425

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 23, 2009

VALIDUS HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)

Bermuda
(State or other jurisdiction
of incorporation) 001-33606
(Commission File Number) 98-0501001
(I.R.S. Employer Identification No.)

19 Par-La-Ville Road, Hamilton, HM 11 Bermuda
(Address of principal executive offices)

Registrant’s telephone number, including area code: (441) 278-9000

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

þ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-10.1

EX-10.2

Item 1.01. Entry into Material Definitive Agreement.

Amendments to Credit Agreements.

On July 23, 2009, Validus Holdings, Ltd. (“Validus Holdings”) and its wholly owned subsidiary Validus Reinsurance, Ltd. (“Validus Re”) received consents from the lenders under their Three-Year Unsecured Letter of Credit Facility Agreement, dated as of March 12, 2007 (as amended, the “Three-Year Facility”) and the Five-Year Secured Letter of Credit Facility Agreement, dated as of March 12, 2007 (as amended, the “Five-Year Facility” and together with the Three-Year Facility, the “Validus Facilities”) to amend the Validus Facilities.

On July 23, 2009, Validus Holdings and its wholly owned subsidiary Talbot Holdings Ltd. (“Talbot Holdings”) received consents from the lenders under their Standby Letter of Credit Facility, dated as of November 28, 2007 (as amended, the “Talbot Facility” and together with the Validus Facilities, the “Credit Facilities”) to amend the Talbot Facility.

The Credit Facilities are being amended to permit Validus Holdings’ previously announced acquisition of IPC Holdings, Ltd. (“IPC”) pursuant to the Agreement and Plan of Amalgamation, dated as of July 9, 2009, among IPC, Validus Holdings and Validus Ltd., a wholly owned subsidiary of Validus Holdings. In addition to permitting the acquisition, the amendments increase letter of credit fees, commitment fees and interest margins. The amendments to the Credit Facilities will become effective upon consummation of the acquisition and satisfaction or waiver of the other conditions contained therein.

The foregoing description of the amendments does not purport to be complete and is qualified in its entirety by reference to the amendments attached hereto as Exhibits 10.1 and 10.2, which are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit	Description
Exhibit 10.1	Amendment No. 1, dated as of July 23, 2009, to the $100 million Standby Letter of Credit Facility dated as of 28 November 2007, among Talbot Holdings Ltd., Validus Holdings, Ltd., the Lenders party thereto and Lloyds TSB Bank plc, as Agent.
Exhibit 10.2	Second Amendment, dated as of July 24, 2009, to each of the Three-Year Unsecured Letter of Credit Facility Agreement dated as of March 12, 2007, as amended by the First Amendment dated October 25, 2007, and the Five-Year Secured Letter of Credit Facility Agreement dated as of March 12, 2007, as amended by the First Amendment dated October 25, 2007, among Validus Holdings, Ltd., Validus Reinsurance, Ltd., the Lenders party thereto and JPMorgan Chase Bank, National Association, as administrative agent for the Lenders.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 27, 2009

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

EXHIBIT INDEX

Exhibit	Description
Exhibit 10.1	Amendment No. 1, dated as of July 23, 2009, to the $100 million Standby Letter of Credit Facility dated as of 28 November 2007, among Talbot Holdings Ltd., Validus Holdings, Ltd., the Lenders party thereto and Lloyds TSB Bank plc, as Agent.
Exhibit 10.2	Second Amendment, dated as of July 24, 2009, to each of the Three-Year Unsecured Letter of Credit Facility Agreement dated as of March 12, 2007, as amended by the First Amendment dated October 25, 2007, and the Five-Year Secured Letter of Credit Facility Agreement dated as of March 12, 2007, as amended by the First Amendment dated October 25, 2007, among Validus Holdings, Ltd., Validus Reinsurance, Ltd., the Lenders party thereto and JPMorgan Chase Bank, National Association, as administrative agent for the Lenders.

EX-10.1

Exhibit 10.1

Amendment No. 1

To: (1) Talbot Holdings Ltd.
(2) Validus Holdings, Ltd.

