AMENDMENT NO. 4
TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
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THIS AMENDMENT NO. 4 TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (this
"Amendment") is made and entered into as of October 10, 2003, 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"), and is joined by certain subsidiaries of the Borrower,
as Subsidiary Guarantors (the "Subsidiary Guarantors") pursuant to the Joinder
of Subsidiary Guarantors attached hereto.
W I T N E S S E T H:
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WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to that certain Revolving Credit and Term Loan Agreement, dated as of
August 31, 2001, as amended by that certain (i) Amendment No. 1 to Revolving
Credit and Term Loan Agreement, dated as of March 25, 2002, (ii) Amendment No. 2
to Revolving Credit and Term Loan Agreement, dated as of November 21, 2002, and
(iii) Amendment No. 3 to Revolving Credit and Term Loan Agreement, dated as of
April 10, 2003 (as amended, the "Existing Credit Agreement"), pursuant to which
the Lenders have agreed to make Loans to the Borrower, and the Issuing Bank has
agreed to issue Letters of Credit for the account of the Borrower (provided,
subject to the terms and conditions of the Existing Credit Agreement, such
Letters of Credit may be issued on behalf of the Borrower or, if requested by
the Borrower, on behalf of any Subsidiary), all upon the terms and subject to
the conditions specified in the Existing Credit Agreement; and
WHEREAS, the Borrower, the Lenders, the Administrative Agent and, by
joinder hereto, the Subsidiary Guarantors, have agreed to modify and amend the
Existing Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the Borrower, the Lenders, the
Administrative Agent and, by joinder hereto, the Subsidiary Guarantors, agree as
follows:
ARTICLE I
DEFINITIONS
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Section 1.1 Certain Definitions. Unless otherwise defined herein
or the context otherwise requires, the following terms as used in this
Amendment, including the preamble, the recitals and the amendments to certain
definitions set forth in Section 2.1A hereof, have the meanings set forth below:
"Amended Credit Agreement" shall mean the Existing
Credit Agreement, as further amended hereby.
"Amendment No. 4 Effective Date" shall have the
meaning assigned to such term in Article IV.
Section 1.2 Other Definitions. Unless otherwise defined herein,
capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Existing Credit Agreement.
ARTICLE II
AMENDMENTS TO EXISTING AGREEMENT
--------------------------------
Effective as of the Amendment No. 4 Effective Date, the Existing Credit
Agreement is hereby amended in accordance with this Article II as follows:
Section 2.1 Amendment to Section 1.1 - Definitions.
A. Section 1.1 - Definitions of "ARTICLE I -
DEFINITIONS; CONSTRUCTION" of the Existing Credit Agreement is hereby
amended to delete the definitions of the terms "Declarations", "Junior
Indentures", "Junior Subordinated Debt Securities", "Subsidiary" and
"Swap Unwind Fees" in their entirety and to insert the following new
definitions for such terms in their place:
"Declarations" shall mean Declaration I, Declaration
II and/or Declaration III, as the context shall require.
"Junior Indentures" shall mean, collectively and
individually, Junior Indenture I, Junior Indenture II and/or
Junior Indenture III, as the context shall require.
"Junior Subordinated Debt Securities" shall mean,
collectively and individually, the Junior Subordinated Debt
Securities I, the Junior Subordinated Debt Securities II
and/or the Junior Subordinated Debt Securities III, as the
context shall require.
"Subsidiary" shall mean, with respect to any Person
(the "parent"), any corporation, partnership, joint venture,
limited liability company, association or other entity the
accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if
such financial statements were prepared in accordance with
GAAP as of such date, as well as any other corporation,
partnership, joint venture, limited liability company,
association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power, or in the case
of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, Controlled or held, or
(b) that is, as of such date, otherwise Controlled, by the
parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent; provided,
that unless otherwise set forth herein, neither FPIC Trust I,
FPIC Trust II nor FPIC Trust III shall be a "Subsidiary" for
purposes of this Agreement. Unless otherwise indicated, all
references to "Subsidiary" hereunder shall mean a Subsidiary
of the Borrower.
"Swap Unwind Fees" shall mean any fees and/or any
other amounts payable by the Borrower to SunTrust Bank
resulting from the breakage by the Borrower of (a) that
certain Confirmation of Interest Rate Swap Transaction, dated
as of August 29, 2001 (relating to the Term Loan), and/or (b)
that certain Confirmation of Interest Rate Swap Transaction,
dated as of August 29, 2001 (relating to the Revolving Loans),
each by and between SunTrust Bank and the Borrower, together
with the ISDA Master Agreement and Schedule thereto, each
dated as of June 15, 1998, referred to in each Confirmation
and each entered into by and between SunTrust Bank and the
Borrower.
