exhibit10-2.htm


    
      Exhibit
10.2

       

      EXECUTION
COPY

       

      AMENDED AND
RESTATED

      REVOLVING
LINE OF CREDIT NOTE

      


      


      
        	
                $150,000,000.00

              	
                West
      Covina, California

              


      

      May 23, 2008

      


      FOR VALUE RECEIVED, the undersigned
EMPLOYERS HOLDINGS, INC. (“Borrower”) promises to pay to
the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at San
Gabriel Valley RCBO, 1000 Lakes Drive, Suite #250, West Covina,
CA  91790, or at such other place as the holder hereof may designate,
in lawful money of the United States of America and in immediately available
funds, the principal sum of One Hundred Fifty Million Dollars ($150,000,000.00),
or so much thereof as may be advanced and be outstanding, with interest thereon,
to be computed on each advance from the date of its disbursement as set forth
herein.

      


      I.         
DEFINITIONS:

      


      As used herein, the following terms
shall have the meanings set forth after each, and any other term defined in this
Note shall have the meaning set forth at the place defined:

      


      (a)       
“Business Day” means
any day except a Saturday, Sunday or any other day on which commercial banks in
Nevada are authorized or required by law to close.

      


      (b)       
“Fixed Rate Term” means
a period commencing on a Business Day and continuing for 1, 2, 3 or 6 months, as
designated by Borrower, during which all or a portion of the outstanding
principal balance of this Note bears interest determined in relation to LIBOR;
provided however, that no Fixed Rate Term may be selected for a principal amount
less than One Hundred Thousand Dollars ($100,000.00); and provided further, that
no Fixed Rate Term shall extend beyond the scheduled maturity date
hereof.  If any Fixed Rate Term would end on a day which is not a
Business Day, then such Fixed Rate Term shall be extended to the next succeeding
Business Day.

      


      (c)       
“LIBOR” means the rate
per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and
determined pursuant to the following formula:

      


      
        	
                LIBOR
      =  

              	
                Base
      LIBOR

              	 
    
	 
    	
                100% -
      LIBOR Reserve Percentage

              	 
    


      

      


      (i)       
“Base LIBOR” means the
rate per annum for United States dollar deposits quoted by Bank as the
Inter-Bank Market Offered Rate, with the understanding that such rate is quoted
by Bank for the purpose of calculating effective rates of interest for loans
making reference thereto, on the first day of a Fixed Rate Term for delivery of
funds on said date for a period of time approximately equal to the number of
days in such Fixed Rate Term and in an amount approximately equal to the
principal amount to which such Fixed Rate Term applies.  Borrower
understands and agrees that Bank may base its quotation of the Inter-Bank Market
Offered Rate

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      upon such
offers or other market indicators of the Inter-Bank Market as Bank in its
discretion deems appropriate including, but not limited to, the rate offered for
U.S. dollar deposits on the London Inter-Bank Market.

      


      (ii)       
“LIBOR Reserve
Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency
Liabilities” (as defined in Regulation D of the Federal Reserve Board, as
amended), adjusted by Bank for expected changes in such reserve percentage
during the applicable Fixed Rate Term.

      


      (d)       
“LIBOR Margin” means, prior to May 1, 2009, seventy-five one
hundredths of one percent (0.75%), and from and after May 1, 2009, thirty
one hundredths of one percent (0.30%).

      


      (e)       
“Prime Rate” means at
any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate
is one of Bank’s base rates and serves as the basis upon which effective rates
of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Bank may designate.

      


      II.        
INTEREST:

      


      (a)       
Interest.  The
outstanding principal balance of this Note shall bear interest (computed on the
basis of a 360-day year, actual days elapsed) either (i) at a fluctuating rate
per annum equal to the Prime Rate in effect from time to time, or (ii) at a
fixed rate per annum determined by Bank to be LIBOR in effect on the first day
of the applicable Fixed Rate Term plus the LIBOR Margin in effect as of the
first day of such Fixed Rate Term.  When interest is determined in
relation to the Prime Rate, each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within
Bank.  With respect to each LIBOR selection hereunder, Bank is hereby
authorized to note the date, principal amount, interest rate and Fixed Rate Term
applicable thereto and any payments made thereon on Bank’s books and records
(either manually or by electronic entry) and/or on any schedule attached to this
Note, which notations shall be prima facie evidence of the accuracy of the
information noted.

