Exhibit 10.2

 

Conformed

 

AMENDMENT

 

AMENDMENT (this “Amendment”), dated as of June 26, 2009, to the Letter of Credit
and Reimbursement Agreement dated as of December 12, 2007 (as further amended,
supplemented or modified from time to time, the “Facility Agreement”), among
ARCH REINSURANCE LTD., as Obligor, LLOYDS TSB BANK PLC, as Agent and Mandated
Lead Arranger and LLOYDS TSB BANK PLC, ING BANK N.V., LONDON BRANCH and BARCLAYS
BANK PLC, as Original Lenders.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Facility Agreement, the Agent has agreed to issue
Letters of Credit on behalf of the Lenders;

 

WHEREAS, the Obligor has requested that certain provisions of the Facility
Agreement be amended as set forth herein; and

 

WHEREAS, the Agent and the Majority Lenders are willing to agree to such
amendment on the terms set forth herein;

 

NOW THEREFORE, in consideration of the premises and mutual covenants contained
herein, the undersigned hereby agree as follows:

 

I.              Defined Terms.  Terms defined in the Facility Agreement and used
herein shall have the meanings given to them in the Facility Agreement.

 

II.            Amendments to Section 1.1.

 

(a) Section 1.1 is amended by inserting in appropriate alphabetical order the
following definitions:

 

“Amendment” means the Amendment dated as of June 26, 2009 to this Agreement.

 

“Amendment Effective Date” has the meaning provided in the Amendment.

 

“FRBNY” means the Federal Reserve Bank of New York, or any other governmental
authority that is a successor or supplemental lender under TALF.

 

“Permitted TALF Indebtedness” has the meaning provided in the definition of
Permitted Indebtedness in this Section 1.01.

 

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“Permitted TALF Subsidiary” has the meaning provided in the definition of
Permitted Indebtedness in this Section 1.01

 

“TALF” means the Term-Asset Backed Securities Loan Facility, under which FRBNY
will provide funding on a non-recourse basis (other than in the case of certain
exceptions to the non-recourse provisions under TALF) to any eligible borrower
secured by eligible collateral, as announced by the Board of Governors of the
Federal Reserve System and in effect on the effective date of the Amendment and
as thereafter amended or otherwise modified from time to time (including any
successor or supplemental program thereto).

 

(b) Section 1.1 is further amended by adding the following sentence to the end
of the definition of “Indebtedness”:

 

For purposes of Section 6.1.12, “Indebtedness” shall not include any Permitted
TALF Indebtedness.

 

III.           Amendment to Section 1.2.  Section 1.2 of the Facility Agreement
is hereby amended by adding a new Section 1.2.7 reading:

 

1.2.7  For purposes of computing any amount under this Agreement (including, but
not limited to, Parent Consolidated Indebtedness, Consolidated Net Income,
Consolidated Tangible Net Worth, and Parent Consolidated Total Capital) on a
consolidated basis for any purpose under this Agreement, including, but not
limited to, Section 6.1.2 and Section 6.1.3, neither Arch Investments I LLC nor
any other Permitted TALF Subsidiary shall be considered a consolidated
subsidiary of the Parent.

 

IV.           Amendment to Section 5.6.3(b).  Section 5.6.3(b) of the Facility
Agreement is hereby amended by deleting Section 5.6.3(b) and replacing it with a
new Section 5.6.3(b), reading:

 

The Obligor shall not, nor will it permit any of its Subsidiaries to, create,
incur, assume or permit to exist any Indebtedness, or agree, become or remain
liable (contingent or otherwise) to do any of the foregoing, except for
(i) Indebtedness incurred by the Obligor or any of its Subsidiaries hereunder
and other Indebtedness which is either pari passu with, or subordinated in right
of payment to, the Indebtedness incurred by the Obligor hereunder and the other
obligations owing hereunder and under the Fundamental Documents and (ii) in the
case of any Subsidiary, Indebtedness that is permitted under Section 5.6.3(a).

 

V.            Amendment to Section 5.6.3(c)(ii).  Section 5.6.3(c)(ii) is
amended by deleting the word “and” at the end of clause (11) of the definition
of “Permitted Indebtedness”,

 

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replacing the period at the end of clause (12) with “and,” and inserting a new
clause (13) immediately after such clause (12), to read in its entirety as
follows:

 

