Exhibit 10.3
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Agreement") is made and
entered into as of this 15TH day of December, 1998, by and among HILB, XXXXX AND
XXXXXXXX COMPANY, a Virginia corporation (the "Borrower"), the Banks set forth
on the signature page hereto (the "Banks"), and CRESTAR BANK, a Virginia banking
corporation, as agent for the Banks under the Credit Agreement (in such
capacity, the "Agent").
RECITALS
A. The Borrower, the Agent and the Banks are parties to that certain Credit
Agreement dated as of February 12, 1996 and that certain Amendment to Credit
Agreement dated as of February 24, 1997 (together, the "Credit Agreement"),
pursuant to which each Bank, severally and not jointly, agreed to make Loans
from time to time until the Commitment Termination Date in an aggregate
principal amount at any time outstanding not exceeding the amount of its
Commitment. Capitalized terms not otherwise defined herein shall have the
meanings given such terms in the Credit Agreement.
B. The Borrower has requested that the Agent and the Banks make certain
amendments to the Credit Agreement and the Agent and the Banks are willing to
make certain amendments to the Credit Agreement on the terms and conditions set
forth herein.
AGREEMENT
In consideration of the Recitals and of the mutual promises and
covenants contained herein, the Borrower, the Agent and the Banks agree as
follows:
1. Amendments to Credit Agreement. The Borrower, the Agent and the
Banks agree to the following amendments to the Credit Agreement:
(a) Section 7.02 of the Credit Agreement is amended by
deleting the existing provision and substituting the following in lieu thereof:
"SECTION 7.02. Indebtedness to Total Capitalization
Ratio. The ratio of Consolidated Indebtedness to the sum
of Consolidated Indebtedness plus Consolidated Net Worth
shall not at any time exceed .55 to 1.00. For purposes
of this covenant, (i) Consolidated Indebtedness shall be
determined as of the date of the last day of each
quarter and the date of any change in Consolidated
Indebtedness, and (ii) Consolidated Net Worth shall be
calculated as of the last day of each quarter."
(b) The definition of "Commitment" as set forth in Exhibit A
of the Credit Agreement is amended by deleting the existing provision and
substituting the following in lieu thereof:
"'Commitment' means, with respect to each Bank,
$20,000,000, as such amount may be reduced from time to
time pursuant to this Agreement."
(c) The definition of "Commitment Termination Date" as set
forth in Exhibit A of the Credit Agreement is amended by deleting the existing
provision and substituting the following in lieu thereof:
"'Commitment Termination Date' means December 31, 2003,
or such earlier date and time on which the Commitments
are terminated pursuant to Article VIII."
(d) Schedule 4.06(a) is amended by deleting the existing
schedule in its entirety and substituting in lieu thereof the Schedule 4.06(a)
attached hereto.
2. Representations and Warranties. The Borrower hereby represents
and warrants to the Agent and the Banks as follows:
(a) Recitals. The Recitals in this Agreement are true and
correct in all respects.
(b) Incorporation of Representations. All representations
and warranties of the Borrower in the Credit Agreement are incorporated herein
in full by this reference and are true and correct as of the date hereof.
(c) No Defaults. No Default or Event of Default has occurred
and is continuing under the Credit Agreement.
(d) Corporate Power; Authorization. The Borrower has the
corporate power, and has been duly authorized by all requisite corporate action,
to execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly executed and delivered by the Borrower.
(e) Enforceability. This Agreement is the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.
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(f) No Violation. The Borrower's execution, delivery and
performance of this Agreement do not and will not (i) violate any law, rule,
regulation or court order to which the Borrower is subject, or (ii) conflict
with or result in a breach of the Borrower's Articles of Incorporation or Bylaws
or any agreement or instrument to which the Borrower is party or by which it or
its properties are bound.
(g) Obligations Absolute. The obligation of the Borrower to
repay the Loans, together with all interest accrued thereon, is absolute and
unconditional, and there exists no known right of set off or recoupment,
counterclaim or defense of any nature whatsoever to payment of the Obligations,
and, to the Borrower's knowledge, it does not currently hold and has not
previously held any claims of any kind against the Banks and their respective
employees, directors, agents, successors or assigns arising out of or in any way
connected with this Agreement, the Credit Agreement or the Replacement Notes.
