Attached files
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| EX-10.1 - EX-10.1 - Amtrust Financial Services, Inc. | v209408_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported) January 28,
2011
AmTrust
Financial Services, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-33143
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04-3106389
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(State
or other jurisdiction
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(Commission
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IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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59
Maiden Lane, 6th
Floor, New York, New York
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10038
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (212)
220-7120
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.133-4 (c))
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Item 1.01
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Entry into a Material Definitive
Agreement.
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On
January 28, 2011, AmTrust Financial Services, Inc. (the “Company”) entered into
a $150 million credit agreement (the “Credit Agreement”),
among JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of
Nova Scotia, as Syndication Agent, SunTrust Bank, as Documentation Agent, and
the various lending institutions party thereto. The credit facility is a
revolving credit facility with a letter of credit sublimit of $50 million
and an expansion feature not to exceed $50 million. Proceeds of
borrowings under the Credit Agreement may be used for working capital,
acquisitions and general corporate purposes. In connection with
entering into the Credit Agreement, the Company terminated its existing Loan
Agreement, dated as of June 3, 2008, with JPMorgan Chase Bank, N.A., and its
Uncommitted Line of Credit Letter Agreement, dated as of June 3, 2008, with
JPMorgan Chase Bank, N.A. The Company used proceeds of borrowings
under the Credit Agreement to pay off the $6.7 million principal balance
outstanding under the Loan Agreement. Letters of credit in the amount of $27.8
million that were issued and outstanding under the Uncommitted Line of Credit
Letter Agreement will be deemed issued under the Credit
Agreement. The Uncommitted Line of Credit Letter Agreement had no
outstanding principal balance at termination.
The
Credit Agreement contains certain restrictive covenants customary for facilities
of this type (subject to negotiated exceptions and baskets), including
restrictions on indebtedness, liens, acquisitions and investments, restricted
payments and dispositions. There are also financial covenants that
require the Company to maintain a minimum consolidated net worth, a maximum
consolidated leverage ratio, a minimum fixed charge coverage ratio, a minimum
risk-based capital and a minimum statutory surplus. The Credit Agreement also
provides for customary events of default, with corresponding grace periods,
including failure to pay principal when due, failure to pay interest or fees
within three days after becoming due, failure to comply with covenants, breaches
of representations and warranties, default under certain other indebtedness,
certain insolvency or receivership events affecting the Company and its
subsidiaries, the occurrence of certain material judgments, or a change in
control of the Company. Upon the occurrence and during the
continuation of an event of default, the administrative agent, upon the request
of the requisite percentage of the lenders, shall terminate the obligations of
the lenders to make loans and to issue letters of credit under the Credit
Agreement, declare the Company’s obligations under the Credit Agreement to
become immediately due and payable and/or exercise any and all remedies and
other rights under the Credit Agreement. The Credit Agreement has a
maturity date of January 28, 2014.
ABR
borrowings (which are borrowings bearing interest at a rate determined by
reference to the Alternate Base Rate) under the Credit Agreement will bear
interest at (x) the greatest of (a) the administrative agent’s Prime
Rate, (b) the Federal Funds Effective Rate plus 0.5 percent
or (c) the Adjusted LIBO Rate for a one month interest period on such day
plus
1 percent, plus (y) a
margin that is adjusted on the basis of the Company’s consolidated leverage
ratio. Eurodollar borrowings under the Credit Agreement will bear interest at
the Adjusted LIBO Rate for the Interest Period in effect plus a margin that is
adjusted on the basis of the Company’s consolidated leverage
ratio. Fees payable by the Company under the Credit Agreement include
a letter of credit participation fee (the margin applicable to Eurodollar
borrowings), a letter of credit fronting fee with respect to each letter of
credit (.125%) and a commitment fee on the available commitments of
the lenders (a range of .35% to .45% based on the Company’s consolidated
leverage ratio).
Certain
of the lenders and their affiliates have provided, from time to time, and may
continue to provide, investment banking, commercial banking, financial and other
services to the Company, including letters of credit, depository and account
processing services, for which the Company has paid and intends to pay customary
fees.
The
description of the Credit Agreement is qualified in its entirety by reference to
the full text of the agreement, which is filed as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
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Item 2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement.
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The
information contained in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
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Item
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits.
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Exhibit No.
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Description
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10.1
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Credit Agreement, dated January
28, 2011, among the Company, JPMorgan Chase Bank, N.A., as Administrative
Agent, The Bank of Nova Scotia, as Syndication Agent, SunTrust Bank, as
Documentation Agent, and the lending institutions party
thereto.
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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AmTrust Financial Services,
Inc.
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(Registrant)
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Date January 31,
2011
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/s/
Stephen Ungar
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Stephen
Ungar
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General
Counsel and Secretary
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