Exhibit 10.1

 

Conformed

 

SECOND AMENDMENT

 

SECOND AMENDMENT (this “Amendment”), dated as of June 26, 2009, to the Second
Amended and Restated Credit Agreement dated as of August 30, 2006 together with
the First Amendment to the Second Amended and Restated Credit Agreement dated as
of October 1, 2007 (together, as further amended, supplemented or modified from
time to time, the “Credit Agreement”), among ARCH CAPITAL GROUP LTD., ARCH
CAPITAL GROUP (U.S.) INC., various DESIGNATED SUBSIDIARY BORROWERS party
thereto, the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative
Agent, THE BANK OF NEW YORK, as Collateral Agent, BANK OF AMERICA, N.A., as
Syndication Agent, and BARCLAYS BANK PLC, THE BANK OF NEW YORK, WACHOVIA BANK,
N.A., CALYON, NEW YORK BRANCH, CITIBANK, N.A., ING BANK N.V., LONDON BRANCH and
LLOYDS TSB BANK PLC, as Documentation Agents.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and
have made, certain loans and other extensions of credit to the Borrower;

 

WHEREAS, the Borrower has requested that certain provisions of the Credit
Agreement be amended as set forth herein; and

 

WHEREAS, the Lenders are willing to agree to such amendment on the terms set
forth herein;

 

NOW THEREFORE, in consideration of the premises and mutual covenants contained
herein, the undersigned hereby agree as follows:

 

I.                                         Defined Terms.  Terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

 

II.                                     Amendments to Section 1.01.

 

(a) Section 1 is amended by inserting in appropriate alphabetical order the
following definitions:

 

“FRBNY” means the Federal Reserve Bank of New York, or any other governmental
authority that is a successor or supplemental lender under TALF.

 

“Permitted TALF Indebtedness” has the meaning provided in the definition of
Permitted Subsidiary Indebtedness in this Section 1.01.

 

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“Permitted TALF Subsidiary” has the meaning provided in the definition of
Permitted Subsidiary Indebtedness in this Section 1.01

 

“Second Amendment” means the Second Amendment, dated as of June 26, 2009, to
this Agreement.

 

“Second Amendment Effective Date” has the meaning provided in the Second
Amendment.

 

“TALF” means the Term Asset-Backed Securities Loan Facility, under which FRBNY
will provide funding on a non-recourse basis (other than in the case of certain
exceptions to the non-recourse provisions under TALF) to any eligible borrower
secured by eligible collateral, as announced by the Board of Governors of the
Federal Reserve System and in effect on the effective date of the Amendment and
as thereafter amended or otherwise modified from time to time (including any
successor or supplemental program thereto).

 

(b) Section 1.01 is further amended by adding the following sentence to the end
of the definition of “Indebtedness”:

 

For purposes of Section 8.04, “Indebtedness” shall not include any Permitted
TALF Indebtedness.

 

(c) Section 1.01 is further amended by deleting the word “and” at the end of
clause (k) of the definition of “Permitted Subsidiary Indebtedness”, replacing
the period at the end of clause (l) with “and,” and inserting a new clause
(m) immediately after such clause (l), to read in its entirety as follows:

 

(m) Indebtedness incurred by Arch Investments I LLC, a Delaware limited
liability company, or any other Subsidiary directly or indirectly formed by the
Parent Borrower solely for the purpose of participating in TALF (any such
entity, a “Permitted TALF Subsidiary”), provided that the Administrative Agent
consents to the designation of such other Subsidiary as a Permitted TALF
Subsidiary, which consent shall not be unreasonably delayed or withheld, arising
out of funding extended through TALF and any guarantee of any obligations
relating thereto by an affiliate of the Permitted TALF Subsidiary (any such
Indebtedness or guarantee, “Permitted TALF Indebtedness”); provided, that if
TALF is amended or modified following the date hereafter such that a Permitted
TALF Subsidiary incurring Indebtedness under TALF as so amended or modified
would (i) be materially adverse to the interests of the Lenders, (ii) change any
of the limitations or requirements set forth in this clause (m), or (iii) change
in any material respect the exceptions to the non-recourse

 

