Document:

Exhibit 10.40

Exhibit 10.40

TO: Meir Sperling

From: Dan Bodner

Subject: Employment Offer

Date: 2000–08–30

Comverse Infosys is pleased to offer you the following employment agreement based on several meetings and discussions
that were held since the beginning of this year:

	 	1.	 	Your title will be Managing Director of Comverse Infosys (Israel) and President of Telecom Network
Division (worldwide). As a senior member of the top management team you will carry additional
responsibilities as agreed upon from time to time.

	 	2.	 	Your base salary will be 56,000 shekels per month.

	 	3.	 	Your bonus includes 40,000 options of Comverse Technology (CMVT) at a price of $76.125, vested over 4
years according to the company’s option plan. Annual cash bonus may be paid at the end of each fiscal year
based on the company’s performance and at the company’s discretion.

	 	4.	 	Your equity includes 300,000 options of Comverse Infosys, Inc at a price of $1.35, vested over 4.5
years starting March 15, 2000 with 25% of the options vesting on September 15, 2001 and each 25% increment at
the anniversary thereof. An option agreement will be provided to you within 30 days from your starting date
based on the company’s employee stock option plan.

	 	5.	 	You will be entitled to using a company car such as Mazda 626 or equivalent.

	 	6.	 	You will be entitled to all standard company benefits at the maximum level (details to be discussed).

	 	7.	 	Employemnt termination will occur on a mutual notice of 90 days. In case the company decides to
terminate within the first year of employment, the employee will not be required to work during the 90 days
notice period and the employee will be paid for the notice period and for additional 90 days.

	 	8.	 	Attached please find our standard Employee Confidentiality Agreement.

	 	9.	 	Employment start date is September 17, 2000.

/s/ Meir Sperling

/s/ Dan BodnerExhibit 10.41

Exhibit 10.41

[English Translation
— Original in Hebrew]

To

Migdal Sahar Insurance Company Ltd.

Mivtahim – Pension Fund Ltd.

Life Insurance Division

Dear Madam, Sir,

Subject: Managers’ insurance policies on the name of Sperling Meir

We hereby notify you of our consent to obtain title to the above managers’ insurance policy/ies starting as of
17.9.2000 (September 17, 2000). We will hold the policies subject to all of their terms, provisions and restrictions,
including provision of automatic ownership transfer to the insured in any event of end of employment. The meaning of
this provision is giving an irrevocable instruction under which the ownership to the policy will be automatically
transferred to the insured if the insured employment with the employer will terminate for any reason. The owner of the
policy will not be able to receive refund of any kind nor will be able to anyhow use the monies (lien, loan etc.)
without obtaining the insured’s consent.

Please include in the policies a clause ensuring the sole right of the insured himself, in any event of payment on
these policies’ account, to all amounts accumulated in the policy until above date.

Monthly salary of the insured is 56,000 NIS. Payments are linked to the salary as will be from time to time.

Employer provisions

Employee provisions 

8.33% for compensation

5.00% for rewards

5.00% for rewards

2.50% for disability and inability to work

Part of the provisions will be paid to “Mivtahim” pension fund in accordance to a ceiling (cap) that will be updated
from time to time.

I hereby confirm and agree in advance to adapt the policies to changes in the premiums and in the insurance amounts.

/s/ Meir Sperling

COMVERSE INFOSYS LTD.

Meir Sperling

signature and stamp of

recipient of ownershipExhibit 10.42

Exhibit 10.42

Summary of the Terms of Verint Systems Inc. Executive Officer Annual Bonus Plan

Verint Systems Inc. (the “Company”) maintains an annual bonus program (the
“AIP”) for its executive officers. Under the AIP, each executive officer is eligible to receive an annual cash bonus
upon the satisfaction of pre determined performance goals. The target bonus under the AIP is
established annually by the Compensation Committee of the Company’s Board of Directors (the
“Committee”) as part of the Committee’s regular compensation review process and is paid
upon certification by the Committee of the achievement of the underlying performance goals. In
establishing target bonuses, in addition to the factors considered as part of the compensation
review process generally, the compensation committee also considers the target bonus set forth in
the executive officer’s employment agreement (if applicable), as well as special achievements,
promotions, and other facts and circumstances specific to the individual officer.

The performance goals under the AIP are based on revenue and a measure of profitability
(either operating income or net income) and expressed on a non-GAAP basis. In the case of executive
officers with responsibility for a specific operating unit, performance goals may also include the
applicable unit’s revenue and profitability. In addition to company-wide performance goals (or if
applicable, unit-based goals) a portion of the target bonus may also be tied to the achievement of
non-financial management business objectives (MBOs) approved by the Committee. The revenue and
profitability performance goals established by the Committee generally come in the form of a range,
wherein the participant may achieve a percentage of his or her target
bonus (generally 65-75%) at the
low end of the performance range (or threshold), 100% of his target bonus towards the middle of the
performance range (target performance), and up to 200% of his target bonus at the high end of the
performance range.Exhibit 10.43

Exhibit 10.43

___________ 2009

Personal & Confidential

Officer Name

Dear ___________,

On behalf of Verint, I would like to express our appreciation for the on-going hard work and contribution you continue
to make as an executive officer of Verint (the ‘Company’).

I am pleased to confirm your eligibility to receive a special bonus payment (the “Special Bonus”). The Special
Bonus is in addition to your base salary and any other cash or other incentive program for which you may be eligible.
The total amount of this Special Bonus is U.S.$               . It will be paid in two equal installments, with the first
payment in April, 2010 and the second in April, 2011 (each, an applicable “Payment Date”) [in local currency at
the time the payment is made].

In order to receive this bonus, you must be employed by the Company on the Payment Date. In the event your employment
is terminated for any reason prior to the applicable Payment Date, you will forfeit the Special Bonus. However, you
will receive any unpaid portion of the Special Bonus if your employment is terminated by the Company without Cause ([as
defined and determined in accordance with the terms of your Employment Agreement][as defined on Annex I
hereto]), with such payment to be made within 30 days following your termination.

As with all compensation information, we expect you to hold information about this additional bonus in the strictest
confidence.

The target amount of the Special Bonus is the gross payment prior to any statutory or voluntary withholding. Please
note that the Special Bonus is a one-time special benefit and will not become part of your compensation package and
will not be considered in calculating any other benefits, except as required by law.

Should you have any questions, please do not hesitate to contact me. Please know that your continued support and
dedication are recognized and valued.

Cordially,

Dan Bodner

Chief Executive Officer

 

1

 

Annex I1

“Cause” shall mean one or more of the following:

	 	1.	 	conviction of, or plea of guilty or no contest to, a crime which is punishable by more than one year in
prison;

	 	2.	 	an indictment for a crime involving dishonesty or fraud;

	 	3.	 	willful and intentional breach by the executive of his obligations to the Company or of the term of
executive’s employment contract (from and after the time it is signed), in each case, which is materially
harmful to the Company;

	 	4.	 	willful misconduct, or any dishonest or fraudulent act or omission, which is materially harmful to the
Company;

	 	5.	 	a violation of any U.S. or local securities or financial reporting laws, rules or regulations, or any
policy of the Company relating to the foregoing;

	 	6.	 	violation of the Company’s policies on harassment, discrimination or substance abuse; or

	 	7.	 	executive’s gross negligence, gross neglect of duties, or gross insubordination.

But, in the case of clauses 3, 4, or 7 of this definition, if such conduct is capable of being cured, such conduct
will only be considered “Cause” if the Company has first notified executive in writing of such circumstance and
executive has failed to cure, to the extent curable, it within 15 days of receiving such notice.

 

	1	 	Include only for executive officers who do not have a
formal employment agreement.

 

2exv10w1

Exhibit 10.1

EXECUTION COPY

 

 

THREE-YEAR UNSECURED LETTER OF CREDIT FACILITY AGREEMENT

dated as of

March 12, 2010

among

VALIDUS HOLDINGS, LTD.,

VALIDUS REINSURANCE, LTD.,

VARIOUS DESIGNATED SUBSIDIARY ACCOUNT PARTIES,

The Lenders Party Hereto,

DEUTSCHE BANK SECURITIES INC.,

as Syndication Agent,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

DEUTSCHE BANK SECURITIES INC.,

and

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I
	 	 	 	 
	Definitions
	 	 	 	 
	 
	 	 	 	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Classification of Loans and Borrowings
	 	 	21	 
	SECTION 1.03. Terms Generally
	 	 	21	 
	SECTION 1.04. Accounting Terms; GAAP
	 	 	21	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	Letters of Credit; Loans
	 	 	 	 
	 
	 	 	 	 
	SECTION 2.01. Several Letters of Credit
	 	 	22	 
	SECTION 2.02. Fronted Letters of Credit
	 	 	22	 
	SECTION 2.03. Conditions to the Issuance of all Letters of Credit
	 	 	24	 
	SECTION 2.04. Letter of Credit Requests
	 	 	26	 
	SECTION 2.05. Agreement to Repay Letter of Credit Drawings
	 	 	26	 
	SECTION 2.06. Increased Costs
	 	 	27	 
	SECTION 2.07. Letter of Credit Expiration and Extensions
	 	 	27	 
	SECTION 2.08. Changes to Stated Amount
	 	 	28	 
	SECTION 2.09. Termination and Reduction of Commitments
	 	 	28	 
	SECTION 2.10. Mandatory Prepayment; Cash Collateralization
	 	 	28	 
	SECTION 2.11. Fees
	 	 	29	 
	SECTION 2.12. Taxes
	 	 	30	 
	SECTION 2.13. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	31	 
	SECTION 2.14. Mitigation Obligations; Replacement of Lenders
	 	 	33	 
	SECTION 2.15. Designated Subsidiary Account Parties
	 	 	34	 
	SECTION 2.16. Loans
	 	 	34	 
	SECTION 2.17. Loans and Borrowings
	 	 	34	 
	SECTION 2.18. Requests for Borrowings
	 	 	35	 
	SECTION 2.19. Funding of Borrowings
	 	 	35	 
	SECTION 2.20. Interest Elections
	 	 	36	 
	SECTION 2.21. Repayment of Loans; Evidence of Debt
	 	 	37	 
	SECTION 2.22. Voluntary Prepayment of Loans
	 	 	38	 
	SECTION 2.23. Interest
	 	 	38	 
	SECTION 2.24. Alternate Rate of Interest
	 	 	39	 
	SECTION 2.25. Break Funding Payments
	 	 	39	 
	SECTION 2.26. Defaulting Lenders
	 	 	40	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	Representations and Warranties
	 	 	 	 
