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EXHIBIT 10.11
AMENDMENT NO. 2 TO REVOLVING CREDIT AGREEMENT
This Amendment No. 2 to Revolving Credit Agreement ("Amendment") dated
as of July 28, 2000 by and among the lenders signatories hereto ("Banks"),
Comerica Bank as agent for the Banks (in such capacity, "Agent"), and
Meadowbrook Insurance Group, Inc., a Michigan corporation ("Company").
RECITALS
A. Company and Banks entered into that certain Revolving Credit
Agreement dated as of August 3, 1999, as amended by Amendment No. 1 dated as of
March 27, 2000 ("Agreement").
B. The parties desire to amend the Agreement.
NOW, THEREFORE, the parties agree that the Agreement is amended as
follows:
1. The definition of "Revolving Credit Aggregate Commitment" set forth
in Section 1 of the Agreement is amended to read in its entirety as follows:
"`Revolving Credit Aggregate Commitment' shall mean Sixty Million
Dollars ($60,000,000) until July 30, 2000 and shall automatically be
reduced to Fifty Million Dollars ($50,000,000) on the earlier to occur
of (i) the receipt by Company of the proceeds of Subordinated Debt
issued to Atlantic Mutual Insurance Company and (ii) July 31, 2000 and
shall automatically be reduced to Forty Million Dollars ($40,000,000)
on September 30, 2000, subject to further reduction or termination
under Section 2.8 or 9.2 hereof."
2. Section 2.10 of the Agreement is amended to read in its entirety as
follows:
"2.10 Use of Proceeds. In no event shall Company directly use the
proceeds of any Advance to make any mandatory or optional prepayment of
any Subordinated debt."
3. Section 7.20 of the Agreement is deleted in its entirety.
4. Section 8.3 is amended to read in its entirety as follows:
"Create, incur, assume or suffer to exist any Guarantee Obligation
except pursuant to the Loan Documents and the guaranty by certain of
Company's Subsidiaries of the Subordinated Debt in favor of Atlantic
Mutual Insurance Company."
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5. Section 8.7(a) of the Agreement is amended to read in its entirety
as follows:
"(a) Permitted Investments and an existing loan by Company to
Robert Cubbin and Kathleen Cubbin in the principal amount of
$720,462 the proceeds of which were used by Robert Cubbin to
purchase shares of the Company's stock (`Cubbin Loan')
excluding any extension, renewal or increase thereof;"
6. Company has advised Banks that its Subsidiary, Liberty Premium
Finance, Inc. ("Liberty") has or will incur indebtedness under an up to
$6,000,000 working capital line of credit, which credit facility is secured by a
lien on the premium receivables of Liberty. Banks hereby consent to the
incurrence of such Debt and the granting of liens on Liberty's premium
receivables to secure such Debt. This consent shall not act as a consent or
waiver of any other transaction, act or omission, whether related or unrelated
thereto. This consent shall not extend to or affect any obligation, covenant or
agreement not expressly consented to hereby.
7. Company hereby represents and warrants that, after giving effect to
the amendments contained herein, (a) execution, delivery and performance of this
Amendment and any other documents and instruments required under this Amendment
or the Agreement are within Company's powers, have been duly authorized, are not
in contravention of law or the terms of the Company's Articles of Incorporation
or Bylaws and do not require the consent or approval of any governmental body,
agency, or authority; and this Amendment and any other documents and instruments
required under this Amendment or the Agreement, will be valid and binding in
accordance with their terms; (b) the representations and warranties of Company
set forth in Sections 6.1 through 6.19 of the Agreement are true and correct in
all material respects on and as of the date hereof with the same force and
effect as if made on and as of the date hereof; (c) the representations and
warranties of Company set forth in Section 6.20 of the Agreement are true and
correct in all material respects as of the date hereof with respect to the most
recent financial statements furnished to the Bank by Company in accordance with
Section 7.1 of the Agreement; and (d) no Event of Default, or condition or event
which, with the giving of notice or the running of time, or both, would
constitute an Event of Default under the Agreement, has occurred and is
continuing as of the date hereof.
8. This Amendment shall be effective upon (a) execution hereof by
Company, Agent and the Majority Banks and (b) execution by the Guarantors of the
attached Acknowledgment; provided, however the provisions of paragraph 4 of this
Amendment shall be effective as of the date the Company made the Cubbin Loan.
9. This Amendment may be signed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
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WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, as Agent MEADOWBROOK INSURANCE GROUP, INC.
By: By:
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Jon E. Sasinowski
Its: Vice President Its:
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BANKS: COMERICA BANK
By:
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Jon E. Sasinowski
Its: Vice President
BANK ONE
By:
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Its:
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ACKNOWLEDGMENT
The undersigned Guarantors acknowledge the foregoing Amendment No. 2 to
Credit Agreement and further acknowledged that the Guaranty dated August 3, 1999
from the Guarantors in favor of the Agent and the Banks remains in full force
and effect in accordance with its terms.
MEADOWBROOK, INC., a Michigan corporation
By:
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Its:
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MEADOWBROOK OF FLORIDA, INC.,
a Florida corporation
By:
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Its:
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ASSOCIATION SELF INSURANCE SERVICES, INC.,
an Alabama corporation
By:
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Its:
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CREST FINANCIAL CORPORATION,
a Nevada corporation
By:
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Its:
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