REG-XL Group plc Acquisition <Origin Href="QuoteRef">CGL.L</Origin> <Origin Href="QuoteRef">XL.N</Origin> - Part 3

CastelnauAnnouncement

28/01/2015 24:09

- Part 3: For the preceding part double click  ID:nBw9jYtt7b 

affect the availability of the
Acquisition to persons who are not resident in the United Kingdom, the United
States, the Republic of Ireland or Bermuda.Persons who are not resident in the
United Kingdom, the United States, the Republic of Ireland or Bermuda or who are
subject to laws of any jurisdiction other than the United Kingdom, the United
States, the Republic of Ireland or Bermuda, should inform themselves about, and
observe, any applicable requirements.In particular, the ability of Catlin
Shareholders who are not resident in the United Kingdom, the United States, the
Republic of Ireland or Bermuda to vote their Catlin Shares with respect to the
Acquisition at the Court Meeting and the General Meeting may be affected by the
laws of the relevant jurisdiction in which they are located. Any person
(including, without limitation, nominees, trustees and custodians) who would, or
otherwise intends to, forward this announcement, the Circular or any
accompanying document to any jurisdiction outside the United Kingdom, the United
States, the Republic of Ireland or Bermuda should refrain from doing so and seek
appropriate professional advice before taking any action.

The Acquisition will not be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including, without
limitation, telephonic or electronic) of interstate or foreign commerce of, or
any facility of a national, state or other securities exchange of, a Restricted
Jurisdiction. If the Acquisition is implemented by way of a Takeover Offer
(unless otherwise determined by XL and permitted by applicable law and
regulation), the offer may not be capable of acceptance by any such use, means,
instrumentality or facility or from within a Restricted
Jurisdiction.Accordingly, copies of this announcement and formal documentation
relating to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded or distributed in, into or from a
Restricted Jurisdiction and persons receiving this announcement (including
custodians, nominees and trustees) must not distribute or send it into or from a
jurisdiction where to do so would violate laws in that jurisdiction. Doing so
may render invalid any related purported acceptance of a Takeover Offer.If the
Acquisition is implemented by a Bermuda Merger or by way of a Takeover Offer and
XL extends the Takeover Offer into the U.S., it will do so in satisfaction of
the procedural and filing requirements of the U.S. securities laws at that time,
to the extent applicable thereto.

Forward-Looking Statements

This announcement contains forward-looking statements, both with respect to XL
and Catlin and their industries, that reflect their current views with respect
to future events and financial performance. Statements that are not historical
facts, including statements about XL`s or Catlin`s beliefs, plans or
expectations, are forward-looking statements. These statements are based on
current plans, estimates and expectations, all of which involve risk and
uncertainty. Statements that include the words "expect," "intend," "plan,"
"believe," "project," "anticipate," "may", "could" or "would" or similar
statements of a future or forward-looking nature identify forward-looking
statements. Actual results may differ materially from those included in such
forward-looking statements and therefore you should not place undue reliance on
them.

A non-exclusive list of the important factors that could cause actual results to
differ materially from those in such forward-looking statements includes: (a)
changes in the size of claims relating to natural or man-made catastrophe losses
due to the preliminary nature of some reports and estimates of loss and damage
to date; (b) trends in rates for property and casualty insurance and
reinsurance; (c) the timely and full recoverability of reinsurance placed by XL
or Catlin with third parties, or other amounts due to XL or Catlin; (d) changes
in the projected amount of ceded reinsurance recoverables and the ratings and
credit worthiness of reinsurers; (e) actual loss experience from insured or
reinsured events and the timing of claims payments being faster or the receipt
of reinsurance recoverables being slower than anticipated; (f) increased
competition on the basis of pricing, capacity, coverage terms or other factors
such as the increased inflow of third party capital into reinsurance markets,
which could harm either XL`s or Catlin`s ability to maintain or increase its
business volumes or profitability; (g) greater frequency or severity of claims
and loss activity than XL`s or Catlin`s respective underwriting, reserving or
investment practices anticipate based on historical experience or industry data;
(h) changes in the global financial markets, including the effects of inflation
on XL`s or Catlin`s business, including on pricing and reserving, increased
government involvement or intervention in the financial services industry and
changes in interest rates, credit spreads, foreign currency exchange rates and
future volatility in the world`s credit, financial and capital markets that
adversely affect the performance and valuation of either XL`s or Catlin`s
investments, financing planning and access to such markets or general financial
condition; (i) changes in ratings, rating agency policies or practices; (j) the
potential for changes to methodologies, estimations and assumptions that
underlie the valuation of XL`s or Catlin`s respective financial instruments that
could result in changes to investment valuations; (k) changes to XL`s or
Catlin`s respective assessment as to whether it is more likely than not that it
will be required to sell, or has the intent to sell, available-for-sale debt
securities before their anticipated recovery; (l) the ability of XL`s or
Catlin`s subsidiaries to pay dividends; (m) the potential effect of legislative
or regulatory developments in the jurisdictions in which XL or Catlin operates,
such as those that could impact the financial markets or increase their
respective business costs and required capital levels, including but not limited
to changes in regulatory capital balances that must be maintained by operating
subsidiaries and governmental actions for the purpose of stabilizing the
financial markets; (n) the actual amount of new and renewal business and
acceptance of products and services, including new products and services and the
materialization of risks related to such products and services; (o) changes in
applicable tax laws, tax treaties or tax regulations or the interpretation or
enforcement thereof; (p) the effects of mergers, acquisitions, divestitures and
retrocession agreements; and (q) in the case of XL, the other factors set forth
in XL`s reports on Form 10-K, Form 10-Q and other documents on file with the
SEC.

