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EXHIBIT 10.32
WAIVER AND CONSENT LETTER
February 21, 2006
North Pointe Holdings Corporation
28819 Franklin Road
Suite 300
Southfield, Michigan 48057
Attention: James B. Petcoff
Re:
Amended and Restated
Credit Agreement (the "Credit Agreement") dated
as of January 26, 2004 by and among North Pointe Holdings
Corporation
("Company"), Comerica Bank, as Agent ("Agent") and the Lenders
party
to the Credit Agreement ("Banks"), as amended
Dear Mr. Petcoff:
The
Company has advised the Agent and the Banks that the Company
intends
to: (i) form a Delaware statutory trust called NP Capital Trust I
(the "Trust");
(ii) purchase all of the Trust's common interests for the sum of
$620,000; (iii)
cause the Trust to sell $20,000,000 of preferred interests to an
unrelated third
party; and (iv) sell to the Trust, for $20,620,000, junior
subordinated notes of
the Company in substantially the form attached as Exhibit A (all of
such steps,
the "Offering"). The Company will pay the expenses associated with
the Offering,
and is expected to receive approximately $19,000,000 of net
proceeds from the
Offering,
The
Offering would violate certain provisions of the Credit
Agreement,
including Section 7.1, as to the purchase by the Company of equity
interests in
the Trust and Section 7.3, as to the guaranty by the Company of the
payment of
amounts owed by the Trust to holders of the Trust's preferred
interests, and
would require that the junior subordinated notes be deemed
Subordinated Debt by
the Banks as set forth in Section 7.4.
The
Company has requested that the Agent and the Banks consent to
the
Offering and waive any Event of Default which would arise under the
Credit
Agreement as a result of the Offering. Based on the Agent's receipt
of the
approval of the Majority Banks and subject to the terms of this
letter, the
Banks consent to the Offering and waive any Event of Default under
the Credit
Agreement resulting from the Offering, including without limitation
any Event of
Default which would arise under the provisions of Section 7.1
(relating to the
issuance of Equity Investments and relating to creation of the
Trust as a
subsidiary), Section 7.3 (relating to the guaranty of certain
payment
obligations of the Trust and Section 7.4 (relating to the issuance
of
Subordinated Debt).
This
Waiver and Consent shall not be deemed to amend or alter in any
respect the terms and conditions of the Credit Agreement, the Notes
or any of
the other Loan Documents, or to constitute a waiver or release by
any of the
Banks of any right, remedy or Event of Default under the Credit
Agreement, the
Notes or any of the other Loan Documents, except to the extent
expressly set
forth above. Furthermore, this Waiver and Consent shall not affect
in any manner
whatsoever any rights or remedies of the Banks with respect to any
other
non-compliance by the Company with the Credit Agreement or the
other Loan
Documents whether in the nature of an Event of Default or
otherwise, and whether
now in existence or subsequently arising.
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Except as specifically defined to the contrary herein, capitalized
terms
used in this Waiver shall have the meanings given them in the
Credit
Agreement.
Very truly yours,
COMERICA BANK, AS AGENT
By: /s/ Michael Wooder
------------------------------------
Its: Vice President
cc: Larry R. Shulman, Esq.
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CONSENT TO WAIVER
The
undersigned hereby approves and consents to the foregoing waiver on
the
terms set forth in the Waiver and Consent Letter to which this
Consent to Waiver
is attached and, assuming approval by the requisite lenders,
authorizes the
Agent to execute and deliver the Waiver and Consent Letter to the
Company.
FIFTH THIRD BANK
By: /s/ John Bebb
------------------------------------
Its: V.P.
Dated: February 22, 2006
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CONSENT TO WAIVER
The
undersigned hereby approves and consents to the foregoing waiver on
the
terms set forth in the Waiver and Consent Letter to which this
Consent to
Waiver is attached and, assuming approval by the requisite lenders,
authorizes
the Agent to execute and deliver the Waiver and Consent Letter to
the Company.
JPMORGAN CHASE BANK NA,
SUCCESSOR BY MERGER TO BANK ONE, N.A.
By: /s/ Rick Ellis
------------------------------------
Its: SVP
Dated: February 22, 2006
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EXHIBIT A
FLOATING RATE JUNIOR SUBORDINATED NOTE DUE 2036
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST
COMPANY ("DTC") OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE
FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC
TO A NOMINEE
OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY
BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS
AMENDED (THE "SECURITIES ACT"), AND SUCH SECURITIES, AND ANY
INTEREST THEREIN,
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF ANY
SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY
BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED
BY RULE 144A UNDER THE SECURITIES ACT.
THE
HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR
THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED,
RESOLD OR
OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, (II) TO A PERSON
WHOM THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE
144A, (III) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING
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OF SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF AN
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE
SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE
SECURITIES ACT OR (V) PURSUANT TO AN EXEMPTION FROM THE SECURITIES
ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE
OF (III) OR
(V), SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF
COUNSEL AND
OTHER INFORMATION SATISFACTORY TO IT AND (B) THE HOLDER WILL NOTIFY
ANY
PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN
(A) ABOVE.
THE
SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING
AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000, TO THE
FULLEST EXTENT
PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES, OR ANY
INTEREST THEREIN,
IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN
$100,000 AND
MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL
EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH
PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES
FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF
OR INTEREST
ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED
TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.
THE
HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS
ACCEPTANCE
HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS
NOT AN
EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS
AMENDED (THE "CODE") (EACH A "PLAN" OR AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE
"PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND
NO PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS
SECURITY OR ANY
INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY
INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF
THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF
SECTION 3(3) OF
ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A
TRUSTEE OR
OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN,
OR ANY OTHER
PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR
PLAN TO
FINANCE SUCH PURCHASE.
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NORTH POINTE HOLDINGS CORPORATION
FLOATING RATE JUNIOR SUBORDINATED NOTE DUE 2036
No. 1
$20,620,000
North Pointe Holdings Corporation, a corporation organized and
existing
under the laws of Michigan (hereinafter called the "Company" which
term includes
any successor Person under the Indenture hereinafter referred to),
for value
received, hereby promises to pay to LaSalle Bank National
Association, not in
its individual capacity, but solely as Property Trustee for NP
Capital Trust I,
a Delaware statutory trust (the "Holder"), or registered assigns,
the principal
sum of Twenty Million Six Hundred Twenty Thousand Dollars
($20,620,000) or such
other principal amount represented hereby as may be set forth in
the records of
the Securities Registrar hereinafter referred to in accordance with
the
Indenture on March 15, 2036. The Company further promises to pay
interest on
said principal sum from February [___________], 2006, or from the
most recent
Interest Payment Date to which interest has been paid or duly
provided for,
quarterly (subject to deferral as set forth herein) in arrears on
March 15, June
15, September 15 and December 15 of each year, commencing March 15,
2006, or if
any such day is not a Business Day, on the next succeeding Business
Day (and
additional interest shall accrue in respect of the amounts whose
payment is so
delayed for the period from and after such, Interest Payment Date
until such
next succeeding Business Day), except that, if such Business Day
fells in the
next succeeding calendar year, such payment shall be made on the
immediately
preceding Business Day, in each case, with the same force and
effect as if made
on the Interest Payment Date, at a fixed rate equal to [
___________]% per annum
through the interest payment date in March 2011 and thereafter at a
variable
rate equal to LIBOR plus [3.60]% per annum, together with
Additional Tax Sums,
if any, as provided in Section 10.5 of the Indenture, until the
principal
hereof is paid or duly provided for or made available for payment;
provided,
further, that any overdue principal, premiu
