EXHIBIT 10B
[SUNTRUST LETTERHEAD]
September 12, 2000
Mr. Cory T. Walker,
Chief Financial Officer
BROWN & BROWN, INC.
220 South Ridgewood Avenue
Daytona Beach, Florida 32115-2412
Re: SunTrust Bank ("SUNTRUST"): Extension of Term Loan
to Brown & Brown, Inc. (the "BORROWER") in the
amount of $90,000,000 and Modification of Existing
Revolving Loan to the Borrower in the Amount of
$50,000,000
Dear Mr. Walker:
We are pleased to advise you of the commitment by
SunTrust Bank ("SUNTRUST") subject to the terms and conditions
set forth in this letter, to (i) extend a Term Loan up to the
amount of $90,000,000, and (ii) modify the existing Revolving
Loan in the amount of $50,000,000, (collectively, the "FACILITY")
to Brown & Brown, Inc. (the "BORROWER"). Attached as EXHIBIT "A"
to this letter is a Summary of Principal Terms and Conditions
(the "TERM SHEET") setting forth the principal terms and
conditions on and subject to which SunTrust is willing to make
the Facility.
You represent and warrant that information made available
to SunTrust by you or any of your representatives in connection
with the transactions contemplated hereby is as of such date to
the best of your knowledge complete and correct in all material
respects and does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements contained therein not materially misleading in
light of the circumstances under which such statements were made.
In arranging the Facility, SunTrust will be using and relying on
such information without independent verification thereof.
The commitment of SunTrust hereunder is subject to the
condition, among others, that after the date hereof there shall
not have occurred, in the reasonable opinion of SunTrust, any
materially adverse change in or disruption of financial or
capital market conditions or any
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materially adverse change in the condition or the Borrower. In addition,
the commitment of SunTrust is subject to the negotiation and definitive
documentation with respect to the Facility satisfactory to
SunTrust and its counsel. Such documentation shall contain the
terms and conditions set forth in the Term Sheet and such other
indemnities, covenants, representations and warranties, events of
default, conditions precedent, and other terms and conditions as
shall be satisfactory in all respects to SunTrust. The terms and
conditions of the commitment of SunTrust hereunder and of the
Facility are not limited to the terms and conditions set forth
herein and in the Term Sheet, and the matters which are not
covered by the provisions of this letter and the Term Sheet are
subject to the approval of SunTrust.
The costs and expenses (including, without limitation,
the reasonable fees and expenses of counsel to SunTrust) arising
in connection with the preparation, execution and delivery of
this letter and the definitive financing agreements shall be for
your account. You further agree to indemnify and hold harmless
SunTrust and each director, officer, employee, affiliate and
agent thereof (each, an "INDEMNIFIED PERSON") against, and to
reimburse each indemnified person, upon its demand, for, any
losses, claims, damages, liabilities or other expenses ("LOSSES")
incurred by such indemnified person insofar as such Losses arise
out of or in any way relate to or result from this letter or the
financings contemplated hereby, including, without limitation,
Losses consisting of legal or other expenses incurred in
connection with investigating, defending or participating in any
legal proceeding relating to any of the foregoing (whether or not
such indemnified person is a party thereto); PROVIDED that the
foregoing will not apply to any Losses to the extent that result
from the gross negligence or willful misconduct of such
indemnified person. Your obligations under this paragraph shall
remain effective whether or not definitive financing
documentation is executed and notwithstanding any termination of
this letter. Neither SunTrust nor any other indemnified person
shall be responsible or liable to any other person for
consequential damages which may be alleged as a result of this
letter or the financing contemplated hereby.
This letter shall be governed by the laws of the State of
Florida. This letter may not be amended or modified except in
writing and shall be governed by the internal laws (and not by
laws of conflicts) of the State of Florida. SunTrust's
obligations under this letter are enforceable solely by the
Borrower's signing this letter and may not be relied upon by any
other person. This letter is confidential and you may not
disclose this letter or any of its terms to any other third party
other than your accountants, attorneys and consultants to you in
this financing.
