Form 8-K
Marsh & McLennan Co Inc
23 November 2004
Date: November 22, 2004
Notification of filing of Current Report on Form 8-K
Please be advised that Marsh & McLennan Companies, Inc. (MMC) filed a Current
Report on Form 8-K with the Securities and Exchange Commission today. A copy of
the 8-K is set out below.
Jean McConney
Corporate Counsel
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) November 17, 2004
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Marsh & McLennan Companies, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-5998 36-2668272
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1166 Avenue of the Americas, New York, NY 10036
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 345-5000
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
(_) Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
(_) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
(_) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
(_) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Section 1--Registrant's Business and Operations
Item 1.01. Entry into a Material Definitive Agreement.
On November 17, 2004, Marsh & McLennan Companies, Inc. ('MMC') entered into a
commitment letter with Citibank, N.A., Bank of America, N.A. and Deutsche Bank
AG New York Branch and certain of their affiliates (the 'Arranging Banks') with
respect to a new $1 billion term loan facility (the 'Term Loan Facility') and
the amendment of $1.7 billion of existing revolving facilities (the 'Revolving
Facilities' and together with the Term Loan Facility, the 'Facilities'). The
Term Loan Facility would replace MMC's existing $700 million and $355 million
revolving credit facilities which are due to expire in 2005. The Arranging Banks
have committed an aggregate of $525 million to the Term Loan Facility with the
balance to be raised in the syndicated bank loan market. The commitment letter
is subject to certain customary conditions including satisfactory completion of
documentation, due diligence and syndication.
The Term Loan Facility will mature December 31, 2006, $1 billion of the amended
Revolving Facilities will mature June 13, 2007 and $700 million of the amended
Revolving Facilities will mature June 9, 2009. The Facilities will be
unconditionally guaranteed by Marsh Inc., Putnam Investments Trust and Mercer
Inc.
MMC expects that the closing of the Facilities will occur in mid-December. While
MMC knows of no reason why it will not be able to achieve this goal, there can
be no assurance.
The foregoing brief summary of the commitment letter is qualified in its
entirety by reference to the commitment letter, a copy of which is filed
herewith.
Section 9--Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
10.1 Commitment Letter dated as of November 17, 2004 among MMC,
Citibank, N.A., Bank of America, N.A. and Deutsche Bank AG
New York Branch and certain of their affiliates.
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INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Marsh & McLennan Companies, Inc. and its subsidiaries ('MMC') and their
representatives may from time to time make verbal or written statements
(including certain statements contained in this report and other MMC filings
with the Securities and Exchange Commission and in our reports to stockholders)
relating to future results, which are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Such statements
may include, without limitation, discussions concerning revenues, expenses,
earnings, cash flow, elimination of market service agreements ('MSA'), capital
structure, existing credit facilities, access to commercial paper markets,
pension funding, the adverse consequences arising from market-timing issues at
Putnam, including fines and restitution, the matters raised in the complaint
filed by the New York State Attorney General's Office stating a claim for, among
other things, fraud and violations of New York State antitrust and securities
laws, as well as market and industry conditions, premium rates, financial
markets, interest rates, foreign exchange rates, contingencies, and matters
relating to MMC's operations and income taxes. Such forward-looking statements
are based on available current market and industry materials, experts' reports
and opinions, and long-term trends, as well as management's expectations
concerning future events impacting MMC. Forward-looking statements by their very
nature involve risks and uncertainties. Factors that may cause actual results to
differ materially from those contemplated by any forward-looking statements
contained herein include, in the case of MMC's risk and insurance services
business, changes in competitive conditions, the impact of litigation and other
matters concerning the claims brought by the New York State Attorney General's
Office and state insurance regulators, loss of clients, inability to collect
previously accrued MSA revenue, movements in premium rate levels, the conditions
for the transfer of commercial risk and other changes in the global property and
casualty insurance markets, natural catastrophes, mergers between client
organizations, and insurance or reinsurance company insolvencies. Factors to be
considered in the case of MMC's investment management business include changes
in worldwide and national equity and fixed income markets, actual and relative
investment performance, the level of sales and redemptions, and the ability to
maintain investment management and administrative fees at historic levels; and
with respect to all of MMC's activities, the ability to amend or replace MMC's
existing credit facilities to provide long term support for commercial paper
borrowings following the claims brought by the New York State Attorney General,
the continued strength of MMC's relationships with its employees and clients,
the ability to successfully integrate acquired businesses and realize expected
synergies, changes in general worldwide and national economic conditions, the
impact of terrorist attacks, changes in the value of investments made in
individual companies and investment funds, fluctuations in foreign currencies,
actions of competitors or regulators, changes in interest rates or in the
ability to access financial markets, developments relating to claims, lawsuits
and contingencies, prospective and retrospective changes in the tax or
accounting treatment of MMC's operations, and the impact of tax and other
legislation and regulation in the jurisdictions in which MMC operates.
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Forward-looking statements speak only as of the date on which they are made, and
MMC undertakes no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which it is made or to reflect the
occurrence of unanticipated events. Please refer to Marsh & McLennan Companies'
2003 Annual Report on Form 10-K for 'Information Concerning Forward-Looking
Statements,' its reports on Form 8-K, and quarterly reports on Form 10-Q.
MMC is committed to providing timely and materially accurate information to the
investing public, consistent with our legal and regulatory obligations. To that
end, MMC and its operating companies use their websites to convey meaningful
information about their businesses, including the anticipated release of
quarterly financial results and the posting of updates of assets under
management at Putnam. Monthly updates of total assets under management at Putnam
will be posted to the MMC website the first business day following the end of
each month. Putnam posts mutual fund and performance data to its website
regularly. Assets for most Putnam retail mutual funds are posted approximately
two weeks after each month-end. Mutual fund net asset value (NAV) is posted
daily. Historical performance and Lipper rankings are also provided. Investors
can link to MMC and its operating company websites through www.mmc.com.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MARSH & McLENNAN COMPANIES, INC.
