Exhibit 10.36
FIRST AMENDMENT
OF
CREDIT AGREEMENT
THIS FIRST AMENDMENT OF CREDIT AGREEMENT (this "Amendment"), dated as
of February 19, 1998, is by and among LAWYERS TITLE CORPORATION, a Virginia
corporation (the "Company"), the several financial institutions party to this
Amendment (collectively, the "Banks"; individually, a "Bank"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, individually and as
administrative agent for the Banks (the "Agent").
RECITALS:
WHEREAS, the Company, the Agent, and the Banks are parties to that
certain Revolving Credit Agreement dated as of November 7, 1997 (the "Credit
Agreement"); and
WHEREAS, the Company, the Agent, and the Banks desire to amend the
Credit Agreement on the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the Credit
Agreement.
SECTION 2. Amendments to the Credit Agreement. The Credit Agreement
is, as of the Effective Date (as defined below), hereby amended as follows:
(a) Article I of the Credit Agreement is amended by
adding the following definition in appropriate alphabetical order:
""Net Investment Income" means, with respect to any Insurance
Subsidiary at any time, its net investment income for the
applicable period as determined in accordance with SAP
("Operations and Investment Exhibit Statement of Income," page
4, line 9 of the Annual Statement)."
(b) Section 6.01(e) of the Credit Agreement is amended by
deleting the phrase "audited and certified by independent certified public
accountants of recognized national standing" appearing in such subsection in its
entirety and substituting therefor the phrase "certified by the chief financial
officer or other appropriate officer of such Material Insurance Subsidiary
having substantially the same authority and responsibility as the chief
financial officer and copies of the statutory-basis financial statements of each
of the Material Insurance Subsidiaries audited and certified by independent
certified public accountants of recognized national standing, as soon as they
are available."
(c) Section 7.11(c) is amended in its entirety to read as
follows:
"(c) declare or pay cash dividends to its
stockholders and purchase, redeem or
otherwise acquire shares of its capital
stock or warrants, rights or options to
acquire any such shares for cash in an
aggregate amount for all such dividends,
purchases, redemptions and acquisitions not
in excess of 25% of Net Income of the
Company arising after December 31, 1996 and
computed on a cumulative consolidated basis;
provided, that immediately after giving
effect -------- to such proposed action, no
Default or Event of Default would exist; and
provided further that solely for purposes of
this subsection 7.11(c), there --------
------------------- shall be excluded from
the computation of Net Income the one-time
after-tax charge taken by the Company,
during the fiscal quarter ending March 31,
1998 not in excess of $15,000,000 related
solely to the Stock Acquisition."
(d) The Credit Agreement is further amended by deleting
Exhibit A attached thereto and substituting therefor Exhibit A attached
to this Amendment.
SECTION 3. Conditions Precedent to Effectiveness of Amendment. This
Amendment shall become effective upon the date (the "Effective Date") when the
Company, the Agent and the Required Banks (without respect to whether this
Amendment has been executed by all Banks) shall have executed and delivered this
Amendment.
SECTION 4. Representations and Warranties of Company. The Company
represents and warrants to the Agent and the Banks that:
(a) The representations and warranties contained in the
Credit Agreement are true and correct in all material respects at and
as of the date hereof as though made on and as of the date hereof
(except to the extent specifically made with regard to a particular
date).
(b) No Event of Default or Default has occurred and is
continuing.
(c) The execution, delivery and performance of this
Amendment has been duly authorized by all necessary action on the part
of, and duly executed and delivered by, the Company and this Amendment
is a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in
equity or at law).
(d) The execution, delivery and performance of this
Amendment does not conflict with or result in a breach by the Company
of any term of any material contract,
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loan agreement, indenture or other agreement or instrument to which the
Company is a party or is subject.
SECTION 5. References to and Effect on the Credit Agreement.
(a) On and after the Effective Date each reference in the
Credit Agreement to "this Agreement," "hereunder," "hereof," "herein,"
or words of like import shall mean and be a reference to the Credit
Agreement as amended hereby.
(b) Except as specifically amended above, the Credit
Agreement shall remain in full force and effect and are hereby ratified
and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of the Agent or the Banks under
the Credit Agreement.
SECTION 6. Execution in Counterparts. This Amendment may be executed in
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. This Amendment shall be binding upon the respective parties
hereto upon the execution and delivery of this Amendment by the Company, the
Agent, and each Bank. Delivery of an executed counterpart of a signature page of
this Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Amendment.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS
WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS THEREOF.
