EXHIBIT 10.1

 

EIGHTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT

 

EIGHTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
January 31, 2003, among U.S.I. HOLDINGS CORPORATION, a Delaware corporation (the
“Borrower”), the various lenders from time to time party to the Credit Agreement
referred to below (the “Lenders”), CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as
Administrative Agent (the “Administrative Agent”) and JPMORGAN CHASE BANK (f/k/a
The Chase Manhattan Bank), as Syndication Agent (the “Syndication Agent”). All
capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to such terms in the Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Lenders, the Administrative Agent and the Syndication
Agent are parties to a Credit Agreement, dated as of September 17, 1999 (as
amended, modified or supplemented to the date hereof, the “Credit Agreement”);

 

WHEREAS, the Borrower has requested that the Lenders agree to amend certain
provisions of the Credit Agreement as herein provided; and

 

WHEREAS, the Lenders have agreed to the amendments and consents to the Credit
Agreement as herein provided, subject to the terms and conditions set forth
herein;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.    Notwithstanding anything to the contrary contained in Section 7.2, 7.8(e)
or 7.9 of the Credit Agreement, USIS or one of its Wholly Owned Subsidiaries may
acquire a company (the “Target”) previously identified to the Administrative
Agent (the “Acquisition”) pursuant to a (and in accordance with the definition
of) Permitted Acquisition, provided that in connection with the Acquisition, the
Borrower and/or one of its Wholly Owned Subsidiaries shall be permitted to
assume a note owed by the Target to certain shareholders thereof with an
outstanding principal amount of approximately $3,160,000 (the “Shareholder
Note”), so long as (i) at least $1,910,000 in principal of the Shareholder Note
is repaid by the Borrower and/or one of its Wholly Owned Subsidiaries within one
week following the closing of the Acquisition (with the amount of such repayment
not to apply toward the basket contained in clause (iv)(C) of the last paragraph
of the definition of Permitted Acquisition (as in effect after giving effect to
this Amendment)) and (ii) concurrently with the closing of the Acquisition,
approximately $1,250,000 in principal of such Shareholder Note shall be
cancelled and exchanged for a USI Seller Note complying with the terms of the
Credit Agreement as amended hereby.

 

2.    The definition of “Permitted Acquisition” appearing in Section 1.1 of the
Credit Agreement is hereby amended by inserting the following paragraph
immediately following the end of said definition:

 

“Notwithstanding the foregoing, from the period from the Eighth Amendment
Effective Date to and including October 1, 2003 (the “Period”), the Borrower and

 

--------------------------------------------------------------------------------

 

its Wholly Owned Subsidiaries may acquire Permitted Businesses, so long as (i)
the revenues for all Permitted Businesses acquired during such period are not
greater than $25,000,000 in the aggregate (calculated for each Permitted
Business acquired, for the 12-month period most recently ended for such
Permitted Business prior to the acquisition thereof), (ii) the total cash
consideration (excluding any payments scheduled to be made after the Term Loan
Maturity Date and the Revolving Credit Loan Maturity Date) for all such
acquisitions consummated during such period is not greater than $16,000,000,
(iii) the aggregate Acquisition Consideration for each such acquisition does not
exceed 6.5 times the projected Consolidated EBITDA of the business acquired
(such projections to be determined by the Borrower based upon reasonable
assumptions and the past performance of the acquired business) for the twelve
months following the acquisition, (iv) any USI Seller Notes issued in connection
with any such acquisition is (A) Permitted Seller Debt, (B) subordinated to the
obligations under the Credit Agreement pursuant to a subordination agreement in
the form of Exhibit K hereto or otherwise in form and substance satisfactory to
the Administrative Agent and (C) does not require any scheduled principal
payments in connection therewith prior to the Term Loan Maturity Date or the
Revolving Credit Loan Maturity Date, if such payments would cause the aggregate
amount of principal payments in respect of USI Seller Notes incurred in
connection with all businesses acquired during the Period and due prior to
December 31, 2003 to exceed $1,000,000, and (v) the conditions set forth in
clauses (x) and (y)(a) (excluding clause (a)(ii)), (c), (d), (e), (f) and (g) of
this definition are satisfied as of the date of such acquisition.”

 

3.    Section 1.1 of the Credit Agreement is hereby further amended by inserting
the following defined terms in the appropriate alphabetical order:

 

“Eighth Amendment” shall mean the Eighth Amendment and Consent to this
Agreement, dated as of January 31, 2003.

 

“Eighth Amendment Effective Date” shall have the meaning provided in the Eighth
Amendment.

