Exhibit 10.14.3
EXECUTION COUNTERPART
AMENDMENT NO. 2 TO CREDIT AGREEMENT (5-YEAR)
AMENDMENT NO. 2 dated as of June 30, 1999, between MID OCEAN
LIMITED, a corporation duly organized and validly existing under the laws of the
Cayman Islands (the "Company"); each of the other Obligors identified under the
caption "OBLIGORS" on the signature pages hereto; each of the lenders that is a
signatory hereto (individually, a "Bank" and, collectively, the "Banks"); and
THE CHASE MANHATTAN BANK, as administrative agent for the Banks (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
The Company, the Banks and the Administrative Agent are parties to a
Credit Agreement (5-Year) dated as of September 2, 1997, as amended by Amendment
No. 1 dated as of August 5, 1998 (the "Credit Agreement"), providing, subject to
the terms and conditions thereof, for loans to be made by said Banks to the
Company in an aggregate principal amount not exceeding $100,000,000. The
Company, the Banks and the Administrative Agent wish to amend the Credit
Agreement in certain respects, including adding XL Capital, XL Insurance and XL
Mid Ocean (as such terms are defined below) as borrowers and guarantors
thereunder 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 Amendment Date as
provided in Section 5 below, the Credit Agreement is hereby amended as follows:
2.01. References in the Credit Agreement (including references to
the Credit Agreement as amended hereby) 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
adding the following new definitions (to the extent not already included in said
Section 1.01) and inserting the same in the appropriate alphabetical locations
and amending the following definitions (to the extent already included in said
Section 1.01), as follows:
"Borrower" shall mean each of the Company, XL Capital, XL Insurance
and XL Mid Ocean.
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"Borrowers' Jurisdiction" shall mean (a) Bermuda, (b) the Cayman
Islands and (c) any other country (i) where any Borrower is licensed or
qualified to do business or (ii) from which payments hereunder are made by
any Borrower.
"Consolidated Tangible Net Worth" shall mean at any date the
consolidated stockholders' equity of XL Capital and its consolidated
Subsidiaries less their consolidated Intangible Assets, all determined as
of such date. For purposes of this definition "Intangible Assets" means
the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups (other than write-ups resulting
from foreign currency translations and write-ups of assets of a going
concern business made within twelve months after the acquisition of such
business) subsequent to November 30, 1998, in the book value of any asset
owned by XL Capital or a consolidated Subsidiary and (ii) all unamortized
debt discount and expense, unamortized deferred charges, deferred
acquisition costs, goodwill, patents, trademarks, service marks, trade
names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization or developmental expenses and other intangible assets.
"Designated Lender" shall mean, with respect to any Designating
Lender, an Eligible Designee designated by it pursuant to Section 11.06(j)
hereof as a Designated Lender for purposes of this Agreement.
"Designating Lender" shall mean, with respect to each Designated
Lender, the Bank that designated such Designated Lender pursuant to
Section 11.06(j) hereof.
"Eligible Designee" shall mean a special purpose corporation that
(i) is organized under the laws of the United States or any state thereof,
(ii) is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and (iii) issues (or the
parent of which issues) commercial paper rated at least A-1 or the
equivalent thereof by Standard & Poor's or P-1 or the equivalent thereof
by another recognized rating service.
"Guarantor" shall mean each of the Company, XL Capital, XL Insurance
and XL Mid Ocean.
"Indebtedness" shall mean, for any Person: (a) indebtedness created,
incurred or assumed by such Person for borrowed money or obligations of
such Person evidenced by bonds, debentures, promissory notes or similar
instruments; (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property or services, other than trade accounts
payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business; (c) Capital Lease
Obligations of
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such Person; (d) Indebtedness of others secured by a Lien on the Property
of such Person, whether or not the respective indebtedness so secured has
been assumed by such Person; (e) obligations of such Person in respect of
letters of credit or similar instruments issued or accepted by banks and
other financial institutions for account of such Person (other than
letters of credit and banker's acceptances arising in the ordinary course
of such Person's business); and (f) Guarantees by such Person of
Indebtedness of others; provided that insurance payment liabilities, as
such, and liabilities in the ordinary course of such person's business as
an insurance or reinsurance company or corporate member of Lloyd's or as a
provider of financial services or contracts (other than in connection with
the provision of financing to such Person or any of such Person's
Affiliates) shall not be deemed to constitute Indebtedness.
