Exhibit 4(v)
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of the 23rd day of
March, 2001 (this "Amendment"), is made among XXXXXX NORTH AMERICA, INC., a
Virginia corporation formerly known as Xxxxxx Corporation (the "Borrower"),
XXXXXX CORPORATION, a Virginia corporation formerly known as Xxxxxx Holdings,
Inc. ("Holdings"), the banks and financial institutions listed on the signature
pages thereof or that became parties thereto after the date thereof
(collectively the "Lenders"), and FIRST UNION NATIONAL BANK (the "Agent").
RECITALS
A. The Borrower, Holdings, the Agent and the Lenders are parties to a
Credit Agreement, dated as of December 21, 1999 (as three times amended by
Amendments, dated February 4, 2000, March 17, 2000 and August 3, 2000, 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 notified the Agent that it intends to undertake a
corporate reorganization pursuant to which, among other things, the following
shall occur (the "Reorganization"): (i) the Target will create a new holding
company Subsidiary, (ii) Terra Nova UK shall transfer the Capital Stock of most
of its Subsidiaries to the Target which shall then contribute such capital stock
to its new holding company Subsidiary, and (iii) the Target shall transfer the
Capital Stock of Terra Nova UK to Holdings so that Terra Nova UK shall be a
direct Subsidiary of Holdings.
C. The Borrower has requested that the Agent and the Lenders agree to
amend the Credit Agreement (1) to treat, for purposes of the representations,
warranties, covenants and other terms of the Credit Agreement, Terra Nova UK and
its Subsidiaries after the Reorganization as if they are Subsidiaries of the
Target, and (2) to make certain amendments to the Credit Agreement. The Borrower
also desires to prepay in part the Loans and terminate in part the Commitments.
The Agent and the Lenders are willing to make the amendments set forth herein in
accordance with the terms hereof.
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 1
AMENDMENTS EFFECTIVE AS OF THE DATE HEREOF
1.1 Definitions.
(a) New Definitions. Section 1.1 of the Credit Agreement is hereby
amended by inserting the following definitions of "Fourth Amendment," "Fourth
Amendment Date" and "Rating Agencies" in appropriate alphabetical order:
"Fitch" shall mean Fitch, Inc. and any successor thereto.
"Fourth Amendment" shall mean the Fourth Amendment to Credit
Agreement, dated as of March ___, 2001. between the Borrower,
Holdings, the Agent and the Lenders.
"Fourth Amendment Date" shall mean the date of the Fourth
Amendment.
"Rating Agencies" shall mean Standard & Poor's, Fitch and
Xxxxx'x.
(b) Deleted Definition. The definition of Duff & Xxxxxx is deleted in its
entirety.
(c) Available Dividend Amount. The definition of "Available Dividend
Amount" shall be amended and restated as follows:
"Available Dividend Amount" shall mean, with respect to any
U.S. Insurance Subsidiary for any fiscal year, the aggregate maximum
amount of dividends that is permitted by the Insurance Regulatory
Authority of its jurisdiction of domicile, under Applicable Law
(without the necessity of any consent, approval or other action of
such Insurance Regulatory Authority involving the granting of
permission or the exercise of discretion by such Insurance Regulatory
Authority), to be paid by such U.S. Insurance Subsidiary to the
Borrower or another Subsidiary of the Borrower during such fiscal
year (whether or not any such dividends are actually paid).
(d) Statutory Capital and Surplus. The definition of "Statutory Capital
and Surplus" shall be amended and restated as follows:
"Statutory Capital and Surplus" shall mean, as to any Insurance
Subsidiary, the "surplus as regards policyholders" as of the end of
each of its fiscal quarters, as reported on line 27, column 1, page 3
of the Annual Statement of such Insurance Subsidiary in the case of
calculations made as of the last day of any fiscal year of such
Insurance Subsidiary (or, with respect to any Insurance Subsidiary
that is not a U.S. Insurance Subsidiary, such other line, column or
page of the Annual Statement as appropriate), or as determined in a
consistent manner for any date other than one of which an Annual
Statement is prepared.
1.2 Target and its Subsidiaries. Notwithstanding the fact that after the
consummation of the Reorganization Terra Nova UK and its Subsidiaries will not
be a Subsidiaries of the
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Target, Terra Nova UK and its Subsidiaries shall be deemed to be Subsidiaries of
the Target for purposes of this Credit Agreement.
