Exhibit 10.1

				EXECUTION VERSION

DATED 19 NOVEMBER 2009

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

LLOYDS TSB BANK PLC
AS AGENT

AND

LLOYDS TSB BANK PLC
AS SECURITY TRUSTEE

AMENDMENT AND RESTATEMENT AGREEMENT
RELATING TO A $100,000,000 STANDBY LETTER
OF CREDIT FACILITY AGREEMENT
DATED 28 NOVEMBER 2007

CONTENTS

Clause				Page
1.		Definitions And Interpretation			1
2.		Amendment			2
3.		Representations			2
4.		Continuity And Further Assurance			2
5.		Conditions Subsequent			3
6.		Fees, Costs And Expenses			3
7.		Miscellaneous			4
8.		Governing Law			4

Schedule 1		Conditions Precedent			5
Schedule 2		Restated Agreement			8
Signatures					9

THIS AGREEMENT is dated 19 November 2009 and made between:

(1)		THE BORROWER (as defined in the Original Facility Agreement);
(2)		THE GUARANTOR (as defined in the Original Facility Agreement);
(3)		VALIDUS REINSURANCE, LTD (the “Security Provider”);
(4)		ING BANK N.V., LONDON BRANCH and LLOYDS TSB BANK PLC as continuing lenders (the “Continuing Lenders”) and CALYON as exiting lender (the “Exiting Lender” and together with the Continuing Lenders, the “Lenders”);
(5)		ING BANK N.V., LONDON BRANCH and LLOYDS TSB BANK PLC (whether acting individually or together, the “Arranger”);
(6)		LLOYDS TSB BANK PLC as agent of the other Finance Parties other than the Security Trustee (the “Agent”); and
(7)		LLOYDS TSB BANK PLC as security trustee for the Secured Parties (the “Security Trustee”).

IT IS AGREED as follows:

1.		DEFINITIONS AND INTERPRETATION
1.1		Definitions
		In this Agreement:
		“Agency Fee Letter” means the agency fee letter dated on or about the date of this Agreement between the Borrower and the Agent, setting out any of the fees referred to in Clause 6 (Fees, costs and expenses).
		“Effective Date” means the date on which the Agent confirms to the Lenders and the Borrower that it has received each of the documents listed in Schedule 1 (Conditions Precedent) in a form and substance satisfactory to the Agent.
		“Letter of Comfort” means a comfort letter from Lloyd’s substantially in the form set out in Schedule 8 (Letter of Comfort) of the Original Facility Agreement with such amendments as may be requested by the Agent.
		“Original Facility Agreement” means the $100,000,000 standby letter of credit facility agreement dated 28 November 2007 between, the Borrower, the Guarantor, the Agent, the Arranger, the Security Trustee and others.
		“Participation Fee Letter” means the participation fee letter dated on or about the date of this Agreement between the Borrower and the Arranger, setting out any of the fees referred to in Clause 6 (Fees, costs and expenses).
		“Restated Agreement” means the Original Facility Agreement, as amended by this Agreement, the terms of which are set out in Schedule 2 (Restated Agreement).

		“Structuring Fee Letter” means the structuring fee letter dated on or about the date of this Agreement between the Borrower and Lloyds TSB Bank plc in its capacity as Arranger, setting out any of the fees referred to in Clause 6 (Fees, costs and expenses).
1.2		Incorporation of defined terms

	(a)		Unless a contrary indication appears, a term defined in the Original Facility Agreement has the same meaning in this Agreement.
	(b)		The principles of construction set out in the Original Facility Agreement shall have effect as if set out in this Agreement.

1.3		Clauses
		In this Agreement any reference to a “Clause” or a “Schedule” is, unless the context otherwise requires, a reference to a Clause or a Schedule to this Agreement.
1.4		Third party rights
		A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
1.5		Designation
		In accordance with the Original Facility Agreement, each of the Borrower and the Agent designates this Agreement as a Finance Document.
2.		AMENDMENT
		With effect from the Effective Date, the Original Facility Agreement shall be amended and restated so that:

	(a)		it shall be read and construed for all purposes as set out in Schedule 2 (Restated Agreement); and
	(b)		each Continuing Lender’s Commitment shall be reduced to the respective amount set out in the column opposite its name in Schedule 1 (The Original Lenders) of the Restated Agreement and the Exiting Lender’s Commitment shall be reduced to zero whereupon it shall cease to be a Lender.

3.		REPRESENTATIONS
		The Representations (as set out in the Original Facility Agreement) are deemed to be made by each Obligor (by reference to the facts and circumstances then existing) on the date of this Agreement and the Representations (as set out in the Restated Agreement) are deemed to be made by each Obligor (by reference to the facts and circumstances then existing) on the Effective Date.
4.		CONTINUITY AND FURTHER ASSURANCE
4.1		Continuing obligations
		The provisions of the Original Facility Agreement and the other Finance Documents shall, save as amended by this Agreement, continue in full force and effect.
4.2		Confirmation of guarantees and security

(a)

The Guarantor confirms for the benefit of the Finance Parties that:

	(i)		its guarantee to each Finance Party of the punctual performance by each other Obligor of all of that Obligor’s obligations under the Finance Documents and its indemnity to the Finance Parties each as set out in Clause 19 (Guarantee and Indemnity) of the Original Facility Agreement; and
	(ii)		the Security created by it under each Security Document to which it is a party,

			shall remain in full force and effect and will continue to secure all obligations expressed to be secured thereunder, notwithstanding the amendments to the Original Facility Agreement effected by this Agreement.
	(b)		The Security Provider confirms for the benefit of the Finance Parties that the Security created by it under each Security Document to which it is a party shall remain in full force and effect and will continue to secure all obligations expressed to be secured thereunder, notwithstanding the amendments to the Original Facility Agreement effected by this Agreement.

5.		CONDITIONS SUBSEQUENT
5.1		Letter of Comfort The Borrower:

	(a)		shall use all reasonable endeavours to obtain a Letter of Comfort from Lloyd’s and deliver such Letter of Comfort to the Agent on or prior to the Effective Date; and
	(b)		shall, notwithstanding paragraph (a) above, procure that a Letter of Comfort is issued by Lloyd’s and delivered to the Agent no later than the date falling 15 Business Days after the Effective Date or such later date as may be agreed by the Agent.

6.		FEES, COSTS AND EXPENSES
6.1		Structuring Fee The Borrower shall pay to Lloyds TSB Bank plc in its capacity as Arranger, the structuring fees specified in the Structuring Fee Letter between Lloyds TSB Bank plc in its capacity as Arranger and the Borrower at the times, and in the amounts, specified in such letter.
6.2		Participation Fee The Borrower shall pay to the Arranger, the participation fees specified in the Participation Fee Letter between the Arranger and the Borrower at the times, and in the amounts, specified in such letter.
6.3		Agency Fee The Borrower shall pay to the Agent for its own account, the agency fees payable in accordance with Clause 16.4 (Agency Fees) of the Restated Agreement.

6.4		Transaction expenses The Borrower shall promptly, within five Business Days of demand, pay the Agent, the Arranger and the Security Trustee the amount of all costs and expenses (including, but not limited to, legal fees and disbursements) reasonably incurred by any of them (and, in the case of the Security Trustee, by any Receiver or Delegate) in connection with the negotiation, preparation, printing and execution of this Agreement and any other documents referred to in this Agreement.
7.		MISCELLANEOUS
7.1		Incorporation of terms The provisions of Clause 34 (Notices), Clause 36 (Partial Invalidity), Clause 37 (Remedies and waivers) and Clause 42 (Enforcement) of the Original Facility Agreement shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those clauses to “this Agreement” or “the Finance Documents” are references to this Agreement.
7.2		Counterparts This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
8.		GOVERNING LAW
		This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

SCHEDULE 1

Conditions Precedent

1.

Corporate Documents

	(a)		A copy of the constitutional documents of each Obligor and each other member of the Group that is party to this Agreement or a certificate from a director or officer of the Guarantor confirming that its constitutional documents and those of the other Obligors delivered to the Agent in connection with the Original Facility Agreement have not been amended and remain correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.
	(b)		A copy of a resolution of the board of directors of each Obligor and each other member of the Group that is party to this Agreement:

	(i)		approving the terms of, and the transactions contemplated by, this Agreement and resolving that it execute this Agreement;
	(ii)		authorising a specified person or persons to execute this Agreement on its behalf; and
	(iii)		authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party.

	(c)		A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above.
	(d)		A certificate of the Guarantor (signed by a director or officer of the Guarantor) confirming that neither the execution, delivery and performance by the Guarantor or any of its Significant Subsidiaries that is party to this Agreement of this Agreement nor compliance with the terms and provisions thereof, nor the consummation of the transactions contemplated therein:

	(i)		will contravene any applicable provision of any law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality;
	(ii)		will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (other than Liens in favour of the Security Trustee pursuant to the Security Documents) upon any of its property or assets or those of any of its Significant Subsidiaries pursuant to the terms of any material indenture, mortgage, deed of trust, loan agreement, credit agreement or any other material instrument to which it or any of its

			Significant Subsidiaries is a party or by which it or any of its property or assets are bound or to which it may be subject; or
	(iii)		will violate any provision of its certificate of incorporation, by-laws or other organisational documents, nor those of its Significant Subsidiaries.

	(e)		A copy of a resolution of the Guarantor in its capacity as holder of the outstanding shares of the Security Provider, approving the terms of, and the transactions contemplated by, this Agreement.
	(f)		A certificate of the Guarantor (signed by a director or officer of the Guarantor) certifying that each copy document delivered to the Agent pursuant to paragraphs 1(a), 1(b), 1(e) and 3(c) of this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

2.

Legal opinions

	(a)		A legal opinion of Clifford Chance LLP, legal advisers to the Arranger and the Agent in England, substantially in the form distributed to the Lenders prior to signing this Agreement.
	(b)		A legal opinion of Conyers, Dill & Pearman, legal advisers to the Arranger and the Agent in Bermuda, substantially in the form distributed to the Lenders prior to signing this Agreement.

3.

Other documents and evidence

	(a)		A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.
	(b)		Evidence that all actual or contingent liabilities under each Letter of Credit issued under the Original Facility Agreement have been or will be irrevocably discharged and released and that each such Letter of Credit has been cancelled and returned to the Agent no later than the Effective Date.
	(c)		The unaudited consolidated financial statements of the Borrower for its financial year ended 31 December 2008.
	(d)		The audited consolidated financial statements of the Guarantor for its financial year ended 31 December 2008.
	(e)		The executed Structuring Fee Letter, Participation Fee Letter and Agency Fee Letter and evidence that all fees, costs and expenses payable pursuant to those letters and pursuant to Clause 6 (Fees, costs and expenses) have been or will be paid.
	(f)		A statement provided by the Bank of New York in relation to the value of the collateral in the Collateral Accounts as of the date of this Agreement.

	(g)		Evidence that the Security Provider has an A.M. Best financial strength rating of at least “A-”.
	(h)		The Business Plan.

SCHEDULE 2
Restated Agreement

DATED 28 NOVEMBER 2007

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

LLOYDS TSB BANK PLC
AS SECURITY TRUSTEE

$25,000,000 STANDBY LETTER OF CREDIT
FACILITY AGREEMENT

CONTENTS

Clause				Page
1.		Definitions And Interpretation			1
2.		The Facility			25
3.		Utilisation Of The Facility			27
4.		Letter Of Credit Commission			31
5.		Market Disruption And Alternative Interest Rates			31
6.		Notification			32
7.		Borrower’s Indemnity To The Lenders			33
8.		Prepayment And Cancellation			35
9.		Collateralisation Of Letters Of Credit			36
10.		Commitment Increase Request			36
11.		Tax Gross Up And Indemnities			40
12.		Increased Costs			43
13.		Illegality			45
14.		Other Indemnities			45
15.		Mitigation			47
16.		Commitment Commission And Fees			48
17.		Costs And Expenses			49
18.		Default Interest And Break Costs			50
19.		Guarantee And Indemnity			52
20.		Representations			55
21.		Information Undertakings			63
22.		Financial Condition			67
23.		General Undertakings			70
24.		Events Of Default			83
25.		Changes To The Lenders			88
26.		Changes To The Obligors			92
27.		Role Of The Agent And The Arranger			93
28.		Role Of Security Trustee			98
29.		Conduct Of Business By The Finance Parties			106
30.		Sharing Among The Finance Parties			106
31.		Payment Mechanics			109
32.		Set-Off			112

Clause				Page
33.		Application Of Proceeds			112
34.		Notices			113
35.		Calculations And Certificates			116
36.		Partial Invalidity			116
37.		Remedies And Waivers			117
38.		Counterparts			117
39.		Amendments And Waivers			117
40.		Counterparts			118
41.		Governing Law			119
42.		Enforcement			119
43.		Confidentiality			119

Schedule 1 The Original Lenders			121
Schedule 2 Conditions Precedent			122
Schedule 3 Form Of Utilisation Request			125
Schedule 4 Form Of Transfer Certificate			126
Schedule 5 Form Of Credit Institution Confirmation			129
Schedule 6 Form Of Letter Of Credit			130
Schedule 7 Mandatory Costs Rate			135
Schedule 8 Letter Of Comfort			138
Schedule 9 Eligible Collateral Table			139
Schedule 10 Form Of Borrowing Base Certificate			140
Schedule 11 Existing Liens			142
Schedule 12 Existing Intercompany Arrangements And Agreements			143
Schedule 13 Permitted Subsidiary Indebtedness			144
Schedule 14 Subsidiaries			145
Schedule 15 Existing Affiliate Transactions			147
Schedule 16 Additional Lender Accession Letter			148
Signatures			150

THIS AGREEMENT is made on 28 November 2007

BETWEEN

(1)		TALBOT HOLDINGS LTD. (the “Borrower”);
(2)		VALIDUS HOLDINGS, LTD. (the “Guarantor”);
(3)		ING BANK N.V., LONDON BRANCH and LLOYDS TSB BANK PLC as mandated lead arranger(s) (whether acting individually or together, the “Arranger”);
(4)		ING BANK N.V. as structuring agent (the “Structuring Agent”);
(5)		LLOYDS TSB BANK PLC as agent of the other Finance Parties other than the Security Trustee (the “Agent”);
(6)		LLOYDS TSB BANK PLC as Security Trustee for the Secured Parties (the “Security Trustee”); and
(7)		THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The Original Lenders) as lenders (the “Original Lenders”).