(13) Indebtedness incurred by Arch Investments I LLC, a Delaware limited
liability company, or any other Subsidiary directly or indirectly formed by the
Parent solely for the purpose of participating in TALF (any such entity, a
“Permitted TALF Subsidiary”), provided that the Agent consents to the
designation of such other Subsidiary as a Permitted TALF Subsidiary, which
consent shall not be unreasonably delayed or withheld, arising out of funding
extended through TALF and any guarantee of any obligations relating thereto by
an affiliate of the Permitted TALF Subsidiary (any such Indebtedness or
guarantee, “Permitted TALF Indebtedness”); provided, that if TALF is amended or
modified following the date hereafter such that a Permitted TALF Subsidiary
incurring Indebtedness under TALF as so amended or modified would (i) be
materially adverse to the interests of the Lenders, (ii) change any of the
limitations or requirements set forth in this clause (13), or (iii) change in
any material respect the exceptions to the non-recourse provisions, then from
the date of such amendment or modification, as applicable, no Permitted TALF
Subsidiary shall incur any additional Indebtedness under TALF under this clause
(13), unless such Indebtedness is consented to by the Agent.  For avoidance of
doubt, the parties hereto acknowledge and agree that (x) amendments or
modifications to TALF relating to eligibility requirements for borrowers or
collateral, collateral haircuts, tenor and interest rates applicable to loans
extended thereunder, administrative fees, program size, termination date or
allocation procedures shall not be materially adverse to the interests of the
Lenders for purposes of this clause (13), and (y) any Indebtedness incurred
under this clause (13) by a Permitted TALF Subsidiary prior to the date of the
applicable amendment or modification discussed in the proviso above shall
continue to constitute Permitted Indebtedness under this clause (13) regardless
of any amendment or modification that may occur following the date such
Indebtedness is incurred.

 

VI.           Effective Date.  This Amendment shall become effective on the date
(the “Amendment Effective Date”) on which the Agent shall have received a
counterpart of this Amendment, executed and delivered by the Obligor and the
Majority Lenders.

 

VII.          Expenses.  The Obligor agrees to pay and reimburse the Agent for
all its reasonable costs and out-of-pocket expenses incurred in connection with
the preparation and delivery of this Amendment, including, without limitation,
the reasonable fees and disbursements of counsel to the Agent.

 

VIII.        Representations and Warranties.  The Obligor hereby represents that
as of the Amendment Effective Date: (i) each of the representations and
warranties made by it in or pursuant to the Fundamental Documents is true and
complete in all material respects as if made on and as of such date (it being
understood and agreed that any representation or warranty that by its terms is
made as of a specific date shall be required to be true and complete in all
material respects only as of such specified date), (ii) no Default or Event of
Default has occurred and is continuing after giving effect to the amendments
contemplated herein and (iii) the consolidated

 

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balance sheet of the Parent and its Subsidiaries as at December 31, 2008 and the
related consolidated statements of income, shareholders’ equity and cash flows
for the fiscal year ended on such date, reported on by PricewaterhouseCoopers
LLP are complete and correct and present fairly the consolidated financial
condition of the Parent and its Subsidiaries as at such date, and the
consolidated results of their operations for the fiscal year then ended.

 

IX.           Amendment Fee.  The Obligor agrees to pay each Lender which
consents to this Amendment on or prior to 12:00 p.m., EDT Friday, June 26, 2009
(by executing and delivering to the Agent or its counsel an executed counterpart
to this Amendment on or prior to such time), an amendment fee in an amount equal
to 0.035% of the aggregate amount of such Lender’s Commitment; such fees shall
be payable no later than 5:00 p.m., EDT Wednesday, July 1, 2009 in immediately
available funds to the Agent on behalf of the applicable Lender.  Payment of the
amendment fee hereunder is contingent upon receipt of at least the consents from
the Majority Lenders on or prior to 12:00 p.m., EDT Friday, June 26, 2009.

 

X.            Effect.  Except as expressly amended and waived hereby, all of the
representations, warranties, terms, covenants and conditions of the Fundamental
Documents shall remain unamended and not waived and shall continue to be in full
force and effect.

 

XI.           Counterparts.  This Amendment may be executed in multiple
counterparts each of which shall be an original and all of which when taken
together shall constitute but one and the same Agreement.

 

XII.         GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.

 

 

ARCH REINSURANCE LTD.

 

 

 

 

 

By

/s/ Nicolas Papadopoulo

 

 

Name: Nicolas Papadopoulo

 

 

Title: President & CEO

 

SIGNATURE PAGE – AMENDMENT

 

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LLOYDS TSB BANK PLC,
as Agent and Lender

 

 

 

 

 

By

/s/ W.S. Thomas

 

 

Name: W.S. Thomas

 

 

Title: Director, Loan Syndicate

 

SIGNATURE PAGE – AMENDMENT

 

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ING BANK N.V., LONDON BRANCH

 

 

 

 

 

By:

/s/ N J Marchant

 

 

Name: N J Marchant

 

 

Title: Director

 

 

 

 

 

 

 

By:

/s/ M E R Sharman

 

 

Name: M E R Sharman

 

 

Title: Director

 

SIGNATURE PAGE – AMENDMENT

 

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BARCLAYS BANK PLC

 

 

 

 

 

By:

/s/ David Barton

 

 

Name: David Barton

 

 

Title: Director

 

SIGNATURE PAGE – AMENDMENT

 

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