Document:

exv10w2

Exhibit 10.2

EXECUTION COPY

          THIRD AMENDMENT dated as of March 12, 2010 (this “Amendment”) to the Five-Year Secured
Letter of Credit Facility Agreement dated as of March 12, 2007, as amended by the First Amendment
dated October 25, 2007 and as amended by the Second Amendment dated July 24, 2009 (the
“Five-Year Facility Agreement”) (each as heretofore amended, supplemented or otherwise
modified, the “Credit Agreement”), among VALIDUS HOLDINGS, LTD. (the “Company”),
VALIDUS REINSURANCE, LTD. (“Validus Re” and collectively with the Company, the “Account
Parties”), the LENDERS from time to time party thereto and JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).

          WHEREAS, the Account Parties and the Required Lenders have agreed, on the terms and subject to
the conditions set forth herein, to amend the Credit Agreement in the manner set forth herein;

          NOW, THEREFORE, in consideration of the above premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

          SECTION 1. Defined Terms. Capitalized terms used and not defined herein have the
meanings given to them in the Credit Agreement (as amended hereby).

          SECTION 2. Amendments to the Credit Agreement. Effective as of the Third Amendment
Effective Date (as defined below), the Credit Agreement is hereby amended as follows:

          (a) Section 1.01 of the Credit Agreement is amended to add the following definitions thereto
in appropriate alphabetical order and, where applicable, delete and replace in their entirety the
corresponding previously existing definitions:

     “Change of Control” means (a) Validus Re or any other Account Party ceasing to
be a Wholly-Owned Subsidiary of the Company, (b) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934, as amended, and the rules of the SEC thereunder as in
effect on the date hereof) of Equity Interests representing more than 50% of either the
aggregate ordinary voting power or the aggregate equity value represented by the issued and
outstanding Equity Interests in the Company, or (c) the occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Company by Persons who were
neither (i) nominated by the board of directors of the Company nor (ii) appointed by
directors so nominated.

     “Consolidated Indebtedness” means, as of any date of determination, all
Indebtedness (other than (a) Indebtedness described in clause (i) of the definition thereof
that does not constitute bonds, debentures, notes or similar instruments that are generally
recourse with respect to the Company and its Subsidiaries, (b) obligations (contingent or
otherwise) in respect of undrawn letters of credit and (c) Indebtedness that is non-recourse
with respect to the Company and its Subsidiaries) of the Company and its Subsidiaries. For
the avoidance of doubt, “Consolidated Indebtedness” shall not include contingent obligations
of the Company or any Subsidiary as an account party or applicant in respect of any
Guarantee unless such Guarantee supports an obligation that constitutes Indebtedness.

     “Defaulting Lender” means any Lender, as reasonably determined by the
Administrative Agent in good faith, that has (a) failed to fund any portion of its
participations in Letters of Credit within three (3) Business Days of the date required to
be funded by it hereunder unless such Lender’s failure to fund such participation is based
on such Lender’s reasonable determination

 

 

that the conditions precedent to funding such participation under this Agreement have
not been satisfied and such Lender has notified the Administrative Agent in writing of such
determination, (b) notified the Company, the Administrative Agent, the LC Issuer or any
Lender in writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does not intend to
comply with its funding obligations under this Agreement or under other agreements generally
in which it commits to extend credit, (c) failed, within (3) three Business Days after
request by the Administrative Agent, to confirm that it will comply with the terms of this
Agreement relating to its obligations to fund prospective participations in then outstanding
Letters of Credit unless subject to a good faith dispute based on such Lender’s reasonable
determination that the conditions precedent to funding such participation under this
Agreement have not been satisfied and such Lender has notified the Administrative Agent in
writing of such determination, provided that any such Lender shall cease to be a
Defaulting Lender under this clause (c) upon receipt of such confirmation by the
Administrative Agent, (d) otherwise failed to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within three (3) Business
Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or
is insolvent or has a parent company that has become or is insolvent or (ii) become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or custodian, appointed for it, or has taken
any action in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment or has a parent company that has become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or custodian appointed for it, or has taken
any action in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment; provided, that a Lender shall not become a Defaulting
Lender solely as the result of (x) the acquisition or maintenance of an ownership interest
in such Lender or a Person controlling such Lender or (y) the exercise of control over a
Lender or a Person controlling such Lender, in each case, by a Governmental Authority or an
instrumentality thereof.

     “Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid and treated as interest expense under GAAP, (d) all
obligations of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current ordinary course
trade accounts payable), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
Lien on property owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed, provided that the amount of Indebtedness of such Person shall be
the lesser of (i) the fair market value of such property at such date of determination
(determined in good faith by the Company) and (ii) the amount of such Indebtedness of such
other Person, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) all obligations (or to the extent netting is permitted
under the applicable agreement governing such Capital Markets Products and such netting is
limited with respect to the counterparty or counterparties of such agreement, all net
termination obligations) of such Person under transactions in Capital Markets Products and
(j) all reimbursement obligations of such Person in respect of letters of credit, letters of
guaranty, bankers’ acceptances and similar credit transactions; provided that,
Indebtedness shall not include any preferred (including without limitation trust preferred)
or preference securities or Hybrid Capital, in each case issued by the Company, to the
extent such preferred or preference securities or Hybrid Capital would be treated

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as equity issued by the Company under the applicable procedures and guidelines of S&P
as of the date hereof. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such Indebtedness
provide that such Person is not liable therefor. For the avoidance of doubt, Indebtedness
shall not include (v) current trade payables (including current payables under insurance
contracts and current reinsurance payables) and accrued expenses, in each case arising in
the ordinary course of business, (w) obligations and Guarantees of Regulated Insurance
Companies with respect to Policies, (x) obligations and Guarantees with respect to products
underwritten by Regulated Insurance Companies in the ordinary course of business, including
insurance and reinsurance policies, annuities, performance and surety bonds, assumptions of
liabilities and any related contingent obligations and (y) Reinsurance Agreements and
Fronting Arrangements and Guarantees thereof entered into by any Regulated Insurance Company
in the ordinary course of business.

     “Insurance Licenses” means the material licenses (including licenses or
certificates of authority from Applicable Insurance Regulatory Authorities), permits or
authorizations to transact insurance and reinsurance business held by any Regulated
Insurance Company.

     “IPC” means Validus Amalgamation Subsidiary, Ltd., a company organized under
the laws of Bermuda and successor by amalgamation to IPC Holdings, Ltd.

     “Lloyd’s LC Facility” means that certain amended and restated letter of credit
facility agreement, dated as of November 19, 2009, between the Company and Talbot Holdings
Ltd. and Lloyds TSB Bank plc and ING Bank N.V., London Branch providing for the issuance of
letters of credit in support of obligations of Talbot Holdings Ltd. under its 2010 and 2011
underwriting years’ letter of credit facility procurement agreements and capital stock
arrangements with Talbot 2002 Underwriting Capital Ltd. 2002 in an aggregate principal
amount of up to $25,000,000 at any time outstanding (the “FAL Facility Agreement”)
and any modifications, amendments, restatements, waivers, extensions, renewals, replacements
or refinancings thereof; provided that any such modifications, amendments, waivers,
extensions, renewals, replacements or refinancings be on terms which, when taken together as
a whole, are not adverse in any material respect to the interests of the Lenders, as
compared to those contained in the FAL Facility Agreement.

     “Minimum Consolidated Net Worth Amount” means, at any time, an amount which
initially shall be equal to $2,925,590,000, and which amount shall be increased as follows:
(i) immediately following the last day of each fiscal quarter (commencing with the fiscal
quarter ended December 31, 2009) by an amount (if positive) equal to 50% of the Net Income
for such fiscal quarter and (ii) by 50% of the aggregate increases in the consolidated
shareholders’ equity of the Company during such fiscal quarter by reason of the issuance and
sale of common Equity Interests of the Company, including upon any conversion of debt
securities of the Company into such Equity Interests.

     “Permitted Subsidiary Indebtedness” means:

     (a) Indebtedness of any Subsidiary of the Company under the Credit Documents or
existing on the date hereof and listed on Schedule 3.14 and extensions, renewals and
replacements of any such Indebtedness, provided that such extending, renewal or
replacement Indebtedness (i) shall not be Indebtedness of an obligor that was not an obligor
with respect to the Indebtedness being extended, renewed or replaced, (ii) shall not be in a
principal amount that exceeds the principal amount of the Indebtedness being extended,
renewed or replaced (plus any accrued but unpaid interest and redemption premium payable by
the terms of such Indebtedness thereon and reasonable refinancing or renewal fees, costs and
expenses), (iii) shall not have an earlier maturity date or shorter weighted average life
than the Indebtedness being extended, renewed or

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replaced and (iv) shall be subordinated to the Guaranteed Obligations on terms (if any)
at least as favorable to the Lenders as the Indebtedness being extended, renewed or
replaced;

     (b) Indebtedness of any Subsidiary of the Company incurred in the ordinary course of
business in connection with any Capital Markets Product that are not entered into for
speculative purposes;

     (c) Indebtedness owed by Subsidiaries of the Company to the Company or any of its
Subsidiaries;

     (d) Indebtedness of any Subsidiary of the Company incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed by any Subsidiary of the Company in connection with
the acquisition of any such assets or secured by a Lien on any such assets prior to the
acquisition thereof, provided that (i) such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of such construction or improvement
and (ii) the aggregate principal amount of Indebtedness permitted by this clause (d) shall
not exceed $10,000,000 at any time outstanding;

     (e) Indebtedness of any Subsidiary of the Company in respect of letters of credit
issued to reinsurance cedents, or to lessors of real property in lieu of security deposits
in connection with leases of any Subsidiary of the Company, in each case in the ordinary
course of business;

     (f) Indebtedness of any Subsidiary of the Company incurred in the ordinary course of
business in connection with workers’ compensation claims, self-insurance obligations,
unemployment insurance or other forms of governmental insurance or benefits and pursuant to
letters of credit or other security arrangements entered into in connection with such
insurance or benefit;

     (g) Indebtedness of any Designated Subsidiary Account Parties under the Three-Year
Unsecured Letter of Credit Facility;

     (h) Indebtedness representing installment insurance premiums owing by the Company or
any Subsidiary in the ordinary course of business in respect of the liability insurance,
casualty insurance or business interruption insurance maintained by the Company or any
Subsidiary, in each case in respect of their properties and assets (but excluding, for the
avoidance of doubt, any insurance or reinsurance provided or obtained by the Company or any
Subsidiary in connection with performing its Insurance Business or managing risk in respect
thereof); and

     (i) without duplication, additional Indebtedness of Subsidiaries of the Company not
otherwise permitted under clauses (a) through (h) of this definition which, when added to
the aggregate amount of all Liens (other than with respect to Indebtedness incurred pursuant
to this clause (i)) incurred by the Company pursuant to Section 6.03(w), shall not exceed at
any time outstanding 5% of Consolidated Net Worth at the time of incurrence of any new
Indebtedness under this clause (i); provided that immediately after giving effect
(including pro forma effect) to the incurrence of any Indebtedness pursuant to this clause
(i), no Event of Default shall have occurred and be continuing.

     “Significant Insurance Subsidiary” means a Regulated Insurance Company which is
also a Significant Subsidiary.

     “Significant Subsidiary” means (a) Validus Re, (b) Talbot Holdings Ltd. and (c)
each other Subsidiary of the Company that either (i) as of the end of the most recently
completed fiscal

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year of the Company for which audited financial statements are available, has assets
that exceed 10% of the total consolidated assets of the Company and all of its Subsidiaries
as of the last day of such period or (ii) for the most recently completed fiscal year of the
Company for which audited financial statements are available, has revenues that exceed 10%
of the consolidated revenue of the Company and all of its Subsidiaries for such period;
provided that, if at any time the aggregate amount of the total consolidated assets
of the Company and all of its Subsidiaries or the consolidated revenue of the Company and
all of its Subsidiaries attributable to Subsidiaries that are not Significant Subsidiaries
exceeds fifteen percent (15%) of the total consolidated assets of the Company and all of its
Subsidiaries as of the end of any such fiscal year or fifteen percent (15%) of the
consolidated revenue of the Company and all of its Subsidiaries for any such fiscal quarter,
the Company (or, in the event the Company has failed to do so within ten days, the
Administrative Agent) shall designate sufficient Subsidiaries as “Significant Subsidiaries”
to eliminate such excess, and such designated Subsidiaries shall for all purposes of this
Agreement constitute Significant Subsidiaries.

     “Talbot Facility” means the $60,000,000 three-year revolving credit facility
agreement, dated on or about the Effective Date, between the Company and Talbot Holdings
Ltd. and Lloyds TSB Bank plc and any modifications, amendments, restatements, waivers,
extensions, renewals, replacements or refinancings thereof; provided that any such
modifications, amendments, waivers, extensions, renewals, replacements or refinancings be on
terms which, when taken together as a whole, are not adverse in any material respect to the
interests of the Lenders.

     “Three-Year Unsecured Letter of Credit Facility” means the $340,000,000
unsecured letter of credit facility among the Company, Validus Re, various Designated
Subsidiary Account Parties, JPMorgan Chase Bank, N.A., as administrative agent, and one or
more lenders entered into on March 12, 2010, including the related collateral and security
documents and other instruments and agreements executed in connection therewith, and
amendments, renewals, replacements, refinancings and restatements to any of the foregoing
(provided that the principal amount thereof shall not exceed $340,000,000 or, if increased
in accordance with its terms, $400,000,000, plus reasonable refinancing costs, fees and
expenses).

          (b) Section 1.01 of the Credit Agreement is amended to delete in its entirety the definitions
of “IPO” and “Permitted Investors” therefrom.

          (c) The definition of “Net Worth” appearing in Section 1.01 of the Credit Agreement is amended
to delete the reference to “2006” and replace it with “2009”.

          (d) Section 1.03 of the Credit Agreement is amended to add the following sentence at the end
thereof:

          “Notwithstanding any other provision contained herein, all terms of an accounting or
financial nature used herein to calculate compliance with Sections 6.10 and 6.11 shall be
construed, and all computations of amounts and ratios referred to herein shall be made,
without giving effect to any election under Accounting Standards Codification 825-10-25
(previously referred to as Statement of Financial Accounting Standards 159) (or any other
Accounting Standards Codification or Financial Accounting Standard having a similar result
or effect) to value any Consolidated Indebtedness of the Company or any Subsidiary at “fair
value”, as defined therein.”

          (e) Section 2.12(f) of the Credit Agreement is amended by adding the following sentence at the
beginning thereof:

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          “(f) If a Lender or the Administrative Agent shall determine, in its sole discretion,
that it is entitled to claim a refund from a Governmental Authority in respect of
Indemnified Taxes or Other Taxes paid by any Account Party pursuant to this Section 2.12,
such Lender or the Administrative Agent, as applicable, shall promptly notify such Account
Party of the availability of such refund claim and, if the Lender or the Administrative
Agent, as applicable, determines in its sole discretion that making a claim for refund will
not have an adverse effect on its Taxes or business operations, shall, within 60 days after
receipt of a request by such Account Party and at the Company’s expense, make a claim to
such Governmental Authority for such refund.”

          (f) Section 2.14(b) of the Credit Agreement is amended to delete the word “each” appearing
immediately prior to the phrase “Account Party” the first time such phrase appears and replacing
such word with the word “any”.

          (g) Section 2.16 is hereby amended and restated in its entirety as follows:

          “Section 2.16 Additional Commitments. (a) The Company shall have the right, at
any time and from time to time, after the Effective Date and prior to the Commitment
Expiration Date to request (so long as no Default or Event of Default is then in existence
or would result therefrom) on one or more occasions that one or more existing Lenders
(and/or one or more other Eligible Persons which will become Lenders as provided pursuant to
clause (v) below) provide Additional Commitments; it being understood and agreed, however,
that (i) no existing Lender shall be obligated to provide an Additional Commitment as a
result of any request by the Company, (ii) any existing Lender may provide an Additional
Commitment without the consent of any other Lender, (iii) (A) each provision of Additional
Commitments on a given date pursuant to this Section 2.16 shall be in a minimum aggregate
amount (for all Additional Commitment Lenders (including, in the circumstances contemplated
by clause (v) below, Eligible Persons who will become Additional Commitment Lenders) of at
least $25,000,000 (or such lesser amount as is acceptable to the Administrative Agent) and
(B) the aggregate Commitments for all Lenders hereunder shall not exceed $700,000,000, (iv)
all up-front fees payable to any Additional Commitment Lender shall be as set forth in the
relevant Additional Commitment Agreement, (v) the Company may request Additional Commitments
from Eligible Persons which are reasonably acceptable to the Administrative Agent and each
Fronting Lender, (vi) all Additional Commitments provided on a given date pursuant to this
Section 2.16 shall have the same terms and conditions as all then existing Commitments
(other than with respect to upfront fees) and shall be added to such existing Commitments in
accordance with clause (b) of this Section 2.16 below and (vii) all actions taken by the
Account Party pursuant to this Section 2.16 shall be done in coordination with the
Administrative Agent. No consent of any Lender (other than the Lenders providing the
Additional Commitments) shall be required for any Additional Commitments made pursuant to
this Section 2.16.

          (b) The effectiveness of Additional Commitments pursuant to this Section 2.16 shall be
subject to the occurrence of the following: (i) the Company, each Designated Subsidiary
Account Party, the Administrative Agent and each existing Lender or Eligible Person, as the
case may be, which agrees to provide an Additional Commitment (each, an “Additional
Commitment Lender”) shall have executed and delivered to the Administrative Agent an
Additional Commitment Agreement substantially in the form of Exhibit E or such other
form reasonably acceptable to the Administrative Agent, subject to such modifications in
form and substance reasonably satisfactory to the Administrative Agent as may be necessary
or appropriate (with the effectiveness of such Additional Commitment Lender’s Additional
Commitment to occur upon delivery of such Additional Commitment Agreement to the
Administrative Agent, the payment of any fees

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required in connection therewith and the satisfaction of the other conditions set forth
in this Section 2.16 to the reasonable satisfaction of the Administrative Agent), (ii) all
Several Letters of Credit outstanding at such time shall have been returned by each
respective beneficiary thereunder to the respective Issuing Agent and shall either have been
cancelled and/or exchanged for new or amended Several Letters of Credit which give effect to
such Additional Commitments, and such Additional Commitment Lenders, (iii) if such
Additional Commitment Lender is not a United States person (as such term is defined in
Section 7701(a)(3) of the Code) for U.S. Federal income tax purposes or would otherwise
constitute a Foreign Lender, such Additional Commitment Lender shall have provided to the
Company the appropriate documentation described in Section 2.12(e), (iv) the Company and
each Designated Subsidiary Account Party shall have delivered to the Administrative Agent
resolutions authorizing the incurrence of the obligations to be incurred pursuant to each
Additional Commitment, and (v) the Company and each Designated Subsidiary Account Party
shall have delivered to the Administrative Agent an opinion, in form and substance
reasonably satisfactory to the Administrative Agent, from counsel to the Company and such
Designated Subsidiary Account Party reasonably satisfactory to the Administrative Agent and
dated such date, covering certain matters similar to those set forth in the opinions of
counsel delivered to the Lenders on the Effective Date pursuant to Section 4.01(b) and such
other matters as the Administrative Agent may reasonably request. The Administrative Agent
shall promptly notify each Lender as to the occurrence of each Additional Commitment Date,
and (x) on each such date, the Total Commitment under, and for all purposes of, this
Agreement and each other Credit Document shall be increased by the aggregate amount of such
Additional Commitments and (y) on each such date, the Commitment Schedule shall be deemed
modified to reflect the revised Commitments of each affected Lender.”

          (h) Section 3.01 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to the word “Subsidiaries” appearing therein.

          (i) Section 3.04 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately following the phrase “to the best knowledge of the Company or any of its” appearing
therein.

          (j) Section 3.08 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 3.08. True and Complete Disclosure; Projections and Assumptions. All
factual information (taken as a whole) heretofore or contemporaneously furnished by the
Company or any of its Subsidiaries to the Administrative Agent or any Lender (including all
information contained in the Credit Documents) for purposes of or in connection with this
Agreement or any transaction contemplated herein is, and all other factual information
(taken as a whole with all other such information theretofore or contemporaneously
furnished) hereafter furnished by any such Persons to the Administrative Agent or any Lender
will be, true and accurate in all material respects on the date as of which such information
is dated and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole with all other such information theretofore or
contemporaneously furnished) not materially misleading at such time in light of the
circumstances under which such information was provided; provided that with respect
to projections, the Company or the applicable Designated Subsidiary Account Party represents
only that the projections contained in such materials are based on good faith estimates and
assumptions believed by the Company to be reasonable and attainable at the time made, it
being recognized by the Administrative Agent and the Lenders that such projections as to
future events are not to be viewed as facts and are subject to significant uncertainties and
contingencies

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many of which are beyond the Company’s control and that actual results during the
period or periods covered by any such projections may materially differ from the projected
results.”

          (k) Section 3.09 of the Credit Agreement is hereby amended to (i) delete each reference to
“2006” appearing therein and to replace each such reference with “2009” and (ii) delete the word
“Borrower” appearing therein and replace such word with the word “Company”.

          (l) Section 3.12(a) is hereby amended to (i) delete the word “and” appearing at the end of
clause (ii) thereof and replace such word with a comma and (ii) add the following at the end of the
first sentence thereof:

          “and (iv) specifying if such Subsidiary is a Significant Subsidiary.”

          (m) Section 3.12(b) is hereby amended to insert the word “Significant” immediately prior to
the word “Subsidiaries” appearing therein.

          (n) Section 3.13 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to the word “Subsidiaries” appearing therein.

          (o) Section 3.14 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to the word “Subsidiaries” appearing therein.

          (p) Section 3.15 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to each reference to “Subsidiaries” appearing therein.

          (q) Section 3.16 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 3.16 Insurance Licenses. There is (i) no Insurance License that is
the subject of a proceeding for suspension, revocation or limitation or any similar
proceedings, (ii) no sustainable basis for such a suspension, revocation or limitation, and
(iii) no such suspension, revocation or limitation threatened by any Applicable Insurance
Regulatory Authority, that, in each instance under (i), (ii) and (iii) above and either
individually or in the aggregate, has had, or would reasonably be expected to have, a
Material Adverse Effect.”

          (r) Section 3.17 of the Credit Agreement is hereby amended to delete the reference to
“Regulated Insurance Company” appearing therein and to replace such reference with the phrase
“Significant Insurance Subsidiary”.

          (s) Section 3.19 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to each reference to “Subsidiaries” or “Subsidiary” appearing therein.

          (t) Articles V and VI of the Credit Agreement are hereby amended to delete the word
“irrevocably” appearing in each of the preambles thereto.

          (u) Section 5.01(c) of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “(c) Officer’s Certificates. At the time of the delivery of the financial
statements provided for in Sections 5.01(a) and 5.01(b), a certificate of a Financial
Officer of the

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Company (i) certifying that no Default or Event of Default has occurred or, if any
Default or Event of Default has occurred, specifying the nature and extent thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with the provisions of Sections 6.10 and
6.11, as at the end of such fiscal year or quarter, as the case may be, (iii) certifying
that the Regulated Insurance Companies have maintained adequate reserves and (iv) stating
whether any change in GAAP or in the application thereof has occurred since December 31,
2009 and, if any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate; it being agreed that a certificate in a
form substantially similar to the Covenant Compliance Calculations delivered by the Company
under the Existing LC Facility on November 30, 2006 with respect to the fiscal period ended
September 30, 2006 is acceptable to the Administrative Agent for purposes hereof.”

     (v) Section 5.01(e) of the Credit Agreement is hereby amended to delete the first
reference to “the Company” appearing therein and replace such reference with the phrase “an
Authorized Officer.”

          (w) Section 5.01(h) of the Credit Agreement is hereby amended to delete each reference to
“Regulated Insurance Company” appearing therein and to replace each such reference with
“Significant Insurance Subsidiary”.