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provisions, then from the date of such amendment or modification, as applicable,
no Permitted TALF Subsidiary shall incur any additional Indebtedness under TALF
under this clause (m), unless such Indebtedness is consented to by the
Administrative Agent.  For avoidance of doubt, the parties hereto acknowledge
and agree that (x) amendments or modifications to TALF relating to eligibility
requirements for borrowers or collateral, collateral haircuts, tenor and
interest rates applicable to loans extended thereunder, administrative fees,
program size, termination date or allocation procedures shall not be materially
adverse to the interests of the Banks for purposes of this clause (m), and
(y) any Indebtedness incurred under this clause (m) by a Permitted TALF
Subsidiary prior to the date of the applicable amendment or modification
discussed in the proviso above shall continue to constitute Permitted Subsidiary
Indebtedness under this clause (m) regardless of any amendment or modification
that may occur following the date such Indebtedness is incurred.

 

III.                                 Amendment to Section 1.04.  Section 1.04 of
the Credit Agreement is hereby amended by adding a new clause (b) reading:

 

(b) Notwithstanding the foregoing, for purposes of computing any amount under
this Agreement (including, but not limited to, Consolidated Indebtedness,
Consolidated Net Income, Consolidated Net Worth, Consolidated Tangible Net
Worth, and Consolidated Total Capital) on a consolidated basis for any purpose
under this Agreement, including, but not limited to, Section 7.09 Maximum Parent
Borrower Leverage Ratio and Section 7.10 Minimum Consolidated Tangible Net
Worth, neither Arch Investments I LLC nor any other Permitted TALF Subsidiary
shall be considered a consolidated subsidiary of the Parent Borrower.

 

IV.                                 Amendment to Section 7.04(a). 
Section 7.04(a) of the Credit Agreement is hereby amended by deleting
Section 7.04(a) and replacing it with a new Section 7.04(a), reading:

 

No Borrower will, nor will it permit any of its Subsidiaries to, create, incur,
assume or permit to exist any Indebtedness, or agree, become or remain liable
(contingent or otherwise) to do any of the foregoing, except in the case of any
Borrower or Intermediate Holdings for the Loans and other Indebtedness which is
either pari passu with, or subordinated in right of payment to, the Loans and
the other Obligations and in the case of any Subsidiary that is not a Designated
Subsidiary Borrower for Indebtedness that is permitted under section 7.04(b).

 

V.                                     Amendment to Section 7.11.  Section 7.11
of the Credit Agreement is hereby amended by deleting clause (xiv) and replacing
it with a new clause (xiv), reading:

 

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(xiv) pursuant to an agreement or instrument relating to any Permitted
Subsidiary Indebtedness of the type described in clause (e), (h), (i), (k), or
(m) of the definition thereof if such encumbrance or restriction is not
materially more disadvantageous to the Lenders than is customary in comparable
financings and such encumbrance or restriction will not materially affect such
Borrower’s ability to make principal or interest payments on the Loans or to
reimburse Unpaid Drawings and

 

VI.                                 Effective Date.  This Amendment shall become
effective on the date (the “Second Amendment Effective Date”) on which the
Administrative Agent shall have received a counterpart of this Amendment,
executed and delivered by each Borrower, Intermediate Holdings and the Required
Lenders

 

VII.                             Expenses.  The Parent Borrower agrees to pay
and reimburse the Administrative Agent for all its reasonable costs and
out-of-pocket expenses incurred in connection with the preparation and delivery
of this Amendment, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent.

 

VIII.                         Representations and Warranties.  Each Credit Party
hereby represents that as of the Second Amendment Effective Date: (i) each of
the representations and warranties made by it in or pursuant to the Credit
Documents is true and correct in all material respects as if made on and as of
such date (it being understood and agreed that any representation or warranty
that by its terms is made as of a specific date shall be required to be true and
correct in all material respects only as of such specified date), (ii) no
Default or Event of Default has occurred and is continuing after giving effect
to the amendments contemplated herein and (iii) the consolidated balance sheet
of the Parent and its Subsidiaries as at December 31, 2008 and the related
consolidated statements of income, shareholders’ equity and cash flows for the
fiscal year ended on such date, reported on by  PricewaterhouseCoopers LLP are
complete and correct and present fairly the consolidated financial condition of
the Parent Borrower and its Subsidiaries as at such date, and the consolidated
results of their operations for the fiscal year then ended.

