EXHIBIT 10(f)
AMENDMENT NO. 1 TO CREDIT AGREEMENT, CONSENT AND WAIVER
This Amendment, Consent and Waiver (this "Amendment") is entered into as
of June 29, 1999 by and among Folksamerica Holding Company, Inc., a New York
corporation (the "Borrower"), The First National Bank of Chicago,
individually and as Agent ("Agent"),and the other financial institutions
signatory hereto (the "Lenders").
RECITALS
A. The Borrower, the Agent and the Lenders are party to that certain
$100,000,000 Credit Agreement dated as of February 24, 1999 (the "Credit
Agreement"). Unless otherwise specified herein, capitalized terms used in
this Amendment shall have the meanings ascribed to them by the Credit
Agreement.
B. The Borrower, the Agent and the undersigned Lenders wish to amend the
Credit Agreement, provide certain consents thereunder and waive certain
provisions thereof on the terms and conditions set forth below.
Now, therefore, in consideration of the mutual execution hereof and
other good and valuable consideration, the parties hereto agree as follows:
1. AMENDMENT TO CREDIT AGREEMENT. Upon the Effective Date (as
defined below), the Credit Agreement shall be amended as follows:
(a) ARTICLE I is amended by deleting the definitions of
"Aggregate Available Commitment", "Fund" and "Unfunded Liabilities" and
replacing each in its entirety to read as follows:
"`Aggregate Available Commitment' means, at any time, (a) the
Aggregate Commitment at such time LESS (b) the outstanding Facility
Letter of Credit Obligations at such time LESS (c) the outstanding
Allowable Fund Indebtedness at such time."
"`Fund' means White Mountains Insurance Group, Inc., a
Delaware corporation, formerly known as Fund American Enterprises
Holdings, Inc."
"`Unfunded Liabilities' means the amount (if any) by which the
present value of all vested and unvested accrued benefits under all
Single Employer Plans exceeds the fair market value of all such
Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans and valued on a
basis consistent with that used to prepare the Borrower's annual
audited financial statements."
(b) ARTICLE I is amended by deleting the proviso at the end of
the definition of "Allowable Seller Paper" and replacing such proviso in
its entirety to read as follows:
"PROVIDED, that (i) to the extent such Indebtedness has been
Defeased or (ii) during such time when there are no outstanding
Advances and no Facility Letter of Credit Obligations, the
condition set forth in CLAUSE (c) above shall not be applicable."
(c) ARTICLE I is amended by adding the following definition
for "Allowable Fund Indebtedness" in its proper alphabetical order:
"`Allowable Fund Indebtedness' means Subordinated Indebtedness
of the Borrower issued to Fund, in an aggregate principal amount
not to exceed $85,000,000, the proceeds of which are used to either
(a) finance a mandatory prepayment of Advances pursuant to SECTION
2.2(c) or (b) so long as there are no outstanding Advances, finance
the general corporate needs of the Borrower; PROVIDED, in either
case such Indebtedness is issued on terms and conditions
satisfactory to the Required Lenders, including (i) terms of
subordination, (ii) default provisions, (iii) limitation on
amortization of principal and payment of fees and cash interest,
(iv) interest rates and (v) covenants."
(d) SECTION 2.2(c) is amended by adding the following at the
end of the first parenthetical phrase of such section:
", excluding SECTION 6.11(i)"
(e) SECTION 2.5.3(b) is amended by adding the following
proviso at the end of such section:
"PROVIDED, that issuance of Allowable Fund Indebtedness subject to
the prepayment provisions of SECTION 2.2(c) shall not require that
the Aggregate Commitment be reduced to the extent that Allowable
Fund Indebtedness is repaid on or prior to June 30, 2000."
(f) SECTION 5.10 is amended by deleting the first sentence in
such section and replacing it in its entirety to read as follows:
"Except as disclosed on SCHEDULE 5.10 or as otherwise disclosed by
the Borrower in writing to the Lenders, neither the Borrower nor
any other member of the Controlled Group maintains any Single
Employer Plans, and no Single Employer Plan has any Unfunded
Liability."
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(g) SECTION 6.11 is amended (i) by removing the word "and" at
the end of SECTION 6.11(h), (ii) by moving the existing SECTION 6.11(i)
to a new SECTION 6.11(j) and (iii) by replacing SECTION 6.11(i) in its
entirety with the following:
"(i) Allowable Fund Indebtedness to the extent that it
complies with the mandatory prepayment provisions of SECTION
2.2(c) and the reductions in the Aggregate Commitment provisions
of SECTION 2.5.3(b); and"
(h) SECTION 6.16(g) is amended in its entirety to read as
follows:
"(g) Liens on (1) the Account in connection with Defeasing
Allowable Seller Paper or (2) escrow accounts in connection with
Allowable Seller Paper;"
(i) SECTION 6.23(b) is amended by deleting the second
reference contained therein to the dollar amount of "$500,000" and
replacing it with a reference to the dollar amount of "$1,000,000".
(j) SECTION 7.18 is amended by deleting the reference
contained therein to the dollar amount of "$500,000" and replacing it
with a reference to the dollar amount of "$1,000,000".
(k) SCHEDULE 5.10 is amended in its entirety and replaced with
SCHEDULE 5.10 attached hereto.
