EXECUTION COPY
PRICING AGREEMENT
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
As Representatives of the several
Underwriters named in Schedule I hereto
August 18, 2004
Ladies and Gentlemen:
XL Capital Ltd, a Cayman Islands exempted limited company (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated August 18, 2004 (the "Underwriting
Agreement"), between the Company on the one hand and Morgan Stanley & Co.
Incorporated and Lehman Brothers Inc., on the other hand, to issue and sell to
the Underwriters named in Schedule I hereto (the "Underwriters") the Debt
Securities specified in Schedule II hereto (the "Designated Debt Securities").
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Debt Securities which are the subject of this Pricing Agreement.
Each reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Debt Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Debt Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the aggregate principal amount of Designated Debt Securities set forth opposite
the name of such Underwriter in Schedule I hereto.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and one for each of the Representatives
plus one for each counsel counterparts hereof, and upon acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination, upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
XL Capital Ltd
By: /s/ Christopher V. Greetham
-----------------------------------
Name: Christopher V. Greetham
Title: Executive Vice President &
Chief Investment Officer
Accepted as of the date hereof:
Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
By: Morgan Stanley & Co. Incorporated
By: /s/ Harold J. Hendershot III
------------------------------
Name: Harold J. Hendershot III
Title: Executive Director
By: Lehman Brothers Inc.
By: /s/ Martin Goldberg
------------------------------
Name: Martin Goldberg
Title: Senior Vice President
For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.
SCHEDULE I
PRINCIPAL AMOUNT OF
DESIGNATED DEBT SECURITIES
UNDERWRITER TO BE PURCHASED
----------- --------------------------
Morgan Stanley & Co. Incorporated $150,000,000
Lehman Brothers Inc. $150,000,000
------------
Total..................................... $300,000,000
============
SCHEDULE II
TITLE OF DESIGNATED DEBT SECURITIES:
5.25% Senior Notes due 2014
AGGREGATE PRINCIPAL AMOUNT OF DESIGNATED DEBT SECURITIES:
$300,000,000
INITIAL OFFERING PRICE TO PUBLIC:
99.432% of the principal amount of the Designated Debt Securities, plus
accrued interest, if any, from August 23, 2004.
PURCHASE PRICE BY UNDERWRITERS:
98.982% of the principal amount of the Designated Debt Securities, plus
accrued interest, if any, from August 23, 2004.
UNDERWRITERS' COMMISSION:
0.450%
FORM OF DESIGNATED DEBT SECURITIES:
Book-entry only form represented by one or more global certificates
deposited with The Depository Trust Company ("DTC") of its designated custodian,
to be made available for checking by the Representatives at least 24 hours prior
to the Time of Delivery.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (Same-Day) funds
INDENTURE:
Indenture, dated June 2, 2004, between the Company and The Bank of New
York, as Trustee, as supplemented by the First Supplemental Indenture, to be
dated as of August 23, 2004
MATURITY:
September 15, 2014
INTEREST RATE:
5.25% per annum
INTEREST PAYMENT DATES:
March 15 and September 15, commencing on March 15, 2005
RECORD DATES:
The relevant record dates will be the March 1 and September 1 preceding
the relevant payment dates
REDEMPTION PROVISIONS:
The Notes are redeemable at the option of the Company (i) in whole at
any time or in part from time to time at a make-whole redemption price described
in the Prospectus under the caption "Description of the Senior Notes--Optional
Redemption" and (ii) if a "tax event" occurs, as described in the Prospectus
under the caption "Description of the Senior Notes--Tax Event Redemption"), in
each case in accordance with and subject to the terms to be set forth in the
Indenture.
SINKING FUND PROVISIONS:
No sinking fund provisions
ADDITIONAL CLOSING CONDITIONS:
None
TIME OF DELIVERY:
9:30 A.M., New York City time, on August 23, 2004
TIME OF DELIVERY LOCATION:
Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New
York 10017
DELAYED DELIVERY:
None
LISTING:
None
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.