ii) of the issuance, renewal, extension or amendment of a
Syndicated Letter of Credit or a Non-Syndicated Letter of Credit, if any
Alternative Currency Letter of Credit is then outstanding and (iii) on which the
Commitments are to be reduced pursuant to Section 2.11, specifying for each such
Alternative Currency Letter of Credit (after giving effect to issuance thereof,
as applicable):
(A) the date on which such Alternative Currency Letter of Credit was
or is being issued;
(B) the Alternative Currency of such Alternative Currency Letter of
Credit;
(C) the aggregate undrawn amount of such Alternative Currency Letter
of Credit (in such Alternative Currency);
(D) the aggregate unpaid amount of LC Disbursements under such
Alternative Currency Letter of Credit (in such Alternative Currency);
(E) the Alternative Currency LC Exposure (in Dollars) in respect of
such Alternative Currency Letter of Credit; and
Credit Agreement
-34-
(F) the aggregate amount of Alternative Currency LC Exposures (in
Dollars).
Each Alternative Currency Letter of Credit Report shall be delivered to the
Administrative Agent and each of the Lenders by 10:00 a.m. (New York City time)
on the date on which it is required to be delivered.
SECTION 2.07. Loans and Borrowings.
(a) Loans. Subject to the terms and conditions set forth herein, (I) each
Lender under the Letter of Credit Tranche agrees to make Loans and (II) each
Lender under the Revolving Credit Tranche agrees to make Loans, in each case, to
an Account Party from time to time during the Availability Period in an
aggregate principal amount that will not result in (i) such Lender's outstanding
Loans exceeding such Lender's Applicable Percentage of the Aggregate Maximum
Loan Amount, (ii) such Lender's Credit Exposures (excluding any Alternative
Currency LC Exposure) exceeding such Lender's respective Commitment, (iii) the
aggregate Credit Exposures of all Lenders under the Letter of Credit Tranche
exceeding the aggregate Letter of Credit Commitments of all Lenders, (iv) the
aggregate outstanding principal amount of the Loans under the Letter of Credit
Tranche exceeding the RC Sublimit, (v) the aggregate outstanding principal
amount of the Loans under the Revolving Credit Tranche exceeding the total
Revolving Credit Commitments or (vi) the sum of (A) the aggregate outstanding
principal amount of the Loans and (B) the aggregate outstanding principal amount
of the Loans under (and as defined in) the Other Credit Agreement exceeding the
Aggregate Maximum Loan Amount. Loans may be made, or be outstanding, to more
than one of the Account Parties at any time. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Account Parties may
borrow, prepay and reborrow Loans under the Tranches.
(b) Obligations of Lenders. Except as provided herein, each Loan shall be
made as part of a Borrowing consisting of Loans of the same Type made by the
Lenders ratably in accordance with their respective Applicable Percentage of the
Aggregate Maximum Loan Amount. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders to make Loans hereunder
are several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(c) Type of Loans. Subject to Section 2.15, each Borrowing shall be
constituted entirely of ABR Loans or of Eurodollar Loans as any Account Party
may request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Account Parties to repay such Loan in accordance
with the terms of this Agreement.
(d) Minimum Amounts; Limitation on Number of Borrowings. Each Eurodollar
Borrowing shall be in an aggregate amount of $10,000,000 or a larger multiple of
$1,000,000. Each ABR Borrowing shall be in an aggregate amount equal to
$10,000,000 or a larger multiple of $1,000,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
Aggregate Maximum Loan Amount or that is requested to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.03(a).
Credit Agreement
-35-
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of ten Eurodollar
Borrowings outstanding.
(e) Limitations on Interest Periods. Notwithstanding any other provision of
this Agreement, no Account Party shall be entitled to request (or to elect to
convert to or continue as a Eurodollar Borrowing) any Borrowing if the Interest
Period requested therefor would end after the Commitment Termination Date.
(f) Non-Pro Rata Borrowings and Prepayments. Except as provided in this
paragraph (f), Loans made as part of a Borrowing shall be made by the Lenders
under both Tranches ratably in accordance with their respective Applicable
Percentage of the Aggregate Maximum Loan Amount and each request for a Borrowing
under Section 2.08 shall be a request for a Borrowing under both Tranches;
provided that, notwithstanding anything herein to the contrary:
(i) if (but only if), at the time of any requested Borrowing, Letters
of Credit shall be outstanding under the Letter of Credit Tranche in such
amounts that the Account Parties would not be able to borrow on a ratable
basis the full amount of such requested Borrowing in accordance with the
foregoing provisions, the relevant Account Party requesting such Borrowing
shall be permitted only (A) to borrow hereunder the maximum aggregate
principal amount of Loans from the Lenders under both Tranches, such that,
after giving effect to such Borrowing, the Lenders shall have Loans then
outstanding ratably in accordance with their respective Applicable
Percentage of the Aggregate Maximum Loan Amount and/or (B) simultaneously,
to borrow from the Lenders having Revolving Credit Commitments hereunder on
a non-pro rata basis (such Loans from such Lenders being referred to herein
as "Non-Pro Rata Loans") and to borrow under the Other Credit Agreement,
such that, after giving effect to such borrowings, each Lender with a
Revolving Credit Commitment shall have Loans then outstanding in an
aggregate principal amount not exceeding its Applicable Percentage of the
sum of the aggregate outstanding principal amount of the Loans (including
Non-Pro Rata Loans) and the Loans under (and as defined in) the Other
Credit Agreement (it being understood, for the avoidance of doubt, that
Non-Pro Rata Loans may not be made to the extent that Loans hereunder
and/or Loans under (and as defined in) the Other Credit Agreement are not
available to be made);
(ii) (subject to clause (i) above) if, at the time of any Borrowing,
Non-Pro Rata Loans are outstanding, such Borrowing shall be made from the
Lenders under the Letter of Credit Tranche and/or the Lenders under the
Revolving Credit Tranche hereunder in amounts (as reasonably determined by
the Administrative Agent) such that, after giving effect to such Borrowing,
the Lenders shall have Loans then outstanding ratably in accordance with
their respective Applicable Percentage of the Aggregate Maximum Loan Amount
(or as nearly thereto as possible);
(iii) if, at the time of any prepayment of Loans, Non-Pro Rata Loans
are outstanding, such prepayment shall be applied first to the prepayment
of Non-Pro Rata Loans to the extent necessary to ensure that, after giving
effect to such prepayment, the Loans are held by the Lenders ratably in
accordance with their respective Applicable
Credit Agreement
-36-
Percentage of the Aggregate Maximum Loan Amount (or as nearly thereto as
possible); and
(iv) if, at the time of any prepayment of loans under the Other Credit
Agreement, Non-Pro Rata Loans are outstanding, the relevant Account Parties
shall simultaneously prepay Non-Pro Rata Loans pursuant to Section 2.13 to
the extent necessary to ensure that, after giving effect to such
prepayment, the Loans are held by the Lenders ratably in accordance with
their respective Applicable Percentage of the Aggregate Maximum Loan Amount
(or as nearly thereto as possible).
SECTION 2.08. Requests for Borrowings.
(a) Notice by the Account Parties. To request a Borrowing, XL Capital shall
notify the Administrative Agent of such request by telephone (i) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (ii) in the case of
an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of
the proposed Borrowing; provided that any such notice of an ABR Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.03(a) may be given not later than 11:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by XL Capital.
(b) Content of Borrowing Requests. Each telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.07:
(i) the relevant Account Party;
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing (and, if applicable, the relevant Tranche under which such
Borrowing is to be made);
(v) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the
term "Interest Period" and permitted under Section 2.07(e); and
(vi) the location and number of such Account Party's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.09.
(c) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each relevant Lender of the details thereof
and of the amount of such Lender's Loan to be made as part of the requested
Borrowing.
Credit Agreement
-37-
(d) Failure to Elect. If no election as to the Type of a Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Eurodollar Borrowing,
then the requested Borrowing shall be made instead as an ABR Borrowing.
SECTION 2.09. Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time (or 1:00 p.m., New York City time with
respect to ABR Loans requested by XL Capital no later than 11:00 a.m. on the
same day), to the account of the Administrative Agent most recently designated
by it for such purpose by notice to the Lenders. The Administrative Agent will
make such Loans available to the relevant Account Party by promptly crediting
the amounts so received, in like funds, to an account of such Account Party
maintained with the Administrative Agent in New York City and designated by such
Account Party in the applicable Borrowing Request.
(b) Presumption by the Administrative Agent. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing (or in the case of any ABR Borrowing, on or prior to the proposed date
of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the relevant Account Party a corresponding amount.
In such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
the relevant Account Party severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to such Account
Party to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case
of such Account Party, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
SECTION 2.10. Interest Elections.
(a) Elections by the Account Parties. The Loans constituting each Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Borrowing, shall have the Interest Period
specified in such Borrowing Request. Thereafter, the relevant Account Party may
elect to convert such Borrowing to a Borrowing of a different Type or to
continue such Borrowing as a Borrowing of the same Type and, in the case of a
Eurodollar Borrowing, may elect the Interest Period therefor, all as provided in
this Section. The relevant Account Party may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
constituting such Borrowing, and the Loans constituting each such portion shall
be considered a separate Borrowing.
(b) Notice of Elections. To make an election pursuant to this Section, XL
Capital shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing
Credit Agreement
-38-
Request would be required under Section 2.08 if XL Capital were requesting a
Borrowing of the Type resulting from such election to be made on the effective
date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by XL Capital.
(c) Content of Interest Election Requests. Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.07:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) of this paragraph shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which shall
be a period contemplated by the definition of the term "Interest Period"
and permitted under Section 2.07(e).
(d) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of an Interest Election Request, the Administrative Agent shall advise
each Lender of the details thereof and of such Lender's portion of each
resulting Borrowing.
(e) Failure to Elect; Events of Default. If XL Capital fails to deliver a
timely and complete Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period therefor, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies XL
Capital, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period therefor.
SECTION 2.11. Termination, Reduction and Increase of the Commitments.
(a) Scheduled Termination. Unless previously terminated, the Commitments
shall terminate at the close of business on the Commitment Termination Date.
