THIRD AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT

EX-10.1 3 dex101.htm THIRD AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT Third Amendment and Limited Consent to Credit Agreement

Exhibit 10.1

EXECUTION VERSION

THIS THIRD AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, dated as of the 28th day of February, 2009 (this “Amendment”), is entered into by and among Max Bermuda Ltd. (f/k/a Max Re Ltd.), a Bermuda company (“Max Bermuda”) and Max Capital Group Ltd. (f/k/a Max Re Capital Ltd.), a Bermuda company (“Max Capital” and together with Max Bermuda, each a “Borrower” and collectively the “Borrowers”), various financial institutions which are parties hereto (the “Lenders”), Bank of America, National Association, as fronting bank (in such capacity, the “Fronting Bank”), Bank of America, National Association, as letter of credit administrator (in such capacity, the “LC Administrator”) and Bank of America, National Association, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

RECITALS

A. The Borrowers, the Lenders and the Administrative Agent are parties to the Credit Agreement, dated as of August 7, 2007 (as amended, restated, supplemented or modified from time to time and in effect on the date hereof, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings given to them in the Credit Agreement.

B. Max Capital and IPC Holdings, Ltd., a Bermuda company organized under the laws of Bermuda (“IPC Holdings”), have proposed a business combination (the “Amalgamation”) in which IPC Holdings has formed IPC Limited, a wholly owned Bermuda Subsidiary (“Amalco Sub”) and, pursuant to the Amalgamation Agreement (as defined below) upon satisfaction of certain conditions precedent, amalgamate Amalco Sub with Max Capital into Max Holdings Ltd. (“Max Holdings”). Immediately after the amalgamation, IPC Holdings will change its name to Max Capital Group Ltd. and will directly own 100% of the equity interests of (i) Max Holdings, (ii) IPCRe Limited (“IPCRe Limited”) and (iii) IPCRe Underwriting Services Limited (“IPC Underwriting”). Max Holdings will own 100% of the equity interests of (i) Max Bermuda, (ii) Max USA Holdings Ltd. (“Max US”), (iii) Max UK Holdings Ltd. (“Max UK”), (iv) Max Managers Ltd. and (v) Max Capital Services Limited.

C. The Borrowers desire to obtain the consent of the Required Lenders to the Amalgamation prior to the public announcement thereof and to make certain amendments to the Credit Agreement, and the Administrative Agent and the Required Lenders have agreed to make such amendments on the terms and conditions set forth herein. IPC Holdings is pursuing an amendment of its Credit Agreement (the “IPC/Wachovia Credit Agreement”), dated as of April 13, 2006, among IPC Holdings, IPCRe Limited, the lenders identified therein and Wachovia Bank, National Association, as administrative agent, in substantially similar form as this Amendment.

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

ARTICLE I

LIMITED CONSENT

1.1 Subject to the satisfaction of the conditions set forth in Section 3.1 of this Amendment, the undersigned Lenders hereby each offer their limited consent to the Amalgamation until the earlier of the following (each, a “Consent Termination Event”) (i) 5:00 p.m. EDT on November 30, 2009, if the Amalgamation shall not have been consummated and the conditions set forth in Section 3.2 herein shall not have been satisfied by such time, (ii) the date upon which the board of directors of either IPC Holdings or Max Capital shall have withdrawn or modified its approval of the Amalgamation in a manner adverse to the Lenders; (iii) the date upon which Max Capital advises the Administrative Agent, or the Administrative Agent otherwise reasonably determines that the Amalgamation Agreement (as defined below) shall have been waived, amended, supplemented or otherwise modified in a manner materially adverse to the Lenders; or (iv) the fees and , to the extent invoiced, expenses (including legal fees and expenses) specified in the engagement letter, dated February 26, 2009, among IPC Holdings, Max Capital, Banc of America Securities LLC and Wachovia Capital Markets, LLC have not been paid within two Business Days of the Consent Effective Date.

1.2 Upon the occurrence of any Consent Termination Event, the limited consent set forth in Section 1.1 hereof shall upon written notice of the Administrative Agent to each of IPC Holdings and Max Capital terminate and be of no further force or effect, and all rights and remedies with respect to the matters set forth in Section 1.1 hereof of the Administrative Agent and the Lenders under the Credit Agreement and any other Credit Document shall, without any further action by any person, automatically be reinstated as if the limited consent set forth in Section 1.1 hereof had not become effective; provided that the occurrence of a Consent Termination Event in and of itself shall not constitute a Default or Event of Default under the Credit Agreement. This limited consent shall not constitute or be deemed to be a waiver of, consent to or departure from, any other term or provision in the Credit Agreement, which shall continue in full force and effect, nor shall this limited consent constitute a course of dealing among the parties.