WHEREAS:

In support of the obligations of the Borrower under the Borrower’s 2010 and 2011 underwriting years’ letter of credit facility procurement agreements and capital stack arrangements with Talbot 2002 Underwriting Capital Ltd., Validus Holdings, Ltd., as Guarantor, and Talbot Holdings Ltd., as Borrower, enter into this Agreement.

ACCORDINGLY, IT IS AGREED as follows.

SECTION 1
INTERPRETATION

1.		DEFINITIONS AND INTERPRETATION
1.1		Definitions
		In this Agreement:
		“Accepting Parties” has the meaning given to such term in Clause 10.6 (Partial approval of Commitment Increase Request).
		“Account Party” means Talbot 2002 Underwriting Capital Ltd.
		“Additional Lender” has the meaning given to such term in Clause 10.4 (Decline of Commitment Increase Request).
		“Additional Lender Accession Letter” means an additional lender accession letter from an Additional Lender to the Agent substantially in the form set out in Schedule 16 (Additional Lender Accession Letter).
		“Advance Rate” means, for any category of Cash or obligation or investment specified in Schedule 9 (Eligible Collateral Table) in the column entitled “Cash and Eligible

		Securities” in the Eligible Collateral Table (other than Cash, the “Eligible Securities”), the percentage set forth opposite such category of Cash or Eligible Securities in the column entitled “Advance Rate” of the Eligible Collateral Table and, in each case, subject to the original term to maturity criteria set forth therein.
		“Affiliate” means, with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified.
		“Agent’s Spot Rate of Exchange” means the Agent’s spot rate of exchange for the purchase of the relevant currency with the Base Currency in the London foreign exchange market at or about 11:00 a.m. on a particular day.
		“A.M. Best” means A.M. Best Company and its successors.
		“Amendment Agreement” means the amendment and restatement agreement dated 19 November 2009 between the Parties relating to this Agreement.
		“Applicable Insurance Regulatory Authority” means, when used with respect to any Regulated Insurance Company:

	(a)		the insurance department or similar administrative authority or agency located in each state or jurisdiction (foreign or domestic) in which such Regulated Insurance Company is domiciled; or
	(b)		to the extent asserting regulatory jurisdiction over such Regulated Insurance Company, the insurance department, authority or agency in each state or jurisdiction (foreign or domestic) in which such Regulated Insurance Company is licensed,

		and shall include any federal or national insurance regulatory department, authority or agency that may be created and that asserts insurance regulatory jurisdiction over such Regulated Insurance Company.
		“Approved Credit Institution” means a credit institution within the meaning of the First Council Directive on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions (No. 77/780/EEC) which has been approved by the Council of Lloyd’s for the purpose of providing guarantees and issuing or confirming letters of credit comprised (or to be comprised) in a member’s Funds at Lloyd’s.
		“Authorisation” means an authorisation, consent, approval, resolution, license, exemption, filing or registration.
		“Authorised Signatory” means, in relation to an Obligor, any person who is duly authorised (in such manner as may be reasonably acceptable to the Agent) and in respect of whom the Agent has received a certificate signed by a director or another Authorised Signatory of such Obligor setting out the name and signature of such person and confirming such person’s authority to act.

		“Availability Period” means the period commencing on the date of this Agreement and ending on 31 December 2010.
		“Available Commitment” means, in relation to a Lender at any time and save as otherwise provided herein its Commitment less the Base Currency Amount of its share of the Outstandings at such time provided that such amount shall not be less than zero.
		“Available Facility” means, at any time, the aggregate of the Available Commitments adjusted, in the case of a proposed utilisation, so as to take into account:

	(a)		any reduction in the Commitment of a Lender pursuant to the terms hereof;
	(b)		the Base Currency Amount of any Letter of Credit which pursuant to any other utilisation, is to be issued; and
	(c)		the Base Currency Amount of any Letter of Credit which is due to expire or returned as cancelled,

		on or before the proposed Utilisation Date relating to such utilisation.
		“Base Currency” means dollars.
		“Base Currency Amount” means, in relation to a Letter of Credit, the amount specified in the Utilisation Request for that Letter of Credit (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent’s Spot Rate of Exchange on the date which is three Business Days before the Utilisation Date or, if later, on the date the Agent receives the Utilisation Request).
		“Bermuda Companies Law” means the Companies Act 1981 of Bermuda as amended from time to time including every modification, reenactment or revision thereof for the time being in force.
		“Borrowing Base” means, at any time, the aggregate amount of Cash and Eligible Securities held in the Collateral Accounts under the Security Agreement at such time multiplied in each case by the respective Advance Rates for Cash and such Eligible Securities (the value of Eligible Securities at any time being determined on the basis of the Borrowing Base Report (as defined in the Security Agreement) then most recently prepared by the Special Report Agent) provided that all Cash and Eligible Securities in respect of any Borrowing Base shall only be included in such Borrowing Base to the extent the same are subject to a first priority perfected security interest in favour of the Security Trustee pursuant to the Security Documents.
		“Borrowing Base Certificate” means a Borrowing Base Certificate substantially in the form set out in Schedule 10 (Form of Borrowing Base Certificate) or in such other form reasonably acceptable to the Agent.
		“Business Day” means a day (other than a Saturday or Sunday) on which banks generally are open for business in both London and New York.

		“Business Plan” means the 2010 business plan of the Guarantor, a copy of which has been provided to the Agent pursuant to paragraph 3(h) of Schedule 1 (Conditions Precedent) of the Amendment Agreement.
		“Capital Lease Obligations” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“Capital Markets Product” means, as to any person, any security, commodity, derivative transaction or other financial or similar product purchased, sold or entered into by such person for the purpose of a third-party undertaking or assuming one or more risks otherwise assumed by such person or entered into by such person for the purpose of managing one or more risks otherwise assumed by such person or other agreements or arrangements entered into by such person designed to transfer credit risk from one party to another, including:

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

		“Cash” means the category of “Cash” described in the definition of Advance Rate.
		“Cash Equivalents” means, as to any person:

(a)

securities issued or directly and fully guaranteed or insured by the US or any agency or instrumentality thereof (provided that the full faith and credit of the US is pledged in support thereof) having maturities of not more than one year from the date of acquisition;

	(b)		time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organised under the laws of the US, any state thereof, the District of Columbia or any foreign jurisdiction having, capital, surplus and undivided profits aggregating in excess of $200,000,000, with maturities of not more than one year from the date of acquisition by such person;
	(c)		repurchase obligations with a term of not more than 90 days for underlying securities of the types described in paragraph (a) above entered into with any bank meeting the qualifications specified in paragraph (b) above;
	(d)		commercial paper rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition by such person;
	(e)		obligations of obligors organised outside the US (including sovereign nations), which obligations are correlative in type, maturity and rating as those set forth in paragraphs (a) through (d) above; and
	(f)		investments in “money market funds” within the meaning of Rule 2a-7 of the Investment Company Act of 1940 of the US, as amended, substantially all of whose assets are comprised of securities of the types described in paragraphs (a) through (e) above.

“Change of Control” means the occurrence of any of the following events or conditions:

	(a)		the Borrower or Validus Reinsurance, Ltd. cease to be a Wholly-Owned Subsidiary of the Guarantor;
	(b)		any person, including any syndicate or group deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of capital stock of the Guarantor entitling such person to exercise 50% or more of the total voting power of all shares of capital stock of the Guarantor that is entitled to vote generally in elections of directors, other than an acquisition by the Guarantor, any of its subsidiaries or any employee benefit plans of the Guarantor; or
	(c)		a majority of the members of the Guarantor’s board of directors are persons who are then serving on the board of directors without having been nominated or otherwise approved in writing by at least a majority of the individuals who constituted the board of directors of the Guarantor as of the date hereof (or their replacements as herein required)

		“Charged Property” means all the assets of any member of the Group which from time to time are, or are expressed to be, the subject of the Transaction Security.
		“Closing Date” means the Effective Date (as defined in the Amendment Agreement).
		“Code” means the Internal Revenue Code of 1986.

		“Collateral” means, in relation to any Lender’s Proportion of a Letter of Credit, a deposit in the Collateral Accounts and the term “Collateralised” shall be construed accordingly.
		“Collateral Accounts” has the meaning set forth in the Control Agreement.
		“Commitment” means:

	(a)		in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading “Commitment” in Schedule 1 (The Original Lenders); and
	(b)		in relation to any other Lender, the amount in the Base Currency of any Commitment transferred to it under this Agreement,

		together with any increase in such Commitment effected in accordance with Clause 10 (Commitment Increase Request), to the extent not cancelled, reduced or transferred by it under this Agreement.
		“Commitment Increase Fee” has the meaning given to such term in Clause 10.2 (Commitment Increase Fee).
		“Commitment Increase Request” has the meaning given to such term in Clause 10.1.1.
		“Confidentiality Undertaking” means a confidentiality undertaking substantially in a recommended form of the Loan Market Association from time to time, or such other form as may be agreed between the Borrower and the Agent.
		“Consolidated Indebtedness” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“Consolidated Net Worth” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“Consolidated Total Capital” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“Control” means, with respect to any person, the possession, directly or indirectly, of the power:

	(a)		to vote 10% or more of the voting power of the securities having ordinary voting power for the election of directors of such person; or
	(b)		to direct or cause the direction of the management or policies of a person, whether through the ability to exercise voting power, by contract or otherwise,

		and “Controlling” and “Controlled” have meanings correlative thereto.
		“Control Agreement” has the meaning set forth in the Security Agreement.
		“Corporate Member” means the Account Party, being a corporate member of Lloyd’s.

		“Credit Institution Confirmation” means the confirmation in form and substance satisfactory to Lloyd’s and substantially in the form set out in Schedule 5 (Form of Credit Institution Confirmation).
		“Custodian” means custodian under the Control Agreement and the Security Agreement.
		“Declined Amount” has the meaning given to such term in Clause 10.4 (Decline of Commitment Increase Request).
		“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
		“Defaulting Lender” means any Lender 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.

		“Delegate” means any delegate, agent, attorney or co-Security Trustee appointed by the Security Trustee.
		“Disruption Event” means either or both of:

(a)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

	(i)		from performing its payment obligations under the Finance Documents; or
	(ii)		from communicating with other Parties in accordance with the terms of the Finance Documents,

(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

		“DTC” means the Depository Trust Company.
		“Eligible Collateral Table” means the table set out in Schedule 9 (Eligible Collateral Table).
		“Eligible Investment Grade Securities” means the following categories of Eligible Securities in the column entitled “Advance Rate” of the Eligible Collateral Table:

	(a)		Investment Grade Municipal Bonds; and
	(b)		Investment Grade Non-Convertible U.S. Corporate Bonds.

