EXHIBIT 10.01
SIXTH AMENDMENT
TO THE
CREDIT AGREEMENT
Dated as of June 17, 1999
This SIXTH AMENDMENT dated as of June 17, 1999 (this "Sixth Amendment") is
between THE CENTRIS GROUP, INC., a Delaware corporation, formerly known as US
Facilities Corporation (the "Borrower"), and FLEET NATIONAL BANK, a national
banking association, formerly known as Shawmut Bank Connecticut, N.A. and Fleet
National Bank of Connecticut (the "Bank").
PRELIMINARY STATEMENTS. The Borrower and the Bank entered into a Credit
Agreement dated as of December 20, 1994, which agreement was amended by a First
Amendment to the Credit Agreement dated as of March 29, 1996, a Second Amendment
to the Credit Agreement dated as of July 1, 1996, a Third Amendment to the
Credit Agreement dated as of September 30, 1998, a Fourth Amendment to the
Credit Agreement (Amending and Restating the Credit Agreement) dated as of
October 26, 1998 and a Fifth Amendment to the Credit Agreement (Amending and
Restating the Credit Agreement) dated as of December 28, 1998 (as so amended the
"Credit Agreement"). The Borrower has requested the Bank to waive certain
Events of Default and to amend certain covenants and has agreed to a revision of
the schedule of commitment reductions under the Credit Agreement. The Bank is
agreeable to the Borrower's request subject to certain terms and conditions.
Accordingly, the Borrower and the Bank agree as follows:
Section 1. Amendments to the Credit Agreement. Effective as of the
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effective date hereof and subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the Credit Agreement is hereby amended
as follows:
(a) The definition of "Applicable Margin" in Section 1.1 of the Credit
Agreement is replaced with the following:
"Applicable Margin" means:
(a) with respect to Base Rate Loans, the rate per annum for each
rating level period set forth in the schedule below:
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Applicable Margin
-----------------
Level I Period 1.00%
Level II Period .75%
Level III Period .50%
(b) with respect to CD Rate Loans, the rate per annum for each rating
level period set forth in the schedule below:
Applicable Margin
-----------------
Level I Period 2.625%
Level II Period 2.375%
Level III Period 2.125%
(c) with respect to Eurodollar Rate Loans, the rate per annum for
each rating level period set forth in the schedule below:
Applicable Margin
-----------------
Level I Period 1.25%
Level II Period 1.00%
Level III Period .75%
(b) The definition of "Level I Period" in Section 1.1 of the Credit
Agreement is replaced with the following:
"Level I Period" shall mean any period during which the consolidated
Debt of the Borrower and its Subsidiaries is greater than or equal to
20% of its Total Capitalization.
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(c) The definition of "Level II Period" in Section 1.1 of the Credit
Agreement is replaced with the following:
"Level II Period" shall mean any period during which the consolidated
Debt of the Borrower and its Subsidiaries is greater than or equal to
15% and less than 20% of its Total Capitalization.
(d) The following definition shall be added after the definition of "Level
II Period" in Section 1.1 of the Credit Agreement:
"Level III Period" shall mean any period during which the consolidated
Debt of the Borrower and its Subsidiaries is less than 15% of its
Total Capitalization.
(e) The following definition shall be added after the definition of "Lien"
in Section 1.1 the Credit Agreement:
"Life Net Premiums Written" for any period means the combined net
premiums of each Insurance Subsidiary of the Borrower which conducts a
life insurance business. On the annual SAP Financial Statements form
for life companies, for the year ended December 31, 1998, the net
premiums appear on line 20d, column (1) on page 8 thereof.
(f) The definition of "Pledge Agreements" in Section 1.1 of the Credit
Agreement is replaced with the following:
"Pledge Agreements" mean collectively the Seaboard Pledge Agreement,
USF RE Pledge Agreement, the VASA North Atlantic Pledge Agreement and
the USFIC Pledge Agreement (upon its due execution).
(g) The following definition shall be added after the definition of
"Property" in Section 1.1 of the Credit Agreement:
"Property and Casualty Net Premiums Written" for any period means the
combined net property and casualty premiums of each Insurance
Subsidiary of the Borrower which conducts a property and casualty
business. On the annual SAP Financial Statements form for property and
casualty companies for the year ended December 31, 1998, the net
premiums appear on line 32, column (1) on page [7] thereof.
(h) The definition of "Net Premiums Written" in Section 1.1 of the Credit
Agreement is deleted.
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(i) The definition of "Statutory Net Income" in Section 1.1 of the Credit
Agreement is replaced with the following:
"Statutory Net Income" means, for any period the net income of each
Insurance Subsidiary of the Borrower that appears, or should appear,
on the SAP Financial Statements. On the respective annual SAP
Financial Statements form for life companies for the year ended
December 31, 1998, the net income amount appears on line 33, column
(1), on page 4 thereof. On the respective annual SAP Financial
Statements form for property and casualty companies for the year ended
December 31, 1998, the net income amount appears on line 16, column
(1), on page 4 thereof.
