Exhibit 10.16
SECOND AMENDMENT
dated as of July 26, 2002
to
$1,000,000,000
CREDIT AGREEMENT
dated as of
August 3, 2000, as amended,
among
Xxxx Xxxxxxx Financial Services, Inc.
Xxxx Xxxxxxx Life Insurance Company,
The Banks Listed Herein,
Fleet National Bank,
as Co-Administrative Agent,
JPMorgan Chase Bank,
as Co-Administrative Agent,
Citicorp USA, Inc.,
as Syndication Agent,
The Bank of New York,
as Co-Documentation Agent (364-Day Revolver),
and
The Bank of Nova Scotia,
as Co-Documentation Agent (364-Day Revolver)
Fleet Securities, Inc.,
and
X.X. Xxxxxx Securities Inc.
as
Joint Bookrunners and Joint Lead Arrangers
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT TO CREDIT AGREEMENT ("Second Amendment") dated as
of July 26, 2002, among XXXX XXXXXXX FINANCIAL SERVICES, INC. ("JHFS"), XXXX
XXXXXXX LIFE INSURANCE COMPANY ("JHLIC" and, collectively with JHFS, the
"Borrowers"), the BANKS listed on the signature pages hereof, FLEET NATIONAL
BANK, as co-administrative agent, and JPMORGAN CHASE BANK (f/k/a The Chase
Manhattan Bank), as co-administrative agent.
WHEREAS, the Borrowers, Xxxx Xxxxxxx Capital Corporation ("JHCC"),
the Banks, and the Agent entered into to a Credit Agreement dated as of August
3, 2000 ("Original Credit Agreement") pursuant to which the Banks agreed, on the
terms and conditions stated therein, to extend credit to the Borrowers and JHCC
pursuant to a 364-Day Revolving Credit Facility ("364-Day Revolver") and a
Multi-Year Revolving Credit Facility ("Multi-Year Revolver");
WHEREAS, the Borrowers, the Banks, and the Agent entered into a
First Amendment to Credit Agreement dated as of July 27, 2001 ("First
Amendment") pursuant to which the parties made certain amendments to the
Original Credit Agreement (as so amended, the "First Amended Credit Agreement")
so as, among other things, (i) to acknowledge the termination of JHCC as a
Borrower thereunder, (ii) to renew the 364-Day Revolver for an additional
364-day period commencing on the date of the First Amendment, (iii) to
reallocate the 364-Day Commitment of BankOne, NA (Main Office Chicago), (iv) to
clarify the Borrowers' reporting obligations concerning their financial
covenants, and (v) to eliminate commercial paper ratings as a basis for
determining pricing with respect to the 364-Day Revolver;
WHEREAS, the Borrowers have requested that the Banks make certain
further amendments to the First Amended Credit Agreement so as, among other
things, (i) to renew the 364-Day Revolver for an additional 364-day period
commencing on the date of the Second Amendment, (ii) to amend the pricing for
the 364-Day Revolver to include a premium of 15 basis points in the event the
Borrowers exercise the one-year term-out option thereunder, (iii) to eliminate
the Adjusted Statutory Surplus covenant and JHLIC's reporting obligations with
respect thereto and to amend the remaining financial covenants applicable to
both the 364-Day Revolver and the Multi-Year Revolver, (iv) to amend the
conditions for optional increases in the aggregate Commitments under the 364-Day
Revolver or the Multi-Year Revolver, and (v) to reallocate the 364-Day
Commitments of Xxxxxx Commercial Paper, Inc., The Northern Trust Company, and
Westdeutsche Landesbank Gerozentrale, New York Branch (each an "Exiting Bank"
and, collectively, the "Exiting Banks"); and
WHEREAS, the Banks are willing to make such amendments on the terms
and conditions set forth in this Second Amendment;
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NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized terms used but not defined herein shall
have the same meanings herein as such terms have in the First Amended Credit
Agreement.
