Exhibit 10-21




 




AMENDMENT

NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT




 




This Amendment (this “Amendment”) is entered

into as of October 18, 2002, by and among The Navigators Group, Inc., a

Delaware corporation (the “Borrower”), Bank One, NA (formerly known as

The First National Bank of Chicago), individually and as agent (“Agent”),

and the other financial institutions signatory hereto.




 




RECITALS




 




A.            The Borrower, the Agent and the Lenders are party to

that certain Amended and Restated Credit Agreement dated as of

December 21, 1998, as amended by Amendment No. 1 to Amended and

Restated Credit Agreement dated as of March 28, 2000, Amendment No. 2

to Amended and Restated Credit Agreement dated as of September 20, 2000

and Amendment No. 3 to Amended and Restated Credit Agreement dated as of

December 31, 2001 (as so amended, the “Credit Agreement”).  Unless otherwise specified herein,

capitalized terms used in this Amendment shall have the meanings ascribed to

them by the Credit Agreement.




 




B.            The Borrower, the Agent and the undersigned Lenders

wish to amend the Credit Agreement on the terms and conditions set forth below.




 




NOW, THEREFORE, in

consideration of the mutual execution hereof and other good and valuable

consideration, the parties hereto agree as follows:




 




1.             Amendments

to Credit Agreement.  Upon the

“Effective Date” (as defined below), the Credit Agreement shall be amended as

follows:




 




(a)           Article

I of the Credit Agreement shall be amended by deleting the definition of

“Deferred Policy Acquisition Costs” in its entirety.




 




(b)           The

definition of “Consolidated Total Intangible Assets” in Article I of the Credit

Agreement shall be amended and restated in its entirety to read as follows:




 




“Consolidated

Total Intangible Assets” means, at any time, the total intangible assets of the

Borrower and its Consolidated Subsidiaries calculated on a consolidated basis

as of such time including, but not limited to, goodwill, patents, trademarks,

tradenames, copyrights and franchises and excluding deferred policy acquisition

costs.




 




(c)           The

definition of “Consolidated Tangible Net Worth” in Article I of the Credit

Agreement shall be amended and restated in its entirety to read as follows:




 




“Consolidated

Tangible Net Worth” means the excess of (a) Consolidated Total Tangible Assets

over (b) Consolidated Total Liabilities, excluding,




 





























 




however,

for the purposes of Section 7.24.1, the effect of any unrealized

gain or loss reported under Statement of Financial Accounting Standards No.

115.




 




(d)           The

definition of “Letter of Credit Termination Date” in Article I of the

Credit Agreement shall be amended and restated in its entirety to read as

follows:




 




“Letter

of Credit Termination Date” means November 19, 2003 or any later date as

may be specified as the Letter of Credit Termination Date in accordance with Section 3.10

or any earlier date on which the Letter of Credit Commitment is reduced to zero

or otherwise terminated pursuant to the terms thereof.




 




(e)           Section

2.7(a) of the Credit Agreement shall be amended and restated in its entirety to

read as follows:




 




(a) The Aggregate Revolving Credit Commitment shall be

automatically and permanently reduced by the following amounts on the following

dates (such reductions to take place regardless of any prior reductions of the

Aggregate Revolving Credit Commitment pursuant to Section 2.7(b)

but to be reduced in order of maturity by the amount of any prior reductions of

the Aggregate Revolving Credit Commitment pursuant to Section 2.4(b)):




 




	

  Date


  	

   


  	

  Reduction

  Amount


  	

   


  
	

  April 1, 2003


  	

   


  	

  $


  	

  1,750,000


  	

   


  
	

  July 1, 2003


  	

   


  	

  $


  	

  1,750,000


  	

   


  
	

  October 1, 2003


  	

   


  	

  $


  	

  2,000,000


  	

   


  
	

  January 1, 2004


  	

   


  	

  $


  	

  2,000,000


  	

   


  
	

  April 1, 2004


  	

   


  	

  $


  	

  2,250,000


  	

   


  
	

  July 1, 2004


  	

   


  	

  $


  	

  2,250,000


  	

   


  
	

  Revolving Credit

  Termination Date


  	

   


  	

  $


  	

  2,500,000


  	

   


  





 




(f)            Section

7.15 of the Credit Agreement shall be amended and restated in its entirety to

read as follows:




 




7.15.        Contingent

Obligations.  The Borrower will not,

nor will it permit any Subsidiary to, make or suffer to exist any Contingent

Obligation (including, without limitation, any Contingent Obligation with

respect to the obligations of a Subsidiary), except (a) by endorsement of

instruments for deposit or collection in the ordinary course of business, (b)