      


      (b)       
Selection of Interest
Rate Options.  At any time any portion of this Note bears
interest determined in relation to LIBOR, it may be continued by Borrower at the
end of the Fixed Rate Term applicable thereto so that all or a portion thereof
bears interest determined in relation to the Prime Rate or to LIBOR for a new
Fixed Rate Term designated by Borrower.  At any time any portion of
this Note bears interest determined in relation to the Prime Rate, Borrower may
convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower.  At
such time as Borrower requests an advance hereunder or wishes to select a LIBOR
option for all or a portion of the outstanding principal balance hereof, and at
the end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i)
the interest rate option selected by Borrower; (ii) the principal amount
subject thereto; and (iii) for each LIBOR selection, the length of the
applicable Fixed Rate Term. Any such notice may be given by telephone (or such
other electronic method as Bank may 

       

      
        
          
          

        

        
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      permit) so
long as, with respect to each LIBOR selection, (A) if requested by Bank,
Borrower provides to Bank written confirmation thereof not later than three (3)
Business Days after such notice is given, and (B) such notice is given to Bank
prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time
during any Business Day if Bank, at its sole option but without obligation to do
so, accepts Borrower’s notice and quotes a fixed rate to Borrower.  If
Borrower does not immediately accept a fixed rate when quoted by Bank, the
quoted rate shall expire and any subsequent LIBOR request from Borrower shall be
subject to a redetermination by Bank of the applicable fixed rate.  If
no specific designation of interest is made at the time any advance is requested
hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have
made a Prime Rate interest selection for such advance or the principal amount to
which such Fixed Rate Term applied.

      


      (c)       
Taxes
and Regulatory Costs.  Borrower shall pay to Bank
immediately upon demand, in addition to any other amounts due or to become due
hereunder, any and all (i) withholdings, interest equalization taxes, stamp
taxes or other taxes (except income and franchise taxes) imposed by any domestic
or foreign governmental authority and related in any manner to LIBOR, and (ii)
future, supplemental, emergency or other changes in the LIBOR Reserve
Percentage, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or foreign
governmental authority or resulting from compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority and related in any manner to LIBOR to the extent
they are not included in the calculation of LIBOR.  In determining
which of the foregoing are attributable to any LIBOR option available to
Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.

      


      (d)       
Payment of
Interest.  Interest accrued on this Note shall be payable on
the first day of each month, commencing June 1, 2008.

      


      (e)       
Default
Interest.  From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

      


      III.       
BORROWING AND REPAYMENT:

      


      (a)       
Borrowing and
Repayment.  Borrower may from time to time during the term of
this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above; provided further, that from and
after May 1, 2009, the total outstanding borrowings under this Note shall
not at any time exceed Fifty Million Dollars ($50,000,000.00).  The
unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for Borrower, which balance may be 

       

      
        
          
          

        

        
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      endorsed
hereon from time to time by the holder.  The outstanding principal
balance of this Note shall be due and payable in full on
March 26, 2011.

      


      (b)       
Advances.  Advances
hereunder, to the total amount of the principal sum stated above, may be made by
the holder at the written request (including by telefacsimile) of two persons
acting together, one being either William E. Yocke or Cynthia Morrison, and the
other being either Douglas Dirks or Lenard Ormsby, who are authorized to request
advances and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated
above.  The holder may rely in good faith upon any such request
delivered to it bearing signatures that purport to be signatures of the
aforementioned persons and shall be under no duty to verify the authenticity of
any such signatures.  Further, the holder shall have no obligation to
determine whether any person requesting an advance is or has been authorized by
Borrower pursuant to its constituent documents.

      


      (c)       
Application of
Payments.  Each payment made on this Note shall be credited
first, to any interest then due and second, to the outstanding principal balance
hereof.  All payments credited to principal shall be applied first, to
the outstanding principal balance of this Note which bears interest determined
in relation to the Prime Rate, if any, and second, to the outstanding principal
balance of this Note which bears interest determined in relation to LIBOR, with
such payments applied to the oldest Fixed Rate Term first.