		“Eligible Securities” has the meaning provided in the definition of the term “Advance Rate”.
		“Environmental Law” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
		“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Guarantor or any subsidiary directly or indirectly resulting from or based upon:

	(a)		its violation of any Environmental Law;
	(b)		its generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials;
	(c)		its exposure to any Hazardous Materials;
	(d)		its release or threatened release of any Hazardous Materials into the environment; or
	(e)		any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing,

		but in each of (a) through (e) excluding liabilities arising out of Capital Markets Products and insurance and reinsurance contracts, agreements and arrangements in each case entered into in the ordinary course of business and not for speculative purposes.
		“Equity Interests” means, with respect to any person, shares of capital stock of (or other ownership or profit interests in) such person, warrants, options or other rights for the purchase or other acquisition from such person of shares of capital stock of (or other ownership or profit interests in) such person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such person or warrants, rights or options for the purchase or other acquisition from such person of such shares (or such other interests), and other ownership or profit interests in such person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorised or otherwise existing on any date of determination.
		“ERISA” means the Employee Retirement Income Security Act of 1974 of the US, as amended from time to time and the regulations promulgated and rulings issued thereunder.
		“ERISA Affiliate” means any corporation or trade or business which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Guarantor or any of its subsidiaries or is under common control (within the meaning of Section 414(c) of the Code) with the Guarantor or any of its subsidiaries.
		“Event of Default” means any circumstance described as such in Clause 24 (Events of Default) other than Clause 24.14 (Acceleration and Cancellation).
		“Existing Affiliate Transactions” means the transactions set forth on Schedule 15 (Existing Affiliate Transactions).
		“Existing Facility” means the $30,000,000 standby letter of credit facility dated 25 November 2003 (as amended and restated by amendment and restatement agreements dated 23 November 2004, 25 November 2005, 2 March 2006 and 29 November 2006 and an amendment letter dated 28 June 2007) and entered into between the Borrower as parent, the Account Party and Talbot Underwriting Holdings Ltd as guarantors and Lloyds TSB Bank plc as bank.
		“Expiry Date” means, in relation to any Letter of Credit, the date on which the maximum aggregate liability thereunder is to be reduced to zero.
		“Facility” means the letter of credit facility granted to the Borrower in this Agreement.
		“Facility Office” means, in relation to the Agent, the office identified with its signature below or such other office as it may select by notice and, in relation to any Lender, the office notified by it to the Agent in writing prior to the date hereof (or, in the case of a Transferee, at the end of the Transfer Certificate to which it is a party as Transferee) or such other office as it may from time to time select by notice to the Agent.
		“Fee Letter” means any letter or letters dated on or about the date of this Agreement between the Borrower and the Arrangers (or the Agent and the Borrower, the Security

		Trustee and the Borrower or the Structuring Agent and the Borrower), setting out any of the fees referred to in Clause 16 (Commitment Commission and fees).
		“Finance Documents” means this Agreement, any Fee Letter, the Security Documents and any other document designated in writing as a “Finance Document” by the Agent and the Borrower.
		“Finance Parties” means the Agent, the Structuring Agent, the Security Trustee, the Arrangers and the Lenders.
		“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower or the Guarantor.
		“Five-Year Secured Letter of Credit Facility” means the $500,000,000 five-year secured letter of credit facility dated 12 March 2007 between Validus Holdings, Ltd., Validus Reinsurance, Ltd., JPMorgan Chase Bank, National Association, as administrative agent and others, including the related instruments and agreements executed in connection therewith, and amendments, renewals, replacements, refinancings and restatements to any of the foregoing.
		“Foreign Pension Plan” means any plan, fund (including any superannuation fund) or other similar program established or maintained outside the US by the Guarantor or any one or more of its subsidiaries primarily for the benefit of employees of the Guarantor or such subsidiaries residing outside the US, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.
		“Fronting Arrangement” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“FSA Handbook” means the UK Financial Services Authority Handbook of Rules and Guidance (as amended from time to time).
		“Funds at Lloyd’s” has the meaning given to it in paragraphs 16 and 17 of the Membership Byelaw (No. 5 of 2005).
		“GAAP” means US GAAP, or, in relation to subsidiaries of the Guarantor which are incorporated in England and Wales, UK GAAP.
		“General Prudential Sourcebook” means the General Prudential Sourcebook for Banks, Building Societies, Insurers and Investment Firms (as amended and replaced from time to time), which forms part of the FSA Handbook.
		“Governmental Authority” means the government of the US, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
		“Group” means the Guarantor and its subsidiaries for the time being.

		“Guarantee” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
		“Hybrid Capital” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“Increase Date” has the meaning given to such term in Clause 10.7 (Increase Date).
		“Indebtedness” of any person means, without duplication:

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

limitation trust preferred) or preference securities or Hybrid Capital to the extent such preferred or preference securities or Hybrid Capital would be treated as equity under the applicable procedures and guidelines of S&P as of the date of this Agreement.

		The Indebtedness of any person shall include the Indebtedness of any other entity (including any partnership in which such person is a general partner) to the extent such person is liable therefor as a result of such person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such person is not liable therefor. For the avoidance of doubt, Indebtedness shall not include (v) current trade payables (including current payables under insurance contracts and current reinsurance payables) and accrued expenses, in each case arising in the ordinary course of business, (w) obligations and Guarantees of Regulated Insurance Companies with respect to Policies, (x) obligations and Guarantees with respect to products underwritten by Regulated Insurance Companies in the ordinary course of business, including insurance and reinsurance policies, annuities, performance and surety bonds, assumptions of liabilities and any related contingent obligations, (y) Reinsurance Agreements and Fronting Arrangements and Guarantees thereof entered into by any Regulated Insurance Company in the ordinary course of business and (z) indebtedness arising under any Syndicate Arrangement.
		“Insurance Business” means one or more aspects of the business of selling, issuing or underwriting insurance or reinsurance and other businesses reasonably related thereto.
		“Insurance Contract” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“Insurance License” has the meaning given to such term in Clause 20.15 (Insurance Licenses).
		“Integrated Prudential Sourcebook” means the Prudential Sourcebook for Insurers (as amended and replaced from time to time), which forms part of the FSA Handbook.
		“Interest Period” means, save as otherwise provided herein, in relation to an Unpaid Sum, any of those periods mentioned in Clause 18.1 (Default Interest Periods).
		“IPC” means IPC Holdings, Ltd., a company previously organised under the laws of Bermuda and now known as Validus Amalgamation Subsidiary, Ltd. (a company also organised under the laws of Bermuda and previously known as Validus, Ltd.), being the amalgamated company resulting from the amalgamation of IPC Holdings, Ltd. with Validus, Ltd., such amalgamation being effective as at 4 September 2009.
		“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, 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.
		“Junior Subordinated Deferrable Debentures” has the meaning given to such term in Clause 22.2 (Financial Definitions).
		“L/C Commission Rate” means:

	(a)		for any period in which all or any part of Borrowing Base consists of Eligible Investment Grade Securities, 0.50 per cent. per annum.; and
	(b)		at any other time, 0.40 per cent. per annum.

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

	(a)		the principle that equitable remedies may be granted or refused at the discretion of a court and the limitations imposed by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting the rights of creditors or (as the case may be) secured creditors;
	(b)		the time barring of claims, the possibility that an undertaking to assume liability for or to indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;
	(c)		similar principles, rights and defences under the laws of any other jurisdiction; and
	(d)		any other matters which are set out as qualifications or reservations as to matters of law of general application in the legal opinions delivered to any of the Finance Parties in connection with the Finance Documents.

“Lender” means any financial institution:

	(a)		named in Schedule 1 (The Original Lenders); or
	(b)		which has become a party hereto in accordance with Clause 25 (Changes to the Lenders),

and which has not ceased to be a party hereto in accordance with the terms hereof.

“Lender’s Proportion” means, in relation to a Letter of Credit, the proportion which that Lender’s participation in that Letter of Credit bears to the participation of all the Lenders, determined in accordance with Clause 3.4 (Each Lender’s Participation in Letters of Credit).

“Letter of Comfort” means a comfort letter from Lloyd’s substantially in the form set out in Schedule 8 (Letter of Comfort) or with such amendments as may be requested by the Borrower and/or Lloyd’s and reasonably approved by the Agent.

“Letter of Credit” means a letter of credit issued or to be issued pursuant to Clause 3 (Utilisation of the Facility) substantially in the form set out in Schedule 6 (Form of Letter of Credit) or in such other form requested by the Borrower which is approved by the Lenders (such approval not to be unreasonably withheld).

“Leverage Ratio” has the meaning given to such term in Clause 22.2 (Financial Definitions).

“LIBOR” means, in relation to any Unpaid Sum on which interest for a given period is to accrue:

	(a)		the percentage rate per annum equal to the offered quotation which appears on the appropriate page of the Reuters screen which displays the British Bankers Association Interest Settlement Rate for the relevant currency for such period; or
	(b)		if such page or such service shall cease to be available, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London Interbank market

at 11.00 a.m. on the Quotation Date for such period.

“Lien” means, with respect to any asset:

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

“Lloyd’s” means the society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s.

“Lloyd’s Trust Deed” means a trust deed in the form prescribed by Lloyd’s for execution by a member, or any other member of the Group which provides Own FAL on behalf of a member, in respect of that member’s insurance business.

“Lloyd’s Trust Fund” means a fund held on the terms of a Lloyd’s Trust Deed.

“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.

“Managed Syndicate” means Syndicate 1183 at Lloyd’s, which is currently under the management of the Managing Agent.

“Managing Agent” means Talbot Underwriting Ltd.

“Mandatory Costs Rate” means the percentage rate per annum calculated by the Agent in accordance with Schedule 7 (Mandatory Costs Rate).

“Material Adverse Effect” means a material adverse effect on:

	(a)		the business, operations, assets, liabilities or financial condition of the Group taken as a whole;
	(b)		the ability of the Obligors or any other member of the Group that is party to any Finance Document to perform their material or payment obligations under the Finance Documents; or
	(c)		the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party under the Finance Documents.

“Minimum Consolidated Net Worth Amount” has the meaning given to such term in Clause 22.2 (Financial Definitions).

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

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

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

“Net Income” has the meaning given to such term in Clause 22.2 (Financial Definitions).

“Net Worth” means, as to any person, the sum of its capital stock (including its preferred stock), capital in excess of par or stated value of shares of its capital stock (including its preferred stock), retained earnings and any other account which, in accordance with US GAAP, constitutes stockholders equity, but excluding:

	(a)		any treasury stock; and
	(b)		the amount of the effects of Financial Accounting Statement No. 115 (which amount is shown on the Guarantor’s 31 December 2006 balance sheet under the caption “Accumulated other comprehensive income” and which, after adoption of Financial Accounting Statements Nos. 157 and 159 will be measured as the difference between investments carried at estimated fair value and investments carried at amortised cost).

“Notice of Non-Extension” means a notice of the kind referred to in Clause 3.7 (Notice of Non-Extension in respect of Letters of Credit).

“Obligors” means the Borrower and the Guarantor.

“Optional Currency” means sterling.

“Original Financial Statements” means:

	(a)		in relation to the Borrower, its audited consolidated financial statements for its financial year ended 31 December 2006; and
	(b)		in relation to the Guarantor, its audited consolidated financial statements for its financial year ended 31 December 2006.

“Outstandings” means, at any time, the Base Currency Amount of the aggregate of the maximum actual and contingent liabilities of the Lenders in respect of each outstanding Letter of Credit.

“Own FAL” means, in relation to the Account Party, such part of its Funds at Lloyd’s as is provided by the Account Party or any other member of the Group by way of Cash and/or investments and/or covenant and charge or otherwise as permitted by Lloyd’s from time to time (which shall be valued by Lloyd’s in accordance with Lloyd’s usual practice).

“Party” means a party to this Agreement.

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

“Permitted Subsidiary Indebtedness” means:

(a)

Indebtedness of any subsidiary of the Guarantor under the Finance Documents or existing on the date hereof and listed on Schedule 13 (Permitted Subsidiary Indebtedness) and extensions, renewals and replacements of any such Indebtedness, provided that such extending, renewal or replacement Indebtedness:

	(i)		shall not be Indebtedness of an obligor that was not an obligor with respect to the Indebtedness being extended, renewed or replaced;
	(ii)		shall not be in a principal amount that exceeds the principal amount of the Indebtedness being extended, renewed or replaced (plus any accrued but unpaid interest and redemption premium payable by the terms of such Indebtedness thereon and reasonable refinancing or renewal expenses);
	(iii)		shall not have an earlier maturity date or shorter weighted average life than the Indebtedness being extended, renewed or replaced; and
	(iv)		shall be subordinated to the obligations of the Guarantor in respect of this Agreement on the same terms (if any) as the Indebtedness being extended, renewed or replaced;

	(b)		Indebtedness of any subsidiary of the Guarantor incurred in the ordinary course of business in connection with any Capital Markets Product that are not entered into for speculative purposes;
	(c)		Indebtedness owed by subsidiaries of the Guarantor to the Guarantor or any of its subsidiaries;
	(d)		Indebtedness of any subsidiary of the Guarantor incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed by any subsidiary of the Guarantor in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, provided that:

	(i)		such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement; and
	(ii)		the aggregate principal amount of Indebtedness permitted by this paragraph (d) shall not exceed $10,000,000 at any time outstanding;

	(e)		Indebtedness of any subsidiary of the Guarantor in respect of letters of credit issued to reinsurance cedents, or to lessors of real property in lieu of security deposits in connection with leases of any subsidiary of the Guarantor, in each case in the ordinary course of business;
	(f)		Indebtedness of any subsidiary of the Guarantor incurred in the ordinary course of business in connection with workers’ compensation claims, self-insurance obligations, unemployment insurance or other forms of governmental insurance or benefits and pursuant to letters of credit or other security arrangements entered into in connection with such insurance or benefit;
	(g)		Indebtedness under the Five-Year Secured Letter of Credit Facility, Indebtedness under the Three-Year Unsecured Letter of Credit Facility and Indebtedness under the IPC Facilities;
	(h)		Indebtedness arising under any Syndicate Arrangement;

(i)

without duplication, additional Indebtedness of subsidiaries of the Guarantor not otherwise permitted under paragraphs (a) through (h) of this definition which, when added to the aggregate amount of all Liens (other than with respect to Indebtedness incurred pursuant to this paragraph (i)) incurred by the Guarantor pursuant to sub-clause 23.14.26 of Clause 23.14 (Liens), shall not exceed at any time outstanding 5 per cent. of Consolidated Net Worth at the time of incurrence of any new Indebtedness under this paragraph (i); provided that immediately after giving effect (including pro forma effect) to the incurrence of any Indebtedness pursuant to this paragraph (i), no Event of Default shall have occurred and be continuing.

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

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

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

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

“Proportion” means, in relation to a Lender:

(a)

the proportion borne by its Commitment to the Total Commitments (or, if the Total Commitments are then zero, by its Commitment to the Total Commitments immediately prior to their reduction to zero); and

(b)

in respect of any Letter of Credit and save as otherwise provided herein, the proportion (expressed as a percentage) borne by such Lender’s Available Commitment to the Available Facility immediately prior to the issue of such Letter of Credit.

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

“Quotation Date” means, in relation to any period for which an interest rate is to be determined hereunder:

	(a)		(if the currency is domestic sterling) the first day of that period; or
	(b)		(for any other currency) two Business Days before the first day of that period,

unless market practice differs in the Relevant Interbank Market for a currency, in which case the Quotation Date for that currency will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Date will be the last of those days).

