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EXHIBIT 10.1
NOTE AGREEMENT
This Note Agreement dated as of , 1997 (the "Agreement"), is
entered into by and between Delphi International Ltd., a Bermuda corporation
(the "Company"), and Delphi Financial Group, Inc., a Delaware corporation
("Delphi"), Reliance Standard Life Insurance Company, an Illinois corporation
("RSL") and Safety National Casualty Corporation, a Missouri corporation
("Safety National") (Delphi, RSL and Safety National are referred to
collectively as the "Purchasers").
W I T N E S S E T H
WHEREAS, the Company proposes to grant to the holders of the outstanding
Class A Common Stock, par value $.01 per share of Delphi (the "Delphi Class A
Common Stock"), to the holders of the outstanding Class B Common Stock of Delphi
(the "Delphi Class B Common Stock" and, together with the Delphi Class A Common
Stock, the "Delphi Common Stock"), and to the holders of options to purchase
Delphi Common Stock, non-transferable rights (collectively, the "Rights") to
purchase Common Shares, par value $.01 per share, of the Company ("Common
Shares");
WHEREAS, the Company's offering of Common Shares pursuant to the Rights is
hereinafter referred to as the "Rights Offering"; and
WHEREAS, the Purchasers desire to purchase notes from the Company and the
Company desires to sell notes to the Purchasers, upon the terms and subject to
the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and considerations contained below, the parties hereto
agree as follows:
1. THE NOTE. The Purchasers will purchase the note (the "Note") from the
Company in the aggregate principal amount of Thirty Million U.S. Dollars
($30,000,000.00) (the "Principal Amount"), which amount shall be used in whole
and in substantial part by the Company to capitalize Oracle Reinsurance Company,
Ltd., the Company's wholly-owned reinsurance subsidiary.
2. DATE MADE. The Note shall be made on the date concurrent with the
completion of the Rights Offering. That date shall be the day upon which the
exercise period for the Rights shall expire.
3. PROMISSORY NOTE. In conjunction with the Note, the Company has issued
to the Purchasers a promissory note, in the form attached hereto as Annex A
representing the Company's promise to repay the Principal Amount and interest
then accrued on the Maturity Date (as defined herein).
4. INTEREST. The Principal Amount of the Note will bear simple interest
at a rate equal to % per annum payable semiannually in arrears. Interest on
the Principal Amount shall begin to accrue on the date this Note is made, as
defined in Section 2 of this Agreement.
5. METHOD OF PAYMENT OF INTEREST. During any five (5) year period that
this Note shall be outstanding, the Company shall have the option to pay accrued
interest in either cash or through the issuance of additional promissory notes
given to the Purchasers, in the same form and under the same terms as in Annex A
(attached hereto), in lieu of cash.
6. MATURITY. The Principal Amount shall mature on (the
"Maturity Date"). On the Maturity Date, the Principal Amount, along with all
interest then accrued and outstanding, shall become due and payable by the
Company.
7. SUBORDINATION. The payment by the Company of the Principal Amount and
interest accrued on the Note shall be subordinated and junior in right of
payment to the prior payment in full of all Senior Indebtedness (as defined
herein) of the Company, whether presently outstanding or hereafter incurred and
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shall rank pari passu with all subordinated indebtedness of the Company, whether
presently outstanding or hereinafter incurred. Senior Indebtedness includes all
indebtedness of the Company which is not expressly pari passu or subordinate to
the Note.
8. ADDITIONAL NOTES. During the five (5) year period after issuance of
the Note the Purchasers will purchase an additional Five Million U.S. Dollars
($5,000,000.00) at the option of the Company.
9. GOVERNING LAW. This Agreement shall be governed by, and construed and
interpreted in accordance with the laws of the State of New York, without regard
to the conflict of laws principles thereof.
10. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11. MISCELLANEOUS. The Company hereby expressly waives presentment for
payment, protest and demand, notice of protest, demand and dishonor and
nonpayment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DELPHI INTERNATIONAL LTD.
By:
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Name:
Title:
DELPHI FINANCIAL GROUP, INC.
By:
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Name:
Title:
RELIANCE STANDARD LIFE
INSURANCE COMPANY
By:
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Name:
Title:
SAFETY NATIONAL
CASUALTY CORPORATION
By:
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Name:
Title:
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ANNEX A
PROMISSORY NOTE
U.S. $30,000,000 New York, New York
, 1997
FOR VALUE RECEIVED, the undersigned, Delphi International Ltd., a Bermuda
corporation (the "Company"), hereby promises to pay to the order of the
Purchasers (as defined in the Note Agreement of even date herewith by and
between the undersigned and Delphi Financial Group, Inc., a Delaware
corporation, Reliance Standard Life Insurance Company, an Illinois corporation
and Safety National Casualty Corporation, a Missouri corporation) at such places
as the Purchasers shall designate, the principal amount of Thirty Million U.S.
Dollars ($30,000,000.00), on and to pay interest in
like money (or in promissory notes of the Company in lieu thereof, as provided
for in the Note Agreement) at said office, or at such other place as the
Purchaser shall designate, from the date hereof, on the principal balance hereof
from time to time in accordance with the provisions of that certain Note
Agreement.
This Promissory Note has been executed by the undersigned in the State of
New York and shall be construed in accordance with and governed by the laws of
the State of New York, without regard to the conflict of laws provisions
thereof.
DELPHI INTERNATIONAL LTD.
By:
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Name:
Title:
