Document:

Exhibit 10.1

 

EXECUTION VERSION

 

FIRST AMENDMENT TO FIRST LIEN CREDIT AGREEMENT

 

This FIRST AMENDMENT TO FIRST LIEN CREDIT AGREEMENT (this “Amendment”) dated as of May 11, 2018, is among SN EF UNSUB, LP, a Delaware limited partnership (the “Borrower”), the Lenders party hereto and JPMorgan Chase Bank, N.A., as Administrative Agent.

 

PRELIMINARY STATEMENT

 

A.                                    The Borrower, the banks, financial institutions and other lending institutions from time to time parties thereto (each, a “Lender” and, collectively, the “Lenders”), JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent (in such capacity, the “Collateral Agent”) for the Lenders and as an Issuing Bank, CITIBANK, N.A., as an Issuing Bank and each other Issuing Bank from time to time party thereto, are parties to that certain First Lien Credit Agreement dated as of March 1, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”).

 

B.                                    The Borrower has requested that certain amendments and modifications be made to the Credit Agreement. Subject to the terms and conditions of this Amendment, the Lenders and the Administrative Agent have agreed to enter into this Amendment with the Borrower in order to effectuate such amendments and modifications to the Credit Agreement and to increase the Borrowing Base, all as set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein, the parties agree as follows:

 

Section 1.                                           Definitions. Unless otherwise defined in this Amendment, each capitalized term used in this Amendment has the meaning assigned to such term in the Credit Agreement.

 

Section 2.                                           Amendments to Credit Agreement.  Each of the Borrower, the Lenders and the Administrative Agent hereby acknowledge that on and as of the First Amendment Effective Date (as defined below), the terms of the Credit Agreement shall be amended as follows:

 

(a)                                 The definition of “ABR” is hereby amended by inserting the following at the end thereof:

 

“ If ABR is being used as an alternate rate of interest pursuant to Section 2.10, then ABR shall be the greater of clause (a) and (b) and shall be determined without reference to clause (c). For the avoidance of doubt, if ABR shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.”

 

(b)                                 The definition of “Applicable Margin” is hereby amended and restated as follows:

 

 

““Applicable Margin” shall mean, for any day, with respect to any ABR Loan or LIBOR Loan, as the case may be, or the Commitment Fee Rate, the rate per annum set forth in the grid below based upon the Borrowing Base Utilization Percentage in effect on such day:

 

Borrowing Base Utilization Grid

 

	
Borrowing Base
   Utilization Percentage
    	
 
    	
< 25%
    	
 
    	
>25% and <
   50%
    	
 
    	
>50% and <
   75%
    	
 
    	
>75% and <
   90%
    	
 
    	
>90%
    	
 
    
	
LIBOR Loans
    	
 
    	
2.00
    	
%
    	
2.25
    	
%
    	
2.50
    	
%
    	
2.75
    	
%
    	
3.00
    	
%
    
	
ABR Loans
    	
 
    	
1.00
    	
%
    	
1.25
    	
%
    	
1.50
    	
%
    	
1.75
    	
%
    	
2.00
    	
%
    
	
Commitment Fee Rate
    	
 
    	
0.50
    	
%
    	
0.50
    	
%
    	
0.50
    	
%
    	
0.50
    	
%
    	
0.50
    	
%
    

 

Each change in the Commitment Fee Rate or Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.”

 

(c)                                  The definition of “Collateral Coverage Minimum” is hereby amended by replacing the phrase “90%” with the phrase “85%”.

 

(d)                                 Section 2.10(a) of the Credit Agreement is hereby amended and restated as follows:

 

“(a)                           In the event that (x) in the case of Section 2.10(a)(i) below, the Administrative Agent or (y) in the case of Section 2.10(a)(ii) below, the Administrative Agent upon the advice of the Required Lenders and (z) in the case of Section 2.10(a)(iii) below, any Lender, shall have reasonably determined (in each case, which determination shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto):”

 

(e)                                  Section 2.10(a)(i) of the Credit Agreement is hereby amended by adding the following parenthetical immediately after the last word thereof:

 

“(including, without limitation, by means of an Interpolated Rate or because the LIBO Screen Rate is not available or published on a current basis)”

 

(f)                                   Section 2.10(a)(ii) of the Credit Agreement is hereby amended by deleting the phrase “any Lender shall have reasonably determined (which determination shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto),”.

