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Exhibit 10.62
AMENDED AND RESTATED CREDIT
AGREEMENT
between
ITT EDUCATIONAL SERVICES, INC.
and
JPMORGAN CHASE BANK, N.A.
Dated effective as of December 17, 2007
AMENDED AND RESTATED CREDIT
AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated
effective as of December 17, 2007, is between ITT EDUCATIONAL SERVICES, INC. , a
Delaware corporation (the “Borrower”), and
JPMORGAN CHASE BANK, N.A. , a national banking association (the
“Bank”).
WHEREAS, the Borrower and the Bank have previously
entered into a certain Credit Agreement dated as of December 22,
2006 (the "Prior Agreement"); and
WHEREAS, the Borrower has requested an increase and
extension of the credit facilities from the Bank provided for in
the Prior Agreement and the Bank is willing to increase and extend
such credit facilities upon the terms and conditions hereinafter
set forth; and
WHEREAS, the parties have mutually agreed to amend
and restate the terms of the Prior Agreement by the terms of this
Agreement;
NOW THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties, hereby agree as
follows:
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1.1.
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Defined Terms . As
used herein:
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“Advance” has the meaning ascribed to
such term in the Notes.
“Affiliate” means any Person that,
directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with
Borrower.
“Agreement” means this Amended and
Restated Credit Agreement, as further modified, amended or replaced
from time to time.
"Applicable Margin" means the applicable per annum
rate set forth below related to a Secured Note or Unsecured Note,
as the case may be, based upon the Borrower's Indebtedness to Net
Worth Ratio as reflected in its most recent Financials:
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APPLICABLE MARGIN
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LEVEL I
STATUS
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LEVEL II
STATUS
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LEVEL III
STATUS
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Secured Note
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0.13%
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0.15%
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0.18%
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Unsecured Note
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0.35%
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0.51%
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0.69%
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For the purposes of this definition, the following
terms have the following meanings, subject to the final paragraph
of this definition:
" Financials
" means the annual or quarterly Financial Statements
of the Borrower delivered pursuant to this Agreement.
" Level I
Status" exists at any date if, as of the last day of
the fiscal quarter of the Borrower referred to in the most recent
Financials, the Indebtedness to Net Worth Ratio is less than 2.00
to 1.00.
" Level II
Status " exists at any date if, as of the
last day of the fiscal quarter of the Borrower referred to in the
most recent Financials, (i) the Borrower has not qualified for
Level I Status and (ii) the Indebtedness to Net Worth Ratio
is
less than or equal to 6.0 to 1.00.
" Level III
Status " exists at any date if, as of the
last day of the fiscal quarter of the Borrower referred to in the
most recent Financials, the Borrower has not qualified for Level I
Status or Level II Status.
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" Status
" means Level I Status, Level II Status or Level III
Status,
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The Applicable Margin shall be determined in
accordance with the foregoing table based on the Borrower's Status
as reflected in the then most recent Financials. Adjustments, if
any, to the Applicable Margin shall be effective five Business Days
after the Bank has received the applicable Financials. If the
Borrower fails to deliver Financial Statements to the Bank at the
time required pursuant to this Agreement, then beginning on the
fifth Business Day after the date such Financial Statements were
due to be delivered, the Applicable Margin shall be the highest
Applicable Margin for a Secured Note or an Unsecured Note, as
applicable, set forth in the foregoing table until five days after
such Financials are so delivered. As of the Closing Date and until
the first adjustment as provided above, the Applicable Margin shall
be at Level II Status.
“Authorized Officer” means any of the
Chief Executive Officer, the President and/or the Chief Financial
Officer of the Borrower or such other officer whose authority to
perform acts to be performed only by an Authorized Officer under
the terms of this Agreement is evidenced to the Bank by a certified
copy of an appropriate resolution of the Board of Directors of the
Borrower.
“Bank” means JPMorgan Chase Bank, N.A.,
a national banking association, its successors and
assigns.
“Borrower” means ITT Educational
Services, Inc., a Delaware corporation, its successors and
assigns.
“Business Day” has the meaning ascribed
to such term in the Notes.
“Closing Date” means December 17,
2007.
“Collateral Requirement” will have the
meaning ascribed to such term In Section 2.7 hereof.
“Control Agreement” means that certain
Control Agreement dated August 30, 2007, among the Borrower, the
Bank, and JPMorgan Chase Bank, N.A. as Intermediary, as the same
may be modified, amended, or replaced from time to time.
“Custodial Account” means the Custodial
Account established by the Borrower with the Bank (initially
Account No. xxxxxxxxxx) in which the Bank has been granted a
security interest to cover Obligations under the Secured Notes,
which will contain investment property subject to the Security
Agreement
“Current Financials” means the Financial
Statements of Borrower as of December 31, 2006, and for the fiscal
year then ended.
“Default” means any of the events
specified in Section 6 hereof.
“EBITDA” means, for any period, net
income for such period plus (a) without duplication and to the
extent deducted in determining net income for such period, the sum
of (i) interest expense for such period, (ii) income tax expense
for such period, (iii) all amounts attributable to depreciation and
amortization expense for such period, (iv) any extraordinary
charges for such period and (v) any other non-cash charges for such
period (but excluding any non-cash charge in respect of an item
that was included in net income in a prior period) , minus (b)
without duplication and to the
extent included in net income, any extraordinary
gains and any non-cash items of income for such period, all
calculated for the Borrower on a consolidated basis in accordance
with GAAP.
“Environmental Laws” means all
provisions of laws, statutes, ordinances, rules, regulations,
permits, licenses, judgments, writs, injunctions, decrees, orders,
awards and standards promulgated by any Governmental Authority
concerning health, safety and protection of, or regulation of the
discharge of substances into, the environment.
“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended from
time-to-time.
“ERISA Affiliate” means any trade or
business, whether or not incorporated, which together with Borrower
would be treated as a single employer under ERISA.
“Financial Statements” means the balance
sheets, income statements and statements of cash flows of Borrower,
and any accompanying notes or other disclosures to such
statements.
“GAAP” means generally accepted
accounting principles in the United States of America in effect
from time to time as promulgated by the Financial Standards
Accounting Board and recognized and interpreted by the American
Institute of Certified Public Accountants.
“Governmental Authority” means any
nation or government, any state or other political subdivision
thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to any government, including, without limiting the generality of
the foregoing, any agency, body, commission, court or department
thereof whether federal, state, local or foreign.
“Hazardous Substances” means asbestos,
polychlorinated biphenyls and petroleum products and any other
regulated, hazardous or toxic materials, wastes and substances
which are defined, determined, regulated or identified as such in
any Environmental Laws (whether now existing or hereafter enacted
or promulgated).
“Indebtedness” means (a) all
indebtedness or other obligations of the Borrower for borrowed
money or for the deferred purchase price of property or services;
(b) all indebtedness or other obligations of any other Person for
borrowed money or for the deferred purchase price of property or
services, to the extent the payment or collection of which the
Borrower has guaranteed or in respect of which the Borrower is
liable, contingently or otherwise, including, without limitation,
liability by way of agreement to purchase, to provide funds for
payment, to supply funds to or otherwise to invest in such other
Person, or otherwise to assure a creditor against loss, excluding
however, (i) endorsements on instruments for collection in the
ordinary course of business, and (ii) the amount of any potential
liability for guarantees or other payment obligations under the
Risk Sharing Loan Program Agreement between the Borrower and Sallie
Mae, Inc. dated as of July 17, 2007, as the same may be amended,
modified or replaced, that under GAAP are not required to be, and
have not been, recorded as a liability in the Borrower's Financial
Statements; (c) all indebtedness or other obligations of the
Borrower for borrowed money or for the deferred purchase price of
property or services to the extent the same are secured by (or for
which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, deed of
trust, pledge, lien, security interest or other charge or
encumbrance upon or in property (including, without limitation,
accounts) owned by the Borrower, whether or not the Borrower has
assumed or become liable for the payment of such indebtedness or
obligations, and (d) capitalized lease obligations of the
Borrower.
"Indebtedness to Net Worth Ratio" means the ratio of
the Borrower's (i) Indebtedness, to (ii) total shareholder's
equity, as reflected in the Financials.
“Leverage Ratio” means, on any date, the
ratio of (a) total Indebtedness on such date to (b) EBITDA for the
period of four consecutive fiscal quarters ended on such
date.
“Line of Credit A” means the revolving
line of credit made available by the Bank to the Borrower in the
maximum principal amount of One Hundred Ten Million and 00/100
Dollars ($110,000,000.00), governed by this Agreement, including
any renewal or extension thereof.
“Line of Credit B” means the revolving
line of credit made available by the Bank to the Borrower in the
maximum principal amount of Fifty Million and 00/100 Dollars
($50,000,000.00), governed by this Agreement, including any renewal
or extension thereof.
"Lines of Credit" means collectively, Line of Credit
A and Line of Credit B.
“Loan Documents” means this Agreement,
the Notes, the Security Agreement, and all other documents executed
and delivered by Borrower or any other third party to govern,
evidence, guarantee or secure the Lines of Credit.
“Loss” shall have the meaning ascribed
in Section 8.9 hereof.
“Maturity Date” means July 1,
2010.
“Notes” means the Secured Notes and the
Unsecured Notes, any renewals, amendments, replacements or renewals
thereof, and any other promissory note delivered by Borrower
pursuant to this Agreement. “Note” means any of the
Secured Notes or the Unsecured Notes, any renewals, amendments,
replacements or renewals thereof.
“Obligations” means all unpaid principal
and accrued and unpaid interest on the Notes, all accrued and
unpaid fees hereunder, including, without limitation, any advances
pursuant to this Agreement or any amendment, and to the extent
recoverable, all reasonable costs of collection and enforcement of
any and all thereof, including reasonable attorney fees.
“PBGC” means the Pension Benefit
Guaranty Corporation established pursuant to ERISA, or any
successor entity.
“Permitted Encumbrances” means (a) liens
for taxes or assessments which are not yet due, liens for taxes or
assessments or liens of judgments which are being contested,
appealed or reviewed in good faith by appropriate proceedings which
prevent foreclosure of any such lien or levy of execution
thereunder and against which liens, if any, adequate insurance or
reserves have been provided; (b) pledges or deposits to secure
payment of workers’ compensation obligations and deposits or
indemnities to secure public or statutory obligations or for
similar purposes; (c) liens and other security interests in favor
of Bank; and (d) those further encumbrances (if any) shown
on Schedule 1 attached hereto.
“Permissible Investments” means the
investments specified as Permissible Investments in the Investment
Guidelines attached to the Investment Management Agreement dated as
of December 22, 2006, between the Borrower and J.P. Morgan
Investment Management Inc. pertaining to the Custodial Account
which also meet the Maturity Guidelines and Quality Guidelines
specified therein, without amendment unless consented to by the
Bank.
“Person” means and includes an
individual, a partnership, a joint venture, a corporation, a trust,
an unincorporated association and a Governmental
Authority.
“Secured Notes” means the Secured
Promissory Notes, in substantially the forms of
Exhibit A and
Exhibit B hereto, duly
executed by Borrower to Bank to evidence secured borrowings under
Line of Credit A or Line of Credit B, respectively, including any
amendment, modification, renewal, extension or replacement thereof.
"Secured Note" means either of the Secured Notes.
“Security Agreement” means the Security
Agreement with Respect to Custodial Account and Investment Property
of even date herewith or later in the form of Exhibit E hereto, from the Borrower
in favor of the Bank, duly executed by Borrower and Bank, to secure
borrowings under the Secured Notes, including any amendment,
modification, renewal, extension or replacement thereof.
“Unsecured Notes” means the Unsecured
Promissory Notes, in substantially the form of
Exhibit C and
Exhibit D hereto, duly
executed by Borrower to Bank to evidence unsecured borrowings under
Line of Credit A or Line of Credit B, respectively, including any
amendment, modification, renewal, extension or replacement thereof.
"Unsecured Note" means either of the Unsecured Notes.
“Unmatured Default” means any event
which with notice, or lapse of time, or both, would constitute a
Default.
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1.2.
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Rules of Construction . The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms. Use of the
terms “herein” “hereof”, and
“hereunder” shall be deemed references to this
Agreement in its entirety and not to the Section clause in which
such term appears.
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1.3.
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Accounting Terms .
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP.
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2.1.
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Lines of Credit .
Subject to the terms and conditions of this Agreement, Bank shall
make the Lines of Credit available to Borrower for general working
capital purposes, including reacquisition of Borrower’s
common stock, in an initial maximum principal amount of up to One
Hundred Sixty Million Dollars ($160,000,000.00), which will be
available under (a) Line of Credit A in the initial maximum
principal amount of One Hundred Million Dollars ($100,000,000.00),
but increasing to One Hundred Ten Million Dollars ($110,000,000.00)
upon satisfaction of the condition stated in Section 5.2, and (b)
Line of Credit B in the maximum principal amount of Fifty Million
Dollars ($50,000,000.00). All Advances under the Lines of Credit
will be payable in full in any and all events on the Maturity Date.
The Borrower, at any time and from time to time, may permanently
reduce either of the Lines of Credit in whole or in part, in
integral multiples of $1,000,000, upon at least one Business Day
written notice to the Bank, which notice shall specify the amount
of any such reduction, provided, however, that the amount of the
Lines of Credit may not be reduced below the outstanding principal
balance of the Notes.
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Prior to the Maturity Date, the Borrower may borrow,
repay and reborrow under the Lines of Credit so long as the
aggregate principal amount outstanding under the Lines of Credit
does not exceed the foregoing limitations, or as otherwise limited
under this Agreement. Advances under the Lines of Credit will be in
the minimum amount and increments set forth in the applicable
Notes.
The entire outstanding balance of Line of Credit A
and the Borrower’s obligation to pay interest thereon, at all
times shall be evidenced by either the relevant Secured Note or the
Unsecured Note given to further evidence Line of Credit A. The
entire outstanding balance of Line of Credit B and the
Borrower’s obligation to pay interest thereon, at all times
shall be evidenced by either the relevant Secured Note or the
Unsecured Note given to further evidence Line of Credit B. The
Borrower may elect to borrow under either or both of the Lines of
Credit, on a secured basis or on an unsecured basis. Advances
outstanding under the Prior Agreement on the Closing Date shall
continue as secured Advances under Line of Credit A and Line of
Credit B and on the Closing Date shall be evidenced by the Secured
Notes. At any time Borrower has elected to borrow under either of
the Lines of Credit on a secured basis, Borrower, upon not
fewer
than ten (10) days prior written notice to the Bank,
may elect to borrow on the relevant Line of Credit on an unsecured
basis, and on the effective date of such election (subject to the
condition that no Default has occurred and is continuing) the
entire outstanding principal balance of the relevant Secured Note
shall be deemed to have been paid and satisfied by an Advance made
under the relevant Line of Credit and evidenced by the relevant
Unsecured Note, which Advance shall be unsecured. At any time
Borrower has elected to borrow under either of the Lines of Credit
on an unsecured basis, Borrower, upon not fewer than ten (10)
Business Days prior written notice to the Bank, may elect to borrow
on the relevant Line of Credit on a secured basis, and on the
effective date of such election (subject to satisfaction of all
conditions in this Agreement to the making of secured Advances) the
entire outstanding principal balance of the relevant Unsecured Note
shall be deemed to have been paid and satisfied by an Advance made
under the relevant Line of Credit and evidenced by the relevant
Secured Note. The effective date of each such election will be the
tenth (10 th ) Business Day following delivery of such
election by the Borrower to the Bank.
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2.2.
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Interest . Prior to
maturity or Default, the outstanding principal balance of the Lines
of Credit from time to time shall bear interest at a per annum rate
or rates as contemplated and otherwise set forth in the relevant
Note which evidences the outstanding Advances.
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2.3.
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Payments of Principal and Interest
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2.3.1.
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Lines of Credit .
Interest on the outstanding balance of the Lines of Credit from
time to time shall be due and payable as provided for in the Notes.
The entire principal balance of the Lines of Credit, together with
all accrued and unpaid interest thereon, and all fees and charges
payable in connection therewith shall be due and payable on the
Maturity Date.
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2.3.2.
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Method of Payment .
All payments of principal and interest hereunder shall be made in
immediately available funds to Bank at Bank’s address set
forth on the signature page hereof or at any other place specified
in writing by Bank to Borrower, by Noon (Indianapolis time) on the
date when due.
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2.3.3.
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Business Day . If
any required payment of principal or interest provided herein
becomes due and payable on a date other than a Business Day, the
maturity of the installment of principal or interest shall be
extended to the next succeeding Business Day, and interest shall be
payable during such extension of maturity.
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2.4.
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Prepayment . Subject
to the limitations set forth in this Agreement, Borrower may
borrow, pay, reborrow and repay the available principal amount of
the Lines of Credit at any time, and from time to time, subject to
the provisions set forth in the Notes.
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2.5.1.
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Commitment Fees . In
connection with the availability of each of the Lines of Credit,
the Borrower will pay to the Bank a commitment fee equal to 0.15%
per annum on the average daily unused balance of each of the Lines
of Credit. Such fee will be payable quarterly in arrears following
receipt of an invoice therefore to the Borrower, calculated on the
last day of each calendar quarter and at the maturity of the Lines
of Credit.
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2.5.2.
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Late Charges . The
Borrower shall pay to the Bank for each required payment due under
a Note which is paid more than ten (10) days following its due
date, a late charge equal to the greater of (i) $25.00, or (ii)
five percent (5.0%) of the required payment amount, provided
however that the late charge assessed with respect to any late
payment will not exceed Fifteen Hundred and 00/100 Dollars
($1,500.00).
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2.5.3.
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General . The
compensation provided in this Section 2.5 shall be in consideration
of the services of Bank in connection with the Lines of Credit and
shall be in addition to any
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other fee, charge, payment or expense required to be
borne by the Borrower under the Loan Documents.
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2.6.
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Method of Advance .
Whenever the Borrower desires the Bank to make an Advance under
either of the Lines of Credit, the Borrower, by an Authorized
Officer shall give the Bank notice by not later than 1:30 p.m.,
Indianapolis time on the day of the proposed Advance which shall be
a Business Day, which notice shall specify the amount and the
proposed date of the Advance and whether such Advance is being
taken under Line of Credit A or Line of Credit B. Such notice shall
be given in writing (which may be a facsimile transmission or
e-mail) and the Bank, in making an Advance, shall be authorized to
rely on any such notice which shall have been received by it in
good faith from a Person reasonably believed to be an Authorized
Officer. All Advances will be made to the Borrower by a credit to
the Borrower's account maintained at the Bank. All advances by Bank
and payments by Borrower shall be recorded by Bank on its books and
records, and the principal amount outstanding from time to time,
plus interest payable thereon, shall be determined from the books
and records of Bank. The books and records of Bank shall be
presumed prima facie correct as to such matters,
absent manifest error.
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2.7.
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Security for Secured Notes
. Advances evidenced by a Secured Note will be
secured under the terms of the Security Agreement. At any time any
portion of the outstanding principal balance of the Advances is
evidenced by a Secured Note, the Borrower will at all times
maintain investment property in the Custodial Account subject to
the Security Agreement which constitute Permissible Investments
with a market value of not less than 105.3% of the outstanding
principal balance of such Secured Note (the “Collateral
Requirement”). If the Collateral Requirement is not satisfied
for any period of ten (10) consecutive Business Days (the
“Cure Period”), the Borrower shall be deemed to have
elected to borrow the Advances outstanding under such Secured Note
on an unsecured basis, and such deemed election shall be
immediately effective as of the close of the Bank’s business
on the last day of the Cure Period. If Borrower is borrowing under
both Lines of Credit on a secured basis, and the Collateral
Requirement is satisfied for one, but not both, Secured Notes, Bank
shall implement this Section 2.7 so as to maximize the secured
Advances.
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3.
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Representations and Warranties
. Borrower represents, covenants and warrants to
Bank as follows:
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3.1.
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Due Organization .
Borrower represents that it is a corporation duly organized and
validly existing in the State of Delaware and is qualified to do
business as a foreign entity in every State in which failure to be
qualified reasonably could be expected to have a material adverse
effect on its business.
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3.2.
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Power . Borrower
possesses the requisite power to enter into the Loan Documents, to
borrow thereunder, to execute and deliver the Loan Documents and to
perform its obligations thereunder.
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3.3.
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Authority . Borrower
has taken the necessary corporate action to authorize the execution
and delivery of the Loan Documents and the borrowings thereunder
and the granting of the security interests therein, and none of the
provisions of the Loan Documents violates, breaches, contravenes,
conflicts with, or causes a default under any provision of
certificate of incorporation or by-laws of Borrower or any
provision of any existing note, bond, mortgage, debenture,
indenture, trust, license, lease, instrument, decree, order,
judgment, or agreement to which either Borrower is a party or by
which it or its assets may be bound or affected.
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3.4.
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Financial Statements . The Current Financials were prepared in accordance with GAAP
and fairly present the financial condition of the Borrower as of
the date thereof and the results of its operations for the period
then ended and, to the knowledge of the Borrower, since such dates,
there has been no material adverse change in Borrower’s
financial condition.
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3.5.
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Binding Obligations . Each of the Loan Documents to be executed by Borrower, when
issued for value, will constitute a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as the same may be limited by
reorganization,
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bankruptcy, insolvency, moratorium or other laws
affecting generally the enforcement of creditors’
rights.
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3.6.
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Default . No event
has occurred and or no circumstances exists that constitute, or
which with notice, lapse of time, or both, would constitute a
material default under the terms and conditions of any trust,
debenture, indenture, note, bond, instrument, mortgage, material
lease, order, decree, or judgment to which the Borrower is a party
or by which it or its assets are bound.
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3.7.
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Tax Returns . To
Borrower’s knowledge, except as otherwise disclosed in
writing to Bank, all tax returns or reports of the Borrower
required by law to have been filed have been filed, and all taxes,
assessments, contributions, fees and other governmental charges
(other than those presently payable without penalty or interest and
those currently being contested in good faith and against which
adequate reserves have been established) upon Borrower or its
assets, properties or income, which are payable, have been paid,
except for any that if not filed or paid, could not reasonably be
expected to have a material adverse effect on the
Borrower
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3.8.
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Litigation . Except
as set forth on Schedule 3.8
, no litigation or proceeding of any Governmental
Authority or other Person is presently pending or, to the
Borrower’s knowledge threatened, nor has any claim been
asserted, against Borrower which seeks to enjoin the transactions
contemplated by this Agreement or which, if adversely determined,
would materially affect the business, operations, financial
condition or properties of the Borrower.
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3.9.
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ERISA . To the best
of Borrower’s knowledge, Borrower and each ERISA Affiliate is
in compliance in all material respects with all applicable
provisions of ERISA, and neither Borrower nor any ERISA Affiliate
has incurred any liability to the PBGC. Neither a “reportable
event”, nor a “prohibited transaction”, has
occurred under, nor has there occurred any complete or partial
withdrawal from, nor has there occurred any other event which would
constitute grounds for termination of or the appointment of a
trustee to administer any “employee benefit plan”
(including any “multi-employer plan”) maintained for
employees of Borrower or any ERISA Affiliate, all within the
meanings ascribed by ERISA.
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3.10.
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Full Disclosure . To
Borrower’s knowledge, no written information, exhibit,
memorandum, or report (excluding estimated future operating
results) furnished by Borrower to Bank in connection with the
negotiation of the Lines of Credit contains any material
misstatement of fact, or omits to state any fact necessary to make
the statements contained therein not materially misleading, and all
estimated future operating results, if furnished, were prepared on
the basis of assumptions, data, information, tests or other
conditions believed to be valid or accurate or to exist at the time
such estimates were prepared and furnished. There currently exists
no fact or circumstance relative to Borrower, whether or not
disclosed, which is presently anticipated to have a material
adverse effect upon the business, operations, financial condition
or properties of Borrower or the ability of Borrower to fully
perform its obligations under the Loan Documents.
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3.11.
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Licenses . Borrower
possesses such franchises, licenses, permits, patents, copyrights,
trademarks, and consents of appropriate Governmental Authorities to
own its property and as are necessary to carry on its
business.
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3.12.
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Compliance with Law . Borrower is in substantial compliance with all applicable
requirements of law and of all Governmental Authorities,
noncompliance with which reasonably could be expected to have a
materially adverse effect upon the business, operations, financial
condition or properties of Borrower.
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3.13.
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Margin Stock .
Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning
of Regulation U of the Board of Governors of the Federal Reserve
System), and, and except as permitted by Section 2.1, no part of
the proceeds of the Lines of Credit will be used, either directly
or indirectly, for the purpose, whether immediate, incidental or
remote, of purchasing or carrying any margin stock or of
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extending credit to others for the purpose of
purchasing or carrying any margin stock, and Borrower shall furnish
to Bank, upon its request, a statement in conformity with the
requirements of Federal Reserve Board Form U-1 referred to in
Regulation U. Further, no part of the proceeds of the Lines of
Credit will be used for any purpose that violates, or which is
inconsistent with, the provisions of Regulations G, T, U or X of
the Board of Governors.
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3.14.
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Approvals . No
authorization, consent, approval or any form of exemption of any
Governmental Authority is required in connection with the execution
and delivery by Borrower of the Loan Documents, the borrowings and
performance by Borrower thereunder or the issuance of the
Notes.
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3.15.
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Insolvency .
Borrower is not “insolvent” within the meaning of that
term as defined in §101(32) of the Federal Bankruptcy Code and
is able to pay its debts as they mature.
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3.16.
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Regulation .
Borrower is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended, or a
“holding company” or an “affiliate of a holding
company” or a “subsidiary of a holding company”
within the meanings of the Public Utility Holding Company Act of
1935, as amended.
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3.17.
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Environmental Compliance
. To the knowledge of Borrower, except as disclosed
in any written report delivered to Bank, Borrower is in material
compliance with all material Environmental Laws, including, without
limitation, all Environmental Laws in jurisdictions in which
Borrower owns or operates, or has owned or operated, a facility or
site, arranges or has arranged for disposal or treatment of
hazardous substances, solid waste or other waste, accepts or has
accepted for transport any hazardous substances, solid waste or
other wastes or holds or has held any interest in real property or
otherwise. No litigation or proceeding arising under, relating to
or in connection with any Environmental Law is pending or, to
Borrower’s knowledge, threatened against Borrower, any real
property which a Borrower holds or has held an interest or any past
or present operation of Borrower. No release, threatened release or
disposal or hazardous waste, solid waste or other wastes is
occurring, or, to the knowledge of the Borrower, has occurred, on,
under or to any real property in which Borrower holds any interest
or performs any of its operations, in material violation of any
material Environmental Law. As used in this Section,
“litigation or proceeding” means any demand, claim,
notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by a Governmental
Authority.
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4.1.
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Negative Covenants .
Until the Obligations shall have been fully and finally paid and
performed, without the prior written consent of Bank, which consent
shall not be unreasonably withheld, Borrower will not:
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4.1.1.
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Dispose of Property . Except in the ordinary course of business (which will include
the disposition of equipment or real property no longer used or
useful to the Borrower), sell, transfer, lease or otherwise dispose
of any material part of Borrower’s assets or properties, or
discount, with or without recourse, any accounts of Borrower
without prior notification to the Bank.
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4.1.2.
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Further Encumber .
Except for Permitted Encumbrances, and liens granted under the
Security Agreement, voluntarily create or suffer to exist any
mortgage, pledge, lien or other encumbrance upon any of its
properties or assets, real or personal, tangible or intangible,
whether now owned or hereafter acquired.
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4.1.3.
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Merge, Etc . Enter
into any consolidation or merger with any Person unless the
Borrower will be the surviving corporation in such merger or
consolidation.
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4.1.4.
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Change Name or Place of Business
. Change its name or jurisdiction of organization,
except after thirty (30) days prior written notice to the
Bank.
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4.1.5.
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Accounting Policies . Change its fiscal year or any of its significant accounting
policies, except to the extent necessary to comply with or
permitted by GAAP.
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4.1.6.
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Change of Business .
Make any material change in the nature of its business as carried
on at the date of closing of the Lines of Credit, which change
could reasonably be expected to have a material adverse effect on
the business or financial condition of the Borrower.
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4.1.7.
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Benefit Plans .
Permit any condition to exist in connection with any employee
benefit plan which would constitute grounds for the PBGC to
institute proceedings to have the employee benefit plan terminated
or a trustee appointed to administer the employee benefit plan; or
engage in, or permit to exist or occur any other condition, event
or transaction with respect to any employee benefit plan which
could result in Borrower incurring any material liability, fine or
penalty.
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4.1.8.
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Permissible Investments . Amend the definition of Permissible Investments contained in
the Investment Guidelines attached to the Investment Management
Agreement dated as of December 22, 2006, between the Borrower and
J.P. Morgan Investment Management Inc., or the Maturity Guidelines
and Quality Guidelines specified therein.
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4.2.
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Affirmative Covenants . Until the Obligations shall have been fully and finally paid
and performed, unless expressly waived in writing by Bank, which
waiver shall not be unreasonably withheld, Borrower
shall:
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4.2.1.
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Financial Reporting . Furnish to Bank:
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4.2.1.1.
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As soon as practicable, but in any event within
120 days after the end of each fiscal year, its audited balance
sheet and related statements of operations, stockholders' equity
and cash flows as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous fiscal
year, all reported on by independent public accountants of
recognized national standing (without a “going concern”
or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the
Borrower and its consolidated subsidiaries on a consolidated basis
in conformity with GAAP;
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4.2.1.2.
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As soon as practicable, but in any event within
45 days after the end of each of fiscal quarter of the Borrower,
its internally prepared balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the
fiscal year, all certified by one of its officers as presenting
fairly in all material respects the financial condition and results
of operations of the Borrower on a consolidated basis in accordance
with GAAP, subject to normal year-end adjustments and the absence
of footnotes;
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4.2.1.3.
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Within 45 days after the end of each fiscal
quarter of the Borrower, a certificate setting forth the status of
Borrower’s compliance as at the end of such fiscal quarter
with the financial covenants set forth in Section 4.3 hereof, and
setting forth Borrower’s Indebtedness to Net Worth Ratio as
of the end of such fiscal quarter, signed by one of its authorized
officers and further indicating whether there exists any Default
under this Agreement, and if so the event or condition which gives
rise to such Default;
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4.2.1.4.
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As soon as possible, but in any event within
thirty (30) days after the commencement thereof, a written
statement describing any litigation instituted
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by or against Borrower which, if adversely
determined, could reasonably be expected to have a material effect
upon the business, operations, financial condition or properties of
Borrower;
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4.2.1.5.
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As soon as possible, but in any event within ten
(10) days after Borrower becomes aware thereof, a written statement
describing any reportable event or prohibited transaction which has
occurred with respect to any employee benefit plan and the action
which Borrower proposes to take with respect thereto;
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4.2.1.6.
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Such other information as Bank may from time to
time reasonably request in writing.
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4.2.2.
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Existence . Maintain
its existence and right to do business.
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4.2.3.
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Taxes, Etc . Pay and
discharge all taxes, assessments, judgments, orders, and
governmental charges or levies imposed upon Borrower or on its
income or profits or upon its property prior to the date on which
penalties attach thereto and all lawful claims which, if unpaid,
may become a lien or charge upon the property of Borrower, provided
that a Borrower shall not be required to pay any tax, assessment,
charge, judgment, order, levy or claim, if such payment is being
contested diligently, in good faith, and by appropriate proceedings
which will prevent foreclosure or levy upon its property and
adequate reserves against such liability have been
established.
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4.2.4.
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Maintain Properties . Maintain all properties and assets used by, or useful to,
Borrower in the ordinary course of its business in good working
order and condition and suitable for the purpose for which it is
intended, ordinary wear and tear excepted, and from time to time,
make any necessary repairs and replacements.
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4.2.5.
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Insurance . Maintain
in full force and effect public liability insurance and casualty
insurance policies with coverages and with such companies as are
reasonably acceptable to Bank.
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4.2.6.
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Books and Records .
Keep proper books of account in which full, true and correct
entries will be made of all dealings and transactions of and in
relation to the business and affairs of Borrower, and, upon
reasonable advance notice and during normal business hours, and as
often as Bank may reasonably request, permit authorized
representatives of Bank to (a) have access to the premises and
properties of Borrower and to the records relating to the
operations of Borrower; (b) make copies of or excerpts from such
records; (c) discuss the affairs, finances and accounts of Borrower
with and be advised as to the same by the chief executive and
financial officers of Borrower; and (d) audit and inspect such
books, records, accounts, memoranda and correspondence at all
reasonable times, to make such abstracts and copies thereof as Bank
may deem necessary.
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4.2.7.
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Reports . File, as
appropriate, on a timely basis, annual reports, operating records
and any other reports or filings required to be made with any
Governmental Authority, which if not filed, could reasonably be
expected to have a material adverse effect on the business of
financial condition of the Borrower.
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4.2.8.
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Licenses . Maintain
in full force and effect all material operating permits, licenses,
franchises, and rights required by Borrower in the ordinary course
of business.
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4.2.9.
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Compliance with Law . Comply with, conform to, and obey in all material respects
all material laws, ordinances, rules, regulations and other legal
requirements applicable to Borrower, including, without limitation,
all material Environmental Laws and ERISA.
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4.2.10.
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Trade Accounts . Pay
all trade accounts in accordance with Borrower’s customary
practice.
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4.2.11.
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Use of Proceeds .
Use the proceeds of the Lines of Credit solely for the purposes
herein described.
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4.2.12.
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Loan Payments . Duly
and punctually pay or cause to be paid principal and interest on
the Lines of Credit in lawful money of the United States at the
time and places and in the manner specified herein and in the
Notes.
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4.2.13.
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Banking Relationship . Maintain a banking deposit account with Bank through which
transactions related to the Lines of Credit may be
accomplished.
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4.3.
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Financial Covenants . Until the Obligations shall have been fully and finally paid
and performed, unless expressly waived in writing by Bank, Borrower
shall have:
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4.3.1.
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Leverage Ratio . A
Leverage Ratio, determined as of the end of each fiscal quarter, of
not greater than 1.0 to 1.0.
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4.3.2.
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Unrestricted Cash and Investments to
Indebtedness . A ratio of (i) the
combination of its unrestricted cash and unrestricted investments
(including any investments in the Custodial Account), to (ii) its
Indebtedness, of not less than 1.5 to 1.0, as of the end of any
fiscal quarter or fiscal year of the Borrower.
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5.1.
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Conditions to Closing . The effectiveness of the Agreement and the closing of the
transactions contemplated by this Agreement shall be subject, among
other things, to satisfaction of each of the following conditions
precedent:
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5.1.1.
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Authorization .
Borrower shall have furnished to Bank, (a) certified copies of each
of Borrower’s certificate of incorporation and by-laws, both
as amended, accompanied by recent certificate of good standing
issued by the Delaware Secretary of State, and (b) a certified copy
of resolutions adopted by its Board of Directors authorizing the
Lines of Credit and the execution and delivery of the Loan
Documents, and (c) a certificate of incumbency specifying the names
and capacities of those Persons authorized to execute the Loan
Documents.
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5.1.2.
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Loan Documents .
Each of the Loan Documents shall have been executed and delivered
by Borrower to Bank.
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5.1.3.
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Expenses . Borrower
shall have reimbursed Bank for all reasonable legal fees and other
reasonable expenses (if any) of Bank in connection with the Lines
of Credit.
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5.1.4.
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Other Documents .
Borrower shall have furnished such other documents, instruments,
financing statements and certificates as Bank may reasonably
request.
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5.1.5.
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Consents . All
consents necessary for the consummation of the transaction
contemplated by this Agreement and the Loan Documents shall have
been obtained.
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5.1.6.
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No Default . As of
the Closing Date , there shall not exist a Default.
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5.2.
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Condition to Advances Under Line of Credit A
in Excess of $100,000,000.00 . The
aggregate outstanding principal balance of the Advances under Line
of Credit A shall not exceed $100,000,000.00 unless and until
Borrower shall have furnished to Bank a certified copy
of
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resolutions adopted by its Board of Directors
authorizing the Borrower to incur Indebtedness under this Agreement
in an amount not less than $160,000,000.00.
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5.3.
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Conditions to Advances . Prior to each subsequent extension of any credit to the
Borrower under this Agreement:
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5.3.1.
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No Default . No
Default or Unmatured Default shall have occurred and be
continuing.
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5.3.2.
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Representations and Warranties
. Each representation and warranty contained in
Section 3 shall be true and correct as of the date of such advance,
except to the extent any such representation or warranty relates
solely to an earlier date and except changes reflecting
transactions permitted by this Agreement or otherwise consented to
by the Bank.
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5.3.3.
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Secured Advances .
If Borrower is borrowing on a secured basis, Borrower has executed
and delivered the Security Agreement, the Control Agreement is in
effect, and the Collateral Requirement shall be satisfied after
giving effect to such borrowing.
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5.3.4.
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Expenses . Borrower
shall have reimbursed Bank for all reasonable legal fees and other
reasonable expenses incurred by Bank and payable by Borrower in
connection with the Lines of Credit.
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5.4.
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General . Each
request for an Advance under the Lines of Credit shall constitute a
representation and warranty by Borrower that the applicable
conditions contained in this Section 5 have been
satisfied.
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6.
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Default The
occurrence of any of the following events shall be deemed a Default
hereunder:
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6.1.
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any representation or warranty made by Borrower
to Bank under or in connection with any Loan Document shall be
false in any material respect as of the date on which
made;
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6.2.
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Borrower fails to pay the principal of or
interest on a Note, or any fee or other payment Obligation when
due;
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6.3.
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the breach by Borrower of the covenants contained
in Section 4.1;
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6.4.
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the breach by the Borrower of any of the terms of
the Security Agreement which remain uncured after any applicable
grace and cure period set forth therein;
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6.5.
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the breach by Borrower of any other terms or
provisions of the Loan Documents, other than a breach which
constitutes a Default under Section 6.1, 6.2 or 6.3, not cured
within thirty (30) days after written notice from Bank to Borrower
specifying such breach;
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6.6.
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the failure of Borrower to pay any other
Indebtedness exceeding $10,000,000 when due or within any
applicable grace or cure period, or the default by Borrower in the
performance of any other term, provision or condition contained in
any agreement under which any such Indebtedness was created or is
governed, the effect of which is to permit the holder or holders of
such Indebtedness to cause such Indebtedness to become due prior to
its stated maturity, unless such default is waived in writing by
the holder or holders of such Indebtedness; or any such
Indebtedness shall be validly declared to be due and payable or
required to be prepaid prior to the stated maturity
thereof;
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6.7.
