EX-10.1






Exhibit 10.1




AMENDMENT NO. 2

TO

CREDIT AGREEMENT




AMENDMENT NO. 2 (this “Amendment”), dated as of December 18, 2008, to the Credit
Agreement, dated as of December 21, 2006, by and between Max Bermuda Ltd. (f/k/a Max Re Ltd.), a
Bermuda company (the “Borrower”) and The Bank of Nova Scotia (the “Bank”), as
amended by Amendment No. 1, dated as of December 20, 2007 (as the same may be amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”).



RECITALS




I. Capitalized terms used herein and not herein defined shall have the meanings set forth in
the Credit Agreement.



II. The Borrower desires to amend the Credit Agreement upon the terms and conditions herein
contained, and the Bank has agreed thereto.



Accordingly, in consideration of the Recitals and the covenants, conditions and agreements
hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:



1. The defined term “Commitment Termination Date” contained in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety as follows:




“Commitment Termination Date” means the earlier of (a) December 17, 2009 and
(b) the occurrence of a Commitment Termination Event.



2. The defined term “Cash Equivalents” contained in Section 1.1 of the Credit
Agreement is hereby amended by deleting all of the text contained in paragraph (b) thereof
(including each of its subparagraphs), and inserting in its place “[Reserved]”.



3. The defined term “Commitment” contained in Section 1.1 of the Credit Agreement is hereby
amended by deleting the amount “$100,000,000” contained in the second sentence thereof, and
inserting in its place the amount “$75,000,000”.



4. Section 2.11(a) of the Credit Agreement is hereby amended by (i) deleting the percentage
“0.10%” contained in the first sentence thereof, and inserting in its place the percentage “0.25%”
and (ii) deleting the phrase “one-tenth of one percent (.10%)” contained in clause (z) of the
second sentence thereof, and inserting in its place the phrase “one quarter of one percent
(0.25%)”.



5. Section 2.11(b) of the Credit Agreement is hereby amended by deleting the percentage
“0.25%” contained in the first sentence thereof and inserting in its place the percentage “0.75%”.



6. Schedule 1.1 to the Credit Agreement is hereby amended and restated in the form of Schedule
1.1 hereto.



7. Schedule 1.2 to the Credit Agreement is hereby amended and restated in the form of Schedule
1.2 hereto.



8. Schedule 4.1, Schedule 4.2, Schedule 4.7, Schedule 4.9 and Schedule 4.10 to the Credit
Agreement are hereby amended and restated in the form of Schedule 4.1, Schedule 4.2, Schedule 4.7,
Schedule 4.9 and Schedule 4.10 hereto respectively.



9. Exhibit B to the Credit Agreement is hereby amended and restated in the form of Exhibit B
hereto.



10. Paragraphs 1 through 9 hereof shall not be effective until each of the following
conditions is satisfied (the date, if any, on which such conditions shall have first been satisfied
being referred to herein as the “Amendment Effective Date”):




(a) The Bank shall have received from the Borrower either (i) a counterpart of this
Amendment executed on behalf of the Borrower or (ii) written evidence satisfactory to the
Bank (which may include telecopy transmission of a signed signature page of this Amendment)
that the Borrower has executed a counterpart of this Amendment.




(b) The Bank shall have received a closing certificate, duly executed by the proper
parties and substantially in the form of Exhibit A hereto.




(c) The Bank shall have received the written opinion of Conyers Dill & Pearman, as
special Bermuda legal counsel to the Borrower, in form and substance reasonably acceptable
to the Bank.




(d) All fees and expenses payable to the Bank (including the reasonable fees and
expenses of counsel to the Bank) due and payable on or prior to the Amendment Effective
Date shall have been paid.



11. The Borrower (i) reaffirms and admits the validity and enforceability against the Borrower
of each Credit Document and all of its obligations thereunder, (ii) agrees and admits that it has
no defense to or offset against any such obligation, and (iii) represents and warrants that, as of
the date of the execution and delivery hereof by the Borrower, no Default has occurred and is
continuing.