B. Section 1.1 - Definitions of "ARTICLE I -
DEFINITIONS; CONSTRUCTION" of the Existing Credit Agreement is hereby
further amended to add the definitions of the terms "Common
Securities", "Declaration III", "FPIC Trust III", "Junior Indenture
III" and "Junior Subordinated Debt Securities III" in their proper
alphabetical order as follows:
"Common Securities" shall mean the common securities
issued by FPIC Trust I, FPIC Trust II and/or FPIC Trust III.
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"Declaration III" shall mean the Amended and Restated
Declaration of Trust of FPIC Trust III, dated on or about the
date of issuance of the Junior Subordinated Debt Securities
III, and all amendments, modifications, supplements,
restatements or replacements thereof.
"FPIC Trust III" shall mean FPIC Capital Statutory
Trust III, a Connecticut statutory trust established pursuant
to Declaration III.
"Junior Indenture III" shall mean the Indenture dated
on or about the date of issuance of the Junior Subordinated
Debt Securities III, by and between the Borrower, as Issuer,
and U.S. Bank, as Trustee, relating to the Junior Subordinated
Debt Securities III, and all amendments, modifications,
supplements, restatements or replacements thereof.
"Junior Subordinated Debt Securities III" shall mean
the Floating Rate Junior Subordinated Deferrable Interest
Debentures due 2033 issued by the Borrower under Junior
Indenture III, and all renewals, extensions or modifications
thereof; provided, that the aggregate principal amount
outstanding at any time thereunder shall never exceed
$20,620,000.
Section 2.2 Amendment to Section 7.1(h) - Indebtedness. Section
7.1 - Indebtedness of "ARTICLE VII NEGATIVE COVENANTS" of the Existing Credit
Agreement is hereby amended to delete Section 7.1(h) in its entirety and to
insert the following new Section 7.1(h) in its place:
(h) the separate Guarantees by the Borrower with
respect to certain "Securities" to be issued by FPIC Trust I as
contemplated by Declaration I, by FPIC Trust II as contemplated by
Declaration II and by FPIC Trust III as contemplated by Declaration
III;
Section 2.3 Amendment to Section 7.4(h) - Investments, Loans,
Etc. Section 7.4 - Investments, Loans, Etc. of "ARTICLE VII NEGATIVE COVENANTS"
of the Existing Credit Agreement is hereby amended to delete Section 7.4(h) in
its entirety and to insert the following new Section 7.4(h) in its place:
(h) Investments made by the Borrower in FPIC
Trust I, FPIC Trust II and FPIC Trust III; provided, that such
Investments shall be in the form of Common Securities in principal
amount not exceeding, in the case of FPIC Trust I, $310,000, in the
case of FPIC Trust II, $620,000 and, in the case of FPIC Trust III,
$620,000, at any time outstanding;
Section 2.4 Amendment to Section 7.7 - Transactions with
Affiliates. Section 7.7 - Transactions with Affiliates of "ARTICLE VII NEGATIVE
COVENANTS" of the Existing Credit Agreement is hereby amended to delete such
Section in its entirety and to insert the following new Section 7.7 in its
place:
Section 7.7 Transactions with Affiliates. The Borrower
will not, and will not permit any of its Subsidiaries to, sell, lease
or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in
any other transactions with, any of its Affiliates, except (a) in the
ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its Subsidiaries not
involving any other Affiliates, (c) any Restricted Payment permitted by
Section 7.5 and (d) transactions between the Borrower and FPIC Trust I
contemplated by Declaration I, FPIC Trust II contemplated by
Declaration II and/or FPIC Trust III contemplated by Declaration III.
Section 2.5 Amendment to Section 7.14 - Certain Covenants
Relating to Debt Securities. Section 7.14 - Certain Covenants Relating to Debt
Securities of "ARTICLE VII NEGATIVE COVENANTS" of the Existing Credit Agreement
is hereby amended to strike the word "and" at the end of Section 7.14(e), to
strike the "." at the end of Section 7.14(f) and insert "; and" in its place and
to add the following new Section 7.14(g):
(g) permit or allow FPIC Trust III to own or hold any
assets or property other than the Junior Subordinated Debt Securities
III (or the proceeds thereof), or to engage in any business other than
the sale
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of the "Securities" contemplated by Declaration III or other activities
deemed necessary, advisable or incidental thereto.