2. Amendments to First Amended Credit Agreement. Upon the terms and
subject to the conditions of this Second Amendment, the First Amended Credit
Agreement is hereby amended in each of the following respects:
(a) The definition of "Expiration" in Section 1.01 of the First
Amended Credit Agreement is amended to read in its entirety as follows:
""Expiration" means, with respect to the 364-Day Revolver, the
364th day after the Second Amendment Effective Date or, if extended in
accordance with Section 2.06(b), the 364th day after the immediately
preceding Expiration."
(b) The definition of "364-Day Termination Date" in Section 1.01 of
the First Amended Credit Agreement is amended to read in its entirety as
follows:
""364-Day Termination Date" means the 364th day after the
Second Amendment Effective Date, or if the maturity of the 364-Day
Revolver shall have been extended pursuant to Section 2.06(b) hereof, the
364th day after the immediately preceding Expiration."
(c) The definition of "Permitted Collateralization Obligation" in
Section 1.01 of the First Amended Credit Agreement is amended to read in
its entirety as follows:
""Permitted Collateralization Obligation" means any obligation
relating to REMICs, pass-through obligations, collateralized mortgage
obligations, collateralized bond obligations or similar instruments,
except an obligation of JHFS, JHLIC or any Subsidiary (excluding any
Subsidiary that is the issuer of the REMIC, pass-through obligation,
collateralized mortgage obligation, collateralized bond obligation or
similar instrument) to the extent that such obligation requires a cash
payment by JHFS, JHLIC or such Subsidiary, recourse for the payment of
which is not limited to specific assets of JHFS, JHLIC or such Subsidiary
(excluding any obligation of JHFS, JHLIC or such Subsidiary (i) to make
advances in connection with the servicing of such REMIC, pass-through
obligation, collateralized mortgage obligation, collateralized bond
obligation or similar instrument, (ii) to repurchase collateral, or (iii)
to provide indemnification for certain liabilities arising from
misrepresentations in and omissions of material facts from offering
materials for such obligations so long as claims for such
misrepresentations or omissions remain inchoate and unasserted)."
(d) Section 1.01 of the First Amended Credit Agreement is amended by
inserting the following new definitions:
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""Second Amendment" means the Second Amendment to Credit
Agreement dated as of July 26, 2002."
""Second Amendment Effective Date" means the date on which the
Second Amendment becomes effective in accordance with Section 5 thereof."
(e) The last sentence of Section 2.06(a) of the First Amended Credit
Agreement is amended to read in its entirety as follows:
"If the Borrowers choose the first anniversary of the last
Expiration of the 364-Day Revolver as the Final Maturity Date, (x) no
additional Borrowings shall be permitted under the 364-Day Revolver
between such Expiration and the Final Maturity Date, and (y) with respect
to all principal amounts outstanding under the 364-Day Revolver, the
applicable interest rate shall be determined as otherwise provided herein
plus a premium of 15 basis points until the earlier of payment in full or
the Final Maturity Date."
(f) Section 2.09A(c)(iii) of the First Amended Credit Agreement is
amended to read in its entirety as follows:
"(iii) on the Increased Commitment Date, JHFS's senior
unsecured long-term debt ratings from S&P and Xxxxx'x are at least A and
A3, respectively, and JHLIC's financial strength ratings from S&P and
Xxxxx'x are at least AA and Aa3, respectively."
(g) Section 5.01(e) of the First Amended Credit Agreement is deleted
in its entirety.
(h) Section 5.08 of the First Amended Credit Agreement is deleted in
its entirety.
(i) Section 5.08A of the First Amended Credit Agreement is amended
to read in its entirety as follows:
"SECTION 5.08A. Shareholders' Equity. JHFS will not, at any
time, permit GAAP total shareholders' equity as would be or is shown on
JHFS' consolidated balance sheet as of such time prepared in accordance
with GAAP (after excluding unrealized appreciation and depreciation on
certain investments pursuant to FAS 115) to be less than $4,000,000,000."
