Document:

Exhibit 10.1

 

WAIVER AND AMENDMENT NO. 1

 

Dated as of June 30, 2011

 

to

 

CREDIT AGREEMENT

 

Dated as of January 28, 2011

 

THIS WAIVER AND AMENDMENT NO. 1 (“Amendment”) is made as of June 30, 2011 and shall, upon satisfaction of the conditions precedent set forth in Section 3 below be effective as of the date hereof (the “Amendment No. 1 Effective Date”) by and among AmTrust Financial Services, Inc., a Delaware corporation (the “Borrower”), the financial institutions listed on the signature pages hereof and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), under that certain Credit Agreement dated as of January 28, 2011 by and among the Borrower, the Lenders and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.

 

WHEREAS, the Borrower has requested that the requisite Lenders and the Administrative Agent agree to make certain modifications to the Credit Agreement;

 

WHEREAS, the Borrower, the Lenders party hereto and the Administrative Agent have so agreed on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders party hereto and the Administrative Agent hereby agree to enter into this Amendment.

 

1.           Waiver.  The Borrower has informed the Lenders that an Event of Default has occurred as a result of the Borrower’s failure to comply with Section 6.15(d) of the Credit Agreement due to Wesco Insurance Company, a Subsidiary of the Borrower, permitting its “total adjusted capital” to be less than the amount required thereunder for the fiscal year of the Borrower ended on December 31, 2010 (such specific failure, the “Specified Default”).  Subject to the satisfaction of the conditions precedent set forth in Section 3 below, the Lenders party hereto hereby waive (a) the Specified Default and (b) any other Event of Default arising under clause (c) of Article VII of the Credit Agreement solely as a result of the Specified Default.  Furthermore, and for the avoidance of doubt, the Lenders party hereto agree that Wesco Insurance Company shall not be required to comply with Section 6.15(d) of the Credit Agreement with respect to the fiscal year of the Borrower ended on December 31, 2010 (it being understood and agreed that the Borrower and its other Subsidiaries shall continue to be required to comply with Section 6.15(d) of the Credit Agreement).  This specific waiver applies only to the Specified Default and only for the period and for the express circumstances described above.  This specific waiver shall not be construed to constitute (i) a waiver of any other event, circumstance or condition or of any other right or remedy available to the Administrative Agent or any Lender pursuant to the Credit Agreement or any other Loan Document or (ii) a course of dealing or a consent to any departure by the Borrower from any other term or requirement of the Credit Agreement.

 

  

  

  

 

2.           Amendments to Credit Agreement.  Effective as of the Amendment No. 1 Effective Date but subject to the satisfaction of the conditions precedent set forth in Section 3 below, the Credit Agreement is hereby amended as follows:

 

(a)           Section 1.01 of the Credit Agreement is amended to insert the following new definitions thereto in the appropriate alphabetical order as follows:

 

“Majestic” means Majestic Insurance Company, a California corporation.

“Permitted Majestic Acquisition” means the acquisition by the Borrower of the renewal rights to Majestic’s workers’ compensation insurance business in consideration, in part, of the assumption by the Borrower of all of Majestic’s liabilities under outstanding workers’ compensation insurance policies (including federal longshore and harbor workers’ compensation act (“USL&H”) policies) through a loss portfolio transfer and quota share reinsurance agreement by which the Borrower will receive from Majestic cash and invested assets in an amount equal to Majestic's reserves for such liabilities, as adjusted in the agreement.  It is understood and agreed that, as required by law, a significant portion of Majestic’s assets to be received by the Borrower are on deposit with the State of California, other U.S. states and the U.S. Department of Labor as security for its obligations to workers’ compensation and USL&H policyholders and will continue to be on deposit following the consummation of the Permitted Majestic Acquisition.

“Permitted Majestic Indebtedness” means the reimbursement obligations of the Borrower under the letter of credit facility established by the Borrower as a result of the Permitted Majestic Acquisition for the sole purpose of complying with the deposit requirements of the State of California and the U.S. Department of Labor as security for the Borrower’s obligations to workers’ compensation and USL&H policyholders in connection with the business acquired by the Borrower pursuant to the Permitted Majestic Acquisition.

“Permitted Majestic Liens” means the liens encumbering the cash or investment assets of the Borrower that secure the Permitted Majestic Indebtedness (but excluding, for the avoidance of doubt, any other Indebtedness or other obligations other than customary margin requirements in respect of letter of credit facilities similar to the Permitted Majestic Indebtedness).

