Exhibit 10.1

 

SECOND AMENDMENT TO LOAN AGREEMENT

 

THIS SECOND AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is made and entered
into as of April 26, 2013 by and among HCC INSURANCE HOLDINGS, INC., a Delaware
corporation (the “Borrower”); each of the Lenders which is a party to the Loan
Agreement (as defined below) (individually, a “Lender” and, collectively, the
“Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, Administrative Agent for
the Lenders and Lead Arranger (in such capacity, together with its successors in
such capacity, the “Agent”).

 

RECITALS

 

A.            The Borrower, the Lenders and the Agent executed and delivered
that certain Loan Agreement dated as of March 8, 2011, as amended by instrument
dated as of September 22, 2011.  Said Loan Agreement, as heretofore amended,  is
herein called the “Loan Agreement”.  Any capitalized term used in this Amendment
and not otherwise defined shall have the meaning ascribed to it in the Loan
Agreement.

 

B.            The Borrower, the Lenders and the Agent desire to amend the Loan
Agreement in certain respects.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth, and further good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, the Lenders and the Agent do hereby agree as follows:

 

SECTION 1. Amendments to Loan Agreement.

 

(a)           The definition of “Affiliate” set forth in Section 1.1 of the Loan
Agreement is hereby amended to read in its entirety as follows:

 

Affiliate means any Person controlling, controlled by or under common control
with any other Person.  For purposes of this definition, “control” (including
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or otherwise.  Notwithstanding the foregoing, in relation to The Royal Bank of
Scotland plc, the term “Affiliate” shall not include (i) the UK government or
any member or instrumentality thereof, including Her Majesty’s Treasury and UK
Financial Investments Limited (or any directors, officers, employees or entities
thereof) or (ii) any persons or entities controlled by or under common control
with the UK government or any member or instrumentality thereof (including Her
Majesty’s Treasury and UK Financial Investments Limited) and which are not part
of The Royal Bank of Scotland Group plc and its subsidiaries or subsidiary
undertakings.

 

(b)           The definition of “Margin Percentage” set forth in Section 1.1 of
the Loan Agreement is hereby amended to read in its entirety as follows:

 

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Margin Percentage means, on any day, the applicable per annum percentage rate
set forth at the appropriate intersection in the table shown below, based upon
the ratings by S&P and Moody’s applicable on such date to the Index Debt:

 

Index Debt Rating
(S&P/Moody’s)

 

Margin Percentage for
LIBOR Borrowings

 

Margin Percentage for
Base Rate Borrowings

 

Margin Percentage for
Commitment Fees

 

 

 

 

 

 

 

 

 

Greater than or equal to A+/A1 (Tier 1)

 

1.000

%

0.000

%

0.100

%

A/A2 (Tier 2)

 

1.125

%

0.125

%

0.125

%

A-/A3 (Tier 3)

 

1.250

%

0.250

%

0.150

%

BBB+/Baa1 (Tier 4)

 

1.500

%

0.500

%

0.200

%

Less than BBB+/Baa1 (Tier 5)

 

1.750

%

0.750

%

0.250

%

 

If the Index Debt rating is split-rated, the higher rating will apply; if
split-rated by more than one level, the pricing Tier applicable to the level one
grade lower than the higher level will apply.  If either S&P or Moody’s no
longer issue an Index Debt rating for Borrower, the pricing Tier will be based
solely upon the S&P or Moody’s Index Debt rating that is issued and effective. 
If neither S&P nor Moody’s issue an Index Debt rating for Borrower, pricing will
be based on Tier 5 until either S&P or Moody’s issues a Index Debt rating for
Borrower.  If the ratings established or deemed to have been established by S&P
or Moody’s for the Index Debt shall be changed (other than as a result of a
change in the rating system of S&P or Moody’s), such change shall be effective
as of the date on which it is first announced by S&P or Moody’s, irrespective of
when notice of such change shall have been furnished by Borrower to Agent and
the Lenders pursuant to this Agreement or otherwise.  Each change in the Margin
Percentage shall apply during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of
the next such change.  If the rating system of S&P or Moody’s shall change,
Borrower and the Lenders shall negotiate in good faith to amend this definition
to reflect such changed rating system and, pending the effectiveness of any such
amendment, the Margin Percentage shall be determined by reference to the rating
most recently in effect prior to such change or cessation.

