EX-10.2






Exhibit 10.2




CUSIP NO. 57772TAD4




	 
	 

	FIRST AMENDMENT AGREEMENT

	 

	dated as of December 19, 2006

	 

	to the

CREDIT AGREEMENT

Dated as of June 1, 2005

	 

	Among

	 

	MAX RE LTD.,

	 

	MAX USA HOLDINGS LTD.

	 

	And

	 

	MAX RE CAPITAL LTD.

	 

	as Borrowers,

	 

	VARIOUS FINANCIAL INSTITUTIONS,

	 

	as the Lenders,

	 

	ING BANK N.V., LONDON BRANCH

	 

	And

	 

	CITIBANK, N.A.

	 

	As Co-Syndication Agents,

	 

	And

	 

	BANK OF AMERICA, NATIONAL ASSOCIATION,

	 

	as Fronting Bank, as Administrative Agent,

	 

	and LC Administrator for the Lenders

	 

	And

	 

	BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Book Manager







1




FIRST AMENDMENT AGREEMENT




This First Amendment Agreement (the “Amendment”) is entered into as of December 19, 2006 among
Max Re Ltd., a Bermuda company (“Max Re”), Max Re Capital Ltd., a Bermuda company (the “Parent”),
Max USA Holdings Ltd., a Delaware corporation, the Lenders listed on the signature pages hereto
(the “Lenders”) and Bank of America, N.A., in its capacity as administrative agent (the
“Administrative Agent”), Fronting Bank and LC Administrator.



R E C I T A L S




WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to the Credit
Agreement, dated as of June 1, 2005 (as amended or modified and in effect on the date hereof, the
“Credit Agreement”); and



WHEREAS, the parties desire to amend the Credit Agreement to increase the Tranche A Commitment
to $450,000,000, to increase the Tranche B Commitment to $150,000,000 and increase the Aggregate
Commitments thereunder to $600,000,000 and amend certain other provisions.



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



SECTION 1 CREDIT AGREEMENT DEFINITIONS. Capitalized terms used herein that are
defined in the Credit Agreement shall have the same meaning when used herein unless otherwise
defined herein.



SECTION 2 AMENDMENTS TO CREDIT AGREEMENT. Effective on, and subject to the occurrence
of the Amendment Effective Date (as defined below), the Credit Agreement shall be as amended as
follows:



2.1 Amendment to Section 1. Section 1.1 of the Credit Agreement is amended as
follows:




(a) The definition of “Parent Loan Sublimit” is deleted in its entirety.




(b) The definition of “Borrower” in the preamble of the Credit Agreement is
deleted and the definition of “Borrower” in Section 1.1 of the Credit Agreement is hereby
amended and restated to read in its entirety as follows:




“Borrower” means each of the Parent, Max Re and US Holdco and
“Borrowers” means collectively the Parent, Max Re and US Holdco.”




(c) The definition of “Change in Control is amended by inserting the following
new subparagraph (d) at the end thereof:




“ or (d) the Parent ceases to own, directly or indirectly, 100% of the
Capital Stock of and beneficial interest in US Holdco entitled to vote upon
general matters submitted to shareholders including election of the board of
directors.”




(d) The definition of “Insurance Code” is amended by deleting the words “Max Re
and its Subsidiaries” and inserting the words “any Insurance Subsidiary” therefor.




(e) The definition of “Primary Policies” is amended by deleting the words “Max
Re or any of its Subsidiaries” and inserting the words “any Insurance Subsidiary” therefor.




(f) The definition of “Reinsurance Agreements” is amended by deleting the words
“Max Re or any of its Subsidiaries” and inserting the words “any Insurance Subsidiary”
therefor.




(g) The following definitions are added in the proper alphabetical order:




“First Amendment” means the First Amendment Agreement dated as of
December 19, 2006 among the Borrowers, the Lenders party thereto, the Administrative
Agent, the Fronting Bank and the LC Administrator.




