Exhibit 10.29
SECOND AMENDMENT TO CREDIT AGREEMENT,
CONSENT AND WAIVER
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER, dated as
of the 9th day of November, 1999 (this "Amendment"), is made among EVEREST
REINSURANCE HOLDINGS, INC., a Delaware corporation (the "Borrower"), and FIRST
UNION NATIONAL BANK (the "Lender").
RECITALS
A. The Borrower and the Lender are parties to a Credit Agreement, dated as of
June 16, 1997, as amended by a First Amendment dated June 10, 1998 (as further
amended, the "Credit Agreement"), providing for the availability of a revolving
credit facility to the Borrower upon the terms and conditions set forth therein.
Capitalized terms used herein without definition shall have the meanings given
to them in the Credit Agreement.
B. The Borrower has informed the Lender that it intends to undertake the
following transactions as part of a corporate restructuring (the
"Restructuring"), all as more particularly described in Form S-4 Registration
Statement of Everest Reinsurance Group, Ltd., a Bermuda corporation ("Everest
Group"), filed with the Securities and Exchange Commission on September 17,
1999: (i) the Borrower formed a new subsidiary, Everest Group, (ii) Everest
Group formed a new subsidiary, Everest Re Merger Corporation, a Delaware company
("Everest Merger"), and (iii) Everest Merger will be merged with and into the
Borrower with the Borrower as the surviving company and pursuant to which (A)
each share of common stock of the Borrower shall be automatically converted into
one share of common stock of Everest Group, and (B) each share of common stock
of Everest Merger will be converted into one share of the Borrower. After the
consummation of the Restructuring, Everest Group shall own 100% of the issued
and outstanding stock of the Borrower. The Restructuring would result in an
Event of Default pursuant to SECTION 8.1(L) of the Credit Agreement, and the
Borrower has requested that the Lender consent to the Restructuring. The Lender
has agreed to so consent upon the terms and conditions set forth herein.
C. The Borrower has also informed the Lender that it has placed $91,700,000 in
trust for the benefit of one of Everest Re's reinsurers, Gilbraltar Casualty
Company, on account of a dispute between Everest Re and Gilbraltar (the
"Gilbraltar Dispute"), all as more particularly described in the Forms 10-Q and
10-K filed by the Borrower before the date hereof, which has resulted in an
Event of Default under SECTION 7.3 of the Credit Agreement (the "Lien Default").
The Borrower has requested that the Lender waive the Lien Default and the Lender
has agreed to waive such Default upon the terms and conditions set forth herein.
D. The Borrower has also requested that the Lender increase the Commitment to
$75,000,000 until January 18, 2000. The Lender has agreed to effect such
amendments upon the terms and conditions set forth herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS
1.1 DEFINITIONS. SECTION 1.1 of the Credit Agreement is amended by amending and
restating in their entirety the definitions of "Commitment" and "Margin
Percentage" as follows:
"Commitment" shall mean (i) on or before January 18,
2000, $75,000,000, and (ii) thereafter, $50,000,000, subject
to reduction as provided in SECTION 2.4.
"Margin Percentage" shall mean, at any time, (a) if
to be added to the LIBOR Rate pursuant to SECTION 2.6 for
purposes of determining the Adjusted LIBOR Rate, (i) with
respect to the first $50,000,000 of principal amount of LIBOR
Loans outstanding, 0.40%, and (ii) with respect to the
principal amount of LIBOR Loans outstanding in excess of
$50,000,000, 0.725%, and (b) if to be used in calculating the
facility fee payable pursuant to SECTION 2.7, (i) with respect
to the first $50,000,000 of Commitments, 0.10%, and (ii) with
respect to the Commitments in excess of $50,000,000, 0.15%.
1.2 NEW DEFINITIONS. SECTION 1.1 of the Credit Agreement is hereby amended by
adding the following definition of Everest Group in appropriate alphabetical
order:
"Everest Group" shall mean Everest Reinsurance Group,
Ltd., a Bermuda corporation.
1.3 LIENS. SECTION 7.3 of the Credit Agreement is hereby amended by (a) deleting
the word "and" at the end of clause (ix) thereof, (b) deleting the "." at the
end of clause (x) thereof and replacing it with "; and", and (c) inserting the
following as a new clause (xi) thereof:
"(xi) Liens with respect to $91,700,000 placed in trust for
the benefit of Gilbraltar Casualty Company on account of a
dispute between Everest Re and such Person.
