First Amendment to Credit Agreement dated as of June 21, 2019 among HMEC, certain financial institutions named therein and PNC Bank, N.A., as administrative agent

Exhibit 10.1(a) EXECUTION VERSION FIRST AMENDMENT TO CREDIT AGREEMENT THIS FIRST AMENDMENT (the “Amendment”) to that certain CREDIT AGREEMENT, dated as of June 21, 2019 (the “Agreement”), among HORACE MANN EDUCATORS CORPORATION, a Delaware corporation (the “Borrower”), the Lenders party thereto (the “Lenders”), and PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”) is dated as of November 20, 2019. WHEREAS, pursuant to the Agreement, the Borrower requested and the Lenders agreed to provide a revolving credit facility to the Borrower in an aggregate principal amount not to exceed $225,000,000 subject to the mutual covenants and agreements contained in the Agreement; WHEREAS, pursuant to a Purchase Agreement by and among Ellard Family Holdings, Inc., Brian M. Ellard, the JCE Exempt Trust and the Borrower, dated as of December 10, 2018, the Borrower ultimately acquired 100% of the equity interests of NTA Life Enterprises, LLC, a Texas limited liability company (“NTA”); WHEREAS, the Borrower desires that the Agreement be amended to provide for NTA’s inclusion as a subsidiary of Borrower engaged in the business of providing life insurance and/or annuities, and related services (consistent with the definition of a “Life Subsidiary” in the Agreement); WHEREAS, the Borrower desires to amend the definition of “Threshold Amount” in the Agreement as described herein and to amend the Agreement in certain other respects as set forth herein; and WHEREAS, the Lenders and the Administrative Agent agree to provide for NTA’s inclusion as a Life Subsidiary under the Agreement and amend the definition of “Threshold Amount.” NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows: 1. AMENDMENTS. Upon satisfaction of the conditions set forth in Section 2, the Agreement shall be amended as follows: 1.1 The definition of “Threshold Amount” in Section 1.01 shall be deleted in its entirety and replaced with: “Threshold Amount” means, with respect to all Insurance Subsidiaries, as of any date of determination, fifteen percent (15%) of the net aggregate admitted assets less separate account assets (as set forth on the financial statements of the Insurance Subsidiaries most recently provided pursuant to Section 5.01(c)). 1.2 The reference to “Horace Mann Life Insurance Company” in Section 6.03 shall be deleted and replaced with the following: “the Life Subsidiaries (taken as a whole)”.

 

1.3 Schedule 3.01 entitled “Jurisdictions” shall be deleted and replaced with Schedule 3.01 attached hereto as Exhibit 1. 1.4 Schedule 3.10 entitled “Subsidiaries” shall be deleted and replaced with Schedule 3.10 attached hereto as Exhibit 2. 1.5 Exhibit B shall be deleted and replaced with Exhibit B attached hereto. 2. CONDITIONS PRECEDENT. This Amendment shall become effective when the Administrative Agent shall have received this Amendment duly executed by the Borrower, the Administrative Agent and the Required Lenders, and notice thereof shall have been given by the Administrative Agent to the Borrower and the Lenders. 3. REPRESENTATIONS AND WARRANTIES. After giving effect to this Amendment, the following statements by the Borrower shall be true and correct (and the Borrower, by its execution of this Amendment, hereby represents and warrants to the Administrative Agent and each Lender that such statements are true and correct as at such times): 3.1 the representations and warranties set forth in Article III of the Agreement are true and correct in all material respects as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date; 3.2 no Default has occurred and is continuing; 3.3 the Borrower has the full power to enter into, execute, deliver and carry out this Amendment and the execution, delivery and performance by the Borrower of this Amendment and the consummation of the transactions contemplated hereby and thereby are within its corporate powers, have been duly authorized by all necessary corporate action (including, without limitation, shareholder approval, if required) and do not contravene or conflict with the Borrower’s articles of incorporation or bylaws; 3.4 each of the Borrower and its Subsidiaries has received all material governmental and other consents and approvals (if any shall be required) necessary for the execution, delivery and performance of this Amendment, and such execution, delivery and performance do not and will not contravene or conflict with, or create a Lien or right of termination or acceleration under, any Requirement of Law or Contractual Obligation binding upon the Borrower or such Subsidiaries; and 3.5 this Amendment has been duly and validly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except to the extent that enforceability of this Amendment may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally or limiting the right of specific performance and general concepts of equity. 735379122 19619932 First Amendment to Credit Agreement