 

4.    Section 7.1(a) of the Credit Agreement is hereby amended by deleting the
table appearing therein in its entirety and inserting the following new table in
lieu thereof:

 

Date

--------------------------------------------------------------------------------

  

Ratio

--------------------------------------------------------------------------------

March 31, 2000

  

4.85

June 30, 2000

  

4.75

September 30, 2000

  

4.50

December 31, 2000

  

4.25

March 31, 2001

  

3.75

June 30, 2001

  

4.00

September 30, 2001

  

4.00

December 31, 2001

  

4.25

March 31, 2002

  

4.375

June 30, 2002

  

4.125

September 30, 2002

  

3.95

 

-2-

--------------------------------------------------------------------------------

 

Date

--------------------------------------------------------------------------------

  

Ratio

--------------------------------------------------------------------------------

December 31, 2002

  

3.75

March 31, 2003

  

2.50

June 30, 2003 and the last day of each fiscal quarter thereafter

  

2.25

 

5.    Section 7.1(c) of the Credit Agreement is hereby amended by deleting the
table appearing therein in its entirety and inserting the following new table in
lieu thereof:

 

Date

--------------------------------------------------------------------------------

  

Ratio

--------------------------------------------------------------------------------

March 31, 2000

  

no test

June 30, 2000

  

no test

September 30, 2000

  

no test

December 31, 2000

  

no test

March 31, 2001

  

no test

June 30, 2001

  

no test

September 30, 2001

  

no test

December 31, 2001

  

no test

March 31, 2002

  

no test

June 30, 2002

  

no test

September 30, 2002

  

no test

December 31, 2002

  

no test

March 31, 2003

  

1.00

June 30, 2003

  

1.10

September 30, 2003

  

1.20

December 31, 2003

  

1.30

March 31, 2004

  

no test

June 30, 2004

  

no test

September 30, 2004

  

no test

 

6.    Section 7.1(d) of the Credit Agreement is hereby amended by deleting the
table appearing therein in its entirety and inserting the following new table in
lieu thereof:

 

Fiscal Quarter

--------------------------------------------------------------------------------

  

Amount

--------------------------------------------------------------------------------

March 31, 2000

  

$

190,000,000

June 30, 2000

  

$

190,000,000

September 30, 2000

  

$

190,000,000

December 31, 2000

  

$

190,000,000

March 31, 2001

  

$

185,000,000

June 30, 2001

  

$

175,000,000

September 30, 2001

  

$

170,000,000

December 31, 2001

  

$

124,000,000

March 31, 2002

  

$

107,000,000

June 30, 2002

  

$

101,000,000

September 30, 2002

  

$

101,000,000

 

-3-

--------------------------------------------------------------------------------

 

Fiscal Quarter

--------------------------------------------------------------------------------

  

Amount

--------------------------------------------------------------------------------

December 31, 2002

  

$

101,000,000

March 31, 2003

  

$

180,000,000

June 30, 2003

  

$

185,000,000

September 30, 2003

  

$

185,000,000

December 31, 2003

  

$

190,000,000

March 31, 2004

  

$

250,000,000

June 30, 2004

  

$

250,000,000

September 30, 2004

  

$

250,000,000

 

7.    Section 7.1 of the Credit Agreement is hereby further amended by inserting
the following new clause (f) immediately following clause (e) thereof:

 

“(f) In determining whether the Borrower has complied with the financial
covenants contained in Sections 7.1(a), (b), (c) and (d), any computation to
determine compliance with such financial covenants shall exclude items listed as
discontinued operations on a financial statement prepared in accordance with
GAAP and delivered to the Administrative Agent pursuant to Section 6.1(a) or
(b).

 

8.    The Credit Agreement is hereby further by amended by inserting Exhibit K
attached hereto.

 

9.    The Borrower hereby represents and warrants that (x) all representations
and warranties contained in Section 4 of the Credit Agreement are true and
correct in all material respects on and as of the Eighth Amendment Effective
Date (as defined below) after giving effect to this Amendment (unless such
representations and warranties relate to a specific earlier date, in which case
such representations and warranties shall be true and correct as of such earlier
date) and (y) there exists no Default or Event of Default on the Eighth
Amendment Effective Date, after giving effect to this Amendment.

 

10.    This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any provision of the Credit Agreement or
any other Loan Document except as expressly set forth herein.

 

11.    This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Borrower and the Administrative Agent.

 

12.    THIS 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.

 

13.    This Amendment shall become effective on the date (the “Eighth Amendment
Effective Date”) when each of the Borrower and the Required Lenders shall have

 

-4-

--------------------------------------------------------------------------------

 

signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered (including by way of facsimile transmission) the same to
the Administrative Agent at its notice office.