By: /s/ Bart Schwartz
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Name: Bart Schwartz
Title: Deputy General Counsel
Date: November 22, 2004
EXECUTION COPY
CITIGROUP GLOBAL MARKETS INC. BANC OF AMERICA DEUTSCHE BANK
CITIBANK, N.A. SECURITIES LLC SECURITIES INC.
390 Greenwich Street BANK OF AMERICA, N.A. DEUTSCHE BANK AG NEW
New York, New York 10013 214 North Tryon Street YORK BRANCH
Charlotte, North Carolina 28255 60 Wall Street
New York, New York 10005-2858
November 17, 2004
MARSH & MCLENNAN COMPANIES, INC.
1166 Avenue of the Americas
New York, NY 10036
Attention: Sandra S. Wijnberg
Senior Vice President and
Chief Financial Officer
$1.0 Billion Term Loan Facility and
$1.7 Billion Revolving Facilities
COMMITMENT LETTER
Ladies and Gentlemen:
Each of Citibank, N.A. ('Citibank'), Bank of America, N.A. ('BofA') and
Deutsche Bank AG New York Branch ('Deutsche Bank' and, together with Citibank
and BofA, the 'Initial Lenders') is pleased to inform Marsh & McLennan
Companies, Inc. (the 'Company') of its several commitment to:
(i) provide the Company with a portion of the term loan facility
described in Annex I hereto (the 'Term Facility'), in each case in the
amount set forth on Schedule 1 hereto and subject to the terms and
conditions set forth herein and in Annex I hereto;
(ii) consent to an amendment of the Credit Agreement (5 Year) dated as
of June 13, 2002 (as amended, supplemented or otherwise modified prior to
the date hereof, the 'Existing 2007 Revolving Facility') among the Company,
the banks and other financial institutions party thereto, and JPMorgan
Chase Bank, as administrative agent (as so amended, the 'Amended 2007
Revolving Facility'), in each case subject to the terms and conditions set
forth herein and in Annex II hereto; and
(iii) consent to an amendment of the Credit Agreement (5 Year) dated
as of June 9, 2004 (as amended, supplemented or otherwise modified prior to
the date hereof, the 'Existing 2009 Revolving Facility' and, together with
the Existing 2007 Revolving Facility, the 'Existing Revolving Facilities')
among the Company, the banks and other financial institutions party
thereto, and JPMorgan Chase Bank, as administrative agent (as so amended,
the 'Amended 2009 Revolving Facility' and, together with the Amended 2007
Revolving Facility, the 'Revolving Facilities'; the Revolving Facilities
and the Term Facility being collectively referred to herein as the
'Facilities'), in each case subject to the terms and conditions set forth
herein and in Annex III hereto (this letter, together with Annexes I, II
and III, being referred to collectively as this 'Commitment Letter').
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Further, subject to the terms and conditions set forth in this Commitment
Letter, (a) Citigroup Global Markets Inc. ('CGMI' and, together with Citibank,
'Citigroup') is pleased to inform the Company of its commitment to act as (i)
Global Coordinator for the Facilities, (ii) Joint Lead Arranger for each of the
Facilities, and (iii) Joint Bookrunner for each of the Facilities, (b) Banc of
America Securities LLC ('BAS') is pleased to inform the Company of its
commitment to act as (i) Joint Lead Arranger for each of the Facilities and (ii)
Joint Bookrunner for the Term Facility and the Existing 2009 Revolving Facility,
(c) Deutsche Bank Securities Inc. ('DBSI' and, together with CGMI and BAS, the
'Arrangers'; the Arrangers and the Initial Lenders being collectively referred
to as the 'Lender Parties') is pleased to inform the Company of its commitment
to act as (i) Joint Lead Arranger for each of the Facilities and (ii) Joint
Bookrunner for the Existing 2007 Revolving Facility, and (d) CGMI is pleased to
inform the Company of its commitment to use its best efforts to arrange a
syndicate of lenders (collectively, the 'Term Lenders') for the balance of the
Term Facility and to solicit the consents required for the Revolving Facilities
(such syndication and solicitation being collectively referred to herein as the
'Syndication,' and the Term Lenders and the lenders under Revolving Facilities
(the 'Revolving Lenders') being collectively referred to herein as the
'Lenders') (it being understood and agreed that neither CGMI nor the Initial
Lenders, nor any affiliate of CGMI or the Initial Lenders, are agreeing to
underwrite such syndication or consents).
Section 1. Conditions Precedent. The commitments of each of the Initial
Lenders and the agreements of each of the Arrangers to provide services
hereunder are subject to: (a) the preparation, execution and delivery of
mutually acceptable loan documentation (including, in the case of the Revolving
Facilities, amendments to existing loan documentation) incorporating
substantially the terms and conditions outlined in this Commitment Letter (the
'Operative Documents'); (b) the absence of (i) any material adverse change in
the business, financial position, results of operations or prospects of the
Company and its consolidated subsidiaries, taken as a whole, since December 31,
2003 (other than matters described in the Company's public filings prior to the
date hereof or otherwise disclosed in writing to the Lender Parties prior to the
date hereof, including, without limitation, (A) the civil complaint filed on
October 14, 2004 by the Attorney General of the State of New York against the
Company and Marsh Inc. in the Supreme Court of the State of New York County of
New York (the 'Complaint'), and (B) any claim arising out of, or any action,
suit or proceeding filed or threatened against the Company or any Subsidiary of
the Company based on, allegations similar to those set forth in the Complaint or
related thereto), and (ii) any circumstance, change or condition in the loan
syndication, financial or capital markets generally that, in the judgment of the
Arrangers, could reasonably be expected to materially impair Syndication; (c)
the accuracy and completeness of all representations that the Company and its
subsidiaries make to the Lender Parties and all material information, taken as a
whole, that the Company and its subsidiaries furnish to the Lender Parties; (d)
the receipt of (i) commitments from other Term Lenders for the balance of the
Term Facility on the terms and conditions set forth in Annex I and (ii) all
consents required in connection with the Revolving Facilities; (e) the Company's
compliance with the terms of this Commitment Letter, including, without
limitation, the payment in full when due of all fees, expenses and other amounts
payable hereunder; and (f) its completion of and satisfaction with a due
diligence investigation of the Company and its subsidiaries.