(b) Voluntary Termination or Reduction. The Account Parties may at any time
terminate, or from time to time reduce, the Commitments and/or may reduce at any
time the Aggregate Maximum Loan Amount; provided that (i) each reduction of the
Commitments or the Aggregate Maximum Loan Amount shall be in an amount that is
$25,000,000 or a larger multiple of $5,000,000, (ii) the Account Parties shall
not terminate or reduce the Commitments if
Credit Agreement
-39-
the Aggregate Credit Exposure would exceed the Commitments, (iii) the Account
Parties shall not reduce the Aggregate Maximum Loan Amount if the outstanding
Loans would exceed the Aggregate Maximum Loan Amount and (iv) the Account
Parties shall not reduce the Aggregate Maximum Loan Amount unless the RC
Sublimit under (and as defined in) the Other Credit Agreement shall be reduced
in a corresponding amount. XL Capital shall notify the Administrative Agent of
any election to terminate or reduce the Commitments or the Aggregate Maximum
Loan Amount under this paragraph (b) at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof, provided that no reduction of the Aggregate Maximum
Loan Amount shall occur in connection with a reduction of the Commitments unless
specified in such notice, except that upon the earlier of (x) the termination of
the Commitments and (y) the Commitment Termination Date, the Aggregate Maximum
Loan Amount shall automatically be reduced to zero. Promptly following receipt
of any such notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by XL Capital pursuant to this paragraph
(b) shall be irrevocable; provided that a notice of termination of the
Commitments delivered by XL Capital may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by XL Capital (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Subject to the
proviso in the immediately preceding sentence, any termination or reduction of
the Commitments or the Aggregate Maximum Loan Amount shall be permanent. Each
reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
(c) Increases to Commitments. XL Capital shall have the right, at any time
by notice to the Administrative Agent, to increase the Commitments hereunder up
to an aggregate amount not exceeding $2,500,000,000 (i) by including as a Lender
hereunder with a new Commitment, any Person which is a NAIC Approved Bank that
is not an existing Lender or (ii) by having an existing Lender increase its
Commitment then in effect (with the consent of such Lender in its sole
discretion) (each new or increasing Lender, a "Supplemental Lender") in each
case with the approval (not to be unreasonably withheld) of the Administrative
Agent, which notice shall specify the name of each Supplemental Lender, the
aggregate amount of such increase and the portion thereof being assumed by each
such Supplemental Lender, and the date on which such increase is to become
effective (each a "Supplemental Commitment Date") (which shall be a Business Day
at least three Business Days after the delivery of such notice and 30 days prior
to the Commitment Termination Date); provided that (x) the Commitment of any
Supplemental Lender that is not an existing Lender shall be in an amount of at
least $25,000,000, (y) the aggregate amount of the increase of the Commitments
effected on any day shall be in an aggregate amount of at least $25,000,000 and
larger multiples of $1,000,000 and (z) any increase of Commitments shall be only
in respect of Letter of Credit Commitments. Each such Supplemental Lender shall
enter into an agreement in form and substance satisfactory to XL Capital and the
Administrative Agent pursuant to which such Supplemental Lender shall, as of the
applicable Supplemental Commitment Date, undertake a Commitment (or, if any such
Supplemental Lender is an existing Lender, pursuant to which such Supplemental
Lender's Commitment shall be increased in the agreed amount on such date) and
such Supplemental Lender shall thereupon become (or, if it is already a Lender,
continue to be) a "Lender" for all purposes hereof; provided that, in the case
of any Supplemental Lender that is not a Lender immediately prior to such
Supplemental Commitment Date and is not listed on the NAIC Approved Bank List,
such Supplemental Lender and its Confirming Lender shall have entered into an
agreement of the type contemplated in the definition of "Confirming Lender" in
Section 1.01.
Credit Agreement
-40-
Notwithstanding the foregoing, no increase in the Commitments hereunder
pursuant to this Section shall be effective unless on the applicable
Supplemental Commitment Date:
(i) no Default shall have occurred and be continuing;
(ii) the representations and warranties of the Obligors set forth in
this Agreement (other than in Section 4.04(b)) shall be true and correct on
and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date); and
(iii) no Loans are outstanding and no notices in respect of the
issuance, amendment, renewal or extension of any Letter of Credit or of any
Borrowing are pending, unless the Administrative Agent otherwise agrees.
Each such notice shall be deemed to constitute a representation and warranty by
XL Capital as to the matters specified in clauses (i) and (ii) of the
immediately preceding sentence as of such date.
SECTION 2.12. Repayment of Loans; Evidence of Debt.
(a) Repayment. Each Account Party hereby unconditionally promises to pay to
the Administrative Agent for account of the relevant Lenders the outstanding
principal amount of the Loans made to such Account Party on the Commitment
Termination Date.
(b) Manner of Payment. Prior to any repayment or prepayment of any
Borrowings hereunder, XL Capital shall select the Borrowing or Borrowings to be
paid and shall notify the Administrative Agent by telephone (confirmed by
telecopy) of such selection not later than 11:00 a.m., New York City time, three
Business Days before the scheduled date of such repayment; provided that each
repayment of Borrowings shall be applied to repay any outstanding ABR Borrowings
before any other Borrowings. If XL Capital fails to make a timely selection of
the Borrowing or Borrowings to be repaid or prepaid, such payment shall be
applied, first, to pay any outstanding ABR Borrowings and, second, to other
Borrowings in the order of the remaining duration of their respective Interest
Periods (the Borrowing with the shortest remaining Interest Period to be repaid
first). Each payment of a Borrowing shall be applied ratably to the Loans
included in such Borrowing.
(c) Maintenance of Records by Lenders. Each Lender shall maintain in
accordance with its usual practice records evidencing the indebtedness of each
Account Party to such Lender resulting from each Loan made by such Lender to
such Account Party, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder.
(d) Maintenance of Records by the Administrative Agent. The Administrative
Agent shall maintain records in which it shall record (i) the amount of each
Loan made to each Account Party hereunder, the Type thereof and each Interest
Period therefor, (ii) the amount of any principal or interest due and payable or
to become due and payable from such Account Party
Credit Agreement
-41-
to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for account of the Lenders and each Lender's
share thereof.
(e) Effect of Entries. The entries made in the records maintained pursuant
to paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such records or
any error therein shall not in any manner affect the obligation of the Account
Parties to repay the Loans in accordance with the terms of this Agreement.
(f) Promissory Notes. Any Lender may request that Loans made by it to any
Account Party be evidenced by a promissory note of such Account Party. In such
event, each Account Party shall prepare, execute and deliver to such Lender a
promissory note payable to such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Administrative
Agent. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section
10.04) be represented by one or more promissory notes in such form payable to
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.13. Prepayment of Loans.
(a) Right to Prepay Borrowings. The Account Parties shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to the requirements of this Section.
(b) Notices, Etc. XL Capital shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.11, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.11. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the relevant Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of a Borrowing of the same Type as provided
in Section 2.07. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.15 and shall be made in the
manner specified in Section 2.12(b).
SECTION 2.14. Fees.
(a) Facility Fee. XL Capital agrees to pay to the Administrative Agent for
account of each Lender a facility fee which shall accrue at a rate per annum
equal to the Applicable Rate (i) prior to the termination of such Lender's
Commitment, on the daily amount of such Commitment (whether used or unused)
during the period from and including the
Credit Agreement
-42-
Effective Date to but excluding the earlier of the date on which such Commitment
terminates and the Commitment Termination Date and (ii) if such Lender continues
to have any Credit Exposure after its Commitment terminates, on the daily amount
of such Lender's Credit Exposure from and including the date on which such
Lender's Commitment terminates to but excluding the date on which such Lender
ceases to have any Credit Exposure. Accrued facility fees shall be payable on
each Quarterly Date and on the earlier of the date the Commitments terminate and
the Commitment Termination Date; provided that any facility fees accruing after
such earlier date shall be payable on demand.
(b) Syndicated Letter of Credit Fees. XL Capital agrees to pay to the
Administrative Agent for account of each Lender under the Letter of Credit
Tranche a letter of credit fee which shall accrue at a rate per annum equal to
the Applicable Rate on the average daily aggregate undrawn amount of all
outstanding Syndicated Letters of Credit during the period from and including
the Effective Date to but excluding the later of the date on which such Lender's
Letter of Credit Commitment terminates and the date on which such Lender ceases
to have any LC Exposure. Syndicated Letter of Credit fees accrued through and
including each Quarterly Date shall be payable on the third Business Day
following such Quarterly Date, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on
which the Letter of Credit Commitments terminate and any such fees accruing
after the date on which the Letter of Credit Commitments terminate shall be
payable on demand.
(c) Non-Syndicated Letter of Credit Fees. XL Capital agrees to pay to the
Administrative Agent for account of each Lender under the Letter of Credit
Tranche a letter of credit fee which shall accrue at a rate per annum equal to
the Applicable Rate on the average daily aggregate undrawn amount of all
outstanding Non-Syndicated Letters of Credit during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Letter of Credit Commitment terminates and the date on which such
Lender ceases to have any LC Exposure. Non-Syndicated Letter of Credit fees
accrued through and including each Quarterly Date shall be payable on the third
Business Day following such Quarterly Date, commencing on the first such date to
occur after the Effective Date; provided that all such fees shall be payable on
the date on which the Letter of Credit Commitments terminate and any such fees
accruing after the date on which the Letter of Credit Commitments terminate
shall be payable on demand.
(d) Participated Letter of Credit Fees. XL Capital agrees to pay (i) to the
Administrative Agent for account of each Lender under the Letter of Credit
Tranche a participation fee with respect to its participations in Participated
Letters of Credit, which shall accrue at a rate per annum equal to the
Applicable Rate on the average daily amount of such Lender's LC Exposure in
respect of Participated Letters of Credit (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Letter of Credit Commitment terminates and the date on which such
Lender ceases to have any such LC Exposure, and (ii) to the Issuing Lender a
fronting fee which shall accrue at a rate per annum as agreed in writing between
XL Capital and the Issuing Lender on the average daily amount of the LC Exposure
in respect of Participated Letters of Credit (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Letter of Credit
Credit Agreement
-43-
Commitments and the date on which there ceases to be any such LC Exposure.
Participation fees and fronting fees accrued through and including each
Quarterly Date shall be payable on the third Business Day following such
Quarterly Date, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the
Letter of Credit Commitments terminate and any such fees accruing after the date
on which the Letter of Credit Commitments terminate shall be payable on demand.
(e) LC Administrative Fees. XL Capital agrees to pay to the Administrative
Agent, for its own account, within 10 Business Days after demand the
Administrative Agent's standard administrative fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder.
(f) Administrative Agent Fees. XL Capital agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between XL Capital and the Administrative
Agent.
(g) Payment and Computation of Fees. All fees payable hereunder shall be
paid on the dates due, in immediately available funds, to the Administrative
Agent for distribution, in the case of the fees referred to in paragraphs (a)
through (d) of this Section, to the Lenders entitled thereto. Fees paid shall
not be refundable under any circumstances. All fees payable under paragraphs (a)
through (d) of this Section shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
SECTION 2.15. Interest.
(a) ABR Loans. The Loans constituting each ABR Borrowing shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Additional Margin, if any.
(b) Eurodollar Loans. The Loans constituting each Eurodollar Borrowing
shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period for such Borrowing plus the Applicable Margin plus the
Applicable Additional Margin, if any.
(c) Default Interest. Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable (other that in respect
of any LC Disbursement under Sections 2.03(d), 2.04(j), and 2.05(i)) by the
Account Parties hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided above or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Payment of Interest. Accrued interest on each Loan shall be payable by
the applicable Account Party in arrears on each Interest Payment Date for such
Loan and upon the date the Commitments terminate; provided that (x) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(y) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Loan prior to the Commitment Termination Date), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such
Credit Agreement
-44-
repayment or prepayment and (z) in the event of any conversion of any Eurodollar
Borrowing prior to the end of the Interest Period therefor, accrued interest on
such Borrowing shall be payable on the effective date of such conversion.
