Exhibit 10.6

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”) is made and
entered into as of the 30th day of December, 2015, by and among:

 

(i)          JAMES RIVER GROUP HOLDINGS, LTD., a Bermuda company (the former
company name of which is Franklin Holdings (Bermuda), Ltd.), and JRG REINSURANCE
COMPANY LTD., a regulated insurance company domiciled in Bermuda (each a
“Borrower” and, collectively, the “Borrowers”);

 

(ii)         THE FINANCIAL INSTITUTIONS as signatory lender parties hereto and
their successors and assigns (each a “Lender” and, collectively, the “Lenders”);
and

 

(iii)        KEYBANK NATIONAL ASSOCIATION, a national banking association, in
its capacity as “Administrative Agent” under the Credit Agreement (defined
below).

 

Recitals:

 

A.           The Borrowers, the Lenders and the Administrative Agent and certain
other parties are the parties to that certain Credit Agreement dated as of June
5, 2013, as amended by a First Amendment dated September 24, 2014, a Waiver
Letter dated February 6, 2015, a Commitment Acceptance Agreement dated May 20,
2015 and a Second Amendment dated December 15, 2015 (collectively, the “Credit
Agreement”), pursuant to which, inter alia, the Lenders agreed, subject to the
terms and conditions thereof, to advance Loans (as this and other capitalized
terms used herein and not otherwise defined herein are defined in the Credit
Agreement) to the Borrowers; and the Letter of Credit Issuer agreed, subject to
the terms and conditions thereof, to issue Letters of Credit.

 

B.           The Borrowers have requested the Lenders to agree to an amendment
to Section 6.13 of the Credit Agreement.

 

 
 

 

Agreements:

 

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
agreements hereinafter set forth, the Borrowers, the Lenders and the
Administrative Agent, intending to be legally bound, hereby agree as follows:

 

1.          Amendment to Credit Agreement. Subject to the terms and conditions
of this Third Amendment, including, without limitation, Paragraph 2, below,
paragraph (a) of Section 6.13 (Risk-Based Capital Ratio; Other Minimum Capital
Requirements) of the Credit Agreement is hereby amended and restated in its
entirety to provide as follows:

 

(a)      (i) The Borrowers shall not, as of the end of any Fiscal Year ending
December 31, 2012 and thereafter through and including December 31, 2014, permit
the Risk-Based Capital Ratio of any Domestic Insurance Subsidiary to be less
than 2.50 to 1, and (ii) the Borrowers shall not, as of the end of any Fiscal
Year ending December 31, 2015 and thereafter, permit the Risk-Based Capital
Ratio (A) of James River Insurance to be less than 2.00 to 1 or (B) of any other
Domestic Insurance Subsidiary to be less than 2.50 to 1.

 

2.          Amendment Effective Date; Conditions Precedent. The amendment set
forth in Paragraph 1, above, shall not be effective unless and until the date on
which all of the following conditions precedent have been satisfied (such date
of effectiveness being the “Third Amendment Effective Date”); provided, however,
that upon the effectiveness of this Third Amendment as provided in this
Paragraph 2, the amendment provided for in Paragraph 1, above, shall be deemed
to be effective, nunc pro tunc, as of the 30th day of December, 2015:

 

(a)          Officer’s Certificate. On the Third Amendment Effective Date, after
giving effect to the amendment set forth in Paragraph 1, above, (i) there shall
exist no Default, and a Financial Officer or other executive officer of each
Borrower, on behalf of such Borrower, shall have delivered to the Administrative
Agent written confirmation thereof dated as of the Third Amendment Effective
Date, (ii) the representations and warranties of the Borrowers under Article 3
of the Credit Agreement shall have been reaffirmed in writing by each Borrower
as being true and correct in all material respects as of the Third Amendment
Effective Date (unless

 

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and to the extent that any such representation and warranty is stated to relate
solely to an earlier date, in which case such representation and warranty shall
have been true and correct in all material respects as of such earlier date),
(iii) each Borrower shall have represented in writing that its execution,
delivery and performance of this Third Amendment have been authorized by all
necessary corporate or company action, and (iv) each Borrower shall have
reaffirmed in writing that the Regulatory Condition Satisfaction remains
effective.

 

(b)          Third Amendment. The Administrative Agent or the Special Counsel
(defined below) shall have received from each Borrower and the Required Lenders
either (i) a counterpart of this Third Amendment signed on behalf of such party
or (ii) written evidence satisfactory to the Administrative Agent (which may
include telecopy or email transmission of a signed signature page of this Third
Amendment) that such party has signed and delivered a counterpart of this Third
Amendment.

 

(c)          Guarantor Confirmations. Each of James River and James River UK
shall have executed and delivered to the Administrative Agent a confirmation of
its Payment Guaranty in form and substance reasonably satisfactory to the
Administrative Agent, accompanied by such certifications regarding good standing
and authorization as the Administrative Agent may reasonably request.

 

(d)          Agent Expenses. The Borrowers shall have paid or caused to be paid
to the Administrative Agent all fees and other amounts due and payable on or
prior to the Third Amendment Effective Date, including, to the extent invoiced,
reimbursement or payment of all reasonable out-of-pocket expenses (including
fees, charges and disbursements of the Special Counsel) required to be
reimbursed or paid by the Borrowers hereunder, under any other Loan Document or
under said fee letter agreement.

 

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(e)          Legal Matters. All legal matters incident to this Third Amendment
and the consummation of the transactions contemplated hereby shall be reasonably
satisfactory to Squire Patton Boggs (US) LLP, Cleveland, Ohio, special counsel
to the Administrative Agent (the “Special Counsel”). Notwithstanding the
foregoing, if the Third Amendment Effective Date has not occurred on or before
March 31, 2016, this Third Amendment shall not become effective and shall be
deemed of no further force and effect.