 

4. MISCELLANEOUS. 4.1 Continuing Effectiveness, etc. This Amendment shall be deemed to be an amendment to the Agreement, and the Agreement as amended hereby, shall remain in full force and effect and is hereby ratified, approved and confirmed in each and every respect. After the effectiveness of this Amendment in accordance with its terms, all references to the Agreement in the Loan Documents or in any other document, instrument, agreement or writing shall be deemed to refer to the Agreement as amended hereby. Each other Loan Document is hereby ratified, approved and confirmed in each and every respect. This Amendment is a Loan Document. 4.2 Headings. The various headings of this Amendment used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment. 4.3 Execution in Counterparts. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Amendment. 4.4 Incorporation of Credit Agreement Provisions. The provisions of Sections 1.03, 9.03, 9.06, 9.07, 9.09, and 9.10 of the Agreement are incorporated herein by reference as if fully set forth herein, mutatis mutandis. [Remainder of page intentionally left blank] 735379122 19619932 First Amendment to Credit Agreement

 

 

 

 

 

 

 

 

 

 

EXHIBIT 1 SCHEDULE 3 ###-###-#### 19619932 First Amendment to Credit Agreement

 

CERTIFICATES OF AUTHORITY BY STATE AND DATE ISSUED STATE HMIC TIC HMP&CIC HMLIC ELICA HMSC NTALIC NTALICNY Alabama 12-19-66 04-18-73 08-20-03 12-15-58 X 01-01-81 Alaska 01-31-64 03-26-73 12-22-87 02-02-62 X 10-15-99 Arizona 05-27-59 11-12-74 06-09-80 07-15-59 08-21-57 X 03-10-98 Arkansas 01-31-64 10-06-77 11-19-75 05-06-50 X 04-12-91 California 01-31-64 03-25-65 08-18-67 X 05-06-97 Colorado 06-05-64 09-05-73 11-13-81 11-02-56 12-31-84 X 02-27-98 Connecticut 06-28-74 11-18-99 11-18-99 11-20-78 X 06-21-99 Delaware 06-02-59 03-02-71 09-25-98 12-08-55 X 06-19-00 Dist. of Col. 08-20-59 01-30-73 05-01-97 12-03-65 X 05-01-97 Florida 09-23-63 08-19-76 04-02-10 07-16-62 08-15-66 X 09-27-79 Georgia 01-31-64 02-09-78 07-02-07 04-05-61 X 12-20-74 Hawaii 08-25-87 02-01-85 08-30-99 Idaho 12-16-68 04-16-73 05-26-88 05-09-60 X 06-08-99 Illinois 01-31-64* 03-09-77* 04-25-75* 08-09-49* 12-31-84* 08-13-73* 12-31-94 Indiana 05-01-68 12-01-77 01-15-98 05-01-57 X 07-19-96 Iowa 12-29-64 05-04-73 11-26-74 08-01-52 X 01-14-00 Kansas 01-31-64 09-13-96 12/21/99 11-12-61 X 04-13-98 Kentucky 01-31-64 08-02-64 11-01-99 02-21-69 X 04-04-97 Louisiana 12-23-58 11-14-73 09-30-99 05-16-61 X 01-16-80 Maine 06-01-70 05-04-88 12-30-98 09-02-60 X 12-07-01 Maryland 01-10-68 10-29-91 03-31-98 06-26-56 X 05-22-98 Massachusetts 10-25-68 02-12-81 09-09-68 X 04-23-14 Michigan 03-19-59 12-14-77 02-23-99 10-27-59 X 11-02-05 Minnesota 02-11-64 06-01-74 08-19-98 10-08-56 X 12-21-98 Mississippi 06-01-58 07-19-74 06-01-97 10- -61 X 02-01-82 Missouri 03-01-64 07-19-88 11-25-74 06-27-60 X 09-10-97 Montana 01-31-64 06-01-73 02-26-88 01-02-54 X 03-10-99 Nebraska 08-30-60 12-15-76 06-24-97 10-29-59 09-28-61 X 01-12-98 Nevada 02-12-68 06-14-99 06-17-99 05-10-60 02-04-83 X 08-14-97 New Hampshire 04-09-69 11-15-76 03-19-01 07-13-61 X 03-28-12 Revised as of 11/05/19 Page 1

