Exhibit 10.31 Execution Copy
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SECOND AMENDMENT TO
CREDIT AGREEMENT, CONSENT AND WAIVER
among
EVEREST REINSURANCE HOLDINGS, INC.,
THE LENDERS NAMED HEREIN,
and
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union National Bank),
as Administrative Agent,
Lead Arranger:
WACHOVIA SECURITIES, INC.
(formerly known as First Union Securities, Inc.)
Dated as of November 21, 2002
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Exhibits
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Exhibit A Form of Second Guarantor Consent
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SECOND AMENDMENT TO
CREDIT AGREEMENT, CONSENT AND WAIVER
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER, dated as of
November 21, 2002 (this "SECOND AMENDMENT"), is made in respect of the Credit
Agreement, dated as of December 21, 1999 (as amended by a First Amendment
thereto dated December 18, 2000 and as amended, modified or supplemented from
time to time, the "CREDIT AGREEMENT"), among EVEREST REINSURANCE HOLDINGS, INC.,
a Delaware corporation (the "BORROWER"), the financial institutions listed on
the signature pages thereof or that become parties thereto after the date
thereof (collectively, the "LENDERS"), and WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union National Bank) ("Wachovia"), as administrative
agent for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT").
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Credit Agreement, as amended by this Second Amendment. Unless
otherwise specified, section references herein refer to sections set forth in
the Credit Agreement, as amended by this Second Amendment.
BACKGROUND STATEMENT
A. Borrower has requested that the Lenders agree to extend the current
Maturity Date of the Credit Agreement of December 21, 2002 pursuant to Section
2.18 of the Credit Agreement. Section 2.18 of the Credit Agreement provides that
Borrower may, by written notice to the Administrative Agent, request up to two
(2) one-year extensions of the Maturity Date, PROVIDED that each such request is
to be given not less than 90 nor more than 120 days prior to the Maturity Date.
Borrower has requested that the Lenders waive the 90-day notice period set forth
in Section 2.18. The Lenders have agreed to extend the Maturity Date and waive
the 90-day notice period upon the terms and subject to the conditions set forth
herein.
B. Borrower has further requested that the Lenders agree to amend the
pricing matrix set forth in the "Applicable Margin Percentage" definition of the
Credit Agreement. The Lenders have agreed to effect such amendment upon the
terms and subject to the conditions set forth herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for themselves
and their successors and assigns, agree as follows:
ARTICLE I
AMENDMENTs TO CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1.1. Section 1.1 of the Credit Agreement is
hereby amended as follows:
(a) Section 1.1 is hereby amended by adding the following definitions
thereto in appropriate alphabetical order:
"SECOND AMENDMENT" shall mean the Second Amendment to Credit
Agreement, Consent and Waiver, dated as of November 21, 2002, among the
Borrower, the Lenders, and the Administrative Agent.
"SECOND AMENDMENT EFFECTIVE DATE" shall have the meaning given to such
term in the Second Amendment.
"SECOND AMENDMENT FEE LETTER" shall mean the letter from Wachovia to
the Borrower, dated November 5, 2002, relating to certain fees payable by
the Borrower in respect of the Second Amendment.
"SECOND GUARANTOR CONSENT" shall mean the Second Guarantor Consent, in
the form of Exhibit A to the Second Amendment, executed and delivered by
Everest Re Group, Ltd. on or prior to the Second Amendment Effective Date.
(b) The definition of "Agreement" is amended by deleting and replacing it
in its entirety with the following:
"AGREEMENT" shall mean this Credit Agreement, as amended by the
First Amendment and by the Second Amendment, and as further amended,
modified or supplemented from time to time.