Section 2. Commitment Termination. The commitments of the Lender Parties
hereunder will terminate on the earlier of (a) the date the Operative Documents
become effective, and (b) December 31, 2004. Before such date, any Lender Party
may terminate its commitment hereunder if any event occurs or information
becomes available that, in the judgment of such Lender Party, results or is
reasonably likely to result in the failure to satisfy any condition set forth in
Section 1.
Section 3. Syndication. CGMI will manage all aspects of the Syndication in
consultation with the Company, including the timing of all offers to potential
Term Lenders and Revolving Lenders, the
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determination of the amounts offered to potential Term Lenders and Revolving
Lenders, the acceptance of commitments of the Term Lenders and the compensation
to be provided to the Lenders.
The Company shall take all action as CGMI may reasonably request to assist
CGMI in forming a syndicate for the Term Facility acceptable to CGMI and in
obtaining consents required in connection with the Revolving Facilities. The
Company's assistance shall include, but not be limited to, (a) making senior
management and representatives of the Company and its principal subsidiaries
available to participate in information meetings with potential Term Lenders and
Revolving Lenders at such times and places as CGMI may reasonably request; (b)
using the Company's best efforts to ensure that the Syndication efforts benefit
from the Company's lending relationships; and (c) providing CGMI with all
information reasonably deemed necessary by it to successfully complete the
Syndication.
To ensure an effective Syndication, the Company agrees that until the
completion of the Syndication (as determined by CGMI), the Company will not, and
will not permit any of its subsidiaries to, syndicate or issue, attempt to
syndicate or issue, announce or authorize the announcement of the syndication or
issuance of, or engage in discussions concerning the syndication or issuance of,
any debt facility or debt security (including any renewals thereof), without the
prior written consent of each Arranger, which consent shall not be unreasonably
withheld; provided, however, that the foregoing shall not limit the Company's
ability to issue commercial paper, other short-term debt programs currently in
place, equity or public debt securities or to refinance existing bilateral
credit facilities (including the Mortgage as defined in the Existing Revolving
Facilities).
Citibank will act as the sole Administrative Agent for the Term Facility,
and JPMorgan Chase Bank will act as the sole Administrative Agent for the
Revolving Facilities. In addition, Citibank will act as Syndication Agent for
the Revolving Facilities, BofA and DBSI will act as Documentation Agents for the
Revolving Facilities, and BofA and DBSI will act as Syndication Agents for the
Term Facility. Except as expressly set forth herein, no additional agents,
co-agents or arrangers will be appointed, or other titles conferred, without the
consent of CGMI. It is further understood and agreed that the name of Citibank
and CGMI (as applicable) shall appear to the left of (and in no event below) the
names of BofA, BAS, Deutsche Bank and DBSI, and above and to the left of the
name of any other Lender, co-lead arranger, joint manager or agent, on the cover
of the Information Memorandum or other syndication materials that describe the
Facilities.
Section 4. Fees. In addition to the fees described in Annexes I, II and
III, the Company shall pay the non-refundable fees set forth in the letter
agreements dated the date hereof (collectively, the 'Fee Letters') between (a)
the Company and the Initial Lenders and (b) the Company and Citigroup. The terms
of the Fee Letters are an integral part of the commitments hereunder and
constitute part of this Commitment Letter for all purposes hereof.
Section 5. Indemnification. The Company shall indemnify and hold harmless
the Lender Parties, each Lender and each of their respective affiliates and each
of their respective officers, directors, employees, agents, advisors and
representatives (each, an 'Indemnified Party') from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and disbursements of counsel), joint or several,
that may be incurred by or asserted or awarded against any Indemnified Party
(including, without limitation, in connection with any investigation, litigation
or proceeding or the preparation of a defense in connection therewith), in each
case arising out of or in connection with or by reason of this Commitment Letter
or the Operative Documents or the transactions contemplated hereby or thereby or
any actual or proposed use of the proceeds of the Facilities, except to the
extent such claim, damage, loss, liability or expense is incurred by reason of
the gross negligence or willful misconduct of such Indemnified Party. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this paragraph applies, such indemnity shall be effective whether or
3
not such investigation, litigation or proceeding is brought by the Company, any
of its directors, security holders or creditors, an Indemnified Party or any
other person or an Indemnified Party is otherwise a party thereto and whether or
not the transactions contemplated hereby are consummated.
No Indemnified Party shall have any liability (whether in contract, tort or
otherwise) to the Company or any of its security holders or creditors for or in
connection with the transactions contemplated hereby, except to the extent such
liability is determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted primarily from such Indemnified Party's
gross negligence or willful misconduct. In no event, however, shall any
Indemnified Party be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including, without limitation, any
loss of profits, business or anticipated savings).
Section 6. Costs and Expenses. The Company shall pay, or reimburse the
Lender Parties on demand for, all out-of-pocket costs and expenses incurred by
the Lender Parties (whether incurred before or after the date hereof) in
connection with the Facilities and the preparation, negotiation, execution and
delivery of this Commitment Letter, including, without limitation, the
reasonable fees and expenses of outside counsel, regardless of whether any of
the transactions contemplated hereby are consummated. The Company shall also pay
all costs and expenses of the Lender Parties (including, without limitation, the
reasonable fees and disbursements of counsel) incurred in connection with the
enforcement of any of their respective rights and remedies hereunder.