3. Conditions Precedent to Effectiveness of Agreement. This
Agreement shall not be effective unless and until each of the following
conditions shall have been satisfied in the Agent and the Banks sole discretion
or waived by the Agent and the Banks, for whose sole benefit such conditions
exist:
(a) The Borrower shall have paid all of the Agent's and the
Banks' costs and expenses (including the Agent's and the Banks' reasonable
attorneys fees) incurred in connection with the preparation of this Agreement.
(b) The Borrower shall have delivered, or caused to be
delivered, to each Bank:
(i) a duplicate original of this Agreement executed
on the Borrower's behalf by its duly authorized officer.
(ii) a duly executed promissory note reflecting such
Bank's increased Commitment and new Commitment Termination Date and
substantially in the form of Exhibit B to the Credit Agreement (each, a
"Replacement Note"), payable to its order and otherwise complying with the
provisions of Section 1.03 of the Credit Agreement, whereupon the original notes
will be returned to the Borrower marked "Cancelled by Substitution".
(c) The Borrower shall have delivered, or caused to be
delivered, to the Agent, (i) a certificate of the Secretary or an Assistant
Secretary of the Borrower dated as of the date hereof substantially in the form
attached as Appendix 1 hereto and (ii) a certificate of the Chief Financial
Officer of the Borrower, substantially in the form attached as Appendix 2
hereto.
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4. Effect and Construction of Agreement. Except as expressly
provided herein, the Credit Agreement shall remain in full force and effect in
accordance with its respective terms, and this Agreement shall not be construed
to:
(i) waive or impair any rights, powers or remedies of the
Agent and the Banks under the Credit Agreement; or
(ii) constitute an agreement by the Agent and the Banks or
require the Agent and the Banks to make further amendments to the
Credit Agreement.
In the event of any inconsistency between the terms of this Agreement and the
Credit Agreement, this Agreement shall govern. The Borrower acknowledges that it
has consulted with counsel and with such other experts and advisors as it has
deemed necessary in connection with the negotiation, execution and delivery of
this Agreement. This Agreement shall be construed without regard to any
presumption or rule requiring that it be construed against the party causing
this Agreement or any part hereof to be drafted.
5. Expenses. The Borrower agrees to pay all costs, fees and
expenses of the Agent and the Banks (including the reasonable fees of the
Agent's and the Banks' counsel) incurred by the Agent and the Banks in
connection with the negotiation, preparation, administration and enforcement of
this Agreement.
6. Miscellaneous.
(a) Further Assurance. The Borrower agrees to execute such
other and further documents and instruments as the Agent may request to
implement the provisions of this Agreement.
(b) Benefit of Agreement. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto, their
respective successors and assigns. No other person or entity shall be entitled
to claim any right or benefit hereunder, including, without limitation, the
status of a third-party beneficiary of this Agreement.
(c) Integration. This Agreement, together with the Credit
Agreement and the Replacement Notes, constitutes the entire agreement and
understanding among the parties relating to the subject matter hereof, and
supersedes all prior proposals, negotiations, agreements and understandings
relating to such subject matter. In entering into this Agreement, the Borrower
acknowledges that it is relying on no statement, representation, warranty,
covenant or agreement of any kind made by the Agent and the Banks or any
employee or agent of the Agent and the Banks, except for the agreements of the
Agent and the Banks set forth herein.
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(d) Severability. The provisions of this Agreement are
intended to be severable. If any provisions of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or enforceability without in any manner affecting the validity of enforceability
of such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the Commonwealth
of Virginia, without regard to the choice of law principles of such state.
(f) Counterparts; Telecopied Signatures. This Agreement may
be executed in any number of counterparts and by different parties to this
Agreement on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
(g) Notices. Any notices with respect to this Agreement
shall be given in the manner provided for in Section 10.04 of the Credit
Agreement.
(h) Amendment. No amendment, modification, rescission,
waiver or release of any provision of this Agreement shall be effective unless
the same shall be in writing and signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CRESTAR BANK, as Agent FIRST UNION NATIONAL BANK
(formerly, First Union National Bank
of Virginia)
By: /s/ By: /s/
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Its: Vice President Its: Vice President
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CRESTAR BANK HILB, XXXXX AND XXXXXXXX
COMPANY
By: /s/ By: /s/ Xxxxxxx Xxxxx
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Its: Vice President Its: Sr. VP, CFO & Treasurer
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