FIRST AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of the 16th day of July, 2003 (this “Amendment”), is made among HILB, XXXXX AND XXXXXXXX COMPANY, a Virginia corporation (the “Borrower”), and WACHOVIA BANK, NATIONAL ASSOCIATION (the “Administrative Agent”) on behalf of the Required Lenders (as defined in the Credit Agreement described below).
RECITALS
A.
The Borrower, the Administrative Agent and the banks and financial institutions listed on the signature pages thereof or that became parties thereto after the date thereof (collectively the “Lenders”) are parties to a Second Amended and Restated Credit Agreement, dated as of July 1, 2002 (the “Credit Agreement”), providing for the availability of a 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 desires to make a voluntary prepayment of the Term Loans and has requested that such prepayment be applied solely to reduce the outstanding principal amount of the Tranche A Term Loans (and not pro rata among the Tranche A Term Loans and Tranche B Term Loans). The Borrower has requested that the Agent and the Lenders (i) amend the Credit Agreement to permit such a prepayment and (ii) make certain other amendments as set forth herein. The Administrative Agent and the Lenders have agreed to effect such amendments on the terms and subject to the 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
New Definition. Section 1.1 of the Credit Agreement is hereby amended by adding the following definition of “First Amendment” in appropriate alphabetical order:
“First Amendment” shall mean the First Amendment to Credit Agreement, dated as of July 16, 2003, between the Borrower, the Administrative Agent and the Lenders.
1.2
Existing Definitions. Section 1.1 of the Credit Agreement is hereby amended as follows:
(a)
The matrix set forth in the definition of “Applicable Margin Percentage” is amended by deleting and replacing it in its entirety with the following:
Leverage Ratio | Applicable | Applicable | Applicable | Applicable | Applicable | |
Greater than or equal to | 1.000% | 2.000% | 2.000% | 2.750% | 0.400% | |
Greater than or equal to | 0.750% | 1.750% | 2.000% | 2.750% | 0.375% | |
Less than | 0.500% | 1.500% | 2.000% | 2.750% | 0.350% |
(b)
The definition of “Consolidated Fixed Charges” is amended by deleting the period at the end thereof and replacing it with the following “; provided, however, that Consolidated Fixed Charges shall not include the first $30,000,000 expended after the date of the First Amendment with respect to Capital Stock repurchases or earnout payments under subsections (d) or (e) above.”
1.3
Voluntary Prepayments. Section 2.7(b) is hereby amended by inserting the following immediately after the first sentence thereof:
Notwithstanding anything in this Section 2.7(b) to the contrary, the Borrower may, at its option, direct that one voluntary prepayment, made on or before July 31, 2003, be applied solely to the remaining scheduled principal payments on the Tranche A Term Loans (and not pro rata among the Tranche A Term Loans and the Tranche B Term Loans).
1.4
Permitted Acquisitions. Section 5.8(a) is hereby amended by:
(a)
deleting the reference to “$100,000,000” in clause (iii) and replacing it with “$125,000,000”.
(b)
deleting the reference to “$75,000,000” in clause (iv) and replacing it with “$100,000,000; provided that, for any period of four consecutive fiscal quarters that includes the
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fiscal quarter ending September 30, 2003, such amount shall be (x) $130,000,000 less (y) the amount by which Capital Stock repurchases during the fiscal year ending December 31, 2003 exceeds $20,000,000”.
(c)
amending and restating clause (v) as follows: “(v) the Acquisition Amount (without regard to the issuance of Capital Stock of the Borrower) with respect to such Acquisition (but specifically excluding, if applicable, any Acquisition consummated on or prior to the Closing Date) paid, incurred or assumed by the Borrower and its Subsidiaries during any period of four consecutive fiscal quarters shall not exceed $35,000,000; and”.
(d)
deleting the reference to “$375,000,000” in clause (vi) and replacing it with “$400,000,000”.
1.5
Indebtedness. Section 7.2 is hereby amended by:
(a)
amending and restating clause (ix) as follows:
(ix)
cash earnout and contingent obligations due and owing by the Borrower or its Subsidiaries in connection with Permitted Acquisitions or Acquisitions that (a) are paid by the Borrower or one of its Subsidiaries within five (5) Business Days of becoming due, or (b) otherwise do not exceed $30,000,000 in aggregate amount at any time;
(b)
amending and restating clause (xi) as follows:
(xi)
reimbursement obligations with respect to secured letters of credit issued to insurance companies in an aggregate amount not to exceed $5,000,000 at any time;
1.6
Restricted Payments. Section 7.6(a) is hereby amended by:
(a)
deleting the reference to “$20,000,000” in clause (ii) and replacing it with “$30,000,000”.