(j) The definition of "Statutory Surplus" in Section 1.1 of the Credit
Agreement is replaced with the following:
"Statutory Surplus" of any Insurance Subsidiary means, for any period,
the surplus of such Insurance Subsidiary that appears, or should
appear, on the SAP Financial Statements of such Insurance Subsidiary.
On the annual SAP Financial Statements form prescribed for life
companies for the year ended December 31, 1998, such amount appears on
line 37, column (1), on page 3 thereof. On the annual SAP Financial
Statements form prescribed for property and casualty companies for the
year ended December 31, 1998, such amount appears on line 27, column
(1), on page 3 thereof.
(k) The following definition shall be added after the definition of
"USFIC" in Section 1.1 of the Credit Agreement:
"US Holdings Guaranty" means the Guaranty Agreement duly executed by
US Holdings, Inc., a Delaware corporation, and delivered to the Bank
in form and substance satisfactory to the Bank.
(l) The following definition shall be added after the definition of "US
Holdings Guaranty" in Section 1.1 of the Credit Agreement:
"USFIC Pledge Agreement" means the Pledge Agreement duly executed by
US Holdings, Inc. and delivered to the Bank in form and substance
satisfactory to the Bank.
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(m) Subsection (a) of Section 2.1 (The Revolving Loans) of the Credit
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Agreement is replaced with the following:
(a) Subject to the terms and conditions of this Agreement, the Bank
agrees to make revolving loans to the Borrower (hereinafter
collectively referred to as "Revolving Loans") from time to time
from and including the date hereof until the earlier of the
Revolving Loan Termination Date or the termination of the
Commitment of the Bank, up to, but not exceeding in the aggregate
principal amount at any one time outstanding, the amount of
SEVENTY-TWO MILLION FIVE HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($72,550,000.00). The Commitment is subject to mandatory
reduction as set forth in Section 2.5.
(n) Section 2.1 (The Revolving Loans) of the Credit Agreement is amended
---------------------------------
to add the following Subsection (c):
(c) The Borrower shall not have any Borrowings outstanding after
September 30, 1999 unless on or prior to September 30, 1999, the
Bank shall have received (i) the USFIC Pledge Agreement duly
executed by the Borrower, dated on or prior to September 30, 1999
together with appropriate stock certificates, undated stock
powers executed in blank and Uniform Commercial Code financing
statements relating thereto, (ii) a favorable opinion of counsel
to the Borrower dated the date of the USFIC Pledge Agreement in
form and substance satisfactory to the Bank and its special
counsel, (iii) a copy of each consent, license approval and
notice required in connection with the execution, delivery,
performance, validity and enforceability of the USFIC Pledge
Agreement, (iv) a certificate of the Secretary or Assistant
Secretary of US Holdings, Inc., dated the date of the USFIC
Pledge Agreement, attesting on behalf of US Holdings, Inc. to all
corporate action taken by it, including resolutions of its Board
of Directors authorizing the execution, delivery and performance
of the USFIC Pledge Agreement and each other document to be
delivered pursuant to the USFIC Pledge Agreement, and attesting
that its Certificate of Incorporation and Bylaws have not been
amended since the date of their prior delivery to the Bank and
are in full force and effect and attesting to the names and true
signatures of the officers of US Holdings, Inc. authorized to
sign the USFIC Pledge Agreement and the other documents delivered
by US Holdings, Inc. and (iv) such other
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documents, certificates and opinions as the Bank or its special
counsel may reasonably request.
(o) Section 2.5 (Mandatory Reduction of Commitment) of the Credit
-----------------------------------------------
Agreement is replaced with the following:
(a) The Commitment of the Bank to make Revolving Loans shall be
automatically and permanently reduced by the amount of
$47,550,000 on the earlier to occur of (i) the receipt by the
Borrower or any Subsidiary of the Net Available Proceeds realized
upon the USF RE Sale or (ii) June 30, 1999. Upon receipt by the
Bank of the principal payment under the Credit Agreement of
$47,550,000, the reduction of the Bank's Commitment to
$25,000,000 pursuant to this Section 2.5(a) and the receipt by
the Bank of all opinions delivered by the Borrower or any of its
counsel in connection with the USF RE Sale containing appropriate
language allowing the Bank to rely on such opinions, the Bank
shall release the pledge of the shares of USF RE.
(b) Commencing March 31, 2000 and continuing on each succeeding June
30, September 30, December 31 and March 31 thereafter until the
Revolving Loan Termination Date, the Commitment of the Bank to
make Revolving Loans shall be automatically and permanently
reduced by $1,500,000 except that on the Revolving Loan
Termination Date, the Commitment shall be automatically and
permanently reduced to zero.
(c) On the effective date of each reduction of the Commitment of the
Bank pursuant to Section 2.5(a) and (b) the Borrower shall repay
such principal amount (together with accrued interest thereon and
any amount due pursuant to Section 2.7(b)) of outstanding
Revolving Loans, if any, as may be necessary so that after such
repayment, the aggregate unpaid principal amount of the Revolving
Loans does not exceed the Commitment as then reduced.
