Composite Conformed Copy
Exhibit 4
AMENDMENT NO. 3
AMENDMENT NO. 3 dated as of March 31, 1995 to the AMENDMENT AND
RESTATEMENT dated as of April 28, 1993 of CREDIT AGREEMENT dated as of April 21,
1992 between THE FIRST AMERICAN FINANCIAL CORPORATION (the "Company"), the
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lenders party thereto (the "Lenders") and THE CHASE MANHATTAN BANK (NATIONAL
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ASSOCIATION), as agent (the "Agent") for the Lenders (such Amendment and
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Restatement, as amended by Amendment No. 1 thereto dated as of March 31, 1994
and Amendment No. 2 thereto dated as of November 22, 1994, being herein called
the "Credit Agreement").
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The Company has requested that the Lenders agree to certain amendments
of the Credit Agreement. The Lenders are willing to do so on the terms and
conditions contained herein.
Accordingly, the parties hereto hereby agree as follows :
SECTION 1. DEFINITIONS. Terms defined in the Credit Agreement shall
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have the same meanings when used herein.
SECTION 2. AMENDMENTS OF CREDIT AGREEMENT. Effective as of March 31,
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1995 but subject to Section 3 hereof, the Credit Agreement is hereby amended as
follows:
A. Section 1.01 of the Credit Agreement is amended by (1) deleting
the definition of "Fixed Charge Coverage Ratio" and (2) inserting the following
new defined terms in the appropriate alphabetical order:
"Available Cash" shall mean, for any Computation Date, the sum of the
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following (without duplication): (a) cash, Permitted Investments and
balances in operating deposit accounts with banks held by the Company and
Non-Regulated First Tier Subsidiaries as at such Computation Date that are
not subject to any Liens (provided that such cash, Permitted Investments
and balances held by any Non-Regulated First-Tier Subsidiary shall be taken
into account only if and to the extent an amount equal to the aggregate
amount thereof may be distributed by such Subsidiary to the Company on such
Computation Date and thereafter during the next succeeding Computation
Period under any legal, regulatory, contractual or other restrictions on
distributions by such Subsidiary to the Company) plus (b) the aggregate of
the Dividend Capacity Amounts for the Regulated First-Tier Subsidiaries for
such Computation Period minus (or plus, in the case of a negative number)
(c) the sum of (1) the aggregate principal amount of the New Revolving
Credit Loans outstanding on such Computation Date minus (2) the aggregate
principal amount of the New Revolving Credit Loans outstanding on the last
day of the fiscal quarter of the Company next preceding the fiscal quarter
in which such Computation Date occurs minus (or plus, in the case of a
negative number) (d) the sum of (1) the aggregate principal amount of loans
and advances made to the Company by Regulated First-Tier Subsidiaries
outstanding on such Computation Date minus (2) the aggregate principal
amount of such loans and advances outstanding on the last day of the fiscal
quarter of the Company next preceding the fiscal quarter in which such
Computation Date occurs plus (e) the sum of (without duplication) (1) the
aggregate amount of payments made by the Company in cash during the fiscal
quarter of the Company ending on such Computation Date in respect of
acquisitions made as permitted by Section 8.05(a) hereof plus (2) capital
contributions made by the Company to its Subsidiaries during such fiscal
quarter plus (3) Dividend Payments made during such fiscal quarter plus (4)
payments made by the Company pursuant to its 401(k) Savings Plan during
such fiscal quarter to match contributions made by participants in such
Plan plus (5) payments made by the Company during such fiscal quarter to
its Employee Stock Ownership Trust to fund repurchases by such Trust of
shares of capital stock of the Company (except that the sum provided for in
this clause (e) shall not exceed the aggregate of the amounts subtracted
pursuant to clauses (c) and (d) above in determining Available Cash for
such Computation Date); provided that none of the calculations provided for
by clauses (c), (d) and (e) above shall be taken into account in
determining Available Cash for the Computation Date occurring on March 31,
1995.
"Computation Period" shall mean each period of four consecutive fiscal
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quarters of the Company, the first of which shall commence on April 1,
1995.
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"Computation Date" shall mean the last day of each fiscal quarter of
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the Company, the first of which shall occur on March 31, 1995.
"Dividend Capacity Amount" shall mean, when used with respect to any
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Regulated First-Tier Subsidiary, for any Computation Period, the maximum
amount of dividends that such Subsidiary is permitted to pay to the Company
on the first day of such Computation Period on the shares of capital stock
of such Subsidiary held by the Company under the laws and regulations
applicable to such Subsidiary determined in accordance with the statutory
or regulatory accounting principles applicable to such Subsidiary (and
taking account of any orders, decrees, memoranda of understanding and other
actions by, or agreements with, the Applicable Bank Regulatory Authority or
Applicable Insurance Regulatory Authority, as the case may be, having
jurisdiction over such Subsidiary and any contractual or other restrictions
affecting the payment of dividends by such Subsidiary); provided that, for
purposes of this definition, (a) statutory or regulatory limitations on the
payment of dividends by such Subsidiary based on the surplus or retained
earnings of such Subsidiary determined as of the last day of the fiscal
year of such Subsidiary next preceding such Computation Period shall be
determined (if the Computation Date next preceding such Computation Period
is later than such last day) as of such Computation Date and (b) statutory
or regulatory limitations on the payment of dividends by such Subsidiary
based on the net income of such Subsidiary for a period comprising one or
more fiscal years of such Subsidiary next preceding such Computation Period
shall be determined (if the Computation Date next preceding such
Computation Period is later than the last day of the last such fiscal year)
for a period having a duration equal to the same number of months in such
fiscal year or fiscal years but ending on such Computation Date.