1.3 Leverage Ratio. Section 6.1 of the Credit Agreement is hereby amended
and restated as follows:
6.1 Leverage Ratio. The Parent will not permit the Leverage
Ratio to be greater than, as of any date on or after the Fourth
Amendment Date, 0.40 to 1.00; provided, however, that if on any date,
the Borrower's senior unsecured debt rating by two Rating Agencies is
BBB-/Baa3 (as applicable) or lower, the Leverage Ratio shall not be
greater than 0.375 to 1.00 (but if at any time during the 90 days
immediately preceding such date, the Borrower's senior unsecured debt
rating by two Rating Agencies was BBB/Baa2 (as applicable) or higher,
the Leverage Ratio may be greater than 0.375 to 1.00 but not greater
than 0.40 to 1.00); provided further, however, that, if after the
Fourth Amendment Date the Borrower has never maintained a senior
unsecured debt rating by two Rating Agencies of BBB/Baa2 (as
applicable) or higher, the Leverage Ratio may be greater than 0.375 to
1.00 but not greater than 0.40 to 1.00 for a period of not greater than
90 days if the increase in the Leverage Ratio is on account of the
incurrence of new Permitted Indebtedness by the Parent or one of its
Subsidiaries. Nothing in this Section 6.1 shall be deemed to allow the
Leverage Ratio to be greater than 0.40 to 1.00 at any time. If, on any
date, any Rating Agency does not provide a senior unsecured debt rating
of the Borrower, for purposes of this Section 6.1, its senior unsecured
debt rating of the Borrower as of such date shall be the senior
unsecured debt rating of Holdings. If, on any date, any Rating Agency
does not provide a senior unsecured debt rating of the Borrower or
Holdings, its senior unsecured debt rating of the Borrower as of such
date shall be deemed to be BBB-/Baa3.
1.4 Interest Coverage Ratio. Section 6.2 of the Credit Agreement is hereby
deleted in its entirety and the following is substituted therefor: "6.2
[Intentionally Omitted]."
1.5 Debt Service Reserve and Interest Reserve. Sections 6.3 and 6.4 of the
Credit Agreement are hereby amended by deleting the references to "two (2)"
therein and replacing such reference with "one and one-half (1.5)".
1.6 Statutory Capital and Surplus. Section 6.5 of the Credit Agreement is
hereby amended and restated as follows:
6.5 Statutory Capital and Surplus. The Borrower and Holdings
will not permit the aggregate Statutory Capital and Surplus of the
Insurance Subsidiaries to be less than (i) at any time from and
including the Fourth Amendment Date to and including
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December 31, 2001, $509,185,070, and (ii) at any time thereafter,
the greater of (A) 75% of the actual aggregate Statutory Capital and
Surplus of the Insurance Subsidiaries as of the last day of the
immediately preceding fiscal year, or (B) the aggregate Statutory
Capital and Surplus required to have been maintained by the
Insurance Subsidiaries under this Section 6.5 during the immediately
preceding fiscal year.
1.7 Available Dividend Amount. The following is inserted as a new
Section 7.11 of the Credit Agreement:
7.11 Available Dividend Amount. The Borrower and Holdings will
not permit, as of any date on or after the Fourth Amendment Date,
the aggregate Available Dividend Amount for the U.S. Insurance
Subsidiaries (other than each U.S. Insurance Subsidiary that is a
Subsidiary of another U.S. Insurance Subsidiary) for the fiscal year
in which such date occurs to be less than (i) at any time from and
including the Fourth Amendment Date to and including December 31,
2001, $32,487,332, and (ii) at any time thereafter, the greater of
(A) the product of (x) 10% of the the aggregate Statutory Capital
and Surplus of the U.S. Insurance Subsidiaries as of the last day of
the immediately preceding fiscal year and (y) 75%, or (2) the
aggregate Available Dividend Amount required to have been maintained
by the U.S. Insurance Subsidiaries under this Section 7.11 during
the immediately preceding fiscal year.
1.8 Compliance Certificate. Attachment A of Exhibit C-2 (Form of SAP
Compliance Certificate) is hereby amended and restated as set forth on Exhibit A
hereto.
ARTICLE II
AMENDMENTS EFFECTIVE AS OF OCTOBER 1, 2001
Effective October 1, 2001, the definition of "Applicable Margin Percentage"
shall be amended and restated as follows:
"Applicable Margin Percentage" shall mean, (a) at any time from
and after October 1, 2001, the applicable percentage to be added to
the LIBOR Rate pursuant to Section 2.8 for purposes of determining
the Adjusted LIBOR Rate, and (b) at any time from and after October
1, 2001 the applicable percentage to be used in calculating the
commitment fee payable pursuant to Section 2.9(c), in each case as
determined under the following matrix with reference to the
Borrower's senior unsecured debt rating, or if the Borrower does not
then have a senior unsecured debt rating, Holding's senior unsecured
debt rating, by Standard & Poor's,
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Fitch and Xxxxx'x (in each case based upon the higher of the
rating of Standard & Poor's and the highest rating of the
other two Rating Agencies):
Applicable Applicable Margin
Standard & Poor's/ Fitch/ Margin Percentage for
Xxxxx'x Rating Percentage for Unutilized
Level -------------- LIBOR Loans Commitments Fee
----- ----------- ---------------
I A-/A-/A3 or above 1.000% 0.20%
II BBB+/BBB+/Baa1 1.125% 0.25%
III BBB/BBB/Baa2 1.250% .30%
IV BBB-/BBB-/Baa3 1.500% .35%
V Below BBB-/BBB-/Baa3 2.500% .50%
Notwithstanding anything set forth herein to the contrary, if
at any time the difference between the senior unsecured debt
rating of Standard & Poor's and the highest senior unsecured
debt rating of the other two Rating Agencies is more than one
rating grade, then for purposes of determining the applicable
level set forth above, the applicable rating shall be one
rating grade higher than the lower of such two ratings. If the
rating system of Standard & Poor's, Fitch or Xxxxx'x changes,
or if any such Rating Agency ceases to be in the business of
rating corporate debt obligations, the Borrower and the
Lenders agree to negotiate in good faith to amend the
references to specific ratings in this definition to reflect
such changed rating system or nonavailability of ratings from
such Rating Agency.