 

IX.                                AMENDMENT FEE.  THE BORROWER AGREES TO PAY
EACH LENDER WHICH CONSENTS TO THIS SECOND AMENDMENT ON OR PRIOR TO 12:00 P.M.,
EDT FRIDAY, JUNE 26, 2009 (BY EXECUTING AND DELIVERING TO THE ADMINISTRATIVE
AGENT OR ITS COUNSEL AN EXECUTED COUNTERPART TO THIS SECOND AMENDMENT ON OR
PRIOR TO SUCH TIME), AN AMENDMENT FEE IN AN AMOUNT EQUAL TO 0.035% OF THE
AGGREGATE AMOUNT OF SUCH LENDER’S REVOLVING CREDIT COMMITMENT; SUCH FEES SHALL
BE PAYABLE NO LATER THAN 5:00 P.M., EDT WEDNESDAY, JULY 1, 2009 IN IMMEDIATELY
AVAILABLE FUNDS TO THE ADMINISTRATIVE AGENT ON BEHALF OF THE APPLICABLE LENDER. 
PAYMENT OF THE AMENDMENT FEE HEREUNDER IS CONTINGENT UPON RECEIPT OF AT LEAST
THE CONSENTS FROM THE REQUIRED LENDERS ON OR PRIOR TO 12:00 P.M., EDT FRIDAY,
JUNE 26, 2009.

 

X.                                    Effect.  Except as expressly amended and
waived hereby, all of the representations, warranties, terms, covenants and
conditions of the Credit Documents shall remain unamended and not waived and
shall continue to be in full force and effect.

 

XI.                                Counterparts.  This Amendment may be executed
in any number of counterparts by the parties hereto (including by facsimile
transmission), each of which

 

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counterparts when so executed shall be an original, but all the counterparts
shall together constitute one and the same instrument.

 

XII.                            GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

 

ARCH CAPITAL GROUP LTD.

 

 

 

 

 

By

/s/ W. Preston Hutchings

 

 

Name: W. Preston Hutchings

 

 

Title: SVP & Chief Investment Officer

 

 

 

 

 

 

 

ARCH CAPITAL GROUP (U.S.) INC.

 

 

 

 

 

 

 

By

/s/ Fred S. Eichler

 

 

Name: Fred S. Eichler

 

 

Title: Sr VP & CFO

 

 

 

 

 

 

 

ARCH REINSURANCE LTD.

 

 

 

 

 

 

 

By

/s/ Nicolas Papadopoulo

 

 

Name: Nicolas Papadopoulo

 

 

Title: President & Chief Executive Officer

 

 

 

 

 

 

 

ARCH REINSURANCE COMPANY

 

 

 

 

 

 

 

By

/s/ John F. Rathgeber

 

 

Name: John F. Rathgeber

 

 

Title: Chairman & CEO

 

 

 

 

 

 

 

ARCH INSURANCE COMPANY

 

 

 

 

 

 

 

By

/s/ Fred S. Eichler

 

 

Name: Fred S. Eichler

 

 

Title: Sr VP & CFO

 

SIGNATURE PAGE – AMENDMENT

 

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ARCH INDEMNITY INSURANCE COMPANY

 

(formerly WESTERN DIVERSIFIED CASUALTY INSURANCE COMPANY)

 

 

 

 

 

By

/s/ Fred S. Eichler

 

 

Name: Fred S. Eichler

 

 

Title: Sr VP & CFO

 

 

 

 

 

 

 

ARCH SPECIALTY INSURANCE COMPANY

 

 

 

 

 

 

 

By

/s/ Fred S. Eichler

 

 

Name: Fred S. Eichler

 

 

Title: Sr VP & CFO

 

 

 

 

 

 

 

ARCH EXCESS & SURPLUS INSURANCE COMPANY

 

 

 

 

 

 

 

By

/s/ Fred S. Eichler

 

 

