Exhibit 10.1
Execution Version
SECOND AMENDMENT AND LIMITED
CONSENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT AND LIMITED
CONSENT TO CREDIT AGREEMENT , dated as of the 8 th day of July, 2009 (this “ Amendment
”), is made among IPC HOLDINGS, LTD. , a company
organized under the laws of Bermuda (“ IPC Holdings
”). IPCRe LIMITED , a company organized under the laws
of Bermuda (“ IPCRe Limited ”), Lenders listed
on the signature pages hereto, and WACHOVIA BANK, NATIONAL
ASSOCIATION , as Administrative Agent and Fronting Bank (the
“ Administrative Agent ”).
RECITALS
A. The Credit Parties, the Lenders
party thereto and the Administrative Agent are parties to that
certain Credit Agreement dated as of April 13, 2006 (as
amended by the First Amendment dated as of January 25, 2008
and as further amended, restated, supplemented or otherwise
modified from time to time, the “ Credit Agreement
”). Capitalized terms used herein without definition shall
have the meanings given to them in the Credit Agreement.
B. IPC Holdings and Validus
Holdings, Ltd., a Bermuda exempted company (“ Acquirer
”) have proposed a business combination in which, pursuant to
the Amalgamation Agreement (as defined below) upon satisfaction of
certain conditions precedent, IPC Holdings will amalgamate with
Validus, Ltd., a Bermuda exempted company and wholly-owned
subsidiary of Acquirer (“Amalco Sub”), into Validus
Ltd. (“ NewCo ”). Immediately after the
consummation of the Amalgamation, Acquirer will directly own 100%
of the equity interests of NewCo.
C. The Credit Parties 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.
STATEMENT OF
AGREEMENT
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 Article IV 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. EST
on January 31, 2010, if the Amalgamation shall not have been
consummated by such time; (ii) the date upon which the board
of directors of IPC Holdings shall have withdrawn or withheld its
approval of the Amalgamation or qualified or modified such approval
in any material manner adverse to the Lenders (taken as a whole),
or publicly proposed to, or publicly announced that it has resolved
to take any such action; (iii) the date upon which IPC
Holdings
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, (iv) the date upon which the
Amalgamation Agreement shall have been terminated by any party
thereto, or (v) the failure by IPC Holdings to pay the closing
fees and expenses set forth in Section 7.3 hereof by 5:00 p.m.
EDT on July 13, 2009.
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 IPC Holdings 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. For the avoidance of doubt,
the occurrence of any Consent Termination Event shall have no
effect upon the amendments set forth in Article II herein or the
termination of the Tranche 1 Commitments set forth in Article III
herein, each of which are irrevocable.
ARTICLE II
AMENDMENTS TO CREDIT
AGREEMENT
Effective as of the Second 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:
“ ‘ Acquirer
’ means Validus Holdings, Ltd., a Bermuda exempted
company.
“ ‘ Amalco Sub
’ means Validus Ltd., a Bermuda exempted company and a wholly
owned subsidiary of the Acquirer
“ ‘ Amalgamation
’ means the amalgamation, pursuant to the Amalgamation
Agreement, of Amalco Sub and IPC Holdings into NewCo, with NewCo
becoming a Wholly Owned Subsidiary of Acquirer.
“ ‘ Amalgamation
Agreement ’ means the Agreement and Plan of Amalgamation,
dated as of July [ —
], 2009, by and among IPC Holdings,
Amalco Sub, and Acquirer in the form attached as Annex A to the
Second Amendment, as amended, modified, restated or supplemented
from time to time in accordance with the terms of the Second
Amendment.
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“ ‘ NewCo ’
means, after the “Effective Time”(as defined in the
Amalgamation Agreement) of the Amalgamation, Validus Ltd., a
Bermuda exempted company.”
“ ‘ Second
Amendment ’ means the Second Amendment and Limited
Consent to Credit Agreement dated as of the 8
th day of July, 2009 among IPC Holdings, IPCRe
Limited, the Lenders and the Administrative Agent.
“ ‘ Second Amendment
Effective Date ’ shall mean the date upon which the
conditions to the effectiveness of the Second Amendment set forth
in Article II thereof are satisfied or waived in accordance with
their terms.”
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 to read as follows:
“ ‘ Credit Party
’ means (i) prior to the Amalgamation, IPCRe Limited or
IPC Holdings, and (ii) after the Amalgamation, IPCRe Limited
and NewCo and “ Credit Parties ” means all of
the foregoing.”
“ ‘ Tranche 2
Maturity Date ’ means the earlier of (i) the date of
consummation of the Amalgamation or (ii) April 13,
2011.”