Section 7. Confidentiality. By accepting delivery of this Commitment
Letter, the Company agrees that this Commitment Letter is for the Company's
confidential use only and that neither its existence nor the terms hereof will
be disclosed by the Company to any person other than the Company's officers,
directors, employees, accountants, attorneys and other advisors, agents and
representatives (the 'Company Representatives') and then only on a confidential
and 'need to know' basis in connection with the transactions contemplated
hereby; provided, however, that the Company may make such other public
disclosures of the terms and conditions hereof as the Company is required by
law, in the opinion of the Company's counsel, to make. The Lender Parties agree
that the provisions of Section 9.11 of the Existing Revolving Facilities apply
to any information made available to them in connection with this Commitment
Letter or any of the transactions contemplated hereby.
Section 8. Representations and Warranties of the Company. The Company
represents and warrants that (a) all information (other than projections) that
has been or will hereafter be made available to the Lender Parties, any Lender
or any potential Lender by the Company or any of its representatives in
connection with the transactions contemplated hereby is or will, when furnished,
be complete and correct in all material respects and does not or will not, when
furnished, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances under which such statements were or are
made and (b) all projections, if any, that have been or will be prepared by the
Company and made available to the Lender Parties, any Lender or any potential
Lender have been or will be prepared in good faith based upon reasonable
assumptions (it being understood that such projections are subject to
significant uncertainties and contingencies, many of which are beyond the
Company's control, and that no assurance can be given that the projections will
be realized). The Company agrees to supplement the information and projections
from time to time until the Operative Documents become effective so that the
representations and warranties contained in this paragraph remain correct.
In providing this Commitment Letter, the Lender Parties are relying on the
accuracy of the information furnished to it by or on behalf of the Company and
its affiliates without independent verification thereof.
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Section 9. No Third Party Reliance, Etc. The agreements of the Lender
Parties hereunder and of any Lender that issues a commitment to provide
financing under the Term Facility or that consents to the Revolving Facilities
are made solely for the benefit of the Company and may not be relied upon or
enforced by any other person. Please note that this Commitment Letter does not
include all of the terms and conditions of the Facilities, and that those
matters that are not covered or made clear herein are subject to mutual
agreement of the parties. The Company may not assign or delegate any of its
rights or obligations hereunder without the prior written consent of the Lender
Parties. This Commitment Letter may not be amended or modified, or any provision
hereof waived, except by a written agreement signed by all parties hereto. This
Commitment Letter is not intended to create a fiduciary relationship among the
parties hereto.
The Company acknowledges that the Lender Parties and/or one or more
affiliates of each of the Lender Parties may provide financing, equity capital,
financial advisory and/or other services to parties whose interests may conflict
with the Company's interests. Consistent with each Lender Party's policy to hold
in confidence the affairs of its customers, each Lender Party agrees that
neither it nor any of its affiliates will furnish confidential information
obtained from the Company to any of such Lender Party's other customers.
Furthermore, neither any Lender Party nor any of its respective affiliates will
make available to the Company confidential information that such Lender Party
obtained or may obtain from any other person.
Each Lender Party reserves the right to employ the services of its
affiliates in providing the services contemplated by this Commitment Letter and
to allocate, in whole or in part, to such affiliates any fees payable to it in
such manner as it and its affiliates may agree in their sole discretion;
provided that the Company shall incur no additional obligations as a result of
any such allocation.
Section 10. Governing Law, Etc. This Commitment Letter shall be governed
by, and construed in accordance with, the law of the State of New York. This
Commitment Letter sets forth the entire agreement between the parties with
respect to the matters addressed herein and supersedes all prior communications,
written or oral, with respect hereto. This Commitment Letter may be executed in
any number of counterparts, each of which, when so executed, shall be deemed to
be an original and all of which, taken together, shall constitute one and the
same Commitment Letter. Delivery of an executed counterpart of a signature page
to this Commitment Letter by telecopier shall be as effective as delivery of an
original executed counterpart of this Commitment Letter. Sections 4 through 8,
10 and 11 hereof shall survive the termination of the commitments of the Lender
Parties hereunder. The Company acknowledges that information and documents
relating to the Facilities may be transmitted through Intralinks, the internet
or similar electronic transmission systems.
Section 11. Waiver of Jury Trial. Each party hereto irrevocably waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
on contract, tort or otherwise) arising out of or relating to this Commitment
Letter or the transactions contemplated hereby or the actions of the parties
hereto in the negotiation, performance or enforcement hereof.
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Please indicate the Company's acceptance of the provisions hereof by (a)
signing the enclosed copy of this Commitment Letter and returning it to Richard
Banziger, Managing Director, Citigroup Global Markets Inc., 390 Greenwich
Street, New York, New York 10013 (fax: (212) 723-8590), and (b) signing the Fee
Letters and returning the same as instructed therein, in each case at or before
5:00 p.m. (New York City time) on November 17, 2004, the time at which the
commitments of the Lender Parties hereunder (if not so accepted prior thereto)
will terminate. If the Company elects to deliver this Commitment Letter by
telecopier, please arrange for the executed original to follow by next-day
courier.
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.
By /s/ Richard Banziger
--------------------
Name: Richard Banziger
Title: Managing Director
CITIBANK, N.A.
By /s/ Matthew Nicholls
--------------------
Name: Matthew Nicholls
Title: Director
BANK OF AMERICA, N.A.