23 July 2009

$100,000,000 standby letter of credit facility agreement dated 28 November 2007 between Talbot Holdings Ltd. as borrower, Validus Holdings, Ltd. as guarantor, Lloyds TSB Bank plc and ING Bank N.V., London Branch as mandated lead arrangers, ING Bank N.V., London Branch as structuring agent, Lloyds TSB Bank plc as agent and security trustee and others (the “Facility Agreement”)

1. Background

(a)

We refer to the Facility Agreement. Capitalised terms used but not defined in this amendment no. 1 (the “Amendment”) shall have the meanings given to them in the Facility Agreement.

(b)

You have informed us that the Guarantor, its wholly owned subsidiary Validus Ltd. (the “Amalgamation Sub”) and IPC Holdings, Ltd., a company organised under the laws of Bermuda (“IPC”) have entered into an Agreement and Plan of Amalgamation dated 9 July 2009 as amended from time to time (the “Plan of Amalgamation”), pursuant to which Amalgamation Sub and IPC will amalgamate (the “Proposed Amalgamation”) and the resulting amalgamated entity will continue as Validus Ltd. (the “Amalgamated Entity”).

2.	Amendment request
	You have requested that the Facility Agreement be amended as set forth in this Amendment to allow the Proposed Amalgamation and related transactions to occur.
3.	Conditions
	Subject to:

(a)	the terms of this Amendment (including compliance by the Borrower and the Guarantor with the undertakings set out in paragraph 4 below);
(b)	the Proposed Amalgamation being completed upon terms consistent with those set out in the Plan of Amalgamation;
(c)	the representations and warranties deemed to be made by each Obligor pursuant to paragraph 6 below being true in all material respects;
(d)	the date of completion of the Proposed Amalgamation (the “Amalgamation Effective Date”) occurring no later than 31 January 2010;
(e)	there being no Default continuing on the date of this Amendment or (after giving effect to this Amendment) the Amalgamation Effective Date or resulting from the Proposed Amalgamation;
(f)	the Borrower delivering to the Agent, no later than the date of this Amendment, a copy of the amendment fee letter (in a form and substance satisfactory to the

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	Agent) setting out the terms of the amendment fee relating to the Proposed Amalgamation, duly executed by each of the Obligors; and
(g)	the Borrower delivering to the Agent a copy of the amendments to the Five-Year Secured Letter of Credit Facility and the Three-Year Unsecured Letter of Credit Facility to permit the Proposed Amalgamation,

	the Facility Agreement shall be amended upon the terms set out in paragraph 5 below.
4.	Undertakings
	In consideration of the Agent and the Majority Lenders agreeing to this Amendment, each of the Borrower and the Guarantor:

(a)	shall promptly notify the Agent of any amendment to the Plan of Amalgamation (to the extent such amendment is not filed with the U.S. Securities and Exchange Commission);
(b)	hereby agrees to certain amendments to the Facility Agreement, upon the terms set out in paragraph 5 below;
(c)	shall, from time to time and in any event within 2 Business Days of demand, supply the Agent with such information relating to the Proposed Amalgamation as the Agent may reasonably request;
(d)	shall, on the Amalgamation Effective Date:

(i)	deliver to the Agent a certificate of an Authorised Signatory of the Guarantor confirming that the Proposed Amalgamation has been completed upon terms consistent with those set out in the Plan of Amalgamation;
(ii)	deliver to the Agent a certificate of a Financial Officer of the Guarantor, setting forth the calculation of Consolidated Net Worth of the Amalgamated Entity using the pro forma balance sheet included in the definitive proxy statement filed with the U.S. Securities and Exchange Commission relating to the Proposed Amalgamation;
(iii)	deliver to the Agent a certificate of a Financial Officer of the Guarantor confirming the financial strength rating assigned to Validus Reinsurance, Ltd, and IPCRe Limited by A.M. Best on such date; and

(e)	shall, promptly after the Amalgamation Effective Date, deliver to the Agent the Certificate of Amalgamation from the Bermuda Registrar of Companies confirming the consummation of the Proposed Amalgamation; and
(f)	shall, in accordance with Clause 16.2 (Amendment costs) of the Facility Agreement, within 5 Business Days of demand, reimburse the Agent and the Security Trustee for the amount of all costs and expenses (including the legal fees of Clifford Chance LLP) reasonably incurred by them in connection with this Amendment.