(b)           Section 5.01 of the Credit Agreement is amended to delete the reference to “Section 5.01(e)” in the first sentence of the last paragraph in Section 5.01 and to replace it with a reference to “Section 5.01(d).”

 

(c)           Section 6.01 of the Credit Agreement is amended to (i) delete the “and” appearing at the end of clause (q) thereof, (ii) delete the period appearing at the end of clause (r) thereof and replace it with “; and” and (iii) add the following as a new clause (s) thereof:

 

“(s) the Permitted Majestic Indebtedness.”

 

(d)           Section 6.02 of the Credit Agreement is amended to (i) delete the “and” appearing at the end of clause (g) thereof, (ii) delete the period appearing at the end of clause (h) thereof and replace it with “; and” and (iii) add the following as a new clause (i) thereof:

 

“(i) the Permitted Majestic Liens.”

 

(e)           Section 6.04 of the Credit Agreement is amended to (i) delete the “and” appearing at the end of clause (k) thereof, (ii) delete the period appearing at the end of clause (l) thereof and replace it with “; and” and (iii) add the following as a new clause (m) thereof:

 

  

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“(m) the Permitted Majestic Acquisition.”

 

(f)           Section 9.01(a)(ii) of the Credit Agreement is amended to delete the reference to “with a copy to JPMorgan Chase Bank, N.A., 277 Park Avenue, 23rd Floor, New York, NY 10172, Attention of Eugene Kennedy III (Telecopy No. (646) 534-3081)” appearing therein and to replace therefor a reference to “with a copy to JPMorgan Chase Bank, N.A., 10 South Dearborn Street, 9th Floor, Chicago, IL 6060, Attention of Svetlana Skopcenko (Telecopy No. (312) 386-7632)”.

 

3.           Conditions of Effectiveness.  The effectiveness of this Amendment is subject to the conditions precedent that the Administrative Agent shall have received (i) counterparts of this Amendment duly executed by the Borrower, the Required Lenders and the Administrative Agent, (ii) for the account of each Lender that delivers its executed signature page hereto by such time as is requested by the Borrower and the Administrative Agent, an amendment fee equal to 0.075% of such Lender’s Commitment and (iii) payment and/or reimbursement of the Administrative Agent’s and its affiliates’ fees and expenses (including, to the extent invoiced, the reasonable fees and expenses of counsel for the Administrative Agent) in connection with this Amendment.

 

4.           Representations and Warranties of the Borrower.  The Borrower hereby represents and warrants as follows:

 

(a)           This Amendment and the Credit Agreement as amended hereby constitute legal, valid and binding obligations of the Borrower and are enforceable against the Borrower in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

(b)           As of the date hereof and giving effect to the terms of this Amendment, (i) no Default or Event of Default shall have occurred and be continuing and (ii) the representations and warranties of the Borrower set forth in the Credit Agreement, as amended hereby, are true and correct as of the date hereof.

 

5.           Reference to and Effect on the Credit Agreement.

 

(a)           Upon the effectiveness hereof, each reference to the Credit Agreement in the Credit Agreement or any other Loan Document shall mean and be a reference to the Credit Agreement as amended hereby.

 

(b)           Each Loan Document and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed.

 

(c)           Except with respect to the subject matter hereof and as set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, nor constitute a waiver of any provision of the Credit Agreement, the Loan Documents or any other documents, instruments and agreements executed and/or delivered in connection therewith.

 

6.           Governing Law.  This Amendment shall be construed in accordance with and governed by the law of the State of New York.

 

  

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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 purpose.

 

8.           Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

[Signature Pages Follow]

 

  

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

 

	 	 
 
 
 
 
AMTRUST FINANCIAL SERVICES, INC.,

as the Borrower

	 
	 	 	 	 
	
 

	
By: 

	/s/ Harry Schlachter	 
	 	Name: 	Harry Schlachter	 
	 	Title:	Treasurer	 
	 	 	 	 

 

	 	 
 
 
JPMORGAN CHASE BANK, N.A.,

individually as a Lender, as Issuing Bank and as Administrative Agent

	 
	 	 	 	 
	
 

	
By: 

	/s/ Thomas A. Kiepura	 
	 	Name: 	Thomas A. Kiepura	 
	 	Title:	Vice President	 
	 	 	 	 

 

	 	 
 
 
THE BANK OF NOVA SCOTIA,

as a Lender

	 
	 	 	 	 
	
 

	
By: 