 

(g)                                  Section 2.10 of the Credit Agreement is hereby amended by inserting the following new Section 2.10(d) after Section 2.10(c) thereof:

 

“(d)                           Notwithstanding anything to the contrary contained in this Agreement or the other Credit Documents, if at any time the Administrative Agent determines (which determination shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto) that (i) the circumstances set forth

 

 

in clause (a)(i) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) have not arisen but the supervisor for the administrator of the LIBO Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBO Screen Rate shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable.  Notwithstanding anything to the contrary in Section 13.1, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment.  Until an alternate rate of interest shall be determined in accordance with this clause (d) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.10(d), only to the extent the LIBO Screen Rate for such Interest Period is not available or published at such time on a current basis), (x) any Notice of Conversion or Continuation that requests a conversion of any Borrowing to or the continuation of any Borrowing as a LIBOR Borrowing shall be ineffective and (y) if any Notice of Borrowing requests a LIBOR Borrowing, such Borrowing shall be made as an ABR Borrowing; provided that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purpose of this Agreement.”

 

(h)                                 Section 10.5(i)(iii) of the Credit Agreement is hereby amended by replacing the phrase “2.75:1.00” with the phrase “3.00:1.00”.

 

(i)                                     Section 10.6(e)(iii) of the Credit Agreement is hereby amended by replacing the phrase “2.75:1.00” with the phrase “3.00:1.00”.

 

(j)                                    Section 10.7(a)(iii) of the Credit Agreement is hereby amended by replacing the phrase “2.75:1.00” with the phrase “3.00:1.00”.

 

(k)                                 Section 10.10(a) of the Credit Agreement is hereby amended and restated to read as follows:

 

“(a) Hedge Agreements with Approved Counterparties in respect of commodities entered into not for speculative purposes the notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect), other than (i) puts, (ii) floors and (iii) basis differential swaps on volumes already hedged pursuant to other Hedge Agreements permitted under this Section 10.10(a), do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement (and for each month during the period during which such hedge

 

 

transaction is in effect), (x) eighty-five percent (85%) of the Credit Parties’ reasonably anticipated projected Hydrocarbon production, for oil, natural gas and natural gas liquids (which may be hedged with Hedge Agreements for crude oil, natural gas, and/or direct and/or basket product components of natural gas liquids) calculated separately on a monthly basis (as forecast based upon the Borrower’s reasonable and justifiable internal projections (assuming no curtailment or interruption of transportation for such projected production)) for the period remaining in the then current calendar year plus the next three (3) calendar years from the date of creation of such hedging transaction and (y) eighty-five percent (85%) of the Credit Parties’ total Proved Reserves for oil, natural gas and natural gas liquids (which may be hedged with Hedge Agreements for crude oil, natural gas, and/or direct and/or basket product components of natural gas liquids) calculated separately on a monthly basis (as such volumes are reflected in the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.12(a), as applicable) for the period commencing with the end of the period specified in clause (x) above to the end of the sixty (60) month period after the date of creation of such hedging transaction (the “Ongoing Hedges”).  Ongoing Hedges shall not, in any case, have a tenor greater than sixty (60) months.  In addition to the Ongoing Hedges, in connection with a proposed or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging transactions with respect to the Credit Parties’ reasonably anticipated projected Hydrocarbon production from the total Proved Reserves of the Credit Parties to be acquired pursuant to the Proposed Acquisition with notional amounts (when aggregated with other commodity Hedge Agreements then in effect), other than (i) puts, (ii) floors and (iii) basis differential swaps on volumes hedged pursuant to other Hedge Agreements permitted under this Section 10.10(a), that do not exceed, as of the date the latest any such hedging transaction is entered into under a Hedge Agreement (and for each month during the period during which such hedge transaction is in effect) 15% of the reasonably anticipated Hydrocarbon production, for oil, natural gas and natural gas liquids (which may be hedged with Hedge Agreements for crude oil, natural gas, and/or direct and/or basket product components of natural gas liquids) calculated separately on a monthly basis, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.12(a), as applicable) prior to such Proposed Acquisition (such that the aggregate shall not be more than 100% of such reasonably anticipated Hydrocarbon production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 months from the date of creation of such hedging transaction during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition, (B) the date of termination of such Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement.  However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition

 

 

must be terminated or unwound within 90 days following the date of termination of such Proposed Acquisition;”

 

(l)                                     Section 10.10 of the Credit Agreement is hereby amended by inserting the following new Section 10.10(e) after Section 10.10(d) thereof:

 

“(e)                            If, after the end of any calendar month, the aggregate volume of all Hedge Agreements in respect of commodities for which settlement payments were calculated in such calendar month and the preceding calendar month (other than (i) puts, (ii) floors and (iii) basis differential swaps on volumes already hedged pursuant to other Hedge Agreements permitted under Section 10.10(a)) exceeded, or will exceed, 100% of actual production of crude oil, natural gas and natural gas liquids  (which may be hedged with Hedge Agreements for crude oil, natural gas, and/or direct and/or basket product components of natural gas liquids), calculated separately, in such calendar months, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production the Borrower or any Subsidiary is marketing, or otherwise unwind existing Hedge Agreements, in each case within five (5) Business Days of the end of such calendar month (or such later time to which the Administrative Agent may agree in its sole discretion) such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production from total Proved Reserves for oil, natural gas and natural gas liquids  (which may be hedged with Hedge Agreements for crude oil, natural gas, and/or direct and/or basket product components of natural gas liquids), calculated separately, for the then-current and any succeeding calendar months.”

 

(m)                             Section 13.1(a) of the Credit Agreement is hereby amended by inserting the phrase “and subject to Section 2.10(d)” immediately after the first instance of the word “Agreement” therein.

 

Section 3.                                           Scheduled Redetermination.  Subject to the occurrence of the First Amendment Effective Date, the Administrative Agent hereby notifies the Borrower of the new Borrowing Base of $380,000,000 and the Lenders and the Borrower hereby agree that, from and after the First Amendment Effective Date until the next Scheduled Redetermination Date, the next Interim Redetermination Date or the next adjustment to the Borrowing Base pursuant to the Borrowing Base Adjustment Provisions, whichever occurs first, the amount of the Borrowing Base shall be $380,000,000.  The parties hereto hereby agree that the foregoing redetermination constitutes the Scheduled Redetermination with respect to April 1, 2018 and this Amendment constitutes the New Borrowing Base Notice with respect thereto.

 

Section 4.                                           Ratification. The Borrower hereby ratifies and confirms all of its obligations under the Credit Agreement (as amended hereby) and the other Credit Documents, and, in particular, affirms that, after giving effect to this Amendment, the terms of the Collateral Agreement and Mortgages secure, and will continue to secure, the Obligations.

 

 

Section 5.                                           Effectiveness. This Amendment shall become effective on the first date on which each of the conditions set forth in this Section 5 is satisfied or waived (such date, the “First Amendment Effective Date”):

 

(a)                                 The Administrative Agent shall have received duly executed counterparts of this Amendment from the Borrower, the Administrative Agent, and the Lenders.

 

(b)                                 The Borrower, by its execution and delivery of this Amendment, does hereby confirm and acknowledge to the Administrative Agent, the Issuing Bank and the Lenders, that (i) the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate or other organizational action, as applicable, on the part of the Borrower, (ii) the Credit Agreement and each other Credit Document to which it or any of its Subsidiaries is a party constitute valid and legally binding agreements enforceable against the Borrower in accordance with their respective terms, except as such enforceability may be limited by Debtor Relief Laws, by general principles of equity and by a covenant of good faith and fair dealing, (iii) each of the representations and warranties set forth in the Credit Agreement and each other Credit Document is true and correct in all material respects with the same effect as though such representations and warranties have been made on and as of the date hereof (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date and except that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates) and (iv) no Default or Event of Default exists under the Credit Agreement or any of the other Credit Documents.