	 
	 	 	 	 
	SECTION 3.01. Corporate Status
	 	 	41	 
	SECTION 3.02. Corporate Power and Authority
	 	 	42	 
	SECTION 3.03. No Contravention of Agreements or Organizational Documents
	 	 	42	 

i

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 3.04. Litigation and Environmental Matters
	 	 	42	 
	SECTION 3.05. Use of Proceeds; Use of Letters of Credit; Margin Regulations

	 	 	42	 
	SECTION 3.06. Approvals
	 	 	42	 
	SECTION 3.07. Investment Company Act
	 	 	43	 
	SECTION 3.08. True and Complete Disclosure; Projections and Assumptions
	 	 	43	 
	SECTION 3.09. Financial Condition
	 	 	43	 
	SECTION 3.10. Tax Returns and Payments
	 	 	43	 
	SECTION 3.11. Compliance with ERISA
	 	 	44	 
	SECTION 3.12. Subsidiaries
	 	 	44	 
	SECTION 3.13. Capitalization
	 	 	44	 
	SECTION 3.14. Indebtedness
	 	 	45	 
	SECTION 3.15. Compliance with Statutes and Agreements
	 	 	45	 
	SECTION 3.16. Insurance Licenses
	 	 	45	 
	SECTION 3.17. Insurance Business
	 	 	45	 
	SECTION 3.18. Properties; Liens; and Insurance
	 	 	45	 
	SECTION 3.19. Solvency
	 	 	46	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	Conditions
	 	 	 	 
	 
	 	 	 	 
	SECTION 4.01. Effective Date
	 	 	46	 
	SECTION 4.02. Each Credit Event
	 	 	48	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	Affirmative Covenants
	 	 	 	 
	 
	 	 	 	 
	SECTION 5.01. Information Covenants
	 	 	48	 
	SECTION 5.02. Books, Records and Inspections
	 	 	51	 
	SECTION 5.03. Insurance
	 	 	51	 
	SECTION 5.04. Payment of Taxes and other Obligations
	 	 	51	 
	SECTION 5.05. Maintenance of Existence; Conduct of Business
	 	 	51	 
	SECTION 5.06. Compliance with Statutes, etc
	 	 	52	 
	SECTION 5.07. ERISA
	 	 	52	 
	SECTION 5.08. Maintenance of Property
	 	 	53	 
	SECTION 5.09. Maintenance of Licenses and Permits
	 	 	53	 
	SECTION 5.10. Further Assurances
	 	 	53	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	Negative Covenants
	 	 	 	 
	 
	 	 	 	 
	SECTION 6.01. Changes in Business or Organizational Documents
	 	 	53	 
	SECTION 6.02. Consolidations, Mergers and Sales of Assets
	 	 	53	 
	SECTION 6.03. Liens
	 	 	54	 
	SECTION 6.04. Indebtedness
	 	 	57	 
	SECTION 6.05. Sale and Lease-Back Transactions
	 	 	57	 
	SECTION 6.06. Issuance of Stock
	 	 	57	 
	SECTION 6.07. Dissolution
	 	 	57	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 6.08. Restricted Payments
	 	 	57	 
	SECTION 6.09. Transactions with Affiliates
	 	 	58	 
	SECTION 6.10. Maximum Leverage Ratio
	 	 	58	 
	SECTION 6.11. Minimum Consolidated Net Worth
	 	 	58	 
	SECTION 6.12. Limitation on Certain Restrictions on Subsidiaries
	 	 	58	 
	SECTION 6.13. Private Act
	 	 	59	 
	SECTION 6.14. Claims Paying Ratings
	 	 	59	 
	SECTION 6.15. End of Fiscal Years; Fiscal Quarters
	 	 	59	 
	SECTION 6.16. Investments, Loans, Advances and Guarantees
	 	 	59	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	Events of Default
	 	 	 	 
	SECTION 7.01. Payments
	 	 	60	 
	SECTION 7.02. Representations, etc
	 	 	60	 
	SECTION 7.03. Covenants
	 	 	60	 
	SECTION 7.04. Default under other Agreements
	 	 	60	 
	SECTION 7.05. Bankruptcy, etc
	 	 	61	 
	SECTION 7.06. ERISA
	 	 	61	 
	SECTION 7.07. Judgments
	 	 	61	 
	SECTION 7.08. Insurance Licenses
	 	 	61	 
	SECTION 7.09. Change of Control
	 	 	62	 
	SECTION 7.10. Company Guaranty
	 	 	62	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	The Agents
	 	 	 	 
	 
	 	 	 	 
	SECTION 8.01. Appointment
	 	 	62	 
	SECTION 8.02. Agents in their Individual Capacities
	 	 	62	 
	SECTION 8.03. Exculpatory Provisions
	 	 	63	 
	SECTION 8.04. Reliance
	 	 	63	 
	SECTION 8.05. Delegation of Duties
	 	 	63	 
	SECTION 8.06. Resignation
	 	 	63	 
	SECTION 8.07. Non-Reliance
	 	 	64	 
	SECTION 8.08. Syndication Agent, Documentation Agents and Joint Lead Arrangers and
Joint Bookrunners
	 	 	64	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	Company Guaranty
	 	 	 	 
	 
	 	 	 	 
	SECTION 9.01. The Company Guaranty
	 	 	64	 
	SECTION 9.02. Bankruptcy
	 	 	65	 
	SECTION 9.03. Nature of Liability
	 	 	65	 
	SECTION 9.04. Independent Obligation
	 	 	65	 
	SECTION 9.05. Authorization
	 	 	65	 
	SECTION 9.06. Reliance
	 	 	66	 
	SECTION 9.07. Subordination
	 	 	66	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 9.08. Waiver
	 	 	66	 
	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	Miscellaneous
	 	 	 	 
	 
	 	 	 	 
	SECTION 10.01. Notices
	 	 	67	 
	SECTION 10.02. Waivers; Amendments
	 	 	68	 
	SECTION 10.03. Expenses; Indemnity; Damage Waiver
	 	 	69	 
	SECTION 10.04. Successors and Assigns
	 	 	70	 
	SECTION 10.05. Survival
	 	 	72	 
	SECTION 10.06. Counterparts; Integration; Effectiveness
	 	 	73	 
	SECTION 10.07. Severability
	 	 	73	 
	SECTION 10.08. Right of Setoff
	 	 	73	 
	SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	73	 
	SECTION 10.10. Waiver of Jury Trial
	 	 	74	 
	SECTION 10.11. Headings
	 	 	74	 
	SECTION 10.12. Confidentiality
	 	 	74	 
	SECTION 10.13. Interest Rate Limitation
	 	 	75	 
	SECTION 10.14. USA Patriot Act
	 	 	75	 
	SECTION 10.15. Termination of Existing Revolving Facility
	 	 	75	 

iv

 

SCHEDULES:

Commitment Schedule

Schedule 2.15  —  Designated Subsidiary Account Parties

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 DSAP Assumption Agreement

Exhibit D  —  Form of Note

Exhibit E  —  Form of Interest Election Request

Exhibit F  —  Form of Letter of Credit Request

Exhibit G-1  —  Opinion of Account Parties’ Special New York Counsel

Exhibit G-2  —  Opinion of Account Parties’ Special Bermuda Counsel

Exhibit H  —  Form of Officer’s Certificate

Exhibit I —  Additional Commitment Agreement

v

 

          THREE-YEAR UNSECURED LETTER OF CREDIT FACILITY AGREEMENT dated as of March 12, 2010 among
VALIDUS HOLDINGS, LTD., a holding company organized under the laws of Bermuda (the
“Company”), VALIDUS REINSURANCE, LTD., a reinsurance company organized under the laws of
Bermuda and a wholly-owned subsidiary of the Company (“Validus Re”), the other Designated
Subsidiary Account Parties (as hereinafter defined) from time to time party hereto, the lenders
from time to time party hereto (each, a “Lender” and, collectively, the “Lenders”),
DEUTSCHE BANK SECURITIES INC., as Syndication Agent and JPMORGAN CHASE BANK, N.A., 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
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

          “Account Parties” means the Company and each Designated Subsidiary Account Party.

          “Additional Commitment” means, for each Additional Commitment Lender, any commitment
provided by such Additional Commitment Lender pursuant to Section 2.27, in such amount as agreed to
by such Additional Commitment Lender in the respective Additional Commitment Agreement;
provided that on the Additional Commitment Date upon which an Additional Commitment of any
Additional Commitment Lender becomes effective, such Additional Commitment of such Additional
Commitment Lender shall (x) in the case of an existing Lender, be added to (and thereafter become a
part of) the existing Commitment of such existing Lender for all purposes of this Agreement as
contemplated by Section 2.27 and (y) in the case of a new Lender, be converted to a Commitment and
become a Commitment for all purposes of this Agreement as contemplated by Section 2.27.

          “Additional Commitment Agreement” means an Additional Commitment Agreement
substantially in the form of Exhibit I (appropriately completed) or such other form
reasonably acceptable to the Administrative Agent.

