CREDIT AGREEMENT

 

TABLE OF CONTENTS

 

		Page
ARTICLE I            DEFINITIONS		1
SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Terms Generally	17
SECTION 1.03.	Accounting Terms; GAAP	17
ARTICLE II           THE CREDITS		17
SECTION 2.01.	Commitments	17
SECTION 2.02.	Loans and Borrowings	18
SECTION 2.03.	Requests for Borrowings, Conversions and Continuations of Loans	18
SECTION 2.04.	Funding of Borrowings	19
SECTION 2.05.	Termination and Reduction of Commitments	20
SECTION 2.06.	Repayment of Loans; Evidence of Debt	21
SECTION 2.07.	Prepayment of Loans	22
SECTION 2.08.	Fees	22
SECTION 2.09.	Interest	23
SECTION 2.10.	Alternate Rate of Interest	24
SECTION 2.11.	Increased Costs	24
SECTION 2.12.	Break Funding Payments	25
SECTION 2.13.	Taxes	26
SECTION 2.14.	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	29
SECTION 2.15.	Mitigation Obligations; Replacement of Lenders	31
SECTION 2.16.	Increase in Commitments	32
SECTION 2.17.	Defaulting Lenders	34
ARTICLE III          REPRESENTATIONS AND WARRANTIES		34
SECTION 3.01.	Organization; Powers	34
SECTION 3.02.	Authorization; Enforceability	34
SECTION 3.03.	Governmental Approvals; No Conflicts	34
SECTION 3.04.	Financial Condition; No Material Adverse Effect	34
SECTION 3.05.	Properties	35
SECTION 3.06.	Litigation and Environmental Matters	35
SECTION 3.07.	Compliance with Laws and Agreements	36
SECTION 3.08.	Investment and Holding Company Status	36
SECTION 3.09.	Taxes	36
SECTION 3.10.	ERISA	36
SECTION 3.11.	Disclosure	36
SECTION 3.12.	No Default	37

 

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TABLE OF CONTENTS

(continued)

 

		Page
SECTION 3.13.	Subsidiaries	37
SECTION 3.14.	Federal Regulations	37
SECTION 3.15.	No Burdensome Restrictions	37
SECTION 3.16.	Insurance	37
SECTION 3.17.	Taxpayer Identification Number	38
ARTICLE IV          CONDITIONS		38
SECTION 4.01.	Conditions to Closing Date	38
SECTION 4.02.	Each Credit Event	40
ARTICLE V           AFFIRMATIVE COVENANTS		40
SECTION 5.01.	Financial Statements and Other Information	40
SECTION 5.02.	Notices of Material Events	42
SECTION 5.03.	Existence; Conduct of Business	43
SECTION 5.04.	Payment of Obligations	43
SECTION 5.05.	Maintenance of Properties; Insurance	43
SECTION 5.06.	Books and Records; Inspection Rights	44
SECTION 5.07.	Compliance with Laws	44
SECTION 5.08.	Use of Proceeds	44
SECTION 5.09.	Environmental Laws	44
ARTICLE VI          NEGATIVE COVENANTS		45
SECTION 6.01.	Financial Condition Covenants	45
SECTION 6.02.	Indebtedness	45
SECTION 6.03.	Liens	46
SECTION 6.04.	Fundamental Changes	46
SECTION 6.05.	Investments, Loans, Advances, Guarantees and Acquisitions; Hedging Agreements	47
SECTION 6.06.	Restricted Payments	47
SECTION 6.07.	Transactions with Affiliates	48
SECTION 6.08.	Restrictive Agreements	48
SECTION 6.09.	Capital Expenditures	48
SECTION 6.10.	Sales and Leasebacks	48
SECTION 6.11.	Changes in Fiscal Periods	49
SECTION 6.12.	Optional Payments and Modifications of Certain Debt Instruments	49
SECTION 6.13.	Use of Proceeds	49
ARTICLE VII        EVENTS OF DEFAULT		49

 

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TABLE OF CONTENTS

(continued)

 