 

(c)                                  The Borrower shall have reimbursed the Administrative Agent for, or paid directly, all fees, costs and expenses required to be paid or reimbursed pursuant to Section 13.5(a) of the Credit Agreement to the extent invoiced at least two Business Days prior to the First Amendment Effective Date.

 

Section 6.                                           GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVERS. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  SECTION 13.13 OF THE CREDIT AGREEMENT IS HEREBY INCORPORATED BY REFERENCE INTO THIS AMENDMENT MUTATIS MUTANDIS AND SHALL APPLY HERETO.

 

Section 7.                                           Miscellaneous. (a) On and after the First Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import, referring to the Credit Agreement, and each reference in each other Credit Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended or otherwise modified by this Amendment; (b) the execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any default of any Credit Party or any right, power or remedy of the Administrative Agent or the Lenders under any of the Credit Documents, nor constitute a waiver of any provision of any of the Credit Documents and

 

 

(c) this Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by facsimile or other electronic transmission, i.e. a “pdf” or a “tif”), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

Section 8.                                           Amendment, Modification and Waiver. This Amendment may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the parties hereto.

 

Section 9.                                           Severability. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 10.                                    Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Administrative Agent, the Collateral Agent, each Issuing Bank, the Lenders and the Credit Parties and their respective successors and assigns.

 

Section 11.                                    Headings. The headings, captions and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

 

Section 12.                                    Integration. This Amendment, the Credit Agreement and the other Credit Documents represent the agreement of the parties hereto with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the parties hereto relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents.

 

[Signature Pages Follow]

 

 

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

 

	
 
    	
SN   EF UNSUB, LP, as the Borrower
    
	
 
    	
 
    
	
 
    	
By:   SN EF UNSUB GP, LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Cameron W. George
    
	
 
    	
Name:
    	
Cameron   W. George
    
	
 
    	
Title:
    	
Chief   Financial Officer and Treasurer
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
JPMORGAN   CHASE BANK, N.A., as Administrative Agent and a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darren Vanek
    
	
 
    	
Name:
    	
Darren   Vanek
    
	
 
    	
Title:
    	
Authorized   Officer
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
Citibank,   N.A., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeff Ard
    
	
 
    	
Name:
    	
Jeff   Ard
    
	
 
    	
Title:
    	
Vice   President
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
CAPITAL   ONE, NATIONAL ASSOCIATION, as Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Higgins
    
	
 
    	
Name:
    	
Michael   Higgins
    
	
 
    	
Title:
    	
Senior   Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
ROYAL   BANK OF CANADA, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Don J. McKinnerney
    
	
 
    	
Name:
    	
Don   J. McKinnerney
    
	
 
    	
Title:
    	
Authorized   Signatory
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
BMO   HARRIS BANK N.A., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James V. Ducote
    
	
 
    	
Name:
    	
James   V. Ducote
    
	
 
    	
Title:
    	
Managing   Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
ING   Capital LLC, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Charles Hall
    
	
 
    	
Name:
    	
Charles   Hall
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Josh Strong
    
	
 
    	
Name:
    	
Josh   Strong
    
	
 
    	
Title:
    	
Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
SunTrust   Bank,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Benjamin Brown
    
	
 
    	
Name:
    	
Benjamin   L. Brown
    
	
 
    	
Title:
    	
Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
ABN   AMRO Capital USA LLC,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darrell Holley
    
	
 
    	
Name:
    	
Darrell   Holley
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Beth Johnson
    
	
 
    	
Name:
    	
Beth   Johnson
    
	
 
    	
Title:
    	
Executive   Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
CANADIAN   IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Trudy Nelson
    
	
 
    	
Name:
    	
Trudy   Nelson
    
	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert Long
    
	
 
    	
Name:
    	
Robert   Long
    
	
 
    	
Title:
    	
Authorized   Signatory
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
FIFTH   THIRD BANK, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Justin Bellamy
    
	
 
    	
Name:
    	
Justin   Bellamy
    
	
 
    	
Title:
    	
Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
NATIXIS,   NEW YORK BRANCH,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brice Le Foyer
    
	
 
    	
Name:
    	
Brice   Le Foyer
    
	
 
    	
Title:
    	
Executive   Director
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Leila Zomorrodian
    
	
 
    	
Name:
    	
Leila   Zomorrodian
    
	
 
    	
Title:
    	
Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
PNC   BANK, NATIONAL ASSOCIATION, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sandra Salazar
    
	
 
    	
Name:
    	
Sandra   Salazar
    
	
 
    	
Title:
    	
Managing   Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
BOKF   NA, dba Bank of Texas,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Martin W. Wilson
    
	
 
    	
Name:
    	
Martin   W. Wilson
    
	
 
    	
Title:
    	
Senior   Vice President
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
CITIZENS   BANK, N.A., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Scott Donaldson
    
	
 
    	
Name:
    	
Scott   Donaldson
    
	
 
    	
Title:
    	
Senior   Vice President
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
Huntington   National Bank, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen Hoffman
    
	
 
    	
Name:
    	
Stephen   Hoffman
    
	
 
    	
Title:
    	
Managing   Director
    
				

 

[First Amendment Signature Page]

 

 

	
 
    	
COMERICA   BANK, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   William B. Robinson
    
	
 
    	
Name:
    	
William   B. Robinson
    
	
 
    	
Title:
    	
Senior   Vice President
    
				

 

[First Amendment Signature Page]Exhibit

Exhibit 4.1
SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”) dated May 10, 2018, between Arch Capital Finance LLC, a Delaware limited liability company (herein called the “Company”), Arch Capital Group Ltd., a Bermuda company (herein called the “Guarantor”), and The Bank of New York Mellon, a New York banking corporation, as trustee hereunder (herein called the “Trustee”).
RECITALS OF THE COMPANY
The Company, the Guarantor and the Trustee entered into an Indenture dated as of December 8, 2016 (the “Original Indenture”), pursuant to which senior unsecured debentures, notes or other evidences of indebtedness of the Company (the “Securities”) may be issued in one or more series from time to time.
The Company, the Guarantor and the Trustee entered into a First Supplemental Indenture dated as of December 8, 2016 (the “First Supplemental Indenture”), pursuant to which the Company issued (x) the Company’s “4.011% Senior Notes due 2026” (the “2026 Notes”) and (y) “5.031% Senior Notes due 2046” (the “2046 Notes” and, together with the 2026 Notes, the “Notes”), in each case fully and unconditionally guaranteed by the Guarantor.
Section 9.01 of the Original Indenture provides that the Company and the Guarantor, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may amend or supplement the Original Indenture or the Securities or the Guarantees without the consent of any Holder to make any modifications or amendments that do not, in the good faith opinion of the Company’s Board of Directors materially adversely affect the interests of the Holders.
The Company and the Guarantor have delivered to the Trustee copies of Board Resolutions duly adopted by their respective Board of Directors authorizing the execution of this Second Supplemental Indenture.
All things necessary to make this Second Supplemental Indenture a valid agreement of the Company, the Guarantor and the Trustee and a valid supplement to the Original Indenture and the First Supplemental Indenture have been done.
NOW, THEREFORE, the Company, the Guarantor and the Trustee mutually covenant and agree, for the equal and proportionate benefit of the respective Holders from time to time of the Notes, as follows:
ARTICLE ONE 
DEFINITIONS AND OTHER PROVISIONS 
OF GENERAL APPLICATION
		
	SECTION 1.1.
	Definitions.

