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AJG > SEC Filings for AJG > Form 8-K on 3-Mar-2014All Recent SEC Filings

Show all filings for GALLAGHER ARTHUR J & CO



Creation of a Direct Financial Obligation or an Obligation under an Off-B

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously disclosed, on December 20, 2013, Arthur J. Gallagher & Co. ("Gallagher") and certain of its subsidiaries (collectively, the "Subsidiary Obligors") entered into a Note Purchase Agreement (the "Purchase Agreement") with certain accredited institutional investors (collectively, the "Purchasers") for a private placement of $600 million aggregate principal amount of unsecured senior notes. The Purchase Agreement provided for three series of senior notes:
$325 million aggregate principal amount of 4.58% Senior Notes, Series H, due in 2024; $175 million aggregate principal amount of 4.73% Senior Notes, Series I, due in 2026; and $100 million aggregate principal amount of 4.98% Senior Notes, Series J, due in 2029 (collectively, the "Notes"). As anticipated, the issuance and sale of the Notes funded and closed on February 27, 2014.

Interest on the Notes is payable semi-annually in arrears on February 27 and August 27 of each year, beginning on August 27, 2014. The Notes are senior unsecured obligations of Gallagher and the Subsidiary Obligors and rank equal in right of payment with all other senior unsecured indebtedness of Gallagher and the Subsidiary Obligors.

The Purchase Agreement contains customary provisions for transactions of this type, including representations and warranties regarding Gallagher and its subsidiaries and various covenants, including covenants that require Gallagher to maintain specified financial ratios. The Purchase Agreement provides for customary events of default, generally with corresponding grace periods, including, without limitation, payment defaults with respect to the Notes, covenant defaults, cross-defaults to other agreements evidencing indebtedness of Gallagher or its subsidiaries, certain judgments against Gallagher or its subsidiaries and events of bankruptcy involving Gallagher or its material subsidiaries.

Under the terms of the Purchase Agreement, the Notes are redeemable, in whole or in part, at 100% of the principal amount being redeemed, together with accrued and unpaid interest and a "make-whole amount" (as defined in the Purchase Agreement) with respect to each Note. If within 90 days after a "change in control" Gallagher (or its successor) does not have an "investment grade rating", Gallagher is obligated to offer to prepay all of the outstanding Notes at the principal amount thereof plus accrued interest (but without any "make-whole amount" or other premium) (as each term is defined in the Purchase Agreement).

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