TENTH AMENDMENT TO EIGHTH AMENDED AND RESTATED LOAN AGREEMENT
Exhibit
10.15
TENTH
AMENDMENT
TO
EIGHTH
AMENDED AND RESTATED LOAN AGREEMENT
THIS
TENTH AMENDMENT TO EIGHTH AMENDED AND RESTATED LOAN AGREEMENT (the "Amendment")
made and entered into as of the 22nd
day of
November, 2006, by and among DIRECT
GENERAL FINANCIAL SERVICES, INC., a
Tennessee corporation whose address is 0000 Xxxxxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxx 00000 (f/k/a Direct Financial Services, Inc.) ("DGFS"), DIRECT
GENERAL PREMIUM FINANCE COMPANY,
a
Tennessee corporation whose address is 0000 Xxxxxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxx 00000 ("DGPFC"; DGFS and DGPFC may be referred to hereinafter either
individually or collectively as "Borrower"), DIRECT
GENERAL CORPORATION,
a
Tennessee corporation (formerly known as Direct Corporation) ("DGC"),
DIRECT
GENERAL INSURANCE AGENCY, INC.,
a
Tennessee corporation, DIRECT
GENERAL INSURANCE AGENCY, INC.,
an
Arkansas corporation, DIRECT
GENERAL INSURANCE AGENCY, INC.,
a
Mississippi corporation, DIRECT
GENERAL INSURANCE AGENCY OF LOUISIANA, INC.,
a
Louisiana corporation, DIRECT GENERAL
AGENCY OF KENTUCKY, INC.,
a
Kentucky corporation, DIRECT
ADJUSTING COMPANY, INC.,
a
Tennessee corporation, DIRECT
ADMINISTRATION, INC.,
a
Tennessee corporation, DIRECT
GENERAL INSURANCE AGENCY, INC.,
a Texas
corporation, DIRECT
GENERAL CONSUMER PRODUCTS, INC.,
a
Tennessee corporation, FIRST
TENNESSEE BANK NATIONAL ASSOCIATION,
a
national banking association organized and existing under the statutes of the
United States of America, with offices at 000 Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxx 00000 (in its agency capacity being herein referred to as "Agent,"
and
in its individual capacity as "FTBNA"), for itself and as agent for the other
Banks hereinafter named, CAPITAL
ONE, N.A.
(successor by merger to Hibernia National Bank), a national banking association
organized and existing under the laws of the United States of America, with
offices at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxx 00000 ("Capital One"),
U.S.
BANK NATIONAL ASSOCIATION,
a
national banking association (f/k/a U.S. Bank, N. A., which was f/k/a Mercantile
Bank National Association) with offices located at 000 0xx
Xxxxxx
X., Xxxxxxxxx, Xxxxxxxxx 00000 ("U.S. Bank"), CAROLINA
FIRST BANK,
a state
bank formed under the laws of the State of South Carolina with offices located
at 000 X. Xxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 ("Carolina First"),
JPMORGAN
CHASE BANK, N.A. (successor
by merger to Bank One, NA (Main Office Chicago) a
national banking association with offices located at 000 Xxxxxxx Xxxxxx, Mail
Code LA2-2714, Xxxxx Xxxxx, Xxxxxxxxx 00000 ("JPMorgan"), REGIONS
BANK,
an
Alabama state banking association with offices located at 000 X. 00xx
Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000 ("Regions"), NATIONAL
CITY BANK OF KENTUCKY,
a
national banking association with offices located at 000 X. Xxxxx Xxxxxx,
00xx
Xxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 ("National City Bank"), FIFTH
THIRD BANK, N.A. (Tennessee),
a
national banking association organized and existing under the laws of the United
States of America, with offices located at 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx
000,
Xxxxxxxx, Xxxxxxxxx 00000 ("Fifth Third"), and MIDFIRST
BANK,
a
national banking association with offices located at 000 X.X. Xxxxx
Xxxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000 ("MidFirst") (FTBNA, Capital One,
U.S. Bank, Carolina First, JPMorgan, and Regions collectively, the "Original
Banks") (the Original Banks, National City Bank, Fifth Third and MidFirst
collectively the "Banks," and each individually, a "Bank").