 

14.    From and after the Eighth Amendment Effective Date, all references in the
Credit Agreement and each of the Loan Documents to the Credit Agreement shall be
deemed to be references to the Credit Agreement after giving effect to this
Amendment.

 

*    *    *

 

 

-5-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

U.S.I. HOLDINGS CORPORATION

By

 

/s/    ROBERT SCHNEIDER

--------------------------------------------------------------------------------

   

Name:  Robert S. Schneider

Title:    Executive Vice President of

          Finance and Administration

 

CREDIT LYONNAIS CAYMAN ISLAND BRANCH

By

 

/s/    W. MICHAEL GEORGE     

--------------------------------------------------------------------------------

   

Name:  W. Michael George

Title:    Authorized Signature

 

JPMORGAN CHASE BANK

By

 

/s/    MARYBETH MULLEN

--------------------------------------------------------------------------------

   

Name:  Marybeth Mullen

Title:    Vice President

          JP Morgan Chase Bank

 

FIRSTAR BANK, N.A.

By

 

--------------------------------------------------------------------------------

   

Name:

Title:

 

--------------------------------------------------------------------------------

 

LASALLE BANK NATIONAL ASSOCIATION

By

 

--------------------------------------------------------------------------------

   

Name:

Title:

 

PILGRIM PRIME RATE TRUST

By:

 

Pilgrim Investments, Inc.

as its investment manager

By

 

--------------------------------------------------------------------------------

   

Name:

Title:

 

PILGRIM AMERICA HIGH INCOME INVESTMENTS, LTD.

By:

 

Pilgrim Investments, Inc. as its investment manager

By

 

--------------------------------------------------------------------------------

   

Name:

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT K

 

SUBORDINATION PROVISIONS

 

Section 1.01.    Subordination of Liabilities.    U.S.I. Holdings Corporation
(the “Company”), for itself, and its successors and assigns, covenants and
agrees, and each holder of the Note to which this Annex A is attached (the
“Note”) by its acceptance thereof likewise covenants and agrees, that the
payment of the principal of, interest on, and all other amounts owing in respect
of, the Note (the “Subordinated Indebtedness”) is hereby expressly subordinated,
to the extent and in the manner hereinafter set forth, to the prior payment in
full in cash of all Senior Indebtedness (as defined in Section 1.07 of this
Annex A). The provisions of this Annex A shall constitute a continuing offer to
all persons who, in reliance upon such provisions, become holders of, or
continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders of Senior Indebtedness, and such holders are hereby made
obligees hereunder the same as if their names were written herein as such, and
they and/or each of them may proceed to enforce such provisions.

 

Section 1.02.    Company Not to Make Payments with Respect to Subordinated
Indebtedness in Certain Circumstances.    (a) Upon the maturity of any Senior
Indebtedness (including interest thereon or fees or any other amounts owing in
respect thereof), whether at stated maturity, by acceleration or otherwise, all
Obligations (as defined in Section 1.07 of this Annex A) owing in respect
thereof shall first be paid in full in cash, before any payment (whether in
cash, property, securities or otherwise) is made on account of the Subordinated
Indebtedness.

 

(b)    The Company may not, directly or indirectly, make any payment of any
Subordinated Indebtedness and may not acquire any Subordinated Indebtedness for
cash or property until all Senior Indebtedness has been paid in full in cash if
any Event of Default under (and as defined in) the Credit Agreement referred to
below or any other issue of Senior Indebtedness is then in existence or would
result therefrom.

 

(c)    In the event that, notwithstanding the provisions of the preceding
subsections (a) and (b) of this Section 1.02, the Company shall make any payment
on account of the Subordinated Indebtedness at a time when payment is not
permitted by said subsection (a) or (b), such payment shall be held by the
holder of the Note, in trust for the benefit of, and shall be paid forthwith
over and delivered to, the holders of Senior Indebtedness or their
representative or the trustee under the indenture or other agreement pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application pro rata to the
payment of all Senior Indebtedness (after giving effect to the relative
priorities of such Senior Indebtedness) remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in cash in accordance with the terms of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness. Without in any way
modifying the provisions of this Annex A or affecting the subordination effected
hereby if the hereafter referenced notice is not given, the Company shall give
the holder of the Note prompt written notice of any event which would prevent
payments under Section 1.02(a) or (b) hereof.