(c) The matrix set forth in the definition of "Applicable Margin
Percentage" is amended by deleting and replacing it in its entirety with the
following:
Standard & Poor's / Applicable Margin
Moody's Percentage for Utilization Fee
Level Rating Commitment Fee LIBOR Loans Usage > 50%
- ----- ------------------- -------------- ----------------- ---------------
I A+/A1 or above 0.070% 0.350% 0.100%
II A/A2 0.080% 0.450% 0.100%
III A-/A3 0.100% 0.525% 0.125%
IV BBB+/Baa1 0.135% 0.675% 0.175%
V BBB/Baa2 0.175% 0.850% 0.250%
VI Less than BBB/Baa2 0.250% 1.250% 0.250%
(d) The definition of "Parent Guaranty" in Section 1.1 is amended by
deleting and replacing it in its entirety with the following:
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"PARENT GUARANTY" shall mean the Guaranty Agreement, dated as of
February 24, 2000, made by the Guarantor in favor of the Administrative
gent and the Lenders, as amended by the Guarantor Consent and Second
Guarantor Consent, and as further amended, modified or supplemented from
time to time.
ARTICLE II
CONSENT AND WAIVER
2.1 CONSENT TO EXTENSION OF MATURITY DATE. Pursuant to Section 2.18 of the
Credit Agreement, the Borrower hereby requests that the Lenders extend the
Maturity Date of the Credit Agreement to December 19, 2003. The Lenders, subject
to the terms and conditions of this Second Amendment, hereby agree to extend the
Maturity Date to December 19, 2003.
2.2 WAIVER. In consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Lenders hereby agree that the 90-day notice period set forth
in Section 2.18 of the Credit Agreement solely with respect of the extension set
forth in SECTION 2.1 of this Second Amendment shall be, and hereby is, waived.
The waiver of the Lenders set forth herein is limited as specified, and shall
not constitute or be deemed to constitute an amendment, modification or waiver
of any provision of the Credit Agreement or a waiver of any Default or Event of
Default except as expressly set forth herein.
ARTICLE III
EFFECTIVENESS
This Second Amendment shall become effective on the date (the "SECOND AMENDMENT
EFFECTIVE DATE") when the last of the following conditions shall have been
satisfied:
(a) The Administrative Agent shall have received counterparts of this
Second Amendment, duly executed by the Borrower and the Lenders listed on the
signature pages attached hereto and in sufficient copies for each Lender.
(b) The Administrative Agent shall have received the following, each dated
as of the Second Amendment Effective Date (unless otherwise specified) and in
sufficient copies for each Lender:
(i) the Second Guarantor Consent, duly completed and executed by
Everest Re Group, Ltd., in substantially the form of EXHIBIT A;
(ii) a favorable opinion of (i) Mayer, Brown, Rowe & Maw, special New
York counsel to the Borrower, (ii) Joseph A. Gervasi, General Counsel
of Everest Re Group, Ltd., and (iii) Conyers Dill & Pearman, Bermuda
counsel of the Guarantor, in each case in form reasonably satisfactory
to the Administrative Agent and substantially covering such opinion matters
as the Administrative Agent may reasonably request.
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(c) The Administrative Agent shall have received a certificate, signed by
the president, the chief financial officer, treasurer or comptroller of the
Borrower, in form and substance satisfactory to the Administrative Agent,
certifying that (i) all representations and warranties of the Borrower contained
in the Credit Agreement and the other Credit Documents are true and correct in
all material respects on and as of the Second Amendment Effective Date, both
immediately before and after giving effect to this Second Amendment (except to
the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty shall
be true and correct in all material respects as of such date), (ii) no Default
or Event of Default has occurred and is continuing, both immediately before and
after giving effect to this Second Amendment, (iii) there is no pending
litigation, bankruptcy or insolvency, insurance regulatory proceeding,
injunction, order or claim pending or, to such individual's knowledge,
threatened against the Borrower or any of its Subsidiaries which (A) is
reasonably likely to result in a Material Adverse Change or (B) purports to
affect this Second Amendment or the transactions contemplated hereby, and (iv)
both immediately before and after giving effect to this Second Amendment, no
Material Adverse Change has occurred since December 31, 2001, and there exists
no event, condition or state of facts that could reasonably be expected to
result in a Material Adverse Change.
(d) Since December 31, 2001, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Second
Amendment, there shall not have occurred any Material Adverse Change or any
event, condition or state of facts that could reasonably be expected to result
in a Material Adverse Change.