          (x) Section 5.01(k) of the Credit Agreement is hereby amended to insert the following phrase
at the end thereof:

          “(including, without limitation, information specifying Insurance Licenses and other
information related thereto).”

          (y) Section 5.05 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to each reference to “Subsidiary” or “Subsidiaries” appearing therein.

          (z) Section 5.06 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to the word “Subsidiary” appearing therein.

          (aa) Section 5.08 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to the word “Subsidiaries” appearing therein.

          (bb) Section 5.09 of the Credit Agreement is hereby amended to insert the word “Significant”
immediately prior to the word “Subsidiaries” appearing therein.

          (cc) Section 6.01 of the Credit Agreement is hereby amended delete the second sentence thereof
in its entirety.

          (dd) Section 6.02 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 6.02 Consolidations, Mergers and Sales of Assets. The Company will
not, and will not permit any of its Subsidiaries to, consolidate or merge with or into any
other Person, or permit any other Person to merge into or consolidate with it;
provided that, in each case subject to compliance with Section 6.16, (i) the Company
may merge with another Person, if (x) the Company is the entity surviving such merger and
(y) immediately after giving effect to such merger, no Default or Event of Default shall
have occurred and be continuing, (ii) any

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Subsidiary may merge, consolidate or amalgamate with or into another Person, if (x) such
Subsidiary survives (or, in the case of an amalgamation, continues immediately following)
such merger, consolidation or amalgamation and (y) immediately after giving effect to such
merger, consolidation or amalgamation, no Default or Event of Default shall have occurred
and be continuing, (iii) Wholly-Owned Subsidiaries of the Company may merge with one another
provided that if one of such Subsidiaries is a Designated Subsidiary Account Party and the
other is not, then the Designated Subsidiary Account Party must be the surviving entity of
such merger and (iv) a Subsidiary (other than a Designated Subsidiary Account Party) of the
Company may merge or consolidate with any other Person if immediately after giving effect to
such merger no Default or Event of Default shall have occurred and be continuing. In
addition, the Company will not, nor will it permit any of its Subsidiaries to, sell, convey,
assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily,
any of its properties or assets, tangible or intangible (each, a “Disposition”),
except (a) (1) such dispositions by the Company or any of its Subsidiaries of any of their
respective properties or assets to the Company or any Wholly-Owned Subsidiary of the Company
and (2) such dispositions by IPC or any of its Subsidiaries of any of their respective
properties or assets to IPC or any of its other Subsidiaries, (b) subject to Section 5.05,
the dissolution or winding up of any Subsidiary other than a Designated Subsidiary Account
Party, (c) Dispositions of used, worn out, obsolete or surplus property of the Company or
any Subsidiary in the ordinary course of business and the assignment, cancellation,
abandonment or other disposition of intellectual property that is, in the reasonable
judgment of the Company, no longer economically practicable to maintain or useful in the
conduct of the business of the Company and the Subsidiaries, taken as a whole; (d) licenses
(as licensor) of intellectual property so long as such licenses do not materially interfere
with the business of the Company or any of its Subsidiaries; (e) Dispositions of cash, cash
equivalents and investment securities (including pursuant to any securities lending
arrangements permitted by clause (u) of Section 6.03 and including in connection with the
posting of collateral (or the realization thereof) under the Three-Year Unsecured Letter of
Credit Facility, the Lloyd’s LC Facility or the IPC Facilities), (f) releases, surrenders or
waivers of contracts, torts or other claims of any kind as a result of the settlement of any
litigation or threatened litigation; (g) the granting or existence of Liens permitted under
this Agreement; (h) leases or subleases of real property so long as such leases or subleases
do not materially interfere with the business of the Company and its Subsidiaries, taken as
a whole, (i) Dividends permitted under Section 6.08, (j) ceding of insurance or reinsurance
in the ordinary course of business, (k) other Dispositions of assets with a fair market
value (as reasonably determined by the board of directors or senior management of the
Company) which in the aggregate do not exceed 10% of the lesser of the book or fair market
value of the property and assets of the Company determined on a consolidated basis as of the
last day of the previous fiscal year of the Company; provided that immediately after
giving effect (including pro forma effect) to any Disposition made pursuant to this clause
(k), no Event of Default shall have occurred and be continuing and (l) Dispositions of
investments made pursuant to Section 6.16(g); provided that, for the avoidance of doubt,
Dispositions of Collateral shall only be made to the extent permitted under Section 4.04 of
the Security Agreement and this Section 6.02(l) shall not serve as a waiver or modification
of the requirements under Section 2.10(b).”

          (ee) Section 6.03 of the Credit Agreement is hereby amended to (i) delete the word “and”
appearing at the end of clause (u) thereof, (ii) change clause (v) thereof to clause (w) thereof
and (iii) add the following as a new clause (v) thereof:

          “(v) Liens on insurance policies and the proceeds thereof securing Indebtedness
permitted by clause (h) of the definition of “Permitted Subsidiary Indebtedness”; and”

-10-

 

          (ff) Clause (p) of Section 6.03 is hereby amended to add “and the Three-Year Unsecured Letter
of Credit Facility Agreement” at the end thereof.

          (gg) Clause (r) of Section 6.03 of the Credit Agreement is hereby amended to delete the
reference to “Section 6.03(v)” appearing therein and to replace such reference with “Section
6.03(w)”.

          (hh) Clause (w) of Section 6.03 of the Credit Agreement is hereby amended to (i) delete each
reference to “clause (v)” appearing therein and to replace each such reference with “clause (w)”
and (ii) delete the reference to “clause (h)” appearing therein and to replace such reference with
“clause (i)”.

          (ii) Section 6.04 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 6.04. Indebtedness. (a)The Company will not create, incur, assume or
permit to exist any Indebtedness, or become or remain liable (contingent or otherwise) to do
any of the foregoing, except for the Indebtedness under the Credit Documents or the
Three-Year Unsecured Letter of Credit Facility or the Lloyd’s LC Facility or the Talbot
Facility and other Indebtedness which is either pari passu with, or subordinated in right of
payment to, such Indebtedness (it being understood that unsecured Indebtedness is not
subordinate to secured Indebtedness solely because it is unsecured, and Indebtedness that is
not guaranteed by a particular Person is not deemed to be subordinate to Indebtedness that
is so guaranteed solely because it is not so guaranteed).

          (b) The Company will not permit any of its Subsidiaries to create, incur, assume or
permit to exist any Indebtedness, or become or remain liable (contingent or otherwise) to do
any of the foregoing, except for Permitted Subsidiary Indebtedness, the Lloyd’s LC Facility
and the Talbot Facility.”

          (jj) Section 6.06 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 6.06. Issuance of Stock. The Company will not permit any of its
Subsidiaries to directly or indirectly issue, sell, assign, pledge, or otherwise encumber or
dispose of any shares of their preferred or preference equity securities or options to
acquire preferred or preference equity securities. For the avoidance of doubt, this Section
6.06 does not relate to the issuance or sale of ordinary or common equity or options
relating thereto.”

          (kk) Section 6.09 of the Credit Agreement is hereby amended to (i) delete the word “and”
appearing at the end of clause (iv) thereof, (ii) change clause (v) thereof to clause (vi) thereof
and (iii) adding the following as a new clause (v) thereof:

          “(v) loans and advances to officers and directors made in the ordinary course of
business and in compliance with Section 6.16 and”

          (ll) Section 6.12 of the Credit Agreement is hereby amended to (i) delete the phrase “after
the execution and delivery thereof,” appearing in clause (xii) thereof and (ii) insert the
following at the end of clause (xiv) thereof:

          “or the Talbot Facility or under any other secured Indebtedness permitted under
Sections 6.03 and 6.04 so long as such encumbrances and restrictions are customary for such
Indebtedness and are no more restrictive, taken as a whole, than the comparable encumbrances
and

-11-

 

restrictions set forth in the Credit Documents as determined in the good faith judgment
of the board of directors of the Company.”

          (mm) Section 6.16 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 6.16. Investments, Loans, Advances and Guarantees. The Company will
not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or permit to exist
any loans or advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of any other Person constituting a
business unit (each, an “Investment”), except for:

(a) Cash Equivalents and Eligible Securities;

(b) Investments existing on the date hereof and set forth on Schedule
6.16;

(c) investments by the Company or its Subsidiaries in the capital stock of
its direct or indirect subsidiaries;

(d) loans or advances made by the Company to any Subsidiary and made by any
Subsidiary to the Company or any other Subsidiary;

(e) Guarantees constituting Indebtedness permitted by Section 6.04;

(f) intercompany Indebtedness permitted under Section 6.04;

(g) Investments that are not permitted by any other clause of this Section
6.16 and that, in the aggregate, do not exceed 30% of Consolidated Net Worth
at the time of the making of any new Investment under this clause (g),
provided that immediately after giving pro forma effect to any such
Investment, no Default shall have occurred and be continuing;

(h) payroll, travel and similar advances to directors, officers and
employees of the Company or any Subsidiary that are made in the ordinary
course of business; and

(i) Investments of any Person in existence at the time such Person becomes a
Subsidiary; provided such Investment was not made in connection with
or anticipation of such Person becoming a Subsidiary and any modification,
replacement, renewal or extension thereof.

For purposes of covenant compliance with Section 6.16(g), the amount of any Investment shall
be the amount actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment, less any amount paid, repaid, returned, distributed or
otherwise received in cash in respect of such Investment.”

-12-

 

          (nn) Section 7.04 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 7.04. Default under other Agreements. (a) The Company, any Designated
Subsidiary Account Party, any Regulated Insurance Company or any Significant Subsidiary
shall (i) default in any payment with respect to Indebtedness (other than any Indebtedness
hereunder but including Indebtedness under the Three-Year Unsecured Letter of Credit
Facility) in excess of $50,000,000 individually or in the aggregate, for the Company and its
Subsidiaries or (ii) default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit (after the expiration
of any applicable grace period provided in the applicable agreement or instrument under
which such Indebtedness was created) the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause (with or without the giving
of notice, the lapse of time or both), any such Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; (b) an “Event of Default”, as defined under the Three-Year Unsecured Letter of
Credit Facility, shall have occurred and be continuing; or (c) Indebtedness of one or more
of the Persons listed in clause (a) above in excess of $50,000,000 shall be declared to be
due and payable or required to be prepaid, other than by a regularly scheduled required
prepayment or as a mandatory prepayment (unless such required prepayment or mandatory
prepayment results from a default thereunder or an event of the type that constitutes an
Event of Default), prior to the scheduled maturity thereof; or”

          (oo) Section 7.05 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

          “Section 7.05. Bankruptcy, etc. The Company, any Designated Subsidiary Account
Party, any Regulated Insurance Company or any Significant Subsidiary shall commence a
voluntary case concerning itself under Title 11 of the United States Code entitled
“Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “Bankruptcy
Code”); or an involuntary case is commenced against any such Person and the petition is
not dismissed within 60 days, after commencement of the case; or a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the
property of any such Person or any such Person commences (including by way of applying for
or consenting to the appointment of, or the taking of possession by, a rehabilitator,
receiver, custodian, trustee, conservator, administrator or liquidator or other similar
official in any jurisdiction (collectively, a “conservator”) of itself or all or any
substantial portion of its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, administration,
liquidation, rehabilitation, supervision, conservatorship or similar law of any jurisdiction
or the Bermuda Companies Law whether now or hereafter in effect relating to any such Person;
or any such proceeding is commenced against any such Person and such proceeding is not
dismissed within 60 days; or any such Person is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered; or any such
Person suffers any appointment of any conservator or the like for it or any substantial part
of its property which continues undischarged or unstayed for a period of 60 days; or any
such Person makes a general assignment for the benefit of creditors; or any corporate action
is taken by any such Person for the purpose of effecting any of the foregoing; or”

-13-

 

          (pp) Section 7.07 of the Credit Agreement is hereby amended to delete the phrase “material
subsidiary of Validus Re” appearing therein and to replace such phrase with “Significant
Subsidiary.”

          (qq) Clause (a)(i) of Section 10.01 of the Credit Agreement is hereby amended and restated in
its entirety as follows:

          “(i) if to the Company, (x) to it at Validus Holdings, Ltd., 29 Richmond Road, Pembroke
HM08 Bermuda, Attention: Chief Financial Officer (Facsimile: (441) 278-9090) and (y) with a
copy (in the case of a notice of a Default) to Skadden, Arps, Slate, Meagher & Flom LLP,
Four Times Square, New York, New York 10036 Attention: Steven Messina (Facsimile: (917)
777-3509);”

     (rr) Clause (a)(iii) of Section 10.01 of the Credit Agreement is hereby amended and
restated in its entirety as follows:

          “(iii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and Agency
Services Group, 1111 Fannin Street, Houston, Texas 77002, Attention of Christina Masroor
(Facsimile No. (713) 750-2223; e-mail: Christina.m.masroor@jpmorgan.com), with a copy to
JPMorgan Chase Bank, N.A., 277 Park Avenue, 36th Floor, New York, New York 10172,
Attention of Brijendra Grewal (Facsimile No. (917) 456-3256; e-mail:
brijendra.s.grewal@jpmorgan.com); and”

     (ss) Section 10.03(b) is hereby amended and restated in its entirety as follows:

          “(b) Each Account Party jointly and severally agrees to indemnify the Agents, the Joint
Lead Arrangers and Joint Bookrunners and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for such Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective obligations
hereunder or any other transactions contemplated hereby, (ii) any Letter of Credit or the
use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether such Indemnitee is a party thereto or whether such claim,
litigation, investigation or proceeding is brought by the Company or any of its Subsidiaries
or a third party; provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or any Related
Party of such Indemnitee.”

          (tt) Section 10.09(b) is hereby amended to add the phrase “non-” immediately prior to the word
“exclusive” appearing therein.

          SECTION 3. Representations and Warranties. Each Account Party hereby represents and
warrants to the Lenders that as of the Third Amendment Effective Date and after giving effect
hereto:

-14-

 

     (a) this Amendment has been duly authorized, executed and delivered by such Account
Party, and each of this Amendment and the Credit Agreement (as amended hereby) constitute
such Account Party’s legal, valid and binding obligation, enforceable against it in
accordance with its terms,

     (b) no Default or Event of Default has occurred and is continuing,

     (c) all representations and warranties of such Account Party contained in the Credit
Agreement (as amended hereby) and the other Credit Documents (excluding those set forth in
Section 3.09(b) of the Credit Agreement) are true and correct in all material respects on
and as of the date hereof (except with respect to representations and warranties expressly
made only as of an earlier date, which representations were true and correct in all material
respects as of such earlier date), and

     (d) Validus Re and IPCRe Limited and each other Significant Insurance Subsidiary that
is material to the Company and its Subsidiaries, taken as a whole, has in effect a current
financial strength rating of no less than “A-” from A.M. Best Company, Inc. (or its
successor) to the extent rated by A.M. Best Company, Inc.

          SECTION 4. Effectiveness. This Amendment shall become effective, with respect to the
Credit Agreement, as of the first date (the “Third Amendment Effective Date”) on which the
Administrative Agent shall have received counterparts hereof duly executed and delivered by each of
the Account Parties and the Required Lenders as defined in the Credit Agreement.

          SECTION 5. Effect of Amendment. Except as expressly set forth herein, this Amendment
shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect
the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or
any other Credit Document, and shall not alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any
other Credit Document, all of which are ratified and affirmed in all respects and shall continue in
full force and effect. Nothing herein shall be deemed to entitle any Account Party to a consent
to, or a waiver, amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any other Credit Document
in similar or different circumstances. This Amendment shall apply and be effective only with
respect to the provisions of the Credit Agreement specifically referred to herein. This Amendment
shall constitute a Credit Document. All representations and warranties made by each Account Party
herein shall be deemed made under the Credit Agreement with the same force and effect as if set
forth in full therein. On and after the Third Amendment Effective Date, any reference to the Credit
Agreement contained in the Credit Documents shall mean the Credit Agreement as modified hereby.

          SECTION 6. Expenses. The Account Parties agree to pay and reimburse the
Administrative Agent (and its applicable affiliates) for its fees and reasonable out-of-pocket
expenses in connection with this Amendment, including the reasonable fees, charges and
disbursements of counsel.

          SECTION 7. Governing Law; Counterparts. (a) This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

          (b) This Amendment may be executed by one or more of the parties to this Amendment on any
number of separate counterparts, and all of such counterparts taken together shall be deemed

-15-

 

to constitute one and the same instrument. This Amendment may be delivered by facsimile or other
electronic imaging means of the relevant executed signature pages hereof.

          SECTION 8. Headings. The headings of this Amendment are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof.

[Signature Pages Follow]

-16-

 

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

	 	 	 	 	 
	 	VALIDUS HOLDINGS, LTD.

 	 
	 	By:  	/s/ Joseph E. (Jeff) Consolino
 	 
	 	 	Name:  	Joseph E. (Jeff) Consolino 	 
	 	 	Title:  	Executive Vice President & Chief
Financial Officer 	 
	 
	 	VALIDUS REINSURANCE, LTD.

 	 
	 	By:  	/s/ Jeff Sangster
 	 
	 	 	Name:  	Jeff Sangster 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreement

 

	 	 	 	 	 
	 	JP MORGAN CHASE BANK, N.A.,

individually as a Lender, as Administrative

Agent and Sole Issuing Agent,

 	 
	 	By:  	/s/ Melvin D. Jackson
 	 
	 	 	Name:  	Melvin D. Jackson 	 
	 	 	Title:  	Vice President 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreement

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK AG NEW YORK BRANCH,

as a Lender

 	 
	 	By:  	/s/ John McGill
 	 
	 	 	Name:  	John McGill 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/s/ Michael Campites
 	 
	 	 	Name:  	Michael Campites 	 
	 	 	Title:  	Director 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreement

 

 

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON

(formerly known as The Bank of New York)

as a Lender

 	 
	 	By:  	/s/ Michael Pensari
 	 
	 	 	Name:  	Michael Pensari 	 
	 	 	Title:  	V.P. 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreement

 

 

	 	 	 	 	 
	 	CREDIT AGRICOLE CORPORATE AND

INVESTMENT BANK

as a Lender

 	 
	 	By:  	/s/ Charles Kornberger
 	 
	 	 	Name:  	Charles Kornberger 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ Walter Jay Buckley
 	 
	 	 	Name:  	Walter Jay Buckley 	 
	 	 	Title:  	Managing Director 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreement

 

 

	 	 	 	 	 
	 	ING BANK N.V., LONDON BRANCH

as a Lender

 	 
	 	By:  	/s/ M E R Sharman
 	 
	 	 	Name:  	M E R Sharman  	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ N Haffner
 	 
	 	 	Name:  	N Haffner 	 
	 	 	Title:  	Director 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreement

 

 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA

as a Lender

 	 
	 	By:  	/s/ David L. Mahmood
 	 
	 	 	Name:  	David L. Mahmood 	 
	 	 	Title:  	Managing Director 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreement

 

 

	 	 	 	 	 
	 	COMERICA BANK

as a Lender

 	 
	 	By:  	/s/ Chatphet Saipetch
 	 
	 	 	Name:  	Chatphet Saipetch 	 
	 	 	Title:  	Vice President 	 
	 

Third Amendment to Five-Year Secured Letter of Credit Facility Agreementexv10w3

Exhibit 10.3

EXECUTION COPY

 

THREE-YEAR REVOLVING CREDIT FACILITY AGREEMENT

dated as of

March 12, 2010

among

TALBOT HOLDINGS LTD.,

VALIDUS HOLDINGS, LTD.

The Lenders Party Hereto,

and

LLOYDS TSB BANK plc,

as Administrative Agent

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I
	 
	 	 	 	 	 	 
	Definitions
	 
	 	 	 	 	 	 
	SECTION 1.01.
	 	Defined Terms	 	 	1	 
	SECTION 1.02.
	 	Classification of Loans and Borrowings	 	 	19	 
	SECTION 1.03.
	 	Terms Generally	 	 	19	 
	SECTION 1.04.
	 	Accounting Terms; GAAP	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 
	 	 	 	 	 	 
	Loans
	 
	 	 	 	 	 	 
	SECTION 2.01.
	 	Commitments	 	 	20	 
	SECTION 2.02.
	 	Loans and Borrowings	 	 	20	 
	SECTION 2.03.
	 	Requests for Borrowings	 	 	20	 
	SECTION 2.04.
	 	Funding of Borrowings	 	 	21	 
	SECTION 2.05.
	 	Interest Elections	 	 	21	 
	SECTION 2.06.
	 	Increased Costs	 	 	23	 
	SECTION 2.07.
	 	Termination and Reduction of Commitments	 	 	23	 
	SECTION 2.08.
	 	Repayment of Loans; Evidence of Debt	 	 	24	 
	SECTION 2.09.
	 	Prepayment of Loans	 	 	24	 
	SECTION 2.10.
	 	Fees	 	 	25	 
	SECTION 2.11.
	 	Interest 	 	 	25	 
	SECTION 2.12.
	 	Alternate Rate of Interest	 	 	26	 
	SECTION 2.13.
	 	Break Funding Payments	 	 	26	 
	SECTION 2.14.
	 	Taxes	 	 	27	 
	SECTION 2.15.
	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	 	 	28	 
	SECTION 2.16.
	 	Mitigation Obligations; Replacement of Lenders	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 
	 	 	 	 	 	 
	Representations and Warranties
	 
	 	 	 	 	 	 
	SECTION 3.01.
	 	Corporate Status	 	 	30	 
	SECTION 3.02.
	 	Corporate Power and Authority	 	 	30	 
	SECTION 3.03.
	 	No Contravention of Agreements or Organizational Documents	 	 	31	 
	SECTION 3.04.
	 	Litigation and Environmental Matters	 	 	31	 
	SECTION 3.05.
	 	Use of Proceeds; Margin Regulations	 	 	31	 
	SECTION 3.06.
	 	Approvals	 	 	31	 
	SECTION 3.07.
	 	Investment Company Act	 	 	31	 
	SECTION 3.08.
	 	True and Complete Disclosure; Projections and Assumptions	 	 	31	 
	SECTION 3.09.
	 	Financial Condition	 	 	32	 
	SECTION 3.10.
	 	Tax Returns and Payments	 	 	32	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	SECTION 3.11.
	 	Compliance with ERISA	 	 	33	 
	SECTION 3.12.
	 	Subsidiaries	 	 	33	 
	SECTION 3.13.
	 	Capitalization	 	 	33	 
	SECTION 3.14.
	 	Indebtedness	 	 	33	 
	SECTION 3.15.
	 	Compliance with Statutes and Agreements	 	 	34	 
	SECTION 3.16.
	 	Insurance Licenses	 	 	34	 
	SECTION 3.17.
	 	Insurance Business	 	 	34	 
	SECTION 3.18.
	 	Properties; Liens; and Insurance	 	 	34	 
	SECTION 3.19.
	 	Solvency	 	 	35	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 
	 	 	 	 	 	 
	Conditions
	 
	 	 	 	 	 	 
	SECTION 4.01.
	 	Effective Date	 	 	35	 
	SECTION 4.02.
	 	Each Credit Event	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 
	 	 	 	 	 	 
	Affirmative Covenants
	 
	 	 	 	 	 	 
	SECTION 5.01.
	 	Information Covenants	 	 	37	 
	SECTION 5.02.
	 	Books, Records and Inspections	 	 	39	 
	SECTION 5.03.
	 	Insurance	 	 	40	 
	SECTION 5.04.
	 	Payment of Taxes and other Obligations	 	 	40	 
	SECTION 5.05.
	 	Maintenance of Existence; Conduct of Business	 	 	40	 
	SECTION 5.06.
	 	Compliance with Statutes, etc.	 	 	40	 
	SECTION 5.07.
	 	ERISA	 	 	40	 
	SECTION 5.08.
	 	Maintenance of Property	 	 	41	 
	SECTION 5.09.
	 	Maintenance of Licenses and Permits	 	 	41	 
	SECTION 5.10.
	 	Further Assurances	 	 	41	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 
	 	 	 	 	 	 