ARTICLE II

AMENDMENTS TO CREDIT AGREEMENT

Effective as of the Amendment Effective Date:

2.1 Amendments to Section 1.1 Consisting of New Definitions. The following definitions are hereby added to Section 1.1 of the Credit Agreement in appropriate alphabetical order:

“Acquisition” means any transaction or series of related transactions, consummated on or after the date hereof, by which IPC Holdings directly, or indirectly through one or more Subsidiaries, (i) acquires any going business, division thereof or line of business, or all or substantially all of the assets, of any Person, whether through purchase of assets, merger or otherwise, or (ii) acquires securities or other ownership interests of any Person that, following such Acquisition, will be deemed a Subsidiary of IPC Holdings.

“Amalco Sub” means IPC Limited, a Bermuda company and Wholly Owned Subsidiary of IPC Holdings.

“Amalgamation” means the amalgamation, pursuant to the Amalgamation Agreement, of Amalco Sub and Max Capital into Max Holdings, with Max Holdings becoming a Wholly Owned Subsidiary of IPC Holdings.

“Amalgamation Agreement” means the Agreement and Plan of Amalgamation, dated as of March [ ], 2009, by and among IPC Holdings, Amalco Sub and Max Capital, in the form attached as Annex B to the Third Amendment, as amended, modified, restated or supplemented from time to time in accordance with the terms of the Third Amendment.

“Amalgamation Date” means the date on which (a) the “Closing” under the Amalgamation Agreement occurs, (b) the application for registration of an amalgamated company in connection with the amalgamation of Amalco Sub and Max Capital has been filed with the proper Governmental Authority and (c) the conditions in Article VI of the Amalgamation Agreement have been satisfied.

“Capital Lease Obligations” means, with respect to any Person, the obligations of such Person to pay rent or other amounts under which is or should be capitalized on the balance sheet in accordance with GAAP, together with any other lease which is in substance a financing lease, including, without limitation, any lease under which (a) such Person has or will have an option to purchase the property subject thereto at a nominal amount or an amount less than a reasonable estimate of the fair market value of such property as of the date the lease is entered into or (b) the term of the lease approximates or exceeds the expected useful life of the property leased thereunder.

“Consolidated Debt” means, at any time, the aggregate (without duplication) of all Debt of IPC Holdings and its Subsidiaries determined on a consolidated basis in accordance with GAAP, but excluding the stated amount of all letters of credit to the extent permitted to be issued under Section 6.2 but only in each case to the extent such letters of credit are not drawn upon. For the avoidance of doubt, Consolidated Debt shall include that portion of the Trust Preferred Securities which (i) is not included as equity by S&P or (ii) even if included as equity by S&P, exceeds 15% of Total Capitalization.

“Consolidated Net Worth” means, at any time, (a) the consolidated shareholders’ equity of IPC Holdings and its Subsidiaries determined in accordance with GAAP (but excluding any extraordinary gain realized in connection with the Amalgamation), plus (b) the aggregate outstanding amount of Trust Preferred Securities of IPC Holdings, if any, but only to the extent (i) such amount is included in a determination of the Consolidated Net Worth (as defined in clause (a) above) of IPC Holdings and its Subsidiaries under the applicable procedures and guidelines of S&P and (ii) the amount included as equity does not exceed 15% of Total Capitalization.

“Credit Party” means any Person who executes a Credit Document other than the Administrative Agent, any Applicable Issuing Party or any Lender.

“Equity Interests” means, with respect to any Person, shares of capital stock of, or any partnership, membership, limited liability company, trust or other ownership or profit interests in, such Person, together with (i) warrants, options or other rights for the purchase or other acquisition from such Person of any of the foregoing, (ii) securities convertible into or exchangeable for any of the foregoing or warrants, options or other rights for the purchase or other acquisition from such Person of any such securities and (iii) any other ownership or profit interests in such Person, in each case, whether voting or nonvoting, and whether or not any of the foregoing are authorized or otherwise existing on any date of determination.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with IPC Holdings or any of its Subsidiaries within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“Financial Strength Rating” means the rating that has been most recently announced by A.M. Best Company, Inc. as the “financial strength rating” for any Insurance Subsidiary.

“Foreign Pension Plan” means any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by IPC Holdings or any one or more of its Subsidiaries primarily for the benefit of employees of IPC Holdings 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.

“Guarantor” means IPC Holdings, Max Holdings and, if required by the Administrative Agent in its sole discretion, Max Capital and Amalco Sub.

