Exhibit 10(PP)
Amendment No. 1 to Put Agreement and Waiver
Among
State Automobile Mutual Insurance Company
State Auto Financial Corporation and
Bank One, NA
Dated as of
August 28, 2002
AMENDMENT NO. 1 TO PUT AGREEMENT AND WAIVER
This Amendment (this "Amendment") is entered into as of August 28, 2002
by and among State Automobile Mutual Insurance Company, a mutual insurance
company duly organized and validly existing under the laws of the State of Ohio
("State Auto Mutual"), State Auto Financial Corporation, a corporation duly
organized and validly existing under the laws of the State of Ohio ("State Auto
Financial" and, together with State Auto Mutual, the "State Auto Obligors"), and
Bank One, NA, as agent (in such capacity, together with its successors in such
capacity, the "Agent") for the Lenders party to the Credit Agreement referred to
below.
RECITALS
A. The State Auto Obligors and the Agent are parties to an Amended and
Restated Put Agreement dated as of November 16, 2001 (the "Put Agreement").
B. The State Auto Obligors and the Agent desire to amend the Put
Agreement on the terms and conditions set forth below.
C. Additionally, the State Auto Obligors have requested a waiver of,
and the Agent wishes to waive, certain provisions of the Put 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. Waiver. The undersigned Agent hereby waives any breach of Section
4.10(c) of the Put Agreement arising solely out of the failure of State Auto
Mutual to prevent the Premium to Surplus Ratio of State Auto P&C to exceed 2.50
to 1 during the fiscal quarter of State Auto P&C ended June 30, 2002.
2. Amendments to Put Agreement. Upon the satisfaction of each of the
conditions set forth in Section 4 below, the Put Agreement shall be amended as
follows:
(a) Article I of the Put Agreement shall be amended by adding
the following definition thereto in alphabetical order:
"State Auto Pool" shall mean, collectively, State Auto Mutual,
State Auto P&C, Milbank, Midwest Security, Farmers Casualty and State
Auto Insurance.
(b) The definition of "Midwest Security" in Article I of the
Put Agreement shall be amended and restated to read as follows:
"Midwest Security" means State Auto Insurance Company of
Wisconsin (formerly known as Midwest Security Insurance Company), a
Wisconsin domiciled property and casualty insurance company.
(c) The definition of "State Auto Insurance" in Article I of
the Put Agreement shall be amended and restated to read as follows:
"State Auto Insurance" means State Auto Insurance Company, an
Ohio corporation to be renamed State Auto Insurance Company of Ohio.
(d) Section 4.10(c) of the Put Agreement shall be amended and
restated in its entirety to read as follows:
(c) Premium to Surplus. State Auto Mutual will not permit its
Premium to Surplus Ratio at any time to exceed (i) 2.00 to 1, at any
time prior to the occurrence of a catastrophe giving rise to Loans
being outstanding under the Credit Agreement (provided that no Loans
are outstanding at such time) and (ii) 2.50 to 1, at any time during
the period from and including the date of occurrence of a catastrophe
giving rise to Loans being outstanding under the Credit Agreement to
but excluding the date all Loans shall have been required to be repaid
in full pursuant to the terms of the Credit Agreement. State Auto
Mutual will not permit the Premium to Surplus Ratio of State Auto P&C
to exceed (x) 2.75 to 1 at any time prior to the occurrence of a
catastrophe giving rise to Loans being outstanding under the Credit
Agreement (provided that no Loans are outstanding at such time) and (y)
3.00 to 1, at any time during the period from and including the date of
occurrence of a catastrophe giving rise to Loans being outstanding
under the Credit Agreement to but excluding the date all Loans shall
have been required to be repaid in full pursuant to the terms of the
Credit Agreement. State Auto Mutual will not permit the Premium to
Surplus Ratio of the State Auto Pool to exceed (x) 2.00 to 1 at any
time prior to the occurrence of a catastrophe giving rise to Loans
being outstanding under the Credit Agreement (provided that no Loans
are outstanding at such time) and (y) 2.50 to 1 at any time during the
period from and including the date of occurrence of a catastrophe
giving rise to Loans being outstanding under the Credit Agreement to
but excluding the date all Loans shall have been required to be repaid
in full pursuant to the terms of the Credit Agreement.
3. Representations and Warranties of State Auto Obligors. Each State
Auto Obligor represents and warrants that:
(a) The execution, delivery and performance by such State Auto
Obligor of this Amendment have been duly authorized by all necessary
corporate action and that this Amendment is a legal, valid and binding
obligation of such State Auto Obligor enforceable against such State
Auto Obligor in accordance with its terms, except as the enforcement
thereof may be subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally;
(b) Each of the representations and warranties contained in
the Put 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
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solely to an earlier date, in which case such representation
or warranty was true and correct on and as of such earlier
date;
(c) After giving effect to this Amendment, no Put Event has
occurred and is continuing.
4. Effective Date. Section 2 of this Amendment shall become effective
as of July 1, 2002 upon satisfaction of the following conditions:
(a) Executed Amendment. Receipt by the Agent of duly executed
counterparts hereof by State Auto Obligors and the Agent.
(b) Fees. The receipt by the Agent of the amendment fee
referenced in Section 6(b) below.
(c) Miscellaneous. Receipt by the Agent of such other
documents, certificates, instruments and opinions as may reasonably be
requested in advance of the date hereof by it.
5. Reference to and Effect Upon the Put Agreement.
(a) Except as specifically amended above, the Put Agreement
shall remain in full force and effect and is 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 Put Agreement or any Loan
Document, nor constitute a waiver of any provision of the Put Agreement
or any Loan Document, except as specifically set forth herein. Upon the
effectiveness of this Amendment, each reference in the Put Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words of similar
import shall mean and be a reference to the Put Agreement as amended
hereby.
6. Costs and Expenses.
(a) Each State Auto Obligor hereby affirms its joint and
several obligation under Section 5.3 of the Put Agreement to reimburse
the Agent for all 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 reasonable attorneys' fees and time charges of
attorneys for the Agent with respect thereto.
(b) The State Auto Obligors hereby jointly and severally agree
that, contemporaneously herewith, the State Auto Obligors shall pay to
the Agent for the ratable benefit of the Lenders party hereto an
amendment fee in an amount equal to $3,000 for each Lender that
executes this Amendment on or before August 28, 2002.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
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CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
8. 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.
9. 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]
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IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date and year first above written.
STATE AUTOMOBILE MUTUAL INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
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STATE AUTO FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
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BANK ONE, NA, as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Director
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