Additionally, the Acquisition is subject to risks and uncertainties,
including:(i) XL and Catlin may be unable to complete the Acquisition because,
among other reasons, conditions to the completion of the Acquisition may not be
satisfied or waived, including the failure to obtain required regulatory
approvals, or the other party may be entitled to terminate the Acquisition; (ii)
receipt of regulatory approvals required by the Acquisition may be subject to
conditions, limitations and restrictions that could negatively impact the
business and operations of the combined company; (iii) uncertainty as to the
timing of completion of the Acquisition; (iv) the ability to obtain approval of
the Acquisition by Catlin Shareholders; (v) uncertainty as to the actual premium
(if any) that will be realised by Catlin Shareholders in connection with the
Acquisition;(vi) uncertainty as to the long-term value of XL ordinary shares to
be issued to Catlin Shareholders in connection with the Acquisition; (vii)
inability to retain key personnel of Catlin or XL during the pendency of the
Acquisition or after completion of the Acquisition; (viii) failure to realise
the potential synergies from the Acquisition, including as a result of the
failure, difficulty or delay in integrating Catlin`s businesses into XL; (ix)
the ability of the Catlin Board to withdraw its recommendation of the
Acquisition; and (x) the outcome of any legal proceedings to the extent
initiated against XL, Catlin and others relating to the Acquisition, as well as
XL and Catlin`s management`s responses to any of the aforementioned factors.

Neither Catlin nor XL undertakes any obligation to update publicly or revise any
forward-looking statement, whether as a result of new information, future
developments or otherwise.

Disclosure Requirements

Catlin is a Bermuda company and is therefore not subject to the Code.
Accordingly, shareholders of Catlin and others dealing in Catlin Shares are not
obliged to disclose any of their dealings under the provisions of the
Code.However, market participants are requested to make disclosures of dealings
as if the Code applied and as if Catlin were in an "offer period" under the
Code. Catlin Shareholders and persons considering the acquisition or disposal of
any interest in Catlin Shares are reminded that they are subject to the
Disclosure and Transparency Rules made by the UKLA and other applicable
regulatory rules regarding transactions in Catlin Shares.

Catlin`s website contains the form of disclosure requested. If you are in any
doubt as to whether or not you should disclose dealings, you should contact an
independent financial adviser authorised by the Financial Conduct Authority
under the FSMA (or, if you are resident in a jurisdiction other than the U.K., a
financial adviser authorised under the laws of such jurisdiction).

In light of the foregoing, as provided in Rule 8.3(a) of the Code, any person
who is "interested" in one per cent. or more of any class of "relevant
securities" of Catlin or of any "securities exchange offeror" (being any
"offeror" other than an "offeror" in respect of which it has been announced that
its "offer" is, or is likely to be, solely in "cash") should have made an
Opening Position Disclosure following the commencement of the "offer period"
which began when the Possible Offer Announcement was released on 17 December
2014.

An Opening Position Disclosure should contain details of the person`s interests
and short positions in, and rights to subscribe for, any "relevant securities"
of each of (i) Catlin and (ii) any "securities exchange offeror(s)". Persons to
whom Rule 8.3(a) would have applied had the Code been applicable should have
made an Opening Position Disclosure by no later than 3:30 p.m. (London time) on
the tenth "business day" following the commencement of the "offer period" which
began when the Possible Offer Announcement was released on 17 December 2014.
Relevant persons who undertake "dealings" in the "relevant securities" of Catlin
or of a "securities exchange offeror" prior to the deadline for making an
Opening Position Disclosure should instead make a Dealing Disclosure.

Rule 8.3(b) of the Code provides that if any person is, or becomes "interested"
(directly or indirectly) in one per cent. or more of any class of "relevant
securities" of an offeree or of any "securities exchange offeror", all
"dealings" in any "relevant securities" of that offeree or of any "securities
exchange offeror" (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") should be publicly
disclosed in a Dealing Disclosure by no later than 3:30 p.m. (London time) on
the "business day" following the date of the relevant transaction.In a situation
where the Code applies, this requirement would continue until the date on which
any "offer" becomes, or is declared, unconditional as to acceptances, lapses or
is otherwise withdrawn or on which the "offer period" otherwise ends.Under Rule
8 of the Code, a Dealing Disclosure would contain details of the "dealing"
concerned and of the person`s interests and short positions in, and rights to
subscribe for, any "relevant securities" of (i) Catlin and (ii) any "securities
exchange offeror", save to the extent that these details have previously been
disclosed under Rule 8.

Accordingly, in the case of both an Opening Position Disclosure and Dealing
Disclosure (if any), disclosures of interests in the shares of each of XL and
Catlin should be made.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire an "interest" in "relevant securities" of
Catlin or a "securities exchange offeror", they would, if the Code were
applicable, be deemed to be a single person for the purpose of Rule 8.3 of the
Code.

Consistent with the provisions of Rule 8.1 of the Code, Opening Position
Disclosures should be made by Catlin and by any "offeror", and all "dealings" in
"relevant securities" of Catlin by Catlin, by any "offeror" or by any persons
"acting in concert" with any of them, should be disclosed in a Dealing
Disclosure by no later than 12:00 p.m. (London time) on the "business day"
following the date of the relevant transaction.

"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
"securities".In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of "securities", or by virtue of any option
in respect of, or derivative referenced to, "securities".

Terms in quotation marks are defined in the Code, which can be found on the
Panel`s website.If you are in any doubt as to whether or not you should disclose
a "dealing" by reference to the above, you should contact an independent
financial adviser authorised by the FCA under the FSMA.

No Profit Forecasts or Estimates

No statement in this announcement is intended as a profit forecast or estimate
of the future financial performance of XL, Catlin or the Enlarged XL Group
following completion of the Acquisition for any period unless otherwise stated.
Furthermore, no statement in this announcement should be interpreted to mean
that: (a) earnings or earnings per Catlin Share for Catlin for the current or
future financial years would necessarily match or exceed the historical
published earnings or earnings per Catlin Share; or (b) earnings or earnings per
XL Share for XL for the current or future financial years would necessarily
match or exceed the historical published earnings or earnings per XL Share.