Contingent Obligations in respect of Letters of Credit; provided, however,

that the Borrower may guarantee (i) the obligations of any Person that is

its or its Subsidiary’s employee so long as the aggregate amount of all such

guaranteed obligations, taken together with the aggregate amount of any and all

loans to such Persons by the Borrower in accordance with Section 7.14

outstanding at any time do not in the aggregate exceed $250,000, (ii) the

obligations of any Subsidiary over the initial contracted lease term under

leases of Property entered into in the ordinary course of business in an

aggregate




 




2





























 




amount not to exceed $5,000,000, (iii) the

obligations of any Subsidiary under office space leases in existence on October

18, 2002 and replacements thereof that are on substantially similar terms and

conditions as the lease being replaced, and (iv) Contingent Obligations in

respect of letters of credit issued by Munichener Ruckversicherung

Aktiengesellschaft (d/b/a Munich) in an aggregate amount not to exceed

£10,625,000.




 




(g)           Section

7.24.1 of the Credit Agreement shall be amended and restated in its entirety to

read as follows:




 




7.24.1      Minimum

Consolidated Tangible Net Worth.  The Borrower will at all times maintain

Consolidated Tangible Net Worth of not less than the sum of

(a) $128,000,000, plus (b) 75% of the cumulative positive

Consolidated Net Income, if any, earned from October 1, 2002 to the date of

calculation, plus (c) 75% of the Net Available Proceeds of any

equity issuance in excess of $1,000,000 (including any capital contribution to

surplus of the Borrower in respect of which no additional shares are issued),

if any, made on or after October 1, 2002 by the Borrower after the Closing

Date.




 




(h)           Section

7.24.2 of the Credit Agreement shall be amended and restated in its entirety to

read as follows:




 




7.24.2      Minimum

Statutory Surplus. 

The Borrower will cause the Significant Insurance Subsidiaries to

maintain an aggregate Statutory Surplus of not less than (i) $110,272,875

in each Fiscal Quarter ending on or before December 31, 2003, and

(ii) at all times thereafter, the sum of (a) $110,272,875, plus

(b) 50% of the cumulative positive aggregate Statutory Net Income, if any,

earned by the Significant Insurance Subsidiaries from January 1, 2004 to

the date of calculation, plus (c) 75% of the Net Available Proceeds

of any equity issuance (including any capital contribution to surplus of any

Significant Insurance Subsidiary in respect of which no additional shares are

issued) by any Significant Insurance Subsidiary after the Closing Date.




 




(i)            The

Pricing Schedule shall be deleted in its entirety, and the Pricing Schedule

attached hereto and made a part hereof shall be substituted in its place.




 




(j)            Schedule

I to the Credit Agreement shall be deleted in its entirety, and Schedule I

attached hereto and made a part hereof shall be substituted in its place.




 




2.             Representations

and Warranties of the Borrower.  The

Borrower represents and warrants that:




 




(a)           The execution, delivery

and performance by the Borrower of this Amendment have been duly authorized by

all necessary corporate action and that this Amendment is a legal, valid and

binding obligation of the Borrower enforceable against the Borrower in

accordance with its terms, except as the enforcement thereof may be subject to  the effect of any applicable




 




3





























 




bankruptcy, insolvency, reorganization, moratorium or similar law

affecting creditors’ rights generally;




 




(b)           Each of the

representations and warranties contained in the Credit Agreement is true and

correct in all material respects on and as of the date hereof as if made on the

date hereof, except to the extent any such representation or warranty is stated

to relate solely to an earlier date, in which case such representation or

warranty shall have been true and correct on and as of such earlier date;




 




(c)           After giving effect to

this Amendment, no Default or Unmatured Default has occurred and is continuing.




 




3.             Effective Date.  Section 1 of this Amendment shall not

become effective unless and until the Borrower has furnished the following to

the Agent with sufficient copies for the Lenders and the other conditions set

forth below have been satisfied:




 




(a)           Amendment.  A copy of this Amendment, executed by the

Borrower, the Agent and the Lenders.




 




(b)           Good

Standing Certificate.  A certificate

of good standing for the Borrower, certified by the appropriate governmental

officer in its jurisdiction of incorporation.