By /s/ Shelly K. Harper
--------------------
Name: Shelly K. Harper
Title: Senior Vice President
BANC OF AMERICA SECURITIES LLC
By /s/ Peter C. Hall
-----------------
Name: Peter C. Hall
Title: Managing Director
DEUTSCHE BANK AG NEW YORK BRANCH
By /s/ Richard Herder
------------------
Name: Richard Herder
Title: Managing Director
By /s/ John S. McGill
------------------
Name: John S. McGill
Title: Director
(Signatures continued on next page)
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DEUTSCHE BANK SECURITIES INC.
By /s/ Richard Herder
------------------
Name: Richard Herder
Title: Managing Director
By /s/ John S. McGill
------------------
Name: John S. McGill
Title: Director
(Signatures continued on next page)
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ACCEPTED AND AGREED
on November 17, 2004:
MARSH & MCLENNAN COMPANIES, INC.
By /s/ Sandra S. Wijnberg
----------------------
Name: Sandra S. Wijnberg
Title: Sr. VP, Chief Financial Officer
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Schedule I
Initial Lender Commitments
Initial Lender Commitment
-------------- ----------
Citibank, N.A. $175,000,000
Bank of America, N.A. $175,000,000
Deutsche Bank AG New York Branch $175,000,000
Annex I
Marsh & McLennan Companies, Inc.
$1.0 Billion 2-Year Term Loan Facility
Summary of Terms and Conditions
-------------------------------
Capitalized terms used herein and not otherwise defined are used with the meanings set forth
in the Commitment Letter to which this Summary of Terms and Conditions is attached.
Borrower: Marsh & McLennan Companies, Inc., a Delaware corporation (the
'Borrower').
Facility Amount: $1.0 billion.
Type of Facility: Two-year unsecured term loan (the 'Term Facility').
Guarantors: The Term Facility will be unconditionally guaranteed by Marsh
Inc., Putnam Investments Trust and Mercer Inc. (collectively,
the 'Guarantors' and, together with the Borrower, the 'Loan
Parties').
Master Agreement: The Term Facility will be entered into at the same time as the
amendment of the Revolving Facilities. The documentation for
the Facilities may include a Master Agreement that will
contain mutually acceptable provisions for collective voting
and pro rata payments in specified circumstances and certain
other matters as agreed by the parties.
Purpose: General corporate purposes.
Global Coordinator: Citigroup Global Markets Inc.
Administrative Agent: Citibank, N.A. (the 'Agent').
Syndication Agents: Bank of America, N.A. and Deutsche Bank AG New York Branch.
Joint Lead Arrangers: Citigroup Global Markets Inc., Banc of America Securities
LLC, and Deutsche Bank Securities Inc.
Joint Bookrunners: Citigroup Global Markets Inc. and Banc of America Securities
LLC.
Lenders: Citibank, Bank of America, N.A., Deutsche Bank AG New York
Branch and other financial institutions acceptable to the
Borrower, the Agent and the Global Coordinator.
Closing Date: On or before December 31, 2004.
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Maturity Date: December 31, 2006.
Interest Rates and
Interest Periods: At the Borrower's option, any Advance that is made to it will
be available at the rates and for the Interest Periods stated
below:
1) Base Rate: a fluctuating rate equal to Citibank's Base Rate
plus the Applicable Margin.
2) Eurodollar Rate: a periodic fixed rate equal to LIBOR plus the
Applicable Margin.
The Eurodollar Rate will be fixed for Interest Periods of 1, 2, 3 or
6 months.
Upon the occurrence and during the continuance of any Event
of Default, each Eurodollar Rate Advance will convert to a
Base Rate Advance at the end of the Interest Period then in
effect for such Eurodollar Rate Advance.
Applicable Margin: The Applicable Margin means:
1) for Base Rate Advances, zero basis points per annum; and
2) for Eurodollar Rate Advances, a rate per annum determined
from time to time in accordance with the Pricing Grid
attached hereto as Exhibit A.
If any principal, interest or other amounts are not paid
when due, the applicable interest rate on those amounts will
increase by 200 basis points per annum.
Reference Banks: Citibank, Bank of America, N.A. and Deutsche Bank AG
New York Branch and/or other banks to be agreed.
Interest Payments: At the end of each Interest Period for each Advance, but
no less frequently than quarterly. Interest will be
computed on a 365/366-day basis for Base Rate Advances
and a 360-day basis for Eurodollar Rate Advances.
Availability: The Term Facility will be available in a single borrowing on
the Closing Date. Amounts borrowed under the Term Facility
and repaid or prepaid may not be reborrowed.
Annual Agency Fee: As agreed between the Agent and the Borrower.
Repayment: The Borrower will repay all outstanding loans under the Term
Facility no later than the Maturity Date.
Optional Prepayment: Advances may be prepaid without penalty, on same day notice
for Base Rate Advances and 2 business days' notice for
Eurodollar Rate
2
Advances, in minimum amounts of $5,000,000 and increments of
$1,000,000 in excess thereof. The Borrower will bear all
costs related to the prepayment of a Eurodollar Rate Advance
prior to the last day of the Interest Period thereof.
Mandatory Prepayments: The Borrower shall repay the Term Facility with 75% of the
net proceeds from certain debt issuances and asset sales
that exceed minimum individual and aggregate amounts to be
agreed.
Increase in Facility
Amount: The Borrower will have the right to increase the Facility
Amount, either at the Closing Date or thereafter until the
Maturity Date, in minimum increments of $50,000,000, by
up to $300 million, provided that no default has occurred
and is continuing. The Borrower may offer the increase to
(i) any existing Lender, and any such Lender will have the
right, but no obligation, to commit to all or a portion of
the proposed increase or (ii) third party financial
institutions acceptable to the Agent, provided that the
minimum commitment of each such institution equals or
exceeds $10,000,000.
Loan Documentation: The Term Facility will be subject to the preparation,
execution and delivery of mutually acceptable loan
documentation that will contain conditions precedent,
representations and warranties, covenants, events of default
and other provisions based on the documentation for the
Existing Revolving Facilities with additional provisions
as reflected below.