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5.	Amendments
	With effect from the Amalgamation Effective Date, the terms of the Facility Agreement shall be amended as follows:

(a)	The following definitions in shall be inserted in Clause 1.1 in appropriate alphabetical order and, where applicable, replace the corresponding previously existing definitions:
	“Defaulting Lender” means any Lender that has:

(a)	failed to fund any portion of its participations in Letters of Credit within three (3) Business Days of the date required to be funded by it hereunder;
(b)	notified the Borrower or the Agent 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; or
(c)	(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 reorganisation 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 reorganisation 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.

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

“IPC Acquisition” has the meaning given to such term in Clause 22.24.9.

“IPC Facilities” means:

(a)

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 letter of credit in an aggregate amount of up to $250 million at any time outstanding, and any modification, amendments, restatements, waivers, extensions, renewals, replacement or refinancing thereof; and

(b)

the letter of credit master agreement between IPCRe Limited and Citibank N.A., providing for letters of credit and any modifications, amendments,

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restatements, waivers, extensions, renewals, replacements or refinancing thereof;

provided that any such modifications, amendments, waivers, extensions, renewals, replacements or refinancing 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 organised under the laws of Bermuda.

“Majority Lenders” means, save as otherwise provided herein a Lender or Lenders whose Commitments amount (or, if each Lender’s Commitment has been reduced to zero, did immediately before such reduction to zero, amount) in aggregate to more than 50 per cent. of the Total Commitments provided that:

(a)	so long as a Lender is a Defaulting Lender, the Commitments of such Lender shall not be included in determining whether the Majority Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Clause 38 (Amendments and Waivers)); and
(b)	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.

“Super-Majority Lenders” means, save as otherwise provided herein a Lender or Lenders whose Commitments amount (or, if each Lender’s Commitment has been reduced to zero, did immediately before such reduction to zero, amount) in aggregate to 66 2/3 per cent. or more of the Total Commitments provided that:

(a)	so long as a Lender is a Defaulting Lender, the Commitments of such Lender shall not be included in determining whether the Super-Majority Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Clause 38 (Amendments and Waivers)); and
(b)	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.

(b) Clause 3.5 is amended by replacing the heading with “Lloyd’s Approved Credit Institution; Defaulting Lender” and by adding a new Clause 3.5.4 as follows:

“3.5.4  In the event that any Lender participating in the Facility is a Defaulting Lender, following a request by the Borrower, (i) the Agent, at the request of and in consultation with the Borrower, shall, subject

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to reaching prior agreement with the Borrower in relation to fees and expenses, use reasonable endeavours to replace the participation of such Lender in the Facility and in any Letter of Credit issued hereunder with one or more of the other Lenders (if any other such Lender is willing to accept all or part of such participation) or with another financial institution that is an Approved Credit Institution and (ii) such Lender shall (in accordance with the provisions of Clause 24 (Changes to the Lenders)) transfer its Commitment and participation in outstanding Letters of Credit to such financial institution which has been agreed between the Agent and the Borrower. The Borrower agrees to reimburse the Finance Parties for all fees, costs and expenses (including legal fees) together with any VAT thereon incurred in connection with such replacement of a Lender’s participation.”

(c)	The reference in Clause 4.2.1 of the Facility Agreement to “0.25 per cent.” shall be deleted and replaced with “0.625 per cent.”;
(d)	Clauses 4.2.2 and 4.2.3 of the Facility Agreement shall be deleted and replaced with “For each Unsecured Letter of Credit, the L/C Commission Rate shall be 3.00 per cent.”
(e)	The following Clause 4.3 (Defaulting Lenders) shall be inserted immediately after Clause 4.2 (Calculation of L/C Commission Rate) of the Facility Agreement:

“4.3	Defaulting Lenders
	Notwithstanding anything to the contrary in this Clause 4, for so long as a Lender is a Defaulting Lender, no letter of credit commission hereunder shall accrue or be payable to such Lender until such Lender ceases to be a Defaulting Lender.”