“Insurance Subsidiary” means Max Re and any other Subsidiary of the
Parent that is licensed by any Governmental Authority to engage in the insurance or
reinsurance business.




“US Holdco” means Max USA Holdings Ltd., a Delaware corporation and a
direct, wholly-owned Subsidiary of the Parent.



2.2 Amendment to Section 2.1. Section 2.1 of the Credit Agreement is amended as
follows:




(a) Section 2.1(b)(ii)(B) is amended and restated in its entirety to read as follows:
“[Intentionally Omitted]”.




(b) Section 2.1(c) is amended by replacing the words “the amount of Loans made to Max
Re and the Parent” with the words “the amount of Loans made to Max Re, the Parent and US
Holdco.”



2.3 Amendment to Section 2.11. Section 2.11 of the Credit Agreement is amended by
inserting the following new subsection (c) at the end thereof:




“(c) US Holdco shall notify the Administrative Agent not less than three (3)
Business Days prior to each date US Holdco incurs any Debt other than Debt under
this Agreement or Debt owed to the Parent (“US Holdco Refunding Debt”) and the
Parent shall notify the Administrative Agent not less than three (3) Business Days
prior to each date the Parent incurs any Debt of the type set forth in clause (a) or
(b) of the definition of “Debt” other than Debt under this Agreement (“Parent
Refunding Debt”). Not later than one (1) Business Day after the receipt of proceeds
of any US Holdco Refunding Debt or any Parent Refunding Debt by US Holdco or the
Parent, as applicable, US Holdco or the Parent, as applicable, shall repay
outstanding Loans in an amount equal to such US Holdco Refunding Debt or Parent
Refunding Debt.”



2.4 Amendment to Section 2.13. Section 2.13 of the Credit Agreement is amended by
inserting the following at the end thereof:




“Notwithstanding anything contained in this Section 2.13 to the contrary, in
the event the Tranche B Commitments are reduced to $100,000,000 pursuant to
Section 2.14(c), MaxRe shall have the right to request, in accordance with
Section 2.19, that the Aggregate Commitments be increased up to
$600,000,000.”



2.5 Amendment to Section 2.14. Section 2.14(c) of the Credit Agreement is amended by
inserting the following at the end thereof:




“On each date that Loans are repaid pursuant to Section 2.11(c), the Tranche
B Commitments shall automatically be reduced by the principal amount of the Loans
prepaid but in no event by more than $50,000,000.”



2.6 Amendments to Section 2.18. Section 2.18 of the Credit Agreement is hereby
amended as follows:




(a) Section 2.18(a) is amended and restated in its entirety to read as follows:




“(a) The Obligations of Parent and US Holdco as Borrowers shall be joint and
several. The Obligations of Max Re as a Borrower shall be several in nature.”




(b) Section 2.18(b) is amended by inserting the following at the end thereof:




“US Holdco hereby irrevocably appoints the Parent as its agent for all purposes
relevant to this Agreement and each of the other Credit Documents, including (i) the
giving and receipt of notices, and (ii) the execution and delivery of all documents,
instruments and certificates contemplated herein and all modifications hereto. Any
acknowledgment, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by US Holdco acting singly,
shall be valid and effective if given or taken only by the Parent. Any notice,
demand, consent, acknowledgement, direction, certification or other communication
delivered to Parent in accordance with the terms of this Agreement shall be deemed
to have been delivered to the Parent and US Holdco.”



2.7 Amendment to Section 2.19. Section 2.19 of the Credit Agreement is amended by
inserting the following at the end thereof:




“In the event that the Tranche B Commitments are reduced to $100,000,000 as a result
of mandatory prepayments pursuant to Section 2.11(c), Max Re shall have the
right after the Refunding Date to request an increase in the Aggregate Commitments
in accordance with this Section 2.19.”