	Negative Covenants
	 
	 	 	 	 	 	 
	SECTION 6.01.
	 	Changes in Business or Organizational Documents	 	 	42	 
	SECTION 6.02.
	 	Consolidations, Mergers and Sales of Assets	 	 	42	 
	SECTION 6.03.
	 	Liens	 	 	43	 
	SECTION 6.04.
	 	Indebtedness	 	 	45	 
	SECTION 6.05.
	 	Sale and Lease-Back Transactions	 	 	45	 
	SECTION 6.06.
	 	Issuance of Stock	 	 	46	 
	SECTION 6.07.
	 	Dissolution	 	 	46	 
	SECTION 6.08.
	 	Restricted Payments	 	 	46	 
	SECTION 6.09.
	 	Transactions with Affiliates	 	 	46	 
	SECTION 6.10.
	 	Maximum Leverage Ratio	 	 	46	 
	SECTION 6.11.
	 	Minimum Consolidated Net Worth	 	 	46	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	SECTION 6.12.
	 	Limitation on Certain Restrictions on Subsidiaries	 	 	47	 
	SECTION 6.13.
	 	Private Act	 	 	47	 
	SECTION 6.14.
	 	Claims Paying Ratings	 	 	47	 
	SECTION 6.15.
	 	End of Fiscal Years; Fiscal Quarters	 	 	47	 
	SECTION 6.16.
	 	Investments, Loans, Advances and Guarantees	 	 	48	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 
	 	 	 	 	 	 
	Events of Default
	 
	 	 	 	 	 	 
	SECTION 7.01.
	 	Payments	 	 	48	 
	SECTION 7.02.
	 	Representations, etc.	 	 	49	 
	SECTION 7.03.
	 	Covenants	 	 	49	 
	SECTION 7.04.
	 	Default under other Agreements	 	 	49	 
	SECTION 7.05.
	 	Bankruptcy, etc.	 	 	49	 
	SECTION 7.06.
	 	ERISA	 	 	50	 
	SECTION 7.07.
	 	Judgments	 	 	50	 
	SECTION 7.08.
	 	Insurance Licenses	 	 	50	 
	SECTION 7.09.
	 	Change of Control	 	 	50	 
	SECTION 7.10.
	 	Company Guaranty	 	 	50	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 
	 	 	 	 	 	 
	The Administrative Agent
	 
	 	 	 	 	 	 
	SECTION 8.01.
	 	Appointment	 	 	51	 
	SECTION 8.02.
	 	Administrative Agent in its Individual Capacity	 	 	51	 
	SECTION 8.03.
	 	Exculpatory Provisions	 	 	51	 
	SECTION 8.04.
	 	Reliance	 	 	51	 
	SECTION 8.05.
	 	Delegation of Duties	 	 	52	 
	SECTION 8.06.
	 	Resignation	 	 	52	 
	SECTION 8.07.
	 	Non-Reliance	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE IX
	 
	 	 	 	 	 	 
	Company Guaranty
	 
	 	 	 	 	 	 
	SECTION 9.01.
	 	The Company Guaranty	 	 	52	 
	SECTION 9.02.
	 	Bankruptcy	 	 	53	 
	SECTION 9.03.
	 	Nature of Liability	 	 	53	 
	SECTION 9.04.
	 	Independent Obligation	 	 	53	 
	SECTION 9.05.
	 	Authorization	 	 	53	 
	SECTION 9.06.
	 	Reliance	 	 	54	 
	SECTION 9.07.
	 	Subordination	 	 	54	 
	SECTION 9.08.
	 	Waiver	 	 	55	 

iii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE X
	 
	 	 	 	 	 	 
	Miscellaneous
	 
	 	 	 	 	 	 
	SECTION 10.01.
	 	Notices	 	 	55	 
	SECTION 10.02.
	 	Waivers; Amendments	 	 	56	 
	SECTION 10.03.
	 	Expenses; Indemnity; Damage Waiver	 	 	57	 
	SECTION 10.04.
	 	Successors and Assigns	 	 	58	 
	SECTION 10.05.
	 	Survival	 	 	60	 
	SECTION 10.06.
	 	Counterparts; Integration; Effectiveness	 	 	60	 
	SECTION 10.07.
	 	Severability	 	 	61	 
	SECTION 10.08.
	 	Right of Setoff	 	 	61	 
	SECTION 10.09.
	 	Governing Law; Jurisdiction; Consent to Service of Process	 	 	61	 
	SECTION 10.10.
	 	Waiver of Jury Trial	 	 	62	 
	SECTION 10.11.
	 	Headings	 	 	62	 
	SECTION 10.12.
	 	Confidentiality	 	 	62	 
	SECTION 10.13.
	 	Interest Rate Limitation	 	 	63	 
	SECTION 10.14.
	 	USA Patriot Act	 	 	63	 

iv

 

SCHEDULES:

Commitment Schedule

Schedule 2.02  —  Mandatory Cost

Schedule 3.12  —  Subsidiaries

Schedule 3.13  —  Capitalization

Schedule 3.14  —  Existing Indebtedness

Schedule 6.03  —  Existing Liens

Schedule 6.09  —  Existing Affiliate Transactions

Schedule 6.12  —  Existing Intercompany Agreements and Arrangements

Schedule 6.16  —  Existing Investments

EXHIBITS:

Exhibit A  —  Form of Assignment and Assumption

Exhibit B  —  Form of Borrowing Request

Exhibit C  —  Form of Note

Exhibit D  —  Form of Interest Election Request

Exhibit E-1  —  Opinion of Credit Parties’ Special New York Counsel

Exhibit E-2  —  Opinion of Credit Parties’ Special Bermuda Counsel

Exhibit F  —  Form of Officer’s Certificate

v

 

          THREE-YEAR REVOLVING CREDIT FACILITY AGREEMENT dated as of March 12, 2010 among TALBOT
HOLDINGS LTD., a holding company organized under the laws of Bermuda (the “Borrower”),
VALIDUS HOLDINGS, LTD., a holding company organized under the laws of Bermuda (the
“Company”), the lenders from time to time party hereto (each, a “Lender” and,
collectively, the “Lenders”), and LLOYDS TSB BANK plc, as Administrative Agent. Unless
otherwise defined herein, all capitalized terms used herein and defined in Section 1.01 are used
herein as so defined.

          The parties hereto hereby agree as follows:

ARTICLE I

Definitions

          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.

          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the sum of (i) (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve
Rate plus, without duplication and (ii) in the case of Loans by a Lender from its office or
branch in the United Kingdom, the Mandatory Cost.

          “Administrative Agent” means Lloyds TSB Bank plc (and each person appointed as a
successor thereto pursuant to Article VIII), in its capacity as administrative agent for the
Lenders hereunder.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

          “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

          “Agreement” means this Three-Year Revolving Credit Facility Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement hereof), extended or
renewed from time to time.

          “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or
if such day is not a Business Day, the immediately preceding Business Day) plus 1%,
provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be
based on the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page
of such page) at approximately 11:00 a.m. London time on such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate shall be effective from and including the effective date of such change in the Prime Rate, the
Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

1

 

          “Applicable Insurance Regulatory Authority” means, when used with respect to any
Regulated Insurance Company, (x) the insurance department or similar administrative authority or
agency located in each state or jurisdiction (foreign or domestic) in which such Regulated
Insurance Company is domiciled or (y) to the extent asserting regulatory jurisdiction over such
Regulated Insurance Company, the insurance department, authority or agency in each state or
jurisdiction (foreign or domestic) in which such Regulated Insurance Company is licensed, and shall
include any Federal or national insurance regulatory department, authority or agency that may be
created and that asserts insurance regulatory jurisdiction over such Regulated Insurance Company.

          “Applicable Percentage” means, with respect to any Lender, the percentage of the Total
Commitment represented by such Lender’s Commitment. If the Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Commitments most recently in effect,
giving effect to any assignments.

          “Applicable Rate” means, on any date, with respect to the Commitment Fee, the
Eurodollar Loans or the ABR Loans, as the case may be, the applicable rate per annum set forth
below under the caption “Commitment Fee Rate”, “Eurodollar Spread” or “ABR Spread”, as the case may
be, based upon the Index Ratings by Moody’s and S&P, respectively, applicable on such date:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category	 	Index Ratings	 	Commitment Fee Rate	 	Eurodollar Spread	 	ABR Spread
	Category 1
	 	 	A-/A3 or better	 	 	0.30	%	 	 	2.25	%	 	 	1.25	%
	Category 2
	 	 	BBB+/Baa1	 	 	0.40	%	 	 	2.50	%	 	 	1.50	%
	Category 3
	 	 	BBB/Baa2	 	 	0.50	%	 	 	3.00	%	 	 	2.00	%
	Category 4
	 	 	BBB-/Baa3	 	 	0.60	%	 	 	3.50	%	 	 	2.50	%
	Category 5
	 	 	BB+/Ba1 or lower	 	 	0.70	%	 	 	4.00	%	 	 	3.00	%

          For purposes of the foregoing, (i) if both Moody’s and S&P shall not have in effect an Index
Rating (other than due to a Cessation Event as defined below), then such rating agency shall be
deemed to have established a rating in Category 5; (ii) if the Index Ratings established or deemed
to have been established by Moody’s and S&P shall fall within different Categories, the Applicable
Rate shall be based on the higher of the two ratings unless one of the two ratings is two or more
Categories lower than the other, in which case the Applicable Rate shall be determined by reference
to the Category next above that of the lower of the two ratings; (iii) if only one of Moody’s and
S&P shall have in effect an Index Rating due to a Cessation Event, then the Applicable Rate shall
be determined by reference to the Category otherwise applicable to such Index Rating, (iv) if only
one of Moody’s and S&P shall have in effect an Index Rating for any reason other than a Cessation
Event, then the Applicable Rate shall be determined by reference to the Category next below the
Category otherwise applicable to such Index Rating; and (v) if the Index Ratings established or
deemed to have been established by Moody’s and S&P shall be changed (other than as a result of a
change in the rating system of Moody’s or S&P), such change shall be effective as of the date on
which it is first announced by the applicable rating agency, irrespective of when notice of such
change shall have been furnished by the Company to the Administrative Agent and the Lenders
pursuant to Section 5.01 or otherwise. Each change in the Applicable Rate shall apply during the
period commencing on the effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If the rating system of Moody’s or S&P shall change,
or if either such rating agency shall cease to be in the business of rating corporate debt
obligations or issuers (such cessation, a “Cessation Event”), the Company and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed rating system or the
unavailability of ratings

2

 

from such rating agency and, pending the effectiveness of any such amendment, the Applicable
Rate shall be determined by reference to the Index Rating most recently in effect prior to such
change or cessation.

          “Approved Fund” has the meaning provided in Section 10.04(b).

          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 10.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form
approved by the Administrative Agent.

          “Authorized Officer” means, as to any Person, the Chief Executive Officer, the
President, the Chief Operating Officer, any Vice President, the Secretary, or the Chief Financial
Officer or Finance Director of such Person or any other officer of such Person duly authorized by
such Person to act on behalf of such Person hereunder.

          “Bankruptcy Code” has the meaning provided in Section 7.05.

          “Bermuda Companies Law” means the Companies Act 1981 of Bermuda and other relevant
Bermuda law.

          “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

          “Borrower” has the meaning provided in the first paragraph of this Agreement.

          “Borrowing” means Loans of the same Type made, converted or continued on the same date
and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

          “Borrowing Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.03.

          “Business Day” means (i) for all purposes other than as covered by clause (ii) below,
any day excluding Saturday, Sunday and any day which shall be in the City of New York or London,
England a legal holiday or a day on which banking institutions are authorized by law or other
governmental actions to close, and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and between banks in
the London interbank market.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

          “Capital Markets Product” means, as to any Person, any security, commodity, derivative
transaction or other financial or similar product purchased, sold or entered into by such Person
for the purpose of a third-party undertaking or assuming one or more risks otherwise assumed by
such Person or entered into by such Person for the purpose of managing one or more risks otherwise
assumed by such Person or other agreements or arrangements entered into by such Person designed to
transfer credit risk from one party to another, including (i) any structured insurance product,
catastrophe bond, rate swap transaction, swap option, basis swap, forward rate transaction,
commodity swap, commodity option,

3

 

commodity hedge, equity or equity index swap, equity or equity index option, bond option,
interest rate option or hedge, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap transaction, currency
option or swap transaction, credit protection transaction, credit swap, credit default swap
(including single default, single-name, basket and first-to-default swaps), credit default option,
equity default swap, total return swap, credit-linked notes, credit spread transaction, repurchase
transaction, reverse repurchase transaction, buy/sellback transaction, securities lending
transaction, weather index transaction, emissions allowance transaction, or forward purchase or
sale of a security, commodity or other financial instrument or interest (including any option with
respect to any of these transactions), (ii) any transaction which is a type of transaction that is
similar to any transaction referred to in clause (i) above that is currently, or in the future
becomes, recurrently entered into in the financial markets, (iii) any combination of the
transactions referred to in clauses (i) and (ii) above and (iv) any master agreement relating to
any of the transactions referred to in clauses (i), (ii) or (iii) above.

          “Cash Equivalents” means, as to any Person, (i) securities issued or directly and
fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank having, or which is the principal banking subsidiary
of a bank holding company organized under the laws of the United States, any State thereof, the
District of Columbia or any foreign jurisdiction having, capital, surplus and undivided profits
aggregating in excess of $200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (ii) above, (iv) commercial paper rated at least A-1 or the
equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in each case maturing not
more than one year after the date of acquisition by such Person, and (v) investments in “money
market funds” within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as amended,
substantially all of whose assets are comprised of securities of the types described in clauses (i)
through (iv) above.

          “Change in Law” means (a) the adoption or effectiveness of any law, rule or
regulation, order, guideline or request or any change therein after the date of this Agreement, (b)
any change adopted or effective in the interpretation, administration or application of any law,
rule or regulation, order, guideline or request or any change therein by any Governmental
Authority, central bank or comparable agency after the date of this Agreement or (c) compliance by
any Lender (or, for purposes of Section 2.06, by any lending office of such Lender or by such
Lender’s holding company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority, central bank or comparable agency made or issued
after the date of this Agreement.

          “Change of Control” means (a) the Borrower ceasing to be a Wholly-Owned Subsidiary of
the Company, (b) the acquisition of ownership, directly or indirectly, beneficially or of record,
by any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended, and
the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing
more than 50% of either the aggregate ordinary voting power or the aggregate equity value
represented by the issued and outstanding Equity Interests in the Company, or (c) the occupation of
a majority of the seats (other than vacant seats) on the board of directors of the Company by
Persons who were neither (i) nominated by the board of directors of the Company nor (ii) appointed
by directors so nominated.

          “Charges” has the meaning provided in Section 10.13.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

4

 

          “Collateral” has the meaning provided in the Five-Year Secured Letter of Credit
Facility.

          “Commitment” means, with respect to each Lender, at any time, the amount set forth
opposite such Lender’s name on the Commitment Schedule, as the same may be reduced or increased
pursuant to Sections 2.07, 2.16 or 10.04. As of the Effective Date, the aggregate Commitments of
all Lenders hereunder is $60,000,000.

          “Commitment Expiration Date” means March 12, 2013.

          “Commitment Fee” has the meaning provided in Section 2.10(a).

          “Commitment Schedule” means the Schedule attached hereto identified as such.

          “Company” means Validus Holdings, Ltd., a holding company organized under the laws of
Bermuda.

          “Company Guaranty” means the guaranty of the Company provided in Article IX.

          “Conditional Termination Notice” has the meaning provided in Section 2.07(c).

          “Consolidated Indebtedness” means, as of any date of determination, all Indebtedness
(other than (a) Indebtedness described in clause (i) of the definition thereof that does not
constitute bonds, debentures, notes or similar instruments that are generally recourse with respect
to the Company and its Subsidiaries, (b) obligations (contingent or otherwise) in respect of
undrawn letters of credit and (c) Indebtedness that is non-recourse with respect to the Company and
its Subsidiaries) of the Company and its Subsidiaries. For the avoidance of doubt, “Consolidated
Indebtedness” shall not include contingent obligations of the Company or any Subsidiary as an
account party or applicant in respect of any Guarantee unless such Guarantee supports an obligation
that constitutes Indebtedness.

          “Consolidated Net Worth” means, as of any date of determination, the Net Worth of the
Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP after
appropriate deduction for any minority interests in Subsidiaries including for the avoidance of
doubt the aggregate principal amount of all outstanding preferred (including without limitation
trust preferred) or preference securities or Hybrid Capital of the Company and its Subsidiaries,
provided that the aggregate outstanding amount of such preferred or preference securities
or Hybrid Capital of the Company and its Subsidiaries shall only be included in Consolidated Net
Worth to the extent such amount would be included in a determination of the consolidated net worth
of the Company and its Subsidiaries under the applicable procedures and guidelines of S&P as of the
date hereof.

          “Consolidated Total Capital” means, as of any date of determination, the sum of (i)
Consolidated Indebtedness and (ii) Consolidated Net Worth at such time.

          “Control” means, with respect to any Person, the possession, directly or indirectly,
of the power (i) to vote 10% or more of the voting power of the securities having ordinary voting
power for the election of directors of such Person or (ii) to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “Credit Event” means the making of any Loan.

5

 

          “Credit Exposure” means, with respect to any Lender at any time, the outstanding
principal amount of such Lender’s Loans.

          “Credit Parties” means the Company and the Borrower.

          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

          “Defaulting Lender” means any Lender, as reasonably determined by the Administrative
Agent in good faith, that has (a) failed to fund any portion of its Loans within three (3) Business
Days of the date required to be funded by it hereunder unless such Lender’s failure to fund such
Loan is based on such Lender’s reasonable determination that the conditions precedent to funding
such Loan under this Agreement have not been satisfied and such Lender has notified the
Administrative Agent in writing of such determination, (b) notified the Company, the Administrative
Agent, or any Lender in writing that it does not intend to comply with any of its funding
obligations under this Agreement or has made a public statement to the effect that it does not
intend to comply with its funding obligations under this Agreement or under other agreements
generally in which it commits to extend credit, (c) failed, within (3) three Business Days after
request by the Administrative Agent, to confirm that it will comply with the terms of this
Agreement relating to its obligations to fund prospective Loans unless subject to a good faith
dispute based on such Lender’s reasonable determination that the conditions precedent to funding
such Loan under this Agreement have not been satisfied and such Lender has notified the
Administrative Agent in writing of such determination, provided that any such Lender shall cease to
be a Defaulting Lender under this clause (c) upon receipt of such confirmation by the
Administrative Agent, (d) otherwise failed to pay over to the Administrative Agent or any other
Lender any other amount required to be paid by it hereunder within three (3) Business Days of the
date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has
a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or liquidation of its business
or custodian, appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment or has a parent
company that has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar
Person charged with reorganization or liquidation of its business or custodian appointed for it, or
has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence
in any such proceeding or appointment; provided, that a Lender shall not become a Defaulting Lender
solely as the result of (x) the acquisition or maintenance of an ownership interest in such Lender
or a Person controlling such Lender or (y) the exercise of control over a Lender or a Person
controlling such Lender, in each case, by a Governmental Authority or an instrumentality thereof.

          “Dispositions” has the meaning provided in Section 6.02.

          “Dividends” has the meaning provided in Section 6.08.

          “Dollars” or “$” refers to lawful money of the United States of America.

          “Effective Date” has the meaning provided in Section 4.01.

          “Eligible Person” means and includes any commercial bank, insurance company, finance
company, financial institution, fund that invests in loans or any other “accredited investor” (as
defined in Regulation D of the Securities Act of 1933, as amended), but in any event excluding the
Company and its Subsidiaries.

6

 

          “Eligible Securities” has the meaning provided in Section 1.01 of the Five-Year
Secured Letter of Credit Facility Agreement.

          “Environmental Law” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.

          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Company or any Subsidiary directly or indirectly resulting from or based upon (a) its violation of
any Environmental Law, (b) its generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) its exposure to any Hazardous Materials, (d) its release
or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing, but in each of (a) through (e) excluding liabilities arising out
of Capital Markets Products and insurance and reinsurance contracts, agreements and arrangements in
each case entered into in the ordinary course of business and not for speculative purposes.

          “Equity Interests” means, with respect to any Person, shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, options or other rights for the
purchase or other acquisition from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or warrants, rights or options for
the purchase or other acquisition from such Person of such shares (or such other interests), and
other ownership or profit interests in such Person (including partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options,
rights or other interests are authorized or otherwise existing on any date of determination.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time and the regulations promulgated and rulings issued thereunder. Section references to
ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.

          “ERISA Affiliate” means any corporation or trade or business which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the
Company or any of its Subsidiaries or is under common control (within the meaning of Section 414(c)
of the Code) with the Company or any of its Subsidiaries.

          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.

          “Event of Default” has the meaning provided in Article VII.

          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any
other recipient of any payment to be made by or on account of any obligation of any Credit Party
hereunder, (a) income or franchise taxes imposed on (or measured by) its net income or net profits
by any jurisdiction in or under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its applicable lending office
is located, or in which it

7

 

conducts a trade or business or has a permanent establishment or is otherwise subject to such
taxes or taxes imposed by a jurisdiction solely as a result of a present or former connection
between the recipient and such jurisdiction, (b) any branch profits taxes imposed by the United
Kingdom or any branch profits taxes or similar tax imposed by any other jurisdiction in which the
recipient is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by such Credit Party under Section 2.16(b)), any withholding tax that is imposed by the
United Kingdom or Bermuda on amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office) or is attributable to such
Foreign Lender’s failure to comply with Section 2.14(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office
(or assignment), to receive additional amounts from such Credit Party with respect to such
withholding tax pursuant to Section 2.14(a).

          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Company.

          “Five-Year Secured Letter of Credit Facility” means the $500,000,000 senior secured
letter of credit facility among the Company, Validus Re, various “Designated Subsidiary Account
Parties”, JPMorgan Chase Bank, N.A., as administrative agent and issuing agent, and one or more
lenders entered into on March 12, 2007, including the related collateral and security documents and
other instruments and agreements executed in connection therewith, and amendments, renewals,
replacements, refinancings and restatements to any of the foregoing (provided that the principal
amount thereof shall not exceed $500,000,000 or, if increased in accordance with its terms,
$700,000,000, plus reasonable refinancing costs, fees and expenses).

          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than (i) Bermuda, or (ii) the United Kingdom or any political subdivision thereof.

          “Foreign Pension Plan” means any plan, fund (including any superannuation fund) or
other similar program established or maintained outside the United States of America by the Company
or any one or more of its Subsidiaries primarily for the benefit of employees of the Company or
such Subsidiaries residing outside the United States of America, which plan, fund or other similar
program provides, or results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan is not subject to
ERISA or the Code.

          “Fronting Arrangement” means an agreement or other arrangement by a Regulated
Insurance Company pursuant to which an insurer or insurers agree to issue insurance policies at the
request or on behalf of such Regulated Insurance Company and such Regulated Insurance Company
assumes the obligations in respect thereof pursuant a Reinsurance Agreement or otherwise.

          “Funds at Lloyd’s” has the meaning attributed to such term in the membership byelaws
of the Society of Lloyd’s.

8

 

          “GAAP” means generally accepted accounting principles in the United States of America.

          “Governmental Authority” means the government of the United Kingdom, any other nation
or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.

          “Guarantee” of or by any Person (the “guarantor”) means any obligation guaranteeing or
intended to guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) to purchase or lease property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee shall not include (x) endorsements of instruments for
deposit or collection in the ordinary course of business and (y) obligations of any Regulated
Insurance Company under Insurance Contracts, Reinsurance Agreements, Fronting Arrangements or
Retrocession Agreements (including any Liens with respect thereto). The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.

