EXHIBIT 10.2
FIRST AMENDMENT AGREEMENT
-------------------------
THIS FIRST AMENDMENT AGREEMENT (this "Amendment"), dated as of September 8,
1997, is among RENAISSANCERE HOLDINGS LTD. (the "Borrower"), the Lenders listed
on the signature pages hereto, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION as Administrative Agent for the Lenders;
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the parties hereto are parties to that certain Third Amended and
Restated Credit Agreement dated as of December 12, 1996 (the "Credit
Agreement");
WHEREAS, the parties hereto wish to amend the Credit Agreement as
hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of the premises and
the mutual agreements herein contained, hereby agree as follows:
Section 1. Credit Agreement Definitions Capitalized terms used herein that
----------------------------
are defined in the Credit Agreement shall have the same meaning when used herein
unless otherwise defined herein.
Section 2. Amendments To Credit Agreement. Effective on (and subject to
------------------------------
the occurrence of) the First Amendment Effective Date (as defined below), the
Credit Agreement shall be amended as follows:
2.1. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is
--------------------------
amended as follows:
(a) The definition of "Commitment Termination Date" is amended by
deleting "December 1, 1999" and inserting "December 1, 2001" therefor.
(b) The definition of "Invested Assets" is amended by inserting the
following at the end thereof: "provided that Catastrophe Bonds shall not be
deemed to be Invested Assets."
(c) The definition of "Net Worth" is amended in its entirety to read
as follows:
"Net Worth means the sum of (a) the shareholders equity, calculated in
---------
accordance with GAAP, plus (b) the outstanding 8.54% Mandatorily Redeemable
----
Capital Securities issued by the Borrower in March, 1997, plus (c) any
----
other preferred shares of the Borrower and its consolidated Subsidiaries
which shall not be redeemable before the Commitment Termination Date.
(d) The definition of "Reinsurance Agreements" is amended by inserting
the following at the end thereof: ", including (for purposes of this Agreement)
Catastrophe Bonds."
(e) The following new definition is inserted in Section 1.1 in its
proper alphabetical order:
"Catastrophe Bonds means (a) any note, bond or other Debt instrument
-----------------
which has a catastrophe risk feature linked to interest payments, principal
payments or both and is issued with the purpose of transferring traditional
reinsurance risk to the capital markets and (b) any equity interest in a
Person controlled by the Borrower formed for the sole purpose of investing
in Debt of the type described in clause (a), in each case which are
purchased by the Borrower in accordance with its customary reinsurance
underwriting procedures.
2.2. Amendment to Section 5.9. Section 5.9 of the Credit Agreement is
-----------------------------------------------------------------
amended as follows:
-------------------
(a) Clause (ii) of Section 5.9 is amended by deleting "95%" and
inserting "80%" therefor.
(b) The last sentence of Section 5.9 beginning "Notwithstanding the
foregoing" is deleted in its entirety.
2.3. Amendment to Section 6.3. Section 6.3(ii) of the Credit Agreement is
---------------------------------------------------------------------
amended in its entirety to read as follows:
-------------------------------------------
(ii) purchases or acquisitions which comply with Section 5.10 provided
(x) no Default or Event of Default has occurred and is continuing or would
result therefrom and (y) the purchase price for any single purchase or
acquisition does not exceed 50% of Net Worth minus all amounts which in
accordance with GAAP would be characterized as intangible assets (including
goodwill) as of the date of such purchase or acquisition (calculated on a
proforma basis giving effect to such acquisition or purchase) and (z) the
aggregate purchase price of all purchases and acquisitions after the First
Amendment Effective Date do not exceed 100% of Net Worth minus all amounts
which in accordance with GAAP would be characterized as intangible assets
(including goodwill).
2.4. Schedule 1.2. Schedule 1.2 of the Credit Agreement is deleted in its
---------------------------------------------------------------------
entirety and Schedule 1.2 to this Amendment is substituted therefor.
--------------------------------------------------------------------
Section 3. Representation And Warranties. In order to induce the Lenders
-----------------------------
and the Administrative Agent to execute and deliver this Amendment, the Borrower
hereby represents and warrants to the Lenders and to the Administrative Agent
that:
-2-
(a) No Event of Default or Default has occurred and is continuing or
will result from the execution and delivery or effectiveness of this
Amendment; and
(b) the warranties of the Borrower contained in Article IV of the
Credit Agreement are true and correct as of the date hereof, with the same
effect as though made on such date; provided that (i) with respect to
clause (a) of Section 4.2, the reference to "1995 Fiscal Year" therein
shall instead be a reference to "1996 Fiscal Year" and (ii) with respect to
clause (a) of Section 4.3, the reference to "December 31, 1995" shall
instead be a reference to "December 31, 1996" and the reference to the nine
months ended September 30, 1996 shall instead be a reference to "the six
months ended June 30, 1997".
Section 4. Conditions to Effectiveness. The Amendment set forth in Section
---------------------------
2 hereof shall become effective on the date (the "First Amendment Effective
Date") when the Administrative Agent shall have received all of the following,
each in form and substance satisfactory to the Administrative Agent:
(a) eight counterparts of this Amendment executed by all of the
parties hereto;
(b) a certificate of an authorized officer of the Borrower as to the
satisfaction of the conditions set forth in Section 3 of this Amendment;
---------
and
(c) such other documents as the Administrative Agent or any Lender may
reasonably request;
provided, however, that the amendment set forth in Section 2.2 hereof
-------- -------
[AMENDMENT TO SECTION 5.9] shall be effective as of June 30, 1997.
Section 5. Reaffirmation of Loan Documents. From and after the date hereof,
-------------------------------
each reference that appears in any other Loan Document to the Credit Agreement
shall be deemed to be a reference to the Credit Agreement as amended hereby. As
amended hereby, the Credit Agreement, is hereby reaffirmed, approved and
confirmed in every respect and shall remain in full force and effect.
Section 6. Counterparts; Effectiveness. This Amendment may be executed by
---------------------------
the parties hereto in any number of counterparts and by the different parties on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same agreement.
-3-
Section 7. Governing Law; Entire Agreement. This Amendment shall be deemed
-------------------------------
a contract made under and governed by the laws of the State of Illinois, without
giving effect to conflicts of laws principles. This agreement constitutes the
entire understanding among the parties hereto with respect to the subject matter
hereof and supersedes any prior agreements with respect thereto.
Section 8. Loan Document. This Amendment is a Loan Document.
-------------
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
RENAISSANCERE HOLDINGS LTD.
By:
---------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent and
Lender
By:
---------------------------------
Title:
FLEET NATIONAL BANK
By:
---------------------------------
Title:
MELLON BANK, N.A.
By:
---------------------------------
Title:
THE BANK OF N.T. ▇▇▇▇▇▇▇▇▇▇▇ & SON LIMITED
By:
---------------------------------
Title:
BANK OF MONTREAL
By:
---------------------------------
Title:
-▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ and/or Cayman
Islands Branch
By:
---------------------------------
Title:
By:
---------------------------------
Title:
BANK OF BERMUDA
By:
---------------------------------
Title:
-6-
SCHEDULE 1.2
Pricing Grid
PRICING PRICING PRICING PRICING PRICING
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
S & P BBB+ or A- A A+ AA- or
Claims below above
Rating
Offshore 0.500% 0.400% 0.350% 0.300% 0.250%
Rate
Non-Use 0.150% 0.125% 0.100% 0.090% 0.080%
Fee Rate