          “Additional Commitment Date” means each date upon which an Additional Commitment under
an Additional Commitment Agreement becomes effective as provided in Section 2.27.

          “Additional Commitment Lender” has the meaning provided in Section 2.27(b).

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

1

 

          “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.

          “Agents” means, collectively, the Administrative Agent, the Syndication Agent and the
Issuing Agent.

          “Agreement” means this Three-Year Unsecured Letter of 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.

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

2

 

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

          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 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.

3

 

          “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 Company for a Borrowing in accordance with
Section 2.18.

          “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 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, 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

4

 

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 the Issuing Agent (or, for purposes of Section 2.06, by any lending office of such
Lender or by such Lender’s or the Issuing Agent’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) 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.

          “Charges” has the meaning provided in Section 10.13.

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

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

          “Collateral Account” has the meaning provided in Section 2.10.

          “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 2.09, 2.14, 2.27 or 10.04. As of the Effective Date, the aggregate
Commitments of all Lenders hereunder is $340,000,000.

          “Commitment Expiration Date” means March 12, 2013.

          “Commitment Fee” has the meaning provided in Section 2.11(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 2.09(c).

5

 

          “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 or the issuance of any Letter of Credit
(or any increase of the Stated Amount thereof).

          “Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and the Dollar amount of its Applicable
Percentage of the Letter of Credit Outstandings at such time.

          “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 or 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 Loan or participation is based on such Lender’s
reasonable determination that the conditions precedent to funding such Loan or 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 Loans and participations in then outstanding Letters of Credit
unless subject to a good faith dispute based on such Lender’s reasonable determination that the

6

 

conditions precedent to funding such Loan or 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.

          “Designated Subsidiary Account Party” means Validus Re and each Wholly-Owned
Subsidiary of the Company set forth on Schedule 2.15 and each Wholly-Owned Subsidiary of
the Company which is designated as a Designated Subsidiary Account Party in accordance with Section
2.15.

          “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.

          “DSAP Assumption Agreement” means an assumption agreement in the form of Exhibit
C or such other form reasonably acceptable to the Administrative Agent.

          “DTC” means the Depository Trust Company.

          “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.

          “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.

7

 

          “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, the Issuing Agent,
any Lender, or any other recipient of any payment to be made by or on account of any obligation of
any Account 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 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 States of America or any 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 Account Party under Section 2.14(b)), any
withholding tax that is imposed by the United States of America 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 2.12(e), except to the extent that such Foreign Lender (or its assignor, if any) was

8

 

entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from such
Account Party with respect to such withholding tax pursuant to Section 2.12(a).

          “Existing Administrative Agent” means the Administrative Agent, as defined in the
Existing Credit Facility.

          “Existing Credit Facility” means that certain Three-Year Unsecured Letter of Credit
Facility Agreement dated as of March 12, 2007 among the Company, Validus Re, the lenders party
thereto, JPMorgan Chase Bank, N.A., as Administrative Agent thereunder, Deutsche Bank AG New York
Branch, as Syndication Agent thereunder, ING Bank N.V., London Branch, Calyon, The Bank of New York
Mellon and Wachovia Bank, National Association, as Documentation Agents thereunder.

          “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 Reinsurance, Ltd., 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 States of America, any State thereof or the District of
Columbia; provided, however, that with respect to an Account Party that is
organized under the laws of the United States of America, any State thereof or the District of
Columbia, a Lender that is organized under the laws of Bermuda shall be considered a Foreign
Lender.

          “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.

          “Fronted Letter of Credit” has the meaning provided in Section 2.02(a).

          “Fronted Unpaid Drawing” has the meaning provided in clause (y) of Section 2.05(a).

9

 

          “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.

          “Fronting Lender” means any Lender (or any Affiliate thereof) which is requested by an
Account Party, and which agrees in writing, to issue Fronted Letters of Credit hereunder pursuant
to Section 2.02.

          “Fronting Participant” has the meaning provided in Section 2.02(b).

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

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

          “Governmental Authority” means the government of the United States of America, 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 each of the Administrative Agent, the
Lenders and each LC Issuer.

          “Guaranteed Obligations” means all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit 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 each Designated Subsidiary Account Party 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

10

 

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 each Designated Subsidiary Account Party with all of the terms, conditions and agreements
contained in this Agreement applicable to such Designated Subsidiary Account Party.

          “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.

          “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.

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          “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.

          “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 2.20(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 Company 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

12

 

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.

          “Issuing Agent” means JPMorgan Chase Bank, N.A. in its capacity as Issuing Agent with
respect to Several Letters of Credit pursuant to Section 2.01.

          “Joint Lead Arrangers and Joint Bookrunners” means, collectively, Deutsche Bank
Securities Inc. and J.P. Morgan Securities Inc.

          “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.

          “LC Issuer” means each of the Issuing Agent and each Fronting Lender.

          “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.

          “Letter of Credit Fee” has the meaning provided in Section 2.11(c).

          “Letter of Credit Outstandings” means, at any time, the sum of (i) the aggregate
Stated Amount of all outstanding Several Letters of Credit, (ii) the aggregate Stated Amount of all
outstanding Fronted Letters of Credit and (iii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit at such time.

          “Letter of Credit Request” has the meaning provided in Section 2.04(a).

          “Letter of Credit Supportable Obligations” means the obligations of the Account
Parties or any of their subsidiaries which are permitted to exist pursuant to the terms of this
Agreement in connection with the Insurance Business of such Account Parties and their subsidiaries.

          “Letters of Credit” means the Several Letters of Credit and the Fronted Letters of
Credit.

          “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

13

 

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 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.

          “Loan” has the meaning provided in Section 2.16(a).

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

          “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 each other Account Party, taken as a whole, to perform their
respective obligations to the Lenders under this Agreement.

          “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.

14

 

          “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.

          “NAIC” means the National Association of Insurance Commissioners and any successor
thereto.

          “NAIC Approved Bank” means (a) any bank listed on the most current list of banks
approved by the Securities Valuation Office of the NAIC (the “NAIC Bank List”) or (b) any
Lender as to which its confirming bank is a bank listed on the NAIC Bank List.

          “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).

          “Notice of Non-Extension” has the meaning provided in Section 2.07.

          “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, the Issuing 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 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

15

 

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; and

          (g) Indebtedness of any Designated Subsidiary Account Parties under the Five-Year Secured
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.

          “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

16

 

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 Account 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.

          “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.

17

 

          “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 2.14(b).

          “Replacement Lender” has the meaning provided in Section 2.14(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 Loan Exposure
and the aggregate amount of Letter of Credit Outstandings 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.

          “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.

          “Several Letter of Credit” has the meaning provided in Section 2.01(a).

          “Several Unpaid Drawing” has the meaning provided in clause (x) of Section 2.05(a).

          “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
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

18

 

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.

          “Stated Amount” means at, any time, the maximum amount available to be drawn under any
Letter of Credit (regardless of whether any conditions for drawing could then be met).

          “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 percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject for
Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any comparable regulation.
The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.

19

 

          “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 Loan Exposure and the aggregate amount of Letter of Credit Outstandings at such
time.

          “Syndication Agent” means Deutsche Bank Securities Inc., in its capacity as
Syndication Agent.

          “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.

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

          “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 Account Party of
this Agreement, the borrowing of Loans by the Company and the use of proceeds thereof and the
issuance of Letters of Credit for the account of any Account Party, 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.

          “Unpaid Drawings” means the Several Unpaid Drawings and the Fronted Unpaid Drawings.

20

 

          “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.

21

 

ARTICLE II

Letters of Credit; Loans

          SECTION 2.01. Several Letters of Credit. (a) Subject to and upon the terms
and conditions set forth herein, each Account Party may request the Issuing Agent, at any time and
from time to time on or after the Effective Date and prior to the Commitment Expiration Date, to
issue, on behalf of each Lender, for the account of such Account Party and in support of, on a
standby basis, Letter of Credit Supportable Obligations of such Account Party to any other Person,
and subject to and upon the terms and conditions herein set forth, the Issuing Agent agrees to
issue at any time and from time to time on or after the Effective Date and prior to the Commitment
Expiration Date one or more irrevocable standby letters of credit denominated in Dollars and in
such form as may be approved by the Issuing Agent which approval shall not be unreasonably withheld
or delayed (each such letter of credit, a “Several Letter of Credit” and, collectively, the
“Several Letters of Credit”). Subject to the terms and conditions hereof and any other
instruments and documents contemplated hereby, it is the intent of the parties hereto that all
Letters of Credit shall be clean and irrevocable and otherwise in a form sufficient for the
beneficiary cedent to take credit on its financial statements for reinsurance recoverables under
applicable rules, laws and regulations.

          (b) Each Several Letter of Credit will be issued by the Issuing Agent on behalf of the Lenders
and each Lender will participate in each Several Letter of Credit pro rata in accordance with its
Applicable Percentage. The obligations of each Lender under and in respect of each Several Letter
of Credit are several, and the failure by any Lender to perform its obligations hereunder or under
any Letter of Credit shall not affect the obligations of the respective Account Party toward any
other party hereto nor shall any other such party be liable for the failure by such Lender to
perform its obligations hereunder or under any Several Letter of Credit.