"Obligors" shall mean each Borrower and each Guarantor.
"Total Funded Debt" shall mean, at any time, all Indebtedness of XL
Capital and its Subsidiaries which would at such time be classified in
whole or in part as a liability on consolidated balance sheet of XL
Capital in accordance with GAAP.
"XL Capital" shall mean XL Capital Ltd, a corporation duly organized
and validly existing under the laws of the Cayman Islands.
"XL Insurance" shall mean XL Insurance Ltd, a limited liability
company duly organized and validly existing under the laws of Bermuda.
"XL Mid Ocean" shall mean XL Mid Ocean Reinsurance Ltd, a limited
liability company duly organized and validly existing under the laws of
Bermuda.
2.03. The following definitions in Section 1.01 of the Credit
Agreement are hereby amended as follows:
(i) The definitions of "Affiliate", "Business Day", "ERISA
Affiliate" and "ERISA Plan" are amended by deleting the references
therein to "the Company" and replacing them with "any Borrower".
(ii) The definitions of "Administrative Agent's Account",
"Agreed Foreign Currency", "Applicable Lending Office",
"Eurocurrency Loans", "Foreign Benefit Plan" and "Material
Subsidiary" are amended by deleting the references therein to "the
Company" and replacing them with "the Borrowers".
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(iii) The definitions of "Board of Directors", "Board
Resolution", "Interest Period" and "Officer" are amended by deleting
the references therein to "the Company" and replacing them with "the
relevant Borrower".
(iv) The definitions of "Change of Control", "Deferred
Acquisition Expenses", "Fiscal Dates", "Material Adverse Effect",
"Net Worth" and "Total Debt" are amended by deleting the references
therein to "the Company" and replacing them with "XL Capital".
2.04 Section 1.01 of the Credit Agreement is hereby amended by
deleting the definition of "Assumed Reinsurance" and "Tangible Net Worth".
2.05 The Credit Agreement is hereby amended by deleting each
reference therein to "Mid Ocean Reinsurance" and replacing it with "XL Mid
Ocean".
2.06. The Credit Agreement is hereby amended as follows by:
(i) deleting each reference to "Company Jurisdiction" and
replacing it with "Borrowers' Jurisdiction";
(ii) deleting each reference to "the Company" in Sections
2.01, 4.01(a), 4.01(b), 4.02, 4.05, 4.07(d), 7.03, 7.04, 7.06, 9(a),
9(b), 9(c), 9(e), 9(f), 9(g), 9(h), 10.03, 10.04, 11.06(g), 11.06(h)
and 11.06(i) and replacing it with "any Borrower";
(iii) deleting each reference to "the Company" in Sections
1.02(b), 2.02, 2.03, 2.04, 2.07, 2.08, 2.09, 3.01, 3.02, 4.07(c),
5.01(b), 5.01(c), 5.01(d), 5.02, 5.05(b), 6.02, 7.09, 7.16, 8.01(g),
8.01(h), 8.01(i), 10.05, 10.06, 10.08, 11.03, 11.06(b), 11.06(c),
11.06(f), 11.12, 11.14(a) and 11.07, and replacing it with "each
Borrower";
(iv) deleting the first reference to "The Company" in Section
4.01(c) and replacing it with "Each Borrower" and deleting the
subsequent references to "the Company" in such Section and replacing
them with "such Borrower";
(v) deleting the first, second and third references to "the
Company" in Section 4.06 and replacing them with "any Borrower",
deleting the subsequent references to "the Company" in such Section
and replacing them with "such Borrower" and deleting the reference
to "such Company" and replacing it with "such Borrower";
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(v) deleting the first reference to "The Company" in Section
4.07(a) and replacing it with "Each Borrower" and the subsequent
references to "the Company" in such Section and replacing them with
"such Borrower";
(vi) deleting the first reference to "The Company" in Section
4.07(b) and replacing it with "any Borrower" and the subsequent
references to "the Company" in such Section and replacing them with
"such Borrower";
(vii) deleting the first reference to "The Company" in Section
5.01(a) and replacing it with "Each Borrower", deleting the second
and third references to "the Company" in such Section and replacing
them with "such Borrower", deleting the reference to "such Company"
in such Section and replacing it with "such Borrower" and deleting
the reference to "any Company" in such Section and replacing it with
"any Borrower";
(viii) deleting the first reference to "the Company" in