2.8 Amendment to Section 4.2. Section 4.2 of the Credit Agreement is amended and
restated in its entirety to read as follows:




“Except (a) as set forth (including estimates of the dollar amounts involved) in
Schedule 4.2 hereto, (b) for claims which are covered by Insurance Policies,
coverage for which has not been denied in writing, (c) for claims which relate to
Reinsurance Agreements or Primary Policies issued by Max Re or its Subsidiaries
which involve a potential liability which does not exceed 10% of Max Re’s Net Worth,
(d) for claims which relate to Reinsurance Agreements or Primary Policies issued by
Insurance Subsidiaries of US Holdco which involve a potential liability which does
not exceed 10% of US Holdco’s Net Worth, and (e) for claims which related to
Reinsurance Agreements or Primary Policies to which it is a party entered into by
any Insurance Subsidiaries in the ordinary course of business (referred to herein as
“Ordinary Course Litigation”), no claim, litigation (including, without
limitation, derivative actions), arbitration, governmental investigation or
proceeding or inquiry is pending or, to the knowledge of the Parent, threatened
against the Parent or its Subsidiaries (i) which would, if adversely determined,
have a Material Adverse Effect or (ii) which relates to any of the transactions
contemplated hereby. Other than any liability incident to such claims, litigation
or proceedings, the Parent and its Subsidiaries have no material Contingent
Liabilities other than Permitted Guarantees.”



2.9 Amendment to Section 4.4. Section 4.4 of the Credit Agreement is amended and
restated in its entirety to read as follows:




“None of the Parent, Max Re or US Holdco is an “investment company” or a company
“controlled by an investment company,” for the purpose of the Investment Company Act
of 1940, as amended. Neither the Parent nor Max Re is engaged in the “investment
business” as defined in The Investment Business Act of 2003 of Bermuda. None of the
Parent, Max Re or US Holdco is subject to regulation under the Federal Power Act,
the Interstate Commerce Act, any public utilities code, or any other Requirement of
Law limiting its ability to incur Debt.”



2.10 Amendment to Section 4.5. Section 4.5 of the Credit Agreement is amended in its
entirety to read as follows:




“None of the Borrowers is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock. None of the Borrowers, any Affiliate or any Person acting on
behalf of a Borrower has taken or will take action to cause the execution, delivery
or performance of this Agreement, the making or existence of the Credit Extensions
or the use of proceeds of the Credit Extensions to violate Regulations U or X of the
FRB.”



2.11 Amendment to Section 4.8. Section 4.8 of the Credit Agreement is amended by
deleting the words “Max Re or the Parent” each time they appear and inserting “a Borrower”
therefor.



2.12 Amendment to Section 4.14. Section 4.14 of the Credit Agreement is amended and
restated in its entirety to read as follows:




“The audited consolidated financial statements of the Parent and Max Re as at
December 31, 2005 as restated on November 14, 2006, and the unaudited consolidated
financial statements of the Parent and Max Re as of September 30, 2006, copies of
which have been delivered to the Lenders, are true and correct in all material
respects, have been prepared in accordance with GAAP consistently applied throughout
the periods involved (except as disclosed therein) and present fairly the
consolidated financial condition of such Borrower and its Subsidiaries at such date
and the result of its operations over the periods then ended.”



2.13 Amendment to Section 5.1. Section 5.1 of the Credit Agreement is amended as
follows:




(a) Section 5.1(a)(i) is amended by adding the following at the end thereof:




“; and (C) of US Holdco, a copy of the unaudited consolidated balance sheets
of US Holdco and its Subsidiaries, as of the close of such quarter and the
related statements of income and cash flows for that portion of the Fiscal
Year ending as of the close of such Fiscal Quarter, all prepared in
accordance with GAAP (subject to normal year-end adjustments) and
accompanied by the certification of an Executive Officer of US Holdco that
all such financial statements are complete and correct and present fairly in
accordance with GAAP (subject to normal year-end adjustments) the
consolidated results of operations and cash flows of US Holdco and its
Subsidiaries as at the end of such Fiscal Quarter and for the period then
ended.