      


      IV.       
PREPAYMENT:

      


      (a)       
Prime
Rate.  Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.

      


      (b)       
LIBOR.  Borrower
may prepay principal on any portion of this Note which bears interest determined
in relation to LIBOR at any time and in the minimum amount of One Hundred
Thousand Dollars ($100,000.00); provided however, that if the outstanding
principal balance of such portion of this Note is less than said amount, the
minimum prepayment amount shall be the entire outstanding principal balance
thereof.  In consideration of Bank providing this prepayment option to
Borrower, or if any such portion of this Note shall become due and payable at
any time prior to the last day of the Fixed Rate Term applicable thereto by
acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a
fee which is the sum of the discounted monthly differences for each month from
the month of prepayment through the month in which such Fixed Rate Term matures,
calculated as follows for each such month:

      


      
        	
                  
        (i)

              	
                Determine the
      amount of interest which would have accrued each month on the amount
      prepaid at the interest rate applicable to such amount had it remained
      outstanding until the last day of the Fixed Rate Term applicable
      thereto.

              


      

      


      
        	
                  
        (ii)

              	
                Subtract from
      the amount determined in (i) above the amount of interest which would have
      accrued for the same month on the amount prepaid for the
  

              


      

       

      
        
          
          

        

        
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                  remaining
      term of such Fixed Rate Term at LIBOR in effect on the date of prepayment
      for new loans made for such term and in a principal amount equal to the
      amount prepaid.

                


        

      

       

      
        	
                  
        (iii)

              	
                If the
      result obtained in (ii) for any month is greater than zero, discount that
      difference by LIBOR used in (ii)
above.

              


      

      


      Borrower
acknowledges that prepayment of such amount may result in Bank incurring
additional costs, expenses and/or liabilities, and that it is difficult to
ascertain the full extent of such costs, expenses and/or
liabilities.  Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank.  If
Borrower fails to pay any prepayment fee when due, the amount of such prepayment
fee shall thereafter bear interest until paid at a rate per annum two percent
(2.00%) above the Prime Rate in effect from time to time (computed on the basis
of a 360-day year, actual days elapsed).

      


      V.       
EVENTS OF DEFAULT:

      


      This Note is made pursuant to and is
subject to the terms and conditions of that certain Amended and Restated Credit
Agreement between Borrower and Bank dated as of May 23, 2008, as
amended from time to time (the “Credit
Agreement”).  Any default in the payment or performance of any
obligation under this Note, or any defined event of default under the Credit
Agreement, shall constitute an “Event of Default” under this
Note.

      


      VI.       
MISCELLANEOUS:

      


      (a)       
Remedies.  Upon
the occurrence of any Event of Default, the holder of this Note, at the holder’s
option, may declare all sums of principal and interest outstanding hereunder to
be immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by Borrower, and the obligation, if any, of the holder to
extend any further credit hereunder shall immediately cease and
terminate.  Borrower shall pay to the holder immediately upon demand
the full amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys’ fees (to include only outside counsel fees),
expended or incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity.

      


      (b)       
Obligations Joint and
Several.  Should more than one person or entity sign this Note
as a Borrower, the obligations of each such Borrower shall be joint and
several.

       

      
        
          
          

        

        
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      (c)       
Governing
Law.  This Note shall be governed by and construed in
accordance with the laws of the State of Nevada.

      


      As of the date hereof, this Note
amends, restates in full and supersedes that certain Revolving Line of Credit
Note dated March 26, 2008, in the maximum principal amount of $50,000,000.00
executed by Borrower in favor of Bank.

      


      [Signature
to follow on next page]

      


      
        
          
          

        

        
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      IN WITNESS
WHEREOF, the undersigned has executed this Note as of the date first written
above.

      


      EMPLOYERS
HOLDINGS, INC.

      


      By:  
/s/ William E.
Yocke

        William E.
Yocke

        Executive Vice
President,

        Chief Financial
Officer