Section 5.03 and replacing it with "any Borrower" and deleting the
second reference to the "Company" in such Section and replacing it
with "such Borrower";
(ix) deleting the first reference to "The Company" in Section
5.04 and replacing it with "Each Borrower" and deleting the second
reference to "the Company" in such Section and replacing it with
"such Borrower";
(x) deleting the first reference to "The Company agrees" in
Section 5.05(a) and replacing it with "The Borrowers agree",
deleting the third and fifth references to "the Company" in such
Section and replacing them with "such Borrower", and replacing the
second, fourth, sixth and seventh references to "the Company" in
such Section and replacing them with "any Borrower";
(xi) deleting the first and third references to "the Company"
in Section 5.06 and replacing them with "any Borrower" and deleting
the second and fourth references to "the Company" in such Section
and replacing them with "such Borrower";
(xii) deleting the first and second references to "the
Company" in Section 6.01(a) and replacing them with "each Borrower"
and deleting the third and fourth references to the "Company" and
replacing them with "such Borrower";
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(xiii) deleting the first reference to "the Company" in
Section 6.01(b) and replacing it with "XL Capital", deleting the
second reference to "the Company" and replacing it with "Mid Ocean
Limited, XL Mid Ocean and XL Insurance", deleting the third
reference to "the Company" and replacing it with "the Borrowers" and
deleting the fourth reference to "the Company" and replacing it with
"each Borrower";
(xiv) deleting all references to the Company in the final
unnumbered paragraph of Section 6.01 and replacing them with "the
Borrowers";
(xv) deleting the reference to "the Company" in the first
sentence of Section 7 and replacing it with "the relevant Borrower";
(xvi) deleting the reference to "the Company" in Sections 7.01
and 7.12 and replacing it with "the relevant Borrower";
(xvii) deleting the first, third, fourth and fifth references
to "the Company" in Section 7.05 and replacing them with "each
Borrower" and deleting the second reference to "the Company" in such
Section and replacing it with "such Borrower";
(xviii) deleting each reference to "the Company nor any of its
Subsidiaries" in Sections 7.08, 7.10 and 7.11 and replacing them
with "any Borrower nor any of its Subsidiaries";
(xix) deleting the first three references to "the Company" in
Section 9(d) and replacing them with "any Borrower" and deleting the
last reference to "the Company" in such Section and replacing it
with "such Borrower";
(xx) deleting the first reference to "the Company" in the last
paragraph of Section 9 and replacing it with "any Borrower" and
deleting each other reference to "the Company" in such paragraph and
replacing them with "the Borrowers";
(xxi) deleting the first reference to "the Company" in Section
10.01 and replacing it with "any Borrower" and deleting the second
reference to "the Company" in such Section and replacing it with
"each Borrower";
(xxii) deleting the reference to "any Company" in Section
11.02 and replacing it with "any Borrower";
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(xxiii) deleting the first two references to "the Company" in
Section 11.04 and replacing them with "each Borrower" and deleting
the last reference to "the Company" in such Section and replacing it
with "any Borrower";
(xxiv) deleting the first reference to "the Company" in
Section 11.06(e) and replacing it with "any Borrower" and deleting
the remaining references to "the Company" in such Section and
replacing them with "each Borrower";
(xxv) deleting each reference to "the Company" in the first
paragraph of Section 11.10 and replacing it with "each Borrower" and
deleting the reference to "the Company" in the second paragraph of
Section 11.10 and replacing it with "any Borrower";
(xxvi) deleting each reference to "the Company" in Sections
11.11 and 11.13 and replacing it with "the Borrowers"; and
(xxvii) deleting the first reference to "The Company" in
Section 11.14(b) and replacing it with "Each Borrower" and deleting
the remaining references to "the Company" in such Section and
replacing them with "the relevant Borrower".
