Exhibit 10(oo)
[On SunTrust Letterhead]
October 24, 2002
VIA FEDERAL EXPRESS
Kim D. Thorpe
Executive Vice President
FPIC Insurance Group, Inc.
225 Water Street, Suite 1400
Jacksonville, FL 32202
Re: Requested Forbearance of Covenant Violation
Dear Mr. Thorpe:
Pursuant to the terms and conditions of Section 5.12 of that certain
Revolving Credit and Term Loan Agreement, dated as of August 31, 2001, by and
among FPIC INSURANCE GROUP, INC., a Florida corporation (the "Borrower"), the
several banks and other financial institutions from time to time party hereto
(the "Lenders"), and SUNTRUST BANK, in its capacity as Administrative Agent for
the Lenders (the "Administrative Agent") and in its capacity as Collateral Agent
for the Lenders (the "Collateral Agent"), as amended by that certain Amendment
No. 1 to Revolving Credit and Term Loan Agreement, dated as of March 25, 2002
(as amended, the "Loan Agreement"; capitalized terms used herein and not defined
herein shall have the meanings given to such terms in said Loan Agreement), the
Borrower is required to "... cause First Professionals at all times to be rated
"A-" or higher, itself or as part of an insurance company group so rated by A.M.
Best Company" ("Best"). As of the date hereof, we understand the Borrower will
not be in compliance with this covenant due to Best's change in the Borrower's
rating from "A-" to "B++" and, as a result, you have requested that the
Administrative Agent and the Lenders forbear enforcement of this covenant
violation until November 23, 2002.
In response, the Administrative Agent and the Lenders will agree to
forbear enforcement of the foregoing covenant violation until November 23, 2002;
provided that the Borrower and each of the Guarantors accept the terms and
conditions hereof (such acceptance to be evidenced by their execution of this
letter agreement in the spaces provided below for such purpose) and, in
consideration of said forbearance to be granted by the Administrative Agent and
the Lenders, agree as follows:
1. No later than November 14, 2002, the Borrower shall
make a mandatory prepayment of the outstanding principal balance of
the Term Loan in the amount of $2,000,000.00 or, alternatively,
shall pledge to the Collateral Agent not less than $2,000,000.00 in
cash collateral, in form and substance acceptable to the
Administrative Agent, to secure the Term Loan. Thereafter, no later
than January 31, 2003, the Borrower shall make an additional
mandatory prepayment of the outstanding principal balance of the
Term Loan in the amount of $1,000,000.00 or, alternatively, shall
pledge to the Collateral Agent not less than $1,000,000.00 in
additional cash collateral, in form and substance acceptable to the
Administrative Agent, to further secure the Term Loan.
2. The Borrower shall execute, and shall cause each of
the Guarantors to execute, any and all documents and instruments
required by the Administrative Agent in connection with the
foregoing, including without limitation, if the Borrower elects to
pledge cash collateral to the Collateral Agent in accordance with
paragraph 1 above, a pledge agreement and other required security
documents, all in form and substance acceptable to the
Administrative Agent.
3. The Borrower shall pay to the Administrative Agent,
concurrently with the acceptance of this letter agreement, a
forbearance fee in an amount equal to 0.25% (25 basis points)
multiplied by the aggregate Commitments, such fee being for the
account of each Lender and payable pro rata based on the ratio of
such Lender's Commitment to the aggregate of all such Lenders'
Commitments.
4. The Borrower and each of the Guarantors, by
acceptance of this letter agreement, jointly and severally, on
behalf of themselves and their respective legal representatives,
successors and assigns, fully, finally and irrevocably release the
Administrative Agent, the Collateral Agent, the Lenders and their
respective officers, directors, affiliates, subsidiaries, parents,
representatives, agents, attorneys, employees, predecessors,
successors and assigns (collectively, the "Released Parties") from
any and all defenses, counterclaims, offsets, cross-claims, claims
and demands of any kind or nature existing as of the date of
acceptance hereof, including without limitation, any usury or lender
liability claims or defenses, whether known or unknown and whenever
and howsoever arising, relating in any way to the Loans, the Loan
Documents or any past relationship between the Borrower and/or such
Guarantors and the Released Parties.
5. The Borrower shall pay all of the Administrative
Agent's legal fees and costs incurred in connection with the
preparation, negotiation and execution of all documentation required
above.