The Original Indenture together with the First Supplemental Indenture and this Second Supplemental Indenture are hereinafter sometimes collectively referred to as the “Indenture.” For the avoidance of doubt, references to any “Section” of the “Indenture” refer to such Section of the Original Indenture as supplemented and amended by the First Supplemental Indenture and as further supplemented 

and amended by this Second Supplemental Indenture. All capitalized terms which are used herein and not otherwise defined herein are defined in the Original Indenture and are used herein with the same meanings as in the Original Indenture. If a capitalized term is defined in the Original Indenture or in the First Supplemental Indenture and in this Second Supplemental Indenture, the definition in this Second Supplemental Indenture shall apply to the Notes.
For all purposes of this Second Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1)    the terms defined in this article have the meanings assigned to them in this article and include the plural as well as the singular;
(2)    all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3)    all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation;
(4)    the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular article, section or other subdivision; and
(5)    all references used herein to the male gender shall include the female gender.
ARTICLE TWO
OPTIONAL REDEMPTION

Article Five of the First Supplemental Indenture is hereby amended as follows:
(a)    Section 5.1 of the First Supplemental Indenture is amended to add the following after the last sentence thereof: 
“Notwithstanding anything to the contrary, the 2026 Notes and the 2046 Notes are not redeemable at the Company’s option on or before December 8, 2021, except that the Company may, redeem the 2026 Notes, in whole and not in part, or the 2046 Notes, in whole and not in part, following the occurrence of a Rating Methodology Event or any other Specified Event at the Redemption Price determined in accordance with this Section 5.1 (a “Specified Event Redemption”); provided, that notice of a Specified Event Redemption shall be given within 90 days of the occurrence of the applicable Specified Event; provided, further, that, at the time of such notice and assuming that payment for such redemption had been made, the applicable Conditions to Redemption (including receipt from the BMA of its consent to the redemption as specified in clause (iii) of the definition of “Conditions to Redemption”) are satisfied and, if not so satisfied, the period for giving of such notice shall be extended until such time as the Conditions to Redemption are satisfied.” 

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(b)    Paragraph 8 of each Note is amended to add the following after the last sentence thereof: 
“Notwithstanding anything to the contrary, the 2026 Notes and the 2046 Notes are not redeemable at the Company’s option on or before December 8, 2021, except that the Company may, redeem the 2026 Notes, in whole and not in part, or the 2046 Notes, in whole and not in part, following the occurrence of a Specified Event at the Redemption Price determined in accordance with Section 5.1 (a “Specified Event Redemption”); provided, that notice of a Specified Event Redemption shall be given within 90 days of the occurrence of the applicable Specified Event; provided, further, that, at the time of such notice and assuming that payment for such redemption had been made, the applicable Conditions to Redemption are satisfied and, if not so satisfied, the period for giving of such notice shall be extended until such time as the Conditions to Redemption are satisfied.”
(c)    Section 5.2 of the First Supplemental Indenture is amended to insert the following defined terms in alphabetical order:
“Applicable Supervisory Regulations” means such insurance supervisory laws, rules and regulations relating to group supervision or the supervision of single insurance entities, as applicable, which are applicable to the Guarantor or the Insurance Group, and which shall initially mean the Group Rules until such time when the BMA no longer has jurisdiction or responsibility to regulate the Guarantor, the Company or the Insurance Group.
“BMA” means the Bermuda Monetary Authority, or, should the Bermuda Monetary Authority no longer have jurisdiction or responsibility to regulate the Guarantor or the Insurance Group, as the context requires, a regulator which is otherwise subject to Applicable Supervisory Regulations. 
“Conditions to Redemption”, are satisfied on any day with respect to a scheduled redemption or a planned purchase of any series of Notes, if:
(i)    the redemption or purchase of such series of Notes would not result in, or accelerate the occurrence of, an Insolvency Event; and
(ii)    the Solvency Capital Requirement is complied with after the repayment or purchase of such series of Notes; and
(iii)    the BMA has given, and not withdrawn by such date, its prior consent to the redemption of such series of Notes and the payment of accrued and unpaid interest or to the purchase of such series of Notes; provided, that if under the Applicable Supervisory Regulations no such consent is required at the time in order for the series of Notes to qualify or continue to qualify, as applicable, as Tier 3 Capital of the Guarantor or the Insurance Group, this clause (iii) shall not apply.
“ECR” means the enhanced capital and surplus requirement applicable to the Insurance Group and as defined in the Insurance Act or, should the Insurance Act or the Group Rules no longer apply to the Insurance Group, any and all other solvency capital requirements defined in the Applicable Supervisory Regulations.