“Guaranty” means the guaranty agreement executed by the Guarantors in favor of the Administrative Agent and the Lenders, in substantially the form of Exhibit A to the Third Amendment, as amended, modified, restated or supplemented from time to time.

“Hedge Agreement” means any interest or foreign currency rate swap, cap, collar, option, hedge, forward rate or other similar agreement or arrangement designed to protect against fluctuations in interest rates or currency exchange rates, including any swap agreement.

“Insurance Regulatory Authority” means, with respect to any Insurance Subsidiary, the Governmental Authority charged with regulating insurance companies or insurance holding companies in its jurisdiction of domicile and, to the extent that it has regulatory authority over such Insurance Subsidiary, in each other jurisdiction in which such Insurance Subsidiary conducts business or is licensed to conduct business.

“IPC Holdings” means IPC Holdings, Ltd., a company organized under the laws of Bermuda.

“IPC Holdings Debt Rating” has the meaning given in the definition of “Applicable Rate”.

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

“IPCRe Subsidiaries” means IPCRe Underwriting Services Limited, a company organized under the laws of Bermuda and IPC Europe Limited, a company organized under the laws of Ireland.

“IPC/Wachovia Credit Agreement” means the Credit Agreement, dated as of April 13, 2006, among IPC Holdings, IPCRe Limited, the lenders identified therein and Wachovia Bank, National Association, as administrative agent.

“Material Subsidiary” means each of Max Holdings, Max Bermuda, IPCRe Limited, each Material Insurance Subsidiary, and each other Subsidiary (after elimination of intercompany accounts) whose consolidated gross assets or gross revenues exceed 5% of the consolidated gross assets or gross revenues of IPC Holdings and its Subsidiaries for the most recent Fiscal Quarter for which financial statements have been delivered pursuant to Section 5.1(a)(i); provided, however that prior to the date after the Amalgamation Date on which financial statements are provided as required in Section 5.1, the Pro Forma Financial Statements shall be used.

“Max Holdings” means Max Holdings, Ltd., a Bermuda company which resulted from the amalgamation of Amalco Sub and Max Capital Holdings, Ltd.

“Max UK” means Max UK Holdings Ltd. (f/k/a Imagine Group (UK) Limited), a company formed under the laws of England and Wales.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto.

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

“Pro Forma Financial Statements” means the pro forma balance sheet and income statement giving effect to the Amalgamation and the transactions contemplated thereby and hereby for the Fiscal Year ending December 31, 2008 calculated in accordance with Regulation S-X under the Securities Act of 1933, as amended, and the update to such pro forma balance sheet and income statement for the 2009 year to date ending on the last day of the most recent Fiscal Quarter ending prior to the Amalgamation Date.

“Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/sanctions, or as otherwise published from time to time.

“Sanctioned Person” means (i) a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

“Third Amendment” means the Third Amendment and Limited Consent to Credit Agreement dated as of the 28th day of February, 2009 among Max Bermuda, Max Capital, the Lenders and the Administrative Agent.

“Total Capitalization” means, as of any date of determination, the sum of (a) Consolidated Net Worth as of such date and (b) Consolidated Debt as of such date.

“Total Voting Power” means, with respect to any Person, the total number of votes which may be cast in the election of directors of such Person at any meeting of stockholders of such Person if all securities entitled to vote in the election of directors of such Person (on a fully diluted basis, assuming the exercise, conversion or exchange of all rights, warrants, options and securities exercisable for, exchangeable for or convertible into, such voting securities) were present and voted at such meeting (other than votes of any securities that may be cast only upon the happening of a contingency).

“Trust Preferred Securities” shall mean any preferred securities offered by a special purpose business trust of which IPC Holdings is the grantor, the proceeds of which are or have been used principally to purchase subordinated debentures issued by IPC Holdings.

“Wholly Owned” means, with respect to any Subsidiary of any Person, that 100% of the outstanding Equity Interests of such Subsidiary is owned, directly or indirectly, by such Person.