The forbearance set forth above shall be applicable until November
23, 2002 only. Commencing on November 23, 2002, unless the Administrative Agent
and the Lenders
have agreed in writing to extend the forbearance period or to modify or waive
the provisions of Section 5.12 of the Loan Agreement, the Borrower shall be in
full compliance with the provisions of said Section and, if the Borrower is not
in full compliance with the provisions of said Section, the same shall
constitute, in the sole discretion of the Required Lenders, an Event of Default
under the Loan Agreement. Notwithstanding the foregoing provisions, the
forbearance contemplated hereby shall be automatically withdrawn and shall
no longer be binding upon the Administrative Agent or the Lenders in the event
the Borrower fails to timely comply with the conditions set forth in each of
paragraphs 1, 2, 3 and 5 above.
Each of the Loan Documents are and shall remain valid, legally
binding obligations of Borrower and the Guarantors, enforceable in accordance
with their terms and, except as provided in paragraph 1 above, the provisions
hereof do not alter, amend or supersede any of the provisions of such Loan
Documents and shall not be deemed to be a novation. The Loan Documents shall
continue to govern the Loans until such time as the Administrative Agent, the
Lenders and the Borrower agree (if at all) to enter into any documents formally
modifying or amending the Loan Documents. Nothing contained herein waives or
excuses any present or future default under the Loan Documents.
The acceptance by the Borrower and each of the Guarantors of the
terms and conditions hereof has been duly authorized by all requisite action,
corporate or otherwise. In the event that the Borrower and/or the Guarantors do
not accept the provisions hereof by placing an "X" by the selected prepayment or
cash collateral option in the space provided below for such purpose, executing
this letter agreement in the spaces provided below for such purpose and
returning same to the Administrative Agent by 5:00 p.m. (Orlando time) on
October 25, 2002, the offer of the Administrative Agent and the Lenders to
provide the forbearance set forth herein shall be withdrawn and void.
To acknowledge your agreement to the terms and conditions upon which
the Administrative Agent and the Lenders will grant the forbearance set forth
above, please provide for execution by all required parties in the spaces
provided below. Following full execution, return the acknowledged copy to me by
telecopy (407-237-4076) and the original by regular mail. If you have any
questions, please feel free to call.
SUNTRUST BANK,
as Administrative Agent, as
Collateral Agent, as Issuing Bank
and as a Lender
By: /s/ Edward E. Wooten
-------------------------------------
Name: Edward E. Wooten
Title: Director
Accepted and agreed to as of the 24th day of October, 2002.
FPIC INSURANCE GROUP, INC.
By: /s/ Kim D. Thorpe
-----------------------------------------------
Name: Kim D. Thorpe
Title: Executive Vice President
and Chief Financial Officer
Additionally, the Borrower hereby selects the following option:
________________ To make mandatory prepayments of the outstanding principal
balance of the Term Loan in the aggregate amount of
$3,000,000.00 in accordance with the terms and
conditions set forth above; or
X To pledge not less than $3,000,000.00 in cash collateral
________________ to the Collateral Agent, in form and substance
acceptable to the Administrative Agent, to secure the
Term Loan in accordance with the terms and conditions
set forth above.
Accepted and agreed to as of the 24th day of October, 2002.
FPIC INSURANCE AGENCY, INC.
EMPLOYERS MUTUAL, INC.
PROFESSIONAL STRATEGY OPTIONS, INC.
ADMINISTRATORS FOR THE PROFESSIONS, INC.
GROUP DATA CORPORATION
FPIC INTERMEDIARIES, INC.
By: /s/ Kim D. Thorpe
-----------------------------------------------
Name: Kim D. Thorpe
Title: Vice President
(On behalf of each named entity)
Agreed to as of the 25th day of October, 2002:
COMPASS BANK
By: /s/ C. French Yarbrough, Jr.
-----------------------------------------------
Name: C. French Yarbrough, Jr.
Title: Senior Vice President
Agreed to as of the ____ day of October, 2002:
BROWN BROTHERS HARRIMAN & CO.
By: /s/ W. Carter Sullivan
-----------------------------------------------
Name: W. Carter Sullivan
Title: Partner
Agreed to as of the 28th day of October, 2002:
REGIONS BANK
By: /s/ Anthony Nigro
-----------------------------------------------
Name: Anthony Nigro
Title: Vice President
Agreed to as of the 28th day of October, 2002:
CAROLINA FIRST BANK
By: /s/ Charles D. Chamberlain
-----------------------------------------------
Name: Charles D. Chamberlain
Title: Executive Vice President