Exhibit 10.8.2

 

ARTHUR J. GALLAGHER & CO.

SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT

 

Harris Trust and Savings Bank

Chicago, Illinois

 

Citibank, N.A.

New York, New York

Bank of America, N.A.

Chicago, Illinois

 

LaSalle Bank National Association

Chicago, Illinois

Barclays Bank Plc

Chicago, Illinois

 

Union Bank of California, N.A.

Los Angeles, California

U.S. Bank National Association

Milwaukee, Wisconsin

 

Fifth Third Bank (Chicago)

Rolling Meadows, Illinois

Comerica Bank

Detroit, Michigan

 

PNC Bank

Pittsburgh, Pennsylvania

 

Ladies and Gentlemen:

 

This Second Amendment and Waiver to Credit Agreement dated as of March 4, 2005
(herein, the “Amendment”) is entered into by and between the undersigned, Arthur
J. Gallagher & Co., a Delaware corporation (the “Borrower”), the Banks and the
Agent. Reference is hereby made to that certain Credit Agreement dated as of
July 21, 2003 (said Credit Agreement, as amended prior to the date hereof, being
referred to herein as the “Credit Agreement”) between the Borrower, Citibank,
N.A., Bank of America, N.A., LaSalle Bank National Association, Barclays Bank
Plc, Union Bank of California, N.A., U.S. Bank National Association, Fifth Third
Bank (Chicago), Comerica Bank, PNC Bank and Harris Trust and Savings Bank,
individually and as Agent. All capitalized terms used herein without definition
shall have the same meanings herein as such terms have in the Credit Agreement.

 

The Borrower has requested that the Banks amend certain representations
contained in the Credit Agreement and waive certain potential Defaults or Events
of Default arising by reason of the Utah Verdict and the Related Accounting
Treatment (each as hereinafter defined), 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 3
below, the Credit Agreement shall be and hereby is amended as follows:

 

1.1. The definition of the term “L/C Commitment” appearing in Section 6.1 of the
Credit Agreement shall be amended and restated in its entirety to read as
follows:

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““L/C Commitment” means $125,000,000, as such amount may be reduced pursuant to
the terms hereof.”

 

1.2. Section 7.6 of the Credit Agreement shall be amended and restated in its
entirety to read as follows:

 

“Section 7.6. No Material Adverse Change. Since December 31, 2004, except as
previously disclosed in the Borrower’s Form 8-K filed with the SEC on February
14, 2005, there has been no change in the condition (financial or otherwise) or
business prospects of the Borrower and its Subsidiaries taken as a whole which
could reasonably be expected to have a Material Adverse Effect.”

 

1.3. Section 7.9 of the Credit Agreement shall be amended and restated in its
entirety to read as follows:

 

“Section 7.9. Litigation and Other Controversies Except as otherwise disclosed
in (i) the Borrower’s financial statements heretofore delivered to the Agent and
(ii) the Borrower’s Form 8-K filed with the SEC on February 14, 2005, there is
no litigation or governmental proceeding or labor controversy pending, nor to
the knowledge of the Borrower threatened, against the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.”

 

SECTION 2. WAIVERS.

 

On February 11, 2005, a jury in the Fourth District Court for the State of Utah
rendered a verdict against AJG Financial Services, Inc. (“AJGFS”), a Material
Wholly-Owned Subsidiary of the Borrower, in favor of Headwaters Incorporated in
the approximate amount of $175,000,000 (the “Utah Verdict”) and, in connection
with the Utah Verdict, it is possible that AJGFS will take a deduction from its
pre-tax net income in the first quarter of the 2005 fiscal year of a like amount
(the “Related Accounting Treatment”).

 

In connection with the Utah Verdict and the Related Accounting Treatment, the
Borrower has requested that the Banks waive any existing or potential Defaults
or Events of Default under the second sentence of Section 9.17 of the Credit
Agreement, Section 10.1(c) of the Credit Agreement and Section 10.1(h) of the
Credit Agreement, in each case, arising by reason of the Utah Verdict, the
judgment entered on the Utah Verdict or the Related Accounting Treatment
(collectively, the “Utah Defaults”).

 

Accordingly, upon the satisfaction of the conditions precedent set forth in
Section 3 below, the Banks hereby waive the Utah Defaults. This waiver shall be
limited specifically to the matters stated herein and it shall not constitute a
waiver of the application of any other term, provision, or condition of the
Credit Agreement.

 

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SECTION 3. CONDITIONS PRECEDENT.

 

The effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:

 

3.1. The Borrower and the Banks shall have executed and delivered this
Amendment.

 

3.2. The Borrower shall have paid to the Agent, for the account of the Banks, an
amendment fee in the amount of $187,500.

 

SECTION 4. REPRESENTATIONS.

 

In order to induce the Agent and the Banks to execute and deliver this
Amendment, the Borrower hereby represents 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 (as amended hereby) 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 Borrower
delivered to the Agent and the Banks) and the Borrower is in compliance with the
terms and conditions of the Credit Agreement and no Default or Event of Default
(other than the Utah Defaults, if any) has occurred and is continuing under the
Credit Agreement or shall result after giving effect to this Amendment.

 

SECTION 5. MISCELLANEOUS.

 

5.1. 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.

 

5.2. The Borrower agrees 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.

 

5.3. 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 Amendment 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 Title:   Vice President Treasurer

 

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Accepted and agreed to.

 

HARRIS TRUST AND SAVINGS BANK,

individually and as Agent

By  

/s/ Peter F. Stack

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Name:   Peter F. Stack Title:   Director CITIBANK, N.A. By  

/s/ Christopher J. Soltis

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Name:   Christopher J. Soltis Title:   Director LASALLE BANK NATIONAL
ASSOCIATION By  

/s/ Siamak Saidi

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Name:   Siamak Saidi Title:   Commercial Banking Officer BANK OF AMERICA, N.A.
By  

/s/ Debra Basler

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Name:   Debra Basier Title:   Senior Vice President BARCLAYS BANK PLC By  

/s/ Rory M. Merchant

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Name:   Rory M. Merchant Title:   Relationship Director

 

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UNION BANK OF CALIFORNIA, N.A. By  

/s/ Christine Davis

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Name:   Christine Davis Title:   Vice President U.S. BANK NATIONAL ASSOCIATION
By  

/s/ James DeVries

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Name:   James DeVries Title:   Senior Vice President FIFTH THIRD BANK (CHICAGO),
a Michigan Banking Corporation By  

/s/ Kim Puszczewicz

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Name:   Kim Puszczewicz Title:   Assistant Vice President COMERICA BANK By  

/s/ Felicia M. Maxwell

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Name:   Felicia M. Maxwell Title:   Vice President PNC BANK By  

/s/ Edward J. Chidiac

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Name:   Edward J. Chidiac Title:   Managing Director

 

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