Conditions Precedent to
Closing: Consistent with Existing Revolving Facilities, including, but
not limited to:
1) Certified copies of corporate documents for the Borrower
and the Guarantors (collectively, the 'Loan Parties')
2) Board resolutions for the Loan Parties.
3) Incumbency/specimen signature certificate for each of
the Loan Parties.
4) Accuracy of representations and warranties made by the
Loan Parties and absence of default.
5) Favorable legal opinion from counsel for the Loan
Parties.
6) Favorable legal opinion from counsel for the Agent.
7) The termination of the commitments of the Lenders and
payment in full of all obligations under (i) the Credit
Agreement (364 Day) dated as of July 7, 2004 (as
amended, supplemented or otherwise modified) among the
Borrower, the banks and other financial institutions
party thereto, and Bank of America, N.A. as
3
administrative agent, and (ii) the Credit Agreement
(364 Day) dated as of June 9, 2004 (as amended,
supplemented or otherwise modified) among the Borrower,
the banks and other financial institutions party
thereto, and JPMorgan Chase Bank, as administrative
agent.
8) Effectiveness of the amendments of the Revolving
Facilities.
Conditions Precedent to
all Advances: As set forth in the Existing Revolving Facilities, including,
but not limited to:
1) All representations and warranties are true and correct
on and as of the date of the Advance, before and after
giving effect to such Advance and to the application of
the proceeds therefrom, as though made on and as
of such date, provided that the representation as to no
material adverse change shall be made only at Closing.
2) No default has occurred and is continuing, or would
result from such Advance.
Representations and
Warranties: Generally as set forth in the Existing Revolving Facilities
and others to be agreed, including, but not limited to:
1) Corporate existence and power.
2) Corporate and governmental authorization; no
contravention.
3) Binding effect of loan documents.
4) Accuracy of financial information and no material
adverse change in the business, financial position,
results of operations or prospects of the Borrower and
its consolidated subsidiaries, taken as whole, since
December 31, 2003, except as to matters that have been
disclosed in the Borrower's public filings before the
Closing Date and other matters disclosed in writing to
and approved by the Lenders, including, without
limitation, (a) the civil complaint filed on October
14, 2004 by the Attorney General of the State of New
York against the Borrower and Marsh Inc. in the Supreme
Court of the State of New York County of New York (the
'Complaint'), and (b) any claim arising out of, or any
action, suit or proceeding filed or threatened against
the Borrower or any Subsidiary of the Borrower based
on, allegations similar to those set forth in the
Complaint or related thereto.
5) No litigation (other than litigation disclosed in the
Borrower's public filings before the Closing Date and
other litigation disclosed in writing to and approved
by the Lenders) pending or, to the knowledge of the
Borrower, threatened, in which there is a
4
reasonable probability of an adverse decision which
would have a material adverse effect on the business,
consolidated financial condition or consolidated results
of operations of the Borrower and its subsidiaries,
considered as a whole, or in any manner draws into
question the validity or enforceability of the loan
documents.
6) ERISA.
7) Taxes.
8) Status of material subsidiaries.
9) No regulatory restrictions.
10) Full disclosure.
11) Margin regulations.
Financial Covenants: 1) Maximum Total Consolidated Debt to EBITDA ('Leverage
Ratio') at levels to be mutually agreed.
2) Minimum Fixed Charge Coverage Ratio at levels to be
mutually agreed.
Covenants: Generally as set forth in the Existing Revolving Facilities
and others to be agreed (in each case applicable to the
Borrower and its subsidiaries and with appropriate
qualifications and exceptions to be agreed), including,
but not limited to:
1) Financial reporting and other information covenants
(including separate financial information to be agreed
with respect to each of the Guarantors).
2) Conduct of business and maintenance of existence.
3) Compliance with laws; borrowing authorizations.
4) Payment of taxes; maintenance of books and records;
inspection rights.
5) Maintenance of insurance.
6) Use of proceeds.
7) Separate existence of each of the Loan Parties and
compliance with corporate formalities.
8) No change in the nature of the business of the Borrower
and its subsidiaries.
5
9) Restrictions on liens.
10) Limitations on incurrence of debt (including issuance of
guarantees) by subsidiaries (including the Guarantors).
11) Restrictions on mergers, consolidations and sale of
significant assets.
12) Restrictions on significant acquisitions and investments.
Events of Default: Generally as set forth in the Existing Revolving Facilities
and others to be agreed (applicable to the Borrower and its
subsidiaries), including, but not limited to:
1) Failure to pay principal when due, or failure to pay
interest, fees or other amounts within 5 days of when
due.
2) Failure to comply with covenants with notice and cure
periods to be agreed for certain covenants.
3) Representations or warranties incorrect in any material
respect.
4) Cross-default to payment defaults on principal
aggregating $100,000,000, or to other events if the
effect is to accelerate or permit acceleration of such
debt.
5) Failure to pay a final judgment or court order if not
stayed within an appropriate period in excess of
$100,000,000 (individually or in the aggregate).
6) Bankruptcy defaults.
7) ERISA defaults.
8) Change of control.
9) Repudiation or unenforceability of guarantees.
Other: Loan documentation will include:
1) Indemnification of the Agent and Lenders and their
respective affiliates, officers, directors, employees,
agents and advisors for any liabilities and expenses
arising out of the Term Facility or the use or proposed
use of proceeds.
2) Waiver of consequential damages.
3) Agency, set-off and sharing language.
4) Required Lenders defined as those holding greater than
50% of outstanding Advances or, if none, commitments.
The consent of all or affected Lenders will be required
to extend the Maturity
6
Date, decrease interest rates, principal or fees,
postpone scheduled payment dates, or for those provisions
requiring 100% Lender approval, reduce the percentage of
Lenders required to take action, or release guarantors
prior to the later of repayment of the Term Facility and
December 31, 2006.