(p) Clause (b) of the Proviso in Section 7.5 (Mergers and Consolidations
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and Acquisitions of Assets) of the Credit Agreement is replaced with the
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following:
(b) the aggregate purchase price and other consideration paid or
payable by the Borrower for all such mergers and/or acquisitions
shall not exceed $5,000,000 in the aggregate during the term of
this Agreement.
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(q) Section 7.9 (Capital Expenditures) of the Credit Agreement is replaced
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with the following:
Make or permit to be made any Capital Expenditure in any fiscal year,
or commit to make any Capital Expenditure in any fiscal year, which
when added to the aggregate Capital Expenditures of the Borrower and
its Subsidiaries theretofore made or committed to be made in that
fiscal year, would exceed $1,500,000.
(r) Section 7.11 (Minimum Consolidated GAAP Net Worth) of the Credit
--------------------------------------------------
Agreement is replaced with the following:
As of the end of any fiscal quarter, commencing with the quarter
ending September 30, 1999, permit Consolidated GAAP Net Worth of the
Borrower and its Subsidiaries to be less than an amount equal to the
sum of (a) $78,000,000, plus (b) 50% of cumulative positive net income
(as determined in accordance with GAAP) for each fiscal quarter
following the fiscal quarter ending June 30, 1998, plus (c) the amount
of paid-in capital resulting from any issuance by the Borrower of its
capital stock after June 17, 1999.
(s) Section 7.12 (Maximum Premiums to Surplus) of the Credit Agreement is
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replaced with the following:
(i) As of the end of each fiscal quarter, permit the ratio of
combined Property and Casualty Net Premiums Written of all of the
Insurance Subsidiaries of the Borrower for the immediately preceding
four fiscal quarters (ending on such date) to combined Statutory
Surplus of such Insurance Subsidiaries at the end of such fiscal
quarter to be greater than 2.0 to 1.
(ii) As of the end of each fiscal quarter, permit the ratio of
combined Life Net Premiums Written of all of the Insurance
Subsidiaries of the Borrower for the immediately preceding four fiscal
quarters (ending on such date) to combined Statutory Surplus of such
Insurance Subsidiaries at the end of such fiscal quarter to be greater
than 5.0 to 1.
(t) Section 7.14 (Minimum Interest Coverage) of the Credit Agreement is
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replaced with the following:
As of the end of each fiscal quarter during the periods set forth
below, for each Insurance Subsidiary, permit the ratio of (a) the sum
of (i) Available
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Dividends, minus dividends paid by such Insurance Subsidiary to the
Borrower for the immediately preceding four fiscal quarters (ending on
such date), plus (ii) an amount equal to the aggregate consolidating
GAAP EBIT of the Borrower and all Subsidiaries (eliminating
intercompany balances and transactions, as applicable), except the
Insurance Subsidiaries, for the immediately preceding four fiscal
quarters (ending on such date) to (b) Interest Expense for the
immediately succeeding four fiscal quarters (beginning on such date)
to be less than (i) 2.0 to 1 for the fiscal year ending December 31,
1995, and (ii) 3.0 to 1 for each fiscal year thereafter. For purposes
of clause (b) above, Interest Expense shall be calculated on the
assumption that Base Rate Loans for the full amount of the Commitment
will be outstanding for the succeeding four fiscal quarters.
(u) Section 7.15 (Minimum Fixed Charge Coverage) of the Credit Agreement
--------------------------------------------
is replaced with the following:
As of the end of each fiscal quarter during the periods set forth
below, for each Insurance Subsidiary, permit the ratio of (a) the sum
of (i) Available Dividends, minus dividends paid by such Insurance
Subsidiary to the Borrower for the immediately preceding four fiscal
quarters (ending on such date), plus (ii) an amount equal to the
aggregate consolidating GAAP EBIT of the Borrower and all Subsidiaries
(eliminating intercompany balances and transactions, as applicable),
except Insurance Subsidiaries, for the immediately preceding four
fiscal quarters (ending on such date) to (b) Fixed Charges for the
immediately succeeding four fiscal quarters (beginning on such date)
to be less than (i) 1.5 to 1 for the fiscal year ending December 31,
1995, and (ii) 1.7 to 1 for each fiscal year thereafter. For purposes
of clause (b) above, Interest Expense shall be calculated on the
assumption that Base Rate Loans for the full amount of the Commitment
will be outstanding for the succeeding four fiscal quarters.
(v) Section 7.16 (Minimum Debt Service Coverage) of the Credit Agreement
--------------------------------------------
is replaced with the following:
As of the end of each fiscal quarter, permit the Debt Service Coverage
Ratio for each Insurance Subsidiary for the immediately preceding four
fiscal quarters (ending on such date) to be less than 1.2 to 1.
(w) Section 7.21 (Debt to Capital Ratio) of the Credit Agreement is
------------------------------------
replaced with the following:
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Permit the consolidated Debt of the Borrower and its Subsidiaries to
exceed 45% of Total Capitalization during the period December 28, 1998
to and including June 30, 1999 or 25% of Total Capitalization after
June 30, 1999.