APPENDIX I

CONDITIONS AND FURTHER TERMS OF THE ACQUISITION

1.Conditions of the Acquisition

The Acquisition will be subject to the satisfaction (or, where applicable,
waiver in accordance with paragraph 2 of this Appendix I) of the following
Conditions: 

Approval of the Scheme

(A) The Acquisition will be conditional upon: 

(i) the Scheme becoming effective by no later than the Long Stop Date; 

(ii) both the Court Meeting and the General Meeting being held by the date which
is 22 days after the expected date for such meetings as set out in the Circular
(or such later date as may be agreed between XL and Catlin); and 

(iii) the Court Hearing being held by the date which is 22 days after the
expected date of the Court Hearing as set out in the Circular (or such later
date as may be agreed between XL and Catlin), 

provided that, Condition A(i), Condition A(ii) and Condition A(iii) may not be
invoked or waived after the latest date specified in each such Condition. 

(B) The Acquisition will be subject to the following further Conditions: 

(i) approval of the Scheme by a majority in number representing not less than
three-fourths of the voting rights of the holders of the Catlin Shares (or the
relevant class or classes thereof, if applicable) present and voting, either in
person or by proxy, at the Court Meeting; 

(ii) the resolutions set out in the notice of the General Meeting being duly
passed by the requisite majority at the General Meeting; 

(iii) the sanction of the Scheme by the Court (in each case with or without
modification but subject to any modification being on terms acceptable to XL and
Catlin) and the delivery of the Scheme Court Order to the Registrar of
Companies; and 

(iv) there being no reason that is reasonably expected to prevent, immediately
following the Scheme becoming effective, the delivery to the Registrar of
Companies of all documentation and consents required to implement the Merger
pursuant to the Bermuda Companies Act immediately following the Scheme becoming
effective (including for the Registrar of Companies to issue a certificate of
merger pursuant to the Bermuda Companies Act confirming the Merger). 

In addition, the Acquisition will be conditional upon the following Conditions
and, accordingly, the necessary actions to make the Acquisition effective will
not be taken unless the following Conditions have been satisfied or, where
relevant, waived in accordance with paragraph 2 of this Appendix I: 

Specific anti-trust and regulatory clearances and approvals

PRA approval

(C) the PRA having given notice in writing under section 189(4)(a) of the FSMA
(or a decision notice under section 189(7) of the FSMA) (in terms which do not
impose any conditions, obligations or restrictions on the Enlarged XL Group
which are material in the context of the Wider Catlin Group or the Wider XL
Group, as the case may be, or in the context of the Acquisition, whether under
the existing insurance regulatory regime in the United Kingdom or under the
Solvency II regime, including in each case in respect of regulatory capital) of
its approval (or being treated as having given its approval by virtue of section
189(6) of the FSMA) in respect of any acquisition of or increase in control (as
defined in sections 181 and 182 of the FSMA) over any member of the Wider Catlin
Group which is a PRA authorised person, which in either case would take place as
a result of the Acquisition; 

Lloyd`s approval

(D) Lloyd`s having given its consent in writing under paragraph 12 of the
Lloyd`s Membership Byelaw or paragraph 43 of the Lloyd`s Underwriting Byelaw (as
the case may be), (in terms which do not impose any conditions, obligations or
restrictions on the Enlarged XL Group which are material in the context of the
Wider Catlin Group or the Wider XL Group, as the case may be, or in the context
of the Acquisition), in respect of any change in the controller of any member of
the Wider Catlin Group which is a corporate member or a managing agent of
Lloyd`s which would take place as a result of the Acquisition; 

Bermuda approvals

(E) (i) the Insurance Division of the Bermuda Monetary Authority confirming in
writing that it has no objection in accordance with the Bermuda Insurance Act
(A) to any change in the shareholder controller of any member of the Catlin
Group, which is a registered person under the Bermuda Insurance Act, or (B) to
any change to any member of the Catlin Group, which is a registered person under
the Bermuda Insurance Act, each as result of the Acquisition, (ii) the
Investment Division of the Bermuda Monetary Authority confirming in writing that
it has no objection in accordance with the Bermuda Investment Business Act 2003
to any change in the majority shareholder controller of any member of the Catlin
Group which is an investment provider licensed under the Bermuda Investment
Business Act 2003, and (iii) the Exchange Control Division of the Bermuda
Monetary Authority confirming in writing that it has no objection in accordance
with the Exchange Control Act 1972 of Bermuda to any issue or transfer of shares
in the Surviving Company in connection with the Acquisition, provided that the
terms of any such non-objection shall not impose any conditions, obligations or
restrictions on the Enlarged XL Group which are material in the context of the
Wider Catlin Group or the Wider XL Group, as the case may be, or in the context
of the Acquisition; 

FINMA approval

(F) FINMA not having initiated any examination within four (4) weeks following
the notification of the change in the qualified participant of Catlin Re
Switzerland Ltd. arising from the Acquisition, or in the event FINMA does
initiate such examination, FINMA having then approved the Acquisition, provided
that the terms of such an approval shall not impose any conditions, obligations
or restrictions on the Enlarged XL Group which are material in the context of
the Wider Catlin Group or the Wider XL Group, as the case may be, or in the
context of the Acquisition; 

United States state insurance regulatory approvals

(G) the commissioner of the Delaware Department of Insurance having approved,
pursuant to 18 Del. Code § 5003, any acquisition of control arising from the
Acquisition, provided that the terms of such approval shall not impose any
conditions, obligations or restrictions on the Enlarged XL Group which are
material in the context of the Wider Catlin Group or the Wider XL Group, as the
case may be, or in the context of the Acquisition; 

(H) the commissioner of the Texas Department of Insurance having approved,
pursuant to Texas Insurance Code § 823.154 and § 4001.253, any acquisition of
control arising from the Acquisition, provided that the terms of such approval
shall not impose any conditions, obligations or restrictions on the Enlarged XL
Group which are material in the context of the Wider Catlin Group or the Wider
XL Group, as the case may be, or in the context of the Acquisition; 