 




(c)           Officer’s

Certificate.  A certificate, signed

by an Authorized Officer of the Borrower, stating that:  (i) on the date hereof no Default or

Unmatured Default has occurred and is continuing; and (ii) each of the

representations and warranties set forth in Article VI of the Credit

Agreement is true and correct on and as of the Effective Date and (iii) except

as set forth therein, no amendments or modifications have been made to the

Borrower’s articles of incorporation or by-laws since December 21, 1998.




 




(d)           Amendment

Fee.  Receipt by the Agent for the

benefit of the Lenders of an amendment fee in an amount equal to fifteen (15)

basis points on each such Lender’s Revolving Credit Commitment and Letter of

Credit Participation Amount on the date hereof after giving effect to this

Amendment, which fee shall be deemed fully earned and non-refundable on the date

hereof (the “Amendment Fee”).




 




(e)           Other.  Such other documents as the Agent, any

Lender or their counsel may have reasonably requested.




 




The date on which the

foregoing conditions have been satisfied is the “Effective Date.”




 




4.             Reference

to and Effect Upon the Credit Agreement.




 




(a)           Except as specifically

amended above, the Credit Agreement and the other Loan Documents shall remain

in full force and effect and are hereby ratified and confirmed.




 




(b)           The execution, delivery

and effectiveness of this Amendment shall not operate as a waiver of any right,

power or remedy of the Agent or any Lender under the Credit Agreement




 




4





























 




or any Loan Document, nor constitute a waiver of any

provision of the Credit Agreement or any Loan Document, except as specifically

set forth herein.  Upon the

effectiveness of this Amendment, each reference in the Credit Agreement to

“this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import

shall mean and be a reference to the Credit Agreement as amended hereby.




 




5.             Costs

and Expenses.




 




(a)           The Borrower hereby

affirms its obligation under Section 10.7 of the Credit Agreement to reimburse

the Agent for all reasonable costs, internal charges and out-of-pocket expenses

paid or incurred by the Agent in connection with the preparation, negotiation,

execution and delivery of this Amendment, including but not limited to the

attorneys’ fees and time charges of attorneys for the Agent with respect

thereto.




 




(b)           The Borrower hereby

agrees that on the Effective Date, the Borrower shall pay the Arranger, the

Agent and the Lenders the Amendment Fee, which Amendment Fee shall be deemed

fully earned and non-refundable on the date hereof.




 




6.             GOVERNING

LAW.  THIS AMENDMENT SHALL BE GOVERNED

BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS

OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS BUT GIVING EFFECT TO FEDERAL LAWS

APPLICABLE TO NATIONAL BANKS.




 




7.             Headings.  Section headings in this Amendment are

included herein for convenience of reference only and shall not constitute a

part of this Amendment for any other purposes.




 




8.             Counterparts.  This Amendment may be executed in any number

of counterparts, each of which when so executed shall be deemed an original but

all such counterparts shall constitute one and the same instrument.




 




[signature pages

follow]




 




5





























 




IN WITNESS WHEREOF, the parties have executed this

Amendment as of the date and year first above written.




 




	

   


  	

  THE NAVIGATORS

  GROUP, INC.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  BANK ONE, NA

  (formerly known as The First National Bank of Chicago), as a Lender and as

  Agent


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  BROWN BROTHERS

  HARRIMAN & CO., as a Lender and as Co-Agent


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  CREDIT LYONNAIS

  NEW YORK BRANCH, as a Lender


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

   


  





 




S-1





























 




	

   


  	

  FLEET NATIONAL

  BANK, as a Lender


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  BARCLAYS BANK

  plc, as a Lender


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  LASALLE BANK

  NATIONAL ASSOCIATION, as a Lender


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

   


  





 




S-2





























 




PRICING SCHEDULE




 




	

  APPLICABLE


  MARGIN


  	

   


  	

  LEVEL I


  STATUS


  	

   


  	

  LEVEL II


  STATUS


  	

   


  	

  LEVEL III


  STATUS


  	

   


  	

  LEVEL IV


  STATUS


  	

   


  
	

  Eurodollar Rate


  	

   


  	

  0.875


  	

  %


  	

  1.000


  	

  %


  	

  1.250


  	

  %


  	

  1.500


  	

  %


  





 




	

  APPLICABLE FEE


  RATE


  	

   


  	

  LEVEL I


  STATUS


  	

   


  	

  LEVEL II


  STATUS


  	

   


  	

  LEVEL III


  STATUS


  	

   


  	

  LEVEL IV


  STATUS


  	

   


  
	

  Commitment Fee


  	

   


  	

  0.125


  	

  %


  	

  0.150


  	

  %


  	

