Exhibit 10.2

 

RELEASE OF GUARANTIES

AND

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS RELEASE OF GUARANTIES AND SECOND AMENDMENT TO CREDIT AGREEMENT (“this
Second Amendment”) is made and entered into as of the 28th day of June, 2004, by
and between STANCORP FINANCIAL GROUP, INC., an Oregon corporation (the
“Borrower”), and KEYBANK NATIONAL ASSOCIATION, a national banking association
(the “Bank”).

 

Recitals:

 

A. The Borrower and the Bank are parties to that certain Credit Agreement dated
as of June 30, 2003 (the “Credit Agreement”), pursuant to which, inter alia, the
Bank agreed, subject to the terms and conditions thereof, to advance the Loan
(as this and other capitalized terms used herein but not otherwise defined
herein are defined in the Credit Agreement) to the Borrower and issue Letters of
Credit at the request of the Borrower.

 

B. On the date hereof, the aggregate unpaid principal balance of the Loan is
$-0-; and the aggregate amount of the Letter of Credit Obligations is $-0-.

 

C. The Borrower has requested that the Bank agree to (i) extend the Expiry Date,
and (ii) release the Guarantors from, and cancel, the Guaranties.

 

D. Subject to the terms and conditions of this Second Amendment, the Bank has
agreed to such requests.

 

Agreements:

 

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
agreements hereinafter set forth, the Borrower and the Bank hereby agree as
follows:

 

1. Release of Guaranties. Subject to the terms and conditions of this Second
Amendment, including, without limitation, Paragraph 3, below, the Bank hereby
releases and cancels each of the Guaranties and agrees that each of SIC and SMI
shall have no further liability thereunder.

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2. Amendments to the Credit Agreement. Subject to the terms and conditions of
this Second Amendment, including, without limitation, Paragraph 3, below, the
Credit Agreement is hereby modified as follows:

 

(A) The definition of “Expiry Date” in Section 1.1 of the Credit Agreement is
amended and restated in its entirety to provide as follows:

 

“Expiry Date” means June 27, 2005.

 

(B) The definitions of “Guarantors” and “Guaranties” are deleted in their
entirety from Section 1.1 of the Credit Agreement.

 

(C) The following sentence is added, at the appropriate alphabetical position,
to Section 1.1 of the Credit Agreement as a new definition of “Material
Subsidiaries”:

 

“Material Subsidiaries” means SIC and SMI.

 

(D) Each and every reference in the Credit Agreement to “Guarantor” or
“Guarantors” shall be deemed to refer to, respectively, “Material Subsidiary” or
“Material Subsidiaries”.

 

(E) Each and every reference in the Credit Agreement to “Guaranty” or
“Guaranties” shall be deemed to be of no further force and effect.

 

3. Effective Date; Conditions Precedent. The release and cancellation of the
Guaranties set forth in Paragraph 1, above, and the modifications to the Credit
Agreement set forth in Paragraph 2, above, shall not be effective, unless and
until the date on which the Borrower has satisfied all of the following
conditions precedent (such date of effectiveness being the “Effective Date”):

 

(A) On the Effective Date and after giving effect to the releases and
modifications contained herein (i) there shall exist no Default or Event of
Default, and the President, a Senior Vice President or the Chief Financial
Officer of the Borrower shall have delivered to the Bank written confirmation
thereof dated as of the Effective Date and (ii) the representations and
warranties of the Borrower under the Credit Agreement shall have been reaffirmed
in writing as of the Effective Date, subject only to variances therefrom
acceptable to the Bank.

 

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(B) The Borrower shall have delivered to the Bank a Certificate of its Secretary
dated as of the Effective Date certifying that attached thereto is a complete
copy of resolutions adopted by the board of directors of the Borrower,
authorizing the execution, delivery and performance of this Second Amendment and
the agreements to be performed by the Borrower hereunder.

 

(C) The Borrower shall have caused SIC and SMI to enter into the Joinder on the
signature page of this Second Amendment.

 

(D) The Borrower shall have paid to the Bank, in immediately available funds, an
extension fee in the amount of Thirty-seven Thousand Five Hundred Dollars
($37,500).

 

(E) All legal matters incident to this Second Amendment and the consummation of
the transactions contemplated hereby shall be reasonably satisfactory to Squire,
Sanders & Dempsey L.L.P., Cleveland, Ohio, special counsel to the Bank (the
“Special Counsel”).

 

(F) The Bank shall have received such other certificates, opinions and
documents, in form and substance satisfactory to it, as it may reasonably
request.

 

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4. Other Loan Documents. Any reference to the Credit Agreement in the Note or
the other Loan Documents shall, from and after the Effective Date, be deemed to
refer to the Credit Agreement, as modified by this Second Amendment.

 

5. Confirmation of Debt. The Borrower hereby affirms all of its Indebtedness,
liabilities and obligations to the Bank under the Credit Agreement and the other
Loan Documents, as the same are modified hereby. The Borrower further
acknowledges and agrees that as of the Effective Date, it has no claims,
defenses or set-off rights against the Bank, and there are no claims, defenses
or set-offs to the enforcement by the Bank of the Indebtedness, liabilities and
obligations of the Borrower under the Credit Agreement, the Note or the other
Loan Documents.

 

6. No Other Modifications; Same Indebtedness. Except as expressly provided in
this Second Amendment, all of the terms and conditions of the Credit Agreement,
the Note and the other Loan Documents remain unchanged and in full force and
effect. The modifications effected by this Second Amendment and by any other
instruments contemplated hereby shall not be deemed to provide for or effect a
repayment and re-advance of any portion of any Loan or Letter of Credit now
outstanding, it being the intention of the Borrower and the Bank hereby that the
Indebtedness owing under the Credit Agreement, as amended by this Second
Amendment, be and hereby is the same Indebtedness as that owing under the Credit
Agreement immediately prior to the effectiveness hereof.

 

7. Reimbursement of Bank’s Expenses. The Borrower shall reimburse the Bank
promptly for costs and expenses incurred by the Bank in connection with this
Second Amendment, including the fees and expenses of the Special Counsel.

 

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8. Governing Law; Binding Effect. This Second Amendment shall be governed by and
construed in accordance with the laws of the State of Ohio and shall be binding
upon and inure to the benefit of the Borrower, the Bank and their respective
successors and assigns.

 

[No additional provisions are on this page; the page next following is the
signature page.]

 

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IN WITNESS WHEREOF the Bank and the Borrower have hereunto set their hands as of
the date first above written.

 

STANCORP FINANCIAL GROUP, INC.

By

 

/s/    CINDY J. MCPIKE

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Cindy J. McPike, Vice President

and Chief Financial Officer

KEYBANK NATIONAL ASSOCIATION

By

 

/s/    MARY K. YOUNG

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Mary K. Young, Vice President

and Portfolio Manager

 

Joinder

 

The undersigned Standard Insurance Company and StanCorp Mortgage Investors, LLC
herby join in the foregoing Second Amendment as of the date first above written
to acknowledge and accept the release and cancellation of their respective
Guaranties.

 

STANDARD INSURANCE COMPANY

     

STANCORP MORTGAGE INVESTORS, LLC

By

 

/s/    ERIC E. PARSONS

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By

 

/s/    ERIC E. PARSONS

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Eric E. Parsons, President

and Chief Executive Officer

         

Eric E. Parsons, President

and Chief Executive Officer

 

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