(I) in the event that any member of the Wider Catlin Group acquires control of
WRM America Indemnity Company, Inc. prior to the Effective Date, the
superintendent of the New York Department of Financial Services having approved,
pursuant to Section 1506 of the New York Insurance Code, any acquisition of
control arising from the Acquisition, provided that the terms of such approval
shall not impose any conditions, obligations or restrictions on the Enlarged XL
Group which are material in the context of the Wider Catlin Group or the Wider
XL Group, as the case may be, or in the context of the Acquisition; 

(J) the waiting periods having expired or been terminated for any and all
pre-acquisition notification (Form E) filings required to be filed with United
States state insurance regulators under applicable United States state insurance
laws, provided that if such expiration or termination is subject to conditions,
obligations or restrictions, the terms of the foregoing do not impose any
conditions, obligations or restrictions on the Enlarged XL Group which are
material in the context of the Wider Catlin Group or the Wider XL Group, as the
case may be, or in the context of the Acquisition; 

Other regulatory approvals

(K) each regulatory or governmental authority (other than any anti-trust
authority) which regulates or licenses any member of the Wider Catlin Group or
any other body corporate in which any member of the Wider Catlin Group has an
interest in shares, and whose prior approval, consent or non-objection to any
change in control or acquisition of or increase in control in respect of that or
any other member of the Wider Catlin Group is required, or any regulatory or
governmental authority whose prior approval, consent or non-objection to the
Acquisition is otherwise required, or from whom one or more licences or
permissions are required in order to complete the Acquisition, having given its
approval, non-objection or consent in writing thereto and, as the case may be,
having granted such licences and permissions (in each case where required and in
terms which do not impose any conditions, obligations or restrictions on the
Enlarged XL Group which are material in the context of the Wider Catlin Group or
the Wider XL Group, as the case may be, or in the context of the Acquisition); 

European Commission clearance

(L) in so far as the Acquisition constitutes a concentration with a Community
dimension within the scope of the Regulation: 

(i) the European Commission having issued a decision, on terms satisfactory to
XL, acting reasonably, in respect of the Acquisition under Article 6(1)(b) or
Article 6(2) of the Regulation (or being deemed to have done so under Article
10(6) of the Regulation); and 

(ii) if any aspect of the Acquisition is referred to a competent authority of a
European Union or EFTA state or more than one such competent authority under
Article 9 of the Regulation, confirmation having been received from each such
competent authority that the Acquisition may proceed on terms satisfactory to
XL, acting reasonably; 

United States Hart-Scott-Rodino clearance

(M) all necessary notifications and filings having been made and all applicable
waiting periods (including any extensions thereof) under the United States
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) and the rules
and regulations made thereunder having expired or been terminated in each case
in respect of the Acquisition and the acquisition or the proposed acquisition of
any shares or other securities in, or control of, Catlin by any member of the
Wider XL Group; 

Turkey anti-trust clearance

(N) all necessary notifications and filings having been made and all clearance
decisions having been received or waiting periods (including any extensions
thereof) under the applicable Turkish anti-trust laws having expired or been
terminated in each case in respect of the Acquisition and the acquisition or the
proposed acquisition of any shares or other securities in, or control of, Catlin
by any member of the Wider XL Group; 

General anti-trust and regulatory

(O) all clearance decisions having been received or waiting periods (including
any extensions thereof) having expired or been terminated under any anti-trust
laws in other jurisdictions where XL and Catlin (in both cases acting
reasonably) agree that an anti-trust filing should be made in each case in
respect of the Acquisition and the acquisition or the proposed acquisition of
any shares or other securities in, or control of, Catlin by any member of the
Wider XL Group; 

(P) no anti-trust regulator or other Third Party, in each case in any
jurisdiction where XL and Catlin (in both cases acting reasonably) agree that an
anti-trust filing should be made (including the following jurisdictions in which
XL and Catlin have so agreed: EU, the United States and Turkey), having decided,
threatened or given notice of its decision to take, institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or reference or
withdrawal of a clearance decision, or having required any action or step to be
taken or otherwise having done anything or having enacted, made or proposed any
statute, regulation, decision, order or change to published practice (and in
each case, not having withdrawn the same), and there not continuing to be
outstanding any statute, regulation, decision or order which would or might be
expected to (in any case to an extent or in a manner which is material in the
context of the Wider Catlin Group or the Wider XL Group, as the case may be, or
in the context of the Acquisition): 

(i) make the Acquisition, its implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control or management of,
any member of the Wider Catlin Group by any member of the Wider XL Group, void,
illegal and/or unenforceable under the laws of any relevant jurisdiction, or
otherwise directly or indirectly prevent, prohibit, or restrain, restrict, delay
or otherwise interfere with the implementation of, or impose additional
conditions or obligations with respect to, or otherwise impede, challenge,
interfere, hinder the Acquisition or its implementation or require amendment to
the terms of the Acquisition or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of, any member of the
Wider Catlin Group by any member of the Wider XL Group, or otherwise challenge
or interfere therewith; 

(ii) require any member of the Wider XL Group or any member of the Wider Catlin
Group to sell, divest, hold separate, or otherwise dispose of all or any
material part of their respective businesses, operations, product lines or
assets or property or to prevent or materially delay any of the above; 

(iii) require any member of the Enlarged XL Group to conduct its business or any
part thereof in a specified manner or impose any limitation on the ability of
all or any of them to conduct their respective businesses (or any part thereof)
or to own, control or manage any of their assets or properties (or any part
thereof), in each case which is material in the context of the Wider Catlin
Group or the Wider XL Group, as the case may be, or in the context of the
Acquisition; 

(iv) impose any material limitation on, or result in a material delay in, the
ability of any member of the Wider XL Group or any member of the Wider Catlin
Group to conduct, integrate or co-ordinate all or any part of its business with
all or any part of the business of any other member of the Wider XL Group and/or
the Wider Catlin Group; 