2.07. Section 7 of the Credit Agreement is hereby amended by adding,
immediately following Section 7.17, a new Section 7.18 to read as follows:
"7.18. Year 2000 Compliance. XL Capital has (i) initiated a review
and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by material suppliers,
vendors and customers) that could be adversely affected by the risk that
computer applications used by XL Capital or any of its Subsidiaries (or
material suppliers, vendors and customers other than those affecting
customers that may give rise to claims under insurance policies issued by
XL Capital or any Subsidiary of XL Capital) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to
any date after December 31, 1999 (the "Year 2000 Problem") and (ii)
developed a plan and timetable for addressing the Year 2000 Problem on a
timely basis. Based on the foregoing, XL Capital believes that all
computer applications of XL Capital and its Subsidiaries that are material
to its or any of its Subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 ("Year 2000
Compliant"), except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect."
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2.08. Section 8.01(a) of the Credit Agreement is hereby amended in
its entirety as follows:
"(a) Within 60 days after the end of each of the first three
quarterly fiscal periods of each fiscal year of XL Capital, consolidated
statements of operations and cash flows of XL Capital and its Subsidiaries
for such period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related consolidated
balance sheet of XL Capital and its Subsidiaries as at the end of such
period, setting forth in each case in comparative form the corresponding
consolidated figures for the corresponding period (except, in the case of
the balance sheet, to the last day of) in the preceding fiscal year (it
being understood that delivery to the Banks of XL Capital's Report on Form
10-Q filed with the SEC shall satisfy the financial statement delivery
requirements of this Section 8.01(a) so long as the financial information
required to be contained in such Report is substantially the same as the
financial information required under this Section 8.01(a)), accompanied by
an Officer's Certificate, which certificate shall state that said
consolidated financial statements present fairly, in all material
respects, the consolidated financial condition and results of operations
of XL Capital and its Subsidiaries in accordance with generally accepted
accounting principles (except for the absence of footnotes), consistently
applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments);".
2.09. Section 8.01(b) of the Credit Agreement is hereby amended in
its entirety as follows:
"(b) as soon as practicable and in any event within 100 days after
the end of each fiscal year of XL Capital, consolidated statements of
operations and cash flows of XL Capital and its Subsidiaries for such
fiscal year and the related consolidated balance sheet of XL Capital and
its Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding consolidated figures for the
preceding fiscal year (it being understood that delivery to the Banks of
XL Capital's Report on Form 10-K filed with the SEC shall satisfy the
financial statement delivery requirements of this Section 8.01(b) so long
as the financial information required to be contained in such Report is
substantially the same as the financial information required under this
Section 8.01(b)), and accompanied by a report thereon of Price
WaterhouseCoopers LLP or any other independent certified public
accountants of recognized national standing, which report shall state
(without a "going concern" or like qualification or exception and without
qualification or exception as to the scope of its audit) that said
consolidated financial statements present fairly, in all material
respects, the consolidated financial condition and results of operations
of XL Capital and its Subsidiaries as at the end of, and for, such fiscal
year in accordance with generally accepted accounting principles in the
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United States of America; and with 100 days after the end of each fiscal
year of each of the Borrowers and within 60 days after the end of each
fiscal quarter of each such fiscal year, a certificate dated as of the end
of such fiscal year or quarter, signed on behalf of each Borrower by a
principal financial officer thereof, (i) stating that as of the date
thereof no Event of Default has occurred and is continuing or exists, or
if an Event of Default has occurred and is continuing or exists,
specifying in detail the nature and period of existence thereof and any
action with respect thereto taken or contemplated to be taken by such
Borrower, (ii) stating in reasonable detail the information and
calculations necessary to establish compliance with the provisions of
Section 8.06 hereof and that such certificate is based on an examination
made by or under the supervision of the signer sufficient to assure that
such certificate is accurate;"
2.10. Sections 8.01(c), (d), (e) and (f) of the Credit Agreement are
deleted in their entirety and replaced with the words "[Intentionally omitted]";
and the unnumbered sentence at the end of Section 8.01 of the Credit Agreement
is deleted in its entirety.