	/s/ David Mahmood 	 
	 	Name: 	David Mahmood	 
	 	Title:	Managing Director	 
	 	 	 	 

 

	 	 
 
 
SUNTRUST BANK,

as a Lender

	 
	 	 	 	 
	
 

	
By: 

	/s/ K. Scott Bazemore	 
	 	Name: 	K. Scott Bazemore	 
	 	Title:	Vice President	 
	 	 	 	 

 

	 	 
 
 
KEYBANK NATIONAL ASSOCIATION,

as a Lender

	 
	 	 	 	 
	
 

	
By: 

	/s/ Marcel Fournier 	 
	 	Name: 	Marcel Fournier	 
	 	Title:	Vice President	 
	 	 	 	 

 

 

Signature Page to Waiver and Amendment No. 1 to

Credit Agreement dated as of January 28, 2011

AmTrust Financial Services, Inc.

 

  

  

  

 

 

	 	 
 
 
ASSOCIATED BANK, NATIONAL ASSOCIATION,

as a Lender

	 
	 	 	 	 
	
 

	
By: 

	/s/ Edward J. Chidiac	 
	 	Name: 	Edward J. Chidiac	 
	 	Title:	Senior Vice President	 
	 	 	 	 

 

	 	 
 
 
CHANG HWA COMMERCIAL BANK, LTD., NEW YORK BRANCH, as a Lender

	 
	 	 	 	 
	
 

	
By: 

	/s/ Eric Y.S. Tsai 	 
	 	Name: 	Eric Y.S. Tsai	 
	 	Title:	Vice President & General Manager	 
	 	 	 	 

 

 

 

 

 

 

 

 

 

Signature Page to Waiver and Amendment No. 1 to

Credit Agreement dated as of January 28, 2011

AmTrust Financial Services, Inc.FIRST SUPPLEMENTAL INDENTURE

 

This First Supplemental Indenture (“Supplemental Indenture”) is made as of the 4th day of July 2011 by and between Verigy Ltd., a corporation duly organized under the laws of Singapore (the “Company”) (Company Registration Number 200601091C), and U.S. Bank National Association, a national banking association organized and existing under the laws of the United States, as Trustee (the “Trustee”), under the Indenture, dated as of July 15, 2009 (the “Indenture”).

 

WITNESSETH

 

WHEREAS, the Company and the Trustee have heretofore executed and delivered the Indenture providing for the issuance by the Company of 5.25% Convertible Senior Notes due 2014 (the “Notes”);

 

WHEREAS, the Company is a party to that certain Implementation Agreement, dated March 28, 2011 (the “Implementation Agreement”), by and between Advantest Corporation, a company organized under the laws of Japan (“Parent”), and the Company, pursuant to which the Company became a wholly owned subsidiary of Parent through a scheme of arrangement (the “Scheme”);

 

WHEREAS, the Scheme became effective on July 4, 2011 (the “Effective Time”) and, from and after the Effective Time, among other things, all issued Company Ordinary Shares other than those held by or on behalf of Parent or its subsidiaries were converted into and thereafter represented the right to receive $15.00 in cash (the “Share Price”), without any interest thereon;

 

WHEREAS, Section 7.05 of the Indenture provides that, in connection with the Scheme, the Company shall execute with the Trustee a supplemental indenture providing that, at the Effective Time, the right to convert each $1,000 principal amount of Notes will be changed to a right to convert such Notes into the kind and amount of cash that a holder of a number of Company Ordinary Shares equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive, and in addition, if the right to convert such Notes is exercised within the period from and including the Effective Time up to, and including, the Business Day immediately prior to the related Fundamental Change Purchase Date, the kind and amount of cash that a holder of a number of Company Ordinary Shares equal to the Additional Shares would have owned or been entitled to receive;

 

WHEREAS, Section 14.01 of the Indenture provides that the Company, when authorized by a resolution certified by the secretary or an assistant secretary or the general counsel of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee and by action of the Trustee may, from time to time, and at any time, enter into a supplemental indenture without the consent of the holders of the Notes to, inter alia, provide for the assumption by a successor corporation, partnership, trust or limited liability company of the obligations of the Company contained in the Indenture or add or modify any other provision of the Indenture with respect to matters or questions arising under the Indenture which the Company and the Trustee may deem necessary or desirable and which does not materially and adversely affect the rights of any holder;

 

WHEREAS, the Company has heretofore delivered or is delivering contemporaneously herewith to the Trustee (i) copies of resolutions of the Board of Directors of the Company authorizing the execution of this Supplemental Indenture and (ii) the Opinion of Counsel described in Section 14.03 of the Indenture; and