12. This Amendment may be executed in any number of counterparts, each of which shall be
original and all of which shall constitute one agreement. It shall not be necessary in making
proof of this Amendment to produce or account for more than one counterpart signed by the party to
be charged.



13. This Amendment shall be governed by, and construed in accordance with, the laws of the
State of New York, without regard to conflict of laws principles that would require the application
of the laws of another jurisdiction.



14. Except as amended hereby, the Credit Agreement shall in all other respects remain in full
force and effect.



[Remainder of page intentionally left blank.]




1




IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the Credit
Agreement to be duly executed and delivered by their proper and duly authorized officers as of the
day and year first above written.




MAX BERMUDA LTD.



By:

Name:

Title:




2




THE BANK OF NOVA SCOTIA



By:

Name:

Title:




3




SCHEDULE 1.1




CONCENTRATION LIMITS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Limitation per	 	Limitation per	 	 	 	 
	 
	 	Issuer (as	 	Issue (as	 	Limitation (as
	 
	 	Percentage of all	 	Percentage of all	 	Percentage of all
	 
	 	Eligible	 	Eligible	 	Eligible
	Eligible Investments
	 	Investments)	 	Investments)	 	Investments)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Cash Equivalents
	 	 	7.5	%	 	 	N/A	 	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Canadian Government
Debt
	 	 	N/A	 	 	 	7.5	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Corporate/Municipal
Securities
	 	 	N/A	 	 	 	7.5	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	MBS (Agency CMOs)
	 	 	N/A	 	 	 	N/A	 	 	 	10.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 






4




SCHEDULE 1.2




BORROWING BASE CALCULATION




	 	 	 	 	 
	 	 	Applicable Percentage
	Eligible Investments	 	of Fair Market Value
	Cash
	 	 	100	%
	Cash Equivalents
	 	 	98	%
	US Government Debt with maturities
	 	 	98	%
	of more than one year but less
	 	 	 	 
	than five years
	 	 	 	 
	US Government Debt with maturities
	 	 	95	%
	of five years or more
	 	 	 	 
	Canadian Government Debt with
	 	 	93	%
	maturities up to ten years
	 	 	 	 
	Corporate/Municipal Securities rated
	 	 	90	%
	AAA or better by S&P or Aaa or better by
	 	 	 	 
	Moody’s with maturities less than ten years
	 	 	 	 
	Corporate/Municipal Securities rated
	 	 	85	%
	AA- or better by S&P or Aa3 or better by Moody’s with
maturities less than five years
	 	 	 	 
	Corporate/Municipal Securities rated
	 	 	80	%
	A- or better by S&P or A3 or better by Moody’s with
maturities less than five years
	 	 	 	 
	MBS (Agency CMOs) rated
	 	 	85	%
	AAA by S&P or Aaa by Moody’s
	 	 	 	 
	with maturities up to five years
	 	 	 	 






5




SCHEDULE 4.1




JURISDICTIONS




Bermuda



Max Bermuda Ltd.



Max Diversified Strategies Ltd.



