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EXHIBIT 10.01
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SECOND AMENDMENT
THIS SECOND AMENDMENT dated as of June 30, 1997 (this "Amendment") is among
LIFE RE CORPORATION (the "Borrower"), various financial institutions (the
"Lenders"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Administrative Agent for the Lenders (in such capacity, the "Administrative
Agent").
W I T N E S E T H:
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WHEREAS, the Borrower, the Lenders and the Administrative Agent have
entered into a Credit Agreement dated as of November 2, 1995 (as previously
amended, the "Agreement") which provides for the Lenders to make Loans to the
Borrower from time to time (terms defined in the Agreement and not otherwise
defined herein are used herein as defined in the Agreement); and
WHEREAS, the parties hereto desire to amend the Agreement in certain
respects as hereinafter set forth;
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:
SECTION 1. AMENDMENTS. Effective on (and subject to the occurrence of)
the Second Amendment Effective Date (as defined below), the Agreement shall be
amended in accordance with Sections 1.1 through 1.6 below.
1.1 Addition of Certain Definitions. Section 1.1 of the Agreement is
amended by adding the following definitions thereto in appropriate alphabetical
sequence:
Capital Securities means the 8.72% Capital Securities issued by the
Capital Trust containing substantially the terms described in the Capital
Trust Offering Memorandum.
Capital Trust means the Life Re Capital Trust I, a special purpose
Delaware business trust established by the Borrower, of which the Borrower
holds all the common securities, which is the issuer of the Capital
Securities, and which loaned to the Borrower (such loan being evidenced by
the Capital Trust Debentures) the net proceeds of the issuance and sale of
the Capital Securities.
Capital Trust Debentures means the 8.72% Junior Subordinated
Deferrable Interest Debentures issued by the
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Borrower to the Capital Trust containing substantially the terms described
in the Capital Trust Offering Memorandum.
Capital Trust Offering Memorandum means the Offering Memorandum dated
June 6, 1997 for $100,000,000 of Capital Securities to be issued by the
Capital Trust.
1.2 Replacement of Certain Definitions. Section 1.1 of the Agreement is
amended by deleting the existing definitions of "Debt", "Indebtedness to
Capitalization Ratio" and "Total Capital" in their entirety and substituting
the following therefor, respectively:
Debt shall mean, with respect to any Person, at any date, without
duplication, (i) all obligations of such Person for borrowed money or in
respect of loans or advances; and (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments.
Notwithstanding the foregoing, (a) any surplus debentures issued by TexasRe
shall not be considered Debt of TexasRe, (b) the Capital Trust Debentures
shall not be considered Debt of the Borrower and (c) the Capital Securities
shall not be considered Debt of the Capital Trust.
Indebtedness to Capitalization Ratio shall mean, at any time, the
ratio of (x) the consolidated Indebtedness of the Borrower and its
Subsidiaries at such time to (y) the sum at such time of the consolidated
Indebtedness of the Borrower and its Subsidiaries plus the consolidated
Equity of the Borrower and its Subsidiaries plus, without duplication, the
outstanding amount of the Capital Securities.
Total Capital shall mean the sum of (a) the Statutory Surplus of Life
Reassurance, plus (b) the Statutory Surplus of TexasRe (excluding the
Statutory Carrying Value of Life Reassurance) to the extent such amount
exceeds the minimum capital and surplus requirements of its Department,
plus (c) any cash, cash equivalents and Invested Assets (excluding surplus
debentures of TexasRe on the books of the Borrower, the GAAP book value of
TexasRe and investments in the Capital Trust) of the Borrower only.
1.3 Amendment to Definition of Indebtedness. The definition of
"Indebtedness" in Section 1.1 of the Agreement is amended by adding the
following sentence at the end thereof: "The obligations of the Borrower in
respect of the Capital Trust Debentures shall not constitute Indebtedness for
purposes of this Agreement, except that such obligations shall constitute
Indebtedness for purposes of Section 9.1.3."
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1.4 Amendment to Definition of Contingent Liability. The definition of
Contingent Liability in Section 1.1 of the Agreement is amended by adding the
following sentence at the end thereof: The obligations of the Borrower under
its guarantee of the Capital Securities shall not constitute Contingent
Liabilities for purposes of this Agreement, except that such obligations shall
constitute Contingent Liabilities (and, therefore, shall constitute
Indebtedness) for purposes of Section 9.1.3.