(e) The Borrower shall have paid (i) to Wachovia, for the ratable benefit
of the Lenders, an amendment fee in the amount of 3 basis points (0.03%) on the
aggregate principal amount of the Lenders' Commitments; and (ii) all other fees
and expenses of the Administrative Agent and the Lenders required hereunder,
under the Second Amendment Fee Letter or under any other Credit Document to be
paid on or prior to the Second Amendment Effective Date.
(f) The Administrative Agent and each Lender shall have received such other
documents, certificates, and instruments in connection with this Second
Amendment and the other transactions contemplated hereby as it shall have
reasonably requested.
On the Second Amendment Effective Date, the Credit Agreement will be
automatically amended as set forth herein. On and after the Second Amendment
Effective Date, the rights and obligations of the parties hereto shall be
governed by the Credit Agreement as amended by this Second Amendment; PROVIDED,
that the rights and obligations of the parties hereto with respect to the period
prior to the Second Amendment Effective Date shall continue to be governed by
the terms of the Credit Agreement.
ARTICLE IV
GENERAL
4.1 FULL FORCE AND EFFECT. Except as expressly amended hereby, the Credit
Agreement shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. As used in the Credit Agreement,
"hereinafter," "hereto," "hereof," and words of similar import shall, unless the
context otherwise requires, mean the Credit Agreement after amendment by this
Second Amendment. Any reference to the Credit Agreement or any of the other
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Credit Documents herein or in any such documents shall refer to the Credit
Agreement and Credit Documents as amended hereby.
4.2 APPLICABLE LAW. THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS (EXCLUDING NEW YORK GENERAL OBLIGATIONS LAW
ss.5-1401). THE PARTIES HERETO HEREBY DECLARE THAT IT IS THEIR INTENTION THAT
THIS SECOND AMENDMENT SHALL BE REGARDED AS MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND THAT THE LAWS OF SAID STATE SHALL BE APPLIED IN INTERPRETING ITS
PROVISIONS IN ALL CASES WHERE LEGAL INTERPRETATION SHALL BE REQUIRED. EACH OF
THE PARTIES HERETO AGREES (A) THAT THIS SECOND AMENDMENT INVOLVES AT LEAST
$250,000; AND (B) THAT THIS SECOND AMENDMENT HAS BEEN ENTERED INTO BY THE
PARTIES HERETO IN EXPRESS RELIANCE UPON NEW YORK GENERAL OBLIGATIONS LAW ss.
5-1401.
4.3 COUNTERPARTS. This Second Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
4.4 HEADINGS. The headings of this Second Amendment are for the purposes of
reference only and shall not affect the construction of this Second Amendment.
[signatures appear on the following pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
EVEREST REINSURANCE HOLDINGS, INC.
By: /s/ STEPHEN L. LIMAURO
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Name: Stephen L. Limauro
Title: Executive Vice President
and Chief Financial Officer
(signatures continued)
SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER
WACHOVIA BANK, NATIONAL
ASSOCIATION (formerly known
as First Union National
Bank), as Administrative
Agent and as a Lender
By: /s/ KIMBERLY SHAFFER
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Name: Kimberly Shaffer
Title: Director
(signatures continued)
SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER
BANK ONE, NA, as a Lender
By: /s/ MARK L. GOLDSTEIN
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Name: Mark L. Goldstein
Title: Managing Director
(signatures continued)
SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER
DEUTSCHE BANK AG, New York and/or
Cayman Island Branches, as a Lender
By: /s/ RUTH LEUNG
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Name: Ruth Leung
Title: Director
By: /s/ CLINTON JOHNSON
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Name: Clinton Johnson
Title: Managing Director
(signatures continued)
SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER
RBC FINANCE B.V., as a Lender
By: /s/ L.P. VOWELL
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Name: L.P. Vowell
Title: Managing Director
(signatures continued)
SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER
JPMORGAN CHASE BANK, as a Lender
By: /s/ HELEN L. NEWCOMB
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Name: Helen L. Newcomb
Title: Vice President
SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER