Exhibit 10.9
Assignment and Assumption Agreement
This Assignment and Assumption Agreement ("Agreement") is made and entered
into as of April 10, 1998 by and among AMS Services, Inc., a Delaware
corporation ("AMS"), InsWeb Corporation, a Delaware corporation ("InsWeb") and
Continental Casualty Company, an Illinois insurance company ("CNA").
WHEREAS, as of November 22, 1996 AMS and InsWeb entered into a letter of
credit arrangement ("Letter of Credit") attached hereto as Exhibit A, wherein
AMS undertook to provide to InsWeb a $25,000,000 letter of credit.
WHEREAS, in support of such Letter of Credit, InsWeb signed a note (the
"Note") payable to AMS in the amount of $25,000,000. A copy of such Note is
attached hereto as Exhibit B.
WHEREAS, AMS, CNA and InsWeb now desire to transfer from AMS to CNA AMS'
rights and obligations to InsWeb pursuant to the Letter of Credit and Note, and
CNA desires to accept such rights and assume such obligations, Letter of Credit
and Note.
NOW THEREFORE, in consideration of the premises and the terms and
conditions of this Agreement, the parties agree as follows:
1. AMS hereby assigns, transfers and conveys to CNA all of the AMS'
rights under the Letter of Credit and the Note, subject to CNA's assumption of
all of AMS' duties and obligations thereunder. AMS represents and warrants that
i) it has full title to the Note and its underlying obligations and AMS has not
pledged, sold, assigned any part of such Note except through this transaction;
ii) the sale of the Note does not violate any law or regulation applicable to
AMS or its business; and iii) this Agreement has been duly authorized and
constitutes the legal, valid and binding obligation of AMS enforceable in
accordance with its terms.
2. CNA hereby assumes and accepts any and all rights, duties and
obligations of AMS under the Letter of Credit and the Note including but not
limited to the obligations to make loans to InsWeb and the right to receive all
future payments including any interest thereon due AMS under the Letter of
Credit and Note. The repayment of $3,200,000 which was borrowed from AMS under
the Letter of Credit and Note prior to this Agreement shall be paid by CNA to
AMS within ten (10) business days of the date following this Agreement. CNA
represents and warrants that i) this Agreement has been duly authorized and
constitutes the legal, valid and binding obligation of CNA enforceable in
accordance with its terms and ii) the sale of the Note does not violate any law
or regulation applicable to CNA or its business.
3. InsWeb consents to the assignment and assumption of the Letter of
Credit and the Note from AMS to CNA as provided in this Agreement.
4. InsWeb hereby releases AMS from any and all rights, duties or
obligations it now has or may have under the terms of the Letter of Credit and
the Note and agrees to pay any and
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all amounts now or hereafter due under the Letter of Credit and Note to CNA,
to the following account.
Continental Casualty Company
Account No. 000-000-0
Xxxxxx Trust and Savings Bank
ABA Routing No. 0000-0000-0
5. Upon receipt of the next scheduled interest payment from InsWeb, CNA
will remit to AMS that portion of the payment relating to the period during
which AMS was the lender.
6. Except as specifically provided in this Agreement the Letter of Credit
and Note shall remain in full force and effect according to their original
terms.
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Accepted and Agreed:
AMS Services, Inc.
/s/ Xxxx Xxxxx
--------------------------------
signature
Xxxx Xxxxx
--------------------------------
name
President
--------------------------------
title
InsWeb Corporation
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
signature
Xxxxxx X. Xxxxxxxxx
--------------------------------
name
Chief Financial Officer
--------------------------------
title
Continental Casualty Company
/s/
--------------------------------
signature
--------------------------------
name
--------------------------------
title
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November 22, 1996
InsWeb Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Ladies and Gentlemen:
I am pleased to advise you that AMS Services, Inc. ("AMS" or "we") has
approved a letter of credit in the amount of $25,000,000 (the "Letter of
Credit") which amount will, subject to the terms and conditions of this letter.
be available to InsWeb Corporation (the "Company or you") through November 22,
2001.
1. AMOUNT AND TERMS OF CREDIT.
(a) The amount available for borrowing under the line of credit shall
be $25,000,000. This Letter of Credit shall expire on November 22, 2001.
(b) All outstanding principal and interest is due and payable upon
the expiration of this Letter of Credit. All borrowings under this Letter of
Credit and any extensions and renewals of same granted by us shall be made
against and evidenced by your promissory note in the form attached to this
letter as Exhibit A (the "Note"). Upon your delivery to us of the Note, this
Letter of Credit will be effective.
(c) Borrowings under this Letter of Credit shall bear interest at the
rate of fifteen percent (15%) per annum. All loans made against the Note, the
status of such loans, the rate of interest applicable to loans and the repayment
of any principal of the Note shall be recorded by us on our books or at our
option endorsed on the reverse side of the Note and the unpaid principal
balance, status and interest rate at any time so recorded or endorsed shall be
prima facie evidence in any court or other proceedings brought to enforce the
Note of the amount remaining unpaid thereon, the interest rate applicable
thereto and the status of loans evidenced thereby.
(d) Interest on all loans shall be computed on the basis of a year of
360 days and the actual number of days elapsed and shall be payable quarterly on
the last day of each quarter (commencing December 31, 1996).
(e) If any principal of any loan is not paid when due, such principal
shall bear interest (which you hereby promise to pay upon demand), as well after
as before judgment, until payment in full thereof at the rate equal to the sum
of three percent (3%) plus the rate of interest in effect thereon at the time of
such default until paid in full.