“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.

“Reference Banks” means the principal London offices of ING Bank N.V., London Branch and Lloyds TSB Bank plc or such banks as may be appointed as such by the Agent after consultation with the Borrower.

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

“Reinsurance Agreement” has the meaning given to such term in Clause 22.2 (Financial Definitions).

“Release Test Calculations” has the meaning given to such term in Clause 21.9 (Release Test Calculations).

“Relevant Interbank Market” means the London interbank market.

“Repeated Representations” means each of the representations set out in Clause 20.1 (Corporate Status) to Clause 20.3 (No Contravention of Agreements or Organisational Documents), Clause 20.9 (Tax Returns and Payments), Clause 20.15 (Insurance Licenses), Clause 20.17 (Properties; Liens; and Insurance) to Clause 20.18 (Solvency) and Clause 20.19 (No Default).

“Representations” means each of the representations set out in Clause 20 (Representations).

“Requested Increase” has the meaning given to such term in Clause 10.1.1.

“Required Proportion” has the meaning given to such term in Clause 10.3 (Notification of Commitment Increase Request).

“Retrocession Agreement” has the meaning given to such term in Clause 22.2 (Financial Definitions).

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw Hill Companies, Inc.

“SAP” means, with respect to any Regulated Insurance Company, the statutory accounting principles and accounting procedures and practices prescribed or permitted by the Applicable Insurance Regulatory Authority of the state or jurisdiction in which such Regulated Insurance Company is domiciled.

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

“Secured Obligations” has the meaning set forth in the Security Agreement.

“Secured Parties” means the Security Trustee, any Receiver or Delegate, the Agent, each Lender and the Arranger from time to time party to this Agreement.

“Security Agreement” means the pledge and security agreement relating to the Collateral dated on or about the date hereof between the Custodian, the Special Report Agent, the Borrower, the Guarantor, the Grantors identified therein from time to time and the Security Trustee.

“Security Documents” means the Security Agreement, the Control Agreement and any other document designated in writing as such by the Borrower and the Security Trustee.

“Significant Subsidiary” means, at any time, each subsidiary of the Guarantor that, as of such time, meets the definition of a “significant subsidiary” under Regulation S-X of the SEC.

“Solvent” means, with respect to any person on a particular date, that on such date:

	(a)		the fair value of its assets exceeds the amount of its liabilities (in each case, as would be reflected on a balance sheet prepared in accordance with GAAP); and
	(b)		such person does not intend to incur debts beyond their ability to pay such debts as they mature (taking into account the timing and amounts of cash to be received by such person, and of amounts to be payable on or in respect of debt of such person).

“Special Report Agent” has the meaning set forth in the Security Agreement.

“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.

“Syndicate Arrangement” means an arrangement entered into by a managing agent at Lloyd’s on behalf of the Account Party together with the other syndicate members with respect to financing or reinsurance for the purposes of or in connection with the underwriting business carried on by all such members of that syndicate.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) imposed by any Governmental Authority.

“Term” means, save as otherwise provided herein, in relation to any Letter of Credit, the period from its Utilisation Date until its Expiry Date.

“Three-Year Unsecured Letter of Credit Facility” means the $200,000,000 three-year unsecured letter of credit facility dated 12 March 2007 between, Validus Holdings, Ltd., JPMorgan Chase Bank, National Association, as administrative agent and others, including the related instruments and agreements executed in connection therewith, and amendments, renewals, replacements, refinancings and restatements to any of the foregoing.

“Total Commitments” means, at any time, the aggregate of the Lenders’ Commitments, being $25,000,000 as at the date of this Agreement together with any increase in the Total Commitments effected in accordance with Clause 10 (Commitment Increase Request).

“Transaction Security” means the Liens created or expressed to be created in favour of the Security Trustee pursuant to the Security Documents.

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.

“Transfer Date” means, in relation to a transfer, the later of:

	(a)		the proposed Transfer Date specified in the Transfer Certificate; and
	(b)		the date specified by the Agent to the Existing Lender and the New Lender upon execution by the Agent of the Transfer Certificate.

“Transferee” means a person to which a Lender seeks to transfer by novation all or part of such Lender’s rights, benefits and obligations under the Finance Documents.

“UCC” means the Uniform Commercial Code, as amended, and as in effect from time to time in the State of New York, except that references to sections of the UCC refer to the section numbers of such sections as of the date of this Agreement.

“UK GAAP” means generally accepted accounting principles in the United Kingdom.

“Unpaid Sum” means the unpaid balance of any of the sums referred to in Clause 18.1 (Default Interest Periods).

“US” means the United States of America.

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

“Utilisation Date” means, in relation to a Letter of Credit, the date on which it is to be issued.

“Utilisation Request” means a notice substantially in the form set out in Schedule 3 (Form of Utilisation Request).

“Validus Guarantee” means the guarantee and indemnity of the Guarantor set out in Clause 19 (Guarantee and Indemnity).

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

1.2

Interpretation

Any reference in this Agreement to:

	1.2.1		the “Agent”, “Structuring Agent”, the “Arranger”, the “Security Trustee”, any “Finance Party”, any “Secured Party”, any “Lender”, any “Obligor” or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees and, in the case of the Security Trustee, any person for the time being appointed as Security Trustee or Security Trustees in accordance with this Agreement;
	1.2.2		a document in “agreed form” is a document which is initialled by or on behalf of the Borrower and the Agent;
	1.2.3		a default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been remedied or waived;
	1.2.4		the “equivalent” on any date in one currency (the “first currency”) of an amount denominated in another currency (the “second currency”) is a reference to the amount of the first currency which could be purchased with the amount of the second currency at the Agent’s Spot Rate of Exchange on such date for the purchase of the first currency with the second currency;
	1.2.5		a “holding company” of a company or corporation shall be construed as a reference to any company or corporation of which the first-mentioned company or corporation is a subsidiary;
	1.2.6		a “member” shall be construed (when the context so requires) as a reference to an underwriting member of Lloyd’s;
	1.2.7		a “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next succeeding calendar month save that, where any such period would otherwise end on a day which is not a Business Day, it shall end on the next succeeding Business Day, unless that day falls in the calendar month succeeding that in which it would otherwise

have ended, in which case it shall end on the immediately preceding Business Day, provided that, if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month (and references to “months” shall be construed accordingly);

	1.2.8		a Lender’s “participation”, in relation to a Letter of Credit, shall be construed as a reference to the rights and obligations of such Lender in relation to such Letter of Credit as are expressly set out in this Agreement;
	1.2.9		a “person” shall be construed as a reference to any natural person, firm, company, corporation, limited liability company, trust, joint venture, government, state or agency of a state (including any Governmental Authority), any association or partnership (whether or not having separate legal personality) of two or more of the foregoing or any other entity;
	1.2.10		“subsidiary” means, with respect to any person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent provided that neither 1384 Capital Limited nor the Talbot Employee Benefit Trust shall be a subsidiary of any parent for the purposes of this Agreement;
	1.2.11		a “successor” shall be construed so as to include an assignee or successor in title of such party and any person who under the laws of its jurisdiction of incorporation or domicile has assumed the rights and obligations of such party under this Agreement or to which, under such laws, such rights and obligations have been transferred;
	1.2.12		“VAT” shall be construed as a reference to value added tax including any similar tax which may be imposed in place thereof from time to time; and
	1.2.13		the “winding-up”, “dissolution” or “administration” of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such company or corporation is incorporated or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors.

1.3		Syndicate
		For the purpose of construing references in this Agreement to a Lloyd’s syndicate, unless the context otherwise requires, the several groups of members to which in successive years a particular syndicate number is assigned by the Council of Lloyd’s shall be treated as the same syndicate notwithstanding that they may not comprise the same members with the same premium income limits.
1.4		Currency Symbols
		“£” and “sterling” denote lawful currency of the United Kingdom for the time being and “dollars” and “$” denote lawful currency of the US for the time being.
1.5		Agreements and Statutes
		Any reference in this Agreement to:

	1.5.1		this Agreement or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, restated, varied, novated or supplemented;
	1.5.2		a statute or treaty shall be construed, unless the context otherwise requires, as a reference to such statute or treaty as the same may have been, or may from time to time be, amended or, in the case of a statute, re-enacted; and
	1.5.3		a byelaw shall be construed as a reference to a byelaw made under Lloyd’s Acts 1871 to 1982 as the same may have been, or may from time to time be, amended or replaced.

1.6		Headings
		Clause and Schedule headings are for ease of reference only.
1.7		Time
		Any reference in this Agreement to a time of day shall, unless a contrary indication appears, be a reference to London time.
1.8		Third Party Rights
		A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

SECTION 2
THE FACILITY

2.		THE FACILITY
2.1		Grant of the Facility
		The Lenders, upon the terms and subject to the conditions hereof, grant to the Borrower on behalf of the Account Party, a multicurrency letter of credit facility in an aggregate amount equal to the Total Commitments.
2.2		Purpose and Application
		The Facility is intended to enable the Account Party to provide Funds at Lloyd’s for the 2010, 2011 and prior open underwriting years of account of the Managed Syndicate, it being acknowledged that for so long as the Letters of Credit issued hereunder are deposited at Lloyd’s, they shall be deemed to support all of the Account Party’s underwriting years of account that have yet to close, and accordingly, the Borrower shall apply all amounts raised by it hereunder in or towards satisfaction of such purposes and none of the Finance Parties shall be obliged to concern themselves with such application.
2.3		Ranking of Funds at Lloyd’s
		It is acknowledged by the parties hereto that, subject to the duties of Lloyd’s as trustee of all Funds at Lloyd’s and to any conditions and requirements prescribed under the Membership Byelaw (No. 5 of 2005) which are for the time being applicable, the Facility will provide Funds at Lloyd’s for the Account Party which, to the extent that such parties are able to procure the same upon and subject to the terms of this Agreement, shall only be applied after all of the Own FAL of the Account Party from time to time has been exhausted.
2.4		Application of Own FAL
		The Borrower shall use all reasonable endeavours to ensure that the Own FAL at Lloyd’s of the Account Party are applied to the fullest extent possible before any payment is made under a Letter of Credit in respect the Account Party (including, without limitation, using all reasonable endeavours to obtain a Letter of Comfort with respect to the order of application of Funds at Lloyd’s).
2.5		Initial Conditions Precedent
		Save as the Lenders may otherwise agree, the Borrower may not deliver a Utilisation Request unless the Agent has confirmed to the Borrower on the Closing Date by means of executing this Agreement that it has received all of the documents and other evidence listed in Schedule 2 (Conditions Precedent) and that each is, in form and substance, satisfactory to the Agent.
2.6		Further conditions precedent
		The Lenders will only be obliged to comply with Clause 3.4 (Each Lender’s participation in Letters of Credit), if on the date of the Utilisation Request and on the proposed Utilisation Date:

2.6.1

no Default is continuing or would result from the issue of the proposed Letter of Credit; and

2.6.2

the Repeated Representations are true in all material respects with the same effect as though such Repeated Representations had been made on the date of the Utilisation Request and on the Utilisation 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).

2.7		Several Obligations
		The obligations of each Lender are several and the failure by a Lender to perform its obligations hereunder shall not affect the obligations of an Obligor towards any other party hereto nor shall any other party be liable for the failure by such Lender to perform its obligations hereunder.
2.8		Several Rights
		The rights of each Finance Party are several and any debt arising hereunder at any time from an Obligor to any Finance Party shall be a separate and independent debt. Except as otherwise stated in the Finance Documents each such party shall be entitled to protect and enforce its individual rights arising out of this Agreement independently of any other party (so that it shall not be necessary for any party hereto to be joined as an additional party in any proceedings for this purpose).

SECTION 3
UTILISATION

3.		UTILISATION OF THE FACILITY
3.1		Utilisation Conditions for the Facility
		Save as otherwise provided herein, a Letter of Credit will be issued at the request of the Borrower if:

	3.1.1		no less than three Business Days before the proposed Utilisation Date, the Agent has received a completed Utilisation Request from such Borrower;
	3.1.2		the proposed Utilisation Date is a Business Day falling within the Availability Period;
	3.1.3		the first day of the Term of the Letter of Credit is a Business Day falling within the Availability Period;
	3.1.4		the proposed Expiry Date of the Letter of Credit shall be:

	(a)		in the case of any Letter of Credit providing Funds at Lloyd’s for the 2010 and prior open underwriting years of account of the Managed Syndicate only, 31 December 2013; and
	(b)		in the case of any Letter of Credit providing Funds at Lloyd’s for the 2011 and prior open underwriting years of account of the Managed Syndicate only, 31 December 2014;

	3.1.5		the Letter of Credit is substantially in the form set out in Schedule 6 (Form of Letter of Credit);
	3.1.6		the beneficiary of such Letter of Credit is Lloyd’s; and
	3.1.7		the conditions set out in Clause 3.2 (Currency and amount) are satisfied,

		provided that no Letter of Credit shall be issued for the account of the Account Party at any time when the Outstandings exceed (or would after the issuance of such Letter of Credit exceed) the Borrowing Base of the Account Party at such time.
3.2		Currency and amount

3.2.1

The currency specified in a Utilisation Request must be the Base Currency or an Optional Currency.

3.2.2

The amount of the proposed Letter of Credit must be:

	(a)		if the currency selected is the Base Currency, a minimum of $1,000,000 or if less, the Available Facility; or
	(b)		if the currency selected is the Optional Currency, a minimum of £500,000 or if less, the Available Facility; and
	(c)		in any event such that its Base Currency Amount is less than or equal to the Available Facility.

