CC Carlton Industries Ltd.

Two subsidiaries of Bermuda-based Arch Capital Group Ltd. are being sued in the United States in a dispute over construction performance bonds. Arch Insurance Co. and Arch Reinsurance Co. were named as the only defendants in a civil complaint that was filed at the 250th Judicial District Court of Travis County, Texas on October 9, 2007 and later transferred by the Arch companies to the U. S. District Court for the Western District of Texas on November 8, 2007.