ARTICLE III
CONSENT AND WAIVER OF COVENANT VIOLATION
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Section 3.1 Consent and Waiver. Under the terms and conditions of
Section 2.10(a) - Mandatory Prepayments; Mandatory Liquid Collateral of Section
2.10 Prepayments of "ARTICLE II - AMOUNT AND TERMS OF THE COMMITMENTS" of the
Existing Credit Agreement, the Borrower is required to make mandatory principal
prepayments from 100% of Net Cash Proceeds received from any Equity Issuance or
Debt Issuance. Notwithstanding the foregoing provisions of Section 2.10(a) to
the contrary, the Administrative Agent and the Lenders hereby agree that a
portion of the Net Cash Proceeds from the issuance of the Junior Subordinated
Debt Securities III may be used by the Borrower to pay any applicable Swap
Unwind Fees in lieu of the mandatory principal prepayment otherwise required by
said Section 2.10(a) and, further, pursuant to Section 10.2(b) of the Existing
Credit Agreement, hereby agree, effective as of the Amendment No. 4 Effective
Date, to waive the mandatory prepayment covenant set forth in Section 2.10(a) of
the Existing Credit Agreement to permit the use of a portion of such Net Cash
Proceeds to pay such Swap Unwind Fees; provided, that the Borrower shall be in
full compliance with such mandatory prepayment covenant at all times after the
Amendment No. 4 Effective Date.
Section 3.2 No Future Waiver. The waiver set forth in Section 3.1
is a one-time waiver, applicable only to the Borrower's non-compliance with the
mandatory prepayment covenant set forth in Section 2.10(a) of the Existing
Credit Agreement prior to the Amendment No. 4 Effective Date, and shall not be
construed to be (a) a waiver as to future compliance with Section 2.10(a) of the
Amended Credit Agreement, (b) a waiver of any Default or Event of Default that
may now or hereafter exist, or (c) an amendment of or modification to the
Existing Credit Agreement. The Administrative Agent and the Lenders hereby
reserve all of their rights, powers and remedies under the Amended Credit
Agreement, after giving effect to this Amendment, and applicable law.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS
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This Amendment shall be and become effective as of the date hereof (the
"Amendment No. 4 Effective Date") when all of the conditions set forth in this
Article IV shall have been satisfied, as reasonably determined by the
Administrative Agent, and thereafter, this Amendment shall be known, and may be
referred to, as "Amendment No. 4":
Section 4.1 Approval by Required Lenders. The Required Lenders
shall have approved the modifications and amendments set forth in this
Amendment, such approval to be evidenced by such Required Lenders' execution of
counterparts of this Amendment as set forth in Section 4.2.
Section 4.2 Execution of Counterparts. The Administrative Agent
shall have received (including by telecopy) counterparts of this Amendment that
shall have been duly executed on behalf of the Borrower, the Subsidiary
Guarantors, the Administrative Agent and the Required Lenders.
Section 4.3 Legal Details, Etc. All documents executed or
submitted pursuant hereto shall be reasonably satisfactory in form and substance
to the Administrative Agent and its counsel prior to or by the time of closing.
Prior to or by the time of closing, the Administrative Agent and its counsel
shall have received all information, certificates, resolutions, legal opinions
and other documents, and such counterpart originals or such certified or other
copies of such originals as the Administrative Agent or its counsel may
reasonably request, and all legal matters incident to the transactions
contemplated by this Amendment shall be reasonably satisfactory to the
Administrative Agent and its counsel.
Section 4.4 Payment of Waiver/Modification Fee. [Not Applicable]
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Section 4.5 Payment of Other Fees and Expenses. The Borrower
shall have paid all out-of-pocket costs and expenses of the Administrative
Agent, including the reasonable fees, charges and disbursements of counsel for
the Administrative Agent, in connection with the preparation, execution and
delivery of this Amendment.
ARTICLE V
MISCELLANEOUS
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Section 5.1 Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agent and the Lenders that, after
giving effect to this Amendment, (a) no Default or Event of Default exists under
the Existing Credit Agreement or any of the other Loan Documents, (b) all
representations and warranties of each Loan Party set forth in the Loan
Documents are true and correct in all material respects on and as of the date
hereof (except for those which expressly relate to an earlier date), (c) since
the date of the most recent financial statements of the Borrower described in
Section 5.1(a) or (b) of the Existing Credit Agreement, there has been no change
which has had or could reasonably be expected to have a Material Adverse Effect,
and (d) the Loan Documents are legal, valid and binding obligations of the
respective Loan Parties and are enforceable by the Administrative Agent and the
Lenders, as applicable, against such Loan Parties in accordance with their
respective terms.
Section 5.2 Cross References. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.
Section 5.3 Instrument Pursuant to Existing Credit Agreement.
This Amendment is a document executed pursuant to the Existing Credit Agreement
and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.
Section 5.4 Loan Documents. The Borrower and the Subsidiary
Guarantors hereby confirm and agree that the Loan Documents are, and shall
continue to be, in full force and effect and hereby ratify and approve in all
respects their obligations thereunder, except that, upon the effectiveness of,
and on and after the date of this Amendment, all references in each Loan
Document to the "Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Existing Credit Agreement shall mean the Amended Credit
Agreement.