(j) Section 5.09 of the First Amended Credit Agreement is amended to
read in its entirety as follows:
"SECTION 5.09. Capitalization Ratio. JHFS will not, at any
time, permit the ratio of (a) total GAAP short- and long-term debt to (b)
GAAP total shareholders'
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equity (after excluding unrealized appreciation and depreciation on
certain investments pursuant to FAS 115) plus total GAAP short- and
long-term debt, in each case as would be or is shown on JHFS' consolidated
balance sheet as of such time prepared in accordance with GAAP, to be
greater than 0.40:1:00; provided, that for purposes of calculating total
GAAP short- and long-term debt, the following shall not be included: (w)
obligations for which recourse for payment is limited to specified assets
of such Person, (x) Permitted Collateralization Obligations, (y)
obligations of a Person which is an insurance company (1) which arise in
connection with policies or contracts of insurance, funding agreements and
other similar contracts entered into in the ordinary conduct of such
Person's insurance business or (2) to the extent that recourse for the
payment of such obligations is limited to assets held in separate accounts
of such Person, and (z) obligations issued under the Xxxx Xxxxxxx Life
Insurance Company SignatureNotes(sm) program as from time to time in
effect."
(k) Exhibit L to the First Amended Credit Agreement is amended to
read in its entirety as set forth in Exhibit L attached hereto.
3. Amendments to 364-Day Revolver Notes. Each of the 364-Day Revolver
Notes (other than the Exiting Bank Notes (as defined below)) is amended by
changing the date at the top of such note to the date of the Second Amendment
Effective Date.
4. Amendments to 364-Day Commitments. The 364-Day Commitment of each
Exiting Bank under the 364-Day Revolver is hereby terminated as of the Second
Amendment Effective Date, and each Exiting Bank is hereby released from its
obligations under the First Amended Credit Agreement with respect to the 364-Day
Revolver (but not with respect to the Multi-Year Revolver) as of the Second
Amendment Effective Date. From and after the Second Amendment Effective Date,
the 364-Day Commitments shall be allocated among the Banks as reflected on the
signature pages hereof under the heading "364-Day Commitments."
5. Conditions Precedent. The amendments and agreements set forth in
Sections 2, 3, and 4 above shall become effective only upon the satisfaction of
the following conditions:
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation
from such party of the execution and delivery of a counterpart hereof by
such party);
(b) receipt by the Agent of each Exiting Bank's 364-Day Revolver
Notes (the "Exiting Bank Notes") for cancellation, and receipt by the
Borrowers of the Exiting Bank Notes marked "Canceled" by the Agent;
provided, that if any Exiting Bank shall be unable to produce one or more
of its original Notes for cancellation, such Exiting Bank shall have
delivered, and the Agent and Borrowers shall have received, an affidavit
of an officer of such Exiting Bank as to the loss, theft, destruction or
mutilation of such Note(s) and certifying that such Note(s) are satisfied
in full and are to be canceled by the Agent,
-4-
and such Exiting Bank's unsecured agreement of indemnity concerning any
claim under such canceled Note(s);
(c) the fact that all amounts payable by the Borrowers on or before
the Second Amendment Effective Date (including the fees then payable, if
any, pursuant to Section 2.08 of the First Amended Credit Agreement) shall
have been paid in full;
(d) receipt by the Agent of an opinion of Xxxx X. Xxxxxxxx, Vice
President and Counsel of JHLIC, addressed to the Agent and the Banks, in
form and substance satisfactory to the Agent;
(e) receipt by the Agent of an opinion of Goulston & Storrs, P.C.,
special counsel for the Agent, addressed to the Agent and the Banks, in
form and substance satisfactory to the Agent; and
(f) receipt by the Agent of all documents it may reasonably request
relating to the existence of each Borrower, the corporate authority for
and the validity of this Second Amendment, and any other matters relevant
hereto, all in form and substance satisfactory to the Agent;
provided that this Second Amendment shall not become effective or be binding on
any party hereto unless all of the foregoing conditions are satisfied not later
than July 26, 2002. At the closing, the Agent or its counsel shall deliver a
notice to the Borrowers and the Banks advising them of the Second Amendment
Effective Date, and such notice shall be conclusive and binding on all parties
hereto.
6. Representations and Warranties. Each Borrower severally represents and
warrants, but only with respect to itself, that:
(a) Representations in First Amended Credit Agreement. Each of the
representations and warranties made by such Borrower in the First Amended
Credit Agreement is true, correct and complete on and as of the date
hereof with the same full force and effect as if each of such
representations and warranties had been made by the Borrower on the date
hereof and in this Second Amendment (except to the extent such
representations and warranties expressly relate to an earlier date).
(b) No Defaults or Events of Default. No Default or Event of Default
exists on the date of this Second Amendment (after giving effect to all of
the arrangements and transactions contemplated by this Second Amendment).
(c) Binding Effect of Documents. This Second Amendment has been duly
authorized, executed and delivered by such Borrower and is in full force
and effect as of the date hereof, and the agreements and obligations of
such Borrower contained herein constitute the legal, valid, and binding
obligations of such Borrower enforceable against such Borrower in
accordance with its terms.
-5-
7. Miscellaneous. This Second Amendment may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which together shall constitute one instrument. In making
proof of this Second Amendment, it shall not be necessary to produce or account
for more than one counterpart thereof signed by each of the parties hereto.
Except to the extent specifically amended and supplemented hereby, all of the
terms, conditions and provisions of the First Amended Credit Agreement and the
Notes shall remain unmodified, and the First Amended Credit Agreement and the
Notes, as amended and supplemented by this Second Amendment, are confirmed as
being in full force and effect, and each Borrower hereby ratifies and confirms
all of its agreements and obligations contained therein. This Second Amendment
and the rights and obligations of each of the parties hereto shall be governed
by and interpreted in accordance with the laws of the Commonwealth of
Massachusetts without regard to conflicts of laws principles. This Second
Amendment shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors in title and assigns.
[Signatures begin on next page]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed by their respective authorized officers as of the day and
year first above written.
XXXX XXXXXXX FINANCIAL SERVICES, XXXX XXXXXXX LIFE INSURANCE
INC. COMPANY
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------ ------------------------------
Title: Vice President and Treasurer Title: Vice President and Treasurer
------------------------------ ------------------------------
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
------------------------------ ------------------------------
Title: Assistant Treasurer Title: Assistant Treasurer
------------------------------ ------------------------------
000 Xxxxxxxxx Xxxxxx, T-58 000 Xxxxxxxxx Xxxxxx, X-00
Xxxxxx, Xxxxxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer Attention: Treasurer
Fax: (000) 000-0000 Fax: (000) 000-0000
Telex number: 62021772 Telex number: 62021772
with a copy to: with a copy to:
Xxxx Xxxxxxx Financial Services, Inc. Xxxx Xxxxxxx Financial Services, Inc.
000 Xxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Investment Law Attention: Investment Law
Fax: (000) 000-0000 Fax: (000) 000-0000
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364-Day Multi-Year
Commitments Commitments
----------- -----------
$32,250,000 $80,000,000 FLEET NATIONAL BANK
("Co-Administrative Agent")
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Title: Managing Director
-------------------------
$32,250,000 $40,000,000 JPMORGAN CHASE BANK
("Co-Administrative Agent")
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------
Title: Vice President
-------------------------
$32,000,000 $40,000,000 CITICORP USA, INC.
("Syndication Agent")
By: /s/ Xxxxx X. Dodge
----------------------------
Title: Managing Director
-------------------------
$32,000,000 $30,312,500 THE BANK OF NOVA SCOTIA
("Co-Documentation Agent" -
364-Day)
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Title: Managing Director
-------------------------
$32,000,000 $10,000,000 THE BANK OF NEW YORK
("Co-Documentation Agent" -
364-Day)
By: /s/ Xxxx Xxxxxxx
----------------------------
Title: Vice President
-------------------------
$28,000,000 $30,312,500 BARCLAYS BANK PLC
By: /s/ Xxxxxx X. XxXxxxxx
----------------------------
Title: Associate Director
-------------------------
364-Day Multi-Year
Commitments Commitments
----------- -----------
$28,000,000 $30,312,500 BNP PARIBAS
By: /s/ Xxxx Xxxxxxxxx
----------------------------
Title: Director
-------------------------
By: /s/ Laurent Vanderzyppe
----------------------------
Title: Director
-------------------------
$28,000,000 $30,312,500 CREDIT SUISSE FIRST BOSTON
By: /s/ Xxx Xxxxx
----------------------------
Title: Director
-------------------------
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------
Title: Vice President
-------------------------
$28,000,000 $30,312,500 DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND BRANCHES
By: /s/ Xxxx X. XxXxxx
----------------------------
Title: Director
-------------------------
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Title: Managing Director
-------------------------
$28,000,000 $30,312,500 ROYAL BANK OF CANADA
By: /s/ Xxxxxxxxx Xxxx
----------------------------
Title: Senior Manager
-------------------------
364-Day Multi-Year
Commitments Commitments
----------- -----------
$28,000,000 $30,312,500 WACHOVIA BANK, N.A.
By: /s/ Xxxxx X. Black
----------------------------
Title: Director
-------------------------
$24,500,000 $30,312,500 COMERICA BANK
By: /s/ Xxxxxx X. Xxxx
----------------------------
Title: Account Officer
-------------------------
$24,500,000 $22,500,000 STATE STREET BANK AND
TRUST COMPANY
By: /s/ Xxxx Xxxx Xxxxxxxxx
----------------------------
Title: Vice President
-------------------------
$0 $22,500,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Xxxxxxx Xxxx Xxx
----------------------------
Title: Executive Director
-------------------------
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Title: Director
-------------------------
$24,500,000 $22,500,000 BANK OF AMERICA, N.A.
By: /s/ Xxxxx X. Xxxxx
----------------------------
Title: Principal
-------------------------
364-Day Multi-Year
Commitments Commitments
----------- -----------
$0 $20,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxx Xxxxx
----------------------------
Title: Vice President
-------------------------
$24,500,000 $0 ABN AMRO BANK N.V.
By: /s/ Xxxx X. Xxxxx
----------------------------
Title: Vice President
-------------------------
By: /s/ Xxxxxxx XxXxxxx
----------------------------
Title: Corporate Banking Officer
-------------------------
$0 $0 XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------
Title: Authorized Signatory
-------------------------
$24,500,000 $0 XXXXXX BROTHERS BANK, FSB
By: /s/ Xxxx Xxxxxx
----------------------------
Title: Vice President
-------------------------
$24,500,000 $0 XXXXXX XXXXXXX BANK
By: /s/ Jaap L. Tonckens
----------------------------
Title: Vice President
-------------------------
364-Day Multi-Year
Commitments Commitments
----------- -----------
$24,500,000 $0 HSBC BANK USA
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------
Title: Head of Insurance
-------------------------
---------------- ----------------
Total 364-Day Total Multi-Year
Commitments Commitments
$500,000,000 $500,000,000
FLEET NATIONAL BANK, as Agent
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Title: Managing Director, Financial Institutions
Division
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
JPMORGAN CHASE BANK, as Agent
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Title: Vice President
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
EXHIBIT L
Senior Unsecured Long Term Debt Ratings - 364-Day Revolver
--------------------------------------------------------------------------------------------------------------------------
Applicable Drawn Cost Applicable
S & P or Xxxxx'x Facility Euro-Dollar (=<50% usage) Usage All-In
Rating Level Rating Fee (bps.) Margin (bps.) (bps.) Fee (bps.) Drawn Cost
--------------------------------------------------------------------------------------------------------------------------
I =>AAA/=>Aaa 4.0 13.5 17.5 5.0 22.5
--------------------------------------------------------------------------------------------------------------------------
II =>AA-/=>Aa3 5.0 15.0 20.0 5.0 25.0
--------------------------------------------------------------------------------------------------------------------------
III =>A+/=>A1 6.0 19.0 25.0 5.0 30.0
--------------------------------------------------------------------------------------------------------------------------
IV AAA/=>Aaa 6.0 11.5 17.5 5.0 22.5
--------------------------------------------------------------------------------------------------------------------------
II =>AA-/=>Aa3 7.0 13.0 20.0 5.0 25.0
--------------------------------------------------------------------------------------------------------------------------
III =>A+/=>A1 8.0 17.0 25.0 5.0 30.0
--------------------------------------------------------------------------------------------------------------------------
IV