(v) impose any material limitation on, or result in a material delay in, the
ability of any member of the Wider XL Group directly or indirectly to acquire,
hold or to exercise effectively all or any rights of ownership in respect of
shares or loans or securities convertible into shares or any other securities
(or the equivalent) in Catlin or on the ability of any member of the Wider
Catlin Group or any member of the Wider XL Group directly or indirectly to hold
or exercise effectively all or any rights of ownership in respect of shares or
loans or securities convertible into shares or any other securities (or the
equivalent) in, or to exercise voting or management control over, any member of
the Wider Catlin Group; 

(vi) require, prevent or materially delay a divestiture, or materially alter the
terms envisaged for any proposed divestiture by any member of the Wider XL Group
or the Wider Catlin Group of any shares or other securities (or the equivalent)
in any member of the Wider Catlin Group or any member of the Wider XL Group; 

(vii) in the event that XL elects to implement the Acquisition by way of a
Takeover Offer, require any member of the Wider XL Group or the Wider Catlin
Group to acquire, or offer to acquire any shares or other securities (or the
equivalent) or interest in any member of the Wider Catlin Group or any member of
the Wider XL Group or any asset owned by any third party (other than in
connection with the implementation of the Acquisition); 

(viii) require any member of the Wider Catlin Group or the Wider XL Group to
relinquish, terminate or amend in any way any material contract to which any
member of the Wider Catlin Group or the Wider XL Group is a party; 

(ix) result in any member of the Wider Catlin Group or any member of the Wider
XL Group ceasing to be able to carry on business under any name under which it
currently does so in any jurisdiction; or 

(x) require any member of the Wider XL Group or any member of the Wider Catlin
Group or any of their respective affiliates to (A) invest, contribute or loan
any capital or assets to; (B) guarantee or pledge capital assets for the benefit
of; (C) maintain, support or guarantee a minimum level of capital or surplus in
excess of the minimum regulatory requirements applicable in respect of such
entity or in excess of any additional regulator-imposed buffer applicable as at
the date hereof; or (D) provide any financial resources, keep-well or support of
any nature whatsoever at any time to, any member of the Wider Catlin Group which
is material in the context of the Wider Catlin Group or the Wider XL Group, as
the case may be, or in the context of the Acquisition, whether under the
existing insurance regulatory regime, including in respect of regulatory
capital, or under the Solvency II regime; or 

(xi) otherwise materially adversely affect all or any of the business, assets,
liabilities, profits, financial or trading position, operational performance or
prospects of any member of the Wider Catlin Group or any member of the Wider XL
Group; 

and all applicable waiting and other time periods (including any extensions
thereof) during which any such anti-trust regulator or other Third Party could
decide to take, institute, implement or threaten any such action, proceeding,
suit, investigation, enquiry or reference or withdrawal of a clearance decision
or take any other step under the laws of any jurisdiction in respect of the
Acquisition or the acquisition or proposed acquisition of any Catlin Shares or
other securities in, or control or management of, Catlin or otherwise intervene
having expired, lapsed or been terminated; 

Listing on the New York Stock Exchange, effectiveness of registration

(Q) 

(i) confirmation having been received by XL that the New XL Shares have been
approved for listing, subject to official notice of issuance, on the New York
Stock Exchange; and 

(ii) in the event that the Acquisition is implemented by way of a Takeover Offer
or a Bermuda Merger, absent an available exemption from the registration
requirements of the U.S. Securities Act, the Registration Statement having been
declared effective by the SEC and no stop order having been issued or
proceedings for suspension of the effectiveness of the Registration Statement
having been initiated or threatened by the SEC and XL having received all
necessary U.S. state securities law or blue sky authorisations; 

Irish Prospectus

(R) (i) the Irish Prospectus shall have been approved by the CBI, and made
available to the public in accordance with Irish Prospectus Law; and (ii) the
UKLA shall have given notice on its website that it has received, from the CBI,
the information referred to in section 87H of the FSMA in relation to the Irish
Prospectus; 

Notifications, waiting periods and Authorisations

(S) all notifications, filings or applications, other than any anti-trust
notifications, filings or applications, which are necessary or are reasonably
considered appropriate or desirable by XL having been made in connection with
the Acquisition and all necessary waiting and other time periods (including any
extensions thereof) under any applicable legislation or regulations of any
relevant jurisdiction having expired, lapsed or been terminated (as appropriate)
and all statutory and regulatory obligations in any jurisdiction having been
complied with in each case in respect of the Acquisition and all Authorisations
which are necessary or reasonably considered appropriate by XL in any relevant
jurisdiction for or in respect of the Acquisition or the acquisition or the
proposed acquisition of any shares or other securities in, or control or
management of, Catlin or any other member of the Wider Catlin Group by any
member of the Wider XL Group having been obtained in terms and in a form
reasonably satisfactory to XL from all relevant Third Parties or (without
prejudice to the generality of the foregoing) from any persons or bodies with
whom any member of the Wider Catlin Group or the Wider XL Group has entered into
contractual arrangements and all such Authorisations necessary, appropriate or
desirable to carry on the business of any member of the Wider Catlin Group in
any jurisdiction having been obtained and all such Authorisations remaining in
full force and effect at the time at which the Acquisition becomes effective and
there being no notice or intimation of any intention to revoke, suspend,
restrict, impede, modify or not to renew such Authorisations in each such case
to an extent or in a manner which is material in the context of the Wider Catlin
Group or the Wider XL Group, as the case may be, or in the context of the
Acquisition; 

Pension liabilities

(T) since 31 December 2013, except as Fairly Disclosed: 

(i) no member of the Wider Catlin Group nor the trustees of any relevant pension
scheme having been a party to an act or a deliberate failure to act, or suffered
any event, which would lead to or entitle any person to commence the winding up
of any such pension scheme or give rise directly or indirectly to a liability
arising out of the operation of sections 38 to 56 (inclusive) of the Pensions
Act 2004 or under section 75 of the Pensions Act 1995 in relation to any such
pension scheme; and 