 

(c)           The definition of “Regulatory Change” set forth in Section 1.1 of
the Loan Agreement is hereby amended to read in its entirety as follows:

 

Regulatory Change means with respect to any Lender, any change on or after the
date of this Agreement in any Legal Requirement (including, without limitation,
Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of lenders including
such Lender under any Legal Requirements (whether or not having the force of
law) by any Governmental Authority; provided, however, that notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines, requirements and
directives thereunder or issued in connection therewith or in

 

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implementation thereof, and (y) all requests, rules, regulations, guidelines,
interpretations or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities
(whether or not have the force of law), in each case pursuant to Basel III,
shall be deemed to be a “Regulatory Change”, regardless of the date enacted,
adopted, issued or implemented.

 

(d)           The definition of “Revolving Loan Maturity Date” set forth in
Section 1.1 of the Loan Agreement is hereby amended to read in its entirety as
follows:

 

Revolving Loan Maturity Date means the maturity of the Notes, April 26, 2017.

 

(e)           Section 8.5 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

8.5          Redemption, Dividends and Distributions.  At any time:  (a) redeem,
retire or otherwise acquire, directly or indirectly, any equity interest in
Borrower other than redemptions, retirements and stock repurchases, which may be
made so long as no Event of Default has occurred which is continuing (or would
result therefrom) or (b) make any distributions of any Property or cash to the
owner of any of the equity interests in Borrower or any of its Material
Subsidiaries other than Permitted Dividends.

 

SECTION 2. Conditions Precedent.  The effectiveness of this Amendment shall be
conditioned upon each of the following:

 

(a)           the Agent shall have received from the Borrower and all of the
Lenders either (1) a counterpart of this Amendment signed on behalf of such
party or (2) written evidence satisfactory to the Agent (which may include
telecopy or e-mail transmission of a signed signature page of this Amendment)
that such party has signed counterparts of this Amendment; and

 

(b)           the Agent shall have received such documents and certificates and
opinions as the Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower and the authorization
of the execution and delivery of this Amendment, all in form and substance
reasonably satisfactory to the Agent and its counsel; and

 

(c)           the Borrower shall pay to the Agent, for the pro rata benefit of
the Lenders, an upfront fee equal to 12.5 basis points on their respective
Commitments.

 

SECTION 3. Ratification.  Except as expressly amended by this Amendment, the
Loan Agreement and the other Loan Documents shall remain in full force and
effect.  None of the rights, title and interests existing and to exist under the
Loan Agreement are hereby released, diminished or impaired, and the Borrower
hereby reaffirms all covenants, representations and warranties in the Loan
Agreement (except such representations and warranties which are, by their
express terms, limited to a prior date).

 

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SECTION 4. Expenses.  The Borrower shall pay to the Agent all reasonable fees
and expenses of its respective legal counsel (pursuant to Section 11.3 of the
Loan Agreement) incurred in connection with the execution of this Amendment.

 

SECTION 5. Certifications.  The Borrower hereby certifies that after giving
effect to this Amendment (a) no material adverse change in the assets,
liabilities, financial condition, business or affairs of the Borrower has
occurred since December 31, 2012 and (b) no uncured Default or uncured Event of
Default has occurred and is continuing or will occur as a result of this
Amendment.

 

SECTION 6. Representations.  This Amendment has been duly executed and delivered
by Borrower and is a legal, valid and binding obligation of Borrower,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency and other similar laws and judicial decisions affecting
creditors’ rights generally and by general equitable principles.  The execution,
delivery and performance of this Amendment (a) have all been duly authorized by
all necessary action; (b) are within the power and authority of Borrower; (c) to
Borrower’s knowledge, do not and will not contravene or violate any Legal
Requirement applicable to Borrower or any of its Subsidiaries or the
Organizational Documents of Borrower or any of its Subsidiaries, the
contravention or violation of which would reasonably be expected to have a
Material Adverse Effect; (d) do not and will not result in the breach of, or
constitute a default under, any material agreement or instrument by which
Borrower or any of its Subsidiaries or any of their Properties may be bound the
contravention or violation of which would reasonably be expected to have a
Material Adverse Effect, and (e) do not and will not result in the creation of
any Lien upon any material Property of Borrower or any of its Material
Subsidiaries except for Permitted Liens.  All necessary permits, registrations
and consents for such execution, delivery and performance have been obtained,
except where the failure to obtain the same would not reasonably be expected to
have a Material Adverse Effect.