 

STATE HMIC TIC HMP&CIC HMLIC ELICA HMSC NTALIC NTALICNY New Jersey Cancelled 05/31/19 X 05-03-06 05-30-96 New Mexico 03-01-64 08-15-73 01-03-03 05-21-56 X 01-02-01 New York 01-31-64 06-17-02 03-27-00 X 10-01-13 North Carolina 10-18-68 07-01-74 03-05-98 07-10-59 X 12-31-90 North Dakota 05-08-62 03-22-73 06-21-88 05-29-62 X 02-23-99 Ohio 02-07-64 12-03-84 12-31-96 12-02-59 10-09-84 X 09-30-97 Oklahoma 03-01-68 11-25-74 11-07-74 12-07-60 08-02-66 X 09-30-80 Oregon 07-15-70 09-01-73 11-15-74 11-01-53 06-05-57 X 08-18-97 Pennsylvania 12-29-63 04-16-81 12-20-99 09-01-49 X 02-15-96 Rhode Island 01-23-70 12-13-73 01-12-98 09-05-61 09-10-73 09-09-11 South Carolina 10-02-58 02-08-74 05-04-82 08-14-61 X 07-14-38 South Dakota 05-01-62 01-22-74 09-14-88 08-03-53 X 10-29-98 Tennessee 01-31-64 09-07-77 11-19-97 03-28-56 X 12-21-81 Texas 01-31-64 12-29-78 05-29-75 07-14-60 06-26-68 09-10-73 09-30-93 Utah 03-01-64 06-14-73 04-05-88 11-22-55 X 12-04-97 Vermont 10-01-68 08-25-99 08-25-97 04-18-56 X 05-13-99 Virginia 02-03-64 03-19-91 03-30-99 04-18-56 X 01-17-90 Washington 02-10-64 12-28-73 12-31-98 11-13-58 09-20-57 X 09-24-98 West Virginia 01-23-64 10-23-89 03-29-99 12-28-60 X 06-16-98 Wisconsin 01-31-64 09-14-73 06-27-74 11-22-68 X 10-28-99 Wyoming 12-24-58 07-23-87 01-18-88 03-24-53 X 07-27-99 Puerto Rico Cancelled 12-17-12 U.S. Virgin Islands 03-01-12 HMIC: Horace Mann Insurance Company TIC: Teachers Insurance Company HMP&CIC: Horace Mann Property & Casualty Insurance Company HMLIC: Horace Mann Life Insurance Company HMSC: Horace Mann Service Corporation ELICA: Educators Life Insurance Company of America NTALIC: National Teachers Associates Life Insurance Company NTALICNY: NTA Life Insurance Company of New York Revised as of 11/05/19 Page 2

 

EXHIBIT 2 SCHEDULE 3 ###-###-#### 19619932 First Amendment to Credit Agreement

 

Horace Mann Educators Corporation Delaware Corporation 100% Educators Life Horace Mann Horace Mann Horace Mann Horace Mann Teachers NTA Life Benefit Insurance Horace Mann Property & ABM Service BCG Securities, Service Lloyds Insurance Insurance Enterprises, Consultants Company of Investors, Inc. Casualty Corporation Inc. Corporation Management Company Company LLC Group, Inc. America Insurance Corporation Company NAIC: 62790 Illinois Texas NAIC: 22578 NAIC: 22683 Illinois Maryland NAIC: 22756 Texas Corporation Corporation Illinois Illinois Delaware Corporation Pennsylvania Corporation Corporation Pennsylvania 100% 100% Corporation Corporation Illinois Corporation Corporation 100% Corporation 100% Corporation National NTA Life NTA Life Horace Mann NTA Life National NTA Life Ellard Teachers Horace Mann Horace Mann EE Micronix, Inc Business Insurance Life Insurance Marketing, Inc. Teacher Management, Enterprises, Inc. Associates Life MGA and Lloyds Services Group, Company of Company Associates, Inc. Inc. Insurance Brokerage of Inc. Company New York Florida, Inc. NAIC: 10996 NAIC: 64513 NAIC: 15320 Florida Texas Delaware Texas Texas NAIC: 87963 Illinois Delaware Delaware Texas New York Corporation Corporation Corporation Corporation Corporation Texas Corporation Corporation Corporation Corporation Corporation Corporation Horace Mann Educators Corporation is a publicly held company.