2.2 Amendments to Section 1.1 Consisting of Modified Definitions. The following definitions in Section 1.1 of the Credit Agreement are hereby amended in their entirety and read as follows:

“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Debt Rating as set forth below:


		Non-Use Fee				Applicable Margin for LIBOR Loans		Base Rate Loans		Letter of Credit Fee
Pricing Level	Debt Rating	Tranche A		Tranche B		Tranche B		Tranche B		Tranche A		Tranche B
1	³ A-/ A3	0.200	%	0.300	%	2.250	%	1.250	%	1.000	%	2.250	%
2	BBB+/Baa1	0.200	%	0.400	%	2.500	%	1.500	%	1.000	%	2.500	%
3	BBB/Baa2	0.200	%	0.500	%	3.000	%	2.000	%	1.000	%	3.000	%
4	BBB-/Baa3	0.200	%	0.625	%	3.750	%	2.750	%	1.000	%	3.750	%
5	<BBB-/Baa3	0.200	%	0.750	%	4.500	%	3.500	%	1.000	%	4.500	%

IPC Holdings Debt Rating means, as of any date of determination, the rating as determined by either S&P or Moody’s (collectively, the “IPC Holdings Debt Ratings”) of IPC Holdings’ non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the respective IPC Holdings Debt Ratings issued by the foregoing rating agencies differ by one level, then the Pricing Level for the higher of such IPC Holdings Debt Ratings shall apply (with the IPC Holdings Debt Rating for Pricing Level 1 being the highest and the IPC Holdings Debt Rating for Pricing Level 5 being the lowest); (b) if there is a split in IPC Holdings Debt Ratings of more than one level, then the Pricing Level that is one level lower than the Pricing Level of the higher IPC Holdings Debt Rating shall apply; (c) if IPC Holdings has only one IPC Holdings Debt Rating, the Pricing Level that is one level lower than that of such IPC Holdings Debt Rating shall apply; and (d) if IPC Holdings does not have any IPC Holdings Debt Rating, Pricing Level 5 shall apply.

Each change in the Applicable Rate resulting from a publicly announced change in the IPC Holdings Debt Rating shall be effective during the period commencing on the date of the public announcement of each upgrade or downgrade and ending on the date immediately preceding the effective date of the next such change.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” and (c) LIBOR for a one-month Interest Period commencing on such day plus 1%. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate plus the Applicable Rate.

“Change of Control” means (a) any Person or group of Persons acting in concert as a partnership or other group, shall, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise, have become, after the date hereof, the “beneficial owner” (within the meaning of such term under Rule 13d-3

under the Exchange Act) of securities of IPC Holdings representing the right to exercise 51% or more of the Total Voting Power of the then outstanding securities of IPC Holdings ordinarily (and apart from rights accruing under special circumstances) having the right to vote in the election of directors; (b) the Board of Directors of IPC Holdings shall cease to consist of a majority of the individuals who constituted the Board of Directors as of the date hereof or who shall have become a member thereof subsequent to the date hereof after having been nominated, or otherwise approved in writing, by at least a majority of individuals who constituted the Board of Directors of IPC Holdings as of the date hereof (or their replacements approved as herein required); (c) Max Bermuda, IPCRe Limited or Max Holdings ceases to be a Wholly Owned Subsidiary of IPC Holdings (except as permitted hereunder); or (d) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of IPC Holdings, Max Holdings, Max Bermuda or IPCRe Limited (except as permitted hereunder).

“Consolidated Net Income” means, for any period, net income (or loss) for IPC Holdings and its Subsidiaries for such period and as reflected on the consolidated financial statements of IPC Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Credit Documents” means this Agreement, each Guaranty, each Letter of Credit, LC Application and LC Amendment Application, the Fee Letter, the Security Agreement, and all other agreements, instruments, certificates, documents, schedules or other written indicia delivered by a Credit Party in connection with any of the foregoing.

“Debt” means, with respect to any Person, at the time of determination (without duplication), (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments, or upon which interest payments are customarily made, (c) the maximum stated or face amount of all surety bonds, letters of credit and bankers’ acceptances issued or created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (d) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade payables incurred in the ordinary course of business and not past due based on customary practices in the trade), (e) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (f) all Capital Lease Obligations of such Person, (g) the principal balance outstanding and owing by such Person under any synthetic lease, tax retention operating lease or similar off-balance sheet financing product, (h) all guarantees or any other direct or indirect liability of such Person with respect to any Debt, liability or other obligation of another Person, whether or not contingent, (i) the net termination obligations of such Person under any Hedge Agreements and Total Return Equity Swaps of such Person, calculated as of any date as if such agreement or arrangement were terminated as of such date, and (j) all indebtedness of the types referred to in clauses (a) through (i) above (A) of any partnership or unincorporated joint venture in which such Person is a general partner or joint venturer to the extent such Person is liable therefor or (B) secured by any Lien on any property or asset owned or held by such Person regardless of whether or not the indebtedness secured thereby shall

have been incurred or assumed by such Person or is nonrecourse to the credit of such Person, the amount thereof being equal to the value of the property or assets subject to such Lien; provided that Debt shall not include (i) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business, (ii) unsecured current liabilities incurred in the ordinary course of business and paid within 90 days after the due date (unless contested diligently in good faith by appropriate proceedings and, if requested by the Administrative Agent, reserved against in conformity with GAAP) other than liabilities that are for money borrowed or are evidenced by bonds, debentures, notes or other similar instruments (except as described in clause (i) above) or (iii) obligations with respect to Primary Policies and Reinsurance Agreements and obligations related or incidental thereto (other than obligations in respect of letters of credit) which are entered into in the ordinary course of business.