(f) You shall give notice to us (which notice shall be irrevocable
once given, and shall be in writing) which must be received by us by no later
than 11:00 a.m. (Houston, Texas time) on the date at least three (3) business
days prior to the date of each loan which we are requested to make, continue
or effect. You shall in any notice requesting a loan under this Letter of
Credit specify the date of the loan requested, the amount of such loan or the
amount to be continued, as the case may be.
2. PERSONS AUTHORIZED TO GIVE INSTRUCTIONS REGARDING BORROWINGS. The
persons authorized to give us instructions to lend money and confirm such
borrowings in accordance with the foregoing are the CEO and any one of the CFO
or the President of the Company.
3. PAYMENT OF LOAN PROCEEDS AND PREPAYMENTS.
(a) The proceeds of each loan shall be made available to you by wire
transfer to your account number 8561012306 at Comerica Bank-California (ABA
Routing No. 000000000) unless the request for such loan directs otherwise,
except to the extent such loan represents the continuation of conversion of a
loan previously made to you, in which case we shall record such continuation on
our books or records or on the schedule to the Note, as appropriate.
(b) All payments in respect of this Letter of Credit shall be made to
us at the First American Bank in Bryan, Texas, account number 0000000 (ABA
Routing No. 000000000), immediately available and freely transferable funds and
shall be paid in full without setoff or counterclaim and without reduction for
and free from any and all taxes, levies, imposts, duties, fees, charges,
deductions, withholdings, restrictions or conditions of any nature imposed by
any government or any political subdivision or taxing authority thereof.
4. CONDITIONS PRECEDENT. The obligation of AMS to issue the Letter of
Credit hereunder or to extend any additional amounts under this Letter of Credit
after the date hereof is subject as of the date hereof, and thereafter, to the
satisfaction of the following condition: the condition and operating results of
the Company shall be in accordance with the business plan approved by the Board
of Directors of the Company, as determined by AMS.
5. AFFIRMATIVE COVENANTS. AMS and the Company hereby agree that as of
the date that this Letter of Credit is effective and for so long as this Letter
of Credit is in effect, and until the Note is paid in full, this Letter of
Credit shall be used for the day-to-day working capital needs of the Company in
the ordinary course of the Company's business as it exists on the date this
Letter of Credit is issued.
6. NEGATIVE COVENANTS. AMS and the Company hereby covenant and agree
that as of the date that this Letter of Credit is effective and for so long as
the Letter of Credit is in effect, and until the Note is paid in full, the
Company will not and will not permit its subsidiaries now or hereafter existing
to declare or pay any dividends, return any capital, or make any disbursements
or distributions of any kind, including but not limited to asset sales or loans,
to its shareholders or investors, or to employees outside the ordinary course of
salary and commission payments.
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7. PRIORITY. This Letter of Credit will have seniority and priority over
all debt and equity of the Company issued or outstanding as of the date hereof
and any other debt or equity of the Company that may be issued or incurred after
the date hereof.
8. MISCELLANEOUS.
(a) It is understood and agreed that this Letter of Credit and any
interest accrued thereon shall have a "first dollar out" priority in the event
that the Company has a public offering of equity.
(b) The Company shall at all times take whatever actions are
necessary to notify third parties of the restrictions and priorities set forth
herein to secure the priorities of this Letter of Credit and to comply with the
restrictions and priorities of this Facility Letter.
(c) This letter may be executed in counterparts, each of which shall
be deemed to be an original but all of which together shall constitute one
agreement.
* * *
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If you are in agreement with the terms set forth above, please sign this
Facility Letter as evidenced below.
Very truly yours,
AMS SERVICES, INC.
By: /s/
---------------------------------
Its:
Accepted and agreed to as of the
date first above written.
InsWeb Corporation
By: /s/ Hussein A. Enan
--------------------------------
Its Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Its Chief Financial Officer
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NOTE
$25,000,000 Due Date: November 22, 0000
Xxxxxxx Xxxxxxx, Xxxxx
Upon the due date stated above, for value received, the undersigned, InsWeb
Corporation, a Delaware corporation (the "Company"), promises to pay to the
order of AMS SERVICES, INC., a Delaware corporation ("AMS"), at its office at
0000 Xxxx Xx Xxxx, Xxxxxxx Xxxxxxx, Xxxxx or at such other place as the holder
hereof may from time to time specify, the principal sum of twenty-five million
$25,000,000, or so much thereof as may be advanced to the Company hereon.
This Note evidences all loans as described in that certain letter agreement
bearing even date herewith by and between the Company and AMS relating to a line
of credit facility extended to the Company (the "Facility Letter") made and to
be made to the Company by AMS under the Facility Letter as the same may from
time to time be renewed or extended and the Company hereby promises to pay
interest on each loan evidenced hereby at the rate and time specified therefor
in the Facility Letter.
Each loan made under the Facility Letter by AMS to the Company, any
repayment of principal hereon and the status of each such loan shall be endorsed
by the holder hereof on the reverse side of this note or (so long as this note
is held by AMS) recorded on the books and records of the holder hereof and the
Company agrees that in any action or proceeding instituted to collect or enforce
collection or this Notice, the amount so endorsed on the reverse side hereof or
recorded on the books and records of AMS shall be prima facie evidence of the
unpaid balance of this Note and the status of each loans as so endorsed or
recorded shall be prima facie evidence of such status.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS
OF MASSACHUSETTS.
The Company hereby waives, presentment for payment and demand. The Company
agrees to pay to the holder hereof all reasonable expenses incurred or paid by
such holder, including reasonable attorneys' fees and court costs, in connection
with the collection of this Note.
InsWeb Corporation
By: /s/ Hussein A. Enan
---------------------------------
Its Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Its Chief Financial Officer