Name: Fred S. Eichler

 

 

Title: Sr VP & CFO

 

 

 

 

 

 

 

ARCH INSURANCE COMPANY (EUROPE) LIMITED

 

 

 

 

 

 

 

By

/s/ Paul Robothom

 

 

Name: Paul Robotham

 

 

Title: Chief Financial Officer

 

SIGNATURE PAGE – AMENDMENT

 

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JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent and Lender

 

 

 

 

 

By

/s/ Melvin Jackson

 

 

Name: Melvin Jackson

 

 

Title: Vice President

 

SIGNATURE PAGE – AMENDMENT

 

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BANK OF AMERICA, N.A., Individually and as Syndication Agent

 

 

 

 

 

By

/s/ Tiffany Burgess

 

 

Name: Tiffany Burgess

 

 

Title: Vice President

 

SIGNATURE PAGE – AMENDMENT

 

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THE BANK OF NEW YORK MELLON,
Individually and as Collateral Agent

 

 

 

 

 

By

/s/ Michael Pensari

 

 

Name: Michael Pensari

 

 

Title: V.P.

 

SIGNATURE PAGE – AMENDMENT

 

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WACHOVIA BANK N.A.

 

 

 

 

 

By

/s/ Ronald J. Fry

 

 

Name: Ronald J. Fry

 

 

Title: Vice President

 

 

 

 

 

By

/s/ M. Eugene Wood, III

 

 

Name: M. Eugene Wood, III

 

 

Title: Managing Director

 

SIGNATURE PAGE – AMENDMENT

 

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ING BANK N.V., LONDON BRANCH

 

 

 

 

 

By

/s/ N J Marchant

 

 

Name: N J Matchant

 

 

Title: Director

 

 

 

 

 

By

/s/ M E R Sharman

 

 

Name: M E R Sharman

 

 

Title: Managing Director

 

SIGNATURE PAGE – AMENDMENT

 

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HSBC BANK USA, NATIONAL ASSOCIATION

 

 

 

 

 

By

/s/ Lawrence Karp

 

 

Name: Lawrence Karp

 

 

Title: Senior Vice President

 

SIGNATURE PAGE – AMENDMENT

 

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BARCLAYS BANK PLC

 

 

 

 

 

By

/s/ David Barton

 

 

Name: David Barton

 

 

Title: Director

 

SIGNATURE PAGE – AMENDMENT

 

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CALYON, NEW YORK BRANCH

 

 

 

 

 

By

/s/ Jay Buckley

 

 

Name: Jay Buckley

 

 

Title: Managing Director

 

 

 

 

 

By

/s/ Charlie Kornberger

 

 

Name: Charlie Korneberger

 

 

Title: Managing Director

 

SIGNATURE PAGE – AMENDMENT

 

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CITBANK, N.A.

 

 

 

 

 

By:

/s/ Peter C. Bickford

 

 

Name: Peter C. Bickford

 

 

Title: Vice President

 

SIGNATURE PAGE – AMENDMENT

 

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ROYAL BANK OF SCOTLAND PLC

 

By:

RBS Securities, Inc., as agent

 

 

for The Royal Bank of Scotland plc

 

 

 

 

 

By

/s/ David Howes

 

 

Name: David Howes

 

 

Title: Vice President

 

SIGNATURE PAGE – AMENDMENT

 

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LLOYDS TSB BANK PLC

 

 

 

 

 

By

/s/ Candi Obrentz

 

 

Name: Candi Obrentz

 

 

Title: Associate Director

 

 

Financial Institutions, USA

 

 

0013

 

 

 

 

 

By

/s/ Alexander Wilson

 

 

Name: Alexander Wilson

 

 

Title:         Director

 

 

Financial Institutions, USA

 

 

W055

 

SIGNATURE PAGE – AMENDMENT

 

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CHANG HWA COMMERCIAL BANK, LTD; NEW YORK BRANCH

 

 

 

 

 

By:

/s/ Jim C.Y. Chen

 

 

Name: JIM C.Y. CHEN

 

 

Title: VP & GENERAL MANAGER

 

SIGNATURE PAGE – AMENDMENT

 

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