(f)	The reference in Clause 15.1 (Commitment Commission on the Facility) of the Facility Agreement to “0.10 per cent.” shall be deleted and replaced with “0.50 per cent.” and the following words shall be inserted before the full stop at the end of Clause 15.1 (Commitment Commission on the Facility) of the Facility Agreement:
	“; provided however, that for so long as a Lender is a Defaulting Lender, no commitment commission hereunder shall accrue or be payable to such Lender until such Lender ceases to be a Defaulting Lender”
(g)	In Clause 19.11.2 of the Facility Agreement, the words “as of the Closing Date” shall be inserted after the words “Except as disclosed in Schedule 14 (Subsidiaries),”.
(h)	The word “The” at the beginning of Clause 19.12 (Capitalisation) of the Facility Agreement shall be deleted and replaced with “As of the Closing Date, the”.

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(i)	The following definition shall be inserted into Clause 21.2 (Financial definitions) of the Facility Agreement:
	““Amalgamation Effective Date” means the date confirmed by the Obligors to the Agent pursuant to amendment no. 1 to this Agreement dated 23 July 2009 between the Obligors and the Agent, as the date upon which the amalgamation of Validus Ltd. and IPC Holdings, Ltd. took effect.”
(j)	The definition of “Minimum Consolidated Net Worth Amount” set out in Clause 21.2 (Financial definitions) of the Facility Agreement shall be deleted and replaced with the following:
	““Minimum Consolidated Net Worth Amount” shall mean, at any time, an amount which initially shall be equal to 70% of the Guarantor’s Consolidated Net Worth as calculated using the pro forma balance sheet included in the definitive proxy statement relating to the IPC Acquisition, and which amount shall be increased immediately following the last day of each financial quarter (commencing with the financial quarter commencing after the date of such pro forma balance sheet) by (i) an amount (if positive) equal to 50% of the Net Income for such financial quarter plus (ii) 50% of the net cash proceeds received from any issuance of shares of common stock of the Guarantor during such financial quarter.”
(k)	Clause 22.13.1(b)(i) of the Facility Agreement shall be deleted and replaced with “such subsidiary is the entity surviving (or, in the case of an amalgamation, continues immediately following) such merger; and”
(l)	Clause 22.13.2(b) of the Facility Agreement shall be deleted and replaced with the following:
	“(1) such Dispositions by the Guarantor or any of their subsidiaries of any of their respective properties or assets to the Guarantor or any Wholly-Owned Subsidiary of the Guarantor 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; and”
(m)	The words “, the Three-Year Unsecured Letter of Credit Facility or the IPC Facilities” shall be inserted after the word “Facility” at the end of Clause 22.13.2(f) of the Facility Agreement.
(n)	The words “or the Three-Year Unsecured Letter of Credit Facility” shall be inserted before the semicolon in Clause 22.14.16 of the Facility Agreement.
(o)	Clause 22.21.3(l) of the Facility Agreement shall be deleted and replaced with the following:
	“restrictions contained in the Five-Year Secured Letter of Credit Facility, restrictions contained in the Three-Year Unsecured Letter of Credit Facility and restrictions contained in the IPC Facilities;”

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(p)	The word “and” at the end of Clause 22.24.7 of the Facility Agreement shall be deleted and the following shall be inserted before the full stop at the end of Clause 22.24.8 of the Facility Agreement:
	“; and

22.24.9 the acquisition by the Guarantor, directly or indirectly through one or more of its subsidiaries, in a non-hostile acquisition of IPC or all or substantially all of the outstanding common shares of IPC whether through merger, amalgamation, scheme of arrangement, share exchange, consolidation or otherwise or through a tender or exchange offer followed by one of the foregoing (the “IPC Acquisition”)”

6.	Representations
	Each Obligor represents and warrants to the Finance Parties that:

(a)	on the date of this Amendment and the Amalgamation Effective Date, the Repeated Representations are true and correct in all material respects on and as of such date and on the Amalgamation Effective Date (it being understood and agreed that any Repeated Representation which by its terms is made as of a specified date shall be required to be true in all material respects only as of such specified date);
(b)	on the date of this Amendment and (after giving effect to this Amendment) the Amalgamation Effective Date, no Default has occurred which is continuing; and
(c)	on the Amalgamation Effective Date, the financial strength rating assigned to Validus Reinsurance, Ltd. and IPCRe Limited by A.M. Best is no lower than “A-”.