(b)
amending and restating clause (iii) as follows:
(iii)
the Borrower may purchase, redeem, retire or otherwise acquire shares of its Capital Stock (A) in order to fund its Deferred Compensation Plans and (B) in addition thereto, in an aggregate amount not to exceed (I) during the fiscal year ending December 31, 2003, (x) $50,000,000 less (y) the amount by which the cash Acquisition Amount described in Section 5.8(a)(iv) and paid during such fiscal year exceeds $100,000,000 and (II) during any fiscal year thereafter, $20,000,000, provided that, in each case, immediately after giving effect thereto, no Default or Event of Default would exist; and
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ARTICLE II
EFFECTIVENESS
This Agreement shall become effective on the date when the last of the following conditions shall have been satisfied:
(a)
The Administrative Agent shall have received counterparts of this Amendment, duly executed by the Borrower and the Subsidiary Guarantors;
(b)
The Administrative Agent shall have received the approval of this Amendment from the Required Lenders (and, in addition to the foregoing, with respect to the amendment contemplated by Section 1.3 the approval of Lenders holding more than fifty-one percent (51%) of the aggregate outstanding principal amount of Tranche B Term Loans); provided that nothing in this ARTICLE II shall prevent the amendments contemplated hereby, other than the amendment contemplated by Section 1.3 hereof, from becoming effective upon the approval of the Borrower and the Required Lenders; and
(c)
The Borrower shall have paid to the Administrative Agent, for the account of each Tranche B Lender executing this Amendment, a fee equal to 0.075% of the Tranche B Term Loans held by such Tranche B Lender as of the date hereof.
ARTICLE III
ACKNOWLEDGEMENT
The Subsidiary Guarantors hereby acknowledge that the Borrower, the Administrative Agent and the Required Lenders have agreed, as provided herein, to amend the Credit Agreement as provided herein. Each Subsidiary Guarantor hereby approves and consents to the transactions contemplated by this Amendment and agrees that its obligations under the Subsidiary Guaranty and the other Credit Documents to which it is a party shall not be diminished as a result of the execution of this Amendment. This acknowledgement by the Subsidiary Guarantors is made and delivered to induce the Administrative Agent and the Lenders to enter into this Amendment, and the Subsidiary Guarantors acknowledge that the Administrative Agent and the Lenders would not enter into this Amendment in the absence of the acknowledgements contained herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Administrative Agent and the Lenders as follows:
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4.1
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 in all material respects 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 in all material respects as of such date).
4.2
No Default. After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
ARTICLE V
MISCELLANEOUS
5.1
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.
5.2
Governing Law. This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of New York (without regard to the conflicts of law provisions thereof).
5.3
Expenses. The Borrower agrees to pay upon demand all reasonable out-of-pocket costs and expenses of the Administrative Agent (including, without limitation, the reasonable fees and expenses of counsel to the Administrative Agent) in connection with the preparation, negotiation, execution and delivery of this Amendment and the other Credit Documents delivered in connection herewith.
5.4
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.
5.5
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.
5.6
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.
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5.7
Counterparts. 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.
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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.
HILB, XXXXX AND XXXXXXXX COMPANY
By:
/s/ Xxxxxxx Xxxxx
Title:
Senior Vice President, Chief Financial Officer and Treasurer
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent on behalf of the Required Lenders
By:
/s/ Xxxxxxx X. Xxxxx
Title:
Director
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For purposes of Article III only:
HILB, XXXXX AND XXXXXXXX INVESTMENT COMPANY
HILB, XXXXX AND XXXXXXXX REALTY COMPANY
HILB, XXXXX AND XXXXXXXX SERVICES COMPANY
HILB, XXXXX AND XXXXXXXX COMPANY OF ALABAMA, INC.
BEIERSDOERFER, XXXXXXX & XXXXX, INC.
HILB, XXXXX AND XXXXXXXX COMPANY OF ARIZONA
HRH INSURANCE SERVICES OF THE COACHELLAVALLEY, INC.
HILB, XXXXX AND XXXXXXXX INSURANCE SERVICES
OF CENTRAL CALIFORNIA, INC.
XXXXXX & XXXXX INSURANCE AGENCY OF ORANGE COUNTY
HRH OF NORTHERN CALIFORNIA INSURANCE SERVICES, INC.
PROFESSIONAL PRACTICE INSURANCE BROKERS, INC.
HILB, XXXXX AND XXXXXXXX INSURANCE SERVICES
OF SAN DIEGO, INC.
ARIS/B&W INSURANCE SERVICES, INC.
SUMMIT RISK MANAGEMENT & INSURANCE SERVICES, INC.
HILB, XXXXX AND XXXXXXXX COMPANY OF DENVER
HILB, XXXXX AND XXXXXXXX COMPANY OF CONNECTICUT, LLC
THE MANAGING AGENCY GROUP, INC.
PREMIUM FUNDING ASSOCIATES, INC.
XXXXXX X. XXXXXX & ASSOCIATES, INC.
HILB, XXXXX AND XXXXXXXX COMPANY
OF GAINESVILLE, FLORIDA, INC.