(x) The following section is added after Section 7.21 of the Credit
Agreement:
Section 7.22. Investment in Subsidiaries. Permit any Investment by
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the Borrower in Subsidiaries in an amount greater than $10,000,000 in
the aggregate during any twelve-month period commencing June 17, 1999.
(y) Schedule 1.1 (Commitments and Lending Offices) of the Credit Agreement
----------------------------------------------
is replaced with Schedule 1.1 attached hereto.
(z) Exhibit A (Revolving Note) of the Credit Agreement is replaced with
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Exhibit A attached hereto.
(aa) Exhibit C (Officer's Certificate) of the Credit Agreement is replaced
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with Exhibit C attached hereto.
Section 2. Waivers.
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(a) The Bank hereby waives, effective as of the date hereof, the Events of
Default that occurred under the Credit Agreement as a result of the failure of
the Borrower to comply with Sections 7.11, 7.14, 7.15 and 7.16 of the Credit
Agreement for the fiscal quarters ended December 31, 1998 and March 31, 1999.
(b) Except as otherwise expressly provided for herein, nothing in this
Sixth Amendment shall extend to or affect in any way any of the Borrower's
obligations or the Bank's rights and remedies arising under the Credit Agreement
or the Revolving Note, and the Bank shall not be deemed to have waived any of
the Bank's rights or remedies with respect to any Event of Default or event or
condition which, with notice or the lapse of time, or both would become an Event
of Default and which upon the Borrowers' execution and delivery of this Sixth
Amendment might otherwise exist or which might hereafter occur.
Section 3. Conditions of Effectiveness. This Sixth Amendment shall become
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effective when, and only when, the Bank shall have received a counterpart of
this Sixth
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Amendment executed by the Borrower and shall have additionally received, in form
and substance satisfactory to the Bank:
(a) A certificate of a Senior Officer of the Borrower stating that:
(i) the representations and warranties contained in Article 5 of the
Credit Agreement are correct on and as of the date of such certificate
as though made on and as of such date (or, if such representation or
warranty is expressly stated to have been made as of a specific date,
as of such specific date);
(ii) other than the Events of Default identified in Section 2(a)
above, no Event of Default or Default has occurred and is continuing
or would result from the signing of this Sixth Amendment or the
transactions contemplated thereby; and
(iii) there has been no material adverse change in the financial
condition, operations, Properties, business or business prospects of
the Borrower and its Subsidiaries, if any, since March 31, 1999.
(b) A Revolving Note for the account of the Bank duly executed by the
Borrower.
(c) A certificate of the Secretary or Assistant Secretary of the Borrower,
dated the Amendment Closing Date, attesting on behalf of the Borrower to all
corporate action taken by the Borrower, including resolutions of its Board of
Directors authorizing the execution, delivery and performance of this Sixth
Amendment, the Revolving Note and each other document to be delivered pursuant
to this Sixth Amendment, and attesting to the names and true signatures of the
officers of the Borrower authorized to sign this Sixth Amendment, the Revolving
Note and the other documents to be delivered by the Borrower under this Sixth
Amendment.
(d) The US Holdings Guaranty duly executed by US Holdings, Inc.
(e) A certificate of the Secretary or Assistant Secretary of US Holdings,
Inc., dated the date of the Amendment Closing Date, attesting on behalf of US
Holdings, Inc. to all corporate action taken by it, including resolutions of its
Board of Directors authorizing the execution, delivery and performance of the US
Holdings Guaranty and each other document to be delivered pursuant to the US
Holdings Guaranty, and attesting that its Certificate of Incorporation and
Bylaws are in full force and effect and are attaching true and correct copies of
such documents and attesting to the names and
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true signatures of the officers of US Holdings, Inc. authorized to sign the US
Holdings Guaranty and the other documents delivered by US Holdings, Inc. and
(f) A certificate of good standing, including a tax good standing, for US
Holdings, Inc. from the Secretary of the State of the state of its
incorporation.
(g) A favorable opinion of X.X. Xxxx, Professional Law Corporation,
counsel to the Borrower, dated the effective date hereof, in form and substance
satisfactory to the Bank and its special counsel.
(h) Payment to the Bank of an amendment fee in the amount of $37,500.
(i) Payment to Day, Xxxxx & Xxxxxx LLP, special counsel to the Bank, of
its legal fees and disbursements.
(j) All information and documents relating to the Borrower, as the Bank
may reasonably request, all in form and substance satisfactory to the Bank and
its special counsel.
Section 4. Representations and Warranties of the Borrower. The Borrower
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represents as follows:
(a) The execution, delivery and performance by the Borrower of this Sixth
Amendment have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of its shareholders; (ii)
violate any provisions of its articles of incorporation or by-laws; (iii)
violate any provision of, or require any filing, registration, consent or
approval under, any law, rule, regulation (including without limitation,
Regulation U and X), order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to and binding upon the Borrower
or any Subsidiary; (iv) result in a breach of or constitute a default or require
any consent under any indenture or loan or credit agreement or any other
material agreement, lease or instrument to which the Borrower or any Subsidiary
is a party or by which it or its Properties may be bound; or (v) result in, or
require, the creation or imposition of any Lien upon or with respect to any of
the Properties now owned or hereafter acquired by the Borrower.