1.5 AMENDMENT OF SECTION 8.2.13. Section 8.2.13 is amended in its
entirety to read as follows:
8.2.13 RESTRICTED PAYMENTS. Not purchase or redeem any shares of
its stock, declare or pay any dividends thereon (other than stock
dividends), make any distribution to stockholders, make any
payments of principal of the Capital Trust Debentures or redeem
(or make any payment in respect of its guarantee of) any Capital
Securities or set aside any funds for any such purpose (any of
the foregoing, a Restricted Payment), except that (i) the
Borrower may make Restricted Payments in any Fiscal Year in an
aggregate amount not exceeding three percent (3%) of the amount
of the Borrower's Equity on the last day of the immediately
preceding Fiscal Year, and (ii) the Borrower may make additional
Restricted Payments if (a) immediately before and after giving
effect thereto no Event of Default or Unmatured Event of Default
exists, (b) Life Reassurance has an A.M. Best rating of A or
better and (c) immediately before and after giving effect thereto
the sum of Total Capital (including, without duplication, the
full amount of the surplus notes) plus, without duplication, the
outstanding amount of the Capital Securities is greater than the
consolidated Indebtedness of the Borrower and its Subsidiaries.
1.6 Amendment of Form of Compliance Certificate. Exhibit E to the
Agreement is deleted in its entirety and replaced by the Exhibit E attached
hereto.
SECTION 2. WARRANTIES. To induce the Lenders to enter into this
Amendment, the Borrower warrants that:
2.1 Authorization. The Borrower is duly authorized to execute and
deliver this Amendment and to perform its obligations under the Agreement, as
amended hereby (the "Amended Agreement").
2.2 No Conflicts. The execution and delivery of this Amendment, and the
performance by the Borrower of its obligations under the Amended Agreement, do
not and will not conflict with
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any provision of law or of the charter or by-laws of the Borrower or of any
agreement binding upon the Borrower.
2.3 Validity and Binding Effect. The Amended Agreement is a legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity
limiting the availability of equitable remedies.
SECTION 3. Conditions Precedent to Effectiveness. the amendments set
forth in SECTION 1 hereof shall become effective, as of the day and year first
above written, on such date (herein called the "Second Amendment Effective
Date") when each of the following conditions precedent have been satisfied.
3.1 Second Amendment. The Administrative Agent shall have received
counterparts of this Amendment executed by the Borrower and all Lenders.
3.2 No Default. No Event of Default or Unmatured Event of Default shall
have occurred and be continuing.
SECTION 4. GENERAL.
4.1 Expenses. The Borrower agrees to reimburse the Administrative Agent
upon demand for all reasonable expenses, including reasonable fees of attorneys
and paralegals for the Administrative Agent, incurred by the Administrative
Agent in connection with the preparation, negotiation and execution of this
Amendment and any document required to be furnished herewith.
4.2 Governing Law. This Amendment shall be governed by the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
4.3 Confirmation of the Agreement. Except as amended hereby, the
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the Second Amendment Effective Date, all
references in the Agreement and the other Loan Documents to "Credit Agreement,"
"Agreement" or similar terms shall refer to the Amended Agreement.
4.4 Execution in Counterparts. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
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4.5 Effectiveness of Pricing Change. Any change to the Applicable
Margin or the Facility Fee Rate resulting from the changes made by this
Amendment shall be effective on and after the Second Amendment Effective Date.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
LIFE RE CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
Title: Executive Vice President
Chief Financial Officer
_______________________________________
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________________________
Title: Vice President and General Counsel
______________________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________________
Title: Vice President
_________________________________________
BANK OF AMERICA ILLINOIS
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________________
Title: Vice President
_________________________________________
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
Title: Vice President
__________________________________________
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_________________________________________
Title: Vice President
_________________________________________
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MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. McCONOY
_________________________________________
Title: Assistant Vice President
_________________________________________
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ ▇▇▇ ▇▇▇▇▇
_________________________________________
Title: Vice President
_________________________________________
BANK OF MONTREAL
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_________________________________________
Title: Director
_________________________________________
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EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
Date: _____________, _____
TO: Bank of America National Trust and Savings
Association, as Administrative Agent, and the
Lenders under the Credit Agreement referred
to below
RE: LIFE RE CORPORATION
Please refer to that certain Amended and Restated Credit Agreement (as
heretofore amended, modified, supplemented, restated, refunded or renewed and
as currently in effect, herein called the "Agreement"), dated as of November 2,
1995, among Life Re Corporation (the "Borrower"), the Lenders and Co-Agents
referred to therein, and Bank of America National Trust and Savings
Association, as Administrative Agent.
Terms defined in the Agreement shall have the same meanings when used
herein.