“Defaulting Lender” means any Lender, as determined in good faith by the Administrative Agent, that (i) has refused to fund, or otherwise defaulted in the funding of, its Percentage of any Borrowing, any LC Advance or LC Borrowing required to be funded by it hereunder, (ii) has notified IPC Holdings, the Administrative Agent, the Fronting Bank 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 generally under other agreements in which it commits to extend credit, (iii) has failed, within 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 its Percentage of any Borrowing, any LC Advance or LC Borrowing required to be funded by it hereunder, (iv) has failed to pay to the Administrative Agent, Fronting Bank or any Lender when due an amount owed by such Lender pursuant to the terms of this Agreement, unless such amount is subject to a good faith dispute, or (v) (a) has become or is insolvent or has a parent company that has become or is insolvent or (b) has become the subject of a proceeding under any applicable bankruptcy, insolvency or similar law of any jurisdiction now or hereafter in effect, or has had a receiver, conservator, trustee 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 proceeding under any applicable bankruptcy, insolvency or similar law of any jurisdiction now or hereafter in effect, or has had a receiver, conservator, trustee 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.

“Eligible Investments” means Cash, Cash Equivalents, MBS Investments, Corporate/Municipal Securities, Government Debt and G7 Securities which (a) have the required rating as set forth on Schedule 1.2, (b) are capable of being marked to market on a daily basis and (c) are held in the Custody Account.

“Material Adverse Effect” means a material adverse effect upon (i) the business, assets, properties, results of operations or condition (financial or otherwise) of IPC Holdings and its Subsidiaries, taken as a whole, (ii) the ability of any Credit Party to

perform its payment or other material obligations under this Agreement or any of the other Credit Documents or (iii) the legality, validity or enforceability of this Agreement or any of the other Credit Documents against any Credit Party thereto or the rights and remedies of the Administrative Agent and the Lenders hereunder and thereunder.

“Material Insurance Subsidiary” means each Insurance Subsidiary that is a Material Subsidiary.

“Material Party” means each of IPC Holdings and each Material Subsidiary.

“Parent” means (a) prior to the Amalgamation Date, Max Capital Group Ltd. and (b) on and after the Amalgamation Date, Max Holdings.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by IPC Holdings or any of its Subsidiaries or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

2.3 Amendments to Section 1.1 Consisting of Deleting Definitions. The following definitions in Section 1.1 of the Credit Agreement are hereby deleted: ABS, Capital Lease, Capital Stock, Contingent Liabilities, Hedging Obligations, Imagine UK, Investment, Parent Debt, Parent Debt to Capital Ratio, Parent Debt Rating, and Plan.

2.4 Amendment to Section 4.3 (Employee Benefit Plans. Section 4.3 of the Credit Agreement is amended in its entirety to read as follows:

“SECTION 4.3 ERISA. Each Plan is in compliance with the applicable provisions of ERISA except where the failure to comply would not have a Material Adverse Effect. No Credit Party (a) maintains or administers any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA; (b) maintains or administers any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA to which IPC Holdings or any ERISA Affiliate makes, is making or is obligated to make contributions or has made or been obligated to make contributions; or (c) has any liability with respect to any matter specified in the foregoing clauses (a) and (b).”

2.5 Amendment to Section 4.12 (Financial Condition). Section 4.12 of the Credit Agreement is hereby amended by adding the following:

“The Pro Forma Financial Statements reflect adjustments made on a pro forma basis to give effect to the consummation of the Amalgamation in accordance with Regulation S-X of the Securities Act of 1933. The Pro Forma Financial Statements have been prepared based on stated assumptions made in good faith and having a reasonable basis set forth therein, present fairly in all material respects the consolidated financial condition of IPC Holdings and its Subsidiaries on an unaudited pro forma basis as of the date set forth therein after giving effect to the consummation of the Amalgamation.”

2.6 Amendments to Section 8.2 Conditions to Credit Extensions. Section 8.2 of the Credit Agreement is hereby amended by (i) amending Section 8.2(b) in its entirety to read as follows:

“(b) No Default. No Default or Event of Default shall have occurred and be continuing or will result from the making of the Credit Extensions and no Default or Event of Default shall have occurred and be continuing under the Credit Documents or the IPC/Wachovia Credit Agreement or will result from the making of the Credit Extensions.”

