[On Bank of Montreal Letterhead]
Exhibit 10.2
[On Bank of Montreal Letterhead]
15 July 2003
HUB International Limited
55 East Jackson Street Boulevard
Chicago, IL
USA, 60604-4187
Attention: Dennis Pauls Re: Swap Transaction (Our Ref. No. 300319 / 353656)
Dear Sir/Madam:
The purpose of this letter agreement is to set forth the terms and conditions of the Swap Transaction entered into between the BANK OF MONTREAL (“BMO”) and HUB International Limited (“Counterparty”) on the Trade Date specified below (the “Swap Transaction”). This letter agreement will constitute a “Confirmation” as referred to in the Agreement specified below.
The definitions and provisions contained in the 2000 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern.
This Confirmation evidences a complete binding agreement between BMO and the Counterparty. This Confirmation constitutes a Confirmation subject to the terms of a master agreement (the “Agreement”). The Agreement shall be in the form of the 1992 Master Agreement (Multicurrency-Cross Border) published by the International Swaps and Derivatives Association, Inc. (the “ISDA” Form) with such modifications as BMO and the Counterparty shall in good faith agree. Until BMO and the Counterparty execute and deliver the Agreement, (i) BMO and the Counterparty shall be deemed to have entered into an agreement in the form of the ISDA Form (without a Schedule), governed by the laws of the State of New York and (ii) this Confirmation, together with all other documents (each an “Other Confirmation”) confirming Specified Transactions (as defined in the ISDA Form) (this Swap Transaction together with such Specified Transactions, collectively, “Transactions”) heretofore, now or hereafter entered into between BMO and the Counterparty (except any Other Confirmation that expressly provides to the contrary), shall supplement, form a part of, and be subject to, an agreement in the form of such ISDA Form as if BMO and the Counterparty had executed an agreement in such form on the Trade Date of the first such Transaction between BMO and the Counterparty. Upon such execution and delivery of the Agreement, the terms thereof shall supercede such ISDA Form as applicable to this Swap Transaction and the other Transactions, and this Confirmation and the Other Confirmations shall supplement, form a part of, and be subject to, the Agreement.
| 1. | The terms of the particular Swap Transaction to which this Confirmation relates are as follows: |
| Trade Date: | 15 July 2003 | |
| Effective Date: | 15 June 2003 | |
| Termination Date: | 15 June 2013 | |
| USD Fixed Amount: | As specified in Schedule I attached initially USD 55,000,000.00 | |
| Fixed Rate Per Payer: | BANK OF MONTREAL |
Fixed Rate Payer Payment Dates: Subject to adjustment in accordance with the Modified Following Business Day Convention: The 15 December and June of each year prior to and including the Termination Date, commencing with 15 December 2003. Period End Date: Unadjusted Fixed Rate and Fixed Rate Day Count Fraction: 6.16% for the Initial Calculation Period and each succeeding Calculation Period on a basis of 30/360 (Unadjusted). Fees: Not Applicable Business Days for USD Payment: New York, Toronto USD Floating Amount: As specified in Schedule I attached initially USD 55,000,000.00 Floating Rate Payer: HUB International Limited Floating Rate Payer Payment Dates: Subject to adjustment in accordance with the Modified Following Business Day Convention: The 15 December and June of each year prior to and including the Termination Date, commencing with 15 December 2003. Floating Rate for Initial
Calculation Period: (excluding the spread): 1.11875% Calculation Agent: BANK OF MONTREAL Fees: Not Applicable Floating Rate Option: USD-LIBOR-BBA Spread: plus 2.54% Floating Rate Day Count Fraction: Actual/360 Designated Maturity: 3 MONTH Reset Dates: First day of each Calculation Period, or Compounding Period, if Compounding is applicable. Compounding: FLAT Compounding Dates: The 15 September, December, March and June of each year subject to adjustment in accordance with the Modified Following Business Day Convention.
Business Days for USD Payment: New York, Toronto Business Days for Floating
Rate Reset: London
| 2. | MUTUAL RIGHT TO TERMINATE: | |
| Either party may, provided that no Event of Default or Potential Event of Default exists with respects to that party, elect to terminate this Swap Transaction on the 4th Anniversary of the Effective Date (the “Optional Termination Date”), by providing at least 5 days prior notice to the other party. Notice may be provided by telephone but is to be followed up with a written notice. In the event a party, (the “Terminating Party”) elects to terminate a Transaction pursuant to the foregoing, the Terminating Party shall at or prior to 2:00 p.m. Toronto time on the Optional Termination Date, determine the amount payable in respect of this Swap Transaction (the “Market Value”) by making the calculations required by Section 6(e)(i) of the Agreement as if the Optional Termination Date were an Early Termination Date designated as a result of the occurrence of an Event of Default with respect to the Terminating Party and the parties had specified Loss and the Second Method for that purpose. The Market Value will be paid by the relevant party on the second Business Day following the Optional Termination Date. | ||
| If there is a dispute between the parties as to the calculation of the Market Value, |
| (a) | the parties will consult with each other in an attempt to resolve the dispute; and | ||
| (b) | if the parties fail to resolve the dispute prior to 3:00 p.m. Toronto time on the Optional Termination Date, then Bank of Montreal shall recalculate the Market Value by making calculations required by Section 6(e)(i) of the Agreement as if the Optional Termination Date were an Early Termination Date designated as a result of the occurrence of an Event of Default with respect to the Terminating Party and the parties had specified Market Quotation and the Second Method for that purpose. |
| Promptly following a resolution pursuant to this paragraph, the Market Value will be paid by the relevant party on the second Business Day following the Optional Termination Date. | ||
| Upon Payment of such sum as provided herein, the obligations of both parties with respect to this Transaction shall be discharged in full. | ||
| 3. | Account Details |
| Payments to HUB International Limited: | ||
| USD | ||
| Please Advise | ||
| Payments to BANK OF MONTREAL: | ||
| USD | ||
| HARRIS BANK INTERNATIONAL CORPORATION 3 TIMES SQUARE NEW YORK USA Account #: 21077777 ATTN: DERIVATIVES OPERATIONS. |
| 4. | Address for Notices in connection with the Swap Transaction. |
| (a) | BANK OF MONTREAL: | |||
| EMFISYS – DERIVATIVES OPERATIONS 130 ADELAIDE STREET WEST SUITE 500 TORONTO, ON CANADA, M5H 4E1 | ||||
| Attention: | Senior Manager Swap Desk | |||
| Facsimile: | 416 ###-###-#### | |||
| Telex No: | 0621778 | |||
| Answerback: | ||||
| (b) | HUB International Limited: | |||
| 55 East Jackson Street Boulevard Chicago, IL USA, 60604-4187 | ||||
| Attention: | Dennis Pauls | |||
| Telephone: Facsimile: | 8 ###-###-#### 8 ###-###-#### |
| 5. | Offices: |
| (a) | The Office of BANK OF MONTREAL for the Swap Transaction is TORONTO, CANADA. | ||
| (b) | The Office of the Counterparty for the Swap Transaction is Chicago, USA. |
| 6. | Documents to be delivered: | Each party shall deliver to the other, at the time of its execution of this Confirmation, evidence of the specimen signature and incumbency of each person who is executing the Confirmation on the party’s behalf, unless such evidence has previously been supplied in connection with the Agreement and remains true and in effect. |
It is the express wish of the parties that this agreement and any related documents be drawn up and executed in English. Les parties conviennent que la prèsente convention et tous les documents s’y rattachant soient rèdigès et signès en anglais.
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to us.
Please contact Franca Miceli at ###-###-#### or Kareen Sewell-Pilgrim at ###-###-#### if you have any questions or discrepancies.
BMO confirms and the Counterparty acknowledges that the Bank uses a computer-based system to execute and transmit Confirmations. The parties hereby acknowledge and accept the use and validity of Confirmations which have been executed by means of an electronically-produced signature, and which have been transmitted and reproduced by telecopier or similar device. The parties acknowledge that in any legal proceedings between them respecting or in any way relating to this Confirmation, each hereby expressly waives any right to raise any defense or waiver of liability based upon the reproduction of this document by telecopier for evidentiary purpose, or the execution of this document by means of an electronically-produced signature. (Our Ref. No. 300319/353656)
Yours sincerely,
BANK OF MONTREAL By: Name: /s/ Rianna Yam
Rianna Yam
Confirmed as of the date first above written:
HUB International Limited By: /s/ Dennis Pauls
(Signature) Name: Dennis Pauls
(Please Print) Title: VP & CFO
Schedule I.
Cashflow Schedule: BANK OF MONTREAL 300319/353656
Side 1
BANK OF MONTREAL pays USD FIXED to HUB International Limited
Period Beg Period End Days Payment Date Notional Amount Fixed Rate % 15 Jun 2003 15 Dec 2003 180 15 Dec 2003 55,000,000.00 6.16 15 Dec 2003 15 Jun 2004 180 15 Jun 2004 55,000,000.00 6.16 15 Jun 2004 15 Dec 2004 180 15 Dec 2004 55,000,000.00 6.16 15 Dec 2004 15 Jun 2005 180 15 Jun 2005 55,000,000.00 6.16 15 Jun 2005 15 Dec 2005 180 15 Dec 2005 55,000,000.00 6.16 15 Dec 2005 15 Jun 2006 180 15 Jun 2006 55,000,000.00 6.16 15 Jun 2006 15 Dec 2006 180 15 Dec 2006 55,000,000.00 6.16 15 Dec 2006 15 Jun 2007 180 15 Jun 2007 55,000,000.00 6.16 15 Jun 2007 15 Dec 2007 180 17 Dec 2007 55,000,000.00 6.16 15 Dec 2007 15 Jun 2008 180 16 Jun 2008 55,000,000.00 6.16 15 Jun 2008 15 Dec 2008 180 15 Dec 2008 55,000,000.00 6.16 15 Dec 2008 15 Jun 2009 180 15 Jun 2009 55,000,000.00 6.16 15 Jun 2009 15 Dec 2009 180 15 Dec 2009 44,000,000.00 6.16 15 Dec 2009 15 Jun 2010 180 15 Jun 2010 44,000,000.00 6.16 15 Jun 2010 15 Dec 2010 180 15 Dec 2010 33,000,000.00 6.16 15 Dec 2010 15 Jun 2011 180 15 Jun 2011 33,000,000.00 6.16 15 Jun 2011 15 Dec 2011 180 15 Dec 2011 22,000,000.00 6.16 15 Dec 2011 15 Jun 2012 180 15 Jun 2012 22,000,000.00 6.16 15 Jun 2012 15 Dec 2012 180 17 Dec 2012 11,000,000.00 6.16 15 Dec 2012 15 Jun 2013 180 17 Jun 2013 11,000,000.00 6.16
Side 2
HUB International Limited pays USD 3 MONTH LIBOR T3750 to BANK OF MONTREAL
Calc Date Period Beg Period End Days Payment Date Notional Amount 12 Jun 2003 16 Jun 2003 15 Sep 2003 91 55,000,000.00 11 Sep 2003 15 Sep 2003 15 Dec 2003 91 15 Dec 2003 55,000,000.00 11 Dec 2003 15 Dec 2003 15 Mar 2004 91 55,000,000.00 11 Mar 2004 15 Mar 2004 15 Jun 2004 92 15 Jun 2004 55,000,000.00 11 Jun 2004 15 Jun 2004 15 Sep 2004 92 55,000,000.00 13 Sep 2004 15 Sep 2004 15 Dec 2004 91 15 Dec 2004 55,000,000.00 13 Dec 2004 15 Dec 2004 15 Mar 2005 90 55,000,000.00 11 Mar 2005 15 Mar 2005 15 Jun 2005 92 15 Jun 2005 55,000,000.00 13 Jun 2005 15 Jun 2005 15 Sep 2005 92 55,000,000.00 13 Sep 2005 15 Sep 2005 15 Dec 2005 91 15 Dec 2005 55,000,000.00 13 Dec 2005 15 Dec 2005 15 Mar 2006 90 55,000,000.00 13 Mar 2006 15 Mar 2006 15 Jun 2006 92 15 Jun 2006 55,000,000.00 13 Jun 2006 15 Jun 2006 15 Sep 2006 92 55,000,000.00 13 Sep 2006 15 Sep 2006 15 Dec 2006 91 15 Dec 2006 55,000,000.00 13 Dec 2006 15 Dec 2006 15 Mar 2007 90 55,000,000.00 13 Mar 2007 15 Mar 2007 15 Jun 2007 92 15 Jun 2007 55,000,000.00 13 Jun 2007 15 Jun 2007 17 Sep 2007 94 55,000,000.00 13 Sep 2007 17 Sep 2007 17 Dec 2007 91 17 Dec 2007 55,000,000.00 13 Dec 2007 17 Dec 2007 17 Mar 2008 91 55,000,000.00 13 Mar 2008 17 Mar 2008 16 Jun 2008 91 16 Jun 2008 55,000,000.00 12 Jun 2008 16 Jun 2008 15 Sep 2008 91 55,000,000.00 11 Sep 2008 15 Sep 2008 15 Dec 2008 91 15 Dec 2008 55,000,000.00 11 Dec 2008 15 Dec 2008 16 Mar 2009 91 55,000,000.00 12 Mar 2009 16 Mar 2009 15 Jun 2009 91 15 Jun 2009 55,000,000.00 11 Jun 2009 15 Jun 2009 15 Sep 2009 92 44,000,000.00 11 Sep 2009 15 Sep 2009 15 Dec 2009 91 15 Dec 2009 44,000,000.00 11 Dec 2009 15 Dec 2009 15 Mar 2010 90 44,000,000.00 11 Mar 2010 15 Mar 2010 15 Jun 2010 92 15 Jun 2010 44,000,000.00 11 Jun 2010 15 Jun 2010 15 Sep 2010 92 33,000,000.00 13 Sep 2010 15 Sep 2010 15 Dec 2010 91 15 Dec 2010 33,000,000.00 13 Dec 2010 15 Dec 2010 15 Mar 2011 90 33,000,000.00 11 Mar 2011 15 Mar 2011 15 Jun 2011 92 15 Jun 2011 33,000,000.00 13 Jun 2011 15 Jun 2011 15 Sep 2011 92 22,000,000.00 13 Sep 2011 15 Sep 2011 15 Dec 2011 91 15 Dec 2011 22,000,000.00 13 Dec 2011 15 Dec 2011 15 Mar 2012 91 22,000,000.00 13 Mar 2012 15 Mar 2012 15 Jun 2012 92 15 Jun 2012 22,000,000.00 13 Jun 2012 15 Jun 2012 17 Sep 2012 94 11,000,000.00 13 Sep 2012 17 Sep 2012 17 Dec 2012 91 17 Dec 2012 11,000,000.00 13 Dec 2012 17 Dec 2012 15 Mar 2013 88 11,000,000.00 13 Mar 2013 15 Mar 2013 17 Jun 2013 92 17 Jun 2013 11,000,000.00