(e) Computation. All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.16. Alternate Rate of Interest. If prior to the commencement of
the Interest Period for any Eurodollar Borrowing:
(a) the Administrative Agent determines in good faith (which
determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate for
such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
(acting in good faith) that the Adjusted LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making
or maintaining their respective Loans included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to XL Capital and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies XL Capital and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or the
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing (unless prepaid) shall be continued as, or converted to, an
ABR Borrowing and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION 2.17. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for account of, or
credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement, any Letter of Credit (or any
participation therein) or any Eurodollar Loan made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining, or participating in, any Letter of Credit (or
of maintaining any participation therein) or Eurodollar Loan (or of maintaining
its obligation to make any such Loan) or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal,
Credit Agreement
-45-
interest or otherwise), then the Account Parties jointly and severally agree
that they will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Letters of Credit
issued or participated in, or the Loans made, by such Lender to a level below
that which such Lender or such Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy),
then from time to time the Account Parties will pay to such Lender such
additional amount or amounts as will compensate such Lender or such Lender's
holding company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender setting forth such
Lender's good faith determination of the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to XL Capital and
shall be conclusive absent manifest error. The Account Parties shall pay such
Lender the amount shown as due on any such certificate within 10 days after
receipt thereof by XL Capital.
(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Account Parties
shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 90 days prior to the date that
such Lender notifies XL Capital of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 90 day period
referred to above shall be extended to include the period of retroactive effect
thereof.
(e) Application to Taxes. Notwithstanding anything in this Section to the
contrary, this Section shall not apply to Taxes, which shall be governed solely
by Section 2.19.
SECTION 2.18. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of an Interest
Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice is permitted to be revocable under Section 2.13(b) and is
revoked in accordance herewith), or (d) the assignment as a result of a request
by XL Capital pursuant to Section 2.21(b) of any Eurodollar Loan other than on
the last day of an Interest Period therefor, then, in any such event, the
Account Parties shall compensate each Lender for the loss attributable to such
event. The loss to any Lender attributable to any such event shall be deemed to
be an amount determined by such Lender to be equal to the excess, if any, of (i)
the amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
Credit Agreement
-46-
continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for such Interest Period, over (ii)
the amount of interest that such Lender would earn on such principal amount for
such period if such Lender were to invest such principal amount for such period
at the interest rate that would be bid by such Lender (or an affiliate of such
Lender) for Dollar deposits from other banks in the eurodollar market at the
commencement of such period. A certificate of any Lender setting forth such
Lender's good faith determination of any amount or amounts that such Lender is
entitled to receive pursuant to this Section shall be delivered to XL Capital
and shall be conclusive absent manifest error. The Account Parties shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof by XL Capital.
SECTION 2.19. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Account Parties hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes; provided that if any Account Party
shall be required to deduct any Indemnified Taxes from such payments, then (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Account Party shall make such deductions and
(iii) such Account Party shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Account Parties. In addition, each
Account Party shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.
(c) Indemnification by the Account Parties. The Account Parties shall
indemnify the Administrative Agent and each Lender, within 10 days after written
demand to XL Capital therefor, for the full amount of any Indemnified Taxes and
Other Taxes (including Indemnified Taxes imposed or asserted on or attributable
to amounts payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes, as the case may be, were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate setting forth the
Administrative Agent's or such Lender's, as the case may be, good faith
determination of the amount of such payment or liability delivered to XL Capital
by a Lender, or by the Administrative Agent on its own behalf or on behalf of a
Lender, shall be conclusive as between such Lender or the Administrative Agent,
as the case may be, and the Account Parties absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Account Party to a Governmental
Authority, XL Capital on behalf of such Account Party shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
Credit Agreement
-47-
(e) Exemptions. Each Lender and the Administrative Agent shall, at the
written request of XL Capital, provide to any Account Party such form,
certification or similar documentation, if any (each duly completed, accurate
and signed) as is currently required by any Account Party Jurisdiction or any
other jurisdiction, or comply with such other requirements, if any, as is
currently applicable in such Account Party Jurisdiction or any other
jurisdiction, in order to obtain an exemption from, or reduced rate of,
deduction, payment or withholding of Indemnified Taxes or Other Taxes to which
such Lender or the Administrative Agent is entitled pursuant to an applicable
tax treaty or the law of such Account Party Jurisdiction or any other
jurisdiction; provided that XL Capital shall have furnished to such Lender or
the Administrative Agent in a reasonably timely manner copies of such
documentation and notice of such requirements together with applicable
instructions. Upon the reasonable request of XL Capital in writing, each Lender
and the Administrative Agent will provide to XL Capital such form, certification
or similar documentation (each duly completed, accurate and signed) as may in
the future be required by any Account Party Jurisdiction or any other
jurisdiction, or comply with such other requirements, if any, as may be
applicable in such Account Party Jurisdiction or any other jurisdiction in order
to obtain an exemption from, or reduced rate of, deduction, payment or
withholding of Indemnified Taxes or Other Taxes to which such Lender or the
Administrative Agent is entitled pursuant to an applicable tax treaty or the law
of the relevant jurisdiction. In addition, each Lender agrees from time to time
when a lapse in time or change in circumstances renders the previous
documentation obsolete or inaccurate in any material respect, it will deliver to
the Account Parties such properly completed and executed documentation as will
permit such payments to continue to be made without withholding or at a reduced
rate, or notify the Account Parties that it is unable to do so.
(f) If the Administrative Agent or a Lender determines, in its reasonable
discretion, that it has received a refund from the relevant Governmental
Authority (in cash or as an offset against another tax liability owing to such
Governmental Authority) of any Taxes or Other Taxes as to which it has been
indemnified by an Account Party or with respect to which an Account Party has
paid additional amounts pursuant to this Section, it shall pay over such refund
to such Account Party (but only to the extent of indemnity payments made, or
additional amounts paid, by such Account Party under this Section with respect
to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that such Account Party, upon the request
of the Administrative Agent or such Lender, agrees to repay the amount paid over
to such Account Party (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to the Administrative Agent or such Lender
in the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes not expressly required to be
made available hereunder which it reasonably deems confidential) to any Account
Party or any other Person.
SECTION 2.20. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Payments by the Account Parties. The Account Parties shall make each
payment required to be made by them hereunder (whether of principal, interest,
fees or reimbursement of LC Disbursements, under Section 2.17, 2.18 or 2.19, or
otherwise) or under any other Credit Document (except to the extent otherwise
provided therein) prior to 12:00 noon,
Credit Agreement
-48-
New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim; provided that any payments in respect of
Alternative Currency Letters of Credit shall be made in the manner (including
the time and place of payment) as shall have been separately agreed between the
relevant Account Party and Lender pursuant to Section 2.06. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
except payments pursuant to Sections 2.17, 2.18, 2.19 and 10.03, which shall be
made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for account of any other Person to
the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time insufficient funds
are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, to pay interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, to pay
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i)
each reimbursement of LC Disbursements (other than in respect of Alternative
Currency Letters of Credit) shall be made to the relevant Lenders, each
Borrowing shall be made from the Lenders, each payment of fees under Section
2.14 shall be made for account of the relevant Lenders, and each termination or
reduction of the amount of the Commitments under Section 2.11 shall be applied
to the respective Commitments (or, in the case of any Borrowing, the respective
commitment to make Loans herunder) of the Lenders, in each case pro rata
according to the amounts of their respective Commitments (or, in the case of any
Borrowing, the respective commitment to make Loans hereunder or, in the case of
any such reimbursement or payment after the termination of the Commitments, pro
rata according to the Aggregate Credit Exposure); (ii) each Borrowing shall be
allocated pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of the making of Loans) or their respective
Loans that are to be included in such Borrowing (in the case of conversions and
continuations of Loans); (iii) each payment or prepayment of principal of Loans
by any Account Party shall be made for account of the Lenders pro rata according
to the respective unpaid principal amounts of the Loans of such Account Party;
and (iv) each payment of interest on Loans by an Account Party shall be made for
account of the Lenders pro rata according to the amounts of interest on such
Loans then due and payable thereunder.
(d) Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or LC Disbursements (other than
with respect to Alternative Currency Letters of Credit) resulting in such Lender
receiving payment of a greater proportion of the aggregate
Credit Agreement
-49-
amount of its Loans and/or LC Disbursements (other than with respect to
Alternative Currency Letters of Credit) and accrued interest thereon then due
than the proportion received by any other relevant Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and/or LC Disbursements (other than with respect to
Alternative Currency Letters of Credit) of such other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and/or LC Disbursements (other than
with respect to Alternative Currency Letters of Credit); provided that (i) 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
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by any Account Party 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 any of its Loans or LC
Disbursements to any assignee or participant, other than to any Account Party or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Account Party 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 such Account Party rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of such
Account Party in the amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent shall have
received notice from an Account Party prior to the date on which any payment is
due to the Administrative Agent for account of the relevant Lenders hereunder
that such Account Party will not make such payment, the Administrative Agent may
assume that such Account Party has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the relevant
Lenders the amount due. In such event, if the relevant Account Party has not in
fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender 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
Administrative Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.20(e),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.21. Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.17, or if any Account Party is required to pay any
additional amount or indemnification payment to any Lender or any Governmental
Authority for account of any Lender pursuant to Section 2.19, then such Lender
shall use reasonable efforts to designate a different lending office for funding
or booking its Loans and/or Letters of Credit hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or Affiliates, if,
in the reasonable judgment of such Lender, such designation or assignment (i)
would eliminate or
Credit Agreement
-50-
reduce amounts payable pursuant to Section 2.17 or 2.19, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. Each Account
Party hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.17, 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 Section 2.19, or if any Lender defaults in its obligation to fund Loans or to
make LC Disbursements hereunder, or if any Lender under the Letter of Credit
Tranche ceases to be a NAIC Approved Bank, then XL Capital may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 10.04), all its interests,
rights and obligations under this Agreement to an assignee selected by XL
Capital that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) XL Capital shall
have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and/or 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 (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.17 or payments required
to be made pursuant to Section 2.19, 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.
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee. Each Guarantor hereby jointly and severally
guarantees to each Lender and the Administrative Agent and their respective
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on the
Loans and LC Disbursements (and interest thereon) made by the Lenders to each of
the Account Parties (other than such Guarantor in its capacity as an Account
Party hereunder) and all other amounts from time to time owing to the Lenders or
the Administrative Agent by such Account Parties under this Agreement, in each
case strictly in accordance with the terms thereof (such obligations being
herein collectively called the "Guaranteed Obligations"). Each Guarantor hereby
further jointly and severally agrees that if any Account Party (other than such
Guarantor in its capacity as an Account Party hereunder) shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, such Guarantor will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at
Credit Agreement
-51-
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
SECTION 3.02. Obligations Unconditional. The obligations of the Guarantors
under Section 3.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of the Account Parties under this Agreement or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Article that the obligations of the Guarantors
hereunder shall be absolute and unconditional, joint and several, under any and
all circumstances. Without limiting the generality of the foregoing, it is
agreed that the occurrence of any one or more of the following shall not alter
or impair the liability of the Guarantors hereunder, which shall remain absolute
and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall be
done or omitted; or
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or any other agreement or instrument referred to herein shall be waived or
any other guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise
dealt with.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against any
Account Party under this Agreement or any other agreement or instrument referred
to herein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations.
SECTION 3.03. Reinstatement. The obligations of the Guarantors under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Account Party in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantors jointly and
severally agree that they will indemnify the Administrative Agent and each
Lender on demand for all reasonable costs and expenses (including reasonable
fees of counsel) incurred by the Administrative Agent or such Lender in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
Credit Agreement
-52-
SECTION 3.04. Subrogation. The Guarantors hereby jointly and severally
agree that until the payment and satisfaction in full of all Guaranteed
Obligations and the expiration and termination of the Commitments they shall not
exercise any right or remedy arising by reason of any performance by them of
their guarantee in Section 3.01, whether by subrogation or otherwise, against
any Account Party or any other guarantor of any of the Guaranteed Obligations or
any security for any of the Guaranteed Obligations.