7. Miscellaneous

(a)	Nothing in this Amendment shall affect the rights of any Finance Party in respect of the occurrence of any other Default or Event of Default which is continuing or any Default or Event of Default which arises on or after the date of this Amendment.
(b)	For the avoidance of doubt, other than in respect of the amendments at paragraph 5 above, this Amendment is sent without prejudice to any rights or remedies we may have under the Finance Documents arising out of or otherwise connected with the matters referred to therein.
(c)	The provisions of the Facility Agreement and the other Finance Documents shall, save as amended by this Amendment, continue in full force and effect.
(d)	This Amendment is designated a “Finance Document” as defined in the Facility Agreement.

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8.	Governing law
	This Amendment and any non-contractual obligations arising out of or in connection with it are governed by English law.

Please indicate your acceptance of the terms of this Amendment by signing, dating and returning a copy of this Amendment to Loans Administration, Lloyds TSB Bank plc, Loans Administration, Bank House, Wine Street, Bristol BS1 2AN with a copy to Stephen Thomas at Lloyds TSB Bank plc, 10 Gresham Street, London EC2V 7AE.

Yours faithfully

Lloyds TSB Bank plc
as Agent

By: /s/ Stephen Thomas

Lloyds TSB Bank plc
as Lender

By: /s/ Stephen Thomas

ING Bank N.V., London Branch
as Lender

By: /s/ Geraldine P. Kelly

CALYON
as Lender

By: /s/ Charles Kornberger

By: /s/ Walter Jay Buckley

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We hereby acknowledge and agree to the terms set out above.

Talbot Holdings Ltd.

By: /s/ Joseph E. (Jeff) Consolino

Validus Holdings Ltd.

By: /s/ Joseph E. (Jeff) Consolino

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EX-10.2

Exhibit 10.2

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

          WHEREAS, the Company proposes to acquire IPC Holdings, Ltd.;

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

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

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

          SECTION 2. Amendments to the Credit Agreements. Effective as of the Second Amendment Effective Date (as defined below), the Credit Agreements are hereby amended as follows:

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

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

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

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

     “Minimum Consolidated Net Worth Amount” means, at any time, an amount which initially shall be equal to 70% of Consolidated Net Worth as calculated using the pro forma balance sheet included in the definitive proxy statement relating to the IPC Acquisition, and which amount shall be increased immediately following the last day of each fiscal quarter (commencing

with the fiscal quarter commencing after the date of such pro forma balance sheet) by (i) an amount (if positive) equal to 50% of the Net Income for such fiscal quarter plus (ii) 50% of the net cash proceeds received from any issuance of shares of common stock of the Company during such fiscal quarter.

          (b) Section 1.01 of the Three-Year Facility Agreement is amended to add the following definitions thereto in appropriate alphabetical order and, where applicable, replace the corresponding previously existing definitions:

     “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, (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, (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.

     “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.

          (c) Section 1.01 of the Three-Year Facility Agreement is amended to delete in its entirety the definitions of “Financials” and “Utilization Increase” therefrom.

          (d) Section 1.01 of the Five-Year Facility Agreement is amended to add the following definitions thereto in appropriate alphabetical order and, where applicable, replace the corresponding previously existing definitions:

     “Applicable Commitment Fee Rate” means 0.125% per annum.

     “Applicable Letter of Credit Fee Rate” means 0.625% per annum.

     “Defaulting Lender” means any Lender, as reasonably determined by the Administrative Agent in good faith, that has (a) failed to fund any portion of its participations in Letters of Credit within three (3) Business Days of the date required to be funded by it hereunder, (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

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statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements generally in which it commits to extend credit, (c) failed, within (3) three Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective participations in then outstanding Letters of Credit, (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.