Recitals
of Fact
Pursuant
to that certain Eighth Amended and Restated Loan Agreement dated as of October
31, 2002 (the "Original Loan Agreement") among the Original Banks, DGFS and
the
other parties named therein, the Original Banks agreed to make loans and
advances to DGFS on a revolving credit basis in an aggregate amount not to
exceed One Hundred Fifteen Million Dollars ($115,000,000.00), evidenced by
individual revolving credit notes to each Bank for the respective Facility
Commitments set out in the Original Loan Agreement, each with a termination
date
of June 30, 2004 (collectively, the "October 2002 Notes").
Pursuant
to that certain First Amendment to Eighth Amended and Restated Loan Agreement
dated as of March 31, 2003 (the "First Amendment") among the Original Banks,
DGFS and the other parties named therein, the Facility Commitment for Regions
was increased to a maximum principal amount of Twenty-Five Million Dollars
($25,000,000.00), and the total Commitment of the Original Banks was increased
to a maximum aggregate principal amount of One Hundred Twenty-Five Million
Dollars ($125,000,000.00).
Pursuant
to that certain Second Amendment to Eighth Amended and Restated Loan Agreement
dated as of May 28, 2003 (the "Second Amendment") among the Original Banks,
National City Bank, DGFS and the other parties named therein, the Facility
Commitment for Carolina First was increased to a maximum principal amount of
Fifteen Million Dollars ($15,000,000.00); the Facility Commitment for Bank
One
was increased to a maximum principal amount of Thirty-Five Million Dollars
($35,000,000.00); National City Bank was added as a Bank with a Facility
Commitment of a maximum principal amount of Fifteen Million Dollars
($15,000,000.00); and the total Commitment of the Banks was increased to a
maximum aggregate principal amount of One Hundred Sixty Million Dollars
($160,000,000.00).
Pursuant
to that certain Third Amendment to Eighth Amended and Restated Loan Agreement
dated as of June 30, 2003 (the "Third Amendment"") among the Banks, DGFS and
the
other parties named therein, the Facility Commitment for Hibernia (now known
as
Capital One) was increased to a maximum principal amount of Twenty Million
Dollars ($20,000,000.00); the Facility Commitment for U.S. Bank was increased
to
a maximum principal amount of Thirty Million Dollars ($30,000,000.00); Fifth
Third was added as a Bank with a Facility Commitment of a maximum principal
amount of Ten Million Dollars ($10,000,000.00); and the total Commitment of
the
Banks was increased to a maximum aggregate principal amount of One Hundred
Eighty Million Dollars ($180,000,000.00).
Pursuant
to that certain Fourth Amendment to Eighth Amended and Restated Loan Agreement,
dated on or about July 17, 2003 (the "Fourth Amendment") among the Banks, DGFS
and the other parties named therein, the Loan Agreement was modified to allow
DGC to pay dividends after the closing of its initial public offering of
stock.
Pursuant
to that certain Fifth Amendment to Eighth Amended and Restated Loan Agreement,
dated as of November 26, 2003 (the "Fifth Amendment") among the Banks, DGFS
and
the other parties named therein, the Facility Commitment for FTBNA was increased
to a maximum principal amount of Forty Million Dollars ($40,000,000.00), the
total Commitment of the Banks was increased to a maximum aggregate principal
amount of One Hundred Ninety Million Dollars ($190,000,000.00), and other
modifications were made to the Loan Agreement.