 

Section 1.03.    Subordination to Prior Payment of All Senior Indebtedness on
Dissolution, Liquidation or Reorganization of Company.    Upon any distribution
of assets of the

 

--------------------------------------------------------------------------------

 

EXHIBIT K

Page 2

 

Company upon dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or otherwise):

 

(a)    the holders of all Senior Indebtedness shall first be entitled to receive
payment in full in cash of all Senior Indebtedness (including, without
limitation, post-petition interest at the rate provided in the documentation
with respect to the Senior Indebtedness, whether or not such post-petition
interest is an allowed claim against the debtor in any bankruptcy or similar
proceeding) before the holder of the Note is entitled to receive any payment of
any kind or character on account of the Subordinated Indebtedness;

 

(b)    any payment or distributions of assets of the Company of any kind or
character, whether in cash, property or securities to which the holder of the
Note would be entitled except for the provisions of this Annex A, shall be paid
by the liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any such Senior Indebtedness
may have been issued, to the extent necessary to make payment in full in cash of
all Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and

 

(c)    in the event that, notwithstanding the foregoing provisions of this
Section 1.03, any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, shall be received by the
holder of the Note on account of Subordinated Indebtedness before all Senior
Indebtedness is paid in full in cash, such payment or distribution shall be
received and held in trust for and shall be paid over to the holders of the
Senior Indebtedness (after giving effect to the relative priorities of such
Senior Indebtedness) remaining unpaid or unprovided for or their representative
or representatives, or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have been
issued, for application to the payment of such Senior Indebtedness until all
such Senior Indebtedness shall have been paid in full in cash, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.

 

Without in any way modifying the provisions of this Annex A or affecting the
subordination effected hereby if the hereafter referenced notice is not given,
the Company shall give prompt written notice to the holder of the Note of any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon assignment for the
benefit of creditors or otherwise).

 

Section 1.04.    Subrogation.    Subject to the prior payment in full in cash of
all Senior Indebtedness, the holder of the Note shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Note shall be paid in full, and for the purpose
of such subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the holder of
the Note by virtue of this Annex A which otherwise would have been made to the
holder of the Note shall, as

 

--------------------------------------------------------------------------------

 

EXHIBIT K

Page 3

 

between the Company, its creditors other than the holders of Senior
Indebtedness, and the holder of the Note, be deemed to be payment by the Company
to or on account of the Senior Indebtedness, it being understood that the
provisions of this Annex A are and are intended solely or the purpose of
defining the relative rights of the holder of the Note, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.

 

Section 1.05.    Obligation of the Company Unconditional.    Nothing contained
in this Annex A is intended to or shall impair, as between the Company and the
holder of the Note, the obligation of the Company, to pay to the holder of the
Note the principal of and interest on the Note as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the holder of the Note and other creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the holder of the Note from exercising all remedies
otherwise permitted by applicable law, subject to the rights, if any, under this
Annex A of the holders of Senior Indebtedness in respect of cash, property, or
securities of the Company received upon the exercise of any such remedy.

 

Section 1.06.    Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness.    No right of any present or future
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act in good faith by
any such holder, or by any noncompliance by the Company with the terms and
provisions of the Note, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Note with respect hereto, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of, change or
extend the time of payment of, or renew or alter, any Senior Indebtedness or
amend, modify or supplement any agreement or instrument governing or evidencing
such Senior Indebtedness or any other document referred to therein, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of default thereunder and
the release of any collateral securing such Senior Indebtedness, all without
notice to or assent from the holder of the Note.

 

Section 1.07.    Senior Indebtedness.    The term “Senior Indebtedness” shall
mean all Obligations (i) of the Company under, or in respect of, the Credit
Agreement (as amended, modified, supplemented, extended, restated, refinanced,
replaced or refunded from time to time, the “Credit Agreement”), dated as of
September 17, 1999, among the Company, the lenders from time to time party
thereto, and Credit Lyonnais Cayman Island Branch, as Administrative Agent, and
each other Loan Document (as defined in the Credit Agreement) to which the
Company is a party and any renewal, extension, restatement, refinancing or
refunding of any thereof and (ii) of the Company under, or in respect of, any
Interest Rate Protection Agreements (as defined in the Credit Agreement),
including any guaranty thereof. As used herein, the term “Obligation” shall mean
all principal, interest, premium, reimbursement obligations, penalties, fees,
expenses, indemnities and other liabilities and obligations (including any
guaranties of the foregoing liabilities and obligations) payable under the
documentation governing any Senior Indebtedness (including interest after the
commencement of any bankruptcy, insolvency, receivership or

 

--------------------------------------------------------------------------------

 

EXHIBIT K

Page 4

 

similar proceeding at the rate provided in the documentation with respect
thereto, whether or not such interest is an allowed claim against the debtor in
any such proceeding).

 

*