Exhibit 10.1


 


EXECUTION
VERSION


FIRST AMENDMENT


(Credit Agreement)


FIRST AMENDMENT, dated as of October 1, 2007 (this “Amendment”),
to the SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 30,
2006 (as amended, supplemented or otherwise 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., CAYLON, 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, the Parent
Borrower, the Designated Subsidiary Borrowers, the Administrative Agent, the
Syndication Agent, the Collateral Agent and the Lenders are parties to the
Credit Agreement;


WHEREAS, the Parent Borrower and the Designated
Subsidiary Borrowers have requested, and upon this Amendment becoming
effective, the Required Lenders have agreed, to amend certain provisions of the
Credit Agreement upon the terms and conditions set forth herein.


NOW, THEREFORE, the parties hereto agree as follows:


SECTION 1.           DEFINITIONS


1.1.          Defined Terms.   Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given such terms in the Credit Agreement.


1.2.          Amendment of Section 1.01 Definitions.   Section
1.01 is hereby amended by replacing the definitions of “Indebtedness” with the
following definitions and by inserting as appropriate in alphabetical order the
definition of “Preferred Securities” which shall mean:


“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 under conditional sale or other title retention agreements
relating to property acquired by such Person, (d) all obligations of such
Person in respect of the deferred purchase price of property or services, (e)
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 (A) the fair market value
of such property at such date of determination (determined in good faith by the
Parent Borrower) and (B) the amount of such Indebtedness of such other


 













 


person, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations of such Person under Interest Rate Protection Agreements,
Hedging Agreements and Credit Protection Agreements and (i) all reimbursement
obligations of such Person in respect of letters of credit, letters of
guaranty, bankers’ acceptances and similar credit transactions.  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 (u) trade payables
(including payables under insurance contracts and reinsurance payables) and
accrued expenses in each case arising in the ordinary course of business, (v)
obligations of Regulation Insurance Companies with respect to Policies, (w)
obligations arising under deferred compensation plans of the Parent Borrower
and its Subsidiaries in effect on the date hereof or which have been approved
by the board of directors of the Parent Borrower, (x) obligations with respect
to products underwritten by Regulated Insurance Companies in the ordinary
course of business, including insurance policies, annuities, performance and
surety bonds and any related contingent obligations (y) reinsurance agreements
entered into by any Regulated Insurance Company in the ordinary course of
business and (z) Preferred Securities.


“Preferred Securities” shall mean, at any time, any
preferred Equity Interests (or capital stock) of such 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.


SECTION 2.           AMENDMENTS TO
CREDIT AGREEMENT


2.1.          Amendment of Section 7.07 Restricted Payments.  Section 7.07 is hereby amended and restated
to read in its entirety as follows:


“The Parent Borrower will not declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its Equity Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or equivalent Persons thereof) as such, make
any distribution of assets, Equity Interests, obligations or securities to its
stockholders, partners or members (or the equivalent Persons thereof) as such,
or permit any of its subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any Equity Interests in Parent Borrower or to sell
any Equity Interest therein (each of the foregoing a “Dividend” and,
collectively, “Dividends”) unless no Default or Event of Default shall
have occurred and be continuing at the time of such Dividend or would result
therefrom, except that the Parent Borrower and its Subsidiaries may declare and
pay cash Dividends with respect to any Preferred Security issued by the Company
or any of its Subsidiaries, if, at the time of and after giving effect to such
dividend, no Default under Sections 8.01, 8.04(a)(i), 8.04(b) or 8.05 shall
have occurred and be continuing.”


SECTION 3.           MISCELLANEOUS


3.1.          Effectiveness. 
This Amendment shall become effective as of the date (the “First
Amendment Effective Date”) of receipt by the Administrative Agent of
counterparts


 



 2
 









 


hereof duly executed by the Parent Borrower,
the Designated Subsidiary Borrowers and Lenders constituting the Required
Lenders.


3.2.          Representations and Warranties.  To induce the Lenders parties hereto to enter
into this First Amendment, the Parent Borrower hereby represents and warrants
to the Administrative Agent and all of the Lenders as of the First Amendment
Effective Date that the representations and warranties made by the Parent
Borrower in the Loan Documents are true and correct in all material respects on
and as of the First Amendment Effective Date, before and after giving effect to
the effectiveness of this First Amendment, as if made on and as of the First
Amendment Effective Date, provided that, any representation or warranty made as
of a specified earlier date need only be true and correct in all material
respects as of such specified earlier date.


3.3.          No Other Amendments Confirmation.  Except as expressly amended, modified and
supplemented hereby, the Credit Agreement is, and shall remain, in full force
and effect in accordance with its terms.


3.4.          Payment of Expenses. 
The Parent Borrower agrees to reimburse the Lender for all reasonable
fees, costs and expenses, including the reasonable fees, costs and expenses of
counsel or other advisors for advice, assistance or other representation in
connection with this Amendment.


3.5.          Counterparts. 
This Amendment may be executed by one or more of the parties hereto on
any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  A set of the copies of this Amendment signed
by all the parties shall be lodged with the Parent Borrower and the
Administrative Agent.  This Amendment may
be delivered by facsimile transmission of the relevant signature pages hereof.


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


[Signature
page to follow]


 



 3














 


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


 


	
  Address:

  	
   

  
	
  Wessex House, 4th floor

  	
  ARCH CAPITAL GROUP LTD.