(b) No authorization, consent, approval, order, license or permit from, or
filing, registration or qualification with, or exemption by, any governmental or
public body or authority, or any subdivision thereof, or any other Person,
including without limitation, the California or Massachusetts Insurance
Commissioner, is required to authorize, or is required in connection with the
execution, delivery and performance by the Borrower of, or the legality,
validity, binding effect or enforceability of, this Sixth Amendment.
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(c) This Sixth Amendment constitutes the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally and by general principles of equity.
(d) No actions, suits or proceedings or investigations (other than routine
examinations performed by insurance regulatory authorities) are pending or, to
the knowledge of the Borrower, threatened against or affecting the Borrower or
any Subsidiary, or any Property of any of them before any court, governmental
agency or arbitrator, which if determined adversely to the Borrower or any
Subsidiary would in any one case or in the aggregate, materially adversely
affect the financial condition, operations, Properties, business or, to the
knowledge of the Borrower, prospects of the Borrower and its Subsidiaries taken
as a whole or the ability of the Borrower to perform its obligations under the
Credit Agreement, as amended by this Sixth Amendment.
(e) No information, exhibit or report furnished in writing by or on behalf
of the Borrower or any officer or director of the Borrower to the Bank in
connection with the negotiation of, or pursuant to the terms of, this Sixth
Amendment contained when made any material misstatement of fact or omitted to
state a material fact necessary to make the statements contained therein not
misleading.
(f) In connection with the USF RE Sale, upon the sale of USF RE, all of
the issued and outstanding shares of the capital stock of US Holdings, Inc. will
be dividended to the Borrower by USF RE and the Borrower will then own all of
the issued and outstanding shares of the capital stock of US Holdings, Inc. and
US Holdings, Inc. will own all of the issued and outstanding shares of the
capital stock of USFIC.
Section 5. Reference to and Effect on the Credit Agreement.
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(a) Upon the effectiveness of this Sixth Amendment, on and after the date
hereof, each reference in the Credit Agreement to "this Credit Agreement",
"hereunder", "hereof", "herein" or words of like import shall mean and be a
reference to the Credit Agreement as amended thereby.
(b) Except as specifically amended above, the Credit Agreement shall
remain in full force and effect and is hereby ratified and confirmed.
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(c) The execution, delivery and effectiveness of this Sixth Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Bank under the Credit Agreement, nor constitute a
waiver of any provision of the Credit Agreement.
Section 6. Costs, Expenses and Taxes. The Borrower agrees to pay on
-------------------------
demand all costs and expenses of the Bank in connection with the preparation,
execution and delivery of this Sixth Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Bank with respect
thereto and with respect to advising the Bank as to its rights and
responsibilities hereunder and thereunder. In addition, the Borrower shall pay
any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of this Sixth Amendment and the other
instruments and documents to be delivered hereunder, and agrees to save the Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
Section 7. Execution in Counterparts. This Sixth Amendment may be
-------------------------
executed in any number of 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.
Section 8. Governing Law. This Sixth Amendment shall be governed by, and
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construed in accordance with, the laws of the State of Connecticut.
Section 9. Defined Terms. Capitalized terms used herein which are not
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expressly defined herein shall have the meanings ascribed to them in the Credit
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE CENTRIS GROUP, INC.
By________________________________
Name:
Title:
FLEET NATIONAL BANK
By________________________________
Name:
Title:
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SCHEDULE 1.1
COMMITMENTS AND LENDING OFFICES
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Percentage
Name and Address of Type of
of Bank Commitment Commitments Loans
---------------- ---------- ----------- ---------
Fleet National Bank Revolving Loans 100% Base Rate
000 Xxxx Xxxxxx $72,550,000 Eurodollar Rate
Xxxxxxxx, Xxxxxxxxxxx 00000 CD Rate
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EXHIBIT A
REVOLVING NOTE
$72,550,000 Hartford, Connecticut
June __, 1999
THE CENTRIS GROUP, INC., formerly known as US Facilities Corporation (the
"Borrower"), for value received, hereby unconditionally promises to pay to the
order of FLEET NATIONAL BANK, a national banking association, formerly known as
Shawmut Bank Connecticut, N.A. and Fleet National Bank of Connecticut (the
"Bank") at its office located at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
for the account of the appropriate Lending Office of the Bank, the principal sum
of SEVENTY-TWO MILLION FIVE HUNDRED FIFTY THOUSAND AND NO/100 Dollars
($72,550,000) or, if less, the unpaid principal amount loaned by the Bank to the
Borrower pursuant to the Agreement referred to below, in lawful money of the
United States of America and in immediately available funds, on the date(s) and
in the manner provided in said Agreement. The Borrower also promises to pay
interest on the unpaid principal balance hereof, for the period such balance is
outstanding, at said principal office for the account of said Lending Office, in
like money, at the rates of interest, on the date(s) and in the manner provided
in said Agreement; and to pay interest on any overdue principal and interest at
the Default Rate.