		Page
ARTICLE VIII       THE ADMINISTRATIVE AGENT		52
SECTION 8.01.	Appointment and Authority	52
SECTION 8.02.	Rights as a Lender	52
SECTION 8.03.	Exculpatory Provisions	52
SECTION 8.04.	Reliance by Administrative Agent	53
SECTION 8.05.	Delegation of Duties	54
SECTION 8.06.	Resignation of Administrative Agent	54
SECTION 8.07.	Non-Reliance on Administrative Agent and Other Lenders	54
SECTION 8.08.	No Other Duties, Etc	55
ARTICLE IX         MISCELLANEOUS		55
SECTION 9.01.	Notices; Effectiveness; Electronic Communication	55
SECTION 9.02.	Waivers; Amendments; Enforcement	57
SECTION 9.03.	Expenses; Indemnity; Damage Waiver	58
SECTION 9.04.	Successors and Assigns	60
SECTION 9.05.	Survival	63
SECTION 9.06.	Counterparts; Integration; Effectiveness	64
SECTION 9.07.	Severability	64
SECTION 9.08.	Right of Setoff	64
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process	65
SECTION 9.10.	WAIVER OF JURY TRIAL	65
SECTION 9.11.	Headings	66
SECTION 9.12.	Confidentiality	66
SECTION 9.13.	Interest Rate Limitation	66
SECTION 9.14.	No Advisory or Fiduciary Responsibility	67
SECTION 9.15.	USA Patriot Act	67

 

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SCHEDULES :

 

Schedule 2.01	—	Commitments
Schedule 3.01	-	Good Standing
Schedule 3.04	-	Financial Condition
Schedule 3.06	—	Disclosed Matters
Schedule 3.13	—	Subsidiaries
Schedule 6.02	—	Existing Indebtedness
Schedule 6.03	—	Existing Liens
Schedule 6.08	—	Existing Restrictions
Schedule 6.10	—	Sale/Leaseback Properties
Schedule 9.01	—	Administrative Agent’s Office; Certain Addresses for Notices

 

EXHIBITS :

 

Exhibit A	—	Form of Assignment and Acceptance
Exhibit B	—	Form of Note
Exhibit C-1	—	Form of Report Under Section 5.01(e)(A)
Exhibit C-2	—	Form of Report Under Section 5.01(e)(B)
Exhibit D	—	Form of Revolving Borrowing Request
Exhibit E	—	Form of Compliance Certificate

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT is entered into as of October 5, 2009, among WADDELL & REED FINANCIAL, INC. (the “ Borrower ”), the several financial institutions from time to time party hereto (collectively, the “ Lenders ” and each individually, a “ Lender ”), and BANK OF AMERICA, N.A. (“ Bank of America ”), as administrative agent for the Lenders (in such capacity, together with any successors thereto in such capacity, the “ Administrative Agent ”).

 

ARTICLE I

 

Definitions

 

SECTION 1.01.  Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

 

“ ABR Loan ” means a Loan that bears interest based on the Alternate Base Rate.

 

“ Adjusted LIBO Rate ” means, with respect to any Eurodollar Loan for any Interest Period, a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

Adjusted LIBO Rate =	LIBO Rate
	1.00 – Eurodollar Reserve Percentage

 

“ Administrative Agent ” has the meaning specified in the introductory paragraph hereto.

 

“ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 9.01 , or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

“ Administrative Questionnaire ” means an administrative questionnaire in a form supplied by the Administrative Agent.

 

“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“ Aggregate Revenue Base ” means the sum of Revenue Bases for all W&R Funds and for all other assets managed by the Borrower or any Subsidiary of the Borrower for other entities.

 

“ Agreement ” means this Credit Agreement, as amended, supplemented or otherwise modified from time to time.