          (e) The definition of “Applicable Rate” appearing in Section 1.01 of the Three-Year Facility Agreement is restated in its entirety to read as follows:

          “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:

		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		0.625	%		3.75	%		2.75	%		3.75	%
Category 5	BB+/Ba1 or lower		0.75	%		4.50	%		3.50	%		4.50	%

          For purposes of the foregoing, (i) if neither Moody’s nor S&P shall have in effect an Index Rating (other than by reason of the circumstances referred to in the last sentence of this definition), then each 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 below that of the higher of the two ratings; (iii) if only one of Moody’s and S&P shall have in effect an Index Rating, then the Applicable Rate shall be determined by reference to the Category of such Index Rating; and (iv) 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.

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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, 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.

          (f) Section 2.14(b) of each of the Credit Agreements is amended to add the phrase “shall become a Defaulting Lender or” immediately after the phrase “If any Lender” appearing at the beginning thereof.

          (g) Section 2.23(b) of the Three-Year Facility Agreement is restated in its entirety as follows:

               “(b) [Intentionally Omitted.]”

          (h) Article II of the Three-Year Facility Agreement is amended to add the following as a new Section 2.26 thereto:

          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).

          (i) Section 5.01 of the Three-Year Facility Agreement is hereby amended to restate clause (i) thereof in its entirety as follows:

     (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) Clause (ii) of Section 6.02 of each of the Credit Agreements is hereby replaced in its entirety with the following:

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     “(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,”

          (k) Clause (a) of Section 6.02 of each of the Credit Agreements is hereby amended by inserting a “(1)” at the beginning thereof and inserting the following at the end thereof:

     “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”

          (l) Clause (e) of Section 6.02 of each of the Credit Agreements is hereby amended by adding the following at the end of the parenthetical phrase contained therein: “or the IPC Facilities”.

          (m) Section 6.03(p) of the Three-Year Facility Agreement is hereby amended and restated in its entirety to read as follows:

          “(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;”

          (n) Section 6.12 of each of the Credit Agreements is amended by inserting the words “or the IPC Facilities” at the end of clause (xiv) thereof.

          (o) Section 6.16 of each of the Credit Agreements is amended by deleting the word “and” at the end of clause (f) thereof, replacing the period at the end of clause (g) thereof with “; and” and inserting the following before the period:

          “(h) acquisition, by no later than January 31, 2010, by the Company, directly or indirectly through one or more of its Subsidiaries, in a non-hostile acquisition of all or substantially all of the outstanding common shares or assets of IPC whether through merger, amalgamation, scheme of arrangement, share exchange, consolidation or otherwise or through a tender or exchange offer followed by one of the foregoing (the “IPC Acquisition”)”.

          (p) In the event this Amendment is executed by each Lender, Section 1.01 of the Three-Year Facility Agreement is amended to add the following definition thereto in appropriate alphabetical order and replace the corresponding previously existing definition:

          “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.

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          (q) In the event this Amendment is executed by each Lender, Section 1.01 of the Five-Year Facility Agreement is amended to add the following definition thereto in appropriate alphabetical order and replace the corresponding previously existing definition:

          “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 Letter of Credit Outstandings exceed 50% of 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 Letter of Credit Outstandings 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.

          (r) In the event this Amendment is executed by each Lender, Section 2.11 of each of the Credit Agreements is hereby amended to insert a new clause (f) therein immediately following clause (e) thereof as follows:

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

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

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

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

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

          SECTION 4. Effectiveness. This Amendment shall become effective, with respect to each Credit Agreement, as of the first date (the “Second Amendment Effective Date”) on which the following conditions are satisfied: (i) the IPC Acquisition shall be consummated (or, in the event the IPC Acquisition consists initially of a tender offer or exchange offer, such tender offer or exchange offer shall be consummated), (ii) the Syndication Agent shall have received counterparts hereof duly executed and

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delivered by each of the Account Parties and the Required Lenders as defined in such Credit Agreement (provided that, for the avoidance of doubt, the amendments to the Credit Agreements set forth in clauses (p), (q) and (r) hereof shall not be effective unless each of the Lenders has delivered an executed counterpart hereof) and (iii) the Company shall have paid to the Syndication Agent (or its affiliate) (a) a fee for the account of each Lender that consents to this Amendment at or prior to 5:00 p.m., New York City time, on July 23, 2009 (or such later date and time specified by the Company and notified in writing by the Administrative Agent to the Lenders) (such Lender, a “Consenting Lender”) in an amount equal to 0.125% of such Lender’s Commitment under such Credit Agreement on the Second Amendment Effective Date and (b) the other fees and expenses payable under Section 6 hereof (in the case of expenses, to the extent invoiced prior to the Second Amendment Effective Date).