          “Guaranteed Creditors” means and includes the Administrative Agent and each Lender.

          “Guaranteed Obligations” means all payment obligations and all other obligations
(including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code or other applicable similar laws, would become due), liabilities and indebtedness owing by the
Borrower to the Guaranteed Creditors under this Agreement (including indemnities, fees and interest
thereon (including, in each case, any interest accruing after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided for in the respective
documentation, whether or not such interest is allowed in any such proceeding)), whether now
existing or hereafter incurred under, arising out of or in connection with this Agreement and the
due performance and compliance by the Borrower with all of the terms, conditions and agreements
contained in this Agreement applicable to the Borrower.

          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.

          “Hybrid Capital” means any security that affords equity benefit to the issuer thereof
(under the procedures and guidelines of the S&P) by having ongoing payment requirements that are
more flexible than interest payments associated with conventional indebtedness for borrowed money
and by being contractually subordinated to such indebtedness. For the avoidance of doubt, the
Company’s Junior Subordinated Deferrable Debentures constitute Hybrid Capital.

9

 

          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest charges are
customarily paid and treated as interest expense under GAAP, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current ordinary course trade accounts payable), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed, provided that the amount of Indebtedness of such
Person shall be the lesser of (i) the fair market value of such property at such date of
determination (determined in good faith by the Company) and (ii) the amount of such Indebtedness of
such other Person, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) all obligations (or to the extent netting is permitted under
the applicable agreement governing such Capital Markets Products and such netting is limited with
respect to the counterparty or counterparties of such agreement, all net termination obligations)
of such Person under transactions in Capital Markets Products and (j) all reimbursement obligations
of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and
similar credit transactions; provided that, Indebtedness shall not include any preferred
(including without limitation trust preferred) or preference securities or Hybrid Capital, in each
case issued by the Company, to the extent such preferred or preference securities or Hybrid Capital
would be treated as equity issued by the Company under the applicable procedures and guidelines of
S&P as of the date hereof. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general partner) to the extent
such Person is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor. For the avoidance of doubt, Indebtedness shall not include (v)
current trade payables (including current payables under insurance contracts and current
reinsurance payables) and accrued expenses, in each case arising in the ordinary course of
business, (w) obligations and Guarantees of Regulated Insurance Companies with respect to Policies,
(x) obligations and Guarantees with respect to products underwritten by Regulated Insurance
Companies in the ordinary course of business, including insurance and reinsurance policies,
annuities, performance and surety bonds, assumptions of liabilities and any related contingent
obligations and (y) Reinsurance Agreements and Fronting Arrangements and Guarantees thereof entered
into by any Regulated Insurance Company in the ordinary course of business.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Indemnitee” has the meaning provided in Section 10.03(b).

          “Index Rating” means (i) with respect to S&P, the Company’s Counterparty Credit Rating
and (ii) with respect to Moody’s, the Company’s Long-term Issuer Rating.

          “Information” has the meaning provided in Section 10.12.

          “Insurance Business” means one or more aspects of the business of selling, issuing or
underwriting insurance or reinsurance and other businesses reasonably related thereto.

          “Insurance Contract” means any insurance contract or policy issued by a Regulated
Insurance Company but shall not include any Reinsurance Agreement, Fronting Arrangement or
Retrocession Agreement.

10

 

          “Insurance Licenses” means the material licenses (including licenses or certificates
of authority from Applicable Insurance Regulatory Authorities), permits or authorizations to
transact insurance and reinsurance business held by any Regulated Insurance Company.

          “Interest Election Request” has the meaning provided in Section 2.05(b).

          “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day that
would have been an Interest Payment Date had successive Interest Periods of three months duration
been applicable to such Borrowing.

          “Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months (or, if available to each Lender affected,
nine or twelve months) thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only,
such next succeeding Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month of such Interest
Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and, in the case of a Eurodollar Borrowing, thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.

          “IPC” means Validus Amalgamation Subsidiary, Ltd., a company organized under the laws
of Bermuda and successor by amalgamation to IPC Holdings, Ltd.

          “IPC Facilities” means (i) the credit agreement among IPC, IPCRe Limited, the lenders
listed on the signature pages thereto, and Wachovia Bank, National Association, as administrative
agent and fronting bank, providing for letters of credit in an aggregate amount of up to $250.0
million at any time outstanding, and any modifications, amendments, restatements, waivers,
extensions, renewals, replacements or refinancings thereof and (ii) the letters of credit master
agreement between IPCRe Limited and Citibank N.A., providing for letters of credit and any
modifications, amendments, restatements, waivers, extensions, renewals, replacements or
refinancings thereof; provided that any such modifications, amendments, waivers, extensions,
renewals, replacements or refinancings be on terms which, when taken together as a whole, are not
adverse in any material respect to the interests of the Lenders, as compared to those contained in
each of the IPC Facilities as of the date hereof.

          “IPCRe Limited” means IPCRe Limited, a company organized under the laws of Bermuda.

          “Junior Subordinated Deferrable Debentures” mean the Company’s Junior Subordinated
Deferrable Interest Debentures due 2036 issued under the Junior Subordinated Indenture dated as of
June 15, 2006 between the Company and JPMorgan Chase Bank, National Association, as Trustee, as the
same has been and may be amended from time to time, and any substantially similarly structured
security issued by the Company or any of its Subsidiaries, including for the avoidance of doubt the
Company’s Junior Subordinated Deferrable Interest Debentures due 2037 issued under the Junior
Subordinated Indenture dated June 21, 2007 between the Company and Wilmington Trust Company, as
Trustee.

11

 

          “Legal Requirements” means all applicable laws, rules and regulations and
interpretations thereof made by any governmental body or regulatory authority (including any
Applicable Insurance Regulatory Authority) having jurisdiction over the Company or a Subsidiary.

          “Lenders” has the meaning provided in the first paragraph of this Agreement.

          “Leverage Ratio” means the ratio of (i) Consolidated Indebtedness to (ii) Consolidated
Total Capital.

          “LIBO Rate” means with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page or pages
of such Service, or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page or pages of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as the rate for Dollar
deposits with a maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate at which deposits of $5,000,000, and for a
maturity comparable to such Interest Period, are offered by the Administrative Agent.

          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

          “Lloyd’s LC Facility” means that certain amended and restated letter of credit
facility agreement, dated as of November 19, 2009 between the Company and the Borrower and Lloyds
TSB Bank plc and ING Bank N.V., London Branch providing for the issuance of letters of credit in
support of obligations of the Borrower under its 2010 and 2011 underwriting years’ letter of credit
facility procurement agreements and capital stock arrangements with Talbot 2002 Underwriting
Capital Ltd. 2002 in an aggregate principal amount of up to $25,000,000 at any time outstanding
(the “FAL Facility Agreement”) and any modifications, amendments, restatements, waivers,
extensions, renewals, replacements or refinancings thereof; provided that any such
modifications, amendments, waivers, extensions, renewals, replacements or refinancings be on terms
which, when taken together as a whole, are not adverse in any material respect to the interests of
the Lenders, as compared to those contained in the FAL Facility Agreement.

          “Loan” has the meaning provided in Section 2.01(a).

          “Mandatory Cost” is described in Schedule 2.02.

          “Margin Stock” has the meaning provided in Regulation U.

          “Material Adverse Effect” means any material adverse condition or any material adverse
change in or affecting (x) the business, operations, assets, liabilities or financial condition of
the Company and its Subsidiaries, taken as a whole, or (y) the rights and remedies of the Lenders
or the ability of the Company and the Borrower, taken as a whole, to perform their respective
obligations to the Lenders under this Agreement.

12

 

          “Maximum Rate” has the meaning provided in Section 10.13.

          “Minimum Consolidated Net Worth Amount” means, at any time, an amount which initially
shall be equal to $2,925,590,000, and which amount shall be increased as follows: (i) immediately
following the last day of each fiscal quarter (commencing with the fiscal quarter ended December
31, 2009) by an amount (if positive) equal to 50% of the Net Income for such fiscal quarter and
(ii) by 50% of the aggregate increases in the consolidated shareholders’ equity of the Company
during such fiscal quarter by reason of the issuance and sale of common Equity Interests of the
Company, including upon any conversion of debt securities of the Company into such Equity
Interests.

          “Moody’s” means Moody’s Investors Service, Inc.

          “Multiemployer Plan” means any multiemployer plan as defined in Section 4001(a)(3) of
ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute
of) the Company, any of its Subsidiaries or any ERISA Affiliate, and each such plan for the five
year period immediately following the latest date on which the Company, such Subsidiary or such
ERISA Affiliate contributed to or had an obligation to contribute to such plan.

          “Net Income” shall mean, for any period, an amount equal to the net income of the
Company and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) for such
period.

          “Net Worth” means, as to any Person, the sum of its capital stock (including its
preferred stock), capital in excess of par or stated value of shares of its capital stock
(including its preferred stock), retained earnings and any other account which, in accordance with
GAAP, constitutes stockholders equity, but excluding (i) any treasury stock and (ii) the amount of
the effects of Financial Accounting Statement No. 115 (which amount is shown on the Company’s
December 31, 2009 balance sheet under the caption “Accumulated other comprehensive income” and
which, after adoption of Financial Accounting Statements Nos. 157 and 159 will be measured as the
difference between investments carried at estimated fair value and investments carried at amortized
cost).

          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other similar excise or property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or performance under, this Agreement
other than any taxes to the extent resulting from a voluntary change in the identity of the
Administrative Agent or any Lender or assignee thereof.

          “Participant” has the meaning provided in Section 10.04(c).

          “Patriot Act” has the meaning provided in Section 10.14.

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

          “Permitted Subsidiary Indebtedness” means:

          (a) Indebtedness of any Subsidiary of the Company under this Agreement or existing on the date
hereof and listed on Schedule 3.14 and extensions, renewals and replacements of any such
Indebtedness, provided that such extending, renewal or replacement Indebtedness (i) shall
not be Indebtedness of an obligor that was not an obligor with respect to the Indebtedness being
extended, renewed or replaced, (ii) shall not be in a principal amount that exceeds the principal
amount of the

13

 

Indebtedness being extended, renewed or replaced (plus any accrued but unpaid interest and
redemption premium payable by the terms of such Indebtedness thereon and reasonable refinancing or
renewal fees, costs and expenses), (iii) shall not have an earlier maturity date or shorter
weighted average life than the Indebtedness being extended, renewed or replaced and (iv) shall be
subordinated to the Indebtedness incurred hereunder on terms (if any) at least as favorable to the
Lenders as the Indebtedness being extended, renewed or replaced;

          (b) Indebtedness of any Subsidiary of the Company incurred in the ordinary course of business
in connection with any Capital Markets Product that are not entered into for speculative purposes;

          (c) Indebtedness owed by Subsidiaries of the Company to the Company or any of its
Subsidiaries;

          (d) Indebtedness of any Subsidiary of the Company incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital Lease Obligations and
any Indebtedness assumed by any Subsidiary of the Company in connection with the acquisition of any
such assets or secured by a Lien on any such assets prior to the acquisition thereof,
provided that (i) such Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement and (ii) the aggregate principal
amount of Indebtedness permitted by this clause (d) shall not exceed $10,000,000 at any time
outstanding;

          (e) Indebtedness of any Subsidiary of the Company in respect of letters of credit issued to
reinsurance cedents, or to lessors of real property in lieu of security deposits in connection with
leases of any Subsidiary of the Company, in each case in the ordinary course of business;

          (f) Indebtedness of any Subsidiary of the Company incurred in the ordinary course of business
in connection with workers’ compensation claims, self-insurance obligations, unemployment insurance
or other forms of governmental insurance or benefits and pursuant to letters of credit or other
security arrangements entered into in connection with such insurance or benefit;

          (g) Indebtedness of any “Designated Subsidiary Account Parties” under the Five-Year Secured
Letter of Credit Facility and (ii) any “Designated Subsidiary Account Parties” under the Three-Year
Unsecured Letter of Credit Facility;

          (h) Indebtedness representing installment insurance premiums owing by the Company or any
Subsidiary in the ordinary course of business in respect of the liability insurance, casualty
insurance or business interruption insurance maintained by the Company or any Subsidiary, in each
case in respect of their properties and assets (but excluding, for the avoidance of doubt, any
insurance or reinsurance provided or obtained by the Company or any Subsidiary in connection with
performing its Insurance Business or managing risk in respect thereof); and

          (i) without duplication, additional Indebtedness of Subsidiaries of the Company not otherwise
permitted under clauses (a) through (h) of this definition which, when added to the aggregate
amount of all Liens (other than with respect to Indebtedness incurred pursuant to this clause (i))
incurred by the Company pursuant to Section 6.03(w), shall not exceed at any time outstanding 5% of
Consolidated Net Worth at the time of incurrence of any new Indebtedness under this clause (i);
provided that immediately after giving effect (including pro forma effect) to the
incurrence of any Indebtedness pursuant to this clause (i), no Event of Default shall have occurred
and be continuing.

14

 

          “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.

          “Plan” means any pension plan as defined in Section 3(2) of ERISA and subject to Title
IV of ERISA, which is maintained or contributed to by (or to which there is an obligation to
contribute of) the Company or any of its Subsidiaries or any of their ERISA Affiliates, and each
such plan for the five year period immediately following the latest date on which the Company, any
of its Subsidiaries or any of their ERISA Affiliates maintained, contributed to or had an
obligation to contribute to such plan.

          “Policies” means all insurance policies, annuity contracts, guaranteed interest
contracts and funding agreements (including riders to any such policies or contracts, certificates
issued with respect to group life insurance or annuity contracts and any contracts issued in
connection with retirement plans or arrangements) and assumption certificates issued or to be
issued (or filed pending current review by applicable Governmental Authorities) by any Regulated
Insurance Company and any coinsurance agreements entered into or to be entered into by any
Regulated Insurance Company.

          “Preferred Securities” means any preferred Equity Interests (or capital stock) of any
Person that has preferential rights with respect to dividends or redemptions or upon liquidation or
dissolution of such Person over shares of common Equity Interests (or capital stock) of any other
class of such Person.

          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank, N.A., as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

          “Private Act” means separate legislation enacted in Bermuda with the intention that
such legislation apply specifically to any Credit Party, in whole or in part.

          “Protected Cell Company” means a Subsidiary that has created segregated accounts
pursuant to the provisions of the Segregated Account Companies Act 2000 of Bermuda.

          “Register” has the meaning provided in Section 10.04(b).

          “Regulated Insurance Company” means any Subsidiary of the Company, whether now owned
or hereafter acquired, that is authorized or admitted to carry on or transact Insurance Business in
any jurisdiction (foreign or domestic) and is regulated by any Applicable Insurance Regulatory
Authority.

          “Regulation D” means Regulation D of the Board as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.

          “Regulation T” means Regulation T of the Board as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

          “Regulation U” means Regulation U of the Board as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

          “Regulation X” means Regulation X of the Board as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

15

 

          “Reinsurance Agreement” means any agreement, contract, treaty, certificate or other
arrangement whereby any Regulated Insurance Company agrees to transfer, cede or retrocede to
another insurer or reinsurer all or part of the liability assumed or assets held by such Regulated
Insurance Company under a policy or policies of insurance issued by such Regulated Insurance
Company or under a reinsurance agreement assumed by such Regulated Insurance Company.

          “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

          “Replaced Lender” has the meaning provided in Section 2.16(b).

          “Replacement Lender” has the meaning provided in Section 2.16(b).

          “Required Lenders” means at any time Lenders having more than 50% of the aggregate
amount of the Commitments; provided that if the Total Commitment has been terminated, then
the Required Lenders means Lenders whose aggregate Credit Exposures exceed 50% of the Revolving
Credit Exposure at such time; provided, further, that, so long as a Lender is a
Defaulting Lender, the Commitments and the Credit Exposures of such Lender shall not be included in
determining whether the Required Lenders have taken or may take any action hereunder (including any
consent to any amendment or waiver pursuant to Section 10.02); provided that any waiver,
amendment or modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender differently than other affected Lenders shall require the consent of
such Defaulting Lender.

          “Retrocession Agreement” means any agreement, contract, treaty or other arrangement
whereby one or more insurers or reinsurers, as retrocessionaires, assume liabilities of reinsurers
under a Reinsurance Agreement or other retrocessionaires under another Retrocession Agreement.

          “Revolving Credit Exposure” means, at any time, the aggregate principal amount of all
Loans then outstanding.

          “S&P” means Standard & Poor’s Ratings Group, a division of the McGraw Hill
Corporation.

          “SAP” means, with respect to any Regulated Insurance Company, the statutory accounting
principles and accounting procedures and practices prescribed or permitted by the Applicable
Insurance Regulatory Authority of the state or jurisdiction in which such Regulated Insurance
Company is domiciled; it being understood and agreed that determinations in accordance with SAP for
purposes of Article VII, including defined terms as used therein, are subject (to the extent
provided therein) to Section 1.04.

          “SEC” means the Securities and Exchange Commission or any successor thereto.

          “Service of Process Agent” means CT Corporation Systems, 111 Eighth Avenue, New York,
New York 10011.

          “Significant Insurance Subsidiary” means a Regulated Insurance Company which is also a
Significant Subsidiary.

          “Significant Subsidiary” means (a) Validus Re, (b) the Borrower and (c) each other
Subsidiary of the Company that either (i) as of the end of the most recently completed fiscal year
of the

16

 

Company for which audited financial statements are available, has assets that exceed 10% of
the total consolidated assets of the Company and all of its Subsidiaries as of the last day of such
period or (ii) for the most recently completed fiscal year of the Company for which audited
financial statements are available, has revenues that exceed 10% of the consolidated revenue of the
Company and all of its Subsidiaries for such period; provided that, if at any time the
aggregate amount of the total consolidated assets of the Company and all of its Subsidiaries or the
consolidated revenue of the Company and all of its Subsidiaries attributable to Subsidiaries that
are not Significant Subsidiaries exceeds fifteen percent (15%) of the total consolidated assets of
the Company and all of its Subsidiaries as of the end of any such fiscal year or fifteen percent
(15%) of the consolidated revenue of the Company and all of its Subsidiaries for any such fiscal
quarter, the Company (or, in the event the Company has failed to do so within ten days, the
Administrative Agent) shall designate sufficient Subsidiaries as “Significant Subsidiaries” to
eliminate such excess, and such designated Subsidiaries shall for all purposes of this Agreement
constitute Significant Subsidiaries.

          “Solvent” means, with respect to any Person on a particular date, that on such date
(a) the amount of the “present fair saleable value” of each of the business and assets of such
Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or
otherwise”, as of such date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of each of the business and assets of such Person is greater than the amount that
will be required to be paid on or in respect of the probable “liability” on the existing debts and
other “liabilities contingent or otherwise” of such Person, (c) the assets of such Person do not
constitute unreasonably small capital for such Person to carry out its business as now conducted
and as proposed to be conducted including the capital needs of such Person, taking into account the
particular capital requirements of the business conducted by such Person and projected capital
requirements and capital availability thereof, (d) such Person does not intend to incur debts
beyond their ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be received by such Person, and of amounts to be payable on or in respect of debt of
such Person) and (e) such Person does not believe that final judgments against such Person in
actions for money damages presently pending will be rendered at a time when, or in an amount such
that, they will be unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum reasonable amount of such judgments in any such actions and the
earliest reasonable time at which such judgments might be rendered) and such Person believes that
its cash flow, after taking into account all other anticipated uses of the cash of such Person
(including the payments on or in respect of debt referred to in paragraph (d) of this definition),
will at all times be sufficient to pay all such judgments promptly in accordance with their terms.
For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means
any (A) right to payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (B) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve, liquid asset, fees or similar requirements (including any marginal, special,
emergency or supplemental reserves or other requirements) established by any central bank, monetary
authority, the Board, the Financial Services Authority, the European Central Bank or other
Governmental Authority for any category of deposits or liabilities customarily used to fund loans
in such currency, expressed in the case of each such requirement as a decimal. Such reserve,
liquid asset, fees or similar requirements shall, in the case of Dollar denominated Loans, include
those imposed pursuant to Regulation D of the Board. Eurodollar Loans shall be deemed to be
subject to such reserve, liquid asset, fee or similar requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to

17

 

any Lender under any applicable law, rule or regulation, including Regulation D of the Board.
The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve, liquid asset or similar requirement.

          “Statutory Statements” means, with respect to any Regulated Insurance Company for any
fiscal year, the annual or quarterly financial statements of such Regulated Insurance Company as
required to be filed with the Insurance Regulatory Authority of its jurisdiction of domicile and in
accordance with the laws of such jurisdiction, together with all exhibits, schedules, certificates
and actuarial opinions required to be filed or delivered therewith.

          “Subsidiary” means any subsidiary of the Company.

          “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of the equity or
ordinary voting power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the parent.

          “Super-Majority Lenders” means at any time Lenders having at least 75% of the
aggregate amount of the Commitments; provided that if the Total Commitment has been
terminated, then the Super-Majority Lenders means Lenders whose aggregate Credit Exposures equal or
exceed 75% of the Revolving Credit Exposure at such time.

          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

          “Three-Year Unsecured Letter of Credit Facility” means the $340,000,000 unsecured
letter of credit facility among the Company, Validus Re, various “Designated Subsidiary Account
Parties”, JPMorgan Chase Bank, N.A., as administrative agent, and one or more lenders entered into
on March 12, 2010, including the related collateral and security documents and other instruments
and agreements executed in connection therewith, and amendments, renewals, replacements,
refinancings and restatements to any of the foregoing (provided that the principal amount thereof
shall not exceed $340,000,000 or, if increased in accordance with its terms, $400,000,000, plus
reasonable refinancing costs, fees and expenses).

          “Total Commitment” means, at any time, the sum of the Commitments of each of the
Lenders at such time.

          “Transaction” means the execution, delivery and performance by each Credit Party of
this Agreement, the borrowing of Loans by the Borrower and the use of proceeds thereof, in each
case, on and after the Effective Date.

          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.

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          “Validus Re” means Validus Reinsurance, Ltd., a company organized under the Laws of
Bermuda.

          “Wholly-Owned Subsidiary” of any Person means any subsidiary of such Person to the
extent all of the capital stock or other ownership interests in such subsidiary, other than
directors’ or nominees’ qualifying shares, is owned directly or indirectly by such Person.

          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan” or an
“ABR Loan”). Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing” or an “ABR Borrowing”).

          SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be construed in accordance
with GAAP or SAP, as the case may be, as in effect from time to time; provided that, if the
Company notifies the Administrative Agent that the Company requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in GAAP or SAP or in
the application thereof on the operation of such provision (or if the Administrative Agent notifies
the Company that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such change in GAAP or SAP
or in the application thereof, then such provision shall be interpreted on the basis of GAAP or SAP
as in effect and applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance with Section 10.02.
Notwithstanding any other provision contained herein, all terms of an accounting or financial
nature used herein to calculate compliance with Sections 6.10 and 6.11 shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without giving effect to any
election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of
Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial
Accounting Standard having a similar result or effect) to value any Consolidated Indebtedness of
the Company or any Subsidiary at “fair value”, as defined therein.

19

 

ARTICLE II

Loans

          SECTION 2.01. Commitments. Subject to and upon the terms and conditions
herein set forth, each Lender severally agrees, at any time and from time to time on and after the
Effective Date and prior to the Commitment Expiration Date, to make a loan or loans (each, a
“Loan” and, collectively, the “Loans”) to the Borrower, which Loans (i) may be made
and maintained only in Dollars; (ii) may be repaid and reborrowed in accordance with the provisions
hereof; (iii) except as hereinafter provided, may, at the option of the Borrower, be incurred and
maintained as, and/or converted into, ABR Loans or Eurodollar Loans, provided that all Loans made
as part of the same Borrowing shall, unless otherwise specified herein, consist of Loans of the
same Type; and (iv) shall not be made (and shall not be required to be made) by any Lender if the
making of same would cause the Revolving Credit Exposure (after giving effect to the use of the
proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding
pursuant to this Agreement) to exceed the Total Commitment as then in effect.