          (c) Each Several Letter of Credit shall be executed and delivered by the Issuing Agent in the
name and on behalf of, and as attorney-in-fact for, each Lender and the Issuing Agent shall act
under each Several Letter of Credit, and each Several Letter of Credit shall expressly provide that
the Issuing Agent shall act, as the agent of each Lender, to (a) receive drafts, other demands for
payment and other documents presented by the beneficiary under such Several Letter of Credit,
(b) determine whether such drafts, demands and documents are in compliance with the terms and
conditions of such Letter of Credit and (c) notify such Lender and such Account Party that a valid
drawing has been made and the date that the related Several Unpaid Drawing is to be made;
provided that the Issuing Agent shall have no obligation or liability for any Several
Unpaid Drawing under such Letter of Credit, and each Several Letter of Credit shall expressly so
provide. Each Lender hereby irrevocably appoints and designates the Issuing Agent as its
attorney-in-fact, acting through any duly authorized officer of the Issuing Agent, to execute and
deliver in the name and on behalf of such Lender each Several Letter of Credit to be issued by such
Lender hereunder. Promptly upon the request of the Issuing Agent, each Lender will furnish to the
Issuing Agent such powers of attorney or other evidence as any beneficiary of any Several Letter of
Credit may reasonably request in order to demonstrate that the Issuing Agent has the power to act
as attorney-in-fact for such Lender to execute and deliver such Several Letter of Credit.

          (d) Each Lender represents and warrants that each Several Letter of Credit constitutes a
legal, valid and binding obligation of such Lender enforceable in accordance with its terms,
provided that the enforceability thereof is subject to general principles of equity and to
bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally.

          SECTION 2.02. Fronted Letters of Credit. (a) Subject to and upon the terms
and conditions set forth herein, each Account Party may request that any Fronting Lender at any
time and

22

 

from time to time on or after the Effective Date and prior to the Commitment Expiration Date
issue for its own account a letter of credit denominated in Dollars for the account of such Account
Party and in support of, on a standby basis, Letter of Credit Supportable Obligations of such
Account Party to any other Person, and subject to and upon the terms and conditions herein set
forth, each Fronting Lender agrees to issue at any time and from time to time on or after the
Effective Date and prior to the Commitment Expiration Date one or more irrevocable standby letters
of credit in such form as may be approved by such Fronting Lender, which approval shall not be
unreasonably withheld or delayed (each such letter of credit, a “Fronted Letter of Credit”
and, collectively, the “Fronted Letters of Credit”). Subject to the terms and conditions
hereof and any other instruments and documents contemplated hereby, it is the intent of the parties
hereto that all Letters of Credit shall be clean and irrevocable and otherwise in a form sufficient
for the beneficiary cedent to take credit on its financial statements for reinsurance recoverables
under applicable rules, laws and regulations.

          (b) Immediately upon the issuance by any Fronting Lender of any Fronted Letter of Credit, such
Fronting Lender shall be deemed to have sold and transferred to each Lender other than such
Fronting Lender (each such Lender, in its capacity under this Section 2.02(b), a “Fronting
Participant”), and each such Fronting Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Fronting Lender, without recourse or
warranty, an undivided interest and participation, to the extent of such Fronting Participant’s
Applicable Percentage, in such Fronted Letter of Credit, each drawing made thereunder and the
obligations of each Account Party under this Agreement with respect thereto, and any security
therefor or guaranty pertaining thereto. Upon any change in the Commitments or Applicable
Percentages of the Lenders pursuant to this Agreement (including pursuant to Section 2.27), it is
hereby agreed that, with respect to all outstanding Fronted Letters of Credit and Fronted Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant to this
Section 2.02 to reflect the new Applicable Percentages of the assignor and assignee Lender or of
all Lenders with Commitments, as the case may be.

          (c) In the event that any Fronting Lender makes any payment under any Fronted Letter of Credit
and the respective Account Party shall not have reimbursed such amount in full to such Fronting
Lender pursuant to Section 2.05, such Fronting Lender shall promptly notify the Administrative
Agent, which shall promptly notify each Fronting Participant, of such failure, and each Fronting
Participant shall promptly and unconditionally pay to such Fronting Lender the amount of such
Fronting Participant’s Applicable Percentage of such unreimbursed payment in Dollars and in
immediately available funds. If, prior to 11:00 a.m. (New York time) on any Business Day, the
Administrative Agent so notifies any Fronting Participant required to fund a payment under a
Fronted Letter of Credit, such Fronting Participant shall make available to such Fronting Lender in
Dollars and in immediately available funds such Fronting Participant’s Applicable Percentage of the
amount of such payment on such Business Day (or, if notice is given after 11:00 a.m. (New York
time) on any Business Day, on the next Business Day). If and to the extent such Fronting
Participant shall not have so made its Applicable Percentage of the amount of such payment
available to such Fronting Lender, such Fronting Participant agrees to pay to such Fronting Lender,
forthwith on demand, such amount, together with interest thereon, for each day from such date to
but excluding the date such amount is paid to such Fronting Lender at the overnight Federal Funds
Effective Rate. The failure of any Fronting Participant to make available to such Fronting Lender
its Applicable Percentage of any payment under any Fronted Letter of Credit shall not relieve any
other Fronting Participant of its obligation hereunder to make available to such Fronting Lender
its Applicable Percentage of any payment on the date required, as specified above, but no Fronting
Participant shall be responsible for the failure of any other Fronting Participant to make
available to such Fronting Lender such other Fronting Participant’s Applicable Percentage of any
such payment.

          (d) Whenever any Fronting Lender receives any payment by any Account Party as to which it has
also received payments from the Fronting Participants pursuant to paragraph (c) above, such

23

 

Fronting Lender shall forward such payment to the Administrative Agent, which in turn shall
distribute to each Fronting Participant which has paid its Applicable Percentage thereof, in
Dollars and in immediately available funds, an amount equal to such Fronting Participant’s share
(based upon the amount funded by such Fronting Participant to the aggregate amount funded by all
Fronting Participants and retained by the Fronting Lender) of the principal amount of such payment
and interest thereon accruing after the purchase of the respective participations.

          (e) The obligations of the Fronting Participants to make payments to each Fronting Lender with
respect to Fronted Letters of Credit issued by it shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the terms and conditions
of this Agreement under all circumstances, including any of the following circumstances:

     (i) any lack of validity or enforceability of this Agreement or any
amendment, supplement or modification hereof;

     (ii) the existence of any claim, setoff, defense or other right which
the Fronting Participant or any of its Affiliates may have at any time against a
beneficiary named in a Fronted Letter of Credit, any transferee of any Fronted
Letter of Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Fronting Lender, any Fronting Participant, any Lender, or
any other Person, whether in connection with this Agreement, any Fronted Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between any Account Party or any of its
Affiliates and the beneficiary named in any such Fronted Letter of Credit);

     (iii) any draft, certificate or any other document presented under
any Fronted Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate in
any respect;

     (iv) the surrender or impairment of any security for the performance
or observance of any of the terms of this Agreement;

     (v) the occurrence of any Default or Event of Default; or

     (vi) any matter or event set forth in Section 2.05(b).

          (f) Upon the request of any Fronting Participant, each Fronting Lender shall furnish to such
Fronting Participant copies of any Fronted Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Fronting Participant.

          SECTION 2.03. Conditions to the Issuance of all Letters of Credit.
(a) Notwithstanding anything to the contrary set forth in this Article II, no LC Issuer shall be
under any obligation to issue any Letter of Credit if at the time of such issuance:

     (i) any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain such LC Issuer from issuing such
Letter of Credit or any requirement of law applicable to such LC Issuer or any Lender or any
request or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such LC Issuer or any Lender shall prohibit, or request
that such LC Issuer or any Lenders refrain from, the issuance of letters of credit generally
or the applicable type of letter of credit or shall impose upon such LC Issuer or any Lender
with respect to the applicable type of letter of credit

24

 

any restriction or reserve or capital requirement (for which such LC Issuer or such
Lender is not otherwise compensated) not in effect on the Effective Date, or any
unreimbursed loss, cost or expense which was not applicable, in effect or known to such LC
Issuer, as of the Effective Date;

     (ii) the conditions precedent set forth in Section 4.02 are not satisfied at
that time; or

     (iii) such LC Issuer shall have received notice from any Account Party or
the Required Lenders prior to the issuance of such Letter of Credit of the type described in
clause (iv) of Section 2.03(b).

     (b) Notwithstanding anything to the contrary set forth in this Article II,

     (i) no Letter of Credit shall be issued at any time when the aggregate Credit
Exposures of all Lenders taken together exceed (or would after giving effect to such
issuance exceed) the Total Commitment at such time;

     (ii) no Fronted Letter of Credit shall be issued by a Fronting Lender at any
time if the Letter of Credit Outstandings in respect of all Fronted Letters of Credit issued
by such Fronting Lender exceed (or would after giving effect to such issuance exceed) the
maximum aggregate Stated Amount of all Fronted Letters of Credit that such Fronting Lender
has agreed to issue in a separate agreement with the Company, if any;

     (iii) each Letter of Credit shall have an expiry date occurring not later
than one year after such Letter of Credit’s date of issuance, provided that, subject
to Section 2.07, each such Letter of Credit may by its terms automatically renew annually
for additional one-year periods unless the respective LC Issuer notifies the beneficiary
thereof, in accordance with the terms of such Letter of Credit, that such Letter of Credit
will not be renewed; and

     (iv) no LC Issuer will issue any Letter of Credit after it has received
written notice from any Account Party or the Required Lenders stating that a Default or an
Event of Default exists until such time as the Issuing Agent shall have received a written
notice of (x) rescission of such notice from the party or parties originally delivering the
same or (y) a waiver of such Default or Event of Default 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).

          (c) Subject to and on the terms and conditions set forth herein, each LC Issuer is hereby
authorized by each Account Party and the Lenders to arrange for the issuance of any Letter of
Credit pursuant to Section 2.01(a) or 2.02(a) and the amendment of any Letter of Credit pursuant to
Section 2.08 and/or 10.02 by:

     (i) completing the commencement date and the expiry date of such Letter of
Credit;

     (ii) (in the case of an amendment increasing or reducing the amount thereof)
amending such Letter of Credit in such manner as such LC Issuer and the respective
beneficiary may agree;

     (iii) in the case of Several Letters of Credit, completing such Letter of
Credit with the participation of each Lender as allocated pursuant to the terms hereof; and

25

 

     (iv) in the case of Several Letters of Credit, executing such Letter of
Credit on behalf of each Lender and following such execution delivering such Letter of
Credit to the beneficiary of such Letter of Credit.