  0.250


  	

  %


  	

  0.300


  	

  %


  
	

  Letter of Credit Participation Fee


  	

   


  	

  0.875


  	

  %


  	

  1.000


  	

  %


  	

  1.250


  	

  %


  	

  1.500


  	

  %


  





 




For the purposes of this

Schedule, the following terms have the following meanings, subject to the final

paragraph of this Schedule:




 




“Level I Status” exists

at any date if, on such date, the Borrower has an S&P Debt Rating of A- or

better or, if the Borrower does not have an S&P Debt Rating, each of

Navigators and each other Significant Insurance Subsidiary of the Borrower

shall have an S&P Financial Strength Rating of A+ or better.




 




“Level II Status” exists

at any date if, on such date, the Borrower has not qualified for Level I

Status, and the Borrower has an S&P Debt Rating of BBB or better or, if the

Borrower does not have an S&P Debt Rating, each of Navigators and each

other Significant Insurance Subsidiary of the Borrower shall have an S&P

Financial Strength Rating of A or better.




 




“Level III Status” exists

at any date if, on such date, the Borrower has not qualified for Level I

Status or Level II Status, and the Borrower has an S&P Debt Rating of

BBB- or better or, if the Borrower does not have an S&P Debt Rating, each

of Navigators and each other Significant Insurance Subsidiary of the Borrower

shall have an S&P Financial Strength Rating of A- or better.




 




“Level IV Status” exists

at any date if, on such date, the Borrower has not qualified for Level I

Status, Level II Status or Level III Status.




 




“S&P” means Standard

and Poor’s Rating Services, a division of The McGraw Hill Companies, Inc.




 




“S&P Debt Rating”

means, at any time, the rating issued by S&P with respect to the Borrower’s

senior unsecured and unguaranteed long-term debt.




 




“S&P Financial

Strength Rating” means, at any time, the rating issued by S&P with respect

to the financial strength of Navigators and each other Significant Insurance

Subsidiary of the Borrower.




 





























 




“Status” means either

Level I Status, Level II Status, Level III Status or Level IV Status.




 




The Applicable Margin,

the Applicable Commitment Fee Rate and the Applicable Letter of Credit

Participation Fee Rate shall be determined in accordance with the foregoing table

based on the Borrower’s Status as determined from its then-current S&P Debt

Rating or, if the Borrower does not have an S&P Debt Rating, the

then-current S&P Financial Strength Rating of Navigators and each other

Significant Insurance Subsidiary of the Borrower.  The credit rating in effect on any date for the purposes of this

Schedule is that in effect at the close of business on such date.  If at any time the Borrower has no S&P

Debt Rating and no Significant Insurance Subsidiary of the Borrower has an

S&P Financial Strength Rating, Level IV Status shall exist.




 




Notwithstanding anything

to the contrary contained in this Pricing Schedule, until the later of

(a) October 1, 2003 and (b) the date on which the aggregate Statutory

Surplus of all Significant Insurance Subsidiaries, as reflected in the most

recent annual or quarterly financial statements of the Borrower delivered

pursuant to Section 7.1(a) or (b), is equal to or greater

than $120,000,000, Level III Status (or Level IV Status, if applicable) shall

exist.




 





























 




Schedule I




 




COMMITMENTS




 




	

  Lender


  	

   


  	

  Revolving Credit


  Commitment


  	

   


  	

  Letter of Credit


  Commitment


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Bank One, NA


  	

   


  	

  $


  	

  3,326,470.66


  	

   


  	

  $


  	

  15,117,647.06


  	

   


  
	

  Brown Brothers Harriman & Co.


  	

   


  	

  $


  	

  1,705,882.33


  	

   


  	

  $


  	

  6,470,588.24


  	

   


  
	

  Credit Lyonnais New York Branch


  	

   


  	

  $


  	

  3,070,588.21


  	

   


  	

  $


  	

  0


  	

   


  
	

  Fleet National Bank


  	

   


  	

  $


  	

  3,070,588.21


  	

   


  	

  $


  	

  6,647,058.82


  	

   


  
	

  Barclays Bank plc


  	

   


  	

  $


  	

  3,326,470.59


  	

   


  	

  $


  	

  15,117,647.06


  	

   


  
	

  LaSalle Bank National Association


  	

   


  	

  $


  	

  0


  	

   


  	

  $


  	

  11,647,058.82


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Total Commitments:


  	

   


  	

  $


  	

  14,500,000


  	

   


  	

  $


  	

  55,000,000