In accordance with Section 8.1.1 (f) of the Agreement, the Borrower
hereby certifies that the statements and calculations set forth below are true
and correct as of ___________________, 19__ (the "Calculation Date"):
I. Section 8.1.10(ii) - Investments.
A. Consolidated Invested Assets of the
Borrower and its Subsidiaries $_____________
B. 15% of Item A $_____________
C. 100% of Statutory Surplus of Life
Reassurance $_____________
D. Maximum aggregate amount of investments
permitted pursuant to Section 8.1.10(ii)
(the lesser of Item B or Item C)
E. Restricted Investments
1. Non-Investment Grade Securities $_____________
2. Common stock and other equity
securities (other than (x)
investments in Subsidiaries and
(y) preferred stock) $_____________
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3. Investments in interests in real property
(excluding those described in the
parenthetical clause in SECTION 8.1.10(ii)(c) $__________
4. Sum of Items E.1 through E.3 $__________
[Item E.4 is not permitted to exceed Item D]
II. Section 8.1.10(iii) - Investments.
A. Admitted assets of Life Reassurance as
of the Calculation Date $__________
B. 4% of Item A $__________
C. Life Reassurance capital and surplus
as of the Calculation Date $__________
D. 20% of Item C
E. The lesser of Item B or Item D $__________
F. The value, as of the Calculation Date,
of the investments of the Borrower and
its Subsidiaries in one securities issuer
which exceed the amount of Item E ___________
(excluding U.S. Government Securities, (name of
Canadian Government Securities and issuer)
investments of the Borrower and/or
its Subsidiaries in the Borrower or any
other Subsidiary) $__________
(value of
[Item F is not permitted to exceed Item E] investment)
III. Section 8.2.1 - EBT to Future Fixed
Charges.
A. EBT for the calendar year ended on the
Calculation Date $__________
B. Future Fixed Charges of Borrower and its
Subsidiaries for the next calendar year: $__________
1. Future Interest Charges $__________
2. Mandatory principal payments with
respect to Consolidated Debt $__________
3. Sum of B.1 and B.2 $__________
C. Item A divided by Item B.3 $__________
[Item C is not permitted to be less than 1.25]
IV. Section 8.2.2 - EBT to Future Interest Charges.
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A. EBT for the four Fiscal Quarters ended on the
Calculation Date $________
B. Future Interest Charges of Borrower and its
Subsidiaries for the next four Fiscal Quarters: $________
1. Outstanding principal amount of Debt at the
Date of Calculation $________
2. Annualized interest rate applicable to Debt $________
3. Item B.1 multiplied by Item B.2 $________
4. Interest corresponding to mandatory principal
reductions scheduled for the next four
Fiscal Quarters $________
5. Item B.3 less Item B.4 $________
C. Item A divided by Item B.5) $________
D. EBT to Future Interest Charges for prior Fiscal
Quarter. ________
[Item C is not permitted to be less than 2.0 for any
two consecutive Fiscal Quarters]
V. Section 8.2.3 Minimum Statutory Surplus
A. Total Adjusted Capital of Life Reassurance as
of the Calculation Date $________
B. Company Action Level (as such term is defined
by NAIC risk-based capital level) $________
[Item A is not permitted to be less than 150% of
Item B]
VI. Section 8.2.4 Indebtedness to Capitalization
A. Consolidated Indebtedness of the Borrower and
its Subsidiaries as of the Calculation Date $________
B. Consolidated Equity of the Borrower and its
Subsidiaries as of the Calculation Date $________
C. Outstanding Amount of Capital Securities as
of Calculation Date $________
D. Item A plus Item B plus Item C $________
E. Item A divided by Item D ________
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[Item E is not permitted to be greater than 45%]
VII. Section 8.2.13 - Restricted Payments.
A. Permitted Restricted Payments
1. Borrower's Equity as of the last day
of the Fiscal Year immediately
preceding the Calculation Date. $________
2. 3% of Item A.1 $________
3. Cumulative amount of Restricted Payments
during the applicable Fiscal Year as of the
Calculation Date $________
B. A.M. Best rating of Life Reassurance as of
the Calculation Date ________
C. Total Capital
1. Statutory Surplus of Life Reassurance $________
2. Statutory Surplus of TexasRe (excluding the
Statutory Carrying Value of Life Reassurance)
to the extent such amount exceeds minimum
capital and surplus requirements of its
Department $________
3. Any cash, cash equivalents and Invested Assets
(excluding surplus debentures of TexasRe on
books of Borrower, GAAP book value of TexasRe
and investments in the Capital Trust) $________
4. Sum of Items C.1 through C.3 $________
D. Outstanding Amount of Capital Securities $________
E. Sum of Items C.4 and D $________
F. Consolidated Indebtedness of Borrower and its
Subsidiaries as of the Calculation Date. $________
[Item A.3 is not permitted to exceed Item A.2
unless (a) no Event of Default or Unmatured Event
of Default exists, (b) Item B is "A" or better and
(c) Item E is greater than Item F]
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VIII. Section 8.14 Capital Expenditures.
A. Cumulative amount of Capital Expenditures
during applicable Fiscal Year as of the
Calculation Date $__________
[Item A is not permitted to exceed
$10,000,000]