The date, type, amount and maturity date of each Revolving Loan made by the
Bank to the Borrower under the Agreement referred to below, and each payment of
principal thereof, shall be recorded by the Bank on its books and, prior to any
transfer of this Revolving Note (or, at the discretion of the Bank, at any other
time), endorsed by the Bank on the schedule attached hereto or any continuation
thereof or otherwise recorded and maintained in its internal records.
This is the Revolving Note referred to in that certain Credit Agreement
dated as of December 20, 1994 (as heretofore amended and hereafter amended from
time to time, the "Agreement") between the Borrower and the Bank and evidences
the Revolving Loans made by the Bank thereunder and is secured by the Pledge
Agreements as set forth in the Agreement and is entitled to the benefits
thereof. All terms not defined herein shall have the meanings given to them in
the Agreement.
The Agreement provides for the acceleration of the maturity of this
Revolving Note upon the occurrence of certain Events of Default and for
prepayments on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Revolving Note.
No waiver of any right or remedy under this Revolving Note shall in any
event be effective unless the same shall be in writing and signed by the Bank
and the Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
In accordance with the provisions of the Agreement, the Borrower shall
reimburse the Bank on demand for all reasonable costs, expenses and charges
(including without limitation, reasonable fees and charges of external legal
counsel for the Bank and costs allocated by the Bank's internal legal
department) incurred by the Bank in connection with the preparation, performance
or enforcement of this Revolving Note.
This Revolving Note shall be binding on the Borrower and its permitted
successors and assigns and shall inure to the benefit of the Bank and its
permitted successors and assigns, provided that the Borrower may not delegate
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any obligations hereunder without the prior written consent of the Bank.
This Revolving Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of Connecticut.
THE BORROWER EXPRESSLY ACKNOWLEDGES THAT THE REVOLVING LOANS EVIDENCED HEREBY
ARE PART OF A COMMERCIAL TRANSACTION AS SUCH TERM IS USED AND DEFINED IN CHAPTER
903a OF THE CONNECTICUT GENERAL STATUTES AND HEREBY VOLUNTARILY AND KNOWINGLY
WAIVES ANY AND ALL RIGHTS WHICH ARE OR MAY BE CONFERRED UPON IT UNDER CHAPTER
903a OF SAID STATUTES (OR ANY OTHER STATUTE AFFECTING PREJUDGMENT REMEDIES) TO
ANY NOTICE OR HEARING OR PRIOR COURT ORDER OR THE POSTING OF ANY BOND PRIOR TO
ANY PREJUDGMENT REMEDY WHICH THE BANK MAY USE. THE BORROWER ACKNOWLEDGES THAT
IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS TRANSACTION
AND THE REVOLVING LOANS.
IN WITNESS WHEREOF, the undersigned has caused this Revolving Note to be
duly executed as of the day and year first above written.
THE CENTRIS GROUP, INC.
By:______________________________
Print Name:
Print Title:
Schedule to
-----------
Revolving Note
--------------
REVOLVING LOANS AND PAYMENTS
----------------------------
Amount and Payments Unpaid
Type of Maturity Principal/ Principal Notation
Date Loan Date Interest Balance By
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EXHIBIT C
OFFICER'S CERTIFICATE
THE CENTRIS GROUP, INC.
Date:__________________
Pursuant to Section 6.9(a) of the Credit Agreement dated as of December 20,
1994, as amended (the "Credit Agreement") between The Centris Group, Inc.,
formerly known as US Facilities Corporation (the "Borrower"), and Fleet National
Bank, formerly known as Shawmut Bank Connecticut, N.A. and Fleet National Bank
of Connecticut (the "Bank"),
I, _______________, DO HEREBY CERTIFY on behalf of the Borrower that:
1. I am the duly elected, qualified and acting Chief Financial Officer of
the Borrower; and
2. Attached hereto as Attachment 1 is a true and correct copy of the
consolidated and consolidating SAP and GAAP financial statements of
the Borrower and its Subsidiaries as of the close of the fiscal
[year/quarter] ending __________, ____; and
3. I have reviewed the Credit Agreement and the condition and
transactions of the Borrower and its Subsidiaries for the fiscal
[year/quarter] ending _____, ____, and to the best of my knowledge the
Borrower has observed and performed all of its covenants and other
agreements, and satisfied every condition contained in the Credit
Agreement and the Revolving Note, and I have not obtained knowledge of
any condition or event which constitutes a Default or an Event of
Default, except as set forth on Attachment 2 attached hereto; and
4. Attached hereto as Attachment 3 is true and correct information (with
detailed calculations) establishing that the Borrower was in
compliance with the covenants set forth in the Credit Agreement during
the fiscal [year/quarter] ending __________ ___, ____.
Except as otherwise defined herein, terms used herein shall have the meanings
set forth in the Credit Agreement, pursuant to which this certificate is
delivered.
IN WITNESS WHEREOF, I have signed this certificate as of the date hereof on
behalf of ___________________.