2
Pursuant
to that certain Sixth Amendment to Eighth Amended and Restated Loan Agreement,
dated as of June 30, 2004 (the "Sixth Amendment"), among the Banks, DGFS, DGPFC
and other parties named therein, DGPFC was added as a Borrower under the Banks'
respective Facility Commitments, DGPFC was added as a party to the Loan
Agreement, the Seventh Amended and Restated Security Agreement as defined
therein, and to other documents evidencing or securing the Loan (the Loan
Agreement and all security documents collectively referred to as the "Security
Documents"), the Banks extended the maturity date of the Loan to June 30, 2007,
and other modifications were made to the Loan Agreement, the Seventh Amended
and
Restated Security Agreement defined therein and certain other loan and security
documents.
Pursuant
to that certain Seventh Amendment to Eighth Amended and Restated Loan Agreement
dated as of December 3, 2004 (the "Seventh Amendment"), DGFS and DGPFC
obtained a Swing Line Loan up to an amount of Thirty Million Dollars
($30,000,000.00) from FTBNA as part of the credit facilities governed by the
Loan Agreement.
Pursuant
to that certain Eighth Amendment to Eighth Amended and Restated Loan Agreement
dated as of June 30, 2006 (the “Eighth Amendment”), the Banks agreed to extend
the Loan Termination Date for their Facility Commitments, provide for future
increases in certain of the Facility Commitments, admitted MidFirst Bank as
a
Bank hereunder, and made other modifications of the Loan Agreement, all as
set
forth in the Eighth Amendment.
Pursuant
to that certain Ninth Amendment to Eighth Amended and Restated Loan Agreement
dated as of November 22, 2006 (the “Dated Date”) but with an Effective Date as
defined therein (the “Ninth Amendment;” the Original Loan Agreement, as amended
thereby, and by the First Amendment, the Second Amendment, the Third Amendment,
the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh
Amendment, and the Eighth Amendment, referred to hereinafter as the "Loan
Agreement"), the Banks agreed to make certain modifications of the Loan
Agreement, all as set forth in the Ninth Amendment, some of which (the
termination of the Regions and MidFirst Facility Commitments) were intended
to
become effective on the Dated Date, and some of which would become effective
only on the Effective Date upon the occurrence of certain conditions related
to
the Merger Transaction and the Bear Xxxxxxx Facilities as such terms are
described in the Ninth Amendment.
The
Banks
have been asked to enter into a further amendment of the Loan Agreement in
order
to evidence more clearly the termination of the Regions and MidFirst Facility
Commitments as of November 22, 2006; to increase the Facility Commitment of
Carolina First from $15,000,000 to $30,000,000 as of November 22, 2006; and
to
make other modifications to the Loan Agreement as set forth herein.
NOW,
THEREFORE, in consideration of the premises as set forth in the Recitals of
Fact, the mutual covenants and agreements hereinafter set out, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed by the parties as follows:
3
Agreements
SECTION
I
- GENERAL TERMS
1. All
capitalized terms used and not defined herein shall have the meaning ascribed
to
them in the Loan Agreement.
2. To
induce
the Banks to enter into this Amendment, the Borrower does hereby absolutely
and
unconditionally, certify, represent and warrant to the Banks, and covenant
and
agree with the Banks, that:
(a) All
representations and warranties made by the Borrower in the Loan Agreement,
as
amended hereby; in the Seventh Amended and Restated Security Agreement dated
as
of October 31, 2002, as thereafter amended from time to time, between the
Borrower and Agent (the "Security Agreement"); and in all other loan documents
(all of which are herein sometimes called the "Loan Documents"), are true,
correct and complete in all material respects as of the date of this
Amendment.
(b) As
of the
date hereof and with the execution of this Amendment, there are no existing
events, circumstances or conditions which constitute, or would, with the giving
of notice, lapse of time, or both, constitute Events of Default.
(c) There
are
no existing offsets, defenses or counterclaims to the obligations of the
Borrowers as set forth in the New Notes, the Security Agreement, the Loan
Agreement, or in any other Loan Document executed by the Borrower, in connection
with the Loan.