"Non-Regulated First-Tier Subsidiary" shall mean any Subsidiary of the
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Company (other than a Regulated First-Tier Subsidiary) owned directly by
the Company.
"Pro Forma Fixed Charge Coverage Ratio" shall mean, as at the first
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day of any each Computation Period, the ratio of (a) Available Cash for the
Computation Date next preceding such Computation Period to (b) Pro Forma
Fixed Charges for such Computation Period.
"Pro Forma Fixed Charges" shall mean, for any Computation Period, the
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sum of the following (without duplication): (a) all payments of principal
of Indebtedness scheduled to be made by the Company and the Non-Regulated
First-Tier Subsidiaries during such Computation Period plus (b) all
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payments of interest in respect of Indebtedness of the Company and the Non-
Regulated First-Tier Subsidiaries estimated to be made during such
Computation Period (determined, in the case of any such interest payable on
a floating rate basis during such Computation Period, at the applicable
floating rate as in effect on the Computation Date next preceding such
Computation Period) plus (c) net Federal, state and local income taxes
payable (or minus net Federal, state and local income taxes receivable) by
the Company as of such Computation Date plus (d) Dividend Payments
estimated to be made during such Computation Period (such estimate to take
account of changes in the outstanding shares of capital stock of the
Company, the respective rates at which dividends are payable on such shares
and other factors affecting the amount of Dividend Payments to become
effective during such Computation Period all to the extent such changes
have been approved by the Board of Directors of the Company prior to such
Computation Period).
"Regulated First-Tier Subsidiary" shall mean any Subsidiary of the
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Company that is an Insurance Company directly owned by the Company or a
Bank Subsidiary directly owned by the Company.
B. Section 8.01 of the Credit Agreement is amended by inserting the
following at the end of the last sentence of said Section 8.01:
(such certificate to include, with respect to said Section 8.11, (I) a
description in reasonable detail of the assumptions underlying the
estimates used in determining Pro Forma Fixed Charges for the Computation
Period commencing on the day next following the last day of such fiscal
period or fiscal year and a certification that such assumptions and
estimates are reasonable and were made in good faith and (II) if such
Computation Period commences on or after July 1, 1995, a description in
reasonable detail of any material differences between such assumptions and
the corresponding assumptions underlying the estimates used in determining
Pro Forma Fixed Charges for the then next preceding Computation Period and
the reasons therefor)
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C. Section 8.09 of the Credit Agreement is amended to read as
follows:
8.09 Stockholders' Equity. The Company will not permit Stockholders'
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Equity to be less than $265,000,000 at any time.
D. Section 8.11 of the Credit Agreement is amended to read as
follows:
8.11 Pro Forma Fixed Charge Coverage Ratio. The Company will not
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permit the Pro Forma Fixed Charge Coverage Ratio for the Computation Period
commencing on the first day of any fiscal quarter of the Company to be less
than 1.4 to 1.
E. Each reference in the Credit Agreement to the Credit Agreement
(including references such as "herein", "hereunder" and the like) is amended to
refer to the Credit Agreement as amended hereby and (unless the context
otherwise requires) to this Amendment.
F. Except as hereby expressly amended, the Credit Agreement shall
remain in full force and effect.
SECTION 3. EFFECTIVENESS OF AMENDMENTS. The amendments provided for
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by Section 2 hereof shall become effective upon the satisfaction of the
following conditions precedent (except, other than in the case of the condition
precedent specified in clause (a) below, to the extent waived by or with the
consent of the Majority Lenders): (a) the execution and delivery by the Agent
of a counterpart of this Amendment and the receipt by the Agent of counterparts
of this Amendment executed and delivered by the Company and Lenders constituting
the Majority Lenders; (b) the receipt by the Agent of evidence satisfactory to
Milbank, Tweed, Hadley & McCloy of the due authorization, execution and delivery
by the Company of this Amendment; and (c) the receipt by the Agent of a
certificate of a senior officer of the Company to the effect that no Default
under the Credit Agreement (as amended hereby) has occurred and is continuing.
The Agent will advise the Company and the Lenders when such conditions have been
so satisfied (or waived as aforesaid).
SECTION 4. EXPENSES. The Company hereby confirms its obligations
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under Section 11.03(a)(ii) of the Credit Agreement with respect to the
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy)
in connection with the negotiation, preparation, execution and delivery of this
Amendment).
SECTION 5. COUNTERPARTS. This Amendment may be executed in any
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number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Amendment by
executing any such counterpart.
SECTION 6. NEW YORK LAW. This Amendment shall be governed by and
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construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
THE FIRST AMERICAN FINANCIAL
CORPORATION
By /s/ Thomas A. Klemens
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Title: Vice President/Chief Financial Officer
By /s/ Parker S. Kennedy
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Title: President
THE CHASE MANHATTAN BANK, N.A.
By /s/ Robert A. Foster
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Title:
FIRST INTERSTATE
BANK OF CALIFORNIA
By /s/ Marla W. Johnson
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Title: Vice President
IMPERIAL BANK
By /s/ Paul Krupela
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Title: Vice President
SANWA BANK CALIFORNIA
By /s/ Art Dunbar
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Title: Vice President
UNION BANK
By /s/ D.S. Lambell
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Title: Vice President
NBD BANK
By /s/ Richard J. Johnsen
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Title: Vice President
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THE CANADA LIFE
ASSURANCE COMPANY
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Trustee on behalf
of The Canada Life Assurance Company
By
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Title:
THE CHASE MANHATTAN BANK, N.A.,
as Agent
By /s/ Robert A. Foster
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Title:
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