By:__________________________________
Print Name:
Title: Chief Financial Officer
ATTACHMENT 1
to
Officer's Certificate
Financial Statements
--------------------
for the period ending
_________________ __, ____
ATTACHMENT 2
to
Officer's Certificate
Defaults and Events of Default
------------------------------
Note: If a Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof and the action proposed to be taken by
the Borrower with respect thereto as required.
ATTACHMENT 3
to
Officer's Certificate
Page 1 of 6
Computations and Information
Showing Compliance with
Sections 7.9 to 7.16, 7.18, 7.19, 7.21 and 7.22
of the
Credit Agreement
Except as otherwise defined herein, terms used herein shall have the meanings
set forth in the Credit Agreement.
Section 7.9. Capital Expenditures
--------------------
1. Aggregate Capital Expenditures actually made, or committed to be made,
during the fiscal year beginning [fill in date of start of fiscal year] = _________________
2. Line 1 does not exceed $1,500,000.
Section 7.10(a). Minimum Statutory Surplus
-------------------------
1. Statutory Surplus of USF RE as of the fiscal quarter ending ____ __,_____
(prior to the USF RE Sale) = _________________
2. Positive Statutory Net Income for each fiscal quarter following the
fiscal quarter ended December 31, 1995 was:
[Include data for each quarter, as applicable]
2a. The sum of positive Statutory Net Income for each of the quarters set forth
in Line 2 above = _________________
2b. 75% of line 2a = _________________
3. Contributions to surplus made by Borrower to USF RE during each fiscal
quarter following the fiscal quarter ended December 31, 1995 were:
[Include data for each quarter, as applicable]
3a. The sum of the contributions for each of the quarters
set forth in line 3 above = _________________
4. The sum of $80,000,000 and line 2b and line 3a = _________________
5. Line 1 is not less than line 4.
ATTACHMENT 3
to
Officer's Certificate
Page 2 of 6
Section 7.10(b).
1. Combined Statutory Surplus of VASA North Atlantic and Seaboard
as of the fiscal quarter ending ____ __, ____ = ________________
2. Positive Statutory Net Income for each fiscal quarter following the
fiscal quarter ended June 30, 1999 was:
[Include data for each quarter, as applicable]
2a. The sum of positive Statutory Net Income for each of the quarters set forth
in Line 2 above = _________________
2b. 75% of line 2a = _________________
3. Contributions to surplus made by Borrower to VASA North Atlantic and
Seaboard during each fiscal quarter following the fiscal quarter ended June 30,
1999 were:
[Include data for each quarter, as applicable]
3a. The sum of the contributions for each of the quarters
set forth in line 3 above = _________________
4. The sum of $42,500,000 and line 2b and line 3a = _________________
5. Line 1 is not less than line 4.
ATTACHMENT 3
to
Officer's Certificate
Page 3 of 6
Section 7.11. Minimum Consolidated GAAP Net Worth
-----------------------------------
1. Consolidated GAAP Net Worth as of the fiscal quarter ending
______________, _____. = _________________
2. Consolidated positive net income (as determined in accordance with GAAP)
for each fiscal quarter following the fiscal quarter ended [______] was:
[Include data for each quarter, as applicable]
2a. The sum of the positive net income for each of the quarters
set forth in Line 2 above = _________________
2b. 50% of line 2a = _________________
3. Paid-in capital resulting from any issuance by the Borrower of its
capital stock = _________________
4. The sum of $78,000,000 and line 2b and line 3 = _________________
5. Line 1 is not less than line 4.
Section 7.12(i). Maximum Premiums to Surplus
---------------------------
1. Combined Property and Casualty Net Premiums Written by all Insurance
Subsidiaries of the Borrower in the property and casualty business for the
immediately preceding four fiscal quarters (ending on [fill in ending date for
fiscal quarter]) = _________________
2. Combined Statutory Surplus of all such Insurance Subsidiaries at
the end of the fiscal quarter ending on [fill in ending date for fiscal quarter] = _________________
3. The ratio of line 1 to line 2 = _________________
4. The ratio in line 3 is not greater than 2.0 to 1 at the
end of such fiscal quarter.
Section 7.12(ii). Maximum Premiums to Surplus
---------------------------
1. Combined Life Net Premiums Written by all Insurance Subsidiaries of
the Borrower in the life business for the immediately preceding four
fiscal quarters (ending on [fill in ending date for fiscal quarter]) = _________________
2. Combined Statutory Surplus of all such Insurance Subsidiaries at
the end of the fiscal quarter ending on [fill in ending date for fiscal quarter] = _________________
ATTACHMENT 3
to
Officer's Certificate
Page 4 of 6
3. The ratio of line 1 to line 2 = _________________
4. The ratio in line 3 is not greater than 5.0 to 1 at the
end of such fiscal quarter.
Section 7.13. [Reserved.]
Section 7.14. Minimum Interest Coverage.