2.11. Clause (j) of Section 8.05 of the Credit Agreement is hereby
redesignated as clause (k) and clauses (h) and (i) of Section 8.05 of the Credit
Agreement are hereby amended in their entirety and a new clause (j) is hereby
added to read as follows:
"(h) Liens securing reimbursement obligations of any of the
Borrowers or their Subsidiaries with respect to letters of credit;
(i) Liens securing Indebtedness incurred so long as such
Indebtedness does not exceed $400,000,000 in the aggregate at any one time
outstanding;
(j) Liens securing Indebtedness outstanding on June 30, 1999 and
listed in Schedule 8.05(j) hereof; and"
2.12. Section 8.06 of the Credit Agreement is hereby amended to read
in its entirety as follows:
"8.06 Certain Financial Covenants.
(a) Consolidated Tangible Net Worth. XL Capital will not, at any
time, permit its Consolidated Tangible Net Worth to be less than
$2,566,000,000.
(b) Ratio of Total Funded Debt to Consolidated Tangible Net Worth.
XL Capital will not permit the ratio of (i) the sum of (x) Total Funded
Debt plus (y) the aggregate undrawn face amount of all letters of credit
(as to which reimbursement obligations are
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unsecured) issued for the account of, or guaranteed by, XL Capital or any
of its consolidated Subsidiaries to (ii) Consolidated Tangible Net Worth
to be greater than 0.35 at any time."
2.13. Section 8 of the Credit Agreement is hereby amended by adding,
immediately following Section 8.13, a new Section 8.14 to read as follows:
"8.14. Year 2000 Compliance. Promptly after any Borrower's discovery
or determination thereof, notice (in reasonable detail) that any computer
application that is material to its or any of its Subsidiaries' business
and operations will not be Year 2000 Compliant (as defined in Section 7.18
hereof), except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect."
2.14. Section 8.12 of the Credit Agreement is hereby deleted in its
entirety and replaced with "[Intentionally omitted]", and each reference to
"Section 8.12" in the Credit Agreement is hereby deleted.
2.15. Section 11.06(a) shall be amended to read in its entirety as
follows:
"(a) No Borrower may assign any of its rights or obligations
hereunder without the prior consent of all the Banks and the
Administrative Agent."
2.16. Section 11.06 of the Credit Agreement is hereby amended by
adding thereto a new paragraph (j) as follows:
"(j) Designated Lenders. Notwithstanding anything to the contrary
contained herein, any Bank (a "Designating Lender") may grant to an
Eligible Designee identified as such (and as a Designated Lender) in
writing from time to time by such Designating Lender to the Administrative
Agent and the Borrowers, the option to provide to the Borrowers all or any
part of any Loan that such Designating Lender would otherwise be obligated
to make to any Borrower pursuant to this Agreement; provided that nothing
herein shall constitute a commitment by such Designated Lender to make any
Loan, (ii) if a Designated Lender elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Designating
Lender shall be obligated to make such Loan pursuant to the terms hereof.
