EXHIBIT 10.8.7
Arthur J. Gallagher & Co. and AJG Financial Services, Inc.
Seventh Amendment to Credit Agreement
Harris Trust and Savings Bank Citibank, N.A.
Chicago, Illinois New York, New York
Bank of America, N.A. LaSalle Bank National Association
Chicago, Illinois Chicago, Illinois
The Northern Trust Company
Chicago, Illinois
Ladies and Gentlemen:
This Seventh Amendment to Credit Agreement dated as of August 9, 2002 but
effective as of June 30, 2002 (herein, the "Amendment"), is entered into by and
between the undersigned, Arthur J. Gallagher & Co, a Delaware corporation
("Gallagher"), AJG Financial Services, Inc., a Delaware corporation ("AJG";
Gallagher and AJG being referred to herein collectively as the "Borrowers" and
individually as a "Borrower"), Citibank, N.A., Bank of America, N.A., LaSalle
Bank National Association, The Northern Trust Company and Harris Trust and
Savings Bank, individually and as Agent (the "Agent"). Reference is hereby made
to that certain Credit Agreement dated as of September 11, 2000, as amended,
between the Borrowers, the Banks and the Agent (the "Credit Agreement"). All
capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Credit Agreement.
The Borrowers desire to modify certain financial covenants and make certain
other amendments to the Credit Agreement, and the Banks are willing to do so
under the terms and conditions set forth in this Amendment.
Section 1. Amendments.
Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended (effective
as of June 30, 2002) as follows:
1.1. Section 6.1 of the Credit Agreement shall be amended by inserting
the following new definition in the appropriate alphabetical order:
""Avia Cargo" means Avia Cargo LLC, an Irish limited liability
company."
1.2. The last sentence of Section 9.5 of the Credit Agreement shall be
amended and restated in its entirety to read as follows:
"Such Compliance Certificate shall also (i) set forth the calculations
supporting such statements in respect of Sections 9.7, 9.8, 9.9 and
9.12 of this Agreement and (ii) contain a "deconsolidating" balance
sheet and income statement (in a form reasonably acceptable to the
Agent) detailing the impact on Gallagher of removing the equity
investments in Birchwood, Two Pierce and Avia Cargo from the
consolidated financial statements of Gallagher as of the applicable
compliance reporting date and also detailing the net effect of such
removal on the calculation of the financial covenants set forth in
Sections 9.7, 9.8 and 9.9 hereof."
1.3. The second sentence of Section 9.8 of the Credit Agreement shall
be amended and restated in its entirety to read as follows:
"For purposes of determining Gallagher's compliance with this Section,
Funded Debt shall be deemed to exclude any Indebtedness for Borrowed
Money which is not a legal obligation of Gallagher and which is
associated with Gallagher's equity investments in Birchwood, Two
Pierce or Avia Cargo as shown on Gallagher's most recent quarterly
financial statements."
1.4. The second sentence of Section 9.9 of the Credit Agreement shall
be amended and restated in its entirety to read as follows:
"For purposes of determining Gallagher's compliance with this Section,
the figures used to calculate the Fixed Charge Coverage Ratio will be
adjusted to exclude from EBITDAR, Capital Expenditures, Restricted
Payments, or Indebtedness for Borrowed Money, as appropriate, any
portion of those respective consolidated totals which are associated
with Birchwood, Two Pierce or Avia Cargo, provided that the
Indebtedness for Borrowed Money associated with Gallagher's
investments in Birchwood, Two Pierce and Avia Cargo and which is part
of this consolidation is not a legal obligation of Gallagher."
1.5. Section 9.10(c) of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
" (c) Indebtedness for Borrowed Money which is not a legal
obligation of Gallagher and which is associated with Gallagher's
equity investments in Birchwood, Two Pierce and Avia Cargo as shown on
Gallagher's most recent quarterly financial statements; and"
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Section 2. Conditions Precedent.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
2.1. The Borrowers and the Required Banks shall have executed and
delivered this Amendment.
2.2. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Agent and its counsel.
Section 3. Representations.
In order to induce the Agent and the Banks to execute and deliver this
Amendment, the Borrowers hereby represent to the Agent and the Banks that as of
the date hereof the representations and warranties set forth in Section 7 of the
Credit Agreement are and shall be and remain true and correct (except that the
representations contained in Section 7.5 shall be deemed to refer to the most
recent financial statements of the Borrowers delivered to the Agent and the
Banks) and the Borrowers are in compliance with the terms and conditions of the
Credit Agreement and no Default or Event of Default has occurred and is
continuing under the Credit Agreement or shall result after giving effect to
this Amendment.
Section 4. Miscellaneous.
4.1. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.
4.2. The Borrowers agree to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation, execution
and delivery of this Amendment, including the fees and expenses of counsel for
the Agent.
4.3. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
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This Seventh Amendment to Credit Agreement is entered into as of the
date and year first above written.
Arthur J. Gallagher & Co.
By /s/ Jack H. Lazzaro
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Name: Jack H. Lazzaro
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Title: Vice President - Treasurer
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AJG Financial Services, Inc.
By /s/ Jack H. Lazzaro
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Name: Jack H. Lazzaro
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Title: CFO
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Accepted and agreed to.
Harris Trust and Savings Bank,
individually and as Agent
By /s/ Len E. Meyer
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Name Len E. Meyer
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Title Vice President
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Citibank, N.A.
By /s/ Peter C. Bickford
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Name Peter C. Bickford
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Title Vice President
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Bank of America, N.A.
By /s/ Mehul D. Mehta
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Name Mehul D. Mehta
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Title Principal
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LaSalle Bank National Association
By /s/ Kyle Freimuth
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Name Kyle Freimuth
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Title Vice President
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The Northern Trust Company
By /s/ Eric Dybing
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Name Eric Dybing
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Title Second Vice President
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