 

 

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%, or (c) the Adjusted LIBO Rate for a one-month Interest Period (it being understood that such rate shall be used solely as a daily reference rate for determining the Alternate Base Rate) in effect for such date (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

“ Applicable Percentage ” means, with respect to any Lender, the percentage (carried to the ninth decimal place) of the total Commitments represented by such Lender’s Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

 

“ Applicable Rate ” means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with respect to the facility fees payable hereunder, as the case may be, the following percentages per annum, based upon the Debt Rating as set forth below:

 

Pricing Level		Debt Rating		Facility Fee		Eurodollar Loans		ABR Loans
1		> A- / A3		0.350	%	2.650	%	1.650	%
2		BBB+ / Baa1		0.400	%	2.850	%	1.850	%
3		BBB / Baa2		0.450	%	3.050	%	2.050	%
4		BBB- / Baa3		0.500	%	3.500	%	2.500	%
5		< BBB- / Baa3		0.625	%	3.875	%	2.875	%

 

, where “Debt Rating” means, as of any date of determination, the rating as determined by either S&P or Moody’s (collectively, the “ Debt Ratings ”) of the Borrower’s non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the respective Debt Ratings issued by the foregoing rating agencies differ by one level, then the Pricing Level for the higher of such Debt Ratings shall apply (with the Debt Rating for Pricing Level 1 being the highest and the Debt Rating for Pricing Level 5 being the lowest); (b) if there is a split in Debt Ratings of more than one level, then the Pricing Level that is one level lower than the Pricing Level of the higher Debt Rating shall apply; (c) if the Borrower has only one Debt Rating, the Pricing Level that is one level lower than that of such Debt Rating shall apply; and (d) if the Borrower does not have any Debt Rating, Pricing Level 5 shall apply.

 

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Initially, the Applicable Rate shall be the percentages per annum set forth opposite Pricing Level 3.  The Applicable Rate shall be subject to adjustment (upwards or downwards, as appropriate), effective as of the date on which S&P or Moody’s announces a rating change which results in a change in the Applicable Rate.

 

“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“ Arranger ” means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager.

 

“ Assignee Group ” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04 ), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

 

“ Availability Period ” means the period from and including the Closing Date to but excluding the earlier of the Revolving Credit Termination Date or the date of termination of the Commitments.

 

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

 

“ Borrower ” has the meaning specified in the introductory paragraph hereto.

 

“ Borrowing ” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01 .

 

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “ Business Day ” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

“ Capital Expenditures ” means, for any period, with respect to any Person, the aggregate of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that should be capitalized under GAAP on a consolidated balance sheet of such Person and its Subsidiaries.

 

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use)

 

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real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“ Change in Control ” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended, and the rules of the SEC thereunder as in effect on the date hereof) other than the Borrower, of shares representing more than 25% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Borrower, (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated, or (c) the acquisition of direct or indirect Control of the Borrower by any Person or group.

 

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement, or (c) compliance by any Lender (or, for purposes of Section 2.11(b) , by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

 

“ Closing Date ” means the date on which the conditions precedent set forth in Section 4.01 shall have been satisfied, which date is October 5, 2009.

 

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

“ Commitment ” means, with respect to each Lender, the commitment of such Lender to make Loans hereunder, expressed as an amount representing the maximum aggregate outstanding principal amount of such Lender’s Loans hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.05 , (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04 , and (c) increased from time to time pursuant to Section 2.16 .  The initial amount of each Lender’s Commitment is set forth on Schedule 2.01 , or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable, and the initial aggregate amount of the Commitments of the Lenders (as set forth on Schedule 2.01 ) is $125,000,000.

 

“ Compliance Certificate ” means a certificate substantially in the form of Exhibit E .

 

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“ Confidential Information Memorandum ” means the Confidential Information Memorandum dated August 2009 and furnished to the Lenders.

 

“ Consolidated EBITDA ” means, for any period, Consolidated Net Income for such period plus , without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring non-cash expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, non-cash losses on sales of assets outside of the ordinary course of business), provided , that the amounts referred to in this clause (e)  shall not, in the aggregate, exceed $1,000,000 for any fiscal year of the Borrower, and (f) any other non-cash charges.  For the purposes of calculating Consolidated EBITDA for any Reference Period pursuant to any determination of the Consolidated Leverage Ratio, (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of $1,000,000; and “Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $1,000,000.