2.3 Amendment to
Section 2.9(e) (Fees) . Section 2.9(e) of the Credit
Agreement is hereby amended by inserting the following proviso at
the end thereof:
“ provided that upon
the earlier of (i) the date 60 days after the Second Amendment
Effective Date and (ii) the date of the consummation of the
Amalgamation, the Tranche 2 Commitment Fee shall be increased to a
per annum rate of 0.15%;”
2.4 Amendment to
Section 2.9(f) (Fees) . Section 2.9(f) of the Credit
Agreement is hereby amended by inserting the following proviso at
the end thereof:
“ provided that upon
the earlier of (i) the date 60 days after the Second Amendment
Effective Date and (ii) the date of the consummation of the
Amalgamation, the Tranche 2 Letter of Credit Fee shall be increased
to a per annum rate of 0.75%;”
2.5 Amendment to
Section 2.19 (Increase in Commitments) . Section 2.19
of the Credit Agreement is deleted in its entirety.
2.6 Amendment to
Section 2.20 (Additional Account Parties) .
Section 2.20 of the Credit Agreement is hereby amended by
adding the words “but prior to the date of consummation of
the Amalgamation” immediately following the words
“after the Effective Date” on the second line
thereof.
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2.7 Amendment to Section 3.1
(Syndicated Letters of Credit) . Section 3.1(c) of the
Credit Agreement is amended in its entirety to read as
follows:
“(c) Expiry Date . Each
Syndicated Letter of Credit shall expire at or prior to the close
of business on the date one year after the date of the issuance of
such Syndicated Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension);
provided , however , that a Syndicated Letter of
Credit shall provide by its terms, and on terms acceptable to the
Administrative Agent, for renewal for successive periods of one
year or less (but not beyond the Final Maturity Date or, if the
Amalgamation shall have been consummated, December 31, 2010)
unless and until the Administrative Agent shall have delivered
prior written notice of nonrenewal to the beneficiary of such
Syndicated Letter of Credit (a “ Notice of
Non-Extension ”) no later than the time specified in such
Syndicated Letter of Credit. The Administrative Agent will give
Notices of Non-Extension as to all outstanding Syndicated Letters
of Credit the earlier of (i) the date it is requested to do so
by the Required Lenders pursuant to Section 9.2(e),
(ii) if the consummation of the Amalgamation shall have
occurred, January 1, 2010 and (iii) if the consummation
of the Amalgamation shall not have occurred, the Tranche 2
Termination Date. The Administrative Agent shall promptly provide a
copy of any such notice to the applicable Account Party, unless
prohibited by any Requirement of Law from doing
so.”
2.8 Amendment to Section 3.2
(Participated Letters of Credit) . Section 3.2(c) of the
Credit Agreement is amended in its entirety to read as
follows:
“(c) Expiry Date . Each
Participated Letter of Credit shall expire at or prior to the close
of business on the date one year after the date of the issuance of
such Participated Letter of Credit (or, in the case of any renewal
or extension thereof, one year after such renewal or extension);
provided , however , that a Participated_Letter of
Credit shall provide by its terms, and on terms acceptable to the
Administrative Agent, for renewal for successive periods of one
year or less (but not beyond the Final Maturity Date or, if the
Amalgamation shall have been consummated, December 31, 2010)
unless and until the Administrative Agent shall have delivered
prior written notice of nonrenewal to the beneficiary of such
Participated_Letter of Credit (a “ Notice of
Non-Extension ”) no later than the time specified in such
Participated_Letter of Credit. The Administrative Agent will give
Notices of Non-Extension as to all outstanding Participated_Letters
of Credit the earlier of (i) the date it is requested to do so
by the Required Lenders pursuant to Section 9.2(e),
(ii) if the consummation of the Amalgamation shall have
occurred, January 1, 2010 and (iii) if the consummation
of the Amalgamation shall not have occurred, the Tranche 2
Termination Date. The Administrative Agent shall promptly provide a
copy of any such notice to the applicable Account Party, unless
prohibited by any Requirement of Law from doing
so.”
2.9 Amendment to
Section 3.10 (Conversion of Letters of Credit) .
Section 3.10 of the Credit Agreement is deleted in its
entirety.
2.10 Amendments to
Section 6.1 and 6.2 . Upon the consummation of the
Amalgamation, the Credit Parties shall no longer be required to
comply with Sections 6.1, 6.2(a), 6.2(c)(i) and (ii) and
6.2(d)(ii) of the Credit Agreement.
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2.11 Amendment to
Section 6.10(b) (Collateral) . Section 6.10(b) of the
Credit Agreement is amended in its entirety as follows:
“(b) Each Account Party shall
at all times cause its respective Borrowing Base to equal or exceed
the sum of 103% of the aggregate principal amount of Tranche 2
Letter of Credit Exposure attributable to such Account Party at
such time.”
2.12 Amendment to
Section 6.10(e) (Collateral) . Section 6.10(e) of the
Credit Agreement is deleted in its entirety.
2.13 Amendments to Article VI
(Affirmative Covenants) . New Section 6.12 of the Credit
Agreement is hereby amended in its entirety as follows:
“6.12 Amalgamation
Matters .
(a) As of the consummation of the
Amalgamation, 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, NewCo, 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 and the consummation of the transactions contemplated
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
