AMENDMENT NO.2 TO CREDIT AGREEMENT

Exhibit 10.1

 

EXECUTION COPY

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

AMENDMENT NO. 2, dated as of May 5, 2006, to the Credit Agreement (as defined below), between XL CAPITAL LTD, a Cayman Islands exempted limited company, X.L. AMERICA, INC., a Delaware corporation, XL INSURANCE (BERMUDA) LTD, a Bermuda limited liability company, and XL RE LTD, a Bermuda limited liability company, each of the Lenders party to the Credit Agreement and JPMORGAN CHASE BANK, N.A. as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

The Obligors, the Lenders and the Administrative Agent are parties to a Three-Year Credit Agreement dated as of June 23, 2004 (as amended by Amendment No. 1 dated as of June 22, 2005, the “Credit Agreement”), providing, subject to the terms and conditions thereof, for extensions of credit to be made by or on behalf of said Lenders to the Account Parties in an aggregate principal or face amount not exceeding $2,000,000,000. The Obligors, the Lenders and the Administrative Agent wish to amend the Credit Agreement in certain respects and, accordingly, the parties hereto hereby agree as follows:

 

Section 1. Definitions. Except as otherwise defined in this Amendment No. 2, terms defined in the Credit Agreement are used herein as defined therein.

 

Section 2. Amendments. Effective as of the date hereof as provided in Section 5 of this Amendment No. 2, the Credit Agreement is hereby amended as follows:

 

2.01. References in the Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references to the Credit Agreement as amended hereby.

 

2.02. Section 1.01 of the Credit Agreement is hereby amended by inserting the following definitions (or, in the case of any of the following defined terms that are already defined in the Credit Agreement, by amending and restating in its entirety each such term to read as set forth below) in their proper respective alphabetical locations:

 

“SCA” means Security Capital Assurance Ltd, a Bermuda limited liability company.

 

“SCA IPO” means the issuance or sale of common shares of SCA to the public pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, in connection with an underwritten offering.

 

“Significant Subsidiary” means, at any time, each Subsidiary of XL Capital that, as of such time, meets the definition of a “significant subsidiary” under Regulation S-X of the SEC; provided, however, that for purposes of this Agreement, from and after the consummation of the SCA IPO, neither SCA nor any of its Subsidiaries shall be a “Significant Subsidiary” of XL Capital.

 

 

“Subsidiary” means, with respect to any Person (the “parent”), at any date, any corporation (or similar entity) of which a majority of the shares of outstanding capital stock normally entitled to vote for the election of directors (regardless of any contingency which does or may suspend or dilute the voting rights of such capital stock) is at such time owned directly or indirectly by the parent or one or more subsidiaries of the parent; provided, however, that for purposes of this Agreement, from and after the consummation of the SCA IPO, neither SCA nor any of its Subsidiaries shall be a “Subsidiary” of any Account Party. Unless otherwise specified, “Subsidiary” means a Subsidiary of an Account Party.

 

“XL Capital Group” means XL Capital Group as determined from time to time by A.M. Best & Co. (or its successor).

 

2.03. Section 6.09 of the Credit Agreement is hereby amended by inserting a new sentence at the end thereof to read as follows:

 

“Notwithstanding anything in this Section to the contrary, from and after the SCA IPO, no Account Party will issue any Letter of Credit, or renew or permit to renew any Letter of Credit existing as of the SCA IPO, or use the proceeds of any Loan, to support the obligations of, or otherwise primarily for the general corporate purposes of, SCA and its Subsidiaries”.

 

2.04. Section 7.08 of the Credit Agreement is hereby amended by inserting the word “Group” immediately after the reference in the first line thereof to “XL Capital”.

 

2.05. Section 10.04(c) of the Credit Agreement is hereby amended by inserting a new clause (iii) at the end thereof to read as follows:

“(iii) In the event that any Lender sells participations in a Loan or Commitment, such Lender, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register on which it enters the name of all participants in the Loans and Commitments held by it (the “Participant Register”). The entries in the Participant Register shall be conclusive in the absence of manifest error, and the participating Lender shall treat each Person whose name is recorded in the Participant Register as the Participant for all purposes of this Agreement and the other Loan Documents, notwithstanding any notice to the contrary.”

 

Section 3. Waiver. Effective as of the date hereof as provided in Section 5 of this Amendment No. 2, the Lenders hereby agree that, notwithstanding anything in Section 7.02 of the Credit Agreement to the contrary, the issuance or sale of shares of SCA pursuant to the SCA IPO shall be permitted and shall not reduce the basket under Section 7.02(b) of the Credit Agreement available to the Account Parties and their respective Subsidiaries for the calendar year ending December 31, 2006.