(ii) no action having been taken by the Pensions Regulator (as defined in the
Pensions Act 2004) to exercise any of its powers in respect of any relevant
pension scheme including its powers pursuant to sections 38 to 56 (inclusive) of
the Pensions Act 2004 and sections 7 and 11 of the Pensions Act 1995 and no such
exercise having been proposed or threatened to Catlin; 

Catlin Shareholder resolutions

(U) no resolution of Catlin Shareholders in relation to any acquisition or
disposal of assets or shares (or the equivalent thereof) in any undertaking or
undertakings (or in relation to any merger, consolidation, demerger,
reconstruction, amalgamation or scheme) being passed at a meeting of Catlin
Shareholders other than in relation to the implementation of the Acquisition and
Catlin not having taken any action that requires or would require approval of
Catlin Shareholders in general meeting pursuant to Rule 21.1 of the Code if the
Code applied to Catlin and the Acquisition; 

Certain matters arising as a result of any arrangement, agreement, etc.

(V) except as Fairly Disclosed, there being no provision of any agreement,
arrangement, lease, licence, franchise, permit or other instrument to which any
member of the Wider Catlin Group is a party, or by or to which any such member
or any of its assets is or are or may be bound, entitled or subject or any event
or circumstance, which, in each case as a consequence of the Acquisition and the
acquisition or proposed acquisition of any shares or other securities in, or
control of, Catlin or any other member of the Wider Catlin Group or otherwise,
would or might be expected to result in (in any case to an extent that is or
would be material in the context of the Wider Catlin Group or in the context of
the Acquisition): 

(i) any monies borrowed by, or any other indebtedness or liabilities (actual or
contingent) of, or any grant available to, any such member being or becoming
repayable or capable of being declared repayable, immediately or prior to its or
their stated maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or inhibited or being
capable of becoming or being withdrawn or inhibited; 

(ii) any such agreement, arrangement, lease, licence, franchise, permit or other
instrument, or the rights, liabilities, obligations, interests or business of
any such member thereunder (or with any other person), being, or becoming
capable of being, terminated or adversely affected, or any onerous obligation or
liability arising or any adverse action occurring thereunder; 

(iii) any such member ceasing to be able to carry on its business under any name
under which it currently does so; 

(iv) any assets or interests of or used by any such member being or being
required to be disposed of or charged or ceasing to be available to any such
member or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any such
member; 

(v) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member or any such mortgage, charge or other security interest (whenever
created, arising or having arisen) becoming enforceable; 

(vi) the creation or acceleration of any liability, actual or contingent, by any
such member; 

(vii) any liability of any such member to make any severance, termination, bonus
or other payment to any of its directors or other officers; 

(viii) any requirement on any such member to acquire, subscribe, pay up or repay
any shares or other securities; 

(ix) the rights, liabilities, obligations or interests of any such member in, or
the business of any such member with, any person, firm, company or body (or any
arrangement or arrangements relating to any such interest or business) being or
becoming capable of being terminated, or adversely modified or affected or any
onerous obligation or liability arising or any adverse action being taken
thereunder; or 

(x) the value of any such member or its financial or trading position or
prospects being prejudiced or adversely affected; 

and no event having occurred which, under any provision of any agreement,
arrangement, lease, licence, franchise, permit or other instrument to which any
member of the Wider Catlin Group is a party or by or to which any such member or
any of its assets are or may be bound, entitled or subject, would or might be
expected to result in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (x) of this Condition; 

Certain events occurring since 31 December 2013

(W) since 31 December 2013, except as Fairly Disclosed or as otherwise permitted
under the Implementation Agreement or the Code Application Letter, no member of
the Wider Catlin Group having: 

(i) save for transactions between Catlin and any of its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Catlin, issued or
agreed to issue or authorised or proposed or announced its intention to
authorise or propose the issue of additional shares (or other securities) of any
class, or securities or securities convertible into or exchangeable for, or
rights, warrants or options to subscribe for or acquire, any such shares,
securities or convertible securities or transferred or sold, or agreed to
transfer or sell or authorised or proposed the transfer or sale of any shares
out of treasury or purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or made any other change to any part of its share capital; 

(ii) other than as required by the terms of the Non-Cumulative Perpetual
Preferred Shares, recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution whether payable
in cash or otherwise, save for distributions to Catlin or a wholly-owned
subsidiary of Catlin by a wholly-owned subsidiary of Catlin; 

(iii) save for transactions between Catlin and any of its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Catlin or pursuant to
the Acquisition, merged or demerged with any body corporate or acquired or
disposed of or transferred, mortgaged or charged or created any security
interest over any material assets or any right, title or interest in any
material asset (including shares or loan capital (or the equivalent thereof) in
any undertaking or undertakings and further including trade investments) or
implemented, effected, authorised or proposed or announced any intention to
implement, effect, authorise or propose any such merger, demerger,
reconstruction, amalgamation, scheme, commitment, acquisition, disposal,
transfer, mortgage, charge or security interest (which, in the case of any
transfer, mortgage, charge or security interest, is other than in the ordinary
course of business consistent with past practice); 

(iv) save for transactions between Catlin and any of its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Catlin, made or
authorised or proposed or announced an intention to propose any change to the
terms of any of its loan capital, debentures or other indebtedness, which in any
case is material in the context of the Wider Catlin Group; 

(v) entered into, implemented or authorised the entry into of, or amended,
terminated or permitted to be terminated, any joint venture, asset or profit
sharing arrangement, partnership or merger of business or corporate entities
which in any case is material in the context of the Wider Catlin Group; 

(vi) issued or agreed to issue, authorised or proposed or announced an intention
to authorise or propose the issue of any debentures or except in the ordinary
course of business consistent with past practice), incurred or increased, or
agreed to incur or increase, any indebtedness in an amount in the aggregate
exceeding $10,000,000 or become, or agreed to become, subject to any liability
(actual or contingent) to an extent which is material in the context of the
Wider Catlin Group or in the context of the Acquisition; 