SECTION 3.05. Remedies. The Guarantors jointly and severally agree that, as
between the Guarantors and the Lenders, the obligations of the Account Parties
under this Agreement may be declared to be forthwith due and payable as provided
in Article VIII (and shall be deemed to have become automatically due and
payable in the circumstances provided in Article VIII) for purposes of Section
3.01 notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against any Account Party and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by any Account Party) shall
forthwith become due and payable by the Guarantors for purposes of Section 3.01.
SECTION 3.06. Continuing Guarantee. The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
SECTION 3.07. Rights of Contribution. The Guarantors (other than XL
Capital) hereby agree, as between themselves, that if any such Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Guarantor of any Guaranteed Obligations, each other Guarantor (other
than XL Capital) shall, on demand of such Excess Funding Guarantor (but subject
to the next sentence), pay to such Excess Funding Guarantor an amount equal to
such Guarantor's Pro Rata Share (as defined below and determined, for this
purpose, without reference to the properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of
such Guaranteed Obligations. The payment obligation of a Guarantor to any Excess
Funding Guarantor under this Section shall be subordinate and subject in right
of payment to the prior payment in full of the obligations of such Guarantor
under the other provisions of this Article III and such Excess Funding Guarantor
shall not exercise any right or remedy with respect to such excess until payment
and satisfaction in full of all of such obligations.
For purposes of this Section, (i) "Excess Funding Guarantor" means, in
respect of any Guaranteed Obligations, a Guarantor that has paid an amount in
excess of its Pro Rata Share of such Guaranteed Obligations, (ii) "Excess
Payment" means, in respect of any Guaranteed Obligations, the amount paid by an
Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed
Obligations and (iii) "Pro Rata Share" means, for any Guarantor, the ratio
(expressed as a percentage) of (x) the amount by which the aggregate present
fair saleable value of all properties of such Guarantor (excluding any shares of
stock of any other Guarantor) exceeds the amount of all the debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder and any obligations of any other Guarantor that have been Guaranteed
by such Guarantor) to (y) the amount by which the aggregate fair saleable value
of all properties of
Credit Agreement
-53-
all of the Guarantors (other than XL Capital) exceeds the amount of all the
debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of the Guarantors under
this Article III) of all of the Guarantors (other than XL Capital), determined
(A) with respect to any Guarantor that is a party hereto on the date hereof, as
of the date hereof, and (B) with respect to any other Guarantor, as of the date
such Guarantor becomes a Guarantor hereunder.
SECTION 3.08. General Limitation on Guarantee Obligations. In any action or
proceeding involving any corporate law, or any bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the
obligations of any Guarantor under Section 3.01 would otherwise, taking into
account the provisions of Section 3.07, be held or determined to be void,
invalid or unenforceable, or subordinated to the claims of any other creditors,
on account of the amount of its liability under Section 3.01, then,
notwithstanding any other provision hereof to the contrary, the amount of such
liability shall, without any further action by such Guarantor, any Lender, the
Administrative 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.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Account Party represents and warrants to the Lenders that:
SECTION 4.01. Organization; Powers. Such Account Party and each of its
Significant Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 4.02. Authorization; Enforceability. The Transactions are within
such Account Parties' corporate powers and have been duly authorized by all
necessary corporate and, if required, by all necessary shareholder action. This
Agreement has been duly executed and delivered by such Account Party and
constitutes a legal, valid and binding obligation of such Account Party,
enforceable against such Account Party in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, examination or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.03. Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of (including any exchange control
approval), registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force and
effect, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of such Account Party or any of its
Significant Subsidiaries or any order of any Governmental Authority, (c) will
Credit Agreement
-54-
not violate or result in a default under any material indenture, agreement or
other instrument binding upon such Account Party or any of its Significant
Subsidiaries or assets, or give rise to a right thereunder to require any
payment to be made by any such Person, and (d) will not result in the creation
or imposition of any Lien on any asset of such Account Party or any of its
Significant Subsidiaries.
SECTION 4.04. Financial Condition; No Material Adverse Change.
(a) Financial Condition. Such Account Party has heretofore furnished to the
Lenders the consolidated balance sheet and statements of income, stockholders'
equity and cash flows of such Account Party and its consolidated Subsidiaries
(A) as of and for the fiscal year ended December 31, 2004, reported on by
PricewaterhouseCoopers LLP, independent public accountants (as provided in XL
Capital's Report on Form 10-K filed with the SEC for the fiscal year ended
December 31, 2004), and (B) as of and for the fiscal quarter ended March 31,
2005, as provided in XL Capital's Report on Form 10-Q filed with the SEC for the
fiscal quarter ended March 31, 2005. Such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of such Account Party and its respective consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP or (in the case of XL
Insurance or XL Re) SAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (B) of the
first sentence of this paragraph.
(b) No Material Adverse Change. Since December 31, 2004, there has been no
material adverse change in the assets, business, financial condition or
operations of such Account Party and its Subsidiaries, taken as a whole.
SECTION 4.05. Properties.
(a) Property Generally. Such Account Party and each of its Significant
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, subject only to Liens permitted
by Section 7.03 and except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Intellectual Property. Such Account Party and each of its Significant
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business,
and the use thereof by such Account Party and its Subsidiaries does not infringe
upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 4.06. Litigation and Environmental Matters.
(a) Actions, Suits and Proceedings. Except as disclosed in Schedule III or
as routinely encountered in claims activity, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of such Account Party, threatened against or
affecting such Account Party or any of its Subsidiaries (i) as to which there is
a reasonable possibility of an adverse determination and that could reasonably
Credit Agreement
-55-
be expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve this Agreement or the Transactions.
(b) Environmental Matters. Except as disclosed in Schedule IV and except
with respect to any other matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, neither such
Account Party nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required for its business under any Environmental Law, (ii) has
incurred any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
SECTION 4.07. Compliance with Laws and Agreements. Such Account Party and
each of its Subsidiaries is in compliance with all laws, regulations and orders
of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 4.08. Investment and Holding Company Status. Such Account Party is
not (a) an "investment company" as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.09. Taxes. Such Account Party and each of its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which such Person has set aside on its books
adequate reserves or (b) to the extent that the failure to file any such Tax
return or pay any such Taxes could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan by an amount that could reasonably be
expected to result in a Material Adverse Effect.
Except as could not reasonably be expected to result in a Material Adverse
Effect, (i) all contributions required to be made by any Account Party or any of
their Subsidiaries with respect to a Non-U.S. Benefit Plan have been timely
made, (ii) each Non-U.S. Benefit Plan has been maintained in compliance with its
terms and with the requirements of any and all applicable laws and has been
maintained, where required, in good standing with the applicable Governmental
Authority and (iii) neither any Account Party nor any of their Subsidiaries has
incurred any obligation in connection with the termination or withdrawal from
any Non-U.S. Benefit Plan.
Credit Agreement
-56-
SECTION 4.11. Disclosure. The reports, financial statements, certificates
or other information furnished by such Account Party to the Lenders in
connection with the negotiation of this Agreement or delivered hereunder (taken
as a whole) do not contain any material misstatement of fact or omit to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, such Account Party represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
SECTION 4.12. Use of Credit. Neither such Account Party nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no Letter of Credit will be
used in connection with buying or carrying any Margin Stock. No part of the
proceeds of any Loan hereunder will be used to buy or carry any Margin Stock
(except for repurchases of the capital stock of XL Capital and purchases of
Margin Stock in accordance with XL Capital's Statement of Investment Policy
Objectives and Guidelines as in effect on the date hereof or as it may be
changed from time to time by a resolution duly adopted by the board of directors
of XL Capital (or any committee thereof)). The purchase of any Margin Stock with
the proceeds of any Loan will not be in violation of Regulation U or X of the
Board and, after applying the proceeds of such Loan, not more than 25% of the
value of the assets of XL Capital and its Subsidiaries taken as a whole consists
or will consist of Margin Stock.
SECTION 4.13. Subsidiaries. Set forth in Schedule V is a complete and
correct list of all of the Subsidiaries of XL Capital as of March 31, 2005,
together with, for each such Subsidiary, (i) the jurisdiction of organization of
such Subsidiary, (ii) each Person holding ownership interests in such Subsidiary
and (iii) the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Schedule V, (x) each of XL Capital
and its Subsidiaries owns, free and clear of Liens, and has the unencumbered
right to vote, all outstanding ownership interests in each Person shown to be
held by it in Schedule V, (y) all of the issued and outstanding capital stock of
each such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) except as disclosed in filings of XL Capital with the SEC
prior to the date hereof, there are no outstanding Equity Rights with respect to
any Account Party.
SECTION 4.14. Withholding Taxes. Based upon information with respect to
each Lender provided by each Lender to the Administrative Agent, as of the date
hereof, the payment of the LC Disbursements and interest thereon, principal of
and interest on the Loans, the fees under Section 2.14 and all other amounts
payable hereunder will not be subject, by withholding or deduction, to any
Indemnified Taxes imposed by Bermuda or the Cayman Islands.
SECTION 4.15. Stamp Taxes. To ensure the legality, validity, enforceability
or admissibility in evidence of this Agreement or any promissory notes
evidencing Loans made (or to be made), it is not necessary, as of the date
hereof, that this Agreement or such promissory notes or any other document be
filed or recorded with any Governmental Authority in Bermuda or the Cayman
Islands, or that any stamp or similar tax be paid on or in respect of this
Agreement in any such jurisdiction, or such promissory notes or any other
document
Credit Agreement
-57-
other than such filings and recordations that have already been made and such
stamp or similar taxes that have been paid.
SECTION 4.16. Legal Form. Each of this Agreement and any promissory notes
evidencing Loans made (or to be made) is in proper legal form under the laws of
any Account Party Jurisdiction for the admissibility thereof in the courts of
such Account Party Jurisdiction.
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date. The obligations of the Lenders (or the
Issuing Lender, as the case may be) to issue or continue Letters of Credit and
to make Loans hereunder are subject to the receipt by the Administrative Agent
of each of the following documents, each of which shall be satisfactory to the
Administrative Agent (and to the extent specified below, to each Lender) in form
and substance (or such condition shall have been waived in accordance with
Section 10.02):
(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page to this Agreement)
that such party has signed a counterpart of this Agreement.
(b) Opinions of Counsel to the Obligors. Opinions, each dated the
Effective Date, of (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., counsel to XL Capital,
substantially in the form of Exhibit B-1, (ii) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.,
counsel to XL America, substantially in the form of Exhibit B-2, (iii)
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special U.S. counsel for the Obligors,
substantially in the form of Exhibit B-3, (iv) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇,
special Bermuda counsel to XL Insurance and XL Re, substantially in the
form of Exhibit B-4 and (v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, special Cayman Islands
counsel to XL Capital, substantially in the form of Exhibit B-5.
(c) Opinion of Special New York Counsel to JPMCB. An opinion, dated
the Effective Date, of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special New
York counsel to JPMCB, substantially in the form of Exhibit C (and JPMCB
hereby instructs such counsel to deliver such opinion to the Lenders).
