The Credit Agreement also contains customary financial covenants including, among others: (a) maximum Debt-to-Total Capitalization; (b) minimum Consolidated Net Worth; and (c) minimum total adjusted statutory capital.
The Credit Agreement provides for customary events of default, including, among others, the failure to pay principal, interest or other amounts payable under the Credit Agreement, failure to comply with certain covenants, material misrepresentations, cross defaults to other material indebtedness, certain insolvency and receivership events affecting Radian or certain of its subsidiaries and judgments in excess of $75 million in the aggregate being rendered against Radian or certain of its subsidiaries.
In the event of a default by Radian, the Agent may, and at the direction of Lenders holding a majority of the aggregate commitments will, terminate the Lenders’ commitments to make loans under the Credit Agreement, declare the obligations under the Credit Agreement immediately due and payable and enforce any and all rights of the Lenders or Agent under the Credit Agreement and related documents. With respect to certain events of default relating to insolvency, the commitments of the Lenders will automatically terminate and all outstanding obligations will become immediately due and payable.
Certain of the Lenders and other parties to the Credit Agreement, and their affiliates, have in the past provided, and may in the future provide, investment banking, underwriting, lending, commercial banking and other advisory services to Radian and its subsidiaries. Such Lenders and other parties have received, and may in the future receive, customary compensation from Radian and its subsidiaries for such services.
The foregoing summary is not a complete description of the Credit Agreement and is qualified in its entirety by reference to the full text of the Credit Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 1.02
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Termination of a Material Definitive Agreement.
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Upon entering into the Credit Agreement described in Item 1.01 above, Radian’s obligations under its prior credit agreement, dated as of October 16, 2017 (as amended, restated, modified or supplemented from time to time), by and among Radian, the Lenders from time to time party thereto and Royal Bank of Canada as Administrative Agent were effectively terminated.