(vii) implemented, effected, authorised or proposed or announced its intention
to implement, effect, authorise or propose any composition, assignment,
reconstruction, amalgamation, scheme, commitment or other transaction or
arrangement otherwise than in the ordinary course of business consistent with
past practice or entered into or varied, or made any offer to enter into or
vary, the terms of any contract, agreement or arrangement with any director or
senior executive of any member of the Wider Catlin Group; 

(viii) entered into or varied or authorised, proposed or announced its intention
to enter into or vary any material agreement, contract, transaction, arrangement
or commitment (whether in respect of capital expenditure or otherwise) other
than in the ordinary course of business consistent with past practice which is
of a long-term, onerous or unusual nature or magnitude or which involves or
might be expected to involve an obligation of a nature or magnitude which would
be or might be expected to be materially restrictive or onerous on the business
of any member of the Wider Catlin Group or the Wider XL Group which taken
together with any other such material agreement, contract, transaction,
arrangement or commitment would be or might be expected to be material in the
context of the Wider Catlin Group or the Wider XL Group, as the case may be; 

(ix) other than in respect of a member which is dormant and was solvent at the
relevant time, taken or proposed any step or corporate action, or had any legal
proceedings instituted or threatened against it or petition presented or order
made, in relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution or
reorganisation or for the appointment of a receiver, administrative receiver,
administrator, manager, trustee or similar officer of all or any material part
of its assets or revenues or any analogous or equivalent steps or proceedings in
any jurisdiction or appointed any analogous person in any jurisdiction or had
any such person appointed; 

(x) been unable, or admitted in writing that it is unable, to pay its debts as
they fall due or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness, or having stopped
or suspended (or threatened to stop or suspend) payment of its debts generally
or ceased or threatened to cease carrying on all or a substantial part of its
business; 

(xi) entered into or changed the terms of, or made any offer (which remains open
for acceptance) to enter into or vary the terms of, any contract, service
agreement, commitment, transaction or arrangement other than to a nature and
extent which is normal and consistent with past practice in the context of the
business concerned; 

(xii) waived, compromised or settled any claim which is material in the context
of the Wider Catlin Group or in the context of the Acquisition otherwise than in
the ordinary course of business consistent with past practice; 

(xiii) terminated or varied the terms of any agreement or arrangement between
any member of the Wider Catlin Group and any other person in a manner which
would or might reasonably be expected to have a material adverse effect on the
financial position of the Wider Catlin Group; 

(xiv) except in relation to changes made or agreed as a result of, or arising
from, legislation or changes to legislation, made or agreed or consented to any
change to: 

(a) the terms of the trust deeds constituting the pension scheme(s) established
by any member of the Wider Catlin Group for its directors, officers, employees
or their dependants; 

(b) the contributions payable to any such scheme(s) or to the benefits which
accrue or to the pensions which are payable thereunder; 

(c) the basis on which qualification for, or accrual or entitlement to, such
benefits or pensions are calculated or determined; 

(d) the basis upon which the liabilities (including pensions) of such pension
schemes are funded, valued or made, or agreed or consented to; or 

(e) the trustees involving the appointment of a trust corporation, 

in a manner which, in any such case, is material in the context of the Wider
Catlin Group or in the context of the Acquisition; 

(xv) save as agreed in writing by XL, proposed, agreed to provide or modified
the terms of any share option scheme, pension scheme obligations, incentive
scheme or other benefit relating to the employment or termination of employment
of any person employed by the Wider Catlin Group which are material in the
context of the Wider Catlin Group or in the context of the Acquisition; 

(xvi) except as disclosed on publicly available registers, made any alteration
to the bye-laws or other incorporation documents of Catlin or any material
alteration to the memorandum of association or bye-laws or articles of
association or similar organisational documents of any member of the Catlin
Group (in each case, other than an alteration in connection with the
Acquisition) which in any such case is material in the context of the Wider
Catlin Group or in the context of the Acquisition; 

(xvii) entered into any contract, commitment, arrangement or agreement otherwise
than in the ordinary course of business consistent with past practice or passed
any resolution or made any offer (which remains open for acceptance) with
respect to or announced any intention to, or to propose to, effect any of the
transactions, matters or events referred to in this Condition; or 

(xviii) having taken (or agreed or proposed to take) any action which requires,
or would require, the consent of the Panel or the approval of Catlin
Shareholders in general meeting in accordance with, or as contemplated by, Rule
21.1 of the Code if the Code applied to Catlin and the Acquisition; 

No adverse change, litigation or regulatory enquiry

(X) since 31 December 2013, except as Fairly Disclosed, there having been: 

(i) no material adverse change or deterioration in the business, assets,
liabilities, shareholders` equity, financial or trading position or profits,
operational performance or prospects of any member of the Wider Catlin Group
which, in any such case, is material in the context of the Wider Catlin Group
and no circumstance having arisen which would or might reasonably be expected to
result in any such adverse change or deterioration; 

(ii) no agreement or arrangement between any member of the Wider Catlin Group
and any other person has been terminated or varied in a manner which, in any
such case, would or might reasonably be expected to have a material adverse
effect on the financial position of the Wider Catlin Group; 

(iii) no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider Catlin Group is or may become a
party (whether as a claimant, defendant or otherwise) and no enquiry, review or
investigation by, or complaint or reference to, any Third Party against or in
respect of any member of the Wider Catlin Group (or any person in respect of
which any such member has or may have responsibility or liability) having been
threatened, announced, implemented or instituted by or against or remaining
outstanding against or in respect of any member of the Wider Catlin Group which,
in any such case, has had, or might reasonably be expected to have, a material
adverse effect on the Wider Catlin Group or in the context of the Acquisition; 