2. CONSENT AND WAIVER UNDER THE CREDIT AGREEMENT. Upon the Effective
Date the Agent and the other Lenders signatory hereto hereby:
(a) consent to and approve the terms and conditions of the
Subordinated Promissory Note, in substantially the form of EXHIBIT A
hereto, to be issued by the Borrower to The Centris Group, Inc.(the
"Centris Note") in an aggregate principal amount of $20,750,000 and deem
such Indebtedness to be Allowable Seller Paper to the extent such
Indebtedness complies with the requirements described in the proviso to
the definition of "Allowable Seller Paper" in the Credit Agreement;
(b) consent to and approve the terms and conditions of the
Subordinated Promissory Note, in substantially the form of EXHIBIT B
hereto, to be issued by the Borrower to Fund (the "Fund Note") in the
aggregate principal amount of $85,000,000 and deem such note to be
Allowable Fund Indebtedness;
(c) waive any breach of Section 6.23(b) of the Credit Agreement
to and including the Effective Date arising solely out of the Unfunded
Liabilities of the Folksamerica Holding Company Employees Retirement
Plan exceeding $500,000 as disclosed on Schedule 5.10 attached to the
Credit Agreement (the "Excess Unfunded Liability"); and
(d) waive any Default or Unmatured Default under Section 7.3 or
7.18 of the Credit Agreement which has heretofore arisen as a result of
the Excess Unfunded Liability; PROVIDED, that such waiver shall only be
valid through the Effective Date.
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3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants that:
(a) The execution, delivery and performance by the Borrower of
this Amendment have been duly authorized by all necessary corporate
action and that this Amendment is a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its
terms, except as the enforcement thereof may be subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting the enforcement of creditors' rights generally;
(b) After giving effect to this Amendment, each of the
representations and warranties contained in the Credit Agreement is true
and correct in all material respects on and as of the date hereof as if
made on the date hereof; and
(c) After giving effect to this Amendment, no Default or
Unmatured Default has occurred and is continuing.
4. EFFECTIVE DATE. This Amendment shall become effective upon the
execution and delivery hereof by the Borrower, the Agent and the Required
Lenders (without respect to whether it has been executed and delivered by all
the Lenders); provided that SECTIONS 1 and 2 hereof shall not become
effective until the date (the "Effective Date") when the following additional
conditions have also been satisfied:
(a) delivery of copies, certified by the Secretary or Assistant
Secretary of the Borrower, of the fully executed Centris Note and Fund
Note, each in substantially the form of EXHIBIT A and B, respectively;
(b) a certificate, executed by the Secretary or Assistant
Secretary of the Borrower, certifying (i) an attached copy of the
Borrower's Board of Directors' resolutions authorizing its execution,
delivery and performance under the Centris Note, the Fund Note and this
Amendment and (ii) that there has been no amendments, supplements or
modifications to any of the Articles of Incorporation, Bylaws or
certificate of incumbency of the Borrower delivered to the Agent on
February 24, 1999;
(c) the execution and delivery of the Reaffirmation of Guaranty
in the form of EXHIBIT C hereto;
(d) a certificate, executed by the Secretary or Assistant
Secretary of Fund, certifying (i) an attached copy of Fund's Board of
Directors' resolutions authorizing and directing any changes to Articles
of Incorporation to effect a change in its corporate name and (ii) that
there have been no amendments, supplements or modifications to any of
the Articles of Incorporation, Bylaws or certificate of incumbency of
Fund delivered to the Agent on February 24, 1999, or attached copies of
such amendments, supplements or modifications; and
(e) such other documents as the Agent, any Lender or their
counsel may have reasonably requested.
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In the event the Effective Date has not occurred on or before July 15,
1999, SECTIONS 1 and 2 hereof shall not become operative and shall be of no
force or effect.
5. REFERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT.
(a) Except as specifically amended, the Credit Agreement and
the other Loan Documents shall remain in full force and effect and are
hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of the
Administrative Agent or any Lender under the Credit Agreement or any
Loan Document, nor constitute a waiver of any provision of the Credit
Agreement or any Loan Document, except as specifically set forth herein.
Upon the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of similar import shall mean and be a reference to the Credit Agreement
as amended hereby.
6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
7. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only, and shall not govern the interpretation of
any of the provisions of this Amendment.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but
all such counterparts shall constitute one and the same instrument.
[signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date and year first above written.
FOLKSAMERICA HOLDING COMPANY, INC.
By:
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Name:
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Title:
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Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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EXHIBIT C
REAFFIRMATION OF GUARANTY
The undersigned acknowledges receipt of a copy of Amendment No. 1 to
Credit Agreement, Consent and Waiver (the "Amendment") dated as of June __,
1999, consents to such amendment and hereby reaffirms its obligations under
the Guaranty dated as of February 24, 1999 in favor of The First National
Bank of Chicago, as Agent, for the Lenders (as defined in the Amendment).
Dated as of June , 1999
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WHITE MOUNTAINS INSURANCE GROUP, INC.
(FORMERLY KNOWN AS FUND AMERICAN
ENTERPRISES HOLDINGS, INC.)
By:
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Name:
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Title:
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