 

Section 4. Representations and Warranties. Each Account Party hereby represents and warrants to the Administrative Agent and the Lenders that (i) the representations

 

and warranties of such Account Party set forth in Article IV of the Credit Agreement are, on the date hereof, true and complete as if made on the date hereof (and after giving effect to this Amendment No. 2) and as if each reference in said Article IV to “this Agreement” includes reference to this Amendment No. 2 and (ii) both immediately before and after giving effect to the amendments under Section 2 hereof, no Default has occurred and is continuing.

 

Section 5. Conditions Precedent. The amendments to the Credit Agreement set forth in Section 2 of this Amendment No. 2 and the waiver under Section 3 of this Amendment No. 2 shall become effective, as of the date hereof, upon receipt by the Administrative Agent of one or more counterparts of this Amendment No. 2 duly executed and delivered by each of the Obligors and the Required Lenders.

 

Section 6. Miscellaneous. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 2 may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement and any of the parties hereto may execute this Amendment No. 2 by signing any such counterpart. This Amendment No. 2 shall be governed by, and construed in accordance with, the laws of the State of New York.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed and delivered as of the day and year first above written.

 

XL CAPITAL LTD,

 

as an Account Party and a Guarantor

 

By:         /s/ Paul Dowden        

Name:  Paul Dowden

Title: Senior Vice President and Chief Risk

                      Officer

 

X.L. AMERICA, INC.,

as an Account Party and a Guarantor

 

By_____/s/ Gabriel G. Carino____________

Name: Gabriel G. Carino

Title: Vice President

XL INSURANCE (BERMUDA) LTD,

as an Account Party and a Guarantor

 

By:      /s/ Christopher A. Coelho        

Name:  Christopher A. Coelho

Title:   Senior Vice President and Chief

                        Financial Officer 

 

XL RE LTD,

as an Account Party and a Guarantor

 

By:          /s/ Andrew Turnbull        

Name: Andrew Turnbull

Title: Senior Vice President

 

JPMORGAN CHASE BANK, N.A.,

individually and as Administrative Agent

By: /s/ Helen L. Newcomb   

Name: Helen L. Newcomb

Title: Managing Director

CITIBANK, N.A.

By: /s/ Michael A. Taylor   

Name: Michael A. Taylor

Title: Managing Director

BARCLAYS BANK PLC

By: /s/ Des Potter   

Name: Des Potter

Title: Director

DEUTSCHE BANK AG NEW YORK BRANCH

By: /s/ Ruth Leung    

Name: Ruth Leung

Title: Director

By: /s/ Richard Herder   

Name: Richard Herder

Title: Managing Director

KEYBANK NATIONAL ASSOCIATION

By: /s/ Mary K. Young   

Name: Mary K. Young

Title: Senior Vice President

WACHOVIA BANK, NATIONAL ASSOCIATION

By: /s/ Joan Anderson   

Name: Joan Anderson

Title: Director

HSBC BANK USA

By: /s/ Daniel G. Serrao   

Name: Daniel G. Serrao

Title: Senior Vice President

MERRILL LYNCH BANK USA

By: /s/ Frank Stepan   

Name: Frank Stepan

Title: Vice President

THE BANK OF TOKYO-MITSUBISHI, LTD.

NEW YORK BRANCH

By: /s/ Chimie T. Pemba   

Name: Chimie T. Pemba

Title: Authorized Signatory

BANK OF AMERICA, N.A.

By: /s/ Debra Basler   

Name: Debra Basler

Title: Senior Vice President

BNP PARIBAS

By: /s/ Marguerite L. Lebon  

Name: Marguerite L. Lebon

Title: Vice President

By: /s/ Laurent Vanderzyppe  

Name: Laurent Vanderzyppe

Title: Managing Director

CREDIT SUISSE NEW YORK BRANCH (f/k/a
Credit Suisse First Boston New York Branch)

By: /s/ Jay Chall    

Name: Jay Chall

Title: Director

By: /s/ James Neira   

Name: James Neira

Title: Associate

ING BANK N.V., LONDON BRANCH

By: /s/ M E R Sharman   

Name: M E R Sharman

Title: Managing Director

By: /s/ N J Marchant   

Name: N J Marchant

Title: Director

LLOYDS TSB BANK PLC, NEW YORK BRANCH

By: /s/ Jason Eperon  

Name: Jason Eperon

Title: Assistant Vice President

By: /s/ Candi Obrentz  

Name: Candi Obrentz

Title: Assistant Vice President

THE ROYAL BANK OF SCOTLAND PLC

By: /s/ David Howes  

Name: David Howes

Title: Vice President

THE BANK OF NEW YORK

By: /s/ Lizanne T. Eberle  

Name: Lizanne T. Eberle

Title: Vice President

COMERICA BANK

By: /s/ Chatphet Saipetch  

Name: Chatphet Saipetch

Title: Vice President

THE BANK OF NOVA SCOTIA

By: /s/ Todd S. Meller  

Name: Todd S. Meller

Title: Managing Director