(ii) adding a new clause (g) thereof as follows:

“(g) Financial Strength Rating. With respect to the making of any Credit Extension under the Tranche B Commitments, the Administrative Agent shall have received satisfactory confirmation from A.M. Best Company that the current Financial Strength Rating of Max Bermuda and IPCRe Limited, individually or on a group basis, is “A-” or better.”

and (iii) replacing the final paragraph of Section 8.2 with the following paragraph:

“Each request for a Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by a Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 8.2(b), (c) and (d) and, in the case of a Credit Extension under the Tranche B Commitments, Section 8.2(g) have been satisfied on and as of the date of the applicable Credit Extension.”

2.7 Amendments to Covenants and Events of Default. Articles V, VI and VII of the Credit Agreement are hereby amended by substituting Annex A attached hereto therefor.

2.8 Amendments to Schedules. (a) Schedules 1.1 (Concentration Limits), 1.2 (Borrowing Base Calculation), and 2.1 (Commitments) are hereby amended by substituting Schedules 1.1, 1.2 and 2.1 attached hereto therefor and (b) Schedule 6.4 attached hereto is added as Schedule 6.4.

ARTICLE III

CONDITIONS OF EFFECTIVENESS

3.1 The limited consent set forth in Article I of this Amendment shall become effective as of the date (the “Consent Effective Date”) when, and only when, each of the following conditions precedent shall have been satisfied:

(a) The Administrative Agent shall have received fifteen counterparts of this Amendment executed and delivered by the Borrowers, the Administrative Agent and the Required Lenders.

(b) the representations and warranties of the Borrowers contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects as of the

Consent Effective Date, with the same effect as though made on such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

(c) An amendment to the IPC/Wachovia Credit Agreement in substantially the same form as this Amendment has been executed and delivered by IPC Holdings, IPCRe Limited, the Administrative Agent and the Required Lenders (as defined in the IPC/Wachovia Credit Agreement) and become effective (subject to Section 3.2(c) below).

(d) No Default or Event of Default has occurred and is continuing or will result from the execution and delivery or effectiveness of this Amendment or the Amalgamation Agreement.

(e) There has not occurred since December 31, 2007 any Material Adverse Effect.

3.2 The amendments set forth in Article II of this Amendment shall become effective as of the date (the “Amendment Effective Date”) when, and only when, each of the following conditions precedent shall have been satisfied:

(a) The Administrative Agent shall have received the following (in such number as the Administrative Agent may deem appropriate):

(i) A Guaranty in substantially the form of Exhibit A to this Amendment executed and delivered by each of IPC Holdings, Max Holdings, and, if required by the Administrative Agent in its sole discretion, Max Capital and Amalco Sub, pursuant to which such Person guarantees the Obligations of the Borrowers (or, in the case of Max Holdings, of Max Bermuda) under the Credit Agreement;

(ii) Legal opinions of counsel to the Credit Parties (including, without limitation, opinions of New York and Bermuda counsel) as may be reasonably requested by the Administrative Agent;

(iii) A certificate of an Executive Officer of each Borrower certifying that after giving effect to the amendments in Article II and filing of the Amalgamation Agreement:

(A) No Default or Event of Default has occurred and is continuing or will result from the execution and delivery or effectiveness of the amendments set forth herein or the Amalgamation;

(B) The representations and warranties of the Credit Parties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects as of the Amendment Effective Date, with the same effect as though made on such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);

(C) There are no material insurance regulatory proceedings pending or, to the knowledge of such Executive Officer, threatened against IPC Holdings, Max Holdings or any Insurance Subsidiary in any jurisdiction; and

(D) There has not occurred since December 31, 2008 any Material Adverse Effect;

(iv) A certificate of the secretary or an assistant secretary of each Credit Party (other than Max Holdings), in form and substance reasonably satisfactory to the Administrative Agent, certifying (i) that attached thereto is a true and complete copy of the certificate of incorporation, memorandum of association (or another similar governing document) and all amendments thereto of such Credit Party, certified as of a recent date by the Registrar of Companies for the Bermuda Ministry of Finance, and that the same has not been amended since the date of such certification, (ii) that attached thereto is a true and complete copy of the Bye-laws or similar governing document of such Credit Party, as then in effect and as in effect at all times from the date on which the resolutions referred to in clause (iii) below were adopted to and including the date of such certificate, and (iii) that attached thereto is a true and complete copy of resolutions adopted by the board of directors (or similar governing body) of such Credit Party authorizing the execution, delivery and performance of the Credit Documents (and, if applicable, the Amalgamation Agreement) to which such Credit Party is or becomes a party, and as to the incumbency and genuineness of the signature of each officer of such Credit Party executing any such Credit Documents, and attaching all such copies of the documents described above;