3.3		Completion of Letters of Credit
		The Agent is authorised to issue each Letter of Credit pursuant to Clause 3.1 (Utilisation Conditions for the Facility) by:

	3.3.1		completing the issue date, the proposed Expiry Date and the other details required in respect of such Letter of Credit, in accordance with the Utilisation Request for such Letter of Credit;
	3.3.2		completing the schedule to such Letter of Credit with the percentage participation of each Lender as allocated pursuant to the terms hereof; and
	3.3.3		executing such Letter of Credit on behalf of each Lender and following such execution delivering such Letter of Credit together with a Credit Institution Confirmation with respect to each Lender to Lloyd’s on the Utilisation Date,

and, promptly after each such Letter of Credit is delivered to Lloyd’s, the Agent shall send a copy of it to the Borrower.

3.4		Each Lender’s Participation in Letters of Credit
		Save as otherwise provided herein, each Lender will participate in each Letter of Credit issued pursuant to this Clause 3 in the proportion borne by its Available Commitment to the Available Facility immediately prior to the issue of such Letter of Credit.
3.5		Lloyd’s Approved Credit Institution

	3.5.1		Each Lender acknowledges that the Agent must provide a Credit Institution Confirmation to Lloyd’s with each Letter of Credit.
	3.5.2		For the purposes of the Agent providing such Credit Institution Confirmation to Lloyd’s, each Lender confirms, on the date of this Agreement and on the date of issue of any Letter of Credit, that, subject to compliance with the terms of this Agreement for the utilisation of a Letter of Credit:

	(a)		it hereby authorises the execution and delivery by the Agent of each Letter of Credit and each such Letter of Credit will be duly executed by the Agent on its behalf; and
	(b)		its obligations under any Letter of Credit constitute its legal, valid and binding obligations.

3.5.3

In the event that any Lender participating in the Facility ceases to be an Approved Credit Institution, following notification by Lloyd’s to the Borrower, the Borrower shall notify the Arrangers thereof and the Arrangers, in consultation with the Borrower, will, subject to agreement relating to fees and expenses, use their 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 or with another Approved Credit Institution. In the event that any such Lender ceases to be so accredited it shall, at the request of the Agent, transfer (in accordance with Clause 25 (Changes to the Lenders)) its Commitment and participation in outstanding Letters of Credit to such financial institution which is accredited by Lloyd’s and which has been agreed by the

Arrangers and the Borrower. The Borrower agrees to reimburse the Agent and the Arrangers 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.

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 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.

3.6		Expiry of Availability Period
		The Available Commitment of each Lender shall be reduced to zero at the end of the Availability Period.
3.7		Notice of Non-Extension in respect of Letters of Credit

3.7.1

The Agent shall, no earlier than:

	(a)		in the case of any Letter of Credit providing Funds at Lloyd’s for the 2010 and prior open underwriting years of account of the Managed Syndicate only, 1 December 2009 and no later than 31 December 2009, give a Notice of Non-Extension to Lloyd’s in respect of such Letter of Credit issued hereunder (and the Lenders hereby authorise the Agent to serve such notice) so that each such Letter of Credit expires at any time after 31 December 2013; or
	(b)		in the case of any Letter of Credit providing Funds at Lloyd’s for the 2011 and prior open underwriting years of account of the Managed Syndicate only, 1 December 2010 and no later than 31 December 2010, give a Notice of Non-Extension to Lloyd’s in respect of such Letter of Credit issued hereunder (and the Lenders hereby authorise the Agent to serve such notice) so that each such Letter of Credit expires at any time after 31 December 2014.

3.7.2

In the event that any Letter of Credit is issued after a Notice of Non-Extension has been given under sub-clause 3.7.1 above the Agent shall give a Notice of Non-Extension in respect of such Letter of Credit at the time such Letter of Credit is issued.

3.7.3

Upon the expiry of a Letter of Credit in accordance with a Notice of Non-Extension, the maximum actual and contingent liabilities of each Lender under the Letter of Credit referred to in such Notice of Non-Extension will be reduced to zero.

3.8		Applied Letters of Credit
		If, notwithstanding the provisions of Clause 2.4 (Application of Own FAL), any sum is paid under a Letter of Credit (an “Applied Letter of Credit”) which is greater than any sum which would have been paid had Own FAL been applied to meet any demand prior to the Funds at Lloyd’s provided pursuant to this Facility in accordance with Clause 2.4 (Application of Own FAL) (the difference between the sum paid under the Applied Letter of Credit and the sum which should have been paid being the “Overpayment”), the Borrower shall, to any extent necessary to facilitate the indemnification of the Lenders under Clause 7 (Borrower’s Indemnity to the Lenders), use all reasonable endeavours to procure the release by Lloyd’s of the Own FAL of the Account Party in an amount equal to the Overpayment and, upon the Lenders being indemnified in full thereunder (but subject to the Agent receiving confirmation in writing from the Borrower that no Default is continuing), either:

	3.8.1		a supplementary Letter of Credit will be issued in an amount equal to the Overpayment having an Expiry Date which is the same as that of the Applied Letter of Credit; or
	3.8.2		the Applied Letter of Credit will be amended by increasing the amount thereof by an amount equal to the Overpayment.

SECTION 4
COSTS OF UTILISATION

4.		LETTER OF CREDIT COMMISSION
4.1		Letter of Credit Commission
		The Borrower shall, in respect of each Letter of Credit requested by it, pay to the Agent for the account of each Lender (for distribution in proportion to each Lender’s Proportion of such Letter of Credit) a letter of credit commission in the currency in which the relevant Letter of Credit is denominated, at the relevant L/C Commission Rate on the aggregate Commitments of the Lenders under such Letter of Credit. Such letter of credit commission shall be calculated on a daily basis according to the Commitments on each such day, and shall be paid in arrear in respect of each successive period of three months (or such shorter period as shall end on the relevant Expiry Date) during the Term of the relevant Letter of Credit, the first such payment to be made on the date falling three Months after the Utilisation Date for such Letter of Credit and successive payments to be made thereafter on the last day of each successive such period (each an “Interest Payment Date”).
4.2		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.
5.		MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES
5.1		Absence of quotations
		Subject to Clause 5.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11.00 am on the Quotation Date, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
5.2		Market Disruption
		If, in relation to any Unpaid Sum:

	5.2.1		LIBOR is to be determined by reference to Reference Banks and at or about 11.00 a.m. on the Quotation Date for the relevant Interest Period none or only one of the Reference Banks supplies a rate for the purpose of determining LIBOR for the relevant Interest Period; or
	5.2.2		before the close of business in London on the Quotation Date for such Unpaid Sum the Agent has been notified by a Lender or each of a group of Lenders to whom in aggregate fifty per cent. or more of such Unpaid Sum is owed that the LIBOR rate does not accurately reflect the cost of funding its participation in such Unpaid Sum,

then, the Agent shall notify the Borrower and the Lenders of such event and, notwithstanding anything to the contrary in this Agreement, Clause 5.3 (Substitute Interest Period and Interest Rate) shall apply to such Unpaid Sum.

5.3		Substitute Interest Period and Interest Rate
		If either sub-clause 5.2.1 or 5.2.2 of Clause 5.2 (Market Disruption) applies to an Unpaid Sum, the rate of interest applicable to each Lender’s portion of such Unpaid Sum during the relevant Interest Period shall (subject to any agreement reached pursuant to Clause 5.4 (Alternative basis of interest or funding)) be the rate per annum which is the sum of:

	5.3.1		the Mandatory Costs Rate, if any, applicable to that Lender’s portion of such Unpaid Sum; and
	5.3.2		the rate per annum notified to the Agent by such Lender before the last day of such Interest Period to be that which expresses as a percentage rate per annum the cost to such Lender of funding from whatever sources it may reasonably select its portion of such Unpaid Sum during such Interest Period.

5.4

Alternative basis of interest or funding

	5.4.1		If either of those events mentioned in sub-clauses 5.2.1 and 5.2.2 of Clause 5.2 (Market Disruption) occurs in relation to an Unpaid Sum and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing on a substitute basis for determining the rate of interest.
	5.4.2		Any alternative basis agreed pursuant to sub-clause 5.4.1 above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

5.5		Interest Rate Determination
		The Agent shall promptly notify the Borrower and the Lenders of each determination of LIBOR and the Mandatory Costs Rate.
5.6		Changes to Interest Rates
		The Agent shall promptly notify the Borrower and the Lenders of any change to: 5.6.1 the proposed length of an Interest Period; or

5.6.2

any interest rate occasioned by the operation of Clause 4.2 (Market Disruption and Alternative Interest Rates).

6.		NOTIFICATION
6.1		Letters of Credit
		Not less than one Business Day before the first day of a Term, the Agent shall notify each Lender, in respect of each Letter of Credit to be issued, of:

	6.1.1		the proposed length of the relevant Term;
	6.1.2		the proposed currency;
	6.1.3		the aggregate principal amount; and
	6.1.4		the Utilisation Date.

6.2		Demands under Letters of Credit
		If a demand is made under a Letter of Credit the Agent shall promptly make demand upon the relevant Borrower in accordance with this Agreement and notify the Lenders.
7.		BORROWER’S INDEMNITY TO THE LENDERS
7.1		Borrower’s Indemnity to Lenders
		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, the Borrower shall irrevocably and unconditionally as a primary obligation indemnify (within 5 Business Days of demand by the Agent) each Finance Party against:

	7.1.1		any sum paid or due and payable by such Finance Party under such Letter of Credit; and
	7.1.2		all liabilities, costs (including, without limitation, any costs incurred in funding any amount which falls due from such Lender in connection with such Letter of Credit), claims, losses and expenses which such Finance Party may at any time reasonably incur or sustain in connection with any Letter of Credit (in each case, invoiced in reasonable detail),

		provided that such indemnity shall not, as to any Finance Party, be available to the extent that such liabilities, costs, claims, losses, damages or related expenses have resulted from the gross negligence or wilful misconduct of any Finance Party.
		The Borrower waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to enforce the Transaction Security before claiming from the Borrower under this Clause 7. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

7.2		Preservation of Rights
		Neither the obligations of the Borrower set out in this Clause 7 nor the rights, powers and remedies conferred on any Lender by this Agreement or by law shall be discharged, impaired or otherwise affected by:

	7.2.1		the winding-up, dissolution, administration or re-organisation of any Lender or any other person or any change in its status, function, control or ownership;
	7.2.2		any of the obligations of any Lender or any other person hereunder or under any Letter of Credit or under any other security taken in respect of the Borrower’s obligations hereunder or otherwise in connection with a Letter of Credit being or becoming illegal, invalid, unenforceable or ineffective in any respect;
	7.2.3		time or other indulgence being granted or agreed to be granted to any Lender or any other person in respect of its obligations hereunder or under or in connection with a Letter of Credit or under any such other security;
	7.2.4		any amendment to, or any variation, waiver or release of, any obligation of any Lender or any other person under a Letter of Credit or this Agreement;

7.2.5

any other act, event or omission which, but for this Clause 7, might operate to discharge, impair or otherwise affect any of the obligations of the relevant Borrower set out in this Clause 7 or any of the rights, powers or remedies conferred upon any Lender by this Agreement or by law.

The obligations of each Borrower set out in this Clause 7 shall be in addition to and independent of every other security which any Lender may at any time hold in respect of such Borrower’s obligations hereunder.

7.3		Settlement Conditional
		Any settlement or discharge between the Borrower and a Lender shall be conditional upon no security or payment to such Lender by the Borrower, or any other person on behalf of the Borrower, being avoided or reduced by virtue of any laws relating to bankruptcy, insolvency, liquidation or similar laws of general application and, if any such security or payment is so avoided or reduced, such Lender shall be entitled to recover the value or amount of such security or payment from the Borrower subsequently as if such settlement or discharge had not occurred.

7.4		Right to make Payments under Letters of Credit
		Each Lender shall be entitled to make any payment in accordance with the terms of the relevant Letter of Credit without any reference to or further authority from the relevant Borrower or any other investigation or enquiry. The Borrower irrevocably authorises each Lender to comply with any demand under a Letter of Credit which is valid on its face.

SECTION 5
PREPAYMENT, CANCELLATION AND COLLATERALISATION

8.		PREPAYMENT AND CANCELLATION
8.1		Automatic Cancellation of the Facility
		At close of business in London on the last Business Day of the Availability Period the Available Commitment of each Lender shall be (if it has not already been) reduced to zero.
8.2		Cancellation of the Facility
		The Borrower may, by giving to the Agent not less than five Business Days’ prior notice to that effect, cancel the whole or any part of the Available Facility (being a minimum amount of $1,000,000 and integral multiples of $500,000 thereafter). Any such cancellation shall reduce the Available Commitment and Commitment of each Lender rateably.
8.3		Notice of Cancellation
		Any notice of cancellation given by the Borrower pursuant to this Clause 8 shall be irrevocable and shall specify the date upon which such cancellation is to be made and the amount of such cancellation provided that any such notice may state that it is conditional upon the effectiveness of replacement financing, in which case such notice may be revoked by the Borrower by notice to the Agent, on or prior to the date specified in such notice as the anticipated effective date of replacement financing, if such condition is not satisfied.
8.4		Notice of Removal of a Lender
		If:

	8.4.1		any sum payable to any Lender by an Obligor is required to be increased pursuant to Clause 11 (Tax Gross-up and Indemnities);
	8.4.2		any Lender claims indemnification from the Borrower under Clause 11.3 (Tax Indemnity) or Clause 12 (Increased Costs),

		the Borrower may, whilst such circumstance continues, give the Agent at least ten Business Days’ notice (which notice shall be irrevocable) of its intention to cancel the Commitment of such Lender.
8.5		Removal of a Lender
		On the day the notice referred to in Clause 8.4 (Notice of Removal of a Lender) expires each Borrower at whose request a Letter of Credit has been issued shall procure that such Lender’s Proportion of each relevant Letter of Credit be reduced to zero (by reduction of the amount of such Letter of Credit in an amount equal to such Lender’s Proportion).
8.6		No Further Availability
		A Lender whose Commitment is to be cancelled under Clause 8.4 (Notice of Removal of a Lender) shall not be obliged to participate in any Letter of Credit on or after the date upon which the Agent receives the Borrower’s notice of its intention to cancel such Commitment, and such Lender’s Available Commitment shall be reduced to zero.