Section 5.5 Counterparts, Effectiveness, Etc. This Amendment may
be executed by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which shall constitute together but one
and the same agreement. The parties may execute facsimile copies of this
Amendment and the facsimile signature of any such party shall be deemed an
original and fully binding on said party; provided, any party executing this
Amendment by facsimile signature agrees to promptly provide six (6) original
executed copies of this Amendment to Administrative Agent.
Section 5.6 Governing Law; Etc. This Amendment shall be governed
by and construed in accordance with the applicable terms and provisions of
Section 10.5 - Governing Law; Jurisdiction; Consent to Service of Process of
"ARTICLE X - MISCELLANEOUS" of the Existing Credit Agreement, which terms and
provisions are incorporated herein by reference.
Section 5.7 No Other Modifications. Except as hereby amended, no
other term, condition or provision of the Existing Credit Agreement shall be
deemed modified or amended, and this Amendment shall not be considered a
novation.
Section 5.8 Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed [under seal in the case of the Borrower] by their respective duly
authorized officers as of the day and year first above written.
FPIC INSURANCE GROUP, INC.
By: /s/ Kim D. Thorpe
-----------------------------------
Name: Kim D. Thorpe
Title: Executive Vice President
and Chief Financial Officer
[SEAL]
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
Revolving Commitment: $10,104,545(1)
Term Loan Commitment: $0
- --------------------------------------------------------------------------------
(1) Subject to permanent reduction in accordance with such Lender's Pro Rata
Share as provided in this Amendment.
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COMPASS BANK
By: /s/ C. French Yarbrough, Jr.
-----------------------------------
Name: C. French Yarbrough, Jr.
Title: Senior Vice President
Revolving Commitment: $3,545,455(1)
Term Loan Commitment: $0
- --------------------------------------------------------------------------------
(1) Subject to permanent reduction in accordance with such Lender's Pro Rata
Share as provided in this Amendment.
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BROWN BROTHERS HARRIMAN & CO.
By: /s/ W. Carter Sullivan
-----------------------------------
Name: W. Carter Sullivan
Title: Partner
Revolving Commitment: $2,304,545(1)
Term Loan Commitment: $0
- --------------------------------------------------------------------------------
(1) Subject to permanent reduction in accordance with such Lender's Pro Rata
Share as provided in this Amendment.
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REGIONS BANK
By: /s/ Anthony Nigro
-----------------------------------
Name: Anthony Nigro
Title: Vice President
Revolving Commitment: $1,772,727(1)
Term Loan Commitment: $0
- --------------------------------------------------------------------------------
(1) Subject to permanent reduction in accordance with such Lender's Pro Rata
Share as provided in this Amendment.
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CAROLINA FIRST BANK
By: /s/ Charles D. Chamberlain
-----------------------------------
Name: Charles D. Chamberlain
Title: Executive Vice President
Revolving Commitment: $1,772,727(1)
Term Loan Commitment: $0
- --------------------------------------------------------------------------------
(1) Subject to permanent reduction in accordance with such Lender's Pro Rata
Share as provided in this Amendment.
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JOINDER OF SUBSIDIARY GUARANTORS
--------------------------------
The undersigned, each being a Subsidiary Guarantor, do hereby
acknowledge and consent to, and agree to be bound by, the foregoing
modifications and amendments to the Existing Credit Agreement as set forth in
this Amendment and to each of the other terms and conditions thereof, and agree
that the Subsidiary Guaranty shall continue in full force and effect and binding
upon and enforceable against such Subsidiary Guarantors in accordance with its
terms from and after the date hereof.
Dated as of the 9th day of October, 2003.
FPIC INSURANCE AGENCY, INC.
By: /s/ Kim D. Thorpe
-----------------------------------
Name: Kim D. Thorpe
Title: Vice President and Treasurer
EMPLOYERS MUTUAL, INC.
By: /s/ Kim D. Thorpe
-----------------------------------
Name: Kim D. Thorpe
Title: Vice President
PROFESSIONAL STRATEGY OPTIONS,
INC.
By: /s/ Kim D. Thorpe
-----------------------------------
Name: Kim D. Thorpe
Title: Vice President and Treasurer
ADMINISTRATORS FOR THE PROFESSIONS,
INC.
By: /s/ Kim D. Thorpe
-----------------------------------
Name: Kim D. Thorpe
Title: Vice President
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GROUP DATA CORPORATION
By: /s/ Kim D. Thorpe
-----------------------------------
Name: Kim D. Thorpe
Title: Vice President
FPIC INTERMEDIARIES, INC.
By: /s/ Kim D. Thorpe
-----------------------------------
Name: Kim D. Thorpe
Title: Vice President
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