(b) Section 5.1(a)(ii) is amended by adding the following at the end thereof:




“; and (C) of US Holdco, a copy of the annual audited consolidated financial
statements of US Holdco and its Subsidiaries consisting of balance sheets
and statements of income and retained earnings and cash flows, setting forth
in comparative form in each case the figures for the previous Fiscal Year,
which financial statements shall be prepared in accordance with GAAP,
certified without material qualification by KPMG or any other firm of
independent certified public accountants of recognized national standing
selected by US Holdco or the Parent and reasonably acceptable to the
Required Lenders that all such financial statements are complete and correct
and present fairly in accordance with GAAP the financial position and the
results of operations and cash flows of US Holdco and its Subsidiaries as at
the end of such year and for the period then ended; provided, however, that
US Holdco shall only be required to provide such statements commencing with
the Fiscal Year ending December 31, 2007 and thereafter.”




(c) Section 5.1(c) is amended and restated in its entirety to read as follows:




“SAP Financial Statements. Within five days after the date filed
with the applicable Governmental Authority for each of its Fiscal Years, but
in any event within 125 days after the end of each Fiscal Year of each
Insurance Subsidiary, a copy of the Annual Statement of each such Insurance
Subsidiary for such Fiscal Year prepared in accordance with SAP and
accompanied by a certificate of an Executive Officer of Max Re (in the case
of Annual Statements of Max Re or any of its Insurance Subsidiaries) or US
Holdco (in the case of Annual Statements of US Holdco or any Insurance
Subsidiary of US Holdco) that such financial statement is complete and
correct and presents fairly in accordance with SAP the financial position of
such Insurance Subsidiary for the period then ended.”




(d) Section 5.1(i)(i) of the Credit Agreement is amended and restated in its entirety
to read as follows:




“Within five (5) Business Days of receipt, a copy of any financial
examination reports by a Governmental Authority with respect to any
Insurance Subsidiary relating to the insurance business of such Insurance
Subsidiary (when, and if, prepared); provided, such Insurance
Subsidiary shall only be required to deliver any interim report hereunder at
such time as such Insurance Subsidiary has knowledge that a final report
will not be issued and delivered to the Administrative Agent within 90 days
of any such interim report.”




(e) Section 5.1(i)(v) is amended by adding the following at the end thereof:




“and promptly, notice of any actual, or to the best of US Holdco’s
knowledge, proposed material changes in the Insurance Code governing the
investment or dividend practices of any of its Insurance Subsidiaries.”



2.14 Amendment to Section 5.2(c). Section 5.2(c) of the Credit Agreement is amended
by inserting the following at the end thereof: “and US Holdco’s corporate existence.”



2.15 Amendment to Section 5.10. Section 5.10 of the Credit Agreement is amended by
inserting the following after the words “financial strength rating” the words “of Max Re.”



2.16 Amendment to Section 6.3. Section 6.3 of the Credit Agreement is amended by
adding the following new subparagraph (i) at the end thereof:




“and (i) unsecured Debt of US Holdco in an amount not to exceed $150,000,000.”



2.17 Amendment to Section 6.8. Section 6.8 of the Credit Agreement is amended in its
entirety to read as follows:




“Not create, incur or assume any agreement to which it is a signatory, other than
this Agreement which places any restrictions upon the right of the Borrowers to
sell, pledge or otherwise dispose of any material portion of its properties now
owned or hereafter acquired (other than with respect to property secured by Liens
permitted under Section 6.7) except for (i) such restrictions imposed under
this Agreement or by federal or state laws upon the right of the Borrowers to sell,
pledge or otherwise dispose of securities owned by it, (ii) restrictions imposed in
connection with Debt permitted under Section 6.3(e) provided that such
restrictions are no more restrictive than those contained in this Agreement and such
restrictions do not prohibit the Borrowers from granting Liens to secure the
Obligations under this Agreement and (iii) restrictions on US Holdco and its
Subsidiaries in connection with Debt permitted under Section 6.3(i).”