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“Group Rules” means the Group Solvency Standards, together with the Group Supervision Rules, as those rules and regulations may be amended or replaced from time to time.
“Group Solvency Standards” means the Bermuda Insurance (Prudential Standards) (Insurance Group Solvency Requirement) Rules 2011, as those rules and regulations may be amended or replaced from time to time.
“Group Supervision Rules” means the Bermuda Insurance (Group Supervision) Rules 2011, as those rules and regulations may be amended or replaced from time to time. 
“Insolvency Event” means, as of the relevant date, the Company or the Guarantor, as applicable, is not, or after making an applicable payment on any series of Notes or any Guarantee would not be, solvent. An Officers’ Certificate relating to each series of Notes as to the solvency of the Company or the Guarantor, as applicable, shall, in the absence of manifest error, be treated and accepted by the Guarantor, the Trustee, the Holders of such series of Notes and all other interested parties as correct and sufficient evidence thereof, shall be final and binding on such parties, and the Trustee shall be entitled to rely on such Officers’ Certificate with respect to such series of Notes without any liability to any Person. 
“Insurance Act” means the Bermuda Insurance Act 1978, as amended from time to time. 
“Insurance Group” means all subsidiaries of the Guarantor that are regulated insurance or reinsurance companies (or part of such regulatory group) pursuant to the Applicable Supervisory Regulations. 
“Issue Date” means December 8, 2016. 
“Rating Methodology Event” means, with respect to any series of Notes, if, as a consequence of a change in, or clarification to, the rating methodology (or the interpretation thereof) of Moody’s Investor Service, Standard & Poor’s Rating Services or Fitch Ratings Inc. or any respective successor, which change or clarification becomes effective on or after the Issue Date, the capital treatment of such series of Notes for the Company or the Guarantor or their respective groups or the Insurance Group is amended in a way that is reasonably determined by the Company or the Guarantor to be materially unfavorable to the Company or the Guarantor or their respective subsidiaries or the Insurance Group and provided such determination by the Company has been notified to the BMA in advance and the BMA has given notice of its approval (or non-disapproval) of such determination.
“Regulatory Event” means, with respect to any series of Notes, if, as a consequence of a change in, or clarification to, the Applicable Supervisory Regulations by the BMA such series of Notes (in whole or in part) will not or will no longer qualify as Tier 3 Capital under the Group Supervision Rules or the Applicable Supervisory Regulations then applicable to the Guarantor or the Insurance Group, as the context requires (and if the Applicable Supervisory Regulations do not refer to such term, the nearest corresponding concept (if any) under the Applicable Supervisory Regulations), as reasonably determined by the Company or the Guarantor. 
“Specified Event” means, with respect to any series of Notes, the occurrence of any of a Tax Event, a Rating Methodology Event or a Regulatory Event with respect thereto.
“Specified Event Redemption” has the meaning forth in Section 5.1.