(d) Corporate Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing, if applicable, of the Obligors,
the authorization of the Transactions and any other legal matters relating
to the Obligors, this Agreement or the Transactions, all in form and
substance reasonably satisfactory to the Administrative Agent and its
counsel.
(e) Officer's Certificate. A certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of XL
Capital, confirming compliance with the conditions set forth in the
lettered clauses of the first sentence of Section 5.02.
Credit Agreement
-58-
(f) Existing 364-Day Credit Agreement; Existing Letters of Credit.
Evidence that (i) the Account Parties shall have paid in full all principal
of and interest accrued on the loans and reimbursement obligations under
the Existing 364-Day Credit Agreement and all fees, expenses and other
amounts owing by the Account Parties thereunder and (ii) the Commitments
under (and as defined in) the Existing 364-Day Credit Agreement have
terminated. In addition, the Administrative Agent shall have (i) received a
notice satisfactory to the Administrative Agent from XL Capital designating
whether any of the Syndicated Letters of Credit, Non-Syndicated Letters of
Credit and/or Participated Letters of Credit under (and as defined in) the
Existing 364-Day Credit Agreement outstanding immediately prior to the
Effective Date are to be continued under this Agreement and (ii) with
respect to each such Non-Syndicated Letters of Credit to be continued
hereunder, evidence that such Non-Syndicated Letters of Credit shall have
been either amended in the manner contemplated by Section 2.04(l) or
replaced with one or more Non-Syndicated Letters of Credit in favor of the
relevant beneficiary issued by the Lenders having Commitments hereunder as
of the Effective Date (or arrangements satisfactory to the Administrative
Agent for such amendment or replacement, as applicable, as promptly as
practicable following the Effective Date shall have been made). The
Obligors and each Lender party hereto that is also a party to the Existing
364-Day Credit Agreement hereby agrees that, as of the Effective Date, the
Commitments (as defined in the Existing 364-Day Credit Agreement) under the
Existing 364-Day Credit Agreement shall be terminated automatically (it
being agreed that this Agreement constitutes notice of such termination to
each such Lender and that pursuant hereto the requirement under Section
2.11(b) of the Existing 364-Day Credit Agreement for prior notice of such
termination is hereby waived by each such Lender).
(g) Other Documents. Such other documents as the Administrative Agent
or any Lender or special New York counsel to JPMCB may reasonably request.
The obligation of any Lender to make its initial extension of credit
hereunder is also subject to the payment by XL Capital of such fees as XL
Capital shall have agreed to pay to any Lender or the Administrative Agent in
connection herewith, including the reasonable fees and expenses of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special New York counsel to JPMCB, in connection
with the negotiation, preparation, execution and delivery of this Agreement and
the other Credit Documents and the extensions of credit hereunder (to the extent
that reasonably detailed statements for such fees and expenses have been
delivered to XL Capital).
The Administrative Agent shall notify the Account Parties and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders (or the Issuing
Lender, as the case may be) to issue or continue, Letters of Credit or to make
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.02) at or prior to
5:00 p.m., New York City time, on June 22, 2005 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
Credit Agreement
-59-
SECTION 5.02. Each Credit Event. The obligation of each Lender to issue,
continue, amend, renew or extend any Letter of Credit or to make any Loan is
additionally subject to the satisfaction of the following conditions:
(a) the representations and warranties of the Obligors set forth in
this Agreement (other than, at any time after the Effective Date, in
Section 4.04(b)) shall be true and correct on and as of the date of
issuance, continuation, amendment, renewal or extension of such Letter of
Credit or the date of such Loan, as applicable (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date);
(b) at the time of and immediately after giving effect to the
issuance, amendment, renewal or extension of such Letter of Credit or such
Loan, as applicable, no Default shall have occurred and be continuing; and
(c) in the case of any Alternative Currency Letter of Credit, receipt
by the Administrative Agent of a request for offers as required by Section
2.06(a).
Each issuance, continuation, amendment, renewal or extension of a Letter of
Credit and each Borrowing shall be deemed to constitute a representation and
warranty by the Obligors on the date thereof as to the matters specified in
clauses (a) and (b) of the immediately preceding sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated, the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Account Parties covenant and agree
with the Lenders that:
SECTION 6.01. Financial Statements and Other Information. Each Account
Party will furnish to the Administrative Agent and each Lender:
(a) within 135 days after the end of each fiscal year of each Account
Party except for XL America (but in the case of XL Capital, within 100 days
after the end of each fiscal year of XL Capital), the audited consolidated
balance sheet and related statements of operations, stockholders' equity
and cash flows of such Account Party and its consolidated Subsidiaries as
of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year (if such figures were already
produced for such corresponding period or periods) (it being understood
that delivery to the Lenders of XL Capital's Report on Form 10-K filed with
the SEC shall satisfy the financial statement delivery requirements of this
paragraph (a) to deliver the annual financial statements of XL Capital so
long as the financial information required to be contained in such Report
is substantially the same as the financial information required under this
paragraph (a)), all reported on by independent public accountants of
recognized national standing (without a "going concern" or like
qualification or
Credit Agreement
-60-
exception and without any qualification or exception as to the scope of
such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results
of operations of such Account Party and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP or (in the case of XL Insurance
and XL Re) SAP, as the case may be, consistently applied;
(b) by June 15 of each year, (i) an unaudited consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows of XL America and its consolidated Subsidiaries as of the end of and
for the immediately preceding fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year (if such figures
were already produced for such corresponding period or periods), all
certified by a Financial Officer of XL America as presenting fairly in all
material respects the financial condition and results of operations of XL
America and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, and (ii) audited statutory
financial statements for each Insurance Subsidiary of XL America reported
on by independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without
any qualification or exception as to the scope of such audit) to the effect
that such audited consolidated financial statements present fairly in all
material respects the financial condition and results of operations of such
Insurance Subsidiaries in accordance with SAP, consistently applied;
(c) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of such Account Party, the consolidated
balance sheet and related statements of operations, stockholders' equity
and cash flows of such Account Party and its consolidated Subsidiaries as
of the end of and for such fiscal quarter and the then elapsed portion of
the fiscal year, setting forth in each case in comparative form the figures
for (or, in the case of the balance sheet, as of the end of) the
corresponding period or periods of the previous fiscal year (if such
figures were already produced for such corresponding period or periods),
all certified by a Financial Officer of such Account Party as presenting
fairly in all material respects the financial condition and results of
operations of such Account Party and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP or (in the case of XL Insurance
and XL Re) SAP, as the case may be, consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes (it being
understood that delivery to the Lenders of XL Capital's Report on Form 10-Q
filed with the SEC shall satisfy the financial statement delivery
requirements of this paragraph (c) to deliver the quarterly financial
statements of XL Capital so long as the financial information required to
be contained in such Report is substantially the same as the financial
information required under this paragraph (c));
(d) concurrently with any delivery of financial statements under
clause (a), (b) or (c) of this Section, a certificate signed on behalf of
each Account Party by a Financial Officer (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 7.03, 7.05, 7.06 and 7.07 and (iii) stating
whether any change in GAAP or (in the case of XL Insurance, XL Re and any
Insurance Subsidiary of XL America) SAP
Credit Agreement
-61-
or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 4.04 and, if any such change
has occurred, specifying any material effect of such change on the
financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clauses (a) and (b)(ii) of this Section, a certificate of the accounting
firm that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines);
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
such Account Party or any of its respective Subsidiaries with the SEC, or
any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any U.S. or other securities exchange, or
distributed by such Account Party to its shareholders generally, as the
case may be;
(g) concurrently with any delivery of financial statements under
clause (a), (b) or (c) of this Section, a certificate of a Financial
Officer of XL Capital, setting forth on a consolidated basis for XL Capital
and its consolidated Subsidiaries as of the end of the fiscal year or
quarter to which such certificate relates (i) the aggregate book value of
assets which are subject to Liens permitted under Section 7.03(h) and the
aggregate book value of liabilities which are subject to Liens permitted
under Section 7.03(h)(it being understood that the reports required by
paragraphs (a), (b) and (c) of this Section shall satisfy the requirement
of this clause (i) of this paragraph (g) if such reports set forth
separately, in accordance with GAAP, line items corresponding to such
aggregate book values) and (ii) a calculation showing the portion of each
of such aggregate amounts which portion is attributable to transactions
among wholly-owned Subsidiaries of XL Capital;
(h) within 90 days after the end of each of the first three fiscal
quarters of each fiscal year and within 135 days after the end of each
fiscal year of XL Capital (commencing with the fiscal year ending December
31, 2005), a statement of a Financial Officer of XL Capital listing, as of
the end of the immediately preceding fiscal quarter of XL Capital, the
amount of cash and the securities of the Account Parties and their
Subsidiaries that have been posted as collateral under Section 7.03(f); and
(i) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of XL
Capital or any of its Subsidiaries, or compliance with the terms of this
Agreement, as the Administrative Agent or any Lender may reasonably
request.
SECTION 6.02. Notices of Material Events. Each Account Party will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default; and
(b) any event or condition constituting, or which could reasonably be
expected to have a Material Adverse Effect.
Credit Agreement
-62-
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the relevant Account Party
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken by such Account Party with respect
thereto.
SECTION 6.03. Preservation of Existence and Franchises. Each Account Party
will, and will cause each of its Significant Subsidiaries to, maintain its
corporate existence and its material rights and franchises in full force and
effect in its jurisdiction of incorporation; provided that the foregoing shall
not prohibit any merger or consolidation permitted under Section 7.01. Each
Account Party will, and will cause each of its Subsidiaries to, qualify and
remain qualified as a foreign corporation in each jurisdiction in which failure
to receive or retain such qualification would have a Material Adverse Effect.
SECTION 6.04. Insurance. Each Account Party will, and will cause each of
its Significant Subsidiaries to, maintain with financially sound and reputable
insurers, insurance with respect to its properties in such amounts as is
customary in the case of corporations engaged in the same or similar businesses
having similar properties similarly situated.
SECTION 6.05. Maintenance of Properties. Each Account Party will, and will
cause each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition the properties now or hereafter owned,
leased or otherwise possessed by and used or useful in its business and will
make or cause to be made all needful and proper repairs, renewals, replacements
and improvements thereto so that the business carried on in connection therewith
may be properly conducted at all times except if the failure to do so would not
have a Material Adverse Effect, provided, however, that the foregoing shall not
impose on such Account Party or any Subsidiary of such Account Party any
obligation in respect of any property leased by such Account Party or such
Subsidiary in addition to such Account Party's obligations under the applicable
document creating such Account Party's or such Subsidiary's lease or tenancy.
SECTION 6.06. Payment of Taxes and Other Potential Charges and Priority
Claims; Payment of Other Current Liabilities. Each Account Party will, and will
cause each of its Subsidiaries to, pay or discharge:
(a) on or prior to the date on which penalties attach thereto, all
taxes, assessments and other governmental charges or levies imposed upon it
or any of its properties or income;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like
Persons which, if unpaid, might result in the creation of a Lien upon any
such property; and
(c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any such property
(other than Liens not forbidden by Section 7.03) or which, if unpaid, might
give rise to a claim entitled to priority over general creditors of such
Account Party or such Subsidiary in any proceeding under the Bermuda
Companies Law or Bermuda Insurance Law, or any
Credit Agreement
-63-
insolvency proceeding, liquidation, receivership, rehabilitation,
dissolution or winding-up involving such Account Party or such Subsidiary;
provided that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, such Account Party or such Subsidiary
need not pay or discharge any such tax, assessment, charge, levy or claim (i) so
long as the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted and so long as such reserves or other
appropriate provisions as may be required by GAAP or SAP, as the case may be,
shall have been made therefor or (ii) so long as such failure to pay or
discharge would not have a Material Adverse Effect.