          SECTION 2.04. Letter of Credit Requests. (a) Whenever an Account Party
desires that a Letter of Credit be issued for its account, such Account Party shall give the
Administrative Agent and the respective LC Issuer written or electronic notice (including by way of
facsimile, e-mail or other electronic transmission) thereof prior to 12:00 Noon (New York time) at
least (x) three Business Days in respect of Fronted Letters of Credit and (y) five Business Days in
respect of Several Letters of Credit, in each case, prior to the proposed date of issuance (which
shall be a Business Day), which notice shall be in the form of Exhibit F or such other form
reasonably acceptable to the Administrative Agent (each, a “Letter of Credit Request”).
Each Letter of Credit Request shall include any other documents as the respective LC Issuer
customarily and generally requires in connection therewith.

          (b) The making of each Letter of Credit Request shall be deemed to be a representation and
warranty by the respective Account Party and the Company that such Letter of Credit may be issued
in accordance with, and it will not violate the requirements applicable to such Account Party
and/or such Letter of Credit of, Section 2.01 or 2.02, as the case may be, and Section 2.03.

          (c) Upon its issuance of, or amendment to, any Letter of Credit, the respective LC Issuer
shall promptly notify the respective Account Party and each Lender of such issuance or amendment,
which notice shall include a summary description of the Letter of Credit actually issued and any
amendments thereto.

          (d) The Stated Amount of each Letter of Credit upon issuance shall be not less than $25,000.

          SECTION 2.05. Agreement to Repay Letter of Credit Drawings. (a) Each
Account Party severally agrees to reimburse (x) each Lender, by making payment to the
Administrative Agent in immediately available funds, for any payment or disbursement made by such
Lender under any Several Letter of Credit issued for its account (each such amount so paid or
disbursed until reimbursed, a “Several Unpaid Drawing”) and (y) the respective Fronting
Lender directly for any payment or disbursement made by such Fronting Lender under any Fronted
Letter of Credit issued for its account (each such amount so paid or disbursed until reimbursed, a
“Fronted Unpaid Drawing”), in each case, with interest on the amount so paid or disbursed
by such Lender, to the extent not reimbursed prior to 1:00 p.m. (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but not including the
date such Lender is reimbursed therefor at a rate per annum which shall be the Alternate Base Rate
as in effect from time to time (plus an additional 2% per annum, payable on demand, if not
reimbursed by the third Business Day after the date on which the respective Account Party receives
notice from the respective LC Issuer of such payment or disbursement).

          (b) Each Account Party’s obligation under this Section 2.05 to reimburse each Lender with
respect to Unpaid Drawings of such Account Party (including, in each case, interest thereon) shall
be absolute and unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which such Account Party may have or have had against such
Lender, or any LC Issuer, including any defense based upon the failure of any drawing under a
Letter of Credit to conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing; provided,
however, that no Account Party shall be obligated to reimburse any Lender for any wrongful
payment made by such Lender under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Lender (as determined by a court of
competent jurisdiction in a final and non-appealable judgment).

26

 

          (c) In determining whether to pay under any Letter of Credit, no LC Issuer shall have any
obligation relative to the other Lenders other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by any LC Issuer under or in connection with any Letter of Credit, if
taken or omitted in the absence of such LC Issuer’s gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable judgment), shall not
create for such LC Issuer any resulting liability to any Account Party or any of its Affiliates or
any Lender.

          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
letters of credit issued by or participated in, assets of, deposits with or for the account of, or
credit extended by, such 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, any Letter of Credit 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 (1)
issuing, maintaining or participating in any Letter of Credit or (2) 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 Letters of Credit and/or
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 applicable Account
Party by such Lender (with a copy to the Administrative Agent), such Account Party 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 2.12 (or would have received additional amounts pursuant to Section 2.12(e) but for a
failure to comply with Section 2.12(e)). A certificate submitted to the applicable Account Party
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 applicable Account Party absent manifest error, although the failure to deliver any
such certificate shall not release or diminish such Account Party’s obligations to pay additional
amounts pursuant to this Section 2.06 upon subsequent receipt of such certificate. Notwithstanding
the foregoing, no Account Party shall 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 such Account Party 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. Letter of Credit Expiration and Extensions. Each Lender
acknowledges that to the extent provided under the terms of any Letter of Credit, the expiration
date of such Letter of Credit will be automatically extended for additional one-year periods,
without written amendment, unless (a) at least 30 days (or such other period required under or by
any Legal Requirement or Applicable Insurance Regulatory Authority) prior to the expiration
date of such Letter of Credit or (b) such extension would cause such Letter of Credit to
remain outstanding on or after the one-year

27

 

anniversary of the Commitment Expiration Date, notice is given by the respective LC Issuer in
accordance with the terms of the respective Letter of Credit (a “Notice of Non-Extension”)
that the expiration date of such Letter of Credit will not be extended beyond its current
expiration date. The respective LC Issuer will give Notices of Non-Extension as to any or all
outstanding Letters of Credit if requested to do so by the Required Lenders pursuant to Article
VII. The respective LC Issuer will give Notices of Non-Extension as to all outstanding Letters of
Credit (i) if the Commitment Expiration Date has occurred and (ii) on the date necessary to prevent
the extension described in the foregoing clause (b). The respective LC Issuer will send a copy of
each Notice of Non-Extension to the respective Account Party concurrently with delivery thereof to
the respective beneficiary, unless prohibited by law from doing so.

          SECTION 2.08. Changes to Stated Amount. At any time when any Letter of
Credit is outstanding, at the request of the respective Account Party, the Issuing Agent will enter
into an amendment increasing or reducing the Stated Amount of such Letter of Credit,
provided that (i) in no event shall the Stated Amount of such Letter of Credit be increased
to an amount which would cause (x) the aggregate Credit Exposures of all Lenders taken together to
exceed the Total Commitment at such time or (y) with respect to a Fronted Letter of Credit, the
Letter of Credit Outstandings in respect of all Fronted Letters of Credit issued by the applicable
Fronting Lender to exceed the maximum aggregate Stated Amount of all Fronted Letters of Credit that
such Fronting Lender has agreed to issue in a separate agreement with the Company, (ii) the Stated
Amount of a Letter of Credit may not be increased at any time if the conditions precedent set forth
in Section 4.02 are not satisfied at such time, and (iii) the Stated Amount of a Letter of Credit
may not be increased at any time after the Commitment Expiration Date.

          SECTION 2.09. 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 Company 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 Company 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 2.22, the aggregate Credit
Exposures of all Lenders taken together 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 Company shall notify the Administrative Agent of any election to terminate or reduce
the Total Commitment under paragraph (b) of this Section 2.09 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 Company pursuant to this Section
shall be irrevocable; 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 2.10. Mandatory Prepayment; Cash Collateralization. (a) If (i) as
of the Commitment Expiration Date, any Letter of Credit may for any reason remain outstanding, (ii)
at any time, the aggregate amount of all Letter of Credit Outstandings exceeds the Total Commitment
as then in

28

 

effect, (iii) any Event of Default occurs and is continuing and the Administrative Agent or
the Required Lenders, as applicable, require the Company and the other Account Parties to deposit
in an account (which account may be a securities account with the meaning of Section 8-501 of the
Uniform Commercial Code as in effect in the State of New York) with the Administrative Agent, in
the name of the Administrative Agent and for the benefit of the Lenders (any such account, a
“Collateral Account”), amounts of cash and Cash Equivalents, to be held as security for
each Account Party’s reimbursement obligations in respect of Letters of Credit then outstanding or
(iv) an Event of Default set forth under Section 7.05 occurs and is continuing, then the Company
shall, or shall cause one or more other Account Parties to, deposit in a Collateral Account on such
date an amount of cash or Cash Equivalents to be held as additional security for the obligations of
each of the Account Parties hereunder such that the amount of cash and Cash Equivalents in such
Collateral Account applicable to each Account Party would equal the aggregate amount of all Letter
of Credit Outstandings and other obligations in respect of Letters of Credit attributable to such
Account Party hereunder, or in the case of clause (ii) above, the excess referred to in such clause
(ii). If at any time the Administrative Agent determines that any funds held in a Collateral
Account pursuant to this Section 2.10(a) are subject to any right or claim of any Person other than
the Agents (on behalf of the Lenders) or that the total amount of such funds is less than the
aggregate amount of all Letter of Credit Outstandings and other obligations of the Account Parties
hereunder, or in the case of clause (ii) above, the excess referred to in such clause (ii), the
Company shall, or shall cause one or more Account Parties to, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held
in a Collateral Account as aforesaid, an amount equal to the excess of (a) the aggregate amount of
all Letter of Credit Outstandings and other obligations in respect of Letters of Credit of the
Account Parties hereunder over (b) the total amount of cash and Cash Equivalents deposited in the
Collateral Account as aforesaid that the Administrative Agent reasonably determines to be free and
clear of any such right and claim, or in the case of clause (ii) above, the excess referred to in
such clause (ii). With respect to any payment to an account required by clause (iii) of the first
sentence of this Section 2.10(a), such payment shall (to the extent not applied to the applicable
reimbursement obligations) be returned to the Company within three Business Days after the
applicable Event of Default shall have been cured or waived.

          (b) If on any date the aggregate Credit Exposures exceed the Total Commitment as then in
effect, the Company shall (i) first, prepay on such date the principal amount of outstanding Loans
in amount equal to the lesser of (x) the amount of any such excess and (y) the principal amount of
all outstanding Loans at such time and (ii) second, cash collateralize any remaining amount of such
excess in the manner specified in clause (a) above.