The making of a Loan by a Designated Lender hereunder shall utilize the
Commitment of the Designating Lender to the same extent, and as if, such
Loan were made by such Designating Lender. Each party hereto hereby agrees
that no Designated Lender shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall
remain with the Designating Lender). In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall
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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 Designated Lender, it
will not institute against, or join any other Person in instituting
against, such Designated Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the
United States or any State thereof. As to any Loans or portion thereof
made by it, each Designated Lender shall have all the rights that a Bank
making such Loans or portion thereof would have had under this Agreement
and otherwise; provided that (i) its voting rights under this Agreement
shall be exercised solely by its Designating Lender, (ii) its Designating
Lender shall be deemed to hold its relevant Note as agent for such
Designated Lender to the extent of the Loans or portion thereof funded by
such Designated Lender and (iii) the designation of a Designated Lender
and the funding of Loans by a Designated Lender shall in no event (x)
subject any of the Borrowers to any delay in the making of a Loan, (y)
cause or give rise to any obligation of any of the Borrowers to indemnify
or hold harmless such Designated Lender or any other Person (including
without limitation pursuant to Sections 5.05 and 11.03 hereof) except to
the extent such obligation would have arisen in favor of the Designating
Lender or another Person if the Designating Lender (rather than such
Designated Lender) had made all of such Designated Lender's Loans and such
Designated Lender had not been designated as such hereunder, or (z) render
the performance of any provisions of the Agreement illegal, void or
unenforceable under any provision of law. Each Designating Lender shall
act as administrative agent for its Designated Lender and give and receive
notices and other communications on behalf of its Designated Lender. Any
payments for the account of any Designated Lender shall be paid to its
Designating Lender as administrative agent for such Designated Lender and
neither the Borrowers nor the Administrative Agent shall be responsible
for any Designating Lender's application of such payments. In addition,
any Designated Lender may (i) with notice to, but without the prior
written consent of, XL Capital and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Designating Lender or to any financial
institutions (consented to by XL Capital and the Administrative Agent)
providing liquidity and/or credit support to or for the account of such
Designated Lender to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to
its Loans or portions thereof to any rating agency, commercial paper
dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such Designated Lender. This Section 11.06(j) may not be
amended without the written consent of each Designating Lender which has
designated a Designated Lender."
2.17. The Credit Agreement is hereby amended by adding a new Section
12 to read as follows:
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"Section 12. Guarantee.
12.01. The Guarantee. Each Guarantor hereby jointly and severally
guarantees to each Bank 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 made by the Banks to each of the Borrowers (other
than such Guarantor in its capacity as a Borrower hereunder) and all other
amounts from time to time owing to the Banks or the Administrative Agent
by such Borrowers 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 such Borrower shall fail
to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, such Guarantor will promptly
pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance
with the terms of such extension or renewal.
12.02. Obligations Unconditional. The obligations of the Guarantors
under Section 12.01 hereof are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Borrowers 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 Section
12 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
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(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 Bank exhaust any right, power or remedy or
proceed against any Borrower 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.
12.03. Reinstatement. The obligations of the Guarantors under this
Section 12 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of any Borrower 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 Bank on demand for all reasonable costs and
expenses (including fees of counsel) incurred by the Administrative Agent
or such Bank 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.
12.04. 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 of the
Banks under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section
12.01 hereof, whether by subrogation or otherwise, against any Borrower or
any other guarantor of any of the Guaranteed Obligations or any security
for any of the Guaranteed Obligations.
12.05. Remedies. The Guarantors jointly and severally agree that, as
between the Guarantors and the Banks, the obligations of the Borrowers
under this Agreement may be declared to be forthwith due and payable as
provided in Section 9 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in Section 9
hereof) for purposes of Section 12.01 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such
obligations from
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becoming automatically due and payable) as against any Borrower 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 Borrower) shall forthwith become due and payable by
the Guarantors for purposes of Section 12.01 hereof.
12.06. Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Section 12 constitutes an
instrument for the payment of money, and consents and agrees that any Bank
or the Administrative Agent, at its sole option, in the event of a dispute
by such Guarantor in the payment of any moneys due hereunder, shall have
the right to bring motion-action under New York CPLR Section 3213.
12.07. Continuing Guarantee. The guarantee in this Section 12 is a
continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
12.08. Rights of Contribution. The Guarantors hereby agree, as
between themselves, that if any 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 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 12.08 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
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 12.08, (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
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and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder and any obligations of any other Guarantor that have
been Guaranteed by such Guarantor) to (y) the amount by which the
aggregate fair saleable value of all properties of all of the Guarantors
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 Section 12) of all of the
Guarantors, 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.
12.09. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Guarantor under Section
12.01 hereof would otherwise, taking into account the provisions of
Section 12.08 hereof, 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 12.01 hereof, then,
notwithstanding any other provision hereof to the contrary, the amount of
such liability shall, without any further action by such Guarantor, any
Bank, 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."
2.18. Exhibits and Schedules.
(i) Exhibit E to the Credit Agreement is hereby replaced in its
entirety with Exhibit E attached to this Amendment No. 2, and each reference in
the Credit Agreement to such Exhibit E shall be deemed to refer to the Exhibit E
attached to this Amendment No. 2.