Ireland



Max Europe Holdings Limited



Max Re Europe Limited



Max Insurance Europe Limited



Switzerland



Branch Office of Max Insurance Europe Limited



Germany



Representative Office of Max Insurance Europe Limited



6




SCHEDULE 4.2




LITIGATION AND CONTINGENT LIABILITIES




Litigation



Two lawsuits filed in the United States District Court for The Northern District of Georgia
name Max Bermuda, along with approximately 100 other insurance companies and brokers. The claims in
each case are that the defendants conspired to manipulate bidding practices for insurance policies
in certain insurance lines and failed to disclose certain commission arrangements. The first of
these cases was filed on April 4, 2006 by New Cingular Wireless Headquarter LLC and 16 other
corporations. The complaint asserts statutory claims under the Sherman Antitrust Act, the Racketeer
Influenced and Corrupt Organization Act, the antitrust laws of several states, as well as common
law claims alleging breach of fiduciary duty and fraud. 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 smaller claims.
The second action was filed October 12, 2007 by Sears, Roebuck & Co. and two affiliated
corporations. The complaint in this suit charges Max Bermuda and certain other insurance company
defendants as the violators of the antitrust and consumer fraud laws of Georgia and other states
and common law claims of inducement of breach of fiduciary duties, tortuous interference with
contract, unjust enrichment, and aiding and abetting fraud. The Judicial Panel on Multidistrict
Litigation transferred this case to the U.S. District Court for the District of New Jersey for
consolidated pretrial proceedings in November 2007. We intend to defend ourselves 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 our
unaudited interim consolidated financial statements as of September 30, 2008.



7




SCHEDULE 4.7




LOCATIONS




Max Bermuda Ltd.



Max Diversified Strategies Ltd.



Max 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



7/8 Wilton Terrace



Dublin 2, Ireland



Max Insurance Europe Limited – Swiss Branch Office



Limbergstrasse, 34



Küsnacht



Canton of Zurich, Switzerland



Max Insurance Europe Limited – German Representative Office



Valentinskamp 24



D-20354 Hamburg



Germany



8




SCHEDULE 4.9




DIRECT AND INDIRECT SUBSIDIARIES OF THE BORROWER




Max Europe Holdings Limited



Max Re Europe Limited



Max Insurance Europe Limited



Max Diversified Strategies Ltd.



9




SCHEDULE 4.10




INSURANCE LICENSES




Bermuda license of the Borrower for General Business Insurance



The Borrower 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.



10




EXHIBIT A




FORM OF CLOSING CERTIFICATE




Reference is made to the Credit Agreement, dated as of December 21, 2006, between Max Bermuda
Ltd. (f/k/a Max Re Ltd.) (the “Borrower”) and The Bank of Nova Scotia (the “Bank”)
(as amended by Amendment No. 1, dated as of December 20, 2007, Amendment No. 2, dated as of
December 18, 2008, and as supplemented or otherwise modified from time to time, the
“Credit Agreement”). Capitalized terms used herein that are defined in the Credit
Agreement shall have the meanings therein defined. This Certificate is being delivered pursuant to
Paragraph 9(b) of Amendment No. 2 to the Credit Agreement.



The undersigned, the duly appointed Secretary of the Borrower, hereby certifies for and on
behalf of the Borrower and not in her personal capacity that:



II. There have been no amendments or modifications to the Organization Documents of the
Borrower since December 20, 2007[,except      ; attached hereto as Annex A
are true, complete and correct copies of all such Organization Documents as amended].



III. Attached hereto as Annex B is a true, complete and correct copy of resolutions of
the Board of Directors of the Borrower authorizing Amendment No. 2 and the transactions
contemplated thereby, all of which are in full force and effect on the date hereof.



IV. Attached hereto as Annex C is a certificate of compliance of the Borrower issued
by the Bermuda Ministry of Finance or analogous official of its jurisdiction of formation.



V. The following persons are duly elected or appointed, as the case may be, and qualified
authorized representatives of the Borrower, and the signatures appearing opposite their respective
names, are the genuine signatures of such persons:



	 	 	 	 	 	 	 	 	 
	Name
	 	Title	 	Signature
	Angelo Guagliano
	 	President and Chief	 	 	—	 
	 
	 	Executive Officer	 	 	 	 
	[___________________]
	 	 	[______________________]	 	 	 	—	 






IN WITNESS WHEREOF, I have hereunto set my hand as of this [18]th day of December, 2008.



	 	 	 
	Name:

Title:

	 	Sarene Bourdages

Secretary






11




I, Angelo Guagliano, the duly appointed President and Chief Executive Officer of the Borrower,
hereby certify for and on behalf of the Borrower and not in my personal capacity to the Bank, on
and as of the date hereof, as follows:



1. That Sarene Bourdages, is the duly elected or appointed, as the case may be, and qualified
Secretary of the Borrower.



2. The representations and warranties of the Borrower set forth in each Credit Document to
which it is a party are true and correct in all material respects on and as of the Amendment
Effective Date (as defined in Amendment No. 2 to the Credit Agreement).