Assignments and
Participations: Each Lender will have the right to assign to one or more
eligible assignees all or a portion of its rights and
obligations under the loan documents, with the consent, not to
be unreasonably withheld, of the Agent and, so long as no
Event of Default has occurred and is continuing, the
Borrower. Minimum aggregate assignment levels will be
$10,000,000 and increments of $1,000,000 in excess thereof.
The parties to the assignment (other than the Borrower) will
pay to the Agent an administrative fee of $3,500.
Each Lender will also have the right, without the consent of
the Borrower or the Agent, to assign (i) as security, all or
part of its rights under the loan documents to any Federal
Reserve Bank and (ii) with notice to the Borrower and the
Agent, all or part of its rights and obligations under the
loan documents to any of its affiliates.
Each Lender will have the right to sell participations in its
rights and obligations under the loan documents, subject to
customary restrictions on the participants' voting rights.
Yield Protection, Taxes,
and Other Deductions: 1) The loan documents will contain yield protection
provisions, customary for facilities of this nature,
protecting the Lenders in the event of unavailability of
funding, funding losses, and reserve and capital adequacy
requirements.
2) All payments to be free and clear of any present or
future taxes, withholdings or other deductions
whatsoever (other than income taxes in the jurisdiction
of the Lender's applicable lending office). The Lenders
will use reasonable efforts to minimize to the extent
possible any applicable taxes and the Borrower will
indemnify the Lenders and the Agent for such taxes paid
by the Lenders or the Agent.
The Borrower will have the right to replace any Lender which
requests reimbursements for amounts owing under (1) and (2)
above, provided that (i) no Default or Event of Default has
occurred and is continuing, (ii) the Borrower has satisfied
all of its obligations under the Term Facility relating to
such Lender, and (iii) any replacement is acceptable to the
Agent (such consent not to be unreasonably withheld).
Governing Law: State of New York.
Counsel to the
Arrangers: Shearman & Sterling LLP.
7
Submission to
Jurisdiction: The Borrower will agree to submit to the non-exclusive
jurisdiction of the courts of the State of New York in
connection with disputes that may arise in connection with
the Term Facility.
8
Exhibit A to Annex I
Pricing Grid
Term Facility
========================================================================================
LEVEL I LEVEL II LEVEL III
========================================================================================
BASIS FOR Either (a) Long-Term Level I is not Neither Level I nor
PRICING Senior Unsecured Debt applicable, but either Level II is applicable
rated at least BBB by (a) Long-Term Senior
S&P or Baa2 by Unsecured Debt rated
Moody's,* or (b) most at least BBB- by S&P
recently calculated and Baa3 by Moody's,
Leverage Ratio is or (b) most recently
less than 2.25 calculated Leverage
Ratio is less than
2.50
------------------------------------------------------------------------------------------
Applicable
Margin for
Eurodollar 100.0 125.0 150.0
Rate Advances
(bps)
------------------------------------------------------------------------------------------
______________________
* In the event of a split rating of greater than one sub-grade, the rating shall be
deemed to be one level higher than the lower of the two ratings.
9
Annex II
Marsh & McLennan Companies, Inc.
Amended $1.0 Billion Revolving Facility (2007)
Summary of Terms and Conditions
-------------------------------
Capitalized terms used herein and not otherwise defined are used with the meanings set forth
in the Commitment Letter to which this Summary of Terms and Conditions is attached.
Borrower: Marsh & McLennan Companies, Inc., a Delaware corporation (the
'Borrower').
Facility Amount: $1.0 billion.
Type of Facility: Five-year unsecured revolving loan maturing June 13, 2007 (the
'2007 Revolving Facility').
Global Coordinator: Citigroup Global Markets Inc.
Administrative Agent: JPMorgan Chase Bank (the 'Agent').
Syndication Agent: Citibank, N.A.
Documentation Agents: Bank of America, N.A. and Deutsche Bank AG New York Branch.
Joint Lead Arrangers: Citigroup Global Markets Inc., Banc of America Securities LLC,
and Deutsche Bank Securities Inc.
Joint Bookrunners: Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.
Lenders: Same Lenders as the Existing 2007 Revolving Facility.
Closing Date of
Amendments: On or before December 31, 2004.
Scope of Amendments: The amendments will implement changes consistent with the
terms and provisions of the Term Facility, including, without
limitation, the following:
(a) Guarantees: Guarantees will be provided by Marsh Inc.,
Putnam Investments Trust and Mercer Inc. So long as no
Default or Event of Default (as defined below) has
occurred and is continuing, the guarantees will be
released when (i) the Term Facility has been paid in
full and discharged, and (ii) the credit rating of the
Borrower is at least A- from S&P and A3 from Moody's
(in case with stable outlook).
1
(b) Pricing: Margins and fees will be revised as set forth
in Exhibit A hereto, and auction rate advances will no
longer be available.
(c) Financial Covenants: (i) Maximum Total Consolidated
Debt to EBITDA at levels to be mutually agreed, and
(ii) Minimum Fixed Charge Coverage Ratio at levels to
be mutually agreed.
(d) Negative Covenants: Same as Term Facility, including
limitations on liens, additional subsidiary debt,
mergers, significant acquisitions, etc.
(e) Master Agreement: Same as Term Facility - e.g.,
regarding collective voting and pro rata payments under
the Facilities in certain circumstances.
Annual Agency Fee: As agreed between the Agent and the Borrower.
Conditions Precedent to
Closing of the
Amendment: Same as conditions precedent to closing of Term Facility,
including, without limitation, consent of the Required Lenders
under the Existing 2007 Revolving Facility.
