EXHIBIT 10.2
PREMIUM LETTER
October 13, 2006
XL Asset Funding Company I LLC
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Re: INSURANCE AND INDEMNITY AGREEMENT (the "Insurance
Agreement"), dated as of October 13, 2006, among XL CAPITAL ASSURANCE INC., a
New York stock insurance company (together with its successors and assigns,
"XLCA"), XL ASSET FUNDING COMPANY I LLC, a Delaware limited liability company
(the "Investment Agreement Provider") and XL LIFE AND ANNUITY HOLDING COMPANY, a
Delaware corporation (together with its successors and assigns, "Holding
Company" and, together with Investment Agreement Provider, the "Provider
Entities").
Ladies and Gentlemen:
This letter will confirm the agreement of XL Asset Funding Company I LLC
("XLAF") and XL Capital Assurance Inc. ("XLCA") that XLAF will make the payments
set forth below in connection with and in consideration of the issue by XLCA of
Financial Guaranty Insurance Policies (collectively, the "Policies").
Capitalized terms used herein but not defined herein shall have the meanings
given those terms in the Insurance Agreement.
The payments payable below shall constitute the "Premium" referred to in the
Insurance Agreement. This letter is the "Premium Letter" referred to in the
Insurance Agreement. The obligations of XLAF hereunder constitute obligations of
XLAF under the Insurance Agreement and this letter shall be deemed to be a part
of the Insurance Agreement as if fully set forth therein.
The Premium (the "Premium") shall be paid on the tenth (10th) Business Day of
each month (or, if such day is not a Business Day, then the next succeeding
Business Day) in arrears, based on the actual number of days in the immediately
preceding calendar month and a year of 365/366 days, in an amount equal to ten
(10) basis points per annum multiplied by sum of the weighted average of the
outstanding principal balance of each Qualified Investment Contract during the
immediately preceding calendar month. The Premium shall be summarized as shown
in the attached Monthly Premium Report attached hereto as Exhibit A and which
shall be delivered to XLCA each month when the Premium is paid. Any changes must
be agreed to by both parties.
Any payments of Premium payable hereunder, once paid, shall not be refundable
for any reason whatsoever, including, without limitation, the lack of any
payment under the Insurance Policies.
No recourse under this letter shall be had against, and no personal liability
shall attach to, any officer, employee, director, affiliate or shareholder of
any party hereto, as such, by the enforcement of any assessment or by any legal
or equitable proceeding, or by virtue of any statute or otherwise in respect of
this letter, it being expressly agreed and understood that this letter is solely
a corporate obligation of each party hereto, and that any and all personal
liability, either at common law or in equity, or by statute or constitution, of
every such officer, employee, director, affiliate or shareholder for breaches by
any party hereto of any obligations under this letter is hereby expressly waived
as a condition of and in consideration for the execution and delivery of this
letter.
Payment to XLCA shall be made by Federal funds wire transfers to XLCA to the
account set forth below, unless another account is designated to you in writing
by a Managing Director of XLCA, with the following details specifically stated
on the wire instructions:
Receiving Bank: Bank of America
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Beneficiary: XL Capital Assurance Inc.
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Account Number ▇▇▇-▇▇▇-▇▇▇▇
Reference: XLAF GIC Program
The Investment Agreement Provider agrees that this letter and the contents
thereof are for its confidential use only and will not, without the prior
written consent of XLCA (except as otherwise required by law), disclose this
letter and the contents thereof to any Person other than its officers,
directors, accountants, attorneys and other advisors.
This agreement shall be governed by the laws of the State of New York, without
regard to its conflicts of law principles.
Sincerely,
XL CAPITAL ASSURANCE INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Managing Director
Acknowledged and Agreed to by
XL ASSET FUNDING COMPANY I LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President