(d) Neither
Borrower has any existing claim for damages against the Banks arising out of
or
related to the Loan; and, if and to the extent (if any) that the Borrowers
or
any of them have or may have any such existing claim (whether known or unknown),
the Borrower do each hereby forever release and discharge, in all respects,
the
Banks with respect to such claim.
(e) The
Loan
Documents, as amended by this Amendment, are valid, genuine, enforceable in
accordance with their respective terms, and in full force and
effect.
SECTION
II -- LOAN AGREEMENT AMENDMENTS
1. The
following definitions shall be added to Section 1.1 of the Loan Agreement in
alphabetical order:
(a) “Trust
Preferred Facility” means the Trust Preferred Securities guaranteed by DGC in
the aggregate original principal amount of $30,000,000.
4
2. Section
6.11 of the Loan Agreement (as set forth in the Sixth Amendment to Eighth
Amended and Restated Loan Agreement) shall be deleted in its entirety and the
following inserted in lieu thereof:
“6.11 Minimum
Consolidated Net Income.
Maintain, beginning December 31, 2006, as to DGC on a consolidated basis, on
a
rolling four (4) quarter basis, as of the end of each fiscal quarter net income
after taxes (GAAP basis) of at least Twenty-Four Million Dollars
($24,000,000.00).”
III.
MISCELLANEOUS
1. All
terms
and provisions of the Loan Agreement, as heretofore amended, which are
inconsistent with the provisions of this Amendment are hereby modified and
amended to conform hereto; and, as so modified and amended, the Loan Agreement
is hereby ratified, approved and confirmed. Except as otherwise may be expressly
provided herein, this Amendment shall become effective as of the date set forth
in the initial paragraph hereof.
2. All
references in all Loan Documents (including, but not limited to, the New Notes,
the Security Agreement, and the Loan Agreement) to the "Loan Agreement" shall,
except as the context may otherwise require, be deemed to constitute references
to the Loan Agreement as amended hereby. All references in the Loan Documents
(including, but not limited to, the Security Agreement and the Loan Agreement)
to the "Notes" shall, except as the context may otherwise require, be deemed
to
constitute references to the Notes as such term is defined herein.
3. MidFirst
Bank joins herein solely for the purpose of terminating its Facility Commitment
as of November 22, 2006 and withdrawing, on such date, as a Bank under the
Loan
Agreement and related documents.
4. Regions
Bank joins herein solely for the purpose of terminating its Facility Commitment
as of November 22, 2006 and withdrawing, on such date, as a Bank under the
Loan
Agreement and related documents.
5. Exhibit
“B” to the Loan Agreement, as set forth in the Eighth Amendment, is hereby
deleted in its entirety, and the schedule attached hereto marked Revised Exhibit
“B” shall be inserted in lieu thereof.
6. Exhibits
"E" and "H" to the Loan Agreement, as set forth in the Eight Amendment, are
hereby deleted in their entirety, and the schedules attached hereto marked
Revised
Exhibit "E" and
Revised Exhibit "H"
shall be
inserted in lieu thereof.
[SEPARATE
SIGNATURE PAGES FOLLOW]
5
SIGNATURE
PAGE
TO
TENTH
AMENDMENT TO EIGHTH AMENDED AND RESTATED LOAN AGREEMENT
IN
WITNESS WHEREOF, the Borrowers, the Guarantors, the Banks and the Agent have
caused this Amendment to be executed by their duly authorized officers, all
as
of the day and year first above written.
BORROWERS:
DIRECT
GENERAL FINANCIAL SERVICES,
INC.,
a
Tennessee corporation
By:
/s/Xxxxx
X. Xxxxx
Xxxxx
X.
Xxxxx, President
DIRECT
GENERAL PREMIUM FINANCE
COMPANY,
a
Tennessee corporation
By:
/s/Xxxxx
X. Xxxxx
Xxxxx
X.