SECTION 6.07. Financial Accounting Practices. Such Account Party will, and
will cause each of its consolidated Subsidiaries to, make and keep books,
records and accounts which, in reasonable detail, accurately and fairly reflect
its transactions and dispositions of its assets and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
transactions are recorded as necessary to permit preparation of financial
statements required under Section 6.01 in conformity with GAAP and SAP, as
applicable, and to maintain accountability for assets.
SECTION 6.08. Compliance with Applicable Laws. Each Account Party will, and
will cause each of its Subsidiaries to, comply with all applicable Laws
(including but not limited to the Bermuda Companies Law and Bermuda Insurance
Laws) in all respects; provided that such Account Party or any Subsidiary of
such Account Party will not be deemed to be in violation of this Section as a
result of any failure to comply with any such Law which would not (i) result in
fines, penalties, injunctive relief or other civil or criminal liabilities
which, in the aggregate, would have a Material Adverse Effect or (ii) otherwise
impair the ability of such Account Party to perform its obligations under this
Agreement.
SECTION 6.09. Use of Letters of Credit and Proceeds. No part of the
proceeds of any Loan and no Letter of Credit will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X. Each Account Party will use the
Letters of Credit issued for its account hereunder in the ordinary course of
business of, and will use the proceeds of all Loans made to it for the general
corporate purposes of, such Account Party and its Affiliates. For the avoidance
of doubt, the parties agree that any Account Party may apply for a Letter of
Credit hereunder to support the obligations of any Affiliate of XL Capital, it
being understood that such Account Party shall nonetheless remain the account
party and as such be liable with respect to such Letter of Credit.
SECTION 6.10. Continuation of and Change in Businesses. Each Account Party
and its Significant Subsidiaries will continue to engage in substantially the
same business or businesses it engaged in (or proposes to engage in) on the date
of this Agreement and businesses related or incidental thereto.
SECTION 6.11. Visitation. Each Account Party will permit such Persons as
any Lender may reasonably designate to visit and inspect any of the properties
of such Account Party, to discuss its affairs with its financial management, and
provide such other information relating to the business and financial condition
of such Account Party at such times as such Lender may reasonably request. Each
Account Party hereby authorizes its financial management to discuss with any
Lender the affairs of such Account Party.
Credit Agreement
-64-
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated, the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, all
Letters of Credit have expired or terminated and all LC Disbursements have been
reimbursed, each of the Account Parties covenants and agrees with the Lenders
that:
SECTION 7.01. Mergers. No Account Party will merge with or into or
consolidate with any other Person, except that if no Default shall occur and be
continuing or shall exist at the time of such merger or consolidation or
immediately thereafter and after giving effect thereto (a) any Account Party may
merge or consolidate with any other corporation, including a Subsidiary, if such
Account Party shall be the surviving corporation, (b) XL Capital may merge with
or into or consolidate with any other Person in a transaction that does not
result in a reclassification, conversion, exchange or cancellation of the
outstanding shares of capital stock of XL Capital (other than the cancellation
of any outstanding shares of capital stock of XL Capital held by the Person with
whom it merges or consolidates) and (c) any Account Party may enter into a
merger or consolidation which is effected solely to change the jurisdiction of
incorporation of such Account Party and results in a reclassification,
conversion or exchange of outstanding shares of capital stock of such Account
Party solely into shares of capital stock of the surviving entity.
SECTION 7.02. Dispositions. No Account Party will, nor will it permit any
of its Significant Subsidiaries to, sell, convey, assign, lease, abandon or
otherwise transfer or dispose of, voluntarily or involuntarily (any of the
foregoing being referred to in this Section as a "Disposition" and any series of
related Dispositions constituting but a single Disposition), any of its
properties or assets, tangible or intangible (including but not limited to sale,
assignment, discount or other disposition of accounts, contract rights, chattel
paper or general intangibles with or without recourse), except:
(a) Dispositions in the ordinary course of business involving current
assets or other invested assets classified on such Account Party's or its
respective Subsidiaries' balance sheet as available for sale or as a
trading account;
(b) sales, conveyances, assignments or other transfers or dispositions
in immediate exchange for cash or tangible assets, provided that any such
sales, conveyances or transfers shall not individually, or in the aggregate
for the Account Parties 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 Account
Party or its Subsidiaries; or
(d) Dispositions from an Account Party or a wholly-owned Subsidiary to
any other Account Party or wholly-owned Subsidiary.
Credit Agreement
-65-
SECTION 7.03. Liens. No Account Party will, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or assets, tangible or intangible, now owned or hereafter acquired by
it, except:
(a) Liens existing on the date hereof (and extension, renewal and
replacement Liens upon the same property, provided that the amount secured
by each Lien constituting such an extension, renewal or replacement Lien
shall not exceed the amount secured by the Lien theretofore existing) and
listed on Part B of Schedule II;
(b) Liens arising from taxes, assessments, charges, levies or claims
described in Section 6.06 that are not yet due or that remain payable
without penalty or to the extent permitted to remain unpaid under the
provision of Section 6.06;
(c) Liens on property securing all or part of the purchase price
thereof to such Account Party and Liens (whether or not assumed) existing
on property at the time of purchase thereof by such Account Party (and
extension, renewal and replacement Liens upon the same property); provided
(i) each such Lien is confined solely to the property so purchased,
improvements thereto and proceeds thereof, and (ii) the aggregate amount of
the obligations secured by all such Liens on any particular property at any
time purchased by such Account Party, as applicable, shall not exceed 100%
of the lesser of the fair market value of such property at such time or the
actual purchase price of such property;
(d) zoning restrictions, easements, minor restrictions on the use of
real property, minor irregularities in title thereto and other minor Liens
that do not in the aggregate materially detract from the value of a
property or asset to, or materially impair its use in the business of, such
Account Party or any such Subsidiary;
(e) Liens securing Indebtedness permitted by Section 7.07(b) covering
assets whose market value is not materially greater than the amount of the
Indebtedness secured thereby plus a commercially reasonable margin;
(f) Liens on cash and securities of an Account Party or any of its
Subsidiaries incurred as part of the management of its investment portfolio
including, but not limited to, pursuant to any International Swaps and
Derivatives Association, Inc. ("ISDA") documentation or any Specified
Transaction Agreement in accordance with XL Capital's Statement of
Investment Policy Objectives and Guidelines as in effect on the date hereof
or as it may be changed from time to time by a resolution duly adopted by
the board of directors of XL Capital (or any committee thereof);
(g) Liens on cash and securities not to exceed $500,000,000 in the
aggregate securing obligations of an Account Party or any of its
Subsidiaries arising under any ISDA documentation or any other Specified
Transaction Agreement (it being understood that in no event shall this
clause (g) preclude any Person (other than any Subsidiary of XL Capital) in
which XL Capital or any of its Subsidiaries shall invest (each an
"investee") from granting Liens on such Person's assets to secure hedging
obligations of such Person, so long as such obligations are non-recourse to
XL Capital or any of its Subsidiaries (other than any investees)), provided
that, for purposes of determining the aggregate amount of cash and/or
securities subject to such Liens under this clause (g), the
Credit Agreement
-66-
aggregate amount of cash and/or securities on which any Account Party or
any Subsidiary shall have granted a Lien in favor of a counterparty at any
time shall be netted against the aggregate amount of cash and/or securities
on which such counterparty shall have granted a Lien in favor of such
Account Party or such Subsidiary, as the case may be, at such time, so long
as the relevant agreement between such Account Party or such Subsidiary, as
the case may be, provides for the netting of their respective obligations
thereunder;
(h) Liens on (i) assets received, and on actual or imputed investment
income on such assets received incurred as part of its business including
activities utilizing ISDA documentation or any Specified Transaction
Agreement relating and identified to specific insurance payment liabilities
or to liabilities arising in the ordinary course of any Account Parties' or
any of their Subsidiary's business as an insurance or reinsurance company
(including GICs and Stable Value Instruments) or corporate member of The
Council of Lloyd's or as a provider of financial or investment services or
contracts, or the proceeds thereof (including GICs and Stable Value
Instruments), in each case held in a segregated trust, trust or other
account and securing such liabilities, (ii) assets securing Exempt
Indebtedness of any Person (other than XL Capital or any of its Affiliates)
in the event such Exempt Indebtedness is consolidated on the consolidated
balance sheet of XL Capital 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 Account Party or any of their
Subsidiaries or its becoming a Subsidiary, and Liens existing on any
property acquired by any Account Party or any of their Subsidiaries at the
time such property is so acquired (whether or not the Indebtedness secured
thereby shall have been assumed) (and extension, renewal and replacement
Liens upon the same property, provided that the amount secured by each Lien
constituting such an extension, renewal or replacement Lien shall not
exceed the amount secured by the Lien theretofore existing), provided that
(i) no such Lien shall have been created or assumed in contemplation of
such consolidation or merger or such Person's becoming a Subsidiary or such
acquisition of property and (ii) each such Lien shall extend solely to the
item or items of property so acquired and, if required by terms of the
instrument originally creating such Lien, other property which is an
improvement to or is acquired for specific use in connection with such
acquired property.
SECTION 7.04. Transactions with Affiliates. No Account Party will, nor will
it permit any of its Significant Subsidiaries to, enter into or carry out any
transaction with (including purchase or lease property or services to, loan or
advance to or enter into, suffer to remain in existence or amend any contract,
agreement or arrangement with) any Affiliate of such
Credit Agreement
-67-
Account Party, or directly or indirectly agree to do any of the foregoing,
except (i) transactions involving guarantees or co-obligors with respect to any
Indebtedness described in Part A of Schedule II, (ii) transactions among the
Account Parties and their wholly-owned Subsidiaries and (iii) transactions with
Affiliates in good faith in the ordinary course of such Account Party's business
consistent with past practice and on terms no less favorable to such Account
Party or any Subsidiary than those that could have been obtained in a comparable
transaction on an arm's length basis from an unrelated Person.
SECTION 7.05. Ratio of Total Funded Debt to Total Capitalization. XL
Capital will not permit its ratio of (a) Total Funded Debt to (b) the sum of
Total Funded Debt plus Consolidated Net Worth to be greater than 0.35:1.00 at
any time.
SECTION 7.06. Consolidated Net Worth. XL Capital will not permit its
Consolidated Net Worth to be less than the sum of (a) $5,000,000,000 plus (b)
25% of consolidated net income (if positive) of XL Capital and its Subsidiaries
for each fiscal quarter ending on or after June 30, 2005.