SECTION 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
LAWYERS TITLE CORPORATION
By: /s/ G. Xxxxxxx Xxxxx
-----------------------------------------
Title: Vice President and Treasurer
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/
-----------------------------------------
Title: Senior Vice President
--------------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: /s/
-----------------------------------------
Title: Senior Vice President
--------------------------------------
CRESTAR BANK,
as Documentation Agent and a Bank
By: /s/
-----------------------------------------
Title: Vice President
--------------------------------------
XXXXXXX BANK, N.A., as Co-Agent and a Bank
By: /s/ E. Xxxxxxx Xxxxx
-----------------------------------------
Title: Vice President
--------------------------------------
FIRST NATIONAL BANK OF MARYLAND, as
Co-Agent and a Bank
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title: Vice President
--------------------------------------
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FLEET NATIONAL BANK, as Co-Agent and a Bank
By: /s/
-----------------------------------------
Title:
--------------------------------------
SUN TRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION, as Co-Agent and a Bank
By: /s/
-----------------------------------------
Title: Vice President
--------------------------------------
UNION BANK OF CALIFORNIA, N.A., as Co-Agent
and a Bank
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Title: Vice President
--------------------------------------
COMERICA BANK, as a Bank
By: /s/
-----------------------------------------
Title: Vice President
--------------------------------------
FIRST UNION NATIONAL BANK, as a Bank
By: /s/
-----------------------------------------
Title:
--------------------------------------
MELLON BANK, N.A., as a Bank
By: /s/
-----------------------------------------
Title: Assistant Vice President
--------------------------------------
NATIONSBANK OF TEXAS, N.A., as a Bank
By: /s/ D. Xxxxx Xxxxxxxx
-----------------------------------------
Title: Vice President
--------------------------------------
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PNC BANK, NATIONAL ASSOCIATION, as a Bank
By: /s/
-----------------------------------------
Title: Assistant Vice President
--------------------------------------
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EXHIBIT A
LAWYERS TITLE CORPORATION
COMPLIANCE CERTIFICATE CALCULATIONS
7.15 Minimum Statutory Surplus
Lawyers Title Insurance Corporation
-----------------------------------
(1) Statutory Surplus as Regards Policyholders at September 30, 1997
$_____________
(2) Covenant Requirement [.80 x (1)]
$_____________
(3) Surplus as Regards Policyholders, Current Period
$_____________
Compliance Requirement: (3) must be greater than or equal to (2) ______
[yes/no]
Commonwealth Land Title Insurance Company
(4) Statutory Surplus as Regards Policyholders at September 30, 1997
$_____________
(5) Covenant Requirement [.80 x (4)]
$_____________
(6) Surplus as Regards Policyholders, Current Period
$_____________
Compliance Requirement: (6) must be greater than or equal to (5) ______
[yes/no]
7.16 Debt to Total Capitalization Ratio
(7) Covenant Requirement:
(a) Fiscal Year ending December 31, 1998 40%
(b) Fiscal Year ending December 31, 1999 37.5%
(c) Fiscal Year ending December 31, 2000 35%
(d) Fiscal Year ending December 31, 2001 32%
(e) Any Fiscal Year ending after December 31, 2001 30%
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(8) Depending on Fiscal Year select appropriate Covenant requirement
from (7) above: _____
(9) Consolidated Debt
$___________
(10) Shareholders' Equity
$___________
(11) Total Capitalization [(9) + (10)]
$___________
(12) Debt to Total Capitalization Ratio [((9) / (11)) x 100]
____________
Compliance Requirement: (8) must be greater than (12) ______
[yes/no]
7.17 Debt Service Coverage Ratio
(13) Covenant Requirement 2.25:1.00
(14) Maximum Dividend Availability from Lawyers Title Insurance
Corporation
[The lesser of 14(b) and 14(c)] $___________
(a) Statutory Capital, as of the end of the most
recent calendar year $___________
(b) 10% of Statutory Capital [14(a) x .10] $___________
(c) Net Income less Capital Gains for rolling four
quarter period just ended $___________
(15) Maximum Dividend Availability from Commonwealth Land
Title Insurance Company
[The greater of 15(b) and 15(c)] $___________
(a) Statutory Capital, as of the end of the most
recent calendar year $___________
(b) 10% of Statutory Capital [15(a) x .10] $___________
(c) Net Income for rolling four quarter period just ended $___________
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(16) Maximum Dividend Availability from Transnation Title
Insurance Company
[The lesser of 16(b) and 16(c)] $___________
(a) Statutory Capital, as of the end of the most
recent calendar year $___________
(b) 10% of Statutory Capital [16(a) x .10] $___________
(c) Net Investment Income for rolling four quarter period
just ended $___________
(17) Cash Dividends paid by non Insurance Subsidiaries of the
Company during rolling four quarter period just ended $___________
(18) Income before equity in undistributed income of Subsidiaries
(without duplication of 14, 15, or 16, as applicable and 17) for
the rolling four quarter period just ended $___________
(19) Total Interest Expense for rolling four quarter period just ended $___________
(20) Interest Tax Shield [(19) x actual marginal federal income tax rate] $___________
(21) Tax-Deductible Goodwill Amortization for rolling four quarter period
just ended $___________
(22) Goodwill Tax Shield [(21) x actual marginal federal income tax rate] $___________
(23) Cash Flow Available to pay Total Interest Expense [(14) + (15) + (16) +
(17) + (18) + (20) + (22)] $___________
(24) Debt Service Coverage Ratio [(23) / (19)] $___________
Compliance Requirement: (24) must be greater than (13) $___________
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