1.4 CHANGE OF CONTROL. Upon the consummation of the Restructuring, SECTION
8.1(L) of the Credit Agreement shall be amended and restated in its entirety as
follows:
(l) Any of the following shall occur:
(i) any Person or group of Persons acting
in concert as a partnership or other group,
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shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or
otherwise, have become, after the date hereof, the "beneficial
owner" (within the meaning of such term under Rule 13d-3 under
the Exchange Act) of securities of Everest Group representing
20% or more of the combined voting power of the then
outstanding securities of Everest Group ordinarily (and apart
from rights accruing under special circumstances) having the
right to vote in the election of directors; (ii) the Board of
Directors of Everest Group shall cease to consist of a
majority of the individuals who constituted the Board of
Directors as of the date hereof or who shall have become a
member thereof subsequent to the date hereof after having been
nominated, or otherwise approved in writing, by at least a
majority of individuals who constituted the Board of Directors
of Everest Group, as applicable, as of the date hereof (or
their replacements approved as herein required); (iii) the
Borrower shall cease to own directly 100% of the issued and
outstanding capital stock of Everest Re; or (iv) Everest Group
shall cease to own directly 100% of the issued and outstanding
capital stock of the Borrower.
ARTICLE II
CONSENT AND WAIVER
The Lender, based upon the representations, warranties and covenants
set forth herein, hereby consents to the Restructuring and waives the Lien
Default. This consent and waiver is limited as specified and shall not
constitute or be deemed to constitute an amendment, modification or waiver of
any provision of the Credit Agreement or a waiver of any Default or Event of
Default except as expressly set forth herein with respect to the Restructuring
and the Lien Default.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Lender as follows:
3.1 REPRESENTATIONS AND WARRANTIES. After giving effect to this Amendment, each
of the representations and warranties of the Borrower contained in the Credit
Agreement and in the other Credit Documents is true and correct on and as of the
date hereof with the same effect as if made on and as of the date hereof (except
to the extent any such representation or warranty is expressly stated to have
been made as of a specific date, in which case such representation or warranty
is true and correct as of such date).
3.2 NO DEFAULT. After giving effect to this Amendment, no Default or Event
of Default has occurred and is continuing.
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3.3 GILBRALTAR DISPUTE. The Borrower and its Subsidiaries are contesting the
Gilbraltar Dispute in good faith by appropriate proceedings.
ARTICLE IV
MISCELLANEOUS
4.1 EFFECT OF AMENDMENT. From and after the effective date of the amendments to
the Credit Agreement set forth herein, all references to the Credit Agreement
set forth in any other Credit Document or other agreement or instrument shall,
unless otherwise specifically provided, be references to the Credit Agreement as
amended by this Amendment and as may be further amended, modified, restated or
supplemented from time to time. This Amendment is limited as specified and shall
not constitute or be deemed to constitute an amendment, modification or waiver
of any provision of the Credit Agreement except as expressly set forth herein.
Except as expressly amended hereby, the Credit Agreement shall remain in full
force and effect in accordance with its terms.
4.2 GOVERNING LAW. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of New Jersey (without regard
to the conflicts of law provisions thereof).
4.3 EXPENSES. The Borrower agrees to pay upon demand all reasonable
out-of-pocket costs and expenses of the Lender (including, without limitation,
the reasonable fees and expenses of counsel to the Lender) in connection with
the preparation, negotiation, execution and delivery of this Amendment and the
other Credit Documents delivered in connection herewith.
4.4 SEVERABILITY. To the extent any provision of this Amendment is prohibited by
or invalid under the applicable law of any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity and only in any
such jurisdiction, without prohibiting or invalidating such provision in any
other jurisdiction or the remaining provisions of this Amendment in any
jurisdiction.
4.5 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon, inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto.
4.6 CONSTRUCTION. The headings of the various sections and subsections of this
Amendment have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof.
4.7 COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. This Amendment shall
become effective upon the execution and delivery of a counterpart hereof by each
of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.
EVEREST REINSURANCE HOLDINGS, INC.
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By: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & Comptroller
FIRST UNION NATIONAL BANK
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By: Xxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
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