 

WHEREAS, all other acts and proceedings required by law and the Indenture necessary to authorize the execution and delivery of this Supplemental Indenture and to make this Supplemental Indenture a valid and binding agreement for the purposes expressed herein, in accordance with its terms, have been complied with or have been duly done or performed;

 

NOW, THEREFORE, in consideration of the foregoing and notwithstanding any provision of the Indenture which, absent this Supplemental Indenture, might operate to limit such action, the parties hereto, intending to be legally bound hereby, agree as follows:

 

ARTICLE 1

 

Definitions

 

Section 1.01. General. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Indenture.

 

  

  

  

 

ARTICLE 2

 

Amendments

 

Section 2.01. Share Price. Subject to and upon compliance with the provisions of the Indenture, the Share Price shall be fixed at $15.00 per Company Ordinary Share.

 

Section 2.02. Conversion. The right to convert each $1,000 principal amount of Notes into Ordinary Shares is hereby changed to a right to convert such Notes into (1) the kind and amount of cash that a holder of a number of Company Ordinary Shares equal to the Conversion Rate immediately prior to the Effective Time would have owned or been entitled to receive, and, in addition, (2) if the right to convert such Notes is exercised within the period from and including the Effective Time up to, and including, the Business Day immediately prior to the related Fundamental Change Purchase Date, the kind and amount of cash that a holder of a number of Company Ordinary Shares equal to the Additional Shares would have owned or been entitled to receive.

 

ARTICLE 3

 

Miscellaneous Provisions

 

Section 3.01 Effectiveness; Construction. This Supplemental Indenture shall become effective and operative and binding upon each of the Company, the Trustee and the holders of the Notes as of the day and year first above written, and upon such effectiveness, the Indenture shall be supplemented in accordance herewith. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby. The Indenture and this Supplemental Indenture shall henceforth be read and construed together.

 

Section 3.02 Indenture Remains in Full Force and Effect. Except as supplemented hereby, all provisions in the Indenture shall remain in full force and effect.

 

Section 3.03 Trust Indenture Act. If any provision of this Supplemental Indenture limits, qualifies or conflicts with any provision of the Trust Indenture Act of 1939, as amended (the “Act”), that is required under the Act to be part of and govern any provision of this Supplemental Indenture, the provisions of the Act shall control. If any provision of this Supplemental Indenture modifies or excludes any provision of the Act that may be so modified or excluded, the Act shall be deemed to apply to the Indenture as so modified or to be excluded by this Supplemental Indenture, as the case may be.

 

Section 3.04 Trustee Matters. The Trustee accepts the Indenture, as supplemented hereby, and agrees to perform the same upon the terms and conditions set forth therein, as supplemented hereby. The Trustee shall be entitled to the benefit of every provision of the Indenture so supplemented relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided. The recitals contained in this Supplemental Indenture shall be taken as the statements of the Company and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

 

Section 3.05 No Third-Party Beneficiaries. Nothing in this Supplemental Indenture, express or implied, shall give to any Person, other than the parties to the Indenture, as supplemented hereby, and their successors, and to the Holders of the Notes, any benefit of any legal or equitable right, remedy or claim under the Indenture, as supplemented hereby.

 

Section 3.06 Severability. In case any provision of this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be impaired thereby.

 

Section 3.07 Headings. The Article and Section headings of this Supplemental Indenture have been inserted for convenience of reference only and are not to be considered a part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 3.08 Successors. All agreements of the Company and the Trustee in this Supplemental Indenture shall bind their respective successors.

 

Section 3.09 Governing Law. This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 3.10 Counterpart Signatures. This Supplemental Indenture may be signed by the parties hereto in multiple counterparts. Each signed counterpart shall be deemed an original, but all of them together shall represent the same agreement.

 

[Signatures follow.]

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

	  	

VERIGY LTD.,

	  	

as the Company

	  	  	  
	  	
By:

	

/s/ Robert Nikl

	  	  	
Name:

	
Robert Nikl

	  	  	
Title:

	
Executive Vice President & Chief Financial Officer

	  	  	  	  
	  	
U.S. BANK NATIONAL ASSOCIATION,

	  	
as the Trustee

	  	  
	  	
By:

	
/s/ Paula Oswald

	  	  	
Name:

	
Paula Oswald

	  	  	
Title:

	
Vice President

 

[Signature Page to First Supplemental Indenture]

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