  
	
  45 Reid Street

  	
   

  
	
  Hamilton, HM 12 Bermuda

  	
   

  
	
  Attention: John D. Vollaro

  	
  By:

  	
  /s/ John D. Vollaro

  	
   

  
	
  Telephone: (441) 278-9253

  	
   

  	
  Title: Executive Vice President & Chief
  Financial Officer

  
	
  Facsimile: (441) 278-9255

  	
   

  
	
   

  	
   

  
	
  One Liberty Plaza

  	
  ARCH CAPITAL GROUP (U.S.) INC.

  
	
  New York, NY 10006

  	
   

  
	
  Attn: Fred Eichler

  	
   

  
	
  Telephone: (646) 746-8235

  	
  By:

  	
  /s/ Fred S. Eichler

  	
   

  
	
  Facsimile: (646) 563-5727

  	
   

  	
  Title: SVP & Chief Financial Officer

  
	
   

  	
   

  
	
  Wessex House

  	
  ARCH REINSURANCE LTD.

  
	
  45 Reid Street, 3rd Floor

  	
   

  
	
  Hamilton, HM 12 Bermuda

  	
   

  
	
  Attn: Michelle Seymour

  	
  By:

  	
  /s/ Michelle Seymour Smith

  	
   

  
	
  Telephone: (441) 278-9250

  	
   

  	
  Title: Vice President/Controller

  
	
  Facsimile: (441) 278-9230

  	
   

  
	
   

  	
   

  
	
  360 Mount Kemble Avenue 

  	
  ARCH REINSURANCE COMPANY

  
	
  P.O. Box 1988

  	
   

  
	
  Morristown, NJ 07962

  	
   

  
	
  Attn: Barry Golub

  	
  By:

  	
  /s/ Barry Golub

  	
   

  
	
  Telephone: (973) 889-6467

  	
   

  	
  Title: Treasurer and Controller

  
	
  Facsimile: (973) 898-9570

  	
   

  
	
   

  	
   

  
	
  One Liberty Plaza

  	
  ARCH INSURANCE COMPANY

  
	
  New York, NY 10006

  	
   

  
	
  Attn: Fred Eichler

  	
   

  
	
  Telephone: (646) 746-8235

  	
  By:

  	
  /s/ Fred S. Eichler

  	
   

  
	
  Facsimile: (646) 563-5727

  	
   

  	
  Title: SVP & Chief Financial Officer

  
	
   

  	
   

  
	
  One Liberty Plaza

  	
  WESTERN DIVERSIFIED CASUALTY

  
	
  New York, NY 10006

  	
  INSURANCE COMPANY

  
	
  Attn: Fred Eichler

  	
   

  
	
  Telephone: (646) 746-8235

  	
   

  
	
  Facsimile: (646) 563-5727

  	
  By:

  	
  /s/ Fred S. Eichler

  	
   

  
	
   

  	
   

  	
  Title: SVP & Chief Financial Officer

  



 


Signature page to First Amendment
to the Second Amended and Restated Credit Agreement


 











 


	
  One Liberty Plaza

  	
  ARCH SPECIALTY INSURANCE

  
	
  New York, NY 10006

  	
  COMPANY

  
	
  Attn: Fred Eichler

  	
   

  
	
  Telephone: (646) 746-8235

  	
   

  
	
  Facsimile: (646) 563-5727

  	
  By:

  	
  /s/ Fred S. Eichler

  	
   

  
	
   

  	
   

  	
  Title: SVP & Chief Financial Officer

  
	
   

  	
   

  
	
  One Liberty Plaza

  	
  ARCH EXCESS & SURPLUS INSURANCE

  
	
  New York, NY 10006

  	
  COMPANY

  
	
  Attn: Fred Eichler

  	
   

  
	
  Telephone: (646) 746-8235

  	
   

  
	
  Facsimile: (646) 563-5727

  	
  By:

  	
  /s/ Fred S. Eichler

  	
   

  
	
   

  	
   

  	
  Title: SVP & Chief Financial Officer

  
	
   

  	
   

  
	
  6th Floor,
  Plantation Place South

  	
  ARCH INSURANCE COMPANY (EUROPE)

  
	
  60 Great Tower Street

  	
  LIMITED

  
	
  London EC3R 5AZ

  	
   

  
	
  United Kingdom

  	
   

  
	
  Attn: Paul Robotham

  	
  By:

  	
  /s/ Paul Robotham

  	
   

  
	
  Telephone: +44-20-7621-5100

  	
   

  	
  Title: Chief Financial Officer

  
	
  Facsimile: +44-20-7621-5101

  	
   

  



 


 


Signature
page to First Amendment to the Second Amended and Restated Credit Agreement


 











 


	
  

  	
  JPMORGAN CHASE BANK, N.A., Individually

  
	
  

  	
  and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melvin Jackson

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

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

  
	
   

  	
  Syndication
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra Bassler

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK, Individually and as

  
	
   

  	
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Pensari

  	
   

  
	
   

  	
   

  	
  Title: V.P.

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald Fry

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  ING
  BANK N.V., LONDON BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ N. Marchant

  	
   

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ I. Taylor

  	
   

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL

  
	
   

  	
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel Serrao

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President

  



 


Signature page to First Amendment
to the Second Amended and Restated Credit Agreement


 











 


	
  

  	
  CALYON, NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sebastian Rocco

  	
   

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles Kornberger

  	
   

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
  LLOYDS TSB BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason Eperon

  	
   

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Candi Obrentz

  	
   

  
	
   

  	
   

  	
  Title: Associate Director

  



 


Signature page to First Amendment
to the Second Amended and Restated Credit Agreement