(ii) Schedule 8.05(j) attached to this Amendment No. 2 shall be
deemed attached to and made a part of the Credit Agreement.
Section 3. Addition of Borrowers and Guarantors. Mid Ocean Limited
hereby agrees to become and be a Guarantor under, and each of XL Capital, XL
Insurance and XL Mid Ocean hereby agrees to become and be a Borrower and a
Guarantor under, and as defined, in the Credit Agreement (as amended hereby) and
agrees to be bound by the terms of the Credit Agreement (as so amended) as a
Guarantor and/or Borrower, as the case may be.
Section 4. Representations and Warranties. Each Obligor hereby
represents and warrants to the Administrative Agent and the Banks that (i) the
representations and warranties set
Amendment No. 2 to Credit Agreement (5-Year)
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forth in Section 7 of the Credit Agreement are, both on the date hereof and as
of the Amendment Date (as defined in Section 5 below), true and complete as if
made on each such date (and after giving effect to this Amendment No. 2) and as
if each reference in said Section 7 to "this Agreement" includes reference to
this Amendment No. 2 and (ii) both immediately prior to and as of the date
hereof, no Default shall have occurred and be continuing.
Section 5. Conditions Precedent. The amendments to the Credit
Agreement under Section 2 above shall become effective upon fulfillment on or
prior to a date (prior to July 31, 1999) designated in writing to the
Administrative Agent by XL Capital (the "Amendment Date") of each of the
following conditions precedent:
(a) Corporate Documents. Receipt by the Administrative Agent of
certified copies of the organizational documents of each Obligor and of
all corporate authority for each Obligor (including, without limitation,
board of director resolutions and evidence of the incumbency and specimen
signature of officers) with respect to the execution, delivery and
performance of this Agreement and each other document to be delivered by
each Obligor from time to time in connection herewith and with the Loans
hereunder (and each of the Administrative Agent and each Bank may
conclusively rely on such certificate of incumbency until it receives
notice in writing from such Obligor to the contrary).
(b) Opinions of Counsel to the Company. Receipt by the
Administrative Agent of opinions of (i) Cahill Gordon & Reindel, (ii)
Conyers, Dill & Pearman, (iii) Paul S. Giordano, Esq. and (iv) Hunter &
Hunter, respectively, the Borrowers' and/or Guarantors' counsel in form
and substance satisfactory to the Administrative Agent (and the Obligors
hereby instruct each such counsel to deliver such opinions to the Banks
and the Administrative Agent).
(c) Representations and Warranties. The representations and
warranties contained in Section 4 above shall be true and correct, and
receipt by the Administrative Agent of a certificate of each Obligor to
that effect.
(d) Payments. Evidence (satisfactory to the Administrative Agent) of
payment of all fees and expenses payable to the Administrative Agent
and/or the Banks in connection with this Amendment No. 2 as heretofore
agreed.
(e) Other Documents. Receipt by the Administrative Agent of such
other documents as the Administrative Agent or any Bank or special New
York counsel to Chase may reasonably request.
Amendment No. 2 to Credit Agreement (5-Year)
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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 amendatory instrument 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 law
of the State of New York.
Amendment No. 2 to Credit Agreement (5-Year)
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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.
OBLIGORS
MID OCEAN LIMITED
as Borrower and as Guarantor
By /s/Brian M. O'Hara
--------------------------------
Title: Chairman
XL CAPITAL LTD
as Borrower and as Guarantor
By /s/Brian M. O'Hara
--------------------------------
Title: President & Chief Executive Officer
XL INSURANCE LTD
as Borrower and as Guarantor
By /s/Brian M. O'Hara
--------------------------------
Title: Chairman
XL MID OCEAN REINSURANCE LTD
as Borrower and as Guarantor
By /s/Brian M. O'Hara
--------------------------------
Title: Chairman
Amendment No. 2 to Credit Agreement (5-Year)
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BANKS
THE CHASE MANHATTAN BANK,
Individually and as Administrative Agent
By /s/ Donald Rands
--------------------------------
Title: Vice President
CITIBANK N.A.