8.7		No Other Cancellation
		The Borrower shall not cancel all or any part of the Total Commitments except at the times and in the manner expressly provided for in this Agreement.
8.8		No Reinstatement
		No amount of the Total Commitments cancelled under this Agreement shall be reinstated.
9.		COLLATERALISATION OF LETTERS OF CREDIT
9.1		Letters of Credit

	9.1.1		Without prejudice to the remainder of this Clause 9, the Borrower shall ensure that at all times, the Borrowing Base is equal to or greater than the Outstandings.
	9.1.2		If at any time the Outstandings exceed the Borrowing Base, then the Obligors shall, within three Business Days of the earlier of any Obligor becoming aware of such shortfall or such shortfall being notified by the Agent to any Obligor, pay or deliver to the Custodian an amount of Cash or Eligible Securities (valued for this purpose based on the respective Advance Rate applicable thereto) as is necessary to satisfy the foregoing.
	9.1.3		Failure by the Obligors to comply with their obligations under sub-clause 9.1.2 within ten (10) Business Days of the earlier of any Obligor becoming aware or receiving notice that the Outstandings exceed the Borrowing Base shall constitute an immediate and automatic Event of Default under the terms and conditions of this Agreement.
	9.1.4		Notwithstanding the frequency of the reporting obligations set forth in Clause 21.8 (Borrowing Base Certificate), this covenant shall apply at all times and shall be tested by reference to the Borrowing Base Certificate most recently supplied in accordance with that Clause.

10.		COMMITMENT INCREASE REQUEST
10.1		Commitment Increase Request

	10.1.1		The Borrower may, on one occasion only and by written notice served on the Agent (such notice being, a “Commitment Increase Request”), indicate that it wishes to increase the Total Commitments (a “Requested Increase”) by an amount of no less than $2,000,000 and thereafter in integral multiples of $500,000 up to a maximum of US$7,500,000.
	10.1.2		Such Commitment Increase Request shall be binding on each of the Obligors and delivered to the Agent no later than the date falling 12 months after the date of the Amendment Agreement.

10.2		Commitment Increase Fee
		A fee shall be payable on the Increase Date by the Borrower to the Agent (the “Commitment Increase Fee”) which shall be distributed to those Lenders which agree to the increase and those Additional Lenders that agree to provide a Commitment, in

		accordance with Clauses 10.5 (Approval of Commitment Increase Request) or 10.6 (Partial approval of Commitment Increase Request). The amount of the Commitment Increase Fee shall be agreed between the Borrower and the Agent prior to the Commitment Increase Request being submitted to the Agent by the Borrower.
10.3		Notification of Commitment Increase Request
		The Agent shall request that each Lender notify the Agent, within 15 Business Days of receipt by the Agent of such Commitment Increase Request, whether it is prepared to assume an increase in its Commitment in an amount equal to the proportion of the Requested Increase as is borne by the aggregate amount of its Commitment to the Total Commitments immediately prior to the date of the Commitment Increase Request (the “Required Proportion”).
10.4		Decline of Commitment Increase Request
		To the extent any Lender declines (and for this purpose a Lender shall be treated as having declined if it has not responded to the Agent in the positive within the period of 15 Business Days referred to in Clause 10.3 (Notification of Commitment Increase Request) above) to assume an increase in its Commitment equal to the Required Proportion (the “Declined Amount”), the Agent shall promptly notify the Borrower in writing. Within 10 Business Days of receiving any such notification, the Borrower may by written notice served on the Agent nominate a bank or financial institution which is an Approved Credit Institution (an “Additional Lender”) to assume a Commitment in an amount of up to the Declined Amount. Such written notice shall also be signed by such Additional Lender and shall confirm that the relevant Additional Lender has agreed to assume a Commitment in an amount of up to the Declined Amount.
10.5		Approval of Commitment Increase Request
		Immediately upon the Agent receiving notifications from the Lenders or Additional Lenders confirming that the full amount of the Requested Increase can be accommodated, it shall notify the Borrower in writing and with effect from the Increase Date:

	10.5.1		the Commitment of each relevant Lender shall be increased by an amount equal to the portion of the Requested Increase it has indicated it is prepared to assume; and
	10.5.2		in respect of an Additional Lender which is not a Lender, a Commitment shall be established for such amount, provided that such Additional Lender has acceded to this Agreement as a Lender in accordance with the terms of Clause 25.8 (Additional Lenders),

whereupon the Borrower shall pay the Commitment Increase Fee to the Agent. Upon receipt of such Commitment Increase Fee, the Agent shall promptly distribute this amount to those Lenders which agreed to the increase and those Additional Lenders that agree to provide a Commitment, in the proportion that the amount of the proposed increase in each such Lender’s or Additional Lender’s Commitments bears to the aggregate amount of the proposed increase in the Total Commitments.

10.6		Partial approval of Commitment Increase Request
		In the event that notifications from Lenders and/or Additional Lenders who are willing to assume, as appropriate, an increase in their Commitment or a new Commitment (“Accepting Parties”) confirm that only part of the Requested Increase can be made available then either:

10.6.1

the Borrower and the Accepting Parties shall be entitled, by notice to the Agent no later than 30 Business Days following receipt by the Agent of the relevant Commitment Increase Request, to accept an increase in Commitment in such lower amount, whereupon with effect from the Increase Date:

	(a)		the Commitment of each relevant Lender shall be increased by an amount equal to the portion of the Requested Increase it has indicated it is prepared to assume; and
	(b)		in respect of an Additional Lender which is not a Lender, a Commitment shall be established for such amount of the Requested Increase it has indicated it is prepared to assume, provided that such Additional Lender has first acceded to this Agreement as a Lender in accordance with the terms of Clause 25.8 (Additional Lenders),

			whereupon the Borrower shall pay the Commitment Increase Fee to the Agent. Upon receipt of such Commitment Increase Fee, the Agent shall promptly distribute this amount to those Lenders which agreed to the increase (or part thereof) and those Additional Lenders that agree to provide a Commitment, in the proportion that the amount of the proposed increase in each such Lender’s or Additional Lender’s Commitments bears to the aggregate amount of the proposed increase in the Total Commitments; or
	10.6.2		the Borrower shall be entitled, by notice to the Agent no later than 30 Business Days following receipt by the Agent of the relevant Commitment Increase Request, to cancel the Commitment Increase Request (without incurring any cost, premium or penalty).

10.7		Increase Date
		For the purposes of this Clause 10, “Increase Date” means:

10.7.1

the date on which the Agent confirms to the Borrower and the Lenders that the Agent, having contacted Lloyd’s to advise that a re-apportionment of commitments will be required in respect of a Letter of Credit and requesting the return of the relevant Letter of Credit (the “Existing Letter of Credit”), is satisfied that arrangements are in place with Lloyd’s for the exchange of the Existing Letter of Credit for a new Letter of Credit (the “New Letter of Credit”) detailing the liability of each issuing lender thereunder and otherwise being:

(a)

for the same amount of the Existing Letter of Credit (in the case of Clause 10.5 (Approval of Commitment Increase Request) above) or for a lesser

			amount (in the case of Clause 10.6 (Partial approval of Commitment Increase Request) above); and
	(b)		otherwise on the same terms as the Existing Letter of Credit for the remainder of the Term of such Existing Letter of Credit,

			such that upon the Increase Date, each Lender’s (including each Additional Lender’s) participation in any Letters of Credit issued hereunder shall be equal to the proportion of that Lender’s Commitments to the Total Commitments; or
	10.7.2		if, in connection with any Requested Increase, the Agent determines that no re-apportionment of commitments is required in respect of any Letter of Credit, the date falling 5 Business Days after the date on which the Agent notifies the Borrower in writing that it has received the relevant acceptances of the Requested Increase from the Lenders.

SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS

11.		TAX GROSS UP AND INDEMNITIES
11.1		Definitions

	11.1.1		In this Agreement:
			“Foreign Lender” means any Lender which is treated by the jurisdiction in which the Borrower is resident for tax purposes:

	(a)		as being resident for tax purposes; or
	(b)		as having a place of business, place of management or permanent establishment,

			in a jurisdiction other than that in which the Borrower is resident.
			“Protected Party” means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of tax in relation to a sum received or receivable (or any sum deemed for the purposes of tax to be received or receivable) under a Finance Document.
			“Tax Credit” means a credit against, relief from or remission or repayment of, any Tax.
			“Tax Deduction” means a deduction or withholding for or on account of tax from a payment under a Finance Document.
			“Tax Payment” means either the increase in a payment made by an Obligor to a Finance Party under Clause 11.2 (Tax gross-up) or a payment under Clause 11.3 (Tax indemnity).
	11.1.2		Unless a contrary indication appears, in this Clause 11 a reference to “determines” or “determined” means a determination made in the discretion (reasonably exercised) of the person making the determination.

11.2

Tax gross-up

	11.2.1		Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
	11.2.2		The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and the relevant Obligor.
	11.2.3		If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

	11.2.4		If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
	11.2.5		Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

11.3

Tax indemnity

	11.3.1		The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of tax by that Protected Party in respect of payments received or receivable by the Protected Party under a Finance Document or the transactions occurring under such Finance Document.
	11.3.2		Sub-clause 11.3.1 above shall not apply:

(a)

with respect to any tax assessed on a Finance Party:

	(i)		under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
	(ii)		under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,

			if that tax is imposed on or calculated by reference to the net income or profits received or receivable (but not any sum deemed to be received or receivable) by that Finance Party or is a franchise or similar tax; or
	(b)		with respect to any tax assessed on a Finance Party which is imposed as a result of a present or former connection between that Finance Party and the jurisdiction imposing that tax (or any political subdivision thereof) (other than any such connection arising as a result of that Finance Party having executed, delivered, become a party to, enforced or performed its obligations or received payments under, this agreement or any other Finance Document); or
	(c)		to the extent a loss, liability or cost is compensated for by an increased payment under Clause 11.2 (Tax gross-up); or
	(d)		to the extent that the loss, liability or cost is a result of failure by the Protected Party to comply with Clause 11.4 (Status of Foreign Lender).

	11.3.3		A Protected Party making, or intending to make a claim under sub-clause 11.3.1 above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.
	11.3.4		A Protected Party shall, on receiving a payment from an Obligor under this Clause 11.3, notify the Agent.

11.4	Status of Foreign Lender
	Any Foreign Lender that is entitled to an exemption from or reduction in the rate of any Tax Deduction from any payment under any of the Finance Documents under the law of the jurisdiction which requires or would require the Tax Deduction, or under any treaty to which that jurisdiction is a party, shall deliver to the Borrower (with a copy to the Agent), at the time or times reasonably specified by the Borrower or the Agent, such properly completed and executed documentation as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Finance Party, if requested by the Borrower or the Agent, shall deliver such other documentation reasonably specified by the Borrower or the Agent as will enable the Borrower or the Agent to determine whether or not such Finance Party is subject to backup withholding or information reporting requirements.
11.5	Tax Credit
	If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
	11.5.1		a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and
	11.5.2		that Finance Party has obtained, utilised and retained that Tax Credit,
	the Finance Party shall pay an amount to the Obligor which that Finance Party reasonably determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
11.6	Value added tax

	11.6.1		All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply, and accordingly, subject to sub-clause 11.6.3 below, if VAT is chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).
	11.6.2		If VAT is chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and any Party (the “Relevant Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the

			amount of such VAT. The Recipient will promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant tax authority which it reasonably determines relates to the VAT chargeable on that supply.
	11.6.3		Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that neither it nor any other member of any group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax authority in respect of the VAT.

12.		INCREASED COSTS
12.1		Increased costs

12.1.1

Subject to Clause 12.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

	(a)		the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or
	(b)		compliance with any law or regulation made after the date of this Agreement,

			together, a “Change in Law”.
	12.1.2		In this Agreement “Increased Costs” means:

	(a)		a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital to a level below that which such Finance Party (or Affiliate) would have achieved but for such Change in Law (taking into consideration such Finance Party’s (or Affiliates’) policies with respect to capital adequacy as generally applied);
	(b)		an additional or increased cost; or
	(c)		a reduction of any amount due and payable under any Finance Document,

which in the good faith determination of such Finance Party is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into a commitment or funding or performing its obligations under any Finance Document.

12.2

Increased cost claims

12.2.1

A Finance Party intending to make a claim pursuant to Clause 12.1 (Increased costs) shall notify the Agent within sixty (60) days of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

12.2.2

Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs and setting out:

	(a)		the basis, in reasonable detail, for the determination of such additional amount or amounts necessary to compensate such Lender as aforesaid; and
	(b)		the basis, in reasonable detail, for the computation of such amount or amounts, which shall be consistently applied. Notwithstanding the foregoing, the Borrower shall not be required to compensate any Finance Party pursuant to Clause 12.1 (Increased costs) for any increased costs or reductions incurred more than 180 days prior to the date that such Finance Party notifies the Borrower of the applicable Change in Law.