If you are in agreement with the foregoing, please sign
and return the enclosed copies of this letter to SunTrust no
later than 5:00 p.m., Orlando time, on September 29, 2000. This
offer shall terminate at such time unless prior thereto we shall
have received signed copies of such letters.
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We look forward to working with you on this transaction.
Very truly yours,
SUNTRUST BANK
By: /S/ EDWARD WOOTEN
__________________________________
Edward Wooten,
Director
ACCEPTED AND AGREED:
BROWN & BROWN, INC.
By: /S/ CORY T. WALKER
V.P. & CFO,
Date: September 29, 2000
<PAGE 4>
TERM SHEET
SUMMARY OF PRINCIPAL TERMS
AND CONDITIONS OF $90,000,000 TERM LOAN
AND $50,000,000 REVOLVING LOAN
September 12, 2000
FACILITY(IES): A. $90,000,000 Term Loan.
B. $50,000,000 Revolving Loan. (This
Facility is currently outstanding and
this Term Sheet provides for the
extension and modification of this
Facility.)
BORROWER: Brown & Brown, Inc. (the "BORROWER")
LENDER: SunTrust Bank and/or its affiliates
("SUNTRUST")
PURPOSE: A. To fund acquisitions by the Borrower.
B. General corporate purposes, including
financing of acquisitions.
MATURITY: A. Seven years from closing date. (NOTE:
The Closing must occur by no later than
January 31, 2001.)
B. October 15, 2002.
INTEREST RATE: The interest rate will be based upon the 30,
60 or 90 day LIBOR rate, plus an applicable
margin based upon the ratio of Total Funded
Debt to EBITDA as follows:
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FACILITY A
Funded >2.0: >1.50: >1.0: <1.0:1.0
Debt/EBITDA 1.0 1.0 1.0 but
but 1.5:1.0
<2.0:
1.0
LIBOR Spread 1.0% 0.75% 0.625% 0.50%
FACILITY B
Funded >2.0: >1.50: >1.0: <1.0:1.0
Debt/EBITDA 1.0 1.0 1.0 but
but 1.5:1.0
<2.0:
1.0
LIBOR Spread 1.0% 0.75% 0.55% 0.45%
Availability Fee 0.25% 0.20% 0.175% 0.15%
The interest rate will be based upon the
quarterly financial statements of the
Borrower. For the period to December 31,
2000 the interest rate and Availability Fee
for Facility B is LIBOR + .45% and 0.15%,
respectively.
LOAN PAYMENTS: A. The principal amount of the term loan
will be paid in equal quarterly payments
over 28 quarters, together with accrued
interest. The actual quarterly
principal payment will depend on the
amount of the term loan actually drawn
down by the Borrower at the Closing.
B. Interest only will be payable quarterly
during the term and principal will be
due in full at Maturity.
CLOSING FEES: A. .010% (10 Basis Points) of the amount
actually funded, payable at Closing.
B. .010% (10 Basis Points) ($50,000),
payable at Closing.
AVAILABILITY This Fee is based on Facility B only, and is
FEE: charged on the unused portion of Facility B.
The Fee is to be determined quarterly and is
based upon the ratio of Funded Debt to EBITDA
as set forth in the table under Interest
Rate.
COLLATERAL: Unsecured.
GUARANTORS: All present and future material subsidiaries
of the Borrower. A "material subsidiary" is
a subsidiary which generates 5% or more of
the Consolidated Net Income of the Borrower
PROVIDED, HOWEVER, if the aggregate net
income of the Borrower and its material
subsidiaries is less than 80% of Consolidated
Net Income,
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then the 5% trigger will be
reduced so that the aggregate of the net
income of the Borrower and the material
subsidiaries is not less than 80% of the
Consolidated Net Income of the Borrower.