2.18 Amendment to Section 6.9. Clause (d) of Section 6.9 of the Credit Agreement is
amended by inserting following the words “except that each of Max Re and the Parent” the words “and
US Holdco and its Subsidiaries”.



2.19 Amendments to Section 7.1. Sections 7.1(c), (d), (e), (h), (i) and (m) are
amended by deleting the words “the Parent or Max Re” each time they appear and inserting “any
Borrower” therefor.



2.20 Amendment to Section 8.2. Section 8.2 is amended by inserting the following new
subparagraph (g) at the end thereof:




“(g) Max Re Rating. Prior to the date the first mandatory prepayment is
made pursuant to Section 2.11(c), on the date any Loan is made, the A.M.
Best Company financial strength rating of Max Re shall be not less than ‘A-‘.”



2.21 Amendment to Schedules. Schedules 2.1, 4.1, 4.2, 4.7, 4.9 and 4.10 of the Credit
Agreement are deleted in their entirety and Schedules 2.1, 4.1, 42., 4.7, 4.9 and 4.10 attached
hereto are substituted therefor.



SECTION 3 REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders, the
Fronting Bank, the LC Administrator and the Administrative Agent to execute and deliver this
Amendment, each of Max Re, the Parent and US Holdco hereby represents and warrants to each such
Person that:




(a) No Default or Event of Default has occurred and is continuing or will result from
the execution and delivery or effectiveness of this Amendment; and




(b) The warranties of the Borrowers contained in Article IV of the Credit Agreement
after giving effect to the amendments in Section 2 hereof are true and correct as of the
Amendment Effective Date, with the same effect as though made on such date.



SECTION 4 CONDITIONS TO EFFECTIVENESS. This Amendment shall become effective as of
the date (the “Amendment Effective Date”) when the Administrative Agent shall have received the
following:



4.1 Amendment. Ten counterparts of this Amendment executed by the Borrowers, the
Administrative Agent, and each Lender whose Commitment is being increased pursuant to this
Amendment.



4.2 US Holdco Documents. Certified Copies of the Organization Documents of US Holdco,
resolutions of the board of directors of US Holdco authorizing the execution, delivery and
performance of this Amendment and a certificate of an Authorized Officer of US Holdco certifying
the names of the individual or individuals authorized to sign this Amendment, together with the
sample of the true signature of each such individual (and the Lenders may conclusively rely on such
certificate until formally advised by a like Certificate of any changes therein).



4.3 Corporate Resolutions. Certified copies of resolutions of the boards of directors
of the Parent and Max Re authorizing the execution, delivery and performance of this Amendment.



4.4 Opinions of Counsel. An opinion of counsel of the Borrowers, addressed to the
Administrative Agent, the Fronting Bank, the LC Administrator and the Lenders from each of (i)
Sarene Bourdages, general counsel to the Loan Parties, (ii) Akin Gump Strauss Hauer & Feld LLP, New
York counsel to the Loan Parties, and (iii) Conyers, Dill and Pearman, Bermuda counsel to Max Re
and the Parent, each in form and substance satisfactory to the Administrative Agent.



4.5 Fees and Expenses. (a) The Administrative Agent shall have received (i) on behalf
of each Lender increasing its Tranche A Commitment, an upfront fee equal to three basis points on
such increase and (ii) on behalf of each Lender increasing its Tranche B Commitment, an upfront fee
equal to eight basis points on the amount of such increase, (b) the Borrowers shall have paid to
the Administrative Agent any amounts due pursuant to the fee letter dated November 29, 2006 and (c)
unless waived by the Administrative Agent, the Borrowers shall have paid all charge and
disbursements of counsel to the Administrative Agent and all out-of-pocket expenses of the
Administrative Agent and the Arranger to the extent invoiced prior to on the Amendment Effective
Date.



SECTION 5 GENERAL.



5.1 Reaffirmation of Credit Documents. From and after the date hereof, each reference
that appears in any other Credit Document to the Credit Agreement shall be deemed to be a reference
to the Credit Agreement as amended hereby. As amended hereby, the Credit Agreement is hereby
reaffirmed, approved and confirmed in every respect and shall remain in full force and effect.
This Amendment is a Credit Document.



5.2 Counterparts; Effectiveness. This Amendment may be executed by the parties hereto
in any number of counterparts and by the different parties in separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall together constitute
but one and the same agreement.



Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. This Amendment constitutes the entire
understanding among the parties hereto with respect to the subject matter hereof and supercedes any
prior agreements with respect thereto.



2




IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by the
respective officers thereunto duly organized as of the date and year first above written.




MAX RE LTD.




By:

Title:





MAX RE CAPITAL LTD.




By:

Title:





MAX USA HOLDINGS LTD.




By:

Title:




3




BANK OF AMERICA, NATIONAL




ASSOCIATION, as Administrative Agent, LC




Administrator, Fronting Bank and Lender




By:

Title:




4




CITIBANK, N.A.




By:

Title:




5




ING BANK N.V., LONDON BRANCH




By:

Title:





By:

Title:




6




HSBC BANK USA, NATIONAL ASSOCIATION




By:

Title:




7




BARCLAYS BANK PLC




By:

Title:




8




WACHOVIA BANK, NATIONAL ASSOCIATION




By:

Title:




9




THE BANK OF NEW YORK




By:

Title:




10




WEBSTER BANK, NATIONAL ASSOCIATION




By:

Title:




11




SCHEDULE 2.1




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Tranche A	 	Tranche B	 	 
	Lender	 	Commitment	 	Commitment	 	Percentage
	Bank of America, N.A.
	 	$	81,666,666.67	 	 	$	28,333,333.32	 	 	 	18.333333332	%
	Citibank, N.A.
	 	$	80,000,000.00	 	 	$	27,500,000.00	 	 	 	17.916666667	%
	ING Bank N.V.,
London Branch
	 	$	80,000,000.00	 	 	$	27,500,000.00	 	 	 	17.916666667	%
	HSBC Bank USA,
National Association
	 	$	50,000,000.00	 	 	$	16,666,666.67	 	 	 	11.111111112	%
	Wachovia Bank,
National Association
	 	$	50,000,000.00	 	 	$	16,666,666.67	 	 	 	11.111111112	%
	The Bank of New York
	 	$	50,000,000.00	 	 	$	16,666,666.67	 	 	 	11.111111112	%
	Barclays Bank Plc
	 	$	38,888,888.89	 	 	$	11,111,111.11	 	 	 	8.333333333	%
	Webster Bank,
National Association
	 	$	19,444,444.44	 	 	$	5,555,555.56	 	 	 	4.166666667	%
	TOTAL
	 	$	450,000,000.00	 	 	$	150,000,000.00	 	 	 	100.0	%






12




SCHEDULE 4.1




JURISDICTIONS




Bermuda



Max Re Ltd.



Max Re Capital Ltd.



Max Re Diversified Strategies Ltd.



Max Re Managers Ltd.



Ireland



Max Europe Holdings Limited



Max Re Europe Limited



Max Insurance Europe Limited



Switzerland


Branch of Max Insurance Europe Limited



United States


Max USA Holdings Ltd.



13




SCHEDULE 4.2




LITIGATION AND CONTINGENT LIABILITIES




Litigation



SEC Inquiry. In connection with an internal review of three finite property and casualty
retrocessional contracts, Parent voluntarily contacted the US Securities and Exchange Commission
(“SEC”) in March 2006. Subsequently, in connection with the SEC’s industry-wide investigation into
non-traditional, or loss mitigation, (re)insurance products, Parent received a subpoena for certain
information and interviews with a number of Parent’s and Max Re’s employees relating to the
business practice review and Parent’s determination to restate its financial statements for the
fiscal years ended December 31, 2005, 2004, 2003, 2002 and 2001. Parent will continue to cooperate
fully with the SEC. Parent cannot predict the ultimate impact, if any, this investigation may have
on Parent’s and/or Max Re’s business or operations. It is possible that the SEC investigation may
result in penalties and relief, including without limitation injunctive relief and/or civil
monetary penalties, or require remediation. The nature of the relief or remedies or remediation
that the SEC may seek cannot be predicted at this time. If an enforcement action is brought by the
SEC, it could have a material adverse effect on Parent and/or Max Re.



Other Actions. On April 4, 2006, a complaint was filed in the U.S. District Court for the Northern
District of Georgia on behalf of New Cingular Wireless Headquarters LLC and 16 other corporations
against approximately 100 insurance entity defendants, including insurance brokers Marsh Inc. and
Aon, and including Max Re. On October 16, 2006, the Judicial Panel on Multidistrict Litigation
transferred the case to the U.S. District Court for the District of New Jersey for pretrial
proceedings on a consolidated basis with other lawsuits raising similar claims. The complaint
alleges that the defendant insurance companies and insurance brokers conspired to manipulate
bidding practices for insurance policies in certain insurance lines and failed to disclose certain
commission arrangements. The named plaintiffs have asserted statutory claims under the Sherman Act,
the Racketeer Influenced and Corrupt Organizations Act, as well as common law claims alleging
breach of fiduciary duty, inducement to breach fiduciary duty, unjust enrichment and fraud. Max Re
intends to defend itself vigorously in this suit but cannot at this time predict the outcome of the
matters described above or estimate the potential costs related to defending the action. No
liability has been established in Parent’s unaudited consolidated financial statements for the
period ended September 30, 2006.



Contingent Liabilities



Guaranty by Max Re Ltd. of a lease of an office building in Dublin, Ireland used by European
Subsidiaries.



A Limited Guaranty by MDS of the obligations of Max Re under a Letter of Credit Agreement with
Hypo-Und Vereinsbank, AG, New York Branch



14




SCHEDULE 4.7




Max Re Capital Ltd.



Max Re Managers Ltd.



Max Re Ltd.



Max Re Diversified Strategies Ltd.




Max Re House




2 Front Street




P.O. Box HM 2565




Hamilton HM KX, Bermuda




and




Vallis Building, 2nd Floor


58 Par-La-Ville Road


Hamilton HM 11, Bermuda



Max Europe Holdings Limited



Max Insurance Europe Limited



Max Re Europe Limited




Harcourt Building




Harcourt Street




Dublin, 2




Ireland



Max Insurance Europe Limited – Swiss Branch




Limbergstrasse 34


Küsnacht


Canton of Zurich, Switzerland



Max USA Holdings Ltd.




9020 Stony Point Parkway


Suite 325


Richmond, VA 23235


USA




and




One Front Street


San Francisco, CA 94111


USA




and




1145 Sanctuary Parkway


Alpharetta, GA 30004


USA




and




300 Welsh Road,


Building No. Four – Suite 160,


Horsham, PA 19044


USA



15




SCHEDULE 4.9




DIRECT AND INDIRECT SUBSIDIARIES OF MAX RE CAPITAL LTD.




Max Europe Holdings Limited



Max Re Europe Limited



Max Insurance Europe Limited



Max Re Diversified Strategies Ltd.



Max Re Managers Ltd.



Max Re Ltd.



Max USA Holdings Ltd.



16




SCHEDULE 4.10




INSURANCE LICENSES




Bermuda licence of Max Re for General Business Insurance



Max Re is licensed as a Class IV, General and long-term Insurer in Bermuda, which allows writing of
all property, casualty, life and health lines.



Max Re Europe Limited is authorized to write reinsurance in Ireland.



Max Insurance Europe Limited is authorized to conduct non-life insurance business in Ireland in the
following classes: 1, 4, 5, 6, 7, 8, 9, 11, 12, 13 and 16. Max Insurance Europe Limited is also
authorized to transact business in Switzerland through a branch in the following classes: B8, B9,
B13 and B16.




17