12.3

Exceptions

12.3.1

Clause 12.1 (Increased costs) does not apply to the extent any Increased Cost is:

	(a)		attributable to a Tax Deduction required by law to be made by an Obligor;
	(b)		compensated for by Clause 11.3 (Tax indemnity) (or would have been compensated for under Clause 11.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in sub-clause 11.3.2 of Clause 11.3 (Tax indemnity) applied) or because of failure of such Finance Party to comply with Clause 10.3) (Tax indemnity);
	(c)		compensated for by the payment of the Mandatory Costs Rate;
	(d)		attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation;
	(e)		attributable to an increase in the rate of corporation tax; or
	(f)		attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

12.3.2

Additionally Clause 12.1 (Increased costs) shall not apply to Increased Costs with respect to taxes imposed on or measured by the net income or net profits of a Lender pursuant to the laws of the jurisdiction in or under the laws of which it is organised or the jurisdiction in which the principal office or applicable lending office of such Lender is located or in which it conducts a trade or business or has a permanent establishment, or has a present or former connection with such jurisdiction, or any subdivision thereof or therein.

12.3.3

In this Clause 12.3, a reference to a “Tax Deduction” has the same meaning given to the term in Clause 11.1 (Definitions).

13.		ILLEGALITY
13.1		If, at any time, any Lender determines in good faith that it is or will become unlawful or prohibited pursuant to any request from or requirement of any central bank or other financial, monetary or other authority (being a request or requirement with which banks are accustomed to comply and the Lender so complies with respect to its clients generally) for such Lender to make, fund, issue, participate in or allow to remain outstanding all or part of its share of the Letters of Credit, then that Lender shall, promptly after becoming aware of the same, deliver to the Borrower through the Agent a notice to that effect.
13.2		Such Lender shall not thereafter be obliged to participate in any Letter of Credit or issue any Letter of Credit (whichever shall be so affected) and the amount of its Available Commitment shall be immediately reduced to zero and if the Agent on behalf of such Lender so requires, the Borrower shall on such date as the Agent shall have specified:

	13.2.1		repay all amounts owing to such Lender hereunder; and
	13.2.2		ensure that the liabilities of such Lender under or in respect of each affected Letter of Credit is reduced to zero.

14.		OTHER INDEMNITIES
14.1		Currency Indemnity
		If any sum (a “Sum”) due from an Obligor under the Finance Documents or any order, judgment given or made in relation thereto has to be converted from the currency (the “First Currency”) in which such Sum is payable into another currency (the “Second Currency”) for the purpose of:

	14.1.1		making or filing a claim or proof against such Obligor;
	14.1.2		obtaining an order, judgment in any court or other tribunal; or
	14.1.3		enforcing any order, judgment given or made in relation thereto,

		the Borrower shall indemnify each person to whom such Sum is due from and against any loss suffered or incurred as a result of any discrepancy between (a) the rate of exchange used for such purpose to convert such Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to such person at the time of receipt of such Sum.
14.2		Other indemnities
		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, each Obligor shall, within five Business Days of demand, indemnify each Secured Party and the Arranger against any cost, loss or liability incurred by that Secured Party or Arranger (and invoiced in reasonable detail) as a result of:

14.2.1

the occurrence of any Event of Default;

	14.2.2		a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 30 (Sharing among the Finance Parties); or
	14.2.3		issuing or making arrangements to issue a Letter of Credit requested by the Borrower in a Utilisation Request but not issued by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone).

14.3		Indemnity to the Agent
		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, the Borrower shall, within five Business Days of demand, indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably and invoiced in reasonable detail) as a result of:

	14.3.1		investigating any event which it reasonably believes is a Default; or
	14.3.2		acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.

14.4

Indemnity to the Security Trustee

14.4.1

Without duplication of any expense reimbursement obligations contained elsewhere in this Agreement or the other Finance Documents, each Obligor shall, within five Business Days of demand, indemnify the Security Trustee and every Receiver and Delegate against any cost, loss or liability incurred by any of them (and invoiced in reasonable detail) as a result of:

	(a)		the taking, holding, protection or enforcement of the Transaction Security;
	(b)		the exercise of any of the rights, powers, discretions and remedies vested in the Security Trustee and each Receiver and Delegate by the Finance Documents or by law; and
	(c)		any default by any Obligor or any other member of the Group that is party to a Finance Document in the performance of any of the obligations expressed to be assumed by it in the Finance Documents.

14.4.2

The Security Trustee may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.

14.5		Exceptions
		The indemnities referred to in Clauses 14.3 (Indemnity to the Agent) and 14.4 (Indemnity to the Security Trustee) shall not apply to the extent that the cost, loss or liability concerned have resulted from the gross negligence or wilful misconduct of the Agent or Security Trustee (as the case may be).

15.

MITIGATION

15.1

If, in respect of any Lender, circumstances arise which would or would upon the giving of notice result in:

	15.1.1		an increase in any sum payable to it or for its account pursuant to Clause 11.2 (Tax Gross-up);
	15.1.2		a claim for indemnification pursuant to Clause 11.3 (Tax Indemnity) or Clause 12 (Increased Costs); or
	15.1.3		the reduction of its Available Commitment to zero or any repayment to be made pursuant to Clause 13 (Illegality),

		then, without in any way limiting, reducing or otherwise qualifying the rights of such Lender or the obligations of the Obligors under any of the Clauses referred to in sub-clauses 15.1.1, 15.1.2 and 15.1.3, such Lender shall promptly upon becoming aware of such circumstances notify the Agent thereof (who shall promptly notify the Borrower) and, in consultation with the Agent and the Borrower and to the extent that it can do so lawfully and without prejudice to its own position, take reasonable steps (including a change of location of its Facility Office or the transfer of its rights, benefits and obligations hereunder to another financial institution which is an Approved Credit Institution and which is acceptable to the Borrower and willing to participate in the Facility) to mitigate the effects of such circumstances provided that such Lender shall be under no obligation to take any such action if, in the good faith judgment of such Lender, to do so might be reasonably expected to have any adverse effect upon its business, operations or financial condition (in each case, taken as a whole).
15.2		In connection with the occurrence of any of the events set forth in sub-clauses 15.1.1 through 15.1.3, the Borrower, at its sole expense and effort, shall have the right, if no Default or Event of Default then exists, to replace such Lender (the “Replaced Lender”), with one or more person or persons (collectively, the “Replacement Lender”) reasonably acceptable to the Agent at which time the Replaced Lender shall assign or transfer, without recourse (in accordance with and subject to the restrictions contained in Clause 25 (Changes to the Lenders)), all its interests, rights and obligations under this Agreement to the Replacement Lender provided that:

15.2.1

the Replacement Lender shall pay to the Replaced Lender in respect thereof an amount equal to the sum of:

	(a)		an amount equal to all Unpaid Sums that have been funded by (and not reimbursed to) such Replaced Lender, together with all then unpaid interest with respect thereto at such time; and
	(b)		an amount equal to all accrued, but theretofore unpaid, fees owing to the Replaced Lender pursuant to Clause 16 (Commitment Commission and fees);

15.2.2

all obligations of the Borrower under the Finance Documents owing to the Replaced Lender (other than those specifically described in sub-clause 15.2.1

			above in respect of which the assignment purchase price has been, or is concurrently being, paid), shall be paid in full to such Replaced Lender concurrently with such replacement;
	15.2.3		such assignment or transfer is likely to result in a reduction in such compensation or payments; and
	15.2.4		no Lender shall be required to become a Replaced Lender if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment or transfer cease to apply.

		For the avoidance of doubt, no Replaced Lender shall be required to execute, sign or deliver any document or assignment in order to be replaced in accordance with this Clause 15.2.
16.		COMMITMENT COMMISSION AND FEES
16.1		Commitment Commission on the Facility
		The Borrower shall pay to the Agent for account of each Lender a commitment commission on the amount of such Lender’s Available Commitment from day to day during the Availability Period, such commitment commission to be calculated at a rate of:

	(a)		for any period in which all or any part of the Borrowing Base consists of Eligible Investment Grade Securities, 0.25 per cent. per annum; and
	(b)		at all other times, 0.20 per cent. per annum,

		on such amount and payable in arrear on the last day of each successive period of three months which ends during such period and on the last day of the Availability Period 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.
16.2		Arrangement Fee
		The Borrower shall pay to the Arranger, the arrangement fees specified in a Fee Letter between the Arranger and the Borrower at the times, and in the amounts, specified in such letter.
16.3		Structuring Fee
		The Borrower shall pay to the Structuring Agent, the structuring fees specified in a Fee Letter between the Structuring Agent and the Borrower at the times, and in the amounts, specified in such letter.
16.4		Agency Fees
		The Borrower shall pay to the Agent for its own account the agency fees specified in a Fee Letter between the Agent and the Borrower at the times, and in the amounts, specified in such letter.

17.		COSTS AND EXPENSES
17.1		Transaction expenses
		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, the Borrower shall within five Business Days of demand, pay the Agent, the Arranger and the Security Trustee the amount of all costs and expenses (including, but not limited to, legal fees of one legal counsel in each relevant jurisdiction) reasonably incurred by any of them (and invoiced in reasonable detail) and, in the case of the Security Trustee, by any Receiver or Delegate, in connection with the negotiation, preparation, execution and perfection of:

	17.1.1		this Agreement and any other documents referred to in this Agreement and the Transaction Security; and
	17.1.2		any other Finance Documents executed after the date of this Agreement.

17.2		Amendment costs
		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, if (a) an Obligor or any other member of the Group that is party to a Finance Document requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 31.9 (Change of currency), the Borrower shall, within five Business Days of demand, reimburse each of the Agent and the Security Trustee for the amount of all costs and expenses (including, but not limited to, legal fees of one legal counsel in each relevant jurisdiction) reasonably incurred by the Agent and the Security Trustee (and invoiced in reasonable detail) and in the case of the Security Trustee, by any Receiver or Delegate, in responding to, evaluating, negotiating or complying with that request or requirement.
17.3		Security Trustee’s ongoing costs

	17.3.1		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, in the event of (i) the occurrence of a Default or (ii) the Security Trustee considering it necessary or expedient or (iii) the Security Trustee being requested by an Obligor or any other member of the Group that is party to a Finance Document or the Majority Lenders to undertake duties which the Security Trustee and the Borrower agree to be of an exceptional nature and/or outside the scope of the normal duties of the Security Trustee under the Finance Documents, the Borrower shall pay to the Security Trustee any additional remuneration that may be agreed between them.
	17.3.2		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, if the Security Trustee and the Borrower fail to agree upon the nature of the duties or upon any additional remuneration, that dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Trustee and approved by the Borrower or, failing approval, nominated (on the application of the Security Trustee) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Borrower) and the determination of

any investment bank shall be final and binding upon the parties to this Agreement.

17.4		Enforcement and preservation costs
		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, the Borrower shall, within five Business Days of demand, pay to Agent the amount of all costs and expenses (including, but not limited to, legal fees of one legal counsel in each relevant jurisdiction but excluding costs and expenses to the extent that they result from the gross negligence or wilful misconduct of the Agent or any of the other Finance Parties) incurred by the Agent (and invoiced in reasonable detail) in connection with the enforcement of, or the preservation of any rights under, any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Trustee as a consequence of taking or holding the Transaction Security or enforcing these rights.
17.5		Stamp taxes
		Without duplication of any expense reimbursement obligations or indemnities contained elsewhere in this Agreement or the other Finance Documents, the Borrower shall pay and, within five Business Days of demand, indemnify each Secured Party and the Arrangers against any stamp duty, registration and other similar Taxes which are incurred by that Secured Party or the Arrangers arising from any payment made under any Finance Document or from the execution, delivery, performance, enforcement or registration of any Finance Document.
18.		DEFAULT INTEREST AND BREAK COSTS
18.1		Default Interest Periods
		If an Obligor fails to pay:

18.1.1

any amount payable by it pursuant to sub-clause 7.1.1 of Clause 7.1 (Borrower’s Indemnity to Lenders), the period beginning on the date on which the relevant Finance Party paid any sum due and payable under the relevant Letter of Credit and ending on the date upon which the obligation of such Obligor to pay such sum is discharged shall be divided into successive periods:

	(a)		the first three periods being periods of a duration of one day each, which (other than the first) shall start on the last day of the preceding such period; and
	(b)		thereafter, each such period shall start on the last day of the preceding period and the duration of each of which shall (except as otherwise provided in this Clause 18) be selected by the Agent;

18.1.2

any other amount payable by it under a Finance Document on its due date, or if any sum due and payable by an Obligor under any judgment of any court in connection herewith is not paid on the date of such judgment, the period beginning on such due date or, as the case may be, the date of such judgment and ending on the date upon which the obligation of such Obligor to pay such sum is discharged shall be divided into successive periods, each of which (other than the first) shall start on the last day of the preceding such period and the

duration of each of which shall (except as otherwise provided in this Clause 18) be selected by the Agent.

18.2		Default Interest
		An Unpaid Sum:

18.2.1

which is a sum referred to in sub-clause 18.1.1 of Clause 18.1 (Default Interest Periods) above shall bear interest:

	(a)		during the first three Interest Periods in respect thereof at LIBOR at the overnight rate on the Quotation Date therefor; and
	(b)		during each Interest Period thereafter, at the rate per annum which is three per cent. per annum above LIBOR on the Quotation Date therefor;

18.2.2

which is a sum referred to in sub-clause 18.1.2 of Clause 18.1 (Default Interest Periods) above shall bear interest during each Interest Period in respect thereof at the rate per annum which is three per cent. per annum above LIBOR, on the Quotation Date therefor.