CONDITIONS TO (1) Execution and delivery of loan
INITIAL documents, together with the furnishing
FUNDING: of other closing documents as required
by the Lender or its counsel.
(2) Receipt of favorable opinions of counsel
for the Borrower. (Subject to
reasonable approval of SunTrust, said
opinion may be furnished by in-house
counsel for the Borrower.)
(3) No default occurs under the existing
Loan Documents.
(4) The absence of any material disruption
or material adverse change in the
financial or capital markets generally
and the absent of any such disruption or
adverse change in the financial or other
condition of the Borrower itself.
CONDITIONS TO These will remain as set forth in the
ALL FUNDINGS: existing Loan Documents.
Financial The existing Financial Covenants will be
Covenants: amended in their entirety to be as follows:
(1) Net Worth of a minimum of the sum of (i)
$100,000,000 (ii) 50% of cumulative Net
Income after June 30, 2000, and (iii)
100% of net cash raised through
contribution or issuance of new equity,
less (iv) receivables from affiliates.
(2) A Fixed Charge Ratio of not less than
1.25 to 1.00 (The Fixed Charge Ratio is
defined as (Net Income + Operating Lease
Payments + Provision for Taxes +
Interest Expense + Depreciation +
Amortization - Capital Expenditures -
Dividends) / (Scheduled Principal
Payments + Interest Expense + Operating
Lease Payments).
(3) A Debt to EBITDA ratio of not greater
than 2.50 - 1.00. (This ratio is
defined as (Revolving Debt + Guaranteed
Debt + Term Debt)/(Net Income +
Provision for Taxes + Interest Expense +
Depreciation + Amortization).
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Covenants will be tested quarterly on a
rolling four quarter schedule.
REPORTING The Reporting Requirements will remain as set
REQUIREMENTS: forth in the existing Loan Documents. In
addition, the Borrower will furnish a
quarterly report of all Funded Debt, in form
reasonably acceptable to SunTrust
REPRESENTATIONS The Representations and Warranties shall
AND WARRANTIES: remain as set forth in the existing Loan
Documents.
AFFIRMATIVE The Affirmative Covenants will remain as set
COVENANTS: forth in the existing Loan Documents,
subject, however, to the review by both the
Borrower and the Lender and in further
modifications as agreed upon. In addition,
if required by the Lender, the Borrower will
enter into hedging agreements with respect to
the interest rate.
NEGATIVE Negative covenants will remain as set forth
COVENANTS: in the Existing Loan Documents, except as
modified by agreement of the Borrower and the
Lender.
EVENTS OF The Events of Default will remain as set
DEFAULT: forth in the existing Loan Documents.
INDEMNIFICATION: The Borrower shall pay all costs and expenses
of SunTrust in connection with the Facility,
including, without limitation, all reasonable
fees and expenses of Akerman, Senterfitt &
Eidson, P.A. counsel to SunTrust. The
Borrower shall indemnify SunTrust and each
Lender against all costs, losses,
liabilities, damages, and expenses incurred
by them in connection with any
investigation,litigation, or other
proceedings relating to the Facility, except
for instances of gross negligence or willful
misconduct on the part of the indemnified
party.
GOVERNING LAW: State of Florida.
CLOSING A. January 31, 2001
DEADLINE:
B. October 15, 2000
<PAGE 8>
DOCUMENTATION: The Facility in the amount of $50,000,000 is
currently outstanding to the Borrower and has
been documented by various Loan Documents
including specifically a Revolving Loan
Agreement dated as of October 15, 1998. This
Facility will be documented by an amended and
restated Loan Agreement which will reflect
the changes set forth in this Commitment.
Thus, unless modified by this Commitment, the
provisions of the existing Loan Documents
will remain. This Summary of Terms and
Conditions is not meant to be all inclusive.
The loan documentation, which must be
satisfactory to SunTrust and its counsel,
will also contain such other terms and
conditions as are customary for Facility of
this type.