3. No Default has occurred and is continuing as of the Amendment Effective Date.



4. The undersigned acknowledges that The Bank of Nova Scotia will rely upon this certificate
and upon the representations and warranties of the Company in this Certificate, in the Credit
Agreement, in Amendment No. 1 to the Credit Agreement and in the Credit Documents.



IN WITNESS WHEREOF, I have hereunto set my hand as of this [18]th day of December, 2008.



Name: Angelo Guagliano




	 	 	 	Title: President and Chief Executive Officer





12




MAX BERMUDA — EXHIBIT B




FORM OF BORROWING BASE CERTIFICATE




     , 20     



The Bank of Nova Scotia


One Liberty Plaza, 26th Floor


New York, New York 10006


Attention: [     ]



I,      , do hereby certify that I am the      of Max Bermuda Ltd., a Bermuda
company (the “Borrower”), and that, as such, I am duly authorized to execute and deliver
this Borrowing Base Certificate pursuant to Section 5.1[[(d)] or [(f)]] of the Credit Agreement,
dated as of December 21, 2006, by and between the Borrower and The Bank of Nova Scotia, as amended
by Amendment No. 1, dated as of December 20, 2007, and Amendment No. 2, dated as of December [18],
2008 (as the same may be amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), and do hereby further certify that:



(a) Capitalized terms used herein which are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement,



(b) As of [Date] (the “Applicable Date”), the Borrowing Base is $     , calculated as
follows:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Type of	 	 	 	 	 	 	 	Dollar Equivalent	 	 	 	 	 	 	 	 	 	Adjusted Fair
	Eligible Investment	 	Fair Market Value	 	 	 	Exchange Percentage	 	 	 	Percentage	 	 	 	Market Value
	Cash

	 	 	$	 	 	X
	 	 	100	%	 	X
	 	 	100	%	 	=
	 	 	$	 
	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	Cash Equivalents

	 	 	$	 	 	X
	 	 	100	%	 	X
	 	 	98	%	 	=
	 	 	$	 
	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	US Government Debt

with maturities of

more than one year

but less than five

years

	 	







$
	 	







X
	 	







100%
	 	







X
	 	







98%
	 	







=
	 	







$

	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	US Government Debt

with maturities of

five years or more

	 	



$
	 	



X
	 	



100%
	 	



X
	 	



95%
	 	



=
	 	



$

	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	Canadian Government

Debt with

maturities up to

ten years

	 	





$
	 	





X
	 	





[     ]%
	 	





X
	 	





93%
	 	





=
	 	





$

	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	Corporate/Municipal

Securities rated

AAA or better by

S&P or Aaa or

better by Moody’s

with maturities

less than ten years

	 	











$
	 	











X
	 	











100%
	 	











X
	 	











90%
	 	











=
	 	











$

	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	Corporate/Municipal

Securities rated

AA- or better by

S&P or Aa3 or

better by Moody’s

with maturities

less than five

years

	 	













$
	 	













X
	 	













100%
	 	













X
	 	













85%
	 	













=
	 	













$

	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	Corporate/Municipal

Securities rated A-

or better by S&P or

A3 or better by

Moody’s with

maturities less

than five years

	 	











$
	 	











X
	 	











100%
	 	











X
	 	











80%
	 	











=
	 	











$

	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	MBS (Agency CMOs)

rated AAA by S&P or

Aaa by Moody’s with

maturities of up to

five years

	 	







$
	 	







X
	 	







100%
	 	







X
	 	







85%
	 	







=
	 	







$

	 

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 
	BORROWING BASE (Total) =
	 	 	$	 
	 
	 	 	 	 






(c) As of the Applicable Date, the LC Obligations outstanding are $     , and



(d) As of the Applicable Date, the LC Obligations do not exceed the Borrowing Base.



IN WITNESS WHEREOF I have hereunto signed my name as of the date first above written.




     




Name:      




Title:      




13