Item 1.01. Entry into a Material Definitive Agreement.

As previously announced, on March 28, 2008, PMA Capital Corporation (the "Company") entered into a Stock Purchase Agreement (the "Agreement") with Armour Reinsurance Group Limited ("Armour Re"), a Bermuda-based corporation, pursuant to which Armour Re will purchase from the Company all of the issued and outstanding shares of PMA Capital Insurance Company, a Pennsylvania domestic property and casualty insurance company, PMA Re Management Company, a Pennsylvania corporation, and High Mountain Reinsurance, Ltd., a Cayman Islands exempted limited liability company. The closing of the sale and transfer of ownership is pending approval by the Pennsylvania Insurance Department. The Department's financial examination of PMA Capital Insurance Company, which includes its review of the loss reserves, is still in process.

Under the amended terms of the Agreement, the Agreement could have been terminated by either the Company or Armour Re if the closing of the sale had not occurred by June 30, 2009. The Company and Armour Re amended the Agreement to extend the termination date to October 31, 2009 or such later date as the parties may mutually agree.

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