 

SECTION 7. Pari Passu Obligations.  Borrower shall ensure that at all times any
unsecured and unsubordinated claims against Borrower under the Loan Documents
rank at least pari passu with the claims of all of its other unsecured and
unsubordinated creditors except those creditors whose claims are mandatorily
preferred by laws of general application to companies.

 

SECTION 8. Miscellaneous.  This Amendment (a) shall be binding upon and inure to
the benefit of the Borrower, the Lenders and the Agent and their respective
successors, assigns, receivers and trustees; (b) may be modified or amended only
by a writing signed by the required parties; (c) shall be governed by and
construed in accordance with the laws of the State of New York and the United
States of America and shall be subject to the provisions of Section 11.14 and
Section 11.15 of the Loan Agreement; (d) may be executed in several counterparts
by the parties hereto on separate counterparts, and each counterpart, when so
executed and delivered, shall constitute an original agreement, and all such
separate counterparts shall constitute but one and the same agreement and
(e) together with the other Loan Documents, embodies the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, consents and understandings relating to such
subject matter.  The headings herein shall be accorded no significance in
interpreting this Amendment.

 

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NOTICE PURSUANT TO TEX. BUS. & COMM. CODE §26.02

 

THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN DOCUMENTS
EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY CONCURRENTLY
HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have caused this
Amendment to be signed by their respective duly authorized officers, effective
as of the date first above written.

 

 

HCC INSURANCE HOLDINGS, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Brad T. Irick

 

 

Brad T. Irick, Executive Vice President &

 

 

Chief Financial Officer

 

[Signature Page for Second Amendment to Loan Agreement]

 

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WELLS FARGO BANK, NATIONAL

 

ASSOCIATION, as Administrative Agent

 

and as a Lender

 

 

 

By:

/s/ Chad D. Johnson

 

Name:

Chad D. Johnson

 

Title:

Senior Vice President

 

[Signature Page for Second Amendment to Loan Agreement]

 

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BANK OF AMERICA, N.A.

 

 

 

 

 

By:

/s/ Christopher Choi

 

Name:

Christopher Choi

 

Title:

Director

 

[Signature Page for Second Amendment to Loan Agreement]

 

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BARCLAYS BANK PLC

 

 

 

 

 

By:

/s/ Dan Broome

 

Name:

Dan Broome

 

Title:

Director

 

[Signature Page for Second Amendment to Loan Agreement]

 

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JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

By:

/s/ Thomas A. Kiepura

 

Name:

Thomas A. Kiepura

 

Title:

Senior Credit Executive

 

[Signature Page for Second Amendment to Loan Agreement]

 

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THE ROYAL BANK OF SCOTLAND PLC

 

 

 

 

 

By:

/s/ Jonathan Biggs

 

Name:

Jonathan Biggs

 

Title:

Relationship Director

 

[Signature Page for Second Amendment to Loan Agreement]

 

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KEYBANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ James Cribbet

 

Name:

James Cribbet

 

Title:

Senior Vice President

 

[Signature Page for Second Amendment to Loan Agreement]

 

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AMEGY BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Kelly Nash

 

Name:

Kelly Nash

 

Title:

Vice President

 

[Signature Page for Second Amendment to Loan Agreement]

 

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THE BANK OF NEW YORK MELLON

 

 

 

 

 

By:

/s/ Adim Offurum

 

Name:

Adim Offurum

 

Title:

Vice President

 

[Signature Page for Second Amendment to Loan Agreement]

 

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THE NORTHERN TRUST COMPANY

 

 

 

 

 

By:

/s/ Karen Czys

 

Name:

Karen Czys

 

Title:

Second Vice President

 

[Signature Page for Second Amendment to Loan Agreement]

 

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