EXHIBIT 10
AMENDMENT NO. 3
TO
LOAN AGREEMENT
THIS AMENDMENT, made and entered into as of January 30, 1998 among
LIFE USA HOLDING, INC., as Borrower, EMPLOYERS REASSURANCE CORPORATION, as Agent
and one of the Lenders, REPUBLIC-VANGUARD LIFE INSURANCE COMPANY and WINTERTHUR
LIFE RE INSURANCE COMPANY, as the other Lenders.
W I T N E S S E T H:
WHEREAS, the parties hereto have entered into the Loan Agreement
dated as of May 17, 1996 and as amended by Amendment No. 1 thereto dated as of
December 30, 1996 and Amendment No. 2 thereto dated May 30, 1997 (the
"Agreement" and all terms defined in the Agreement are used herein as defined in
the Agreement) pursuant to which the Lenders have agreed to make advances to
Borrower on the terms and conditions set forth therein; and
WHEREAS, Borrower has informed the Agent and the Lenders of its
pending transactions with Allianz and provided them with copies of the Stock
Purchase Agreement dated January 13, 1998 (the "Stock Purchase Agreement")
between Borrower and Allianz;
WHEREAS, the Agent and the Lenders are willing to confirm that,
notwithstanding anything to the contrary contained in the Agreement, the
execution and delivery of the Stock Purchase Agreement by Borrower did not and
the performance by Borrower and LifeUSA of the terms of the Stock Purchase
Agreement and the agreements contemplated thereby will not violate any
representation, term or condition of the Agreement or result in or constitute a
default under the Agreement; and
WHEREAS, the parties desire to amend and modify the Agreement as
provided in this Amendment,
NOW, THEREFORE, in consideration of these premises and of the
covenants, conditions and promises hereinafter set forth and for One Dollar
($1.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Confirmation and Waiver. Notwithstanding anything contained in
the Agreement, the Agent and the Lenders hereby irrevocably waive any breach of
any representation, term or condition or default under which would result from
the execution and delivery of the Stock Purchase Agreement by Borrower or the
performance by Borrower or LifeUSA of its obligations
under the Stock Purchase Agreement and the agreements to be entered into
pursuant to the Stock Purchase Agreement. It is further agreed that Allianz is
not an Affiliate of Borrower and will not be an Affiliate of Borrower as a
result of the transactions contemplated by the Stock Purchase Agreement;
provided, however, the parties agree that the Lenders may terminate the
Commitments and require repayment in full of any outstanding amounts under the
Notes and other outstanding Obligations upon ninety (90) days prior written
notice to Borrower if Borrower or any of its subsidiaries hereafter engages in
any transaction with Allianz which the Lenders determine are not on terms which
are arms-length and reasonable to Borrower or its subsidiary engaging in such
transaction, except that the foregoing proviso does not apply to any
transactions contemplated by the Stock Purchase Agreement. Specifically, the
Agent and the Lenders agree that the issuance of any debentures by Borrower
pursuant to Section 2.4 of the Stock Purchase Agreement will not violate Section
7.3 of the Agreement.
2. Representations and Warranties. Borrower represents and warrants
to Agent and Lenders as follows:
(a) All of the representations and warranties of Borrower contained
in the Agreement or in any of the Loan Documents are true and correct in all
material respects on the date hereof as though made on such date, except to the
extent that any such representation or warranty expressly relates to an earlier
date and for changes permitted or contemplated by the Agreement, except as such
representations and warranties are modified or supplemented as follows:
(i) Financial Statements. The representations and
warranties contained in Section 4.6(a) as to audited consolidated
financial statements of Borrower and its Subsidiaries are also made
as to the audited consolidated financial statements of Borrower and
its Subsidiaries as of and for the year ended December 31, 1996
which financial statements have been previously delivered to the
Lenders. The representations and warranties contained in Section
4.6(b)(i) as to annual statutory financial statements of Borrower
and its Subsidiaries are also made as to the annual (audited)
statutory financial statements of Borrower and its Subsidiaries as
of and for the fiscal years ended December 31, 1995 and 1996 which
financial statements have been previously delivered to the Lenders.
(ii) Projections. The representations and warranties
contained in Section 4.7 as to projections provided by Borrower are
also made as to the projections provided by Borrower for the fiscal
years ending on December 31, 1997 through 2002 which have been
previously provided to the Lenders.
(iii) Litigation. Schedule 4.16 attached hereto
supersedes and replaces Schedule 4.16 which was originally delivered
in connection with the execution of the Agreement and
lists certain litigation relating to Borrower or its Subsidiaries as
of the date of this Amendment.
In addition, Borrower represents and warrants that, as of the date hereof, no
Default or Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by Borrower of this
Amendment have been duly authorized by all necessary or proper corporate action
and do not require the consent or approval of any Person which has not been
obtained.
(c) This Amendment has been duly executed and delivered by Borrower
and constitutes a legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms.
3. Fees and Expenses. Pursuant to Section 10.2, Borrower shall pay
all reasonable out-of-pocket costs and expenses of Agent in connection with the
preparation of this Amendment, including the reasonable fees and expenses of its
counsel.
4. Full Force and Effect. Except as expressly set forth herein, the
Agreement as amended hereby shall continue in full force and effect in
accordance with its terms.
5. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which, when so executed and delivered, shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
6. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
principles thereof regarding conflict of laws.
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IN WITNESS WHEREOF, the parties have executed this Agreement, each
as of the date first above written.
LIFE USA HOLDING, INC., as Borrower
By: /s/Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx, Executive
Vice President and Chief
Financial Officer
EMPLOYERS REASSURANCE
CORPORATION, as Agent and Lender
By: /s/Xxxxx X. Xxxxxx
---------------------------
Its: Executive Vice President & Actuary
REPUBLIC-VANGUARD LIFE INSURANCE
COMPANY, as Lender
By: /s/ Xxxx Xxxxx
---------------------------
Its: Senior Vice President
WINTERTHUR LIFE RE INSURANCE
COMPANY, as Lender
By: /s/ Xxxx Xxxxx
---------------------------
Its: Senior Vice President
SCHEDULE 4.16
LIST OF LITIGATION
In addition to routine litigation in the ordinary course of
business, there are the following cases outstanding:
(a) Xxxxx et al. vs. Allianz Life Insurance Company of North
America and LifeUSA Insurance Company (class action
commenced in July, 1997 relating to life insurance
policies pending in Minnesota Federal Court);
(b) Xxxxxxxxx et al. vs. LifeUSA Holding, Inc. (a class
action commenced in January 1998 relating to annuities
currently pending in Pennsylvania Federal Court); and
(c) Xxxxxxx vs. LifeUSA Insurance Company (termination of
agent case in which agent claims damages of $60
million).