(v) A certificate of the secretary or an assistant secretary of Max Holdings, in form and substance reasonably satisfactory to the Administrative Agent, certifying (i) that attached thereto is a true and complete copy of the application for registration of an amalgamated company and resulting memorandum of association of Max Holdings and that the same has been presented for filing with the Registrar of Companies for the Bermuda Ministry of Finance, (ii) that attached thereto is a true and complete copy of the Bye-laws or similar governing document of Max Holdings then in effect and as in effect at all times from the date on which the resolutions referred to in clause (iii) below were adopted to and including the date of such certificate, and (iii) that attached thereto is a true and complete copy of resolutions adopted by the board of directors (or similar governing body) of Max Holdings authorizing the execution, delivery of the Guaranty and the performance of the Guaranty, the Credit Agreement and the other Credit Documents to which it is a party, and as to the incumbency and genuineness of the signature of each officer of Max Holdings executing the Guaranty or any of the other Credit Documents, and attaching all such copies of the documents described above;

(vi) The Pro Forma Financial Statements and a Compliance Certificate executed by IPC Holdings calculated on a pro forma basis as of the date of the most recent year to date update of the Pro Forma Financial Statements provided after giving effect to the Amalgamation and this Amendment and certifying as to the IPC Holdings Debt Rating and updating the projections if there has been any material change from the projections delivered to the Lenders prior to the date of this Amendment;

(vii) A Borrowing Base Certificate executed by Max Bermuda calculated as of the close of business one Business Day prior to the Amendment Effective Date giving effect to the Amendments;

(viii) The investment guidelines for IPC Holdings and its Subsidiaries which will be in effect on the Amalgamation Date;

(ix) Satisfactory confirmation from A.M. Best Company that the current Financial Strength Rating of Max Bermuda and IPCRe Limited, either individually or on a group basis, is “A-” (stable) or better; and

(x) True, complete and correct copies of the Amalgamation Agreement which shall be in full force and effect and shall not have been amended in a manner that is materially adverse to the Lenders since the Consent Effective Date except such amendments as have been approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed) and the other documents required to be executed in connection with the Closing (as defined in the Amalgamation Agreement).

(b) All approvals, permits and consents of any Governmental Authorities (including, without limitation, all relevant Insurance Regulatory Authorities) in each jurisdiction where any of IPC Holdings, Amalco Sub, Max Capital, Max Bermuda, or IPCRe Limited underwrite or engage in material business or of other Persons (the failure of which to obtain would reasonably likely be materially detrimental to the Credit Parties or the Lenders), if any, required in connection with the execution and delivery of the Amalgamation Agreement, this Amendment (including the effectiveness of the amendments herein) and the other Credit Documents and the consummation of the transactions contemplated hereby and thereby shall have been obtained (without the imposition of restrictions or conditions that are materially adverse to the Administrative Agent, the Fronting Bank or the Lenders with respect to the transactions contemplated hereby), and all related filings, if any, shall have been made, and all such approvals, permits, consents and filings shall be in full force and effect and the Administrative Agent shall have received such copies thereof as it shall have reasonably requested; all applicable waiting periods shall have expired or terminated, and no order, injunction or decree shall have been entered by, any Governmental Authority, in each case to enjoin, restrain, restrict, set aside or prohibit, or impose materially adverse conditions upon, the Amalgamation, this Amendment or any of the other Credit Documents or the consummation of the transactions contemplated hereby or thereby.

(c) All conditions precedent to the Closing (as defined in the Amalgamation Agreement) shall have been satisfied or otherwise waived (with the approval of the Administrative Agent), all necessary filings in connection therewith shall have been made, and the Amendment Effective Date will be the same as the Amalgamation Date.

(d) The “Amendment Effective Date” under the IPC/Wachovia Credit Agreement will occur concurrently with the Amendment Effective Date hereunder and either (x) no amendments to other credit facilities of IPC Holdings and its Subsidiaries or Max Capital and its Subsidiaries, as applicable, shall be necessary in connection with the consummation of the Amalgamation or (y) if any such amendments are required, such amendments are, or concurrently with the Amendment Effective Date will become, effective.

(e) The Credit Parties shall have provided the Administrative Agent and the Lenders with all necessary information, documents and certificates as the Administrative Agent and the Lenders may reasonably request in order to comply with the Patriot Act and related “Know Your Customer” rules and regulations.