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Borrower shall (i) have an order for relief
entered with respect to it under the Federal Bankruptcy Code, (ii)
not pay, or admit in writing its inability to pay, its debts
generally as they become due, (iii) make an assignment for the
benefit of creditors, (iv) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial
part of its property, (v) institute any proceeding seeking an order
for relief under
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the Federal Bankruptcy Code or seeking to adjudicate
it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or
other pleading denying the material allegations of any such
proceeding filed against it, or (vi) suspend operations as
presently conducted or discontinue doing business as an ongoing
concern;
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6.8.
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without the application, approval or consent of
Borrower, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for Borrower, or any substantial part
of its property, or a proceeding described in Section 6.7 above
shall be instituted against Borrower and such appointment continues
undischarged or such proceeding continues undismissed or unstayed
for a period of thirty (30) consecutive days;
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6.9.
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any Governmental Authority shall condemn, seize
or otherwise appropriate, or take custody or control of all or any
substantial portion of the property of Borrower; or
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6.10.
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any uninsured judgment exceeding $10,000,000 is
entered against Borrower, and the Borrower shall fail to pay, bond
or otherwise discharge the same once it is no longer stayed on
appeal or otherwise being contested in good faith by appropriate
proceedings which prevent foreclosure or execution and against
which adequate reserves have been established.
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7.1.
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Acceleration . If
any Default described in Sections 6.7 or 6.8 occurs, the Lines of
Credit shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action
on the part of Bank. If any other Default occurs, Bank, by written
notice to Borrower, may terminate its commitments hereunder and
declare the Obligations to be due and payable, whereupon the
Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which
Borrower hereby expressly waives.
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7.2.
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Remedy . Upon the
occurrence and continuance of a Default, Bank may immediately
proceed to exercise all remedies available to it under the Loan
Documents or otherwise under applicable law. No right or remedy
conferred upon or reserved to Bank under the Loan Documents is
intended to be exclusive of any other available remedy or right,
but each and every remedy shall be cumulative and concurrent and
shall be in addition to every other remedy now or hereafter
existing at law or in equity. No single or partial exercise of any
power or right shall preclude any further or other exercise of any
power or right.
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7.3.
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Preservation of Rights . No delay or omission of Bank to exercise any power or right
under the Loan Documents shall impair such power or right or be
construed to be a waiver of any Default or an acquiescence therein,
and any single or partial exercise of any power or right shall not
preclude other or further exercise thereof or the exercise of any
other power or right. No advance hereunder shall constitute a
waiver of any of the conditions of Bank’s obligation to make
further advances, nor, in the event Borrower is unable to satisfy
any such condition, shall a waiver of such condition in any one
instance have the effect of precluding Bank from thereafter
declaring such inability to be a Default hereunder.
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8.1.
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Benefit of Agreement . The terms and provisions of this Agreement, the Notes and the
other Loan Documents shall be binding upon and inure to the benefit
of Borrower and Bank and their respective successors and assigns of
their entire interests, except that Borrower shall not have the
right to assign this Agreement.
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8.2.
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Survival of Representations
. All representations, warranties and agreements of
Borrower contained in the Loan Documents shall survive delivery of
the Notes and the initial advance under the Lines of
Credit.
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8.3.
|
Governmental Regulation . Anything contained in this Agreement to the contrary
notwithstanding, Bank shall not be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by
any applicable statute or regulation.
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8.4.
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Taxes . Any taxes
(excluding taxation of the overall income of Bank) payable or ruled
payable by any Governmental Authority in respect of the Loan
Documents shall be paid by Borrower, together with interest and
penalties, if any.
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8.5.
|
Choice of Law . The
Loan Documents and the rights and obligations of the parties
thereunder and hereunder shall be governed by, and construed and
interpreted in accordance with the laws of the State of Indiana
(but giving effect to federal laws applicable to national banks),
notwithstanding the fact that Indiana conflict of law rules might
otherwise require the substantive rules of law of another
jurisdiction to apply. Borrower hereby consents to the jurisdiction
of any state or federal court located within Marion County,
Indiana. All service of process may be made by messenger, certified
mail, return receipt requested or by registered mail directed to
Borrower at the address indicated aside its signature to this
Agreement. Borrower waives any objection which Borrower may have to
any proceeding commenced in a federal or state court located within
Marion County, Indiana, based upon improper venue or
forum non
conveniens . Nothing contained in this
Section shall affect the right of Bank to serve legal process in
any other manner permitted by law or to bring any action or
proceeding against Borrower or its property in the courts of any
other jurisdiction.
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8.6.
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Headings . Section
headings in the Loan Documents are for convenience of reference
only and shall not govern the interpretation of any of the
provisions of the Loan Documents.
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8.7.
|
Entire Agreement .
The Loan Documents embody the entire agreement and understanding
between Borrower and Bank and supersede all prior agreements and
understandings between Borrower and Bank relating to the subject
matter thereof.
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8.8.
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Expenses . Borrower
shall reimburse Bank for any and all reasonable costs, charges and
out-of-pocket expenses (including reasonable attorneys’ fees
and of outside counsel for Bank), paid or incurred by Bank in
connection with the preparation, review, execution, delivery,
amendment, modification, administration, collection and enforcement
of the Loan Documents, provided that the fees and expenses
associated with the initial preparation, review, execution, and
delivery of this Agreement and the related Loan Documents shall not
exceed $10,000. To the extent not otherwis
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