 

3.          No Other Modifications. Except as expressly provided in this Third
Amendment, all of the terms and conditions of the Credit Agreement and the other
Loan Documents remain unchanged and in full force and effect.

 

4.          Confirmation of Obligations; Release. Each Borrower hereby affirms
as of the date hereof all of its respective Debt and other obligations to each
of the Lender Parties under and pursuant to the Credit Agreement and each of the
other Loan Documents and that such Debt and other obligations are owed to each
of the Lender Parties according to their respective terms. Each Borrower hereby
affirms as of the date hereof that there are no claims or defenses to the
enforcement by the Lender Parties of the Debt and other obligations of such
Borrower to each of them under and pursuant to the Credit Agreement or any of
the other Loan Documents.

 

5.          Administrative Agent’s Expense. The Borrowers agree to reimburse the
Administrative Agent promptly for its reasonable invoiced out-of-pocket costs
and expenses incurred in connection with this Third Amendment and the
transactions contemplated hereby, including, without limitation, the reasonable
fees and expenses of the Special Counsel.

 

6.          Governing Law; Binding Effect. THIS THIRD AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE

 

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STATE OF NEW YORK AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE
BORROWERS, THE LENDERS AND THE ADMINISTRATIVE AGENT AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS.

 

7.          Counterparts. This Third Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart. Any party hereto may execute
and deliver a counterpart of this Third Amendment by delivering by facsimile or
email transmission a signature page of this Third Amendment signed by such
party, and any such facsimile or email signature shall be treated in all
respects as having the same effect as an original signature. Any party
delivering by facsimile or email transmission a counterpart executed by it shall
promptly thereafter also deliver a manually signed counterpart of this Third
Amendment.

 

8.          Miscellaneous.

 

(a)          Upon the effectiveness of this Third Amendment, this Third
Amendment shall be a Loan Document.

 

(b)          The invalidity, illegality, or unenforceability of any provision in
or Obligation under this Third Amendment in any jurisdiction shall not affect or
impair the validity, legality, or enforceability of the remaining provisions or
obligations under this Third Amendment or of such provision or obligation in any
other jurisdiction.

 

(c)          This Third Amendment and all other agreements and documents
executed in connection herewith have been prepared through the joint efforts of
all of the parties. Neither the provisions of this Third Amendment or any such
other agreements and documents nor any alleged ambiguity shall be interpreted or
resolved against any party on the ground that such

 

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party’s counsel drafted this Third Amendment or such other agreements and
documents, or based on any other rule of strict construction. Each of the
parties hereto represents and declares that such party has carefully read this
Third Amendment and all other agreements and documents executed in connection
herewith and therewith, and that such party knows the contents thereof and signs
the same freely and voluntarily. The parties hereby acknowledge that they have
been represented by legal counsel of their own choosing in negotiations for and
preparation of this Third Amendment and all other agreements and documents
executed in connection therewith and that each of them has read the same and had
their contents fully explained by such counsel and is fully aware of their
contents and legal effect.

 

(d)          The Obligations of the Borrowers hereunder are joint and several,
all as more fully set forth in Article 10 of the Credit Agreement.

 

9.          Waiver of Jury Trial. Each of the parties to this Third Amendment
hereby irrevocably waives all right to a trial by jury in any action, proceeding
or counterclaim (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) arising out of
or relating to this Third Amendment, the other LOAN Documents or the
transactions contemplated hereby or thereby. Each party hereto hereby (a)
certifies that no representative, agent or attorney oF any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, and (b) acknowledges
that it and the other parties hereto have been induced to enter into this Third

 

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Amendment by, among other things, the mutual waivers and certificatION in this
section.

 

[No additional provisions are on this page; the page next following is the
signature page.]

 

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IN WITNESS WHEREOF, the Borrowers, the Lenders and the Administrative Agent have
hereunto set their hands as of the date first above written.

 

  BORROWERS       JAMES RIVER GROUP HOLDINGS, LTD.         By:  /s/ Gregg Davis
    Gregg Davis, Chief Financial Officer         JRG REINSURANCE COMPANY LTD.  
      By:  /s/ Kevin Copeland     Kevin Copeland, Chief Financial Officer

 

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  ADMINISTRATIVE AGENT       KEYBANK NATIONAL ASSOCIATION, as Administrative
Agent as Lender         By:  /s/ James Cribbet     James Cribbet, Senior Vice
President         LENDERS       KEYBANK NATIONAL ASSOCIATION,
as Lender         By:  /s/ James Cribbet     James Cribbet, Senior Vice
President

 

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[Lender Signatures Continued]

 

  SUNTRUST BANK,   as Lender         By:  /s/ Paula Mueller     Name: Paula
Mueller     Title: Director

 

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[Lender Signatures Continued]

 

  BANK OF MONTREAL, CHICAGO BRANCH,   as Lender         By:  /s/ Joan Murphy    
Name: Joan Murphy     Title: Director

 

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[Lender Signatures Continued]

 

  THE BANK OF NOVA SCOTIA,   as Lender         By:  /s/ Kevin Chan     Name:
Kevin Chan     Title: Director

 

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[Lender Signatures Continued]

 

  FIRST TENNESSEE BANK, N.A.,   as Lender         By:  /s/ Keith Sherman    
Name: Keith Sherman     Title: Senior Vice President

 

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[Lender Signatures Continued]

 

  YADKIN BANK, as Lender         By:  /s/ Jeff Hendrick     Name: Jeff Hendrick
    Title: Vice President

 

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