By /s/ Michael Taylor
--------------------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES
By /s/ Clinton M. Johnson
--------------------------------
Title: Director
By /s/ John S. McGill
--------------------------------
Title: Director
MELLON BANK, N.A.
By /s/ Karla Maloof
--------------------------------
Title: Vice President
ROYAL BANK OF CANADA
By /s/ Y.J. Bernard
--------------------------------
Amendment No. 2 to Credit Agreement (5-Year)
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Title: Manager
THE BANK OF BERMUDA LIMITED
By /s/ Michael Collins
--------------------------------
Title: Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Sebastian Rocco
--------------------------------
Title: Senior Vice President
STATE STREET BANK AND TRUST COMPANY
By /s/ Edward M. Anderson
--------------------------------
Title: Vice President
BANQUE NATIONALE DE PARIS
By /s/ PhilTruesdale
--------------------------------
Title: Vice President
By /s/
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/
--------------------------------
Amendment No. 2 to Credit Agreement (5-Year)
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Title: Senior Relationship Manager
Amendment No. 2 to Credit Agreement (5-Year)
EXHIBIT E
[Form of Promissory Note]
PROMISSORY NOTE
___________, 1999
FOR VALUE RECEIVED, [INSERT NAME OF BORROWER], a corporation
organized under the laws of the ________________ (the "Borrower") promises to
pay to __________________ (the "Bank"), for account of its respective Applicable
Lending Offices provided for by the Credit Agreement referred to below, at the
Administrative Agent's Account for the respective Currencies of the Loans
evidenced hereby, such amount as shall equal the aggregate unpaid principal
amount of the Loans made by the Bank to the Borrower under the Credit Agreement,
in the respective Currencies in which such Loans are denominated and in
immediately available funds, on the dates and in the principal amounts provided
in the Credit Agreement, and to pay interest on the unpaid principal amount of
each such Loan, at such account, in like money and funds, for the period
commencing on the date of such Loan until such Loan shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, Currency, interest rate and duration of
Interest Period (if applicable) of each Loan made by the Bank to the Borrower,
and each payment made on account of the principal thereof, shall be recorded by
the Bank on its books and endorsed by the Bank on the schedule attached hereto
or any continuation thereof, provided that the failure of the Bank to make any
such recordation or endorsement shall not affect the obligations of the Borrower
to make a payment when due of any amount owing under the Credit Agreement or
hereunder in respect of the Loans made by the Bank.
This Note evidences Loans made by the Bank to the Borrower under the
Credit Agreement (5-Year) dated as of September 2, 1997 (as modified and
supplemented and in effect from time to time, the "Credit Agreement") between
each of the Borrowers party thereto (including the Borrower), each of the
Guarantors party thereto, the lenders named therein (including the Bank), and
The Chase Manhattan Bank, as Administrative Agent, providing for Loans in an
aggregate principal amount not to exceed $100,000,000. Terms used but not
defined in this Note have the respective meanings assigned to them in the Credit
Agreement.
Promissory Note
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 11.06 of the Credit Agreement, this
Note may not be assigned by the Bank to any other Person.
This Note shall be governed by, and construed in accordance with,
the law of the State of New York.
[NAME OF OBLIGOR]
By_________________________
Title:
Promissory Note
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Credit
Agreement to the Borrower, on the dates, in the principal amounts, of the Types,
bearing interest at the rates and having Interest Periods (if applicable) of the
durations set forth below, subject to the payments and prepayments of principal
set forth below:
Prin-
cipal Maturity Unpaid
Amount Type Date Amount Prin- Notation
Date of of Interest of Paid or cipal Made
Made Loan Loan Currency Rate Loan Prepaid Amount by
---- ---- ---- -------- ---- ---- ------- ------ --
Promissory Note
Schedule 8.05(j) (Permitted Liens)
Liens securing Indebtedness (not in excess of $150,000,000) now or hereafter
incurred under the Loan Agreement between X.L. America, Inc., as Borrower, and
X.L. Insurance Company, Ltd. and X.L. Investments, Ltd., as Guarantors, and
Three Rivers Funding Corporation, dated as of December 22, 1998.
Promissory Note