SECTION 7.07. Indebtedness. No Account Party will, nor will it permit any
of its Subsidiaries to, at any time create, incur, assume or permit to exist any
Indebtedness, or agree, become or remain liable (contingent or otherwise) to do
any of the foregoing, except:
(a) Indebtedness created hereunder;
(b) secured Indebtedness (including secured reimbursement obligations
with respect to letters of credit) of any Account Party or any Subsidiary
in an aggregate principal amount (for all Account Parties and their
respective Subsidiaries) not exceeding at any time outstanding 15% of
Consolidated Net Worth;
(c) other unsecured Indebtedness, so long as upon the incurrence
thereof no Default would occur or exist;
(d) Indebtedness consisting of accounts or claims payable and accrued
and deferred compensation (including options) incurred in the ordinary
course of business by any Account Party or any Subsidiary;
(e) Indebtedness incurred in transactions described in Section 7.03(f)
and (g); and
(f) Indebtedness existing on the date hereof and described in Part A
of Schedule II and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof.
SECTION 7.08. Financial Strength Ratings. None of XL Capital, XL Insurance
and XL Re will permit at any time its financial strength ratings to be less than
"A-" from A.M. Best & Co. (or its successor).
SECTION 7.09. Private Act. No Account Party will become subject to a
Private Act other than the X.L. Insurance Company, Ltd. Act, 1989.
Credit Agreement
-68-
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) any Account Party shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or otherwise;
(b) any Account Party shall fail to pay any interest on any Loan or LC
Disbursement or any fee payable under this Agreement or any other amount
(other than an amount referred to in clause (a) of this Article) payable
under this Agreement, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of 5 or more days;
(c) any representation or warranty made or deemed made by any Account
Party in or in connection with this Agreement or any amendment or
modification hereof, or in any certificate or financial statement furnished
pursuant to the provisions hereof, shall prove to have been false or
misleading in any material respect as of the time made (or deemed made) or
furnished;
(d) any Account Party shall fail to observe or perform any covenant,
condition or agreement contained in Article VII;
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article or the reporting
requirement pursuant to Section 6.01(h)) and such failure shall continue
unremedied for a period of 20 or more days after notice thereof from the
Administrative Agent (given at the request of any Lender) to such Obligor;
(f) any Account Party or any of its Subsidiaries shall default (i) in
any payment of principal of or interest on any other obligation for
borrowed money in principal amount of $50,000,000 or more, or any payment
of any principal amount of $50,000,000 or more under Hedging Agreements, in
each case beyond any period of grace provided with respect thereto, or (ii)
in the performance of any other agreement, term or condition contained in
any such agreement (other than Hedging Agreements) under which any such
obligation in principal amount of $50,000,000 or more is created, if the
effect of such default is to cause or permit the holder or holders of such
obligation (or trustee on behalf of such holder or holders) to cause such
obligation to become due prior to its stated maturity or to terminate its
commitment under such agreement, provided that this clause (f) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;
(g) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging any Account Party a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization
of such Account Party under the Bermuda Companies Law or the Cayman Islands
Companies Law or any other similar applicable
Credit Agreement
-69-
Law, and such decree or order shall have continued undischarged or unstayed
for a period of 60 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of an examiner, receiver
or liquidator or trustee or assignee in bankruptcy or insolvency of such
Account Party or a substantial part of its property, or for the winding up
or liquidation of its affairs, shall have been entered, and such decree or
order shall have continued undischarged and unstayed for a period of 60
days;
(h) any Account Party shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking reorganization under the Bermuda Companies Law or the Cayman
Islands Companies Law or any other similar applicable Law, or shall consent
to the filing of any such petition, or shall consent to the appointment of
an examiner, receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of it or a substantial part of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or corporate or
other action shall be taken by such Account Party in furtherance of any of
the aforesaid purposes;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 shall be rendered against any Account
Party or any of its Subsidiaries or any combination thereof and the same
shall not have been vacated, discharged, stayed (whether by appeal or
otherwise) or bonded pending appeal within 45 days from the entry thereof;
(j) an ERISA Event (or similar event with respect to any Non-U.S.
Benefit Plan) shall have occurred that, in the opinion of the Required
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 Account Parties and their Subsidiaries in an aggregate
amount exceeding $100,000,000;
(k) a Change in Control shall occur;
(l) XL Capital shall cease to own, beneficially and of record,
directly or indirectly all of the outstanding voting shares of capital
stock of XL Insurance, XL Re or XL America; or
(m) the guarantee contained in Article III shall terminate or cease,
in whole or material part, to be a legally valid and binding obligation of
each Guarantor or any Guarantor or any Person acting for or on behalf of
any of such parties shall contest such validity or binding nature of such
guarantee itself or the Transactions, or any other Person shall assert any
of the foregoing;
then, and in every such event (other than an event with respect to any Account
Party described in clause (g) or (h) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Account
Parties, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which
Credit Agreement
-70-
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Account Parties accrued hereunder, shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Account Parties;
and in case of any event with respect to any Account Party described in clause
(g) or (h) of this Article, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Account Parties accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Account Parties.
If an Event of Default shall occur and be continuing and XL Capital
receives notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral for the aggregate LC Exposure of all the Lenders
pursuant to this paragraph, the Account Parties shall immediately deposit into
an account established and maintained on the books and records of the
Administrative Agent, which account may be a "securities account" (within the
meaning of Section 8-501 of the Uniform Commercial Code as in effect in the
State of New York (the "Uniform Commercial Code")), in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the total LC Exposure as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any Account Party described in clause (g) or
(h) of this Article. Such deposit shall be held by the Administrative Agent as
collateral for the LC Exposure under this Agreement, and for this purpose each
of the Account Parties hereby grant a security interest to the Administrative
Agent for the benefit of the Lenders in such collateral account and in any
financial assets (as defined in the Uniform Commercial Code) or other property
held therein.
In addition to the provisions of this Article, each Account Party agrees
that upon the occurrence and during the continuance of any Event of Default any
Lender which has issued any Alternative Currency Letter of Credit may, by notice
to XL Capital and the Administrative Agent: (a) declare that all fees and other
obligations of the Account Parties accrued in respect of Alternative Currency
Letters of Credit issued by such Lender shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Account Party and (b) demand the deposit
(without duplication of any amounts deposited with the Administrative Agent
under the preceding paragraph) of cash collateral from the Account Parties in
immediately available funds in the currency of such Alternative Currency Letter
of Credit or, at the option of such Lender, in Dollars in an amount equal to the
then aggregate undrawn face amount of all such Alternative Currency Letters of
Credit and in such manner as previously agreed to by the Account Parties and
such Lender; provided that, in the case of any of the Events of Default
specified in clause (g) or (h) of this Article, without any notice to any
Account Party or any other act by the Administrative Agent or the Lenders, all
fees and other obligations of the Account Parties accrued in respect of all
Alternative Currency Letters of Credit shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Account Party. If the Administrative Agent receives
any notice from a Lender pursuant to the previous sentence, then it will
promptly give notice thereof to the other Lenders.
Credit Agreement
-71-
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative Agent as
its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with any Account Party or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Account Party or any of their Subsidiaries that is communicated
to or obtained by the bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by an Account Party or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be
Credit Agreement
-72-
counsel for any Account Party), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
The Administrative Agent may resign at any time by notifying the Lenders
and the Account Parties. Upon any such resignation, the Required Lenders shall
have the right, in consultation with XL Capital, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent's
resignation shall nonetheless become effective and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and (2) the Required Lenders shall perform the duties of the
Administrative Agent (and all payments and communications provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender directly) until such time as the Required Lenders appoint a successor
agent as provided for above in this paragraph. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by XL Capital to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between XL Capital and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.03 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
Notwithstanding anything herein to the contrary, the Joint Lead Arrangers
and Joint Bookrunners, the Syndication Agent and the Documentation Agents named
on the cover page of this Agreement shall not have any duties or liabilities
under this Agreement, except in their capacity, if any, as Lenders.
Credit Agreement
-73-
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Account Party, to XL Capital at ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇ ▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇); with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq. at the same
address and telecopy number (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention of Loan and
Agency Services Group (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (713)
▇▇▇-▇▇▇▇), with a copy to JPMorgan Chase Bank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy 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 Parties and the
Administrative 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.
Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or any Account Party may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications. Without limiting the foregoing, the Account Parties may furnish
to the Administrative Agent and the Lenders the financial statements required to
be furnished by it pursuant to Section 6.01(a), 6.01(b) or 6.01(c) by electronic
communications pursuant to procedures approved by the Administrative Agent.
SECTION 10.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any
Credit Agreement
-74-
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Account Parties therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent or any Lender may have had notice or knowledge of such Default at the
time.
(b) Amendments. Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Obligors and the Required Lenders or by the Obligors
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall:
(i) increase the Commitment of any Lender without the written consent
of such Lender,
(ii) reduce the principal amount of any Loan or the amount of any
reimbursement obligation of an Account Party in respect of any LC
Disbursement or reduce the rate of interest thereon, or reduce any fees or
other amounts payable hereunder, without the written consent of each Lender
directly affected thereby,
(iii) postpone the scheduled date of payment of the principal amount
of any Loan or 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 an "evergreen" provision"), without the written consent of each
Lender directly affected thereby,
(iv) change Section 2.20(c) or 2.20(d) without the consent of each
Lender directly affected thereby,
(v) release any of the Guarantors from any of their guarantee
obligations under Article III without the written consent of each Lender,
and
(vi) change any of the provisions of this Section or the percentage in
the definition of the term "Required 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 Administrative Agent hereunder without the
prior written consent of the Administrative Agent.
Credit Agreement
-75-
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Account Parties jointly and severally agree to
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), and (ii) all out-of-pocket expenses incurred by
the Administrative Agent or any Lender, including the fees, charges and
disbursements of one legal counsel for the Administrative Agent and one legal
counsel for the Lenders, in connection with the enforcement or protection of its
rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof.
(b) Indemnification by the Account Parties. The Account Parties shall
jointly and severally indemnify the Administrative 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 (but not
including Excluded Taxes), incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby,
the performance by the parties hereto of their respective obligations hereunder
or the consummation of the Transactions or any other transactions contemplated
hereby, (ii) any Loan or the use of the proceeds thereof or any Letter of Credit
or the use thereof (including any refusal by any Lender to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by any Account Party or any of its
Subsidiaries, or any Environmental Liability related in any way to any Account
Party or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses result from or arise out of the gross negligence
or willful misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Account Parties fail
to pay any amount required to be paid by them to the Administrative Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative 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 Administrative Agent in its capacity as such.
(d) Waiver of Consequential Damages, Etc. To the extent permitted by
applicable law, no Account Party shall assert, and each Account Party hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive
Credit Agreement
-76-
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 10.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that (i) no Account Party may
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 an Account Party without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Assignments by Lenders. (i) Subject to the conditions set forth in
paragraph (b)(ii) of this Section, any Lender may assign all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans and LC Disbursements at the time owing to it) to one or
more NAIC Approved Banks (or, in the case of any assignment by a Lender under
the Revolving Credit Tranche, to one or more Persons) with the prior written
consent (such consent not to be unreasonably withheld) of:
(A) the Account Parties, provided that no consent of any Account Party
shall be required for an assignment to a Lender, an Affiliate of a Lender,
an Approved Fund or, if an Event of Default under clause (a), (b), (g) or
(h) of Article VIII has occurred and is continuing, any other assignee; and
(B) the Administrative Agent; and
(C) the Issuing Lender with respect to Participated Letters of Credit.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender, an Approved Fund
or an Affiliate of a Lender or an assignment of the entire remaining amount
of the assigning Lender's Commitment, the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date
the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless each
of the Account Parties and the Administrative Agent otherwise consent,
provided that no such consent of the Account Parties shall be required if
an Event of Default under clause (a), (b), (g) or (h) of Article VIII has
occurred and is continuing;
Credit Agreement
-77-
(B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement;
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver an
Administrative Questionnaire to the Administrative Agent (with a copy to XL
Capital).
(iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(v) of this Section, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender'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 Sections
2.17, 2.18, 2.19 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.04
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 paragraph (c) of
this Section.
(iv) 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 Administrative Agent and the Account Parties, the option to
provide to the Account Parties all or any part of any Loan or LC Disbursement
that such Granting Lender would otherwise be obligated to make to the Account
Parties pursuant to Section 2.01, provided that (i) nothing herein shall
constitute a commitment by any SPV to make any Loan or LC Disbursement, (ii) if
an SPV elects not to exercise such option or otherwise fails to provide all or
any part of such Loan or LC Disbursement, the Granting Lender shall be obligated
to make such Loan or LC Disbursement pursuant to the terms hereof and (iii) the
Account Parties may bring any proceeding against either or both the Granting
Lender or the SPV in order to enforce any rights of the Account Parties
hereunder. The making of a Loan or LC Disbursement by an SPV hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan or 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, reorganization, arrangement,
insolvency or liquidation proceedings or similar
Credit Agreement
-78-
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 Section, any SPV may with notice to,
but without the prior written consent of, the Account Parties or the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loan or Letter of Credit to its Granting
Lender or to any financial institutions (consented to by the Account Parties and
the Administrative Agent) providing liquidity and/or credit support (if any)
with respect to commercial paper issued by such SPV to fund such Loans and 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. Notwithstanding anything to the
contrary in this Agreement, no SPV shall be entitled to any greater rights under
Section 2.17 or Section 2.19 than its Granting Lender would have been entitled
to absent the use of such SPV. This paragraph may not be amended without the
consent of any SPV at the time holding Loans or LC Disbursements under this
Agreement.
(v) The Administrative Agent, acting for this purpose as an agent of the
Account Parties, shall maintain at one of its offices in New York City a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, the Commitment of, and
principal amount of the Loans and 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 Parties, the Administrative
Agent and the Lenders shall 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.
(vi) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph
(b)(ii)(C) of this Section and any written consent to such assignment required
by paragraph (b)(i) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(c) Participations. (i) Any Lender may, without the consent of the Account
Parties, the Administrative Agent or any Issuing Lender, sell participations to
one or more banks 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, the Loans and LC
Disbursements owing to it); provided that (A) any such participation sold to a
Participant which is not a Lender, an Approved Fund or a Federal Reserve Bank
shall be made only with the consent (which in each case shall not be
unreasonably withheld) of XL Capital and the Administrative Agent, unless a
Default has occurred and is continuing, in which case the consent of XL Capital
shall not be required, (B) such Lender's obligations under this Agreement and
the other Credit Documents shall remain unchanged, (C) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (D) the
Credit Agreement
-79-
Account Parties, the Administrative Agent 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 Credit Documents. 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 Credit Documents and to approve any amendment,
modification or waiver of any provision of this Agreement or the other Credit
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 Section 10.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Account Parties agree that each Participant shall be entitled to the benefits of
Sections 2.17, 2.18 and 2.19 (subject to the requirements of such Sections) to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.20(d) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater payment
under Section 2.17, 2.18 or 2.19 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant
or the Lender interest assigned, unless (A) the sale of the participation to
such Participant is made with the Account Parties' prior written consent and (B)
in the case of Section 2.17 or 2.19, the entitlement to greater payment results
solely from a Change in Law formally announced after such Participant became a
Participant.
(d) Certain Pledges. 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, including any such pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(e) No Assignments to Account Parties or Affiliates. Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate any
interest in any Loan or LC Exposure held by it hereunder to any Account Party or
any of its Affiliates or Subsidiaries without the prior consent of each Lender.
SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Account Parties herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and the issuance of any Letters of Credit, regardless of any investigation made
by any such other party or on its behalf and notwithstanding that the
Administrative 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 the
principal of, or any accrued interest on, any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.17, 2.18, 2.19 and 10.03 and Article IX
shall survive and remain in
Credit Agreement
-80-
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract between and among the parties relating to
the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 5.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Account Party against any of and all the
obligations of such Account Party now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement and although such obligations may be unmatured.
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each Obligor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.
Credit Agreement
-81-
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
against any Obligor or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each Obligor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Service of Process. By the execution and delivery of this Agreement, XL
Capital Ltd, XL Insurance (Bermuda) Ltd and XL Re Ltd acknowledge that they have
by a separate written instrument, designated and appointed CT Corporation
System, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or any
successor entity thereto), as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to this Agreement
that may be instituted in any federal or state court in the State of New York.
Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
(e) Waiver of Immunities. To the extent that any Account Party has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution or execution, on the ground of sovereignty or
otherwise) with respect to itself or its property, it hereby irrevocably waives,
to the fullest extent permitted by applicable law, such immunity in respect of
its obligations under this Agreement.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Credit Agreement
-82-
SECTION 10.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. Each of the Account Parties
acknowledge that from time to time financial advisory, investment banking and
other services may be offered or provided to any Account Party 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 Account Parties hereby authorizes each Lender to share any information
delivered to such Lender by such Account Party 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
(i) any such information shall be used only for the purpose of advising the
Account Parties or preparing presentation materials for the benefit of the
Account Parties and (ii) any such subsidiary or affiliate receiving such
information shall be bound by the provisions of paragraph (b) of this Section as
if it were a Lender hereunder. Such authorization shall survive the repayment of
the Loans, the expiration or termination of the Letters of Credit, the
expiration or termination of the Commitments or the termination of this
Agreement or any provision hereof.
(b) Confidentiality. Each of the Administrative Agent, the Lenders and each
SPV agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (i) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (ii) to the extent requested
by any regulatory authority (including self-regulating organizations) having
jurisdiction over the Administrative Agent or any Lender (or any Affiliate
thereof), (iii) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (iv) to any other party to this
Agreement, (v) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, (vi) subject to an agreement in writing containing provisions
substantially the same as those of this paragraph and for the benefit of the
Account Parties, to (a) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (b) any actual or prospective counterparty (or its advisors) to any
swap or derivative transaction relating to any Account Party and its
obligations, (vii) with the consent of the Account Parties or (viii) to the
extent such Information (A) becomes publicly available other than as a result of
a breach of this paragraph or (B) becomes available to the Administrative Agent
or any Lender on a nonconfidential basis from a source other than an Account
Party. For the purposes of this paragraph, "Information" means all information
received from an Account Party relating to an Account Party or its business,
other than any such information that is available to the Administrative Agent or
any Lender on a nonconfidential basis prior to disclosure by such Account Party;
provided that, in the case of information received from an Account Party after
the date hereof, such information is clearly identified at the time of delivery
as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such
Credit Agreement
-83-
Person would accord to its own confidential information. Notwithstanding the
foregoing, each of the Administrative Agent and the Lenders agree that they will
not trade the securities of any of the Account Parties based upon non-public
Information that is received by them.
SECTION 10.13. Judgment Currency. This is an international loan transaction
in which the obligations of each Account Party under this Agreement to make
payment hereunder shall be satisfied only in Dollars and only if such payment
shall be made in New York City, and the obligations of each Account Party under
this Agreement to make payment to (or for account of) a Lender in Dollars shall
not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any other currency or in another place
except to the extent that such tender or recovery results in the effective
receipt by such Lender in New York City of the full amount of Dollars payable to
such Lender under this Agreement. If for the purpose of obtaining judgment in
any court it is necessary to convert a sum due hereunder in Dollars into another
currency (in this Section called the "judgment currency"), the rate of exchange
that shall be applied shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase such Dollars at the principal
office of the Administrative Agent in New York City with the judgment currency
on the Business Day next preceding the day on which such judgment is rendered.
The obligation of each Account Party in respect of any such sum due from it to
the Administrative Agent or any Lender hereunder (in this Section called an
"Entitled Person") shall, notwithstanding the rate of exchange actually applied
in rendering such judgment, be discharged only to the extent that on the
Business Day following receipt by such Entitled Person of any sum adjudged to be
due hereunder in the judgment currency such Entitled Person may in accordance
with normal banking procedures purchase and transfer Dollars to New York City
with the amount of the judgment currency so adjudged to be due; and each Account
Party hereby, as a separate obligation and notwithstanding any such judgment,
agrees to indemnify such Entitled Person against, and to pay such Entitled
Person on demand, in Dollars, the amount (if any) by which the sum originally
due to such Entitled Person in Dollars hereunder exceeds the amount of the
Dollars so purchased and transferred.
SECTION 10.14. USA PATRIOT Act. Each Lender hereby notifies the Account
Parties that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), such Lender is required to
obtain, verify and record information that identifies the Account Parties, which
information includes the name and address of the Account Parties and other
information that will allow such Lender to identify each Account Party in
accordance with said Act.
Credit Agreement
-84-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
X.L. AMERICA, INC., as an
Account Party and a Guarantor
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
U.S. Federal Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
XL INSURANCE (BERMUDA) LTD,
as an Account Party and a Guarantor
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice-President &
Chief Financial Officer
U.S. Federal Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
XL RE LTD,
as an Account Party and a Guarantor
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Underwriting
Officer
U.S. Federal Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
Credit Agreement
-85-
IN WITNESS WHEREOF, XL Capital has caused this Agreement to be duly
executed as a Deed by an authorized officer as of the day and year first above
written.
EXECUTED AS A DEED by XL CAPITAL LTD,
as an Account Party and a Guarantor
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
witness
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President, Chief
Corporate Legal Officer & Secretary
U.S. Federal Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
[SEAL]
Credit Agreement
-▇▇-
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ CHASE BANK, N.A.,
individually and as Administrative Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
BARCLAYS BANK PLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Manager
DEUTSCHE BANK AG NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
Credit Agreement
-87-
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
CALYON NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Title: Asst. Vice President
Credit Agreement
-▇▇-
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
HSBC BANK USA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇ BROTHERS BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
LLOYDS TSB BANK PLC, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇.▇. Tuck
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
Title: Vice President
Financial Institutions, USA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Director - Project Finance (USA)
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Credit Agreement
-▇▇-
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ PLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Relationship Director
▇▇▇▇▇▇▇ STREET CREDIT CORPORATION
By: /s/ Manda D'Agata
----------------------------------------------
Name: Manda D'Agata
Title: Assistant Vice President
BAYERISCHE LANDESBANK, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Second Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: First Vice President
BNP PARIBAS, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
Credit Agreement
-90-
MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: First Vice President
THE BANK OF NEW YORK
By: /s/ Sreecaran Ganesan
----------------------------------------------
Name: Sreecaran Ganesan
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.
NEW YORK BRANCH
By: /s/ Chimie T. Pemba
----------------------------------------------
Name: Chimie T. Pemba
Title: Authorized Signatory
UBS AG, STAMFORD BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Director
Banking Products Services, US
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate Director
Banking Products Services, US
Credit Agreement
-91-
CREDIT SUISSE NEW YORK BRANCH
By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Associate
ING BANK, N.V.
By: /s/ M.E. Sharman
----------------------------------------------
Name: M.E. Sharman
Title: Managing Director
By: /s/ ▇.▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: Director
MIZUHO CORPORATE BANK (USA)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Corporate Banking Officer
Credit Agreement