          SECTION 2.11. Fees. (a) Each Account Party jointly and severally 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 Company agrees to pay to each Agent, for its own account, fees payable in the amounts
and at the times separately agreed upon between the Company and the applicable Agent.

          (c) Each Account Party severally agrees to pay to the Administrative Agent for pro rata
distribution to each Lender (based on their respective Applicable Percentages), a fee in respect of
each Letter of Credit issued for the account of such Account Party (the “Letter of Credit
Fee”) computed

29

 

at a rate per annum equal to the Applicable Rate with respect to the Letter of Credit Fee on
the daily Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable in arrears on the last day of March, June, September and December of each year and upon the
first day after the termination of the Total Commitment upon which no Letters of Credit remain
outstanding. All Letter of Credit 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).

          (d) Each Account Party severally agrees to pay to each Fronting Lender, for its own account, a
fronting fee in respect of, and fees with respect to the issuance, amendment, renewal or extension
of, or processing of drawings under, each Fronted Letter of Credit issued by such Fronting Lender
for the account of such Account Party, in each case in amounts and on dates as shall have
separately been agreed to by the Company and such Fronting Lender. Each Account Party severally
agrees to pay to the Issuing Agent fees with respect to the issuance, amendment, renewal or
extension of, and processing of drawings under, each Several Letter of Credit issued for the
account of such Account Party, in each case in amounts and on dates as shall have separately been
agreed to by the Company and the Issuing Agent.

          (e) 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 Account 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.

          (f) Notwithstanding anything to the contrary in this Section 2.11, 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 2.12. Taxes. (a) Any and all payments by or on account of any
obligation of any Account Party hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if such Account 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, Issuing 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 Account Party shall make such deductions and (iii) such
Account Party shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

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

          (c) Each Account Party severally (and not jointly) agrees to indemnify the Administrative
Agent, the Issuing Agent and each Lender within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes that such Account Party failed to deduct or withhold
and that were paid by the Administrative Agent, the Issuing Agent or such Lender on or with respect
to any payment by or on account of any obligation of such Account 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 Account Party by a Lender or
by the Administrative

30

 

Agent or the Issuing 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 Account Party to a Governmental Authority, such Account 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 Company (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
Company (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
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. 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 Account Party or with
respect to which such Account Party has paid additional amounts pursuant to this Section 2.12, it
shall pay over such refund to such Account Party (but only to the extent of indemnity payments
made, or additional amounts paid, by such Account Party under this Section 2.12 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 Account Party, upon the request of the Administrative Agent or such
Lender, agrees to repay the amount paid over to such Account 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 Account 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 2.12 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 2.13. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Each Account 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 2.12 or otherwise, except as
expressly set forth in Section 2.05) prior to 12:00 noon (or, in the case of any prepayment or
repayment in full of all outstanding Letters of Credit and/or all outstanding Loans, 2:00 p.m.),
New York City 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

31

 

thereon. All such payments shall be made to the Administrative Agent at its offices at 1111
Fannin, 8th floor, Houston, Texas 77002, except that payments pursuant to Sections 2.06,
2.12 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 Unpaid Drawings, Loans or
any fees payable pursuant to Section 2.11 resulting in such Lender receiving payment of a greater
proportion of the 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 Account Party or the Company, as the case may be, 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 Account
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 Account Party or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each
Account 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 Account Party rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Account Party in the amount
of such participation.

          (d) Unless the Administrative Agent shall have received notice from the relevant Account Party
prior to the date on which any payment is due to the Administrative Agent for the account of the
Lenders hereunder that such Account Party will not make such payment, the Administrative Agent may
assume that such Account 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 Account 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
2.13(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.

32

 

          SECTION 2.14. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.06, or if each Account Party 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 2.12, then such Lender shall use reasonable efforts to
designate a different lending office for issuing or funding its Letters of Credit and 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 2.12, 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. Each Account Party hereby jointly and severally
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 any Account Party 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 2.12,
then, in each case, the Company, 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 (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 2.14, 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 (i) all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced Lender, together
with all then unpaid interest with respect thereto at such time and (ii) 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 2.11; (ii) all obligations of each Account Party 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 2.25 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) no
assignment pursuant to this Section 2.14 shall be effective until all of the then outstanding
Several Letters of Credit are returned by each respective beneficiary to the Issuing Agent for
cancellation in exchange for new or amended Several Letters of Credit which give effect to such
assignment (it being understood that to the extent the respective beneficiaries do not consent to
such assignment, such assignment cannot occur); (iv) the Company shall have received the prior
written consent of the Administrative Agent and each Fronting Lender, which consents shall not be
unreasonably withheld or delayed; (v) such assignment will result in a reduction in such
compensation or payments; and (vi) 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
Company 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 cancellation and exchange of each then outstanding Several Letter of
Credit as provided above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate promissory note or notes executed by the Company, 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

33

 

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
2.14.

          SECTION 2.15. Designated Subsidiary Account Parties. The Company may from
time to time designate one or more Persons as an additional Designated Subsidiary Account Party,
subject to the following terms and conditions:

          (a) each such Person shall be a Wholly-Owned Subsidiary of the Company;

          (b) each such Designated Subsidiary Account Party shall enter into an appropriately completed
DSAP Assumption Agreement on or prior to the date of designation hereof;

          (c) on or prior to the date of designation, the Administrative Agent shall have received from
such Person a certificate, signed by an Authorized Officer of such Person in the form of
Exhibit H or such other form reasonably acceptable to the Administrative Agent with
appropriate insertions or 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 (or
similar governing body) of such Person relating to this Agreement which shall be reasonably
satisfactory to the Administrative Agent; and

          (d) on or prior to the date of designation, the Administrative Agent shall have received an
opinion, addressed to the Administrative Agent and each of the Lenders and dated the date of
designation, which opinion shall be in form and substance reasonably satisfactory to the
Administrative Agent, from counsel to the respective Designated Subsidiary Account Party reasonably
satisfactory to the Administrative Agent, covering certain of the matters set forth in the opinions
of counsel delivered to the Administrative Agent on the Effective Date pursuant to Section
4.01(b)(iii), as may be reasonably requested by the Administrative Agent, and such other matters
incident to the transactions contemplated thereby as the Administrative Agent may reasonably
request.

          SECTION 2.16. Loans. 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 Company, 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 Company, 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 aggregate Credit Exposures of all Lenders taken together (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 2.17. 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 2.24, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Company may request in accordance herewith. Each Lender at its

34

 

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 Company 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 $5,000,000. 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 $5,000,000; 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 Company 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 2.18. Requests for Borrowings. To request a Borrowing, the Company
shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, New York City 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., New York
City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by delivery or facsimile or electronic mail 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
Company. Each such telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.17:

     (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 Company’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 Company 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 2.19. 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, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative

35

 

Agent will make such Loans available to the Company by wire transfer of immediately available
funds not later than 1:00 p.m., New York City time, to the account of the Company 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., New York City 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 Company 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 Company
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 Company 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 Company, 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 Company’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 2.20. 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 Company 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 Interest Periods therefor, all as provided in this Section 2.20. Subject to the other
provisions of this Section 2.20, the Company 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
Company shall notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.18 if the Company were requesting a Borrowing
of the Type resulting from such election to be made on the effective date of such election. Each
such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by
delivery or facsimile or electronic mail to the Administrative Agent of an Interest Election
Request in the form of Exhibit E, or such other form reasonably acceptable to the
Administrative Agent, and signed by the Company.

          (c) Each Interest Election Request shall specify the following information in compliance with
Section 2.17:

     (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);

36

 

     (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 Company 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 Company 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.

          SECTION 2.21. Repayment of Loans; Evidence of Debt.

          (a) The Company 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 Company 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 Company
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 Company to
repay the Loans in accordance with the terms of this Agreement.

37

 

          (e) Any Lender may request by written notice to the Company 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 Company 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 D 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 2.22. Voluntary Prepayment of Loans.

          (a) The Company 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 2.25, subject to
prior notice in accordance with paragraph (b) of this Section.

          (b) The Company shall notify the Administrative Agent by telephone (confirmed by facsimile or
electronic mail) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of
prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New
York City 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 2.09, in which case,
subject to Section 2.25, such notice of prepayment may be revoked if such Conditional Termination
Notice is revoked in accordance with Section 2.09) 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 2.17. 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 2.23.

          SECTION 2.23. 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 Company 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
2.23 or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided
in paragraph (a) of this Section 2.23.

          (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

38

 

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 2.24. 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 Company and the Lenders by telephone
(followed by written or facsimile notice) or facsimile or in writing as promptly as practicable
thereafter and, until the Administrative Agent notifies the Company 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 2.25. 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 2.10 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 Company pursuant to Section 2.14, then, in any such event,
the Company 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) 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

39

 

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 Company and shall
be conclusive absent manifest error. The Company shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

          SECTION 2.26. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions
shall apply for so long as such Lender is a Defaulting Lender:

          (a) if any Letter of Credit Outstandings (excluding Letter of Credit Outstandings in respect
of any Several Letter of Credit so long as (i) neither the Issuing Agent nor any Lender (other than
the Defaulting Lender) has an obligation or liability in respect of the Defaulting Lender’s
obligation under such Several Letter of Credit and (ii) the beneficiary under such Several Letter
of Credit or any other third party does not claim or otherwise assert in writing (which claim or
assertion is not withdrawn) that the Issuing Agent or any Lender (other than the Defaulting Lender)
has an obligation or liability in respect of the Defaulting Lender’s obligation under such Several
Letter of Credit) exist at the time a Lender is a Defaulting Lender, the Company shall
within one (1) Business Day following notice by the Administrative Agent cash collateralize such
Defaulting Lender’s Letter of Credit Outstandings (as adjusted above) in accordance with the
procedures set forth in Section 2.10 for so long as such Letter of Credit Outstandings are
outstanding; and

          (b) no LC Issuer shall be required to issue, amend, extend or increase any Letter of Credit
unless it is satisfied that cash collateral will be provided by the Company in accordance with (and
to the extent required by) Section 2.26(a).