On each Adjustment Date (as hereinafter defined), the
Applicable Margin Percentage for all Loans and the commitment
fee payable pursuant to Section 2.9(c) shall be adjusted
effective as of such date in accordance with the above matrix.
For purposes of this definition, "Adjustment Date" shall mean
the fifth (5/th/) Business Day after the announcement by
Standard & Poor's, Fitch or Xxxxx'x of any change in its
rating with respect to the Borrower's or Holding's (as
applicable) senior unsecured debt.
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ARTICLE III
PREPAYMENT; COMMITMENT REDUCTION
3.1 Prepayment. On or before March 26, 2001, the Borrower shall effect a
optional partial prepayment of the Loans pursuant to Section 2.7(a) of the
Credit Agreement in an aggregate amount of not less than $175,000,000.
3.2 Notice of Commitment Reduction. Pursuant to Section 2.5(c) of the
Credit Agreement, the Borrower hereby gives notice that it terminates the
Commitments in part in an aggregate amount of $100,000,000, such termination to
be effective simultaneously with the prepayment contemplated by Section 3.1
hereof. In the event that the prepayment contemplated by Section 3.1 hereof
occurs prior to the date five (5) Business Days after the date hereof, the Agent
and the Lenders hereby waive the notice requirement with respect thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and Holdings hereby represent and warrant to the Agent and the
Lenders as follows:
4.1 Representations and Warranties. After giving effect to this Amendment,
each of the representations and warranties of the Borrower and Holdings
contained in Sections 4.1 and 4.3 the Credit Agreement 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).
4.2 No Default. After giving effect to this Amendment, no Default or Event
of Default has occurred and is continuing.
ARTICLE V
ACKNOWLEDGEMENT
Holdings hereby acknowledges that the Borrower, the Agent and the Lenders
have agreed, as provided herein, to amend the Credit Agreement as provided
herein. Holdings hereby approves and consents to the transactions contemplated
by this Amendment and agrees that its obligations under Article IX of the Credit
Agreement 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 Holdings is made and delivered to induce the Agent and the Lenders to enter
into this Amendment, and Holdings acknowledges that the Agent and the Lenders
would not enter into this Amendment in the absence of the acknowledgements
contained herein.
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ARTICLE VI
MISCELLANEOUS
6.1 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.
6.2 Governing Law. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Virginia (without
regard to the conflicts of law provisions thereof).
6.3 Fees; Expenses. The Borrower and Holdings agree to pay (i) to each
Lender executing this Amendment, an amendment fee equal to such Lender's pro
rata share (based upon on such Lender's Commitment as compared with the
aggregate Commitments of the Lenders executing this Amendment) of $200,000, and
(ii) upon demand all reasonable out-of-pocket costs and expenses of the Agent
(including, without limitation, the reasonable fees and expenses of counsel to
the Agent) in connection with the preparation, negotiation, execution and
delivery of this Amendment and the other Credit Documents delivered in
connection herewith.
6.4 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.
6.5 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.
6.6 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.
6.7 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.
XXXXXX NORTH AMERICA, INC. (formerly known
as Xxxxxx Corporation)
By: _______________________________
Title: _______________________________
XXXXXX CORPORATION
(formerly known as Xxxxxx Holdings, Inc.)
By: _______________________________
Title: _______________________________
FIRST UNION NATIONAL BANK, as Agent and as
a Lender
By: _______________________________
Title: _______________________________
BANK ONE, NA
By: _______________________________
Title: _______________________________
BARCLAYS BANK PLC
By: _______________________________
Title: _______________________________
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XXX XXXXX XXXXXXXXX XXXX
By: _______________________________
Title: _______________________________
CREDIT LYONNAIS NEW YORK BRANCH
By: _______________________________
Title: _______________________________
SUNTRUST BANK
By: _______________________________
Title: _______________________________
FLEET NATIONAL BANK
By: _______________________________
Title: _______________________________
THE NORTHERN TRUST COMPANY
By: _______________________________
Title: _______________________________
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