          SECTION 2.02. Loans and Borrowings.

          (a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its obligations hereunder nor
shall any other party be liable for the failure by such Lender to perform its obligations
hereunder.

          (b) Subject to Section 2.12, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.

          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate principal amount of not less than $2,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $2,000,000; provided that a Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the Total Commitment. Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any time be more than a
total of ten Eurodollar Borrowings outstanding.

          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Commitment Expiration Date.

          SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by written facsimile (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, London time, three Business Days before the date
of the proposed Borrowing and (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
London time, on the date of the proposed Borrowing. Each such written facsimile Borrowing Request
shall be irrevocable and shall be effected via delivery to the Administrative Agent of a Borrowing
Request in the form of Exhibit B or such other form reasonably acceptable to the
Administrative Agent appropriately completed and signed by the Borrower. Each such Borrowing
Request shall specify the following information in compliance with Section 2.02:

20

 

     (i) the aggregate principal amount of the requested Borrowing;

     (ii) the date of such Borrowing, which shall be a Business Day;

     (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

     (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and

     (v) the location and number of the Borrower’s account to which funds are to
be disbursed.

          If no election as to the Type of Borrowing of Loans is specified, then such Borrowing of Loans
shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount
of such Lender’s Loan to be made as part of the requested Borrowing.

          SECTION 2.04. Funding of Borrowings.

          (a) Each Lender shall make each Loan on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, London time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent
will make such Loans available to the Borrower by wire transfer of immediately available funds by
the close of business on such Business Day to the account of the Borrower designated by it in the
applicable Borrowing Request.

          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing (or prior to 1:00 p.m., London time, on the date of such Borrowing
in the case of ABR Borrowings) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing and the Borrower’s
obligations to repay the Administrative Agent in accordance with the previous sentence shall cease
to the extent such Lender has paid such amounts.

          SECTION 2.05. Interest Elections.

          (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect

21

 

Interest Periods therefor, all as provided in this Section 2.05. Subject to the other
provisions of this Section 2.05, the Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.

          (b) To make an election pursuant to this Section (an “Interest Election Request”), the
Borrower shall notify the Administrative Agent of such election by written facsimile by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a
Borrowing of the Type resulting from such election to be made on the effective date of such
election. Each such Interest Election Request shall be irrevocable and shall be confirmed promptly
by delivery or written facsimile to the Administrative Agent of an Interest Election Request in the
form of Exhibit D, or such other form reasonably acceptable to the Administrative Agent,
and signed by the Borrower.

          (c) Each Interest Election Request shall specify the following information in compliance with
Section 2.02:

     (i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in which
case the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

     (ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;

     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term Interest Period.

          If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration.

          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding anything to the contrary contained in this
Agreement, if an Event of Default is in existence, then, so long as an Event of Default is in
existence (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end
of the Interest Period applicable thereto.

22

 

          SECTION 2.06. Increased Costs. If a Change in Law shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate), or (ii) impose on such Lender or the
London interbank market any other conditions directly or indirectly affecting this Agreement or
Eurodollar Loans made by such Lender; and the result of any of the foregoing is to (A) increase the
cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation
to make any such Loan), (B) reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise) or (C) reduce the rate of return on its
capital with respect to the Loans to a level below that which such Lender would have achieved but
for such Change in Law (and taking into consideration such Lender’s policies with respect to
capital adequacy (or those of its holding company), as generally applied), then, upon written
demand to the Borrower by such Lender (with a copy to the Administrative Agent), the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduction. The preceding sentence shall not apply to increased costs with
respect to taxes imposed on or measured by the net income or net profits of a Lender pursuant to
the laws of the jurisdiction in or under the laws of which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is located or in which it
conducts a trade or business or has a permanent establishment, or has a present or former
connection with such jurisdiction, or any subdivision thereof or therein or with respect to Taxes
to the extent that a Lender received additional amounts (or otherwise was indemnified) for such
Taxes pursuant to Section 2.14 (or would have received additional amounts pursuant to
Section 2.14(e) but for a failure to comply with Section 2.14(e)). A certificate submitted to the
Borrower by such Lender (with a copy to the Administrative Agent), setting forth (i) the basis, in
reasonable detail, for the determination of such additional amount or amounts necessary to
compensate such Lender as aforesaid and (ii) the basis, in reasonable detail, for the computation
of such amount or amounts, which shall be consistently applied, shall be final and conclusive and
binding on the Borrower absent manifest error, although the failure to deliver any such certificate
shall not release or diminish the Borrower’s obligations to pay additional amounts pursuant to this
Section 2.06 upon subsequent receipt of such certificate. Notwithstanding the foregoing, the
Borrower shall not be required to compensate any Lender pursuant to this Section 2.06 for any
increased costs or reductions incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the applicable Change in Law; provided that if the Change in Law
giving rise to such increased costs or reductions is retroactive, then such 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.

          SECTION 2.07. Termination and Reduction of Commitments. (a) Unless
previously terminated, the Total Commitment (and the Commitment of each Lender) shall terminate on
the Commitment Expiration Date.

          (b) The Borrower may at any time terminate, or from time to time reduce, the Total Commitment;
provided that (i) each reduction of the Total Commitment shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or
reduce the Total Commitment if, after giving effect to such termination or reduction and any
concurrent prepayment of the Loans in accordance with Section 2.09, the Revolving Credit Exposure
would exceed the Total Commitment. Each such reduction shall be applied to the Commitments of the
Lenders on a pro rata basis based on the amount of such Lenders’ respective Commitments.

          (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Total Commitment under paragraph (b) of this Section 2.07 at least three Business Days prior to
the effective date of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable;

23

 

provided that a notice of termination of Commitments may state that such notice is
conditioned upon the effectiveness of other credit facilities or other alternative financing, in
which case such notice may be revoked without penalty prior to the specified time if such condition
is not satisfied (each such notice a “Conditional Termination Notice”). Any termination or
reduction of the Total Commitment (or the Commitments of any Lender) shall be permanent. Each
reduction of the Total Commitment shall be made ratably among the Lenders in accordance with their
respective Commitments.

          SECTION 2.08. Repayment of Loans; Evidence of Debt.

          (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of all Loans on the Commitment Expiration
Date.

          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.

          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.

          (e) Any Lender may request by written notice to the Borrower and the Administrative Agent that
Loans made by it be evidenced by a promissory note (which may be executed by facsimile). In such
event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in the form of Exhibit C or such other form reasonably acceptable to the
Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be represented by one or
more promissory notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

          SECTION 2.09. Prepayment of Loans.

          (a) The Borrower shall have the right at any time and from time to time to prepay any
Borrowing in whole or in part, without premium or penalty, except as provided in Section 2.13,
subject to prior notice in accordance with paragraph (b) of this Section.

          (b) The Borrower shall notify the Administrative Agent by written facsimile of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 2:00 p.m., London
time, three Business Days before the date of prepayment or (ii) in the case of prepayment of an ABR
Borrowing, not later than 2:00 p.m., London time, on the date of prepayment. Each such notice shall
be irrevocable (unless given in connection with a Conditional Termination Notice, as set forth in
Section

24

 

2.07, in which case, subject to Section 2.13, such notice of prepayment may be revoked if such
Conditional Termination Notice is revoked in accordance with Section 2.07) and shall specify the
prepayment date, the Borrowing or Borrowings which are to be prepaid and the principal amount of
each Borrowing or portion thereof to be prepaid. Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case
of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.11.

          (c) If on any date the Revolving Credit Exposure exceeds the Total Commitment as then in
effect, the Borrower shall prepay on such date the principal amount of outstanding Loans equal to
such excess.

          SECTION 2.10. Fees. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee (the “Commitment Fee”), which shall
accrue at the Applicable Rate with respect to the Commitment Fee on the daily amount of the
unutilized Commitment of such Lender during the period from and including the Effective Date to but
excluding the Commitment Expiration Date. Accrued Commitment Fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the Commitment Expiration
Date, commencing on the first such date to occur after the date hereof. All Commitment Fees shall
be computed on the basis of a year of 365 days (or 366 days in a leap year) and shall be payable
for the actual number of days elapsed (including the first day but excluding the last day).

          (b) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.

          (c) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution to the Persons entitled thereto as set forth above.
Fees paid shall not be refundable under any circumstances. If any fee or other amount payable by
any Credit Party hereunder is not paid when due, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to the Alternate Base Rate plus 2% per annum.

          (d) Notwithstanding anything to the contrary in this Section 2.10, for so long as a Lender is
a Defaulting Lender, no fees hereunder shall accrue or be payable to such Lender until such Lender
ceases to be a Defaulting Lender.

          SECTION 2.11. Interest.

          (a) The ABR Loans shall bear interest at the Alternate Base Rate plus the Applicable Rate with
respect to ABR Loans. The Eurodollar Loans shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Loan plus the Applicable Rate with respect to Eurodollar Loans.

          (b) [Intentionally Omitted.]

          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus
the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section
2.11 or (ii) in the case of

25

 

any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of
this Section 2.11.

          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and on the Commitment Expiration Date; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the Commitment Expiration
Date), accrued interest on the principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.

          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be conclusive absent manifest
error.

          SECTION 2.12. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:

          (a) the Administrative Agent reasonably determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate for such Interest Period; or

          (b) the Administrative Agent is advised by the Required Lenders (based on the reasonable
determination of such Required Lenders) that the Adjusted LIBO Rate for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by written
facsimile or in writing as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing
provided that if the circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.

          SECTION 2.13. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of a mandatory prepayment under Section 2.09 or the occurrence of an
Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any
Eurodollar Loan on the date specified in any notice delivered pursuant hereto, or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.16, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of (i)

26

 

the amount of interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would bid were it to bid,
at the commencement of such period, for dollar deposits of a comparable amount and period from
other banks in the Eurodollar market. A certificate of any Lender setting forth in reasonable
detail any amount or amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

          SECTION 2.14. Taxes. (a) Any and all payments by or on account of any
obligation of any Credit Party hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if such Credit Party shall be required
to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative Agent or Lender (as
the case may be) receives an amount equal to the sum it would have received had no such deductions
been made, (ii) such Credit Party shall make such deductions and (iii) such Credit Party shall pay
the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

          (b) In addition, each Credit Party shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

          (c) Each Credit Party severally (and not jointly) agrees to indemnify the Administrative Agent
and each Lender within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes that such Credit Party failed to deduct or withhold and that were
paid by the Administrative Agent or such Lender on or with respect to any payment by or on account
of any obligation of such Credit Party hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section) and any penalties,
interest and reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether
or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment or liability (with
reasonable detail) delivered to any Credit Party by a Lender or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

          (d) As soon as reasonably practicable after any payment of Indemnified Taxes or Other Taxes by
any Credit Party to a Governmental Authority, such Credit Party shall deliver to the Administrative
Agent the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

          (e) Each Lender shall, to the extent it may lawfully do so, deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably requested by the
Borrower (if any), or will comply with such other requirements, if any, as is currently applicable,
as will permit payments under this Agreement to be made without withholding or at a reduced rate.

          (f) If a Lender or the Administrative Agent shall determine, in its sole discretion, that it
is entitled to claim a refund from a Governmental Authority in respect of Indemnified Taxes or

27

 

Other Taxes paid by any Credit Party pursuant to this Section 2.14, such Lender or the
Administrative Agent, as applicable, shall promptly notify such Credit Party of the availability of
such refund claim and, if the Lender or the Administrative Agent, as applicable, determines in its
sole discretion that making a claim for refund will not have an adverse effect on its Taxes or
business operations, shall, within 60 days after receipt of a request by such Credit Party and at
the Company’s expense, make a claim to such Governmental Authority for such refund. If the
Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund
of any Taxes or Other Taxes as to which it has been indemnified by any Credit Party or with respect
to which such Credit Party has paid additional amounts pursuant to this Section 2.14, it shall pay
over such refund to such Credit Party (but only to the extent of indemnity payments made, or
additional amounts paid, by such Credit Party under this Section 2.14 with respect to the Taxes or
Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses of the
Administrative Agent or such Lender incurred in obtaining such refund and without interest (other
than any interest paid by the relevant Governmental Authority with respect to such refund);
provided that such Credit Party, upon the request of the Administrative Agent or such
Lender, agrees to repay the amount paid over to such Credit Party (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is required to repay such refund to
such Governmental Authority. This Section shall not be construed to require the Administrative
Agent or any Lender to make available its tax returns (or any other information relating to its
taxes which it deems confidential) to such Credit Party or any other Person.

          (g) Any Lender that is not a Lender as of the Effective Date shall not be entitled to any
greater payment under this Section 2.14 than such Lender’s assignor could have been entitled to
absent such assignment except to the extent that the entitlement to a greater payment resulted from
a Change in Law.

          SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Each Credit Party shall make each payment required to be made by it hereunder (whether of
principal, interest, fees or of amounts payable under Section 2.06 or 2.14 or otherwise) prior to
2:00 p.m., London time, on the date when due, in immediately available funds, without set-off or
counterclaim in Dollars. Any amounts received after such time on any date may, in the discretion of
the Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the Administrative
Agent at its offices at Wholesale Loans Servicing, Bank House, Wine Street, Bristol, BS1 2AN United
Kingdom, except that payments pursuant to Sections 2.06, 2.14 and 10.03 shall be made directly to
the Persons entitled thereto. The Administrative Agent shall distribute any such payments received
by it for the account of any other Person to the appropriate recipient promptly following receipt
thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such extension.

          (b) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall
be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to such parties.

          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or any fees payable
pursuant to Section 2.10 resulting in such Lender receiving payment of a greater proportion of the

28

 

aggregate amount of such obligations then due and owed to such Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value) participations in such
obligations of the respective Credit Party owed to such Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably; provided that (i) if
any such participations are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price restored to the extent of
such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed
to apply to any payment made by any Credit Party pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of
or sale of a participation in any of its Commitment or Loans to any assignee or participant, other
than to any Credit Party or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Credit Party consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against such Credit Party rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were a direct creditor
of such Credit Party in the amount of such participation.

          (d) Unless the Administrative Agent shall have received notice from the relevant Credit Party
prior to the date on which any payment is due to the Administrative Agent for the account of the
Lenders hereunder that such Credit Party will not make such payment, the Administrative Agent may
assume that such Credit Party has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the
relevant Credit Party has not in fact made such payment, then each of the Lenders severally agrees
to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender
with interest thereon, for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.

          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.15(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Section until all such
unsatisfied obligations are fully paid.

          SECTION 2.16. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.06, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.06 or Section 2.14, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking of its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.06 or 2.14, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.

          (b) If any Lender shall become a Defaulting Lender or requests compensation under
Section 2.06, or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.06 or Section 2.14,
then, in each case, the Borrower, at its sole expense and effort, shall have the right, if no
Default or Event of Default then exists, to replace such Lender (the “Replaced Lender”),
with one or more Person or Persons

29

 

(collectively, the “Replacement Lender”) reasonably acceptable to the Administrative
Agent at which time the Replaced Lender shall assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in Section 10.04), all its interests, rights and
obligations under this Agreement to the Replacement Lender; provided that (i) at the time
of any replacement pursuant to this Section 2.16, the Replacement Lender and the Replaced Lender
shall enter into one or more Assignment and Assumptions pursuant to Section 10.04(b) (and with all
fees payable pursuant to said Section 10.04(b) to be paid by the Replacement Lender) pursuant to
which the Replacement Lender shall acquire all of the Commitments and outstanding Loans of the
Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof
an amount equal to the sum of (A) an amount equal to the principal amount of, and all accrued but
unpaid interest on, all outstanding Loans of the Replaced Lender and (B) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced Lender pursuant to Section 2.10;
(ii) all obligations of the Borrower under this Agreement owing to the Replaced Lender (other than
those specifically described in clause (i) above in respect of which the assignment purchase price
has been, or is concurrently being, paid), including all amounts owing to the Replaced Lender under
Section 2.13 as a result of the assignment of its Loans under clause (i) above, shall be paid in
full to such Replaced Lender concurrently with such replacement; (iii) the Borrower shall have
received the prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld or delayed; (iv) such assignment will result in a reduction in such
compensation or payments; and (v) no Lender shall be required to become a Replaced Lender if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply. Upon the execution of the
respective Assignment and Assumption, the payment of amounts referred to in clauses (i) and (ii)
above and the return, and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate promissory note or notes executed by the Borrower, the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions applicable to the Replaced Lender
under this Agreement, which shall survive as to such Replaced Lender. For the avoidance of doubt,
no Replaced Lender shall be required to execute, sign or deliver any document or assignment in
order to be replaced in accordance with this Section 2.16.

ARTICLE III

Representations and Warranties

          Each of the Company and the Borrower on behalf of itself and the Subsidiaries represents and
warrants to the Lenders that:

          SECTION 3.01. Corporate Status. Each of the Company and each of its
Significant Subsidiaries (i) is a duly organized and validly existing corporation or business trust
or other entity in good standing under the laws of the jurisdiction of its organization and has the
corporate or other organizational power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage, and (ii) has been
duly qualified and is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified, except, in the case of this clause (ii), where the failure to be
so qualified, authorized or in good standing, either individually or in the aggregate, has not had,
and would not reasonably be expected to have, a Material Adverse Effect.

          SECTION 3.02. Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and provisions of this
Agreement and has taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement. Each Credit Party has duly executed and delivered this Agreement
and this Agreement constitutes the legal, valid and binding obligation of such Credit Party
enforceable against

30

 

such Credit Party in accordance with its terms, except to the extent that enforceability
thereof may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors’ rights generally and general principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law.

          SECTION 3.03. No Contravention of Agreements or Organizational Documents.
Neither the execution, delivery and performance by any Credit Party of this Agreement nor
compliance with the terms and provisions hereof, nor the consummation of the transactions
contemplated herein, (i) will contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the creation or imposition
of (or the obligation to create or impose) any Lien upon any of the property or assets of the
Company or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, credit agreement or any other material instrument to which the Company or
any of its Subsidiaries is a party or by which it or any of its property or assets are bound or to
which it may be subject or (iii) will violate any provision of the certificate of incorporation,
by-laws or other organizational documents of the Company or any of its Subsidiaries.

          SECTION 3.04. Litigation and Environmental Matters. There are no actions,
suits or proceedings pending or, to the best knowledge of the Company or any of its Significant
Subsidiaries, threatened involving the Company or any of its Subsidiaries (including with respect
to this Agreement) that, either individually or in the aggregate, have had, or would reasonably be
expected to have, a Material Adverse Effect. Except for any matters that, either individually or
in the aggregate, have not had, and would not reasonably be expected to have, a Material Adverse
Effect, neither the Company nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.

          SECTION 3.05. Use of Proceeds; Margin Regulations. (a) All proceeds of the
Loans shall be utilized for the general corporate (including acquisitions) and working capital
purposes of the Borrower (which, for the avoidance of doubt, includes making payments and/or
reimbursements with respect to the Five-Year Secured Letter of Credit Facility and/or the
Three-Year Unsecured Letter of Credit Facility); (b) Neither the making of any Loan hereunder nor
the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation
T, U or X and no part of the proceeds of any Loan will be used to purchase or carry any Margin
Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock.

          SECTION 3.06. Approvals. Any (a) order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or exemption by, any
foreign or domestic governmental or public body or authority, or any subdivision thereof, which is
required to authorize or is required or (b) third party approval, permit or license required to be
obtained, in each case in connection with (i) the Transaction or (ii) the legality, validity,
binding effect or enforceability of this Agreement, has been obtained and is in full force and
effect.

          SECTION 3.07. Investment Company Act. No Credit Party is an “investment
company” or a company “controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended.

          SECTION 3.08. True and Complete Disclosure; Projections and Assumptions.
All factual information (taken as a whole) heretofore or contemporaneously furnished by the Company
or

31

 

any of its Subsidiaries to the Administrative Agent or any Lender (including all information
contained in this Agreement) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other factual information (taken as a whole with all
other such information theretofore or contemporaneously furnished) hereafter furnished by any such
Persons to the Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole with all other such
information theretofore or contemporaneously furnished) not materially misleading at such time in
light of the circumstances under which such information was provided; provided that with
respect to projections, the Company or the Borrower represents only that the projections contained
in such materials are based on good faith estimates and assumptions believed by the Company to be
reasonable and attainable at the time made, it being recognized by the Administrative Agent and the
Lenders that such projections as to future events are not to be viewed as facts and are subject to
significant uncertainties and contingencies many of which are beyond the Company’s control and that
actual results during the period or periods covered by any such projections may materially differ
from the projected results.

          SECTION 3.09. Financial Condition. (a) The Company has heretofore
furnished to the Lenders its consolidated balance sheet and consolidated statements of operations
and comprehensive income (loss), shareholders’ equity and cash flows as of and for the fiscal year
ended December 31, 2009 reported on by PricewaterhouseCoopers, independent public accountants.
Such financial statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Company and its consolidated Subsidiaries as of such
dates and for such periods in accordance with GAAP.

          (b) Since December 31, 2009, nothing has occurred, either individually or in the aggregate,
which has resulted in, or would reasonably be expected to result in, any material adverse
condition or any material adverse change in or affecting (i) the business, operations, assets,
liabilities or financial condition of the Company and its Subsidiaries, taken as a whole, or (ii)
the rights and remedies of the Lenders or the ability of the Company and the Borrower, taken as a
whole, to perform their respective obligations to the Lenders under this Agreement.

          SECTION 3.10. Tax Returns and Payments. Except where the failure to do so
would not reasonably be expected, individually or in aggregate, to have a Material Adverse Effect,
the Company and its Subsidiaries (i) have timely filed or caused to be timely filed with the
appropriate taxing authority (taking into account any applicable extension within which to file)
all material income and other material tax returns (including any statements, forms and reports),
domestic and foreign, required to be filed by the Company and its Subsidiaries, and (ii) have
timely paid, collected or remitted or caused to have timely paid, collected or remitted all
material taxes payable by them which have become due and assessments which have become due, except
for those contested in good faith and adequately disclosed and for which adequate reserves have
been established in accordance with GAAP. To the best knowledge of the Company and its
Subsidiaries, there is no action, suit, proceeding, investigation, audit or claim now pending or
proposed or threatened by any authority regarding any income taxes or any other taxes relating to
the Company or any of its Subsidiaries, which, either individually or in the aggregate, has had, or
would reasonably be expected to have, a Material Adverse Effect. As of the Effective Date, neither
the Company nor any of its Subsidiaries has entered into an agreement or waiver or been requested
to enter into an agreement or waiver extending any statute of limitations relating to the payment
or collection of taxes of the Company or any of its Subsidiaries. To the best knowledge of the
Company and its Subsidiaries, no tax Liens have been filed and no claims are pending or proposed or
threatened with respect to any taxes, fees or other charges for any taxable period, except for
Liens permitted under Section 6.03 and claims which, either individually or in the aggregate, have
not had, and would not reasonably be expected to have, a Material Adverse Effect.

32

 

          SECTION 3.11. Compliance with ERISA. (a) Except as, either individually or
in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse
Effect, the Company and its Subsidiaries and their ERISA Affiliates (i) have fulfilled their
respective obligations under the minimum funding standards of ERISA and the Code with respect to
each Plan and are in compliance with the applicable provisions of ERISA and the Code, and (ii) have
not incurred any liability to the PBGC or any Plan or Multiemployer Plan (other than to make
contributions in the ordinary course of business).

          (b) Except as, either individually or in the aggregate, has not had, and would not reasonably
be expected to have, a Material Adverse Effect, (i) each Foreign Pension Plan has been maintained
in compliance with its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained, where required, in good standing with
applicable regulatory authorities, (ii) all contributions required to be made with respect to a
Foreign Pension Plan have been timely made, (iii) neither the Company nor any of its Subsidiaries
has incurred any obligation in connection with the termination of, or withdrawal from, any Foreign
Pension Plan and (iv) the present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan that is required to be funded, determined as of the end of the
Company’s most recently ended fiscal year on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable
to such benefit liabilities.

          SECTION 3.12. Subsidiaries. (a) Set forth on Schedule 3.12 is a
complete and correct list of all of the Subsidiaries of the Company as of the Effective Date,
together with, for each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary,
(ii) each Person holding direct ownership interests in such Subsidiary, (iii) the percentage
ownership of such Subsidiary represented by such ownership interests and (iv) specifying if such
Subsidiary is a Significant Subsidiary. Except as disclosed on Schedule 3.12, as of the
Effective Date, each of the Company and its Subsidiaries owns, free and clear of Liens, and has the
unencumbered right to vote, all outstanding ownership interests in each Person shown to be held by
it on Schedule 3.12.

          (b) As of the Effective Date, there are no restrictions on the Company or any of its
Significant Subsidiaries which prohibit or otherwise restrict the transfer of cash or other assets
from any Subsidiary of the Company to the Company, other than (i) prohibitions or restrictions
existing under or by reason of this Agreement, (ii) prohibitions or restrictions existing under or
by reason of Legal Requirements, (iii) prohibitions and restrictions permitted by Section 6.12 and
(iv) other prohibitions or restrictions which, either individually or in the aggregate, have not
had, and would not reasonably be expected to have, a Material Adverse Effect.

          SECTION 3.13. Capitalization. As of the Effective Date, the authorized
capital stock of the Company consists of 571,428,571.4 shares, par value $0.175 per share. As of
the Effective Date, the authorized capital stock of the Borrower consists of 130,465,500 shares,
par value $0.002 per share. As of the Effective Date, none of the Company’s Significant
Subsidiaries has outstanding any securities convertible into or exchangeable for its capital stock
or outstanding any rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments
or claims of any character relating to, its capital stock except for options, warrants and grants
outstanding in the aggregate amounts set forth on Schedule 3.13.

          SECTION 3.14. Indebtedness. The Company and its Significant Subsidiaries do
not have any Indebtedness for borrowed money on the Effective Date other than the Indebtedness
listed on Schedule 3.14 or set forth on the balance sheet referred to in Section 3.09(a).

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          SECTION 3.15. Compliance with Statutes and Agreements. (a) The Company and
each of its Significant Subsidiaries is in compliance with all applicable statutes, regulations,
rules and orders of, and all applicable restrictions imposed by, and has filed or otherwise
provided all material reports, data, registrations, filings, applications and other information
required to be filed with or otherwise provided to, all governmental bodies, domestic or foreign,
in respect of the conduct of its business and the ownership of its property (including compliance
with all applicable Environmental Laws), except where the failure to comply or file or otherwise
provide, either individually or in the aggregate, has not had, and would not reasonably be expected
to have, a Material Adverse Effect. All required regulatory approvals are in full force and effect
on the date hereof, except where the failure of such approvals to be in full force and effect,
either individually or in the aggregate, has not had, and would not reasonably be expected to have,
a Material Adverse Effect.

          (b) The Company and each of its Significant Subsidiaries is in compliance with all indentures,
agreements and other instruments binding upon it or its property, except where the failure to do
so, either individually or in the aggregate, has not had, and would not reasonably be expected to
have, a Material Adverse Effect.

          SECTION 3.16. Insurance Licenses. There is (i) no Insurance License that is
the subject of a proceeding for suspension, revocation or limitation or any similar proceedings,
(ii) no sustainable basis for such a suspension, revocation or limitation, and (iii) no such
suspension, revocation or limitation threatened by any Applicable Insurance Regulatory Authority,
that, in each instance under (i), (ii) and (iii) above and either individually or in the aggregate,
has had, or would reasonably be expected to have, a Material Adverse Effect.

          SECTION 3.17. Insurance Business. All insurance policies issued by any
Significant Insurance Subsidiary are, to the extent required under applicable law, on forms
approved by the insurance regulatory authorities of the jurisdiction where issued or have been
filed with and not objected to by such authorities within the period provided for objection, except
for those forms with respect to which a failure to obtain such approval or make such a filing
without it being objected to, either individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect.

          SECTION 3.18. Properties; Liens; and Insurance. (a) The Company and its
Significant Subsidiaries have good title to, or valid leasehold interests in, all real and personal
property material to the businesses of the Company and its Significant Subsidiaries, taken as a
whole. There exists no Lien (including any Lien arising out of any attachment, judgment or
execution) of any kind, on, in or with respect to any of the property of the Company or any of its
Significant Subsidiaries, in each case except as expressly permitted by Section 6.03.

          (b) The Company and its Significant Subsidiaries own, or are licensed to use, all trademarks,
trade names, copyrights, patents and other intellectual property material to the businesses of the
Company and its Significant Subsidiaries, taken as a whole, and the use thereof by the Company or
such Significant Subsidiary does not infringe upon the rights of any other Person, except for any
such infringements that, either individually or in the aggregate, have not had, and would not
reasonably be expected to have, a Material Adverse Effect.

          (c) As of the Effective Date, all premiums in respect of each material insurance policy
maintained by the Company and its Significant Subsidiaries have been paid. The Company and the
Borrower believe that the insurance maintained by or on behalf of the Company and its Significant
Subsidiaries is in at least such amounts and against at least such risks as are usually insured
against in the same general area by companies of established repute engaged in the same or similar
businesses.

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          SECTION 3.19. Solvency. On the Effective Date and upon the occurrence of
each Credit Event, both before and after giving effect thereto, (i) each Credit Party, taken
individually, (ii) the Company and its Subsidiaries, taken as a whole, and (iii) each Credit Party
and its respective subsidiaries, taken as a whole, are, in each case, Solvent.

ARTICLE IV

Conditions

          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans
shall not become effective until the date (the “Effective Date”) on which each of the
following conditions is satisfied (or waived in accordance with Section 10.02):

          (a) On or prior to the Effective Date, (i) each of the Borrower, the Company, the
Administrative Agent and each of the Lenders shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Administrative Agent in accordance with
Section 10.01(a) or, in the case of the Lenders, shall have given to the Administrative Agent
written or written facsimile transmission notice (actually received) in accordance with
Section 10.01(a) that the same has been signed and mailed to the Administrative Agent; and (ii)
there shall have been delivered to the Administrative Agent for the account of each Lender that has
requested the same pursuant to Section 2.08(e) the appropriate promissory note or promissory notes,
executed by the Borrower, in each case, in the amount, maturity and as otherwise provided herein.

          (b) On the Effective Date, the Administrative Agent shall have received (i) an opinion, in
form and substance reasonably satisfactory to the Administrative Agent, addressed to the
Administrative Agent and each of the Lenders and dated the Effective Date, from Skadden, Arps,
Slate, Meagher & Flom LLP, special New York counsel to the Credit Parties, which opinion shall
cover the matters contained in Exhibit E-1 hereto and (ii) an opinion, in form and
substance reasonably satisfactory to the Administrative Agent, addressed to the Administrative
Agent and each of the Lenders and dated the Effective Date, from Appleby, special Bermuda counsel
to the Credit Parties, which opinion shall cover the matters covered in Exhibit E-2 hereto
and without duplication.

          (c) (i) On the Effective Date, the Administrative Agent shall have received, from each Credit
Party, a certificate, dated the Effective Date, signed by an Authorized Officer of such Credit
Party, and attested to by the Secretary or any Assistant Secretary of such Credit Party, in the
form of Exhibit F hereto with appropriate insertions and deletions, together with
(x) copies of its certificate of incorporation, by-laws or other organizational documents and
(y) the resolutions of the board of directors of such Credit Party relating to this Agreement which
shall be satisfactory to the Administrative Agent; (ii) On or prior to the Effective Date, all
corporate and legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance
to the Administrative Agent, and the Administrative Agent shall have received all information and
copies of all certificates, documents and papers, including certificates of existence or good
standing certificates, as applicable, and any other records of corporate proceedings and
governmental approvals, if any, which the Administrative Agent reasonably may have requested in
connection therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.

          (d) Since December 31, 2009, nothing shall have occurred or become known to the Administrative
Agent or the Required Lenders which, either individually or in the aggregate, has had, or would
reasonably be expected to have, a Material Adverse Effect.

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          (e) On the Effective Date, no actions, suits or proceedings by any entity (private or
governmental) shall be pending against the Company or any of its Significant Subsidiaries (i) with
respect to this Agreement or the Transaction or (ii) which, either individually or in the
aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect.

          (f) On the Effective Date, all governmental and third party approvals, permits and licenses
required to be obtained in connection with the Transaction on or prior to the Effective Date shall
have been obtained and remain in full force and effect.

          (g) On the Effective Date, the Company and its Significant Subsidiaries shall have no
outstanding preferred stock or Hybrid Capital or Indebtedness for borrowed money except preferred
stock or Hybrid Capital or Indebtedness set forth on Schedule 3.14 or set forth on the
balance sheet referred to in Section 3.09(a).

          (h) On the Effective Date, there shall exist no Default or Event of Default, and all
representations and warranties made by each Credit Party contained herein shall be true and correct
in all material respects (it being understood and agreed that any representation or warranty which
by its terms is made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).

          (i) On the Effective Date, each Significant Insurance Subsidiary (other than Talbot Insurance
(Bermuda), Ltd., an unrated Subsidiary that exclusively writes related party business within the
group comprising the Company and its Subsidiaries) shall have an A.M. Best financial strength
rating of at least “A-”.

          (j) On the Effective Date, the Company shall have paid the Administrative Agent and the
Lenders all fees, reasonable out-of-pocket expenses (including legal fees and expenses of the
Administrative Agent) and other compensation, in each case, to the extent invoiced and due and
payable on or prior to the Effective Date.

          (k) On the Effective Date, the Administrative Agent shall have received a letter from the
Service of Process Agent, presently located at 111 Eighth Avenue, New York, New York, 10011,
indicating its consent to its appointment by the Company and the Borrower as their agent to receive
service of process as specified in this Agreement is in full force and effect and applies to this
Agreement in all respects.

          The Administrative Agent shall notify the Company and the Lenders of the Effective Date, and
such notice shall be conclusive and binding.

          SECTION 4.02. Each Credit Event. The obligation of each Lender to make each
Loan is subject, at the time of, and after giving effect to, each such Credit Event, to the
satisfaction of the following conditions:

          (a) The Effective Date shall have occurred;

          (b) (i) There shall exist no Default or Event of Default and (ii) all representations and
warranties (excluding those set forth in Section 3.09(b)) contained herein shall be true and
correct in all material respects with the same effect as though such representations and warranties
had been made on the date of such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date);

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          (c) The Administrative Agent shall have received (i) a Borrowing Request meeting the
requirements of Section 2.03 with respect to each incurrence of Loans.

          Each occurrence of a Credit Event shall be deemed to constitute a representation and warranty
by the Company and the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section 4.02.

ARTICLE V

Affirmative Covenants

          Until the Total Commitment (and the Commitment of each Lender) has expired or been terminated
and the principal of and interest on each Loan, and all fees payable hereunder shall have been paid
in full, each Credit Party covenants and agrees with the Lenders that:

          SECTION 5.01. Information Covenants. The Company will furnish to the
Administrative Agent (for distribution to the Lenders):

          (a) Annual Financial Statements. As soon as available and in any event within 90
days after the close of each fiscal year of the Company, the consolidated balance sheet of the
Company and its Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income, changes in shareholders’ equity and cash flows of the Company and its
Subsidiaries for such fiscal year, setting forth in comparative form the consolidated figures for
the previous fiscal year, all in reasonable detail and accompanied by a report thereon of
PricewaterhouseCoopers or another independent registered public accounting firm of recognized
national standing selected by the Company (without a “going concern” or like qualification and
without any qualification or exception as to the scope of such audit), which report shall state
that such consolidated financial statements present fairly in all material respects the
consolidated financial position of the Company and its Subsidiaries as at the dates indicated and
their consolidated results of operations and cash flows for the periods indicated in conformity
with GAAP and that the audit by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing standards. The Company
shall be deemed to have delivered the same to the Administrative Agent if the Company files the
same with the SEC via EDGAR and notifies the Administrative Agent of such filing.

          (b) Quarterly Financial Statements. As soon as available and in any event within
60 days after the close of each of the first three quarterly accounting periods in each fiscal year
of the Company, consolidated balance sheets of the Company and its Subsidiaries as at the end of
such period and the related consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries for such period and (in the case of the second and
third quarterly periods) for the period from the beginning of the current fiscal year to the end of
such quarterly period, setting forth in each case in comparative form the consolidated figures for
the corresponding periods of the previous fiscal year, all in reasonable detail and certified by
the chief financial officer of the Company as presenting fairly in all material respects, in
accordance with GAAP, the information contained therein, subject to changes resulting from normal
year-end audit adjustments and the absence of full footnote disclosure. The Company shall be
deemed to have delivered the same to the Administrative Agent if the Company files the same with
the SEC via EDGAR and notifies the Administrative Agent of such filing.

          (c) Officer’s Certificates. At the time of the delivery of the financial statements
provided for in Sections 5.01(a) and 5.01(b), a certificate of a Financial Officer of the Company
(i) certifying that no Default or Event of Default has occurred or, if any Default or Event of
Default has occurred, specifying the nature and extent thereof and any action taken or proposed to
be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with the

37

 

provisions of Sections 6.10 and 6.11, as at the end of such fiscal year or quarter, as the
case may be, (iii) certifying that the Regulated Insurance Companies have maintained adequate
reserves and (iv) stating whether any change in GAAP or in the application thereof has occurred
since December 31, 2009 and, if any such change has occurred, specifying the effect of such change
on the financial statements accompanying such certificate.

          (d) Accounting Firm Certificate. At the time of the delivery of the financial
statements provided for in Section 5.01(a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained knowledge during the course of
their examination of such financial statements of any Default (which certificate may be limited to
the extent required by general accounting rules or guidelines or the guidelines of the applicable
accounting firm, to the extent generally applicable).

          (e) Notice of Default or Litigation. (x) Promptly after an Authorized Officer becomes
aware of the occurrence of any Default and/or any event or condition constituting, or which would
reasonably be expected to have, a Material Adverse Effect, a certificate of an Authorized Officer
of any Credit Party setting forth the details thereof and the actions which the Credit Parties are
taking or propose to take with respect thereto and (y) promptly after any Credit Party knows of the
commencement thereof, notice of any litigation, dispute or proceeding involving a claim against the
Company and/or any Subsidiary which claim has had, or would reasonably be expected to have, a
Material Adverse Effect.

          (f) Other Statements and Reports. Promptly upon the mailing thereof to the security
holders of the Company generally, copies of all financial statements, reports, proxy statements and
other documents so mailed, in each case setting forth any information that is material to the
Company and its Subsidiaries, taken as whole, as reasonably determined by the board of directors of
the Company, a duly authorized committee thereof or an Authorized Officer of the Company;
provided that the Company will not be required to provide any information relating to any
business transaction that has not otherwise been publicly disclosed to the extent that the Company
determines that disclosure of such information to the Lenders would either violate the terms of any
confidentiality agreement, arrangement or understanding with a third party or otherwise jeopardize
the success of such business transaction.

          (g) SEC Filings. Promptly upon the filing thereof, copies of (or, to the extent same
is publicly available via the SEC’s “EDGAR” filing system, written or electronic notification of
the filing of) all publicly available registration statements (other than the exhibits thereto and
any registration statements on Form S-8 or its equivalent) and annual or quarterly reports which
the Company shall have filed with the SEC or any national securities exchange.

          (h) Insurance Reports and Filings.

     (i) Promptly after the filing thereof, a copy of each annual
Statutory Statement filed by each Significant Insurance Subsidiary to the extent
required by the Applicable Insurance Regulatory Authority.

     (ii) Promptly following the delivery or receipt, as the case may be,
by any Significant Insurance Subsidiary or any of their respective Subsidiaries,
copies of (a) each registration, filing or submission made by or on behalf of any
Regulated Insurance Company with any Applicable Insurance Regulatory Authority,
except for policy form or rate filings, (b) each examination and/or audit report
submitted to any Regulated Insurance Company by any Applicable Insurance Regulatory
Authority, (c) all information which the Lenders may from time to time request with
respect to the nature or status of any deficiencies or violations reflected in any
examination report or other

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similar report, and (d) each report, order, direction, instruction, approval,
authorization, license or other notice which the Company, the Borrower or any
Regulated Insurance Company may at any time receive from any Applicable Insurance
Regulatory Authority, in each of (a) through (d), that is material to the Company
and its Subsidiaries, taken as a whole, as reasonably determined by the board of
directors of the Company, a duly authorized committee thereof or an Authorized
Officer of the Company.

     (iii) Promptly after filed with the Applicable Insurance Regulatory
Authority after the end of each fiscal year of the Company, a report by an
independent qualified actuary reviewing the adequacy of loss and loss adjustment
expense reserves as at the end of the last fiscal year of the Company and its
Subsidiaries on a consolidated basis, determined in accordance with SAP;
provided that the delivery of each such report shall be subject to the
consent of the applicable independent actuarial consulting firm, which the Company
shall use commercially reasonable efforts to obtain.

     (iv) Promptly following notification thereof from a Governmental
Authority, notification of the suspension, limitation, termination or non-renewal
of, or the taking of any other materially adverse action in respect of, any material
Insurance License.

          (i) Ratings Information. (i) Promptly after A.M. Best Company, Inc. shall have
announced a downgrade in the financial strength rating of Validus Re, written notice of such rating
change. (ii) Promptly after Moody’s or S&P shall have announced a change in the Index Rating
established or deemed to have been established, written notice of such rating change.

          (j) Other Information. With reasonable promptness, such other information or existing
documents (financial or otherwise) as the Administrative Agent or any Lender may reasonably request
from time to time (including, without limitation, information specifying Insurance Licenses and
other information related thereto).

          (k) Delivery of Information. Each Credit Party and each Lender hereby acknowledges
and agrees that notwithstanding anything to the contrary contained in Section 10.12 of this
Agreement, the Administrative Agent and/or the Company may make available to the Lenders materials
and/or information provided by or on behalf of any Credit Party under this Agreement by posting
such materials and/or information on IntraLinks or another similar electronic system reasonably
acceptable to the Administrative Agent and the Company.

          SECTION 5.02. Books, Records and Inspections. The Company will (i) keep,
and will cause each of its Subsidiaries to keep, proper books of record and account in which full,
true and correct entries in conformity with GAAP or SAP, as applicable, shall be made of all
dealings and transactions in relation to its business and activities; and (ii) subject to binding
contractual confidentiality obligations of the Company or its Subsidiaries to third parties and to
Section 10.12, permit, and will cause each of its Subsidiaries to permit, representatives of the
Administrative Agent or, during the continuation of an Event of Default, any Lender (at the
Administrative Agent’s or such Lender’s expense prior to the occurrence of an Event of Default and
at the Company’s expense (to the extent invoiced and reasonable) after an Event of Default has
occurred and is continuing) to visit and inspect any of their respective properties, to examine
their respective books and records and to discuss their respective affairs, finances and accounts
with their respective officers, employees and independent public accountants, in each case at such
reasonable times (which shall be, unless an Event of Default has occurred and is continuing, during
business hours, upon reasonable prior notice to the Administrative Agent, which notice shall be
promptly conveyed to the Company) and as often as may reasonably be desired; provided that,
unless a Default or Event of Default has occurred and is continuing, such visits and inspections
shall not occur more than

39

 

once in any calendar year. The Company agrees to cooperate and assist in such visits and
inspections. With respect to any such discussions with the Company’s or the Borrower’s independent
public accountants, the Company and the Borrower, respectively, shall be granted the opportunity to
participate therein.

          SECTION 5.03. Insurance. The Company will maintain, and will cause each of
its Subsidiaries to maintain (either in the name of the Company or in the Subsidiary’s own name)
with financially sound and reputable insurance companies, insurance on their property in at least
such amounts and against at least such risks as are usually insured against in the same general
area by companies of established repute engaged in the same or similar businesses.

          SECTION 5.04. Payment of Taxes and other Obligations. The Company will pay
and discharge, and will cause each of its Subsidiaries to pay and discharge, (i) all material
income taxes and all other material taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging to it and (ii) all other
material lawful claims, in each case, on a timely basis prior to the date on which penalties attach
thereto; provided that neither the Company nor any Subsidiary of the Company shall be required to
pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto in accordance with
GAAP.

          SECTION 5.05. Maintenance of Existence; Conduct of Business. The Company
shall maintain, and shall cause each of its Significant Subsidiaries to maintain, its existence and
the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade
names material to the conduct of its business, provided that the Company shall not be required to
maintain the existence of any of its Significant Subsidiaries or any such rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade names (a) if the Company
shall determine in good faith that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Significant Subsidiaries, taken as a whole or (b) in
connection with a Disposition permitted by Section 6.02. The Company will qualify and remain
qualified, and cause each of its Significant Subsidiaries to qualify and remain qualified, as a
foreign corporation in each jurisdiction where the Company or such Significant Subsidiary, as the
case may be, is required to be qualified, except in those jurisdictions in which the failure to
receive or retain such qualifications, either individually or in the aggregate, has not had, and
would not reasonably be expected to have, a Material Adverse Effect.

          SECTION 5.06. Compliance with Statutes, etc. The Company will, and will
cause each Significant Subsidiary to, comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property (including applicable
statutes, regulations, orders and restrictions relating to environmental standards and controls)
other than those the non-compliance with which, either individually or in the aggregate, has not
had, and would not reasonably be expected to have, a Material Adverse Effect.

          SECTION 5.07. ERISA. Promptly after the occurrence of any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan or Foreign Pension Plan,
the Company will furnish to each Lender a certificate of an Authorized Officer of the Company
setting forth details respecting such event or condition and the action if any, that the Company,
the applicable Subsidiary or the applicable ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be filed with or given to the PBGC or an applicable
foreign governmental agency by the Company, such Subsidiary or such ERISA Affiliate with respect to
such event or condition):

40

 

     (i)
any reportable event, as defined in subsections (c)(1), (2), (5) and (6),
and subsection (d)(2) of Section 4043 of ERISA and the regulations issued thereunder, with
respect to a Plan;

     (ii) the filing under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan under a distress termination or the distress termination of any Plan;

     (iii) the institution by the PBGC of proceedings under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company, any of its Subsidiaries or any of its ERISA Affiliates of a notice
from a Multiemployer Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan which would reasonably be expected to result in a liability to the
Company or any of its Subsidiaries in excess of $15,000,000;

     (iv) the receipt by the Company, any of its Subsidiaries or any of its ERISA
Affiliates of notice from a Multiemployer Plan that the Company, any of its Subsidiaries or
any of its ERISA Affiliates has incurred withdrawal liability under Section 4201 of ERISA in
excess of $15,000,000 or that such Multiemployer Plan is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA whereby a deficiency or additional assessment is levied or
threatened to be levied in excess of $15,000,000 against the Company, any of its
Subsidiaries or any of its ERISA Affiliates;

     (v) the institution of a proceeding by a fiduciary of any Plan or
Multiemployer Plan against the Company, any of its Subsidiaries or any of its ERISA
Affiliates to enforce Section 515 or 4219(c)(5) of ERISA asserting liability in excess of
$15,000,000, which proceeding is not dismissed within 30 days; and

     (vi) that any contribution in excess of $15,000,000 required to be made with
respect to a Foreign Pension Plan has not been timely made, or that the Company or any
Subsidiary of the Company may incur any liability in excess of $15,000,000 pursuant to any
Foreign Pension Plan (other than to make contributions in the ordinary course of business).

          SECTION 5.08. Maintenance of Property. The Company shall, and will cause
each of its Significant Subsidiaries to, maintain all of their properties and assets in good
condition, repair and working order, ordinary wear and tear excepted, except where failure to
maintain the same, either individually or in the aggregate, has not had, and would not reasonably
be expected to have, a Material Adverse Effect.

          SECTION 5.09. Maintenance of Licenses and Permits. The Company will, and
will cause each of its Significant Subsidiaries to, maintain all permits, licenses and consents as
may be required for the conduct of its business by any state, federal or local government agency or
instrumentality, except where failure to maintain the same, either individually or in the
aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect.

          SECTION 5.10. Further Assurances. Each Credit Party shall promptly and duly
execute and deliver to the Administrative Agent such documents and assurances and take such further
action as the Administrative Agent may from time to time reasonably request in order to carry out
more effectively the intent and purpose of this Agreement and to establish, protect and perfect the
rights and

41

 

remedies created or intended to be created in favor of the Administrative Agent or the Lenders
pursuant to this Agreement.

ARTICLE VI

Negative Covenants

          Until the Total Commitment (and the Commitment of each Lender) has expired or terminated and
the principal of and interest on each Loan and all fees payable hereunder have been paid in full,
each Credit Party covenants and agrees with the Lenders that:

          SECTION 6.01. Changes in Business or Organizational Documents. The Company
will not, and will not permit any of its Subsidiaries to, engage (directly or indirectly) in any
business other than (a) businesses in which they are engaged (or proposed to be engaged) as of the
Effective Date and reasonable extensions thereof, (b) other specialty insurance and structured risk
insurance and reinsurance product lines, and (c) any other businesses that are complementary or
reasonably related thereto and the conduct of business incidental thereto.

          SECTION 6.02. Consolidations, Mergers and Sales of Assets. The Company will
not, and will not permit any of its Subsidiaries to, consolidate or merge with or into any other
Person, or permit any other Person to merge into or consolidate with it; provided that, in
each case subject to compliance with Section 6.16, (i) the Company may merge with another Person,
if (x) the Company is the entity surviving such merger and (y) immediately after giving effect to
such merger, no Default or Event of Default shall have occurred and be continuing, (ii) any
Subsidiary may merge, consolidate or amalgamate with or into another Person, if (x) such Subsidiary
survives (or, in the case of an amalgamation, continues immediately following) such merger,
consolidation or amalgamation and (y) immediately after giving effect to such merger, consolidation
or amalgamation, no Default or Event of Default shall have occurred and be continuing,
(iii) Wholly-Owned Subsidiaries of the Company may merge with one another provided that if one of
the Subsidiaries is the Borrower, then the Borrower must be the surviving entity of such merger and
(iv) a Subsidiary of the Company (other than the Borrower) may merge or consolidate with any other
Person if immediately after giving effect to such merger no Default or Event of Default shall have
occurred and be continuing. In addition, the Company will not, nor will it permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of,
voluntarily or involuntarily, any of its properties or assets, tangible or intangible (each, a
“Disposition”), except (a) (1) such dispositions by the Company or any of its Subsidiaries
of any of their respective properties or assets to the Company or any Wholly-Owned Subsidiary of
the Company and (2) such dispositions by IPC or any of its Subsidiaries of any of their respective
properties or assets to IPC or any of its other Subsidiaries, (b) subject to Section 5.05, the
dissolution or winding up of any Subsidiary other than the Borrower, (c) Dispositions of used, worn
out, obsolete or surplus property of the Company or any Subsidiary in the ordinary course of
business and the assignment, cancellation, abandonment or other disposition of intellectual
property that is, in the reasonable judgment of the Company, no longer economically practicable to
maintain or useful in the conduct of the business of the Company and the Subsidiaries, taken as a
whole; (d) licenses (as licensor) of intellectual property so long as such licenses do not
materially interfere with the business of the Company or any of its Subsidiaries; (e) Dispositions
of cash, cash equivalents and investment securities (including pursuant to any securities lending
arrangements permitted by clause (u) of Section 6.03 and including in connection with the posting
of collateral (or the realization thereof) under the Five-Year Secured Letter of Credit Facility,
the Three-Year Unsecured Letter of Credit Facility, the Lloyd’s LC Facility or the IPC Facilities),
(f) releases, surrenders or waivers of contracts, torts or other claims of any kind as a result of
the settlement of any litigation or threatened litigation; (g) the granting or existence of Liens
permitted under this Agreement; (h) leases or subleases of real property so long as such leases or
subleases do not materially interfere with

42

 

the business of the Company and its Subsidiaries, taken as a whole; (i) Dividends permitted
under Section 6.08, (j) ceding of insurance or reinsurance in the ordinary course of business, (k)
other Dispositions of assets with a fair market value (as reasonably determined by the board of
directors or senior management of the Company) which in the aggregate do not exceed 10% of the
lesser of the book or fair market value of the property and assets of the Company determined on a
consolidated basis as of the last day of the previous fiscal year of the Company; provided
that immediately after giving effect (including pro forma effect) to any Disposition made pursuant
to this clause (k), no Event of Default shall have occurred and be continuing and (l) Dispositions
of investments made pursuant to Section 6.16(g).

          SECTION 6.03. Liens. Neither the Company nor any of its Subsidiaries will
permit, create, assume, incur or suffer to exist any Lien on any asset tangible or intangible now
owned or hereafter acquired by it, except:

          (a) Liens existing on the Effective Date and listed on Schedule 6.03 hereto;

          (b) Liens securing repurchase agreements constituting a borrowing of funds by the Company or
any Subsidiary in the ordinary course of business for liquidity purposes and in no event for a
period exceeding 90 days in each case;

          (c) Liens arising pursuant to purchase money mortgages, capital leases or security interests
securing Indebtedness representing the purchase price (or financing of the purchase price within
90 days after the respective purchase) of assets acquired by the Company or any of its
Subsidiaries;

          (d) Liens on any asset of any Person existing at the time such Person is merged or
consolidated with or into, or otherwise acquired by, the Company or any of its Subsidiaries or at
the time of acquisition of such asset by the Company or any of its Subsidiaries and not created in
contemplation of such event;

          (e) Liens securing obligations owed by the Company to any of its Subsidiaries or owed by any
Subsidiary of the Company to the Company or any other Subsidiary of the Company, in each case
solely to the extent that such Liens are required by an Applicable Insurance Regulatory Authority
for such Person to maintain such obligations;

          (f) Liens securing insurance or reinsurance obligations of Subsidiaries of the Company owed by
any Subsidiary to the Company or any other Subsidiary of the Company, in each case solely to the
extent that such Liens are required or requested by rating agencies, regulatory agencies, clients
or brokers for such Person to maintain such insurance and reinsurance obligations;

          (g) Liens on investments and cash balances of any Regulated Insurance Company securing
obligations of such Regulated Insurance Company in respect of trust or similar arrangements formed,
letters of credit issued or funds withheld balances established, in each case, in the ordinary
course of business for the benefit of policyholders or cedents to secure insurance or reinsurance
recoverables owed to them by such Regulated Insurance Company;

          (h) inchoate Liens for taxes, assessments or governmental charges or levies not yet due or
Liens for taxes, assessments or governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established in accordance with GAAP;

          (i) Liens in respect of property or assets of the Company or any of its Subsidiaries imposed
by law, which were incurred in the ordinary course of business and do not secure Indebtedness for
borrowed money, such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other

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similar Liens arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of the Company’s or such Subsidiary’s property or
assets or materially impair the use thereof in the operation of the business of the Company or such
Subsidiary or (y) which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property or assets subject
to any such Lien;

          (j) Licenses, sublicenses, leases, or subleases granted to other Persons not materially
interfering with the conduct of the business of the Company or any of its Subsidiaries;

          (k) easements, rights-of-way, restrictions, encroachments and other similar charges or
encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not
materially interfering with the conduct of the business of the Company or any of its Subsidiaries;

          (l) Liens arising out of the existence of judgments or awards not constituting an Event of
Default under Section 7.07;

          (m) Liens (other than Liens imposed under ERISA) incurred in the ordinary course of business
in connection with workers compensation claims, unemployment insurance and social security benefits
and Liens securing the performance of bids, reinsurance obligations, tenders, leases and contracts
in the ordinary course of business, statutory obligations, surety bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business and consistent with
past practice (exclusive of obligations in respect of payment for borrowed money);

          (n) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to
cash and cash equivalents on deposit in one or more accounts maintained by the Company or any of
its Subsidiaries, in each case granted in the ordinary course of business in favor of the bank or
banks with which such accounts are maintained;

          (o) Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness
secured by any Lien permitted by any of the clauses of this Section 6.03, provided that such
Indebtedness is not increased and is not secured by any additional assets;

          (p) Liens created pursuant to the Five-Year Secured Letter of Credit Facility (including the
security documents thereunder) and the Three-Year Unsecured Letter of Credit Facility;

          (q) Liens in respect of property or assets of any Subsidiary of the Company securing
Indebtedness of the type described in clause (e) of the definition of “Permitted Subsidiary
Indebtedness” or securing the Lloyd’s LC Facility;

          (r) Liens in respect of property or assets of any Subsidiary of the Company securing
Indebtedness of the type described in clause (h) of the definition of “Permitted Subsidiary
Indebtedness”; provided that (i) the aggregate amount of such Liens (measured, as to each
such Lien permitted under this clause (r), as the greater of the amount secured by such Lien and
the fair market value at such time of the assets subject to such Lien) shall not, when added to the
aggregate amount of all Liens (measured as set forth in this clause (r) above) incurred pursuant to
Section 6.03(w) and the aggregate amount of outstanding unsecured Indebtedness of Subsidiaries
incurred pursuant to clause (h) of the definition of “Permitted Subsidiary Indebtedness”, exceed at
any time 5% of Consolidated Net Worth at the time of incurrence of any new Liens under this
clause (r) and (ii) immediately after giving effect to the incurrence of any Lien pursuant to this
Section 6.03(r), no Event of Default shall have occurred and be continuing;

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          (s) Liens on assets received by or of the Company or its Subsidiaries and held in trust in
respect of, or deposited or segregated to secure, liabilities assumed in the course of the
reinsurance business or under any Insurance Contracts, Reinsurance Agreements, Fronting
Arrangements or other indemnity arrangements entered in the ordinary course of business;

          (t) Liens not securing indebtedness for borrowed money on cash and securities arising in the
ordinary course of business in connection with the structured risk insurance and reinsurance
product lines of the Company and its Subsidiaries;

          (u) Liens arising in connection with securities lending arrangements entered into by the
Company or any of its Subsidiaries with financial institutions in the ordinary course of business
so long as any securities subject to any such securities lending arrangement do not constitute
Collateral; and

          (v) Liens on insurance policies and the proceeds thereof securing Indebtedness permitted by
clause (h) of the definition of “Permitted Subsidiary Indebtedness”; and

          (w) without duplication of the Liens described in clauses (a) through (v) above, additional
Liens securing obligations of the Company; provided that (i) the aggregate amount of such
Liens (measured, as to each such Lien permitted under this clause (w), as the greater of the amount
secured by such Lien and the fair market value at such time of the assets subject to such Lien)
shall not, when added to the aggregate amount of all Liens (measured as set forth in this clause
(v) above) incurred pursuant to Section 6.03(r) and the aggregate amount of outstanding unsecured
Indebtedness of Subsidiaries incurred pursuant to clause (i) of the definition of “Permitted
Subsidiary Indebtedness”, exceed at any time 5% of Consolidated Net Worth at the time of incurrence
of any new Liens under this clause (w) and (ii) immediately after giving effect to the incurrence
of any Lien pursuant to this Section 6.03(w), no Event of Default shall have occurred and be
continuing.

          SECTION 6.04. Indebtedness. (a) The Company will not create, incur, assume
or permit to exist any Indebtedness, or become or remain liable (contingent or otherwise) to do any
of the foregoing, except for the Indebtedness under this Agreement or the Five-Year Secured Letter
of Credit Facility or the Three-Year Unsecured Letter of Credit Facility or the Lloyd’s LC Facility
and other Indebtedness which is either pari passu with, or subordinated in right of payment to,
such Indebtedness (it being understood that unsecured Indebtedness is not subordinate to secured
Indebtedness solely because it is unsecured, and Indebtedness that is not guaranteed by a
particular Person is not deemed to be subordinate to Indebtedness that is so guaranteed solely
because it is not so guaranteed).

          (b) The Company will not permit any of its Subsidiaries to create, incur, assume or permit to
exist any Indebtedness, or become or remain liable (contingent or otherwise) to do any of the
foregoing, except for Permitted Subsidiary Indebtedness and the Lloyd’s LC Facility.

          SECTION 6.05. Sale and Lease-Back Transactions. The Company will not, and
will not permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer any property, real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property sold or transferred,
except for any such sale of any fixed or capital assets by the Company or any Subsidiary that is
made for cash consideration in an amount not less than the fair value of such fixed or capital
asset and is consummated within 90 days after the Company or such Subsidiary acquires or completes
the construction of such fixed or capital asset, provided that, if such sale and leaseback
results in a Capital Lease Obligation, such Capital Lease Obligation is permitted by Section 6.04
and any Lien made the subject of such Capital Lease Obligation is permitted by

45

 

Section 6.03; provided, that this Section 6.05 shall not prohibit Capital Markets
Products entered into in the ordinary course of business and not for speculative purposes.

          SECTION 6.06. Issuance of Stock. The Company will not permit any of its
Subsidiaries to directly or indirectly issue, sell, assign, pledge, or otherwise encumber or
dispose of any shares of their preferred or preference equity securities or options to acquire
preferred or preference equity securities. For the avoidance of doubt, this Section 6.06 does not
relate to the issuance or sale of ordinary or common equity or options relating thereto.

          SECTION 6.07. Dissolution. The Company and the Borrower shall not suffer or
permit dissolution or liquidation either in whole or in part, except through corporate
reorganization to the extent permitted by Section 6.02.

          SECTION 6.08. Restricted Payments. The Company will not declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity
Interests now or hereafter outstanding, return any capital to its stockholders, partners or members
(or the equivalent Persons thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or the equivalent Persons
thereof) as such, or permit any of its Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any Equity Interests in the Company or to sell any Equity Interests
therein (each of the foregoing a “Dividend” and, collectively, “Dividends”)
provided that this Section 6.08 shall not prohibit Dividends so long as before and after giving
effect (including pro forma effect) thereto, no Default or Event of Default shall have occurred and
be continuing. Notwithstanding the foregoing, the Company may declare and pay cash dividends or
distributions in respect of (i) any trust preferred security, deferrable interest subordinated debt
security, mandatory convertible debt or other hybrid security (including Hybrid Capital) that, at
the time of issuance thereof or at any time prior to the initial dividend or distribution
thereunder, was accorded equity treatment by S&P and/or (ii) any Preferred Security, if, at the
time of and after giving pro forma effect to such dividend or distribution, no Event of Default
under Sections 7.01, 7.04(a)(i) or 7.05 shall have occurred and be continuing.

          SECTION 6.09. Transactions with Affiliates. Neither the Company nor any of
its Subsidiaries shall enter into or be a party to, a transaction with any Affiliate of the Company
or such Subsidiary (which Affiliate is not the Company or a Subsidiary), except (i) transactions
with Affiliates on terms no less favorable to the Company or such Subsidiary than those that could
have been obtained in a comparable transaction on an arm’s length basis from an unrelated Person,
as reasonably determined by the board of directors of the Company or a duly authorized committee
thereof, (ii) Dividends not prohibited by Section 6.08, (iii) fees and compensation paid to and
indemnities provided on behalf of officers and directors of the Company or any of its Subsidiaries
as reasonably determined in good faith by the board of directors, the audit committee or senior
management of the Company, (iv) the issuance of common stock of the Company, (v) loans and advances
to officers and directors made in the ordinary course of business and in compliance with Section
6.16, and (vi) the transactions and payments set forth on Schedule 6.09 and amendments
thereto that are not materially adverse to the Lenders, as reasonably determined by the board of
directors of the Company, a duly authorized committee thereof or an Authorized Officer of the
Company.

          SECTION 6.10. Maximum Leverage Ratio. The Company will not permit the
Leverage Ratio at any time to be greater than 0.35:1.00.

          SECTION 6.11. Minimum Consolidated Net Worth. The Company will not permit
Consolidated Net Worth at any time to be less than the Minimum Consolidated Net Worth Amount in
effect at such time.

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          SECTION 6.12. Limitation on Certain Restrictions on Subsidiaries. The
Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by the Company or any of its
Subsidiaries, or pay any Indebtedness owed to the Company or any of its Subsidiaries, (b) make
loans or advances to the Company or any of its Subsidiaries or (c) transfer any of its properties
or assets to the Company or any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) applicable Legal Requirements, including any Applicable
Insurance Regulatory Authority, (ii) this Agreement, (iii) customary provisions restricting
subletting or assignment of any lease governing any leasehold interest of the Company or any of its
Subsidiaries, (iv) customary provisions restricting assignment of any licensing agreement (in which
the Company or any of its Subsidiaries is the licensee) or other contract (including leases)
entered into by the Company or any of its Subsidiaries in the ordinary course of business,
(v) restrictions on the transfer of any asset pending the close of the sale of such asset,
(vi) restrictions on the transfer of any asset as a result of a Lien permitted by Section 6.03,
(vii) agreements entered into by a Regulated Insurance Company with an Applicable Insurance
Regulatory Authority or ratings agency in the ordinary course of business, (viii) customary
provisions in partnership agreements, limited liability company organizational governance
documents, joint venture agreements and other similar agreements entered into in the ordinary
course of business that restrict the transfer of ownership interests in such partnership, limited
liability company, joint venture or similar Person, (ix) restrictions on cash or other deposits or
net worth imposed by customers under contracts (including Insurance Contracts, Fronting
Arrangements and Reinsurance Agreements) entered into in the ordinary course of business, pursuant
to an agreement or instrument relating to any Permitted Subsidiary Indebtedness of the type
described in clause (d) of the definition thereof if the encumbrances and restrictions contained in
any such agreement or instrument taken as a whole are not materially less favorable to the Lenders
than the encumbrances and restrictions contained in this Agreement, (x) any encumbrances or
restrictions imposed by any amendments or refinancings of the contracts, instruments or obligations
referred to in clause (ix) above provided that such amendments or refinancings are no more
materially restrictive with respect to such encumbrances and restrictions than those prior to such
amendment or refinancing, (xi) restrictions placed in accordance with the Segregated Account
Companies Act 2000 of Bermuda on the transfer of any asset held, carried or deposited in a
segregated account of a Protected Cell Company, (xii) restrictions contained in (A) the Five-Year
Secured Letter of Credit Facility and the other “Credit Documents” referred to (and defined)
therein and (B) the Three-Year Unsecured Letter of Credit Facility and the other “Credit Documents”
referred to (and defined therein), (xiii) agreements and arrangements set forth on Schedule
6.12 and (xiv) encumbrances or restrictions existing under the Lloyd’s LC Facility or the IPC
Facilities or under any other secured Indebtedness permitted under Sections 6.03 and 6.04 so long
as such encumbrances and restrictions are customary for such Indebtedness and are no more
restrictive, taken as a whole, than the comparable encumbrances and restrictions set forth in this
Agreement as determined in the good faith judgment of the board of directors of the Company.

          SECTION 6.13. Private Act. No Credit Party will become subject to a Private
Act.

          SECTION 6.14. Claims Paying Ratings. The Company shall ensure that Validus
Re and each other Regulated Insurance Company that is material to the Company and its Subsidiaries,
taken as a whole, has in effect, at all times, a current financial strength rating of no less than
“B++” from A.M. Best Company, Inc. (or its successor).

          SECTION 6.15. End of Fiscal Years; Fiscal Quarters. The Company will cause
(i) each of its, and each of its Subsidiaries’, fiscal years to end on December 31 of each year and
(ii) each

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of its, and each of its Subsidiaries’, fiscal quarters to end on dates which are consistent
with a fiscal year end as described above.

          SECTION 6.16. Investments, Loans, Advances and Guarantees. The Company will
not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any other interest in,
any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit (each, an “Investment”), except for:

          (a) Cash Equivalents and Eligible Securities;

          (b) Investments existing on the date hereof and set forth on Schedule 6.16;

          (c) investments by the Company or its Subsidiaries in the capital stock of its direct or
indirect subsidiaries;

          (d) loans or advances made by the Company to any Subsidiary and made by any Subsidiary to the
Company or any other Subsidiary;

          (e) Guarantees constituting Indebtedness permitted by Section 6.04;

          (f) intercompany Indebtedness permitted under Section 6.04;

          (g) Investments that are not permitted by any other clause of this Section 6.16 and that, in
the aggregate, do not exceed 30% of Consolidated Net Worth at the time of the making of any new
Investment under this clause (g), provided that immediately after giving pro forma effect
to any such Investment, no Default shall have occurred and be continuing;

          (h) payroll, travel and similar advances to directors, officers and employees of the
Company or any Subsidiary that are made in the ordinary course of business; and

          (i) Investments of any Person in existence at the time such Person becomes a Subsidiary;
provided such Investment was not made in connection with or anticipation of such Person
becoming a Subsidiary and any modification, replacement, renewal or extension thereof.

For purposes of covenant compliance with Section 6.16(g), the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or decreases in the value of
such Investment, less any amount paid, repaid, returned, distributed or otherwise received in cash
in respect of such Investment.