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“Solvency Capital Requirement” means the ECR or any other requirement to maintain assets applicable to the Company or the Guarantor or in respect of the Insurance Group, as applicable, pursuant to the Applicable Supervisory Regulations.
“Tax Event” means, with respect to any series of Notes, if an opinion of a recognized independent tax counsel has been delivered to the Trustee stating that, as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of any Taxing Jurisdiction, or as a result of any change in or amendment to an official interpretation or application of any such laws, rules or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation and the publication of any judicial decisions or regulatory determination), which change or amendment becomes effective on or after the Issue Date, interest payable by the Company or the Guarantor, as applicable, in respect of such series of Notes is no longer, or within 90 days of the date of the opinion will no longer be, fully deductible by the Company or the Guarantor, as applicable, for income tax purposes in the applicable jurisdiction (to the extent that such interest was so deductible as of the time of such Tax Event), and that non-deductibility cannot be avoided by the Company or the Guarantor, as applicable, taking such reasonable measures it (acting in good faith) deems appropriate.
“Taxing Jurisdiction” means Bermuda, or any political subdivision thereof, or any authority or agency therein having the power to tax, or any other jurisdiction from or through which the Company or the Guarantor makes a payment on any series of Notes or any Guarantee or in which the Company or the Guarantor generally becomes subject to taxation, or any jurisdiction in which a successor of the Company or the Guarantor is incorporated.
“Tier 3 Capital” means “Tier 3 Ancillary Capital” as set out in the Group Supervision Rules (or, if the Group Supervision Rules are amended so as to no longer refer to Tier 3 Ancillary Capital in this respect, the nearest corresponding concept (if any) under the Group Supervision Rules, as amended).”
(d)    Section 5.3 of the First Supplemental Indenture is amended to insert the following after Section 5.3(b):
(c)    Notice of any Specified Event Redemption shall state the specified Redemption Date, the facts establishing the right of the Company or the Guarantor to redeem such series of Notes, and that all Outstanding Notes of such series of Notes shall be redeemed at the applicable Redemption Price on the Redemption Date automatically and without any further action by the Holders of such series of Notes. An Officers’ Certificate relating to each series of Notes in connection with any Specified Event Redemption certifying that, as of the date notice of such Specified Event Redemption is given and assuming payment of the Redemption Price had been made on such date, the applicable Conditions to Redemption are satisfied shall, in the absence of manifest error, be treated and accepted by the Guarantor, the Trustee, the Holders of the applicable series of Notes and all other interested parties as correct and sufficient evidence thereof, shall be final and binding on such parties, and the Trustee shall be entitled to rely on such Officers’ Certificate without liability to any Person.” 

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ARTICLE THREE 
 
MISCELLANEOUS
SECTION 3.1.        Effect of this Second Supplemental Indenture.
(a)    This Second Supplemental Indenture is a supplemental indenture within the meaning of Article Nine of the Original Indenture, and the Original Indenture shall be read together with the First Supplemental Indenture and this Second Supplemental Indenture and shall have the same effect over the Notes, in the same manner as if the provisions of the Original Indenture, the First Supplemental Indenture and this Second Supplemental Indenture were contained in the same instrument.
(b)    In all other respects, the Original Indenture and the First Supplemental Indenture are confirmed by the parties hereto.
SECTION 3.2.        Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
SECTION 3.3.        Successors and Assigns.
All covenants and agreements in this Second Supplemental Indenture by the Company, the Guarantor, the Trustee and the Holders shall bind their successors and assigns, whether so expressed or not.
SECTION 3.4.        Severability Clause.
In case any provision in this Second Supplemental Indenture, in the Notes or in the Guarantees shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 3.5.        Benefits of Second Supplemental Indenture.
Nothing in this Second Supplemental Indenture, in the Notes or in the Guarantees, express or implied, shall give to any Person, other than the parties hereto, any benefit or any legal or equitable right, remedy or claim under this Second Supplemental Indenture.
SECTION 3.6.        Conflict.
In the event that there is a conflict or inconsistency between the Original Indenture, the First Supplemental Indenture and this Second Supplemental Indenture, the provisions of this Second Supplemental Indenture shall control; provided, however, if any provision hereof limits, qualifies or conflicts with another provision herein or in the Original Indenture, in either case, which is required or deemed to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required or deemed provision shall control.

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SECTION 3.7.        Governing Law.
THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 3.8.        Trustee.
The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company or the Guarantor, as the case may be.
SECTION 3.9.        Counterparts.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

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IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed on the date and year first written above.
	
				
	 
	ARCH CAPITAL FINANCE LLC, 

	 
	as Issuer

	 
	 
	 

	 
	By:
	/s/ Sara Millard

	 
	 
	Name:
	Sara Millard

	 
	 
	Title:
	EVP & Secretary

	
				
	 
	ARCH CAPITAL GROUP LTD., 

	 
	as Guarantor

	 
	 
	 

	 
	By:
	/s/ Mark D. Lyons

	 
	 
	Name:
	Mark D. Lyons

	 
	 
	Title:
	EVP and CFO

	
				
	 
	THE BANK OF NEW YORK MELLON,

	 
	as Trustee

	 
	 
	 

	 
	By:
	/s/ Laurence J. O'Brien

	 
	 
	Name:
	Laurence J. O'Brien

	 
	 
	Title:
	Vice President

[Second Supplemental Indenture Signature Page]

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