 

EXHIBIT B [FORM OF] COMPLIANCE CERTIFICATE To: The Lenders parties to the Credit Agreement Described Below For the period ended , 20__, this Compliance Certificate is furnished pursuant to that certain Credit Agreement, dated as of June 21, 2019 (as amended, modified, renewed or extended from time to time, the “Agreement”), among Horace Mann Educators Corporation (the “Borrower”), the lenders party thereto, and PNC Bank, National Association, as Administrative Agent. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am a duly elected Executive Officer of the Borrower; 2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements; 3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or Event of Default during or at the time of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and 4. To the extent that there are any changes from the most recently delivered Schedule 3.10, Schedule I attached hereto sets forth a current Schedule 3.10, setting forth each of the Borrower’s Subsidiaries and indicating which Subsidiaries are Material Insurance Subsidiaries, accurate as of the date hereof. 5. Schedule II attached hereto sets forth financial data and computations calculating each of FHLB Liquidity Debt, FHLB Operating Debt and Securities Lending, all of which data and computations are true, complete and correct. 735379122 19619932 First Amendment to Credit Agreement

 

6. Schedule III attached hereto sets forth financial data and computations evidencing the Borrower’s compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event: 735379122 19619932 First Amendment to Credit Agreement

 

The foregoing certifications, together with the computations set forth in Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this ___ day of ______, ____. HORACE MANN EDUCATORS CORPORATION Name: Title: 735379122 19619932 First Amendment to Credit Agreement

 

SCHEDULE I TO COMPLIANCE CERTIFICATE Updated Schedule 3.10 as of _________, ____ ###-###-#### 19619932 First Amendment to Credit Agreement

 

SCHEDULE II TO COMPLIANCE CERTIFICATE Calculation of FHLB Liquidity Debt, FHLB Operating Debt and Securities Lending ###-###-#### 19619932 First Amendment to Credit Agreement

 

SCHEDULE III TO COMPLIANCE CERTIFICATE Compliance as of _________, ____ with Provisions of Sections 6.01, 6.02, 6.03 and 6.10 of the Agreement Section 6.01 – Consolidated Debt to Total Capitalization Required 0.35:1.0 Actual (a) Consolidated Debt of the Borrower and its Consolidated $__________ Subsidiaries on date of determination: (b) Net Worth on date of determination: $__________ (c) (a) plus (b): $__________ (d) Ratio of (a) to (c): :1.0 Section 6.02 – Net Worth Required Minimum Net Worth: $__________ Actual Net Worth:

 

Net Worth (excluding the effect of unrealized gain or loss under FASB 115): $__________ Section 6.03 – Minimum Risk-Based Capital (as of the end of any Fiscal Year) Required: 300% Actual: (a) Life Insurance Subsidiaries (taken as a whole) (1) Total Adjusted Capital on date of determination: $__________ (2) Company Action Level RBC on date of determination: $__________ (3) Ratio of (1) to (2) (expressed as a percentage): ______% (b) The P/C Subsidiaries (taken as a whole) (1) Total Adjusted Capital on date of determination: $__________ (2) Company Action Level RBC on date of determination: $__________ (3) Ratio of (1) to (2) (expressed as a percentage): ______%

 

Section 6.10 – Securities Lending Maximum market value of securities subject to Securities Lending: $ 1 Actual market value of securities subject to Securities Lending (provided that $__________ the market value of any security subject to Securities Lending shall be measured as of the time the applicable Securities Lending transaction was entered into): 1 Maximum Worth to be set at the Threshold Amount less the aggregate amount of FHLB Operating Debt outstanding at time of reporting.