Xxxxx, President
GUARANTORS:
DIRECT
GENERAL CORPORATION,
a
Tennessee corporation
By:/s/Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx,
Senior
Vice-President
DIRECT
GENERAL INSURANCE AGENCY,
INC.,
a
Tennessee corporation
By:
/s/Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx,
Senior
Vice-President
[SIGNATURE
PAGE CONTINUED]
Exhibit
"B"
-
2
DIRECT
GENERAL INSURANCE AGENCY,
INC.,
an
Arkansas corporation
By:
/s/Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx,
Senior
Vice-President
DIRECT
GENERAL INSURANCE AGENCY,
INC.,
a
Mississippi corporation
By:
/s/Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx,
Senior
Vice-President
DIRECT
GENERAL INSURANCE AGENCY
OF
LOUISIANA, INC.,
a
Louisiana corporation
By:
/s/Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx,
Senior
Vice-President
DIRECT
GENERAL AGENCY OF
KENTUCKY,
INC.,
a
Kentucky corporation
By:
/s/Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx,
Senior
Vice-President
DIRECT
ADJUSTING COMPANY, INC.,
a
Tennessee corporation
By:/s/J.
Xxxx Xxxxxx
J.
Xxxx
Xxxxxx,
Senior
Vice-President and Chief Financial Officer
DIRECT
ADMINISTRATION, INC.,
a
Tennessee corporation
By:/s/J.
Xxxx Xxxxxx
J.
Xxxx
Xxxxxx,
Senior
Vice-President and Chief Financial Officer
[SIGNATURE
PAGE CONTINUED]
Exhibit
"B"
-
2
DIRECT
GENERAL INSURANCE AGENCY,
INC.,
a
Texas
corporation
By:
/s/Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx,
Senior
Vice-President
DIRECT
GENERAL CONSUMER
PRODUCTS,
INC.,
a
Tennessee corporation
By:/s/J.
Xxxx Xxxxxx
J.
Xxxx
Xxxxxx, President
BANKS:
FIRST
TENNESSEE BANK NATIONAL
ASSOCIATION
By:/s/Xxx
Xxxxxxx
Title:
Senior Vice President
CAPITAL
ONE, N.A.
By:/s/Xxxxx
Rack
Title:
Senior Vice President
U.S.
BANK NATIONAL ASSOCIATION
By:___________________________________
Title:__________________________________
CAROLINA
FIRST BANK
By:___________________________________
Title:__________________________________
JPMORGAN
CHASE BANK, N.A.
By:/s/Xxxxxx
Xxxx
Title:
Senior Vice President
[SIGNATURE
PAGE CONTINUED]
Exhibit
"B"
-
2
REGIONS
BANK
By:/s/Xxxxxx
Xxxxxx
Title:
Senior Vice President
NATIONAL
CITY BANK OF KENTUCKY
By:/s/
Xxxxx Xxxxxxxx
Title:
Senior Vice President
FIFTH
THIRD BANK, N.A. (Tennessee)
By:/s/Xxxxxx
Xxxxxxxxx
Title:
Officer
MIDFIRST
BANK
By:/s/Xxxxx
Xxxxxx
Title:
Vice President
AGENT:
FIRST
TENNESSEE BANK NATIONAL
ASSOCIATION
By:/s/Xxx
Xxxxxxx
Title:
Senior Vice President
Exhibit
"B"
-
2
REVISED
EXHIBIT "B"
FACILITY
COMMITMENTS OF THE BANKS
AS
OF
NOVEMBER 22, 2006
Revolving
Facility Commitments
|
First
Tennessee Bank National Association
|
$
|
40,000,000.00*
|
||
|
Capital One
|
20,000,000.00
|
|||
|
U.
