EXHIBIT 99.5
SIXTH AMENDMENT AND CONSENT TO THE HOLDINGS GUARANTY
SIXTH AMENDMENT AND CONSENT TO THE HOLDINGS GUARANTY (the
"Amendment"), dated as of January 27, 2003, among TRENWICK GROUP LTD., a company
organized under the laws of Bermuda ("Holdings") and the Banks party to the
Credit Agreement referred to below. Unless otherwise defined herein, capitalized
terms used herein and defined in the Holdings Guaranty referred to below are
used herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Trenwick America Corporation, a Delaware corporation (the
"Borrower"), Trenwick Holdings Ltd., a company organized under the laws of the
United Kingdom (the "Trenwick Holdings"), the lending institutions from time to
time party thereto (each a "Bank" and, collectively, the "Banks"), Wachovia
Bank, National Association (f/k/a First Union National Bank), as Syndication
Agent (the "Syndication Agent"), Fleet National Bank, as Documentation Agent
(the "Documentation Agent"), and JPMorgan Chase Bank (f/k/a The Chase Manhattan
Bank), as Administrative Agent (the "Administrative Agent"), are party to a
Credit Agreement, dated as of November 24, 1999 and amended and restated as of
September 27, 2000 (as the same has been amended, modified or supplemented to,
but not including, the date hereof, the "Credit Agreement");
WHEREAS, Holdings and the Administrative Agent entered into a
Holdings Guaranty, dated as of September 27, 2000 (as the same has been amended,
modified or supplemented to, but not including, the date hereof, the "Holdings
Guaranty") in order to induce the Banks to make Loans to the Borrower and issue
Letters of Credit for the account of the Account Party and Guaranteed Creditors
(and Lending Affiliates thereof) to enter into Interest Rate Protection
Agreements and Other Hedging Agreements with the Borrower and/or the Account
Party; and
WHEREAS, subject to the terms and conditions set forth below, the
parties hereto wish to amend the Holdings Guaranty as provided herein;
NOW, THEREFORE, it is agreed;
A. Consent
1. Notwithstanding anything to the contrary contained in the
Holdings Guaranty or Credit Agreement, Holdings shall be permitted to make a
one-time cash payment to Mr. James F. Billett, Jr. in an amount not to exceed
$2,700,000 pursuant to the letter agreement, dated as of December 31, 2002
between James F. Billett, Jr. and Holdings, provided that such agreement shall
provide for the release of any and all claims by Mr. Billett against Holdings
and any of its Subsidiaries, including, without limitation any claims for
compensation (annual or otherwise), severance payments, disability payments or
medical or other benefits.
B. Amendments
1. Section 4.04(g) of the Holdings Guaranty is hereby amended to
read in its entirety as follows:
"(g) Indebtedness constituting a loan from (i) any Regulated
Insurance Company to another Regulated Insurance Company, (ii) any
Regulated Insurance Company to the Account Party or any Guarantor, (iii)
any Guarantor to the Account Party or any other Guarantor that is not a
Regulated Insurance Company, (iv) Holdings or any Wholly-Owned Subsidiary
thereof to Holdings or any Wholly-Owned Subsidiary thereof which was made
prior to the Sixth Amendment Effective Date and not included in clauses
(i) - (iii) above, without giving effect to any subsequent extension,
renewal or refinancing thereof and (v) Holdings or any Wholly-Owned
Subsidiary thereof to Holdings or any Wholly-Owned Subsidiary thereof not
included in clauses (i) - (iv) above, in an aggregate principal amount not
to exceed $1,000,000 at any one time (without regard to any write-downs,
write-offs or re-characterization of such loans); provided that
notwithstanding anything to the contrary contained in this Agreement or
the Credit Agreement, on and after the Sixth Amendment Effective Date,
Holdings and/or any Subsidiary thereof that is not a Regulated Insurance
Company shall only be permitted to repay loans over the Permitted
Repayment Amount to any Regulated Insurance Company pursuant to this
clause (g) (at the stated maturity of such Indebtedness or otherwise)
(other than loans by TARCO and INSCORP in effect on the Sixth Amendment
Effective Date listed on Annex III attached hereto, which such repayments
shall be subject to clauses (x) and (y) but not clause (z) below) so long
as (x) no Default or Event of Default exists both prior to and after
giving effect to such payment, (y) Holdings has notified each Bank in
writing no later than 10 Business Days before the Account Party's or the
applicable Subsidiary's payment with respect to such Indebtedness, which
notice shall specify (i) the entity that will make such payment and the
Regulated Insurance Company to be repaid, (ii) the amount of the payment,
(iii) the Indebtedness to be repaid and (iv) the date such payment will be
made and (z) the Required Banks do not object to the Account Party's or
the applicable Subsidiary's making such payment prior to the date
specified in the notice previously delivered pursuant to this clause (g);"
2. Schedule I to the Holdings Guaranty is hereby further amended by
inserting the following defined terms in the appropriate alphabetical order:
"INSCORP" shall mean The Insurance Corporation of New York.
"Permitted Repayment Amount" shall mean (i) $100,000 for each
individual loan repayment and (ii) the amount when added to the repayments
made pursuant to clause (i) above, which is less than or equal to
$1,000,000.
"Sixth Amendment" shall mean the Sixth Amendment and Consent to the
Holdings Guaranty, dated as of January 27, 2003.
-2-
"Sixth Amendment Effective Date" shall have the meaning provided in
the Sixth Amendment.
3. The Holdings Guaranty is hereby further amended by inserting
Annex III attached hereto.
C. Miscellaneous Provisions
1. In order to induce the Banks to enter into this Sixth Amendment,
Holdings hereby represents and warrants that (i) the representations and
warranties of Holdings contained in the Holdings Guaranty are true and correct
in all material respects on and as of the Sixth Amendment Effective Date (as
defined below) (except with respect to any representations and warranties
limited by their terms to a specific date, which shall be true and correct in
all material respects as of such date), and (ii) there exists no Default or
Event of Default under the Credit Agreement on the Sixth Amendment Effective
Date, in each case after giving effect to this Amendment.
2. This Sixth Amendment is limited as specified and shall not
constitute an amendment, modification, acceptance or waiver of any other
provision of the Holdings Guaranty or any other Credit Document.
3. THIS SIXTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
4. This Sixth Amendment shall become effective on the date (the
"Sixth Amendment Effective Date") when (i) Holdings and the Required Banks shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of telecopier) the same to the
Administrative Agent and (ii) the Borrower, the Account Party and the Required
Banks have consented to the Sixth Amendment and Waiver to the Credit Agreement,
dated as of January 27, 2003.
5. From and after the Sixth Amendment Effective Date, all references
in the Holdings Guaranty and in the other Credit Documents shall be deemed to be
referenced to the Holdings Guaranty as modified hereby.
* * *
-3-
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
duly executed and delivered as of the date first above written.
TRENWICK GROUP LTD.
By: /s/ Alan L. Hunte
------------------------------------
Name: Alan L. Hunte
Title: Executive Vice President
Chief Financial Officer
[Bank Signature Pages Intentionally Omitted]
ANNEX III
Certain Intercompany Indebtedness
1. Indebtedness owed by Trenwick American Corporation to TARCO in the aggregate
amount of $33,600,000.
2. Indebtedness owed by Trenwick American Corporation to INSCORP in the
aggregate amount of $25,000,000.