          SECTION 2.27. 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 2.27
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
$400,000,000, (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 2.27 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 2.27 below and (vii) all actions taken by the Account Party pursuant to
this Section 2.27 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 2.27.

(b) The effectiveness of Additional Commitments pursuant to this Section 2.27 shall be subject to
the occurrence of the following: (i) the Company, each Designated Subsidiary Account Party, the

40

 

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 I 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 required in connection therewith and
the satisfaction of the other conditions set forth in this Section 2.27 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, (y) on each such date, the Commitment Schedule shall be deemed modified to reflect the
revised Commitments of each affected Lender and (z) on each such date, the Company shall be deemed
to have repaid and reborrowed all outstanding Loans (with such reborrowing to consist of the Types
of Loans, with related Interest Periods if applicable, specified in a notice delivered by the
Company, in accordance with the requirements of Section 2.18). The deemed payments made pursuant
to clause (z) of the immediately preceding sentence shall be accompanied by payment of all accrued
interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to
indemnification by the Company pursuant to the provisions of Section 2.25 if the deemed payment
occurs other than on the last day of the related Interest Periods.

ARTICLE III

Representations and Warranties

          Each of the Company and each Designated Subsidiary Account Party, in each case, 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

41

 

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 Account 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 Account Party has duly executed and delivered this Agreement
and this Agreement constitutes the legal, valid and binding obligation of such Account Party
enforceable against such Account 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 Account 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; Use of Letters of Credit; Margin Regulations.
(a) All proceeds of the Loans shall be utilized for the general corporate (including acquisitions)
and working capital purposes of the Company (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 Letters of Credit issued hereunder); (b) All Letters of Credit shall only be utilized to
support Letter of Credit Supportable Obligations; (c) 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

42

 

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 Account 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 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 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 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 each other Account Party,
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

43

 

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.

          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, 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

44

 

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).

          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

45

 

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 each
Designated Subsidiary Account Party believes 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.

          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 Account Party, taken
individually, (ii) the Company and its Subsidiaries, taken as a whole and (iii) each Account 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
and each LC Issuer to issue Letters of Credit 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 Company, each Designated Subsidiary
Account Party listed on Schedule 2.15, 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 telephonic (confirmed in writing), written or
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 2.21(e) the appropriate promissory note or promissory notes, executed by the Company, 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 Account Parties, which opinion shall
cover the matters contained in Exhibit G-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 Account Parties, which opinion shall cover the matters covered in Exhibit G-2 hereto
and without duplication.

          (c) (i) On the Effective Date, the Administrative Agent shall have received, from each Account
Party, a certificate, dated the Effective Date, signed by an Authorized Officer of such Account
Party, and attested to by the Secretary or any Assistant Secretary of such Account Party, in the
form of Exhibit H 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 Account 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

46

 

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.

          (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 Account 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 each Designated Subsidiary Account
Party 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.

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          SECTION 4.02. Each Credit Event. The obligation of each Lender to make each
Loan and each LC Issuer to issue each Letter of Credit or to increase the Stated Amount thereof 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);

          (c) The Administrative Agent shall have received (i) a Borrowing Request meeting the
requirements of Section 2.18 with respect to each incurrence of Loans and/or (ii) a Letter of
Credit Request meeting the requirements of Section 2.04; and

          (d) To the extent such Credit Event relates to the issuance of a Letter of Credit, all of the
applicable conditions set forth in Section 2.03(a) and (b) shall have been satisfied.

          Each occurrence of a Credit Event shall be deemed to constitute a representation and warranty
by the applicable Account Party and the Company 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) and each Letter of Credit has
expired or been terminated and all Unpaid Drawings, the principal of and interest on each Loan, and
all fees payable hereunder shall have been paid in full, each of the Company and each Designated
Subsidiary Account 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.

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          (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 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 Credit Facility on March 1, 2010 with respect to the
fiscal period ended December 31, 2009 is acceptable to the Administrative Agent for purposes
hereof.

          (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 the Company setting forth the details thereof and the actions which the Company is taking or
proposes to take with respect thereto and (y) promptly after the Company 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.

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          (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 similar report, and (d) each report, order, direction,
instruction, approval, authorization, license or other notice which the Company 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 Account Party and each Lender hereby acknowledges
and agrees that notwithstanding anything to the contrary contained in Section 10.12 of this

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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 Account 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 and the Syndication Agent or, during the continuation of an Event of Default,
any Lender (at such Agent or 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 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 independent
public accountants, the Company 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

51

 

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):

     (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

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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 Account 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 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) and each Letter of Credit has
expired or terminated and all Unpaid Drawings, the principal of and interest on each Loan and all
fees payable hereunder have been paid in full, each of the Company and each Designated Subsidiary
Account 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 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

53

 

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 Five-Year Secured 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).

          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

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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
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;

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          (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) (i) Liens created pursuant to the Five-Year Secured Letter of Credit Facility (including
the security documents thereunder) and (ii) Liens created to cash collateralize a Defaulting
Lender’s Letter of Credit Outstandings pursuant to Section 2.26 hereof;

          (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;

          (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;

          (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.

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          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 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.

          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 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 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

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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.

          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

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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 the Five-Year Secured 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 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 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 Account 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 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

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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. Any Account Party shall (a) default in the payment
when due of any principal on any Loan or any Unpaid Drawing, (b) default, and such default shall
continue for three or more Business Days, in the payment when due of any interest on any Loan or
any Unpaid Drawing, (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 Account 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 Account 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 Company from the Administrative Agent or the Required Lenders; or

          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 Five-Year Secured 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

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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 (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, 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

          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, any Designated Subsidiary Account Party, 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,

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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 Company, 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
Account 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 Account
Party, the result which would occur upon the giving of written notice by the Administrative Agent
as specified in clauses (i) through (iii) 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; (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 Account Party; (iii) terminate any Letter of Credit which may be
terminated in accordance with its terms and/or (iv) direct each Account Party to cause to be
deposited in the Collateral Account maintained by the Administrative Agent such amounts of cash and
Cash Equivalents, to be held as security for such Account Party’s obligations hereunder then
outstanding as contemplated by Section 2.10, equal to the aggregate amount of Letter of Credit
Outstandings and other obligations attributable to such Account Party hereunder. In addition, upon
the occurrence and during the continuation of an Event of Default, each Account Party hereby
appoints the Administrative Agent as the attorney-in-fact of such Account Party, with full power of
substitution, and in the name of such Account Party, to disburse and directly apply the proceeds of
its Collateral Accounts to the satisfaction of any of such Account Party’s obligations hereunder,
as so contemplated. The power-of-attorney granted hereby is a power coupled with an interest and
is irrevocable. Unless directed to do so by the Required 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 Account Party to
continue the same or for the sufficiency or adequacy thereof. At the request of the Administrative
Agent, each Account Party shall ratify all actions taken by the Administrative Agent hereunder.

ARTICLE VIII

The Agents

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

          SECTION 8.02. Agents in their Individual Capacities. Each bank serving as
an 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 an Agent, and such bank and its Affiliates
may accept

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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 an Agent hereunder.

          SECTION 8.03. Exculpatory Provisions. Each Agent shall not have any duties
or obligations except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) no Agent shall be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) no Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that such 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, no Agent
shall 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 such Agent or any of its Affiliates in any capacity. No Agent shall 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. No Agent shall be deemed to have knowledge of any Default unless and until
written notice thereof is given to such Agent by the Company or the applicable Account Party or a
Lender, and no Agent shall 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 such Agent.

          SECTION 8.04. Reliance. Each 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. Each Agent also may rely upon any statement made to it orally
or by telephone and believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. Each Agent may consult with legal counsel (who may be counsel for
the Company), 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. Each 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
such Agent. Each 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 applicable
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 Agent.

          SECTION 8.06. Resignation. Subject to the appointment and acceptance of an
applicable successor Agent as provided in this paragraph, each 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 or syndication 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 Agent gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall

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be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as an Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder. The fees payable by
the Account Parties to a successor Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After an Agent’s resignation
hereunder, the provisions of this Article and Section 10.03 shall continue in effect for the
benefit of such retiring 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 an Agent.

          SECTION 8.07. Non-Reliance. Each Lender acknowledges that it has,
independently and without reliance upon any 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 any 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.

          SECTION 8.08. Syndication Agent and Joint Lead Arrangers and Joint
Bookrunners. Notwithstanding any other provision of this Agreement, each of the Syndication
Agent and the Joint Lead Arrangers and Joint Bookrunners is named as such for recognition purposes
only, and in its capacity as such shall have no powers, duties, responsibilities or liabilities
with respect to this Agreement or the transactions contemplated hereby, except as expressly
contemplated hereby. Without limitation of the foregoing, the Syndication Agent and the Joint Lead
Arrangers and Joint Bookrunners shall not, solely by reason of this Agreement, have any fiduciary
relationship with any Lender or any other Person.

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 from the issuance of the Letters of Credit, the Company hereby agrees with
the Lenders as follows: the Company hereby unconditionally and irrevocably guarantees, as primary
obligor 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 each Designated
Subsidiary Account Party to the Guaranteed Creditors. If any or all of the Guaranteed Obligations
of any Designated Subsidiary Account Party 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 each Designated Subsidiary Account Party, 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.

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          SECTION 9.02. Bankruptcy. Additionally, the Company unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations of each Designated
Subsidiary Account Party hereunder to the Guaranteed Creditors whether or not due or payable by
each Designated Subsidiary Account Party upon the occurrence of any of the events specified in
Section 7.05 with respect to such Designated Subsidiary Account Party, 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 each Designated
Subsidiary Account Party 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 each Designated Subsidiary Account Party 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 each Designated Subsidiary Account Party, 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 each Designated Subsidiary Account Party, or (e) any
payment made to the Guaranteed Creditors on the Guaranteed Obligations which any such Guaranteed
Creditor repays to each Designated Subsidiary Account Party 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 each
Designated Subsidiary Account Party, 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 each Designated Subsidiary Account Party and whether or not any other guarantor, any other party
or each Designated Subsidiary Account Party 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 a Designated
Subsidiary Account Party or other circumstance which operates to toll any statute of limitations as
to a Designated Subsidiary Account Party 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:

          (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;

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          (c) exercise or refrain from exercising any rights against any Designated Subsidiary Account
Party or others or otherwise act or refrain from acting;

          (d) release or substitute any one or more endorsers, guarantors, any Designated Subsidiary
Account Party 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 any Designated Subsidiary Account Party to its creditors other than the
Guaranteed Creditors;

          (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of
any Designated Subsidiary Account Party to the Guaranteed Creditors regardless of what liability or
liabilities of any Designated Subsidiary Account Party 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 any Designated Subsidiary Account Party 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 any Designated Subsidiary
Account Party now or hereafter owing to the Company is hereby subordinated to the Guaranteed
Obligations of each Designated Subsidiary Account Party owing to the Guaranteed Creditors; and if
the Administrative Agent so requests at a time when an Event of Default exists, no Designated
Subsidiary Account Party shall 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
any Designated Subsidiary Account Party 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 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 any Designated Subsidiary Account Party, any other guarantor or any other party,
(ii) proceed against or exhaust any security held from any Designated Subsidiary Account Party, 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 any
Designated Subsidiary Account Party, 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 any Designated
Subsidiary Account Party, any

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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 any Designated
Subsidiary Account Party other than payment in full of the Guaranteed Obligations. The Guaranteed
Creditors may exercise any right or remedy the Guaranteed Creditors may have against any Designated
Subsidiary Account Party 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 any Designated Subsidiary Account Party
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 each Designated Subsidiary Account Party’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, (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);

     (ii) if to a Designated Subsidiary Account Party, at the address specified
opposite its signature below;

     (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

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     (iv) 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 or the Company 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 Account 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, neither the issuance of any Letter of Credit nor the
making of any Loan shall 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, each Account Party, 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 each Account Party and the
Required Lenders or by each Account Party and the Administrative Agent with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the Commitment or the
Loan Exposure of any Lender without the written consent of such Lender, (ii) reduce the amount of
any amount due pursuant to any Letter of Credit or Unpaid Drawing or 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 reimbursement of any Unpaid Drawing or 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 or any Letter of
Credit, without the written consent of each Lender affected thereby, (iv) change Section 2.13(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 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, (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 or
(vi) change any provision of Article II specifically relating to Letters of Credit without the
written consent of each LC Issuer affected thereby;

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and provided, further, that no such agreement shall amend, modify or otherwise
affect the rights or duties of any Agent or any LC Issuer hereunder without the prior written
consent of such Agent or such LC Issuer, as the case may be. 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
(and, if its rights or obligations are affected thereby, each LC Issuer and the Issuing Agent) if
(x) by the terms of such agreement the Commitment of each Lender not consenting to the amendment
provided for therein shall terminate, and any Several Letters of Credit then outstanding shall
either be terminated, amended or returned and reissued, in each case to give effect to such
termination (it being understood that the Company 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 Account Party
jointly and severally agrees to pay (i) all out-of-pocket expenses incurred by the Agents, the
Joint Lead Arrangers and Joint Bookrunners and their Affiliates, including the reasonable fees,
charges and disbursements of counsel, in connection with the syndication of the credit facility
provided for herein, 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 any Agent, any Joint Lead Arranger and Joint Bookrunner
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 and Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such Loans and Letters of
Credit.

          (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, 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 Account Party fails to pay any amount required to be paid by it to
an Agent, under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to such
Agent such Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed

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expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent, in its capacity as such.

          (d) To the extent permitted by applicable law, no Account Party shall assert, and each Account
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 Letter of Credit, 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 Account 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 Account 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
Agents 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 and each LC Issuer.

     (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;

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     (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;

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

     (E) the assignee shall be an NAIC Approved Bank that is not a parent,
subsidiary or Affiliate of any Account Party or any beneficiary under any Letter of
Credit; and

     (F) if any Several Letters of Credit are then outstanding, no such assignment
shall be effective until all such outstanding Several Letters of Credit are either
amended or returned and reissued, in each case to give effect to such assignment.

          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 Account Party to
such assignee under Section 2.06, 2.12 or 2.25 shall be limited to the amount, if any, that
would have been payable thereunder by such Account 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, 2.12, 2.25 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
Account 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 Account 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 Account Parties, and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.

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     (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 Account 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 Unpaid Drawings and the Loans owing to it); provided that (A) such Lender’s
obligations under this 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 Account
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 Account Party agrees
that each Participant shall be entitled to the benefits of Sections 2.06, 2.12 and 2.25 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 2.13(c) as though it were a Lender.

     (ii) A Participant shall not be entitled to receive any greater payment under
Section 2.06 or 2.12 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 2.12 unless the
Company is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Account Parties, to comply with Section 2.12(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 Account 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
issuance of any Letters of Credit 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

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extended hereunder, and shall continue in full force and effect as long as any Letter of
Credit or 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, 2.12, 2.25 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 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 Account
Party against any of and all the obligations of such Account 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

73

 

otherwise have to bring any action or proceeding relating to this Agreement against any
Account 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.

          (e) Each Account 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 Account 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 Agents 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 applicable 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

74

 

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 Account 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 any Agent or any Lender on a
non-confidential basis from a source other than the Company that, to the applicable 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 Account Party relating to the Company, any Subsidiary of the Company or
their respective businesses, other than any such information that is available to any Agent or any
Lender on a non-confidential basis prior to disclosure by any Account 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 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 Unpaid Drawings or any Loan,
together with all fees, charges and other amounts which are treated as interest on such amount or
pursuant to any Letter of Credit or any 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 issuing or holding participation
in such Letter of Credit or such Loan in accordance with applicable law, the rate of interest
payable in respect of such Letter of Credit or 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 Letter of Credit or 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 Letters of Credit or 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
each other Account Party 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 Account Party, which information
includes the name and address of each Account Party and other information that will allow such
Lender to identify each Account Party in accordance with the Patriot Act.

          SECTION 10.15. Termination of Existing Credit Facility. JPMorgan Chase
Bank, N.A., in its capacity as Existing Administrative Agent, hereby agrees, acknowledges and
confirms that upon the effectiveness of this Agreement on the Effective Date and payment in full of
any and all principal, interest, fees and other amounts owing under or in connection with the
Existing Credit Facility (as specified by the Existing Administrative Agent to the Company on or
prior to the Effective Date), all liabilities, obligations and indebtedness owing by the Company
and the Account Parties under the Existing Credit Facility shall be automatically released,
discharged and satisfied in full and all related instruments, agreements and other documents shall
be automatically terminated (provided that any

75

 

contingent and/or indemnity obligations under the Existing Credit Facility which expressly
survive termination thereof shall continue to remain in effect in accordance therewith).

[Signature Pages Follow]

76

 

          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:	 	VALIDUS HOLDINGS, LTD.
	 
	 	 	 	 
	29 Richmond Road, 

Pembroke, HM08 Bermuda

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

	 	 	 	Title: Executive Vice President and Chief
	Facsimile: (441) 278-9090

	 	 	 	          Financial Officer
	 
	 	 	 	 
	Address:	 	VALIDUS REINSURANCE, LTD.
	 
	 	 	 	 
	19 Par-La-Ville Road, 

Hamilton, HM11 Bermuda

	 	By:
	 	/s/ Jeff Sangster
 
 Name:
Jeff Sangster
	Telephone: (441) 278-9000

	 	 	 	Title: Chief Financial Officer
	Facsimile: (441) 278-9090
	 	 	 	 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., 

INDIVIDUALLY, AS A LENDER, AS 

ADMINISTRATIVE AGENT AND AS ISSUING AGENT,

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

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

AS EXISTING ADMINISTRATIVE AGENT, 

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

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	DEUTSCHE BANK SECURITIES INC.,

AS SYNDICATION AGENT, 

 	 
	 	 	 	 
	 	By:  	/s/ Rob Danziger
 	 
	 	 	Name:  	Rob Danziger 	 
	 	 	Title:  	Managing
Director 	 
	 
	 	By:  	      /s/ John McGill
 	 
	 	 	Name:  	John McGill 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	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:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	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 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF BERMUDA LIMITED,

as a Lender

 	 
	 	 	 	 
	 	By:  	/s/ Karla Maloof
 	 
	 	 	Name:  	Karla Maloof 	 
	 	 	Title:  	Director 	 
	 
	 	By:  	
/s/ Guillermo Konecny
 	 
	 	 	Name:  	Guillermo Konecny 	 
	 	 	Title:  	Head of Global Banking & Markets 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	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 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	LLOYDS TSB BANK PLC

as a Lender

 	 
	 	 	 	 
	 	By:  	/s/ Morgan Beanland
 	 
	 	 	Name:  	Morgan Beanland 	 
	 	 	Title:  	Senior Vice President BO33 	 
	 
	 	By:  	                 /s/ Candi Obrentz
 	 
	 	 	Name:  	Candi Obrentz 	 
	 	 	Title:  	Vice President O013 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SUNTRUST BANK,

as a Lender

 	 
	 	 	 	 
	 	By:  	/s/ W. Bradley Hamilton
 	 
	 	 	Name:  	W. Bradley Hamilton 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON

as a Lender

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

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA

as a Lender

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

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	COMERICA BANK,

as a Lender

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

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