18.3		Payment of Default Interest
		Any interest which shall have accrued under Clause 18.2 (Default Interest) in respect of an Unpaid Sum shall be due and payable and shall be paid by the Obligor owing such Unpaid Sum on the last day of each Interest Period in respect thereof or on such other dates as the Agent may specify by notice to such Obligor.
18.4		Break Costs
		If any Lender or the Agent on its behalf receives or recovers all or any part of an Unpaid Sum otherwise than on the last day of an Interest Period relating thereto, the Borrower shall pay to the Agent on demand for account of such Lender an amount equal to the amount (if any) by which (a) the additional interest which would have been payable on the amount so received or recovered had it been received or recovered on the last day of that Interest Period exceeds (b) the amount of interest which in the opinion of the Agent (acting reasonably) would have been payable to the Agent on the last day of that Interest Period in respect of a deposit in the currency of the amount so received or recovered equal to the amount so received or recovered placed by it with a prime bank in London for a period starting on the first Business Day following the date of such receipt or recovery and ending on the last day of that Interest Period.

SECTION 7
GUARANTEE

19.		GUARANTEE AND INDEMNITY
19.1		Guarantee and indemnity
		The Guarantor irrevocably and unconditionally:

	19.1.1		guarantees to each Finance Party punctual performance by the Borrower of all the Borrower’s obligations under the Finance Documents;
	19.1.2		undertakes with each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
	19.1.3		indemnifies each Finance Party immediately on demand against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

19.2		Continuing guarantee
		This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by the Borrower under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
19.3		Reinstatement
		If any payment by the Borrower or any discharge given by a Finance Party (whether in respect of the obligations of the Borrower or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event:

	19.3.1		the liability of the Borrower shall continue as if the payment, discharge, avoidance or reduction had not occurred; and
	19.3.2		each Finance Party shall be entitled to recover the value or amount of that security or payment from the Borrower as if the payment, discharge, avoidance or reduction had not occurred.

19.4		Waiver of defences
		The obligations of the Guarantor under this Clause 19 will not be affected by any act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 19 (without limitation and whether or not known to it or any Finance Party) including:

	19.4.1		any time, waiver or consent granted to, or composition with, the Borrower or other person;
	19.4.2		the release of the Borrower or any other person under the terms of any composition or arrangement with any creditor of an Obligor;

19.4.3

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, the Borrower or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

	19.4.4		any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the Borrower or any other person;
	19.4.5		any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (in each case however fundamental and of whatsoever nature, and whether or not more onerous) or replacement of a Finance Document or any other document or security;
	19.4.6		any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
	19.4.7		any insolvency or similar proceedings.

19.5		Guarantor Intent
		Without prejudice to the generality of Clause 19.4 (Waiver of Defences), the Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental and of whatsoever nature and whether or not more onerous) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following:

	19.5.1		acquisitions of any nature;
	19.5.2		increasing working capital;
	19.5.3		enabling investor distributions to be made;
	19.5.4		carrying out restructurings;
	19.5.5		refinancing existing facilities;
	19.5.6		refinancing any other indebtedness;
	19.5.7		making facilities available to new borrowers;
	19.5.8		any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and
	19.5.9		any fees, costs and/or expenses associated with any of the foregoing.

19.6		Immediate recourse
		The Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Clause 19. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

19.7		Appropriations
		Until all amounts which may be or become payable by the Borrower under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

	19.7.1		refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
	19.7.2		hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor’s liability under this Clause 19.

19.8		Deferral of Guarantor’s rights
		Until all amounts which may be or become payable by the Borrower under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

	19.8.1		to be indemnified by the Borrower;
	19.8.2		to claim any contribution from any other guarantor of the Borrower’s obligations under the Finance Documents; and/or
	19.8.3		to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.

		If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Borrower under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 31 (Payment mechanics) of this Agreement.
19.9		Additional security
		This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

20.		REPRESENTATIONS
		On the date of this Agreement, each Obligor makes to the Finance Parties the representations and warranties set out in Clauses 20.1 (Corporate Status) to 20.7 (Projections and Assumptions), 20.15 (Insurance Licenses), and Clauses 20.19 (No default) to 20.23 (No Winding-up) and the Guarantor makes to the Finance Parties the representations and warranties set out in Clauses 20.8 (Financial Condition) to 20.14 (Compliance with Statutes and Agreements), 20.16 (Security Documents) and Clauses 20.17 (Properties; Liens; and Insurance) and 20.18 (Solvency) in each case in relation to itself and (where applicable) its Significant Subsidiaries.
20.1		Corporate Status
		It and each of its Significant Subsidiaries:

	20.1.1		is a duly organised and validly existing corporation or business trust or other entity in good standing under the laws of the jurisdiction of its organisation and has the corporate or other organisational power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage; and
	20.1.2		has been duly qualified and is authorised to do business and is in good standing in all jurisdictions where it is required to be so qualified,

except, in the case of sub-clauses 20.1.1 (other than in respect of the Obligors or any other member of the Group that is party to a Finance Document) and 20.1.2, where the failure to be so qualified, authorised or in good standing, either individually or in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect.

20.2

Corporate Power and Authority

	20.2.1		It and each of its subsidiaries that is party to any Finance Document has the corporate power and authority to execute, deliver and carry out the terms and provisions of the Finance Documents to which it is a party and has taken all necessary corporate action to authorise the execution, delivery and performance of such Finance Documents.
	20.2.2		It and each of its subsidiaries that is party to any Finance Document has duly executed and delivered each Finance Document to which it is a party and, subject to the Legal Reservations, each such Finance Document constitutes the legal, valid and binding obligation of such Obligor or such subsidiary enforceable against it in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and general principles of equity regardless of whether enforcement is sought in a proceeding in equity or at law.

20.3		No Contravention of Agreements or Organisational Documents
		Neither the execution, delivery and performance, by it or any of its subsidiaries that is party to any Finance Document, of this Agreement or the other Finance Documents to which it is a party nor compliance with the terms and provisions thereof, nor the consummation of the transactions contemplated therein:

	20.3.1		will contravene any applicable provision of any law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality;
	20.3.2		will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (other than Liens in favour of the Security Trustee pursuant to the Security Documents) upon any of its property or assets or those of any of its Significant Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, credit agreement or any other material instrument to which it or any of its Significant Subsidiaries is a party or by which it or any of its property or assets are bound or to which it may be subject; or
	20.3.3		will violate any provision of its certificate of incorporation, by-laws or other organisational documents, nor those of its Significant Subsidiaries.

20.4		Litigation and Environmental Matters
		There are no actions, suits or proceedings pending or, to the best of its knowledge, threatened involving it or any of its Significant Subsidiaries (including with respect to this Agreement or any other Finance Document) that, either individually or in the aggregate, have had, or would reasonably be expected to have, a Material Adverse Effect. Except for any matters that, either individually or in the aggregate, have not had, and would not reasonably be expected to have, a Material Adverse Effect, neither the Guarantor nor any of its Significant Subsidiaries:

	20.4.1		has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law;
	20.4.2		has become subject to any Environmental Liability;
	20.4.3		has received notice of any claim with respect to any Environmental Liability; or
	20.4.4		knows of any basis for any Environmental Liability.

20.5		Approvals
		Any:

	20.5.1		order, consent, approval, license, authorisation, or validation of, or filing, recording or registration with, or exemption by, any foreign or domestic governmental or public body or authority, or any subdivision thereof, which is required by it or any of its Significant Subsidiaries; or
	20.5.2		third party approval, permit or license required to be obtained by it or any of its Significant Subsidiaries,

in each case in connection with (i) the transactions contemplated by the Finance Documents or (ii) the legality, validity, binding effect or enforceability of any Finance Document, has been obtained or effected and is in full force and effect, or will be obtained or effected within the period required by law.

20.6		Investment Company Act
		It is not an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940 of the US, as amended.

20.7		Projections and Assumptions
		The financial projections contained in the Business Plan have been prepared based on good faith estimates and assumptions believed by the Borrower to be reasonable and attainable at the time made, it being recognised by Finance Parties that such projections as to future events are not to be viewed as facts and are subject to significant uncertainties and contingencies many of which are beyond the control of the Obligors and that actual results during the period or periods covered by any such projections may differ from the projected results.

20.8

Financial Condition

	20.8.1		The Guarantor has heretofore furnished to the Agent (on behalf of the Lenders) its consolidated balance sheet and consolidated statements of operations and comprehensive income, (loss), shareholders’ equity and cash flows as of and for the fiscal year ended 31 December 2008 reported on by PricewaterhouseCoopers, independent public accountants. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Guarantor and its consolidated Significant Subsidiaries as of such dates and for such periods in accordance with US GAAP.
	20.8.2		As of the Closing Date, nothing has occurred since 31 December 2008 either individually or in the aggregate, which has resulted in, or would reasonably be expected to result in, any material adverse condition or any material adverse change which, in either case, has a Material Adverse Effect, in or affecting:

	(a)		the business, operations, assets, liabilities or financial condition of the Guarantor and its Significant Subsidiaries, taken as a whole; or
	(b)		the rights and remedies of any Finance Party or the ability of the Obligors, taken as a whole, to perform their respective obligations owed to any Finance Party under this Agreement or any other Finance Document.

20.9

Tax Returns and Payments

20.9.1

Except where the failure to do so would not reasonably be expected, individually or in aggregate, to have a Material Adverse Effect, the Guarantor and its Significant Subsidiaries:

(a)

have timely filed or caused to be timely filed with the appropriate taxing authority (taking into account any applicable extension within which to file) all material income and other material tax returns (including any

			statements, forms and reports), domestic and foreign, required to be filed by the Guarantor and its Significant Subsidiaries; and
	(b)		have timely paid, collected or remitted or caused to have timely paid, collected or remitted all material Taxes payable by them which have become due and assessments which have become due, except for those contested in good faith and for which adequate reserves have been established in accordance with applicable GAAP.

	20.9.2		To the best knowledge of the Guarantor, there is no action, suit, proceeding, investigation, audit or claim now pending or proposed or threatened by any authority regarding any Taxes relating to the Guarantor or any of its Significant Subsidiaries, which, either individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect.
	20.9.3		To the best knowledge of the Guarantor, no Tax Liens have been filed and no claims are pending or proposed or threatened with respect to any Taxes for any taxable period, except for Liens permitted under Clause 23.14 (Liens) and claims which, either individually or in the aggregate, have not had, and would not reasonably be expected to have, a Material Adverse Effect.

20.10

Compliance with ERISA

20.10.1

Except as, either individually or in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect, the Guarantor and its ERISA Affiliates:

	(a)		have fulfilled their respective obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance with the applicable provisions of ERISA and the Code; and
	(b)		have not incurred any liability to the PBGC or any Plan or Multiemployer Plan (other than to make contributions in the ordinary course of business).

20.10.2

Except as, either individually or in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect:

	(a)		each Foreign Pension Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities;
	(b)		all contributions required to be made with respect to a Foreign Pension Plan have been timely made;
	(c)		neither the Guarantor nor any of its Significant Subsidiaries has incurred any obligation in connection with the termination of, or withdrawal from, any Foreign Pension Plan; and
	(d)		the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan that is required to be funded, determined

as of the end of the Guarantor’s most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.

20.11

Subsidiaries

20.11.1

Listed in Schedule 14 (Subsidiaries) is a complete and correct list of all of the subsidiaries of the Guarantor as of the Closing Date, together with, for each such subsidiary:

	(a)		the jurisdiction of organisation of such subsidiary;
	(b)		each person holding direct ownership interests in such subsidiary; and
	(c)		the percentage ownership of such subsidiary represented by such ownership interests.

	20.11.2		Except as disclosed in Schedule 14 (Subsidiaries), as of the Closing Date, each of the Guarantor and its Significant Subsidiaries owns, free and clear of Liens, and has the unencumbered right to vote, all outstanding ownership interests in each person shown to be held by it in Schedule 14 (Subsidiaries).
	20.11.3		As of the Closing Date, there are no restrictions on the Guarantor or any of its Significant Subsidiaries which prohibit or otherwise restrict the transfer of cash or other assets from any Significant Subsidiary of the Guarantor to the Guarantor, other than:

	(a)		prohibitions or restrictions existing under or by reason of this Agreement or the other Finance Documents;
	(b)		prohibitions or restrictions existing under or by reason of Legal Requirements;
	(c)		prohibitions and restrictions permitted by Schedule 12 (Existing Intercompany Arrangements and Agreements) or Clause 23.21 (Limitation on Certain Restrictions on subsidiaries); and
	(d)		other prohibitions or restrictions which, either individually or in the aggregate, have not had, and would not reasonably be expected to have, a Material Adverse Effect.

20.12		Capitalisation
		As of the Closing Date, the authorised capital stock of:

	20.12.1		the Borrower consists of 500,000,000 shares, par value $0.0020 per share;
	20.12.2		the Guarantor consists of 571,428,571.4 shares, par value $0.175 per share.

20.13		Indebtedness
		As of the Closing Date, the Guarantor and its consolidated Significant Subsidiaries have no outstanding Indebtedness for borrowed money required to be set forth on a quarterly balance sheet prepared in accordance with US GAAP other than:

	20.13.1		as set forth on the Guarantor’s consolidated balance sheet as of 30 September 2009;
	20.13.2		borrowings since such date under the revolving credit facilities, letter of credit facilities and lines of credit of the Guarantor and/or its subsidiaries; and
	20.13.3		Permitted Subsidiary Indebtedness.