ARTICLE VII

Events of Default

          If any of the following events (“Events of Default”) shall occur:

          SECTION 7.01. Payments. The Borrower shall (a) default in the payment when
due of any principal on any Loan, (b) default, and such default shall continue for three or more
Business

48

 

Days, in the payment when due of any interest on any Loan, (c) default, and such default shall
continue for five or more Business Days, in the payment when due of any fees or any other amounts
payable hereunder; or

          SECTION 7.02. Representations, etc. Any representation, warranty or
statement made (or deemed made) by any Credit Party herein or in any certificate or statement
delivered or required to be delivered pursuant hereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or

          SECTION 7.03. Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in Section 5.01(e),
5.01(h)(iv), 5.02(ii), 5.05 (but only with respect to the first sentence thereof) or Article VI, or
(b) default in the due performance or observance by it of any term, covenant or agreement (other
than those referred to in Section 7.01 or clause (a) of this Section 7.03) contained in this
Agreement and such default shall continue unremedied for a period of 30 days after written notice
to the Borrower from the Administrative Agent or the Required Lenders; or

          SECTION 7.04. Default under other Agreements. (a) The Company, the
Borrower, any Regulated Insurance Company or any Significant Subsidiary shall (i) default in any
payment with respect to Indebtedness (other than any Indebtedness hereunder but including
Indebtedness under the Five-Year Secured Letter of Credit Facility and Indebtedness under the
Three-Year Unsecured Letter of Credit Facility) in excess of $50,000,000 individually or in the
aggregate, for the Company and its Subsidiaries or (ii) default in the observance or performance of
any agreement or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or to permit (after the
expiration of any applicable grace period provided in the applicable agreement or instrument under
which such Indebtedness was created) the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (with or without the giving of notice, the
lapse of time or both), any such Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; (b) an “Event of
Default”, as defined under the Five-Year Secured Letter of Credit Facility, shall have occurred and
be continuing, or an “Event of Default” under the Three-Year Unsecured Letter of Credit Facility,
shall have occurred and be continuing; or (c) Indebtedness of one or more of the Persons listed in
clause (a) above in excess of $50,000,000 shall be declared to be due and payable or required to be
prepaid, other than by a regularly scheduled required prepayment or as a mandatory prepayment
(unless such required prepayment or mandatory prepayment results from a default thereunder or an
event of the type that constitutes an Event of Default), prior to the scheduled maturity thereof;
or

          SECTION 7.05. Bankruptcy, etc. The Company, the Borrower, any Regulated
Insurance Company or any Significant Subsidiary shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or
any successor thereto (the “Bankruptcy Code”); or an involuntary case is commenced against
any such Person and the petition is not dismissed within 60 days, after commencement of the case;
or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of any such Person or any such Person commences (including by way
of applying for or consenting to the appointment of, or the taking of possession by, a
rehabilitator, receiver, custodian, trustee, conservator, administrator or liquidator or other
similar official in any jurisdiction (collectively, a “conservator”) of itself or all or
any substantial portion of its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, administration,
liquidation, rehabilitation, supervision, conservatorship or similar law of any jurisdiction or the
Bermuda Companies Law whether now or hereafter in effect relating to any such Person; or any such
proceeding is

49

 

commenced against any such Person and such proceeding is not dismissed within 60 days; or any
such Person is adjudicated insolvent or bankrupt; or any order of relief or other order approving
any such case or proceeding is entered; or any such Person suffers any appointment of any
conservator or the like for it or any substantial part of its property which continues undischarged
or unstayed for a period of 60 days; or any such Person makes a general assignment for the benefit
of creditors; or any corporate action is taken by any such Person for the purpose of effecting any
of the foregoing; or

          SECTION 7.06. ERISA. (i) An event or condition specified in Section 5.07
shall occur or exist with respect to any Plan or Multiemployer Plan or Foreign Pension Plan,
(ii) the Company, any of its Subsidiaries or any of its ERISA Affiliates shall fail to pay when due
any amount which they shall have become liable to pay to the PBGC or to a Plan or a Multiemployer
Plan under Title IV of ERISA, or (iii) a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Plan must be terminated, and as a result of such
event, failure or condition, together with all such other events, failures or conditions, the
Company, any of its Subsidiaries or any of its ERISA Affiliates shall be reasonably likely to incur
a liability to a Plan, a Multiemployer Plan, a Foreign Pension Plan or PBGC (or any combination of
the foregoing) in an aggregate amount of $50,000,000 or more; or

          SECTION 7.07. Judgments. One or more judgments or decrees shall be entered
against the Company, the Borrower, any Regulated Insurance Company or any Significant Subsidiary
involving a liability, net of undisputed insurance and reinsurance, of $50,000,000 or more in the
case of any one such judgment or decree or in the aggregate for all such judgments and decrees for
such Persons and any such judgments or decrees shall not have been vacated, discharged, satisfied,
stayed or bonded pending appeal within 60 days from the entry thereof; or

          SECTION 7.08. Insurance Licenses. Any one or more Insurance Licenses of the
Company or any of its Subsidiaries shall be suspended, limited or terminated or shall not be
renewed, or any other action shall be taken by any Governmental Authority, and such suspension,
limitation, termination, non-renewal or action, either individually or in the aggregate, has had,
or would reasonably be expected to have, a Material Adverse Effect; or

          SECTION 7.09. Change of Control. A Change of Control shall occur; or

          SECTION 7.10. Company Guaranty. The Company Guaranty or any provision
thereof shall cease to be in full force or effect, or any Person acting by or on behalf of the
Company shall deny or disaffirm in writing the Company’s obligations under the Company Guaranty, or
the Company shall default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to the Company Guaranty;

then, and in any such event, and at any time thereafter, if an Event of Default shall then be
continuing, the Administrative Agent may, or upon the written request of the Required Lenders
shall, by written notice to the Borrower, take any or all of the following actions, without
prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against any
Credit Party, except as otherwise specifically provided for in this Agreement (provided
that if an Event of Default specified in Section 7.05 shall occur with respect to any Credit Party,
the result which would occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i) and (ii) below shall occur automatically without the giving of any such
notice): (i) declare the Total Commitment terminated, whereupon the Commitment of each Lender
shall forthwith terminate immediately; and (ii) declare the principal of and any accrued interest
and fees in respect of all obligations owing hereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each Credit Party. Unless directed to do so by the Required

50

 

Lenders in accordance with the terms of this Agreement, the Administrative Agent shall have no
obligation to undertake any of the foregoing actions, and, if it takes any such action it shall
have no liability to any Credit Party to continue the same or for the sufficiency or adequacy
thereof. At the request of the Administrative Agent, each Credit Party shall ratify all actions
taken by the Administrative Agent hereunder.

ARTICLE VIII

The Administrative Agent

          SECTION 8.01. Appointment. Each of the Lenders hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms
hereof, together with such actions and powers as are reasonably incidental thereto.

          SECTION 8.02. Administrative Agent in its Individual Capacity. The bank
serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity
as a Lender as any other Lender and may exercise the same as though it were not the Administrative
Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any of its Subsidiaries or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

          SECTION 8.03. Exculpatory Provisions. The Administrative Agent shall not
have any duties or obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing as directed by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02), and (c) except as expressly set forth herein, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Company or any of its Subsidiaries that is communicated to or obtained
by the bank serving as the Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 10.02) or in the absence of its
own gross negligence or willful misconduct. The Administrative Agent shall not be deemed to have
knowledge of any Default unless and until written notice thereof is given to the Administrative
Agent by the Company, the Borrower or a Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set forth herein,
(iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV
or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to
the Administrative Agent.

          SECTION 8.04. Reliance. The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Administrative Agent also may rely upon any
statement made to it orally or by

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telephone and believed by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for
the Company or the Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

     SECTION 8.05. Delegation of Duties. The Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as well as activities
as the Administrative Agent.

          SECTION 8.06. Resignation. Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by notifying the
Lenders and the Company. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor administrative agent with the consent of the Company (not to be unreasonably
withheld or delayed), provided that no such consent shall be required at any time when a Default or
Event of Default exists. If no successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent which shall be a bank with an office in London, United
Kingdom or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative
Agent hereunder by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Credit Parties to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Company and such successor. After
the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.03
shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to be taken by any of
them while it was acting as Administrative Agent.

          SECTION 8.07. Non-Reliance. Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

ARTICLE IX

Company Guaranty

          SECTION 9.01. The Company Guaranty. In order to induce the Lenders to enter into this Agreement and to extend credit
hereunder and in recognition of the direct benefits to be received by the Company and the Borrower
from the making of Loans, the Company hereby agrees with the Lenders as follows: the Company hereby
unconditionally and irrevocably guarantees, as primary obligor

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and not merely as surety, the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of
the Guaranteed Obligations of the Borrower to the Guaranteed Creditors. If any or all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors becomes due and payable
hereunder, the Company unconditionally promises to pay such Guaranteed Obligations to the
Guaranteed Creditors, or order, on demand, together with any and all expenses which may be incurred
by the Guaranteed Creditors in collecting any of the Guaranteed Obligations. This Company Guaranty
is a guaranty of payment and not of collection. If a claim is ever made upon any Guaranteed
Creditor for repayment or recovery of any amount or amounts received in payment or on account of
any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount
by reason of (i) any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any
such claim effected by such payee with any such claimant, then and in such event the Company agrees
that any such judgment, decree, order, settlement or compromise shall be binding upon the Company,
notwithstanding any revocation of this Company Guaranty or any other instrument evidencing any
liability of the Borrower, and the Company shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.

          SECTION 9.02. Bankruptcy. Additionally, the Company unconditionally and irrevocably guarantees the payment of
any and all of the Guaranteed Obligations of the Borrower hereunder to the Guaranteed Creditors
whether or not due or payable by the Borrower upon the occurrence of any of the events specified in
Section 7.05 with respect to the Borrower, and unconditionally promises to pay such indebtedness to
the Guaranteed Creditors, or order, on demand, in lawful money of the United States.

          SECTION 9.03. Nature of Liability. The liability of the Company hereunder is exclusive and independent of any other
guaranty of the Guaranteed Obligations of the Borrower whether executed by the Company, any other
guarantor or by any other party, and the liability of the Company hereunder is not affected or
impaired by (a) any direction as to application of payment by the Borrower or by any other party
(other than a direction by the Guaranteed Creditor receiving such payment), or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the Guaranteed Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Guaranteed Creditors on the Guaranteed
Obligations which any such Guaranteed Creditor repays to the Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and the
Company waives any right to the deferral or modification of its obligations hereunder by reason of
any such proceeding or (f) any action or inaction of the type described in Section 9.05.

          SECTION 9.04. Independent Obligation. The obligations of the Company under this Article IX are independent of the
obligations of any other guarantor, any other party or the Borrower, and a separate action or
actions may be brought and prosecuted against the Company whether or not action is brought against
any other guarantor, any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. The Company waives, to the
full extent permitted by law, the benefit of any statute of limitations affecting its liability
under this Article IX or the enforcement thereof. Any payment by the Borrower or other
circumstance which operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to the Company.

          SECTION 9.05. Authorization. The obligations of the Company under this Article IX shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be released, discharged
or otherwise affected by any action taken by any Guaranteed Creditor to:

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          (a) change the manner, place or terms of payment of, and/or change or extend the time of
payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including any
increase or decrease in the rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;

          (b) take and hold security for the payment of the Guaranteed Obligations and sell, exchange,
release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the
Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst, except to the extent the
Guaranteed Obligations have been paid;

          (c) exercise or refrain from exercising any rights against the Borrower or others or otherwise
act or refrain from acting;

          (d) release or substitute any one or more endorsers, guarantors, the Borrower or other
obligor;

          (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any
liability (including any of those hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Borrower to its creditors other than the Guaranteed Creditors;

          (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of
the Borrower to the Guaranteed Creditors regardless of what liability or liabilities of the
Borrower remain unpaid;

          (g) consent to or waive any breach of, or any act, omission or default under, this Agreement
or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify
or supplement this Agreement or any of such other instruments or agreements; and/or

          (h) take any other action which would, under otherwise applicable principles of common law,
give rise to a legal or equitable discharge of the Company from its liabilities under this Company
Guaranty.

          SECTION 9.06. Reliance. It is not necessary for the Guaranteed Creditors to inquire into the capacity or
powers of the Borrower or the officers, directors, partners or agents acting or purporting to act
on their behalf, and any Guaranteed Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.

          SECTION 9.07. Subordination. Any indebtedness of the Borrower now or hereafter owing to the Company is hereby
subordinated to the Guaranteed Obligations of the Borrower owing to the Guaranteed Creditors; and
if the Administrative Agent so requests at a time when an Event of Default exists, the Borrower
shall not make, or be permitted to make, any payment to the Company in respect of such indebtedness
owed to the Company, but without affecting or impairing in any manner the liability of the Company
under the other provisions of this Company Guaranty. Prior to the transfer by the Company of any
note or negotiable instrument evidencing any of the indebtedness of the Borrower to the Company,
the Company shall mark such note or negotiable instrument with a legend that the same is subject to
this subordination. Without limiting the generality of the foregoing, the Company hereby agrees
with the Guaranteed Creditors that it will not exercise any right of subrogation which it may at
any

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time otherwise have as a result of this Company Guaranty (whether contractual, under Section
509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably
paid in full in cash.

          SECTION 9.08. Waiver. (a) The Company waives any right (except as shall be required by applicable
statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against the
Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held
from the Borrower, any other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor’s power whatsoever. The Company waives any defense based on or arising out of
any defense of the Borrower, any other guarantor or any other party, other than payment in full of
the Guaranteed Obligations, based on or arising out of the disability of the Borrower, any other
guarantor or any other party, or the unenforceability of the Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the Borrower other than
payment in full of the Guaranteed Obligations. The Guaranteed Creditors may exercise any right or
remedy the Guaranteed Creditors may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of the Company hereunder except to the
extent the Guaranteed Obligations have been paid. The Company waives any defense arising out of
any such election by the Guaranteed Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of the Company
against the Borrower or any other party or any security.

          (b) The Company waives all presentments, demands for performance, protests and notices,
including notices of non-performance, notices of protest, notices of dishonor, notices of
acceptance of this Company Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. The Company assumes all responsibility for being and keeping
itself informed of the Borrower’s financial condition and assets, and of all other circumstances
bearing upon the risk of non-payment of the Guaranteed Obligations and the nature, scope and extent
of the risks which the Company assumes and incurs hereunder, and agrees that the Guaranteed
Creditors shall have no duty to advise the Company of information known to them regarding such
circumstances or risks.

          (c) The Company warrants and agrees that each of the waivers set forth above in this
Section 9.08 is made with full knowledge of its significance and consequences, and such waivers
shall be effective to the maximum extent permitted by law.

ARTICLE X

Miscellaneous

          SECTION 10.01. Notices. (a) Except in the case of notices and other communications expressly permitted to
be given by telephone or electronically (and subject to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile, as follows:

     (i) if to the Company or the Borrower, (x) to it at 29 Richmond Road,
Pembroke, HM08 Bermuda, Attention: Chief Financial Officer (Facsimile: (441) 278-9090) and
(y) with a copy (in the case of a notice of a Default) to Skadden, Arps, Slate, Meagher &
Flom LLP, Four Times Square, New York, New York 10036 Attention: Steven Messina (Facsimile:
(917) 777-3509);

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     (ii) if to the Administrative Agent, to Lloyds TSB Bank plc, Wholesale Loans
Servicing, Bank House, Wine Street, Bristol, BS1 2AN United Kingdom, Attention: Bilateral
Loans Team (Facsimile No. +44 20 7158 3204), with a copy to 1st Floor, 25 Gresham Street,
London, EC2V 7HN United Kingdom, Attention: Mark Jackson (Facsimile No. +44 20 7661 4790);
and

     (iii) if to any other Lender, to it at its address (or facsimile number) set
forth in its Administrative Questionnaire.

          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to (x) Article II unless
otherwise agreed by the Administrative Agent and the applicable Lender or (y) Section 5.01(e)(x).
The Administrative Agent, the Company or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be limited to particular
notices or communications.

          (c) Any party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.

          SECTION 10.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent or any Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such
a right or power, preclude any other or further exercise thereof or the exercise of any other right
or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any Credit Party therefrom
shall in any event be effective unless the same shall be permitted by paragraph (b) of this
Section 10.02, and then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the foregoing, the making of
any Loan shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.
In the case of any waiver, the Company, the Borrower, the Administrative Agent and the Lenders
shall be restored to their former positions and rights hereunder and any Default or Event of
Default so waived shall be deemed to be cured and not continuing. No such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right consequent thereon.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Company, the Borrower and the
Required Lenders or by the Company, the Borrower and the Administrative Agent with the consent of
the Required Lenders; provided that no such agreement shall (i) increase the Commitment or
the Credit Exposure of any Lender without the written consent of such Lender, (ii) reduce the
amount of any amount due under any Loan or reduce any interest or fees payable hereunder, without
the written consent of each Lender affected thereby, (iii) postpone the scheduled date for payment
of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment, or postpone the scheduled date of expiration of the Commitments,
without the written consent of each Lender affected thereby, (iv) change Section 2.15(b) or (c) in
a manner that would alter the pro rata sharing of payments required thereby or change any of the
provisions of this Section 10.02 or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of

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Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of
each Lender, or (v) release the Company from the Company Guaranty (or change the Company Guaranty
in a manner that is materially adverse to the Lenders), without the written consent of each Lender;
and provided, further, that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent hereunder without the prior written consent of the
Administrative Agent. Notwithstanding the foregoing or any other provision of this Agreement, any
provision of this Agreement may be amended by an agreement in writing entered into by the Company,
the Super-Majority Lenders and the Administrative Agent if (x) by the terms of such agreement the
Commitment of each Lender not consenting to the amendment provided for therein shall terminate (it
being understood that the Company or the Borrower may cause the Commitment of any such
non-consenting Lender to be assigned to one or more new Lenders in accordance with Section 10.04;
provided that no action shall be required to be taken by such non-consenting Lender
(including the execution of any Assignment and Assumption Agreement)) and (y) at the time such
amendment becomes effective, each Lender not consenting thereto receives payment in full of all
amounts owing to it or accrued for its account under this Agreement.

          SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a) Each Credit Party jointly and severally agrees to pay (i) all out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel, in connection with the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) or protection of its rights
hereunder or thereunder, and (ii) all out-of-pocket expenses incurred by the Administrative Agent
or any Lender, including the reasonable fees, charges and disbursements of one primary counsel and
all applicable foreign counsel thereto, in connection with the enforcement of its rights in
connection with this Agreement, including its rights under this Section, or in connection with the
Loans made hereunder, including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.

          (b) Each Credit Party jointly and severally agrees to indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (each such Person being called
an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the fees, charges and disbursements of
any counsel for such Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement
or instrument contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or any other transactions contemplated hereby, (ii) any Loan or the use of
the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on
or from any property owned or operated by the Company or any of its Subsidiaries, or any
Environmental Liability related in any way to the Company or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory and regardless of whether such
Indemnitee is a party thereto or whether such claim, litigation, investigation or proceeding is
brought by the Company or any of its Subsidiaries or a third party; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from the gross negligence or willful misconduct of such
Indemnitee or any Related Party of such Indemnitee.

          (c) To the extent that any Credit Party fails to pay any amount required to be paid by it to
the Administrative Agent, under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent such Lender’s Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that

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the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the Administrative Agent,
in its capacity as such.

          (d) To the extent permitted by applicable law, no Credit Party shall assert, and each Credit
Party hereby waives, any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, any Loan or the use of the proceeds thereof.

          (e) All amounts due under this Section shall be payable promptly after written demand
therefor.

          SECTION 10.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted hereby except that
(i) no Credit Party may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment or transfer by such
Credit Party without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with this Section.
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby,
Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more Persons all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to such Lender) with
the prior written consent (such consent not to be unreasonably withheld) of:

     (A) the Company, provided that no consent of the Company shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund
or, if an Event of Default has occurred and is continuing, any other assignee; and

     (B) the Administrative Agent.

     (ii) Assignments shall be subject to the following additional conditions:

     (A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not be
less than $5,000,000 unless each of the Company and the Administrative Agent
otherwise consent, provided that no such consent of the Company shall be required if
an Event of Default has occurred and is continuing;

     (B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

     (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500;

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     (D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and

          For the purposes of this Section 10.04(b), the term “Approved Fund” has the following meaning:

          “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.

     (iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement (provided that any liability of any Credit Party to such
assignee under Section 2.06, 2.13 or 2.14 shall be limited to the amount, if any, that would
have been payable thereunder by such Credit Party in the absence of such assignment, except
to the extent any such amounts are attributable to a Change in Law), and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.06, 2.13, 2.14 and 10.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with
this Section 10.04 shall be treated for purposes of this Agreement as a sale by such Lender
of a participation in such rights and obligations in accordance with paragraph (c) of this
Section.

     (iv) The Administrative Agent, acting for this purpose as an agent of the
Credit Parties, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive absent manifest error, and the Credit Parties, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be available for
inspection by the Credit Parties, and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.

     (v) Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Assumption and record the information contained therein in the Register.
No assignment shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.

          (c) (i) Any Lender may, without the consent of any Credit Party or the Administrative Agent,
sell participations to one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this

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Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Credit Parties, the
Administrative Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement
or instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (c)(ii) of this Section, each Credit Party agrees that each
Participant shall be entitled to the benefits of Sections 2.06, 2.13 and 2.14 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled to the benefits
of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to
Section 2.15(c) as though it were a Lender.

     (ii) A Participant shall not be entitled to receive any greater payment under
Section 2.06 or 2.14 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the participation
to such Participant is made with the Company’s prior written consent and the entitlement to
greater payment results solely from a Change in Law. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.14 unless the
Company is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Credit Parties, to comply with Section 2.14(e) as though it
were a Lender.

          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.

          SECTION 10.05. Survival. All covenants, agreements, representations and warranties made by any Credit Party
herein and in the certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loan regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan is outstanding,
any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as
the Total Commitment (and the Commitment of each Lender) has not expired or terminated. The
provisions of Sections 2.06, 2.13, 2.14 and 10.03 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Total Commitment (and the Commitment
of each Lender) or the termination of this Agreement or any provision hereof.

          SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and

60

 

all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement
by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 10.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and enforceability of the
remaining provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

          SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of any Credit Party against any of and all the
obligations of such Credit Party now or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff) which such Lender may
have.

          SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

          (b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern District of New York,
and any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Credit Party or its properties in the courts of any
jurisdiction.

          (c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement in any
court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in connection with
disputes arising out of this Agreement in the manner provided for notices in Section 10.01.
Nothing in this Agreement will affect the right of any party to this Agreement to serve process in
any other manner permitted by law.

61

 

          (e) Each Credit Party hereby irrevocably designates, appoints and empowers the Service of
Process Agent, with offices on the date hereof at 111 Eighth Avenue, New York, New York 10011, as
its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and in
respect of its property, service of any and all legal process, summons, notices and documents which
may be served in any such action or proceeding. If for any reason such designee, appointee and
agent shall cease to be available to act as such, each Credit Party agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes of this provision
reasonably satisfactory to the Administrative Agent under this Agreement.

          SECTION 10.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 10.11. Headings. Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not affect the construction
of, or be taken into consideration in interpreting, this Agreement.

          SECTION 10.12. Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that (i) the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential in accordance with the terms of this Agreement and (ii) that the
Administrative Agent or Lender shall be responsible for any breach of this Section 10.12 by any of
its and its Affiliates’ directors, officers, employees and agents, including accountants, legal
counsel and other advisors), (b) to the extent requested by any regulatory authority or
self-regulatory body, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction
relating to any Credit Party and its obligations, (g) with the consent of the Company or (h) to the
extent such Information (i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent or any Lender on a non-confidential
basis from a source other than the Company or the Borrower that, to the Administrative Agent’s or
Lender’s knowledge, is not subject to a confidentiality undertaking with respect to the applicable
Information. For the purposes of this Section, “Information” means all information now or
hereafter received from any Credit Party relating to the Company, any Subsidiary of the Company or
their respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a non-confidential basis prior to disclosure by any Credit
Party. Any Person required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of

62

 

such Information as such Person would accord to its own confidential information or, in the case of any Lender, such Lender
has treated such Information in a manner consistent with banking industry standards for the
treatment of confidential information. The provisions of this Section 10.12 shall survive the
termination of the Total Commitment (and the Commitment of each Lender) and repayment of the Loans
and the other obligations arising hereunder but such survival shall only be for a period of two (2)
years following the Commitment Expiration Date.

          SECTION 10.13. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate
applicable to any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor)
until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.

          SECTION 10.14. USA Patriot Act. Each Lender hereby notifies the Company and the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”), it is required to obtain, verify and record information that
identifies each Credit Party, which information includes the name and address of each Credit Party
and other information that will allow such Lender to identify each Credit Party in accordance with
the Patriot Act.

[Signature Pages Follow]

63

 

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

	 	 	 	 	 	 	 
	Address:	 	TALBOT HOLDINGS LTD.	 	 
	 
	 	 	 	 	 	 
	29 Richmond Road,

	 	By:	 	/s/ Joseph E. (Jeff) Consolino	 	 
	Pembroke, HM08 Bermuda

	 	 
	 	 

Name: Joseph E. (Jeff) Consolino
	 	 
	Telephone: (441) 278-9000

	 	 
	 	Title:   Executive Vice President	 	 
	Facsimile: (441) 278-9090
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address:	 	VALIDUS HOLDINGS, LTD.	 	 
	 
	 	 	 	 	 	 

	29 Richmond Road

	 	By:	 	/s/ Joseph E. (Jeff) Consolino	 	 
	Pembroke, HM08 Bermuda

	 	 
	 	 

Name: Joseph E. (Jeff) Consolino
	 	 
	Telephone: (441) 278-9000

	 	 
	 	Title:   Executive Vice President &
	 	 
	Facsimile: (441) 278-9090
	 	 	 	Chief Financial Officer 	 	 

 

 

	 	 	 	 	 
	 	LLOYDS TSB BANK plc,

AS ADMINISTRATIVE AGENT AND AS A
LENDER,

 	 
	 	By:  	/s/ Sebastian Kafetz
 	 
	 	 	Name:  	Sebastian Kafetz 	 
	 	 	Title:  	Managing
Director

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