S. Bank National Association
|
30,000,000.00
|
|||
|
Regions
Bank
|
-0-
|
|||
|
Carolina
First Bank
|
30,000,000.00
|
|||
|
National
City Bank
|
15,000,000.00
|
|||
|
Fifth
Third Bank
|
10,000,000.00
|
|||
|
JPMorgan
Chase Bank, N.A.
|
35,000,000.00
|
|||
|
MidWest
Bank
|
-0-
|
|||
|
TOTAL:
|
$
|
180,000,000.00
|
||
* Includes
$30,000,000.00 Swing Line Commitment of First Tennessee Bank National
Association.
AS
OF
JANUARY 1, 2007
Revolving
Facility Commitments
|
First
Tennessee Bank National Association
|
$
|
40,000,000.00*
|
||
|
Capital One
|
25,000,000.00
|
|||
|
U.
S. Bank National Association
|
30,000,000.00
|
|||
|
Carolina
First Bank
|
30,000,000.00
|
|||
|
National
City Bank
|
20,000,000.00
|
|||
|
Fifth
Third Bank
|
15,000,000.00
|
|||
|
JPMorgan
Chase Bank, N.A.
|
35,000,000.00
|
|||
|
TOTAL:
|
$
|
195,000,000.00
|
||
* Includes
$30,000,000.00 Swing Line Commitment of First Tennessee Bank National
Association.
Exhibit
"B"
-
2
2100000-0
12/18/2006
REVISED
EXHIBIT "E"
BORROWING
BASE CERTIFICATE
AS
OF
____ DAY OF _______________, 20___
|
TOTAL
RECEIVABLES FROM POLICYHOLDERS FOR PRIOR REPORT
|
$_______________
|
|
ADD:
|
|
|
New
Contracts
|
$_______________
|
|
LESS:
|
|
|
Cash
Payments
|
($________________)
|
|
TOTAL
RECEIVABLES
FROM
POLICYHOLDERS FOR THIS REPORT:
|
$_______________
|
|
LESS
INELIGIBLE RECEIVABLES:
|
|
|
Amounts
Insured with Insurance Companies with an A.M. Best Rating
not
in compliance with Section 8.13 of the Loan Agreement
|
($_______________)
|
|
Past
Due Receivables (See clause (a)(iv) of definition of Eligible
Receivables.)
|
($_______________)
|
|
Receivables
in Ineligible States
|
($_______________)
|
|
Unearned
Interest, Finance Charges or Service Charges
|
($_______________)
|
|
PLUS
RECEIVABLES FROM INSURERS QUALIFYING UNDER
CLAUSE (b)
OF DEFINITION OF "ELIGIBLE RECEIVABLES"
|
$_______________
|
|
SUBTOTAL:
Eligible Receivables (See Section 1.1)
|
$_______________
|
|
TIMES
ADVANCE RATE
|
x
85%
|
|
TOTAL
AVAILABILITY
|
$_______________
|
|
LESS
LOAN OUTSTANDING (not
to exceed $180,000,000.00)
|
($_______________)
|
|
NET
LOAN AVAILABILITY
|
$_______________
|
The
undersigned each certifies and warrants that the foregoing Borrowing Base
Certificate is true and accurate, based upon the definitions set out in Sections
1.1 and 1.2 of the Loan Agreement.
DATED
this ____ day of ___________________, 20__.
DIRECT
GENERAL FINANCIAL
SERVICES
INC.
By:_______________________________
Title:______________________________
DIRECT
GENERAL PREMIUM
FINANCE
COMPANY
By:
________________________________
Title:
_______________________________
Revised
Exhibit "E"
-
1
REVISED
EXHIBIT "H"
COMPLIANCE
CERTIFICATE
The
undersigned, the duly authorized officers of DIRECT GENERAL FINANCIAL SERVICES
INC., a Tennessee corporation, DIRECT GENERAL PREMIUM FINANCE COMPANY, a
Tennessee corporation (together, the "Borrower"), and DIRECT GENERAL
CORPORATION, a Tennessee corporation ("DGC"), pursuant to that certain Eighth
Amended and Restated Loan Agreement dated as of September 30, 2002, as
subsequently amended (the "Loan Agreement"), among Borrower, DGC, other
guarantors therein named, First Tennessee Bank National Association, Memphis,
Tennessee, as agent and as bank ("Agent"), and the Banks named therein
("Banks"), certifies to said Agent and Banks, in accordance with the terms
and
provisions of said Loan Agreement, as follows:
1. All
of the representations and warranties set forth in Section 5 of the Loan
Agreement are and remain true and correct on and as of the date of this
Certificate with the same effect as though such representations and warranties
had been made on and as of this date.
2. As
of the date hereof, the Borrower and DGC are in full compliance with all of
the
terms and provisions set forth in the Loan Agreement and all of the instruments
and documents executed in connection therewith, and no Event of Default, as
specified in Section 8 of the Loan Agreement, nor any event which, upon
notice, lapse of time or both, would constitute an Event of Default, has
occurred or is continuing.
3. As
used herein, the term "Affiliated Insurers" shall have the meaning ascribed
thereto in the Loan Agreement.
4.
As of
_________________, 20__ (the date of the most recent financial statement
furnished by Borrower and Affiliated Insurers to Agent), the ratios listed
in
the Loan Agreement are as follows:
|
ACTUAL
|
COVENANT
|
||
|
AFFIRMATIVE
COVENANTS (AS TO BORROWER):
|
|||
|
Section
6.13
|
Tangible
Net Worth
|
____________
|
>$9,500,000
|
|
Section
6.14
|
Ratio
of Eligible Receivables to Debt
|
____________
|
>1.05:1.00
|
|
Section
6.15
|
Ratio
of Unearned Premiums to Loan Amount
|
____________
|
>1.1:1.0
|
|
AFFIRMATIVE
COVENANTS (AS TO DGC):
|
|||
|
Section
6.11
|
Minimum
Consolidated Net Income
|
____________
|
>$24,000,000
|
|
Section
6.12
|
Loan
Amount to Net Worth
|
____________
|
<1.75:1.00
|
|
Section
6.13
|
Tangible
Net Worth
|
____________
|
>$200,000,000**
|
|
Section
6.16
|
Debt
Service Coverage
|
____________
|
>1.50:1.00
|
Exhibit
"H"
-
1
|
EVENTS
OF DEFAULT AS MEASURED ON AFFILIATED INSURERS:
|
|||
|
Section
8.4
|
Capital
Adequacy Ratio
|
____________
|
Event
of Default if
≥4.00
to 1.00
|
|
Section
8.5
|
Liquidity
Ratio
|
____________
|
Event
of Default if
<1.0:1.0
|
|
Section
8.6
|
Minimum
Capital Surplus
|
____________
|
Event
of Default if
<$150,000,000.00
|
|
Section
8.8
|
Risk
Based Capital*
|
____________
|
Event
of Default if
<250%
|
|
FUNDED
DEBT / EBITDA CALCULATION:
|
||
|
-
Funded Debt / EBITDA Ratio: (Choose one)
|
||
|
_______
|
Greater
than 2.0 to 1.0
|
(Actual
Ratio:_________________)
|
|
_______
|
Less
than 2.0 to 1.0
|
(Actual
Ratio:_________________)
|
*
Measured Annually
**
Adjusted as provided in Section 6.13.
The
undersigned certify and warrant that the foregoing ratios have been computed
from the figures contained in Borrower's, DGC's and Affiliated Insurers'
financial statement of the date hereinabove indicated, based upon the
definitions set out in Sections 1.1, 1.2 and 1.3 of the Loan
Agreement.
DATED
this ____ day of ______________________, 20__.
DIRECT
GENERAL FINANCIAL
SERVICES
INC.
By:________________________________
Title:_______________________________
DIRECT
GENERAL PREMIUM
FINANCE
COMPANY
By:
_______________________________
Title:
______________________________
DIRECT
GENERAL CORPORATION
By:________________________________
Title:______________________________
Exhibit
"H" - 2