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

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

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

          (b) This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile or other electronic imaging means of the relevant executed signature pages hereof.

          SECTION 8. Effect of Assignments. If any Consenting Lender shall assign any of its Commitments or Loans before the occurrence of the Second Amendment Effective Date, it shall, upon effecting such assignment, cause the assignee of such Commitments or Loans to deliver an executed counterpart to this Amendment to the Syndication Agent and the Company in respect of all such Commitments and Loans. The Consenting Lender may, at its option, give written instructions to the Syndication Agent, upon effecting such assignment, that such assignee is to be paid any fee owing to such Consenting Lender under Section 4(iii) hereof on the Second Amendment Effective Date, and the Company shall have discharged all obligations to pay such fee to such Consenting Lender if such fee is so paid to such assignee. No assignment in violation of the first sentence of this Section 8 shall be effective.

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          SECTION 9. Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

[Signature Pages Follow]

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

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

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, AS LC ISSUER, ADMINISTRATIVE AGENT AND A LENDER,
	by	/s/ Mark M. Cisz
		Name: Mark M. Cisz
		Title: Executive Director

 

DEUTSCHE BANK AG NEW YORK BRANCH,
By:	/s/ Melissa A. Curry
Name:	Melissa A. Curry
Title:	Director
By:	/s/ John S. McGill
Name:	John S. McGill
Title:	Director

THE BANK OF NEW YORK MELLON (formerly known as The Bank of New York),
By:	/s/ Lizanne T. Eberle
Name:	Lizanne T. Eberle
Title:	Managing Director

CALYON NEW YORK BRANCH,
By:	/s/ Charles Kornberger
Name:	Charles Kornberger
Title:	Managing Director
By:	/s/ Walter Jay Buckley
Name:	Walter Jay Buckley
Title:	Managing Director

ING BANK N.V., LONDON BRANCH,
By:	/s/ N. J. Marchant
Name:	N. J. Marchant
Title:	Director
By:	/s/ Geraldine P. Kelly
Name:	Geraldine P. Kelly
Title:	Managing Director

WACHOVIA BANK, NATIONAL ASSOCIATION,
By:	/s/ Karen Hanke
Name:	Karen Hanke
Title:	Director

ABN AMRO BANK N.V.,
By:	/s/ Nancy Beebe
Name:	Nancy Beebe
Title:	Senior Vice President
By:	/s/ Andrew C. Salerno
Name:	Andrew C. Salerno
Title:	Director

THE BANK OF NOVA SCOTIA,
By:	/s/ David Mahmood
Name:	David Mahmood
Title:	Managing Director

 

COMERICA BANK,
By:	/s/ Chatphet Saipetch
Name:	Chatphet Saipetch
Title:	Vice President

UBS LOAN FINANCE LLC,
By:	/s/ Marie Haddad
Name:	Marie Haddad
Title:	Associate Director
UBS LOAN FINANCE LLC,
By:	/s/ Mary E. Evans
Name:	Mary E. Evans
Title:	Associate Director

BNP PARIBAS,
By:	/s/ Riad Jafarov
Name:	Riad Jafarov
Title:	Vice President
By:	/s/ Laurent Vanderzyppe
Name:	Laurent Vanderzyppe
Title:	Managing Director

HSBC BANK USA, NATIONAL ASSOCIATION,
By:	/s/ Lawrence Karp
Name:	Lawrence Karp
Title:	Senior Vice President

 

LLOYDS TSB BANK PLC, in its capacity as a Lender under the Three Year Facility Agreement
By:	/s/ Candi Obrentz
Name:	Candi Obrentz
Title:	Associate Director
By:	/s/ Shane Klein
Name:	Shane Klein
Title:	Director