XXXX INSURANCE GROUP, INC.
INSURANCE CONSULTANTS & ANALYSTS, INC.
HILB, XXXXX AND XXXXXXXX COMPANY OF XXXXXXX
XXXX, XXXXX AND XXXXXXXX COMPANY OF SARASOTA
HILB, XXXXX AND XXXXXXXX COMPANY OF SOUTH FLORIDA
HILB, XXXXX AND XXXXXXXX COMPANY OF TAMPA BAY, INC.
HILB, XXXXX AND XXXXXXXX COMPANY OF ATLANTA
HILB, XXXXX AND XXXXXXXX COMPANY OF GAINESVILLE, GEORGIA
HILB, XXXXX AND XXXXXXXX COMPANY OF SAVANNAH, INC.
HILB, XXXXX AND XXXXXXXX COMPANY OF ILLINOIS
XXXXXXX, XXXXXXXX & PRIEST, INC.
THE XXXXXX CORPORATION
THE XXXXXX AGENCY
THE XXXXXX CORPORATION OF NEW HAMPSHIRE
HILB, XXXXX AND XXXXXXXX COMPANY OF BALTIMORE
HILB, XXXXX AND XXXXXXXX COMPANY OF
METROPOLITAN WASHINGTON
HILB, XXXXX AND XXXXXXXX INSURANCE
AGENCY OF MASSACHUSETTS, LLC
HILB, XXXXX AND XXXXXXXX COMPANY OF GRAND RAPIDS
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HILB, XXXXX AND XXXXXXXX COMPANY OF PORT HURON
HRH INSURANCE SERVICES OF NEVADA, INC.
ASHURST PROCESSING AGENCY, INC.
XXXXXXXX LIFE ASSOCIATES, LLC
HILB, XXXXX AND XXXXXXXX COMPANY
OF NORTHERN NEW JERSEY, LLC
HRH CONSULTING GROUP, LLC
HILB, XXXXX AND XXXXXXXX COMPANY OF NEW YORK, LLC
KAMMSAC INTERNATIONAL, LLC
XXXXXX-XXXXXX HOLDINGS, LLC
PROPERTY OWNERS & MANAGERS PURCHASING GROUP, INC.
HILB, XXXXX AND XXXXXXXX COMPANY OF
UPSTATE NEW YORK, LLC
PROFESSIONAL PRACTICES INSURANCE BROKERS, INC. (SOUTHEAST)
BOAHC, INC. D/B/A XXXXXXXXX XXXXXXXX ASSOCIATES
BOAEB AGENCY, INC.
BOAFS AGENCY, INC.
MIDWEST PENSION SERVICES, INC.
BOAPC AGENCY, INC.
HILB, XXXXX AND XXXXXXXX COMPANY OF OKLAHOMA
HILB, XXXXX AND XXXXXXXX COMPANY OF OREGON
HILB, XXXXX AND XXXXXXXX COMPANY OF PHILADELPHIA, LLC
HILB, XXXXX AND XXXXXXXX COMPANY OF PITTSBURGH, LLC
HRH MERGER COMPANY
HILB, XXXXX AND XXXXXXXX COMPANY OF SAN XXXXXXX
XXXX, XXXXX AND XXXXXXXX COMPANY OF TEXAS
HILB, XXXXX AND XXXXXXXX COMPANY OF VIRGINIA
XXXXXXX X. XXXXX INSURANCE SERVICES, INC.
INTEGRATED RISK SOLUTIONS INSURANCE SERVICES, LLC
TLC XXXXX, LLC
WESTPORT FINANCIAL SERVICES, LLC
WESTPORT INSURANCE AGENCY, LLC
WESTPORT WORLDWIDE, LLC
WESTPORT INSURANCE BROKERAGE, LLC
STAFFING RISK SOLUTIONS, LLC
BAY TECHNOLOGY GROUP, LLC
XXXXX GROUP, INC. (OH)
XXXXX GROUP, INC. (MD)
XXXXX GROUP, INC. (MA)
XXXXX GROUP INVESTMENT ADVISORS, LLC
XXXXX GROUP LIMITED LIABILITY COMPANY
XXXXX GROUP, LLC
XXXXX XXX CORP.
INTEGRATED RISK SOLUTIONS INSURANCE SERVICES, LLC
XXXXX GROUP INSURANCE BROKERS, LLC
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XXXXX/OFJ ACQUISITION CORP.
X’XXXXX, XXXXXXXX & XXXXXX INSURANCE AGENCY, INC.
XXXXX GROUP (NY), LLC
XXXXXXX & COMPANY, LLC
XXXXX GROUP, INC. (TX)
HRH OF COLORADO MERGER COMPANY
XXXXXXX & COMPANY OF WYOMING, INC.
DOMINION SPECIALTY GROUP, INC.
By:
/s/ Xxxxxx X. Xxxxx
Title:
Senior Vice President, General Counsel and Secretary
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