Required Lenders: Required Lenders defined as those holding greater than 50% of
outstanding Advances or, if none, commitments. The consent of
all or affected Lenders will be required to extend the
Maturity Date, decrease interest rates, principal or fees,
postpone scheduled payment dates, or for those provisions
requiring 100% Lender approval, reduce the percentage of
Lenders required to take action, or release guarantors prior
to the later of repayment of the Term Facility and December
31, 2006. After such date, guarantors may be released with 66
2/3% Lender approval.
Governing Law: State of New York.
Counsel to the
Arrangers: Shearman & Sterling LLP.
2
Exhibit A to Annex II
Pricing Grid
2007 Revolving Facility
====================================================================================
LEVEL I LEVEL II LEVEL III
====================================================================================
BASIS FOR Either (a) Long-Term Level I is not Neither Level I
PRICING Senior Unsecured Debt applicable, but nor Level II is
rated at least BBB by either (a) Long-Term applicable
S&P or Baa2 by Senior Unsecured
Moody's,* or (b) most Debt rated at least
recently calculated BBB- by S&P and Baa3
Leverage Ratio is by Moody's, or (b)
less than 2.25 most recently
calculated Leverage
Ratio is less than
2.50
--------------------------------------------------------------------------------------
Applicable 82.5 107.5 125.0
Margin for
Eurodollar
Rate Advances
(bps)
--------------------------------------------------------------------------------------
Facility Fee 17.5 17.5 25.0
(bps)
--------------------------------------------------------------------------------------
______________________
* In the event of a split rating of greater than one sub-grade, the rating shall be
deemed to be one level higher than the lower of the two ratings.
3
Annex III
Marsh & McLennan Companies, Inc.
Amended $700 million Revolving Facility (2009)
Summary of Terms and Conditions
-------------------------------
Capitalized terms used herein and not otherwise defined are used with the meanings set forth
in the Commitment Letter to which this Summary of Terms and Conditions is attached.
Borrower: Marsh & McLennan Companies, Inc., a Delaware corporation (the
'Borrower').
Facility Amount: $700.0 million.
Type of Facility: Five-year unsecured revolving loan maturing June 9, 2009 (the
'2009 Revolving Facility').
Global Coordinator: Citigroup Global Markets Inc.
Administrative Agent: JPMorgan Chase Bank (the 'Agent').
Syndication Agent: Citibank, N.A.
Documentation Agents: Bank of America, N.A. and Deutsche Bank AG New York Branch.
Joint Lead Arrangers: Citigroup Global Markets Inc., Banc of America Securities LLC,
and Deutsche Bank Securities Inc.
Joint Bookrunners: Citigroup Global Markets Inc. and Banc of America Securities
LLC.
Lenders: Same Lenders as the Existing 2009 Revolving Facility.
Closing Date of
Amendments: On or before December 31, 2004.
Scope of Amendments: The amendments will implement changes consistent with the
terms and provisions of the Term Facility, including, without
limitation, the following:
(a) Guarantees: Guarantees will be provided by Marsh Inc.,
Putnam Investments Trust and Mercer Inc. So long as no
Default or Event of Default (as defined below) has
occurred and is continuing, the guarantees will be
released when (i) the Term Facility has been paid in
full and discharged, and (ii) the credit rating of the
Borrower is at least A- from S&P and A3 from Moody's
(in case with stable outlook).
(b) Pricing: Margins and fees will be revised as set forth in
Exhibit A
1
hereto, and auction rate advances will no longer be
available.
(c) Financial Covenants: (i) Maximum Total Consolidated
Debt to EBITDA at levels to be mutually agreed, and
(ii) Minimum Fixed Charge Coverage Ratio at levels to
be mutually agreed.
(d) Negative Covenants: Same as Term Facility, including
limitations on liens, additional subsidiary debt,
mergers, significant acquisitions, etc.
(e) Master Agreement: Same as Term Facility - e.g.,
regarding collective voting and pro rata payments under
the Facilities in certain circumstances.
Annual Agency Fee: As agreed between the Agent and the Borrower.
Conditions Precedent to
Closing of the
Amendment: Same as conditions precedent to closing of Term Facility,
including, without limitation, consent of Required Lenders
under the Existing 2009 Revolving Credit Facility.
Required Lenders: Required Lenders defined as those holding greater than 50% of
outstanding Advances or, if none, commitments. The consent of
all or affected Lenders will be required to extend the
Maturity Date, decrease interest rates, principal or fees,
postpone scheduled payment dates, or for those provisions
requiring 100% Lender approval, reduce the percentage of
Lenders required to take action, or release guarantors prior
to the later of repayment of the Term Facility and December
31, 2006. After such date, guarantors may be released with 66
2/3% Lender approval.
Governing Law: State of New York.
Counsel to the
Arrangers: Shearman & Sterling LLP.
2
Exhibit A to Annex III
Pricing Grid
2009 Revolving Facility
====================================================================================
LEVEL I LEVEL II LEVEL III
====================================================================================
BASIS FOR Either (a) Long-Term Level I is not Neither Level I
PRICING Senior Unsecured Debt applicable, but nor Level II is
rated at least BBB by either (a) Long-Term applicable
S&P or Baa2 by Senior Unsecured
Moody's,* or (b) most Debt rated at least
recently calculated BBB- by S&P and Baa3
Leverage Ratio is by Moody's, or (b)
less than 2.25 most recently
calculated Leverage
Ratio is less than
2.50
--------------------------------------------------------------------------------------
Applicable 82.5 107.5 125.0
Margin for
Eurodollar
Rate Advances
(bps)
--------------------------------------------------------------------------------------
Facility Fee 17.5 17.5 25.0
(bps)
--------------------------------------------------------------------------------------
______________________
* In the event of a split rating of greater than one sub-grade, the rating shall be
deemed to be one level higher than the lower of the two ratings.
3
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