(iv) no contingent or other material liability having arisen or become apparent
to XL or increased which has had, or might reasonably be expected to have, a
material adverse effect on the business, assets, financial or trading position
or profits or prospects of any member of the Wider Catlin Group which, in any
such case, is material in the context of the Wider Catlin Group or in the
context of the Acquisition; and 

(v) no action or steps having been taken and no omissions having been made which
are reasonably likely to lead to or result in the withdrawal, cancellation,
termination, modification or variation of any Authorisation held by or on behalf
of any member of the Wider Catlin Group which is necessary for the proper
carrying on of its business and the withdrawal, cancellation, termination or
modification of which has had, or might reasonably be expected to have, a
material adverse effect on the Wider Catlin Group or in the context of the
Acquisition; 

No discovery of certain matters regarding information and liabilities

(Y) except as Fairly Disclosed, XL not having discovered: 

(i) that any financial, business or other information concerning the Wider
Catlin Group as contained in the information publicly disclosed at any time by
or on behalf of any member of the Wider Catlin Group or disclosed at any time to
any member of the Wider XL Group or to any of their advisers by or on behalf of
any member of the Wider Catlin Group is misleading, contains a misrepresentation
of any fact or omits to state a fact necessary to make that information not
misleading, in each case to an extent which is, in any case itself or together
with other factors, material in the context of the Wider Catlin Group or in the
context of the Acquisition; 

(ii) that any member of the Wider Catlin Group or any partnership, company or
other entity in which any member of the Wider Catlin Group has a significant
economic interest and which is not a subsidiary undertaking of Catlin is subject
to any liability (contingent or otherwise) which, in any such case, is material
in the context of the Wider Catlin Group or in the context of the Acquisition; 

(iii) any information which affects the import of any information disclosed to
XL or its advisors at any time by or on behalf of any member of the Wider Catlin
Group and which is material and adverse in the context of the Wider Catlin Group
or in the context of the Acquisition; and 

(iv) that any member of the Wider Catlin Group or any of their respective
affiliates has failed to satisfy any requirement of any Third Party to (i)
invest, contribute or loan any capital or assets to; (ii) guarantee or pledge
capital assets for the benefit of; (iii) maintain, support or guarantee a
minimum level of capital or surplus in excess of the minimum regulatory
requirements applicable in respect of such entity or in excess of any additional
regulator-imposed buffer; or (iv) provide any financial resources, keep-well or
support of any nature whatsoever at any time to, any member of the Wider Catlin
Group which is material in the context of the Wider Catlin Group or the Wider XL
Group, as the case may be, or in the context of the Acquisition, whether under
the existing insurance regulatory regime, including in respect of regulatory
capital, or under the Solvency II regime; 

Anti-corruption, sanctions and criminal property

(Z) except as Fairly Disclosed, XL not having discovered: 

(i) any past or present member, director, officer or employee of the Wider
Catlin Group, or any other person for whom any such person may be liable or
responsible, has not (in the course of the business of the Wider Catlin Group or
their engagement on it) complied with the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions and any laws
implementing the same, the U.K. Bribery Act 2010 and/or the U.S. Foreign Corrupt
Practices Act of 1977; 

(ii) any past or present member, director, officer or employee of the of the
Wider Catlin Group, or any other person for whom any such person may be liable
or responsible, has (in the course of the business of the Wider Catlin Group or
their engagement on it) engaged in any business with or made any investments in,
or made any payments to, (a) any government, entity or individual with which
U.S. or E.U. persons are prohibited from engaging in activities or doing
business by U.S. or E.U. laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control, or (b) any
government, entity or individual targeted by any of the economic sanctions of
the United Nations or the European Union or any of their respective member
states; and 

(iii) any asset of any member of the Wider Catlin Group constitutes criminal
property as defined by Section 340(3) of the Proceeds of Crime Act 2002 (but
disregarding paragraph (b) of that definition); 

2.Waiver and Invocation of Conditions

XL reserves the right (but shall be under no obligation, except as provided in
the Implementation Agreement) to waive, in whole or in part, all or any of the
Conditions (except the Conditions set out in (B)(i)-(iv) and (Q) above which are
not waivable). Except as provided in the Implementation Agreement, XL shall be
under no obligation to waive or treat as fulfilled any of the Conditions which
are capable of being waived by a date earlier than the date specified in the
Condition set out in (A)(i) for the fulfillment thereof, notwithstanding that
other Conditions may at any earlier date have been waived or fulfilled and that
there are at such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfillment. 

Pursuant to the Implementation Agreement, XL and Catlin have agreed that Rule 13
of the Code will govern the circumstances in which XL can invoke any Condition
so as to cause the Acquisition to lapse. Under Rule 13.5 of the Code, XL may not
invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to
be withdrawn unless the circumstances which give rise to the right to invoke the
condition are of material significance to XL in the context of the Acquisition.
Conditions A, B(i) - (iii) and L are not subject to this provision of the Code.
In addition, pursuant to the Code Application Letter, XL and Catlin have agreed
that for the purpose of Rule 13.5(a) of the Code, it would be of material
significance to XL in the context of the Acquisition, if any of Condition C (PRA
approval), Condition D (relating to Lloyd`s approval), Condition E (Bermuda
Monetary Authority approval), Condition F (FINMA approval), Condition G
(Delaware Department of Insurance approval), Condition H (Texas Department of
Insurance approval), Condition I (New York Department of Financial Services
approval) (if applicable) or Condition M (United States Hart-Scott-Rodino
clearance) is not satisfied. 

3.Implementation by Way of a Takeover Offer

XL may (in accordance with and subject to the terms of the Implementation
Agreement) implement the Acquisition by making, directly or indirectly through
XL Sub, a Takeover Offer as an alternative to the Scheme. 

In such event, the Takeover Offer will be implemented on the same terms (subject
to appropriate amendments), so far as applicable, as those which would apply to
the Scheme. In particular, Conditions (A) and (B) would not apply and, instead,
the Takeover Offer would be subject to the following further Conditions: 

(i) valid acceptances being received (and not, where permitted, withdrawn) by
not 

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