-------------------------
For each Insurance Subsidiary:
1. Available Dividends minus dividends paid by such Insurance Subsidiary
to the Borrower for the immediately preceding four fiscal quarters ending on
[fill in ending date for fiscal quarter] = _________________
2. Consolidating GAAP EBIT of the Borrower and Subsidiaries
(except Insurance Subsidiaries) for the immediately preceding four
fiscal quarters (ending on [fill in ending date for fiscal quarter]). = _________________
3. The sum of line 1 and line 2 = _________________
4. Interest Expense for the immediately following four fiscal
quarters (beginning on [fill in beginning date for following four fiscal
quarters]) = _________________
5. The ratio of line 3 to line 4 = _________________
6. The ratio in line 5 is not less than 2.0 to 1.0 for the fiscal
year ending December 31, 1995 (3.0 to 1.0 for each fiscal year thereafter).
Section 7.15. Minimum Fixed Charge Coverage.
-----------------------------
For each Insurance Subsidiary:
1. Available Dividends minus dividends paid by such Insurance Subsidiary
to the Borrower for the immediately preceding four fiscal quarters ending on
[fill in ending date for fiscal quarter] = _________________
2. Consolidating GAAP EBIT of the Borrower and Subsidiaries
(except Insurance Subsidiaries) for the immediately preceding four
fiscal quarters (ending on [fill in ending date for fiscal quarter]) = _________________
3. The sum of line 1 and line 2 = _________________
4. Fixed Charges for the immediately succeeding four fiscal quarters
(beginning on [fill in ending date for fiscal quarter]) = _________________
5. The ratio of line 3 to line 4 = _________________
ATTACHMENT 3
to
Officer's Certificate
Page 5 of 6
6. The ratio in line 5 is not less than 1.5 to 1.0 for the fiscal year
ending December 31, 1995 (1.7 to 1.0 for each fiscal year thereafter).
Section 7.16. Minimum Debt Service Coverage.
-----------------------------
For each Insurance Subsidiary
1. Available Dividends of such Insurance Subsidiary as of the end of the
fiscal quarter ending on [fill in ending date for fiscal quarter] = _________________
2. Total taxes paid by such Insurance Subsidiary to the Borrower pursuant to
any intercorporate tax-sharing agreement for the immediately preceding
four fiscal quarters (ending on [fill in ending date for fiscal quarter]) = _________________
3. Consolidating income before taxes of the Borrower and Subsidiaries
(except Insurance Subsidiaries) for the immediately preceding four fiscal
quarters (ending on [fill in ending date for fiscal quarter]) = _________________
4. Total taxes (based on GAAP) paid by the Borrower on a consolidated
basis for the immediately preceding four fiscal quarters (ending on [fill in
ending date for fiscal quarter]) = _________________
5. Distributions by Borrower for the immediately preceding four
fiscal quarters (ending on [fill in ending date for fiscal quarter]). = _________________
6. The sum of line 1, line 2 and line 3 minus line 4 and line 5 = _________________
7. Total Interest Expense of the Borrower and its Subsidiaries on
a consolidated basis for the immediately succeeding four fiscal quarters
(beginning on [fill in the beginning date of the next succeeding quarter]) = _________________
8. Total mandatory reductions of Commitment for the succeeding four
fiscal quarters (beginning on [fill in the beginning date of the next
succeeding quarter]). = _________________
9. The sum of line 7 and line 8 = _________________
10. The ratio of line 6 to line 9 = _________________
11. The ratio in line 10 is not less than 1.2 to 1.0.
Section 7.18. Risk-Based Capital Ratio.
------------------------
1. The combined Risk-Based Capital Ratio of the Insurance Subsidiaries
of the Borrower as of the end of the fiscal quarter ending on [fill in ending
date for fiscal quarter] = _________________
2. The ratio in line 1 is not less than 200%.
ATTACHMENT 3
to
Officer's Certificate
Page 6 of 6
Section 7.19. Minimum Credit Ratings.
----------------------
1. The A.M. Best Rating of USF RE (until the USF RE Sale) = _________________
2. The A.M. Best Rating of VASA North Atlantic = _________________
3. The A.M. Best Rating of Seaboard. = _________________
4. The ratings in lines 1, 2 and 3 are not less than "A-".
Section 7.21. Debt to Capital Ratio.
---------------------
1. From the period of December 28, 1998 to June 30, 1999,
a. For the fiscal quarter ended [_________________], consolidated
Debt of the Borrower and its Subsidiaries = _________________
b. For the fiscal quarter ended [_________________], consolidated
GAAP Net Worth = _________________
c. Sum of lines a and b. = _________________
d. 45% of line c = _________________
e. Line a does not exceed line d.
2. After June 30, 1999,
a. For the fiscal quarter ended [_________________], consolidated
Debt of the Borrower and its Subsidiaries = _________________
b. For the fiscal quarter ended [_________________], consolidated
GAAP Net Worth = _________________
c. Sum of lines a and b. = _________________
d. 25% of line c. = _________________
e. Line a does not exceed line d.
Section 7.21. Investment in Subsidiaries.
--------------------------
1. Total Investment by Borrower in its Subsidiaries during
the current twelve-month period from the twelve-month period
commencing June17, 1999. =__________________
ATTACHMENT 3
to
Officer's Certificate
Page 7 of 6
2. Line 1 does not exceed $10,000,000 in the aggregate.