(f) There has not occurred since December 31, 2008 any Material Adverse Effect.

(g) The representations and warranties of the Credit Parties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects as of the Amendment Effective Date, with the same effect as though made on such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

(h) No Default or Event of Default has occurred and is continuing or will result from the effectiveness of the Amendments in Article II hereof or the Amalgamation Agreement.

(i) All fees and reasonable expenses of the Administrative Agent (including, without limitation, legal fees and expenses invoiced prior to such date) in connection with the Amendment Effective Date shall have been paid.

(j) A letter from the process agent agreeing to the service of process terms of each Guaranty or other Credit Document requiring the same.

(k) Such other documents, certificates, opinions and instruments in connection with the transactions contemplated hereby as the Administrative Agent shall have reasonably requested.

ARTICLE IV

CONFIRMATION OF REPRESENTATIONS AND WARRANTIES

Each Credit Party hereby represents and warrants, on and as of the Consent Effective Date and the Amendment Effective Date, that (i) the representations and warranties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects on and as of the Consent Effective Date and the Amendment Effective Date, both immediately before and after giving effect to this Amendment (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date), (ii) this Amendment has been duly authorized, executed and delivered by such Credit Party and constitutes the legal, valid and binding obligation of such Credit Party enforceable against it in accordance with its terms, (iii) no Default or Event of Default shall have occurred and be continuing on the Consent Effective Date and the Amendment Effective Date, both immediately before and after giving effect to this Amendment, (iv) the Credit Parties have heretofore furnished to the Administrative Agent true and complete copies of the Amalgamation Agreement (including all exhibits and schedules) and all amendments, modifications and waivers relating thereto (collectively, the “Amalgamation Documents”) and (v) as of the Amendment Effective Date, none of the Amalgamation Documents has been amended, modified or supplemented, nor any condition or provision thereof waived, in each case in a manner materially adverse to the Lenders other than as approved by the Administrative Agent, and each such Amalgamation Document is in full force and effect.

ARTICLE V

ACKNOWLEDGEMENT AND CONFIRMATION OF THE CREDIT PARTIES

Each of the Credit Parties hereby confirms and agrees that, after giving effect to this Amendment, the Credit Agreement and the other Credit Documents remain in full force and effect and enforceable against the Credit Parties in accordance with their respective terms and shall not be discharged, diminished, limited or otherwise affected in any respect, and represents and warrants to the Lenders that it has no knowledge of any claims, counterclaims, offsets, or defenses to or with respect to its obligations under the Credit Documents, or if such Credit Party has any such claims, counterclaims, offsets, or defenses to the Credit Documents or any transaction related to the Credit Documents, the same are hereby waived, relinquished, and released in consideration of the execution of this Amendment. This acknowledgement and confirmation by the Credit Parties is made and delivered to induce the Administrative Agent and the Lenders to enter into this Amendment, and each of the Credit Parties acknowledges that the Administrative Agent and the Lenders would not enter into this Amendment in the absence of the acknowledgement and confirmation contained herein.

ARTICLE VI

MISCELLANEOUS

6.1 Governing Law. This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of New York.

6.2 Full Force and Effect. Except as expressly amended hereby, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof on the date hereof. As used in the Credit Agreement, “hereinafter,” “hereto,” “hereof,” and words of similar import shall, unless the context otherwise requires, mean the Credit Agreement after amendment by this Amendment. Any reference to the Credit Agreement or any of the other Credit Documents herein or in any such documents shall refer to the Credit Agreement and Credit Documents as amended hereby. This Amendment is limited as specified and shall not constitute or be deemed to constitute an amendment, modification or waiver of any provision of the Credit Agreement except as expressly set forth herein. This Amendment shall constitute a Credit Document under the terms of the Credit Agreement.

6.3 Expenses. All reasonable fees and expenses of counsel to the Administrative Agent, and all reasonable out-of-pocket costs and expenses of the Administrative Agent, in each case, in connection with the preparation, negotiation, execution and delivery of this Amendment and the other Credit Documents delivered in connection herewith shall have been paid.

6.4 Severability. To the extent any provision of this Amendment is prohibited by or invalid under the applicable law of any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity and only in any such jurisdiction, without prohibiting or invalidating such provision in any other jurisdiction or the remaining provisions of this Amendment in any jurisdiction.

6.5 Successors and Assigns. This Amendment shall be binding upon, inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto.

6.6 Construction. The headings of the various sections and subsections of this Amendment have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof.

6.7 Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

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


MAX CAPITAL GROUP LTD.

By:
Name:
Title:

MAX BERMUDA LTD.

By:
Name:
Title:

SIGNATURE PAGE TO