 

“ Consolidated Interest Coverage Ratio ” means, for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period.

 

“ Consolidated Interest Expense ” means, for any period, interest expense (including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Hedging Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP).

 

“ Consolidated Leverage Ratio ” means, as at the last day of any period, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.

 

“ Consolidated Net Income ” means, for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance

 

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with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions, and (c) the undistributed earnings of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation or Requirement of Law applicable to such Subsidiary.

 

“ Consolidated Total Debt ” means, at any date, the aggregate principal amount of all Indebtedness of the Borrower and its Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP.

 

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any indenture, agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“ Debt Rating ” has the meaning specified in the definition of Applicable Rate.

 

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

“ Default Rate ” means when used with respect to any Loan, fee or other amount payable by the Borrower under any Loan Document, an interest rate per annum equal to (a) the Alternate Base Rate plus (b) the Applicable Rate, if any, applicable to ABR Loans plus (c) 2% per annum; provided , however , that with respect to a Eurodollar Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.

 

“ Defaulting Lender ” means any Lender that, as determined by the Administrative Agent, (a) has failed to perform its obligation to fund any portion of its Loans within one Business Day of the date required to be funded by it hereunder, unless such obligation is the subject of a good faith dispute, (b) has notified the Borrower, the Administrative Agent or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit, (c) has failed, within one Business Day after written request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent, that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans, (d) otherwise has failed to pay over to the Administrative Agent or any other Lender any other amount

 

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required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (e) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any bankruptcy or insolvency proceeding, or (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in such Lender or direct or indirect parent company thereof by a Governmental Authority.  A Lender that has become a Defaulting Lender because of an event referenced in this definition may cure such status and shall no longer constitute a Defaulting Lender as provided in the last paragraph of Section 2.17 .

 

“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06 or otherwise delivered in writing to each of the Lenders on or prior to the Closing Date.

 

“ Distribution Fees ” means all fees payable pursuant to a plan contemplated by Rule 12b-1 under the Investment Company Act of 1940, as amended, in connection with the distribution of shares of W&R Funds that are open-end funds.

 

“ dollars ” or “ $ ” refers to lawful money of the United States of America.

 

“ Eligible Assignee ” means any Person that meets the requirements to be an assignee under Section 9.04(b)(v)  and (vi) (subject to such consents, if any, as may be required under Section 9.04(b)(iii) ).

 

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

 

“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ 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) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the

 

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Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) the failure by the Borrower or any ERISA Affiliate to make when due any required contribution (including any required installment) under the pension funding rules to any Plan, determined without regard to whether such required contribution may be or has been waived, (c) the filing of an application for a waiver of any required contribution under the pension funding rules, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. For this purpose, “pension funding rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Plans and set forth in, with respect to plan years ending prior to the effective date as to any such Plan of the Pension Protection Act of 2006, Sections 401(a)(29) and 412 of the Code and Part 3, Subtitle I, of Title I of ERISA each as in effect prior to the Pension Protection Act of 2006 and, thereafter, Sections 412 and 430 through 436 of the Code and Part 3, Subtitle I, of Title I of ERISA each as in effect from time to time.

 

“ Eurodollar Loan ” means a Loan that bears interest based on the Adjusted LIBO Rate.

 

“ Eurodollar Reserve Percentage ” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”).  The LIBO Rate for each outstanding Eurodollar Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

 

“ Event of Default ” has the meaning assigned to such term in Article VII .

 

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any backup withholding or branch profits taxes imposed

 

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by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located, and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.15(b) ), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement or is attributable to such Foreign Lender’s failure or inability to comply with Section 2.13(e) , except to the extent that such Foreign Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.13(a) .

 

“ Existing Credit Agreement ” means the Credit Agreement, dated as of October 6, 2008, among the Borrower, certain financial institutions party thereto as lenders and Bank of America, N.A., as administrative agent for such lenders.

 

“ Federal Funds Effective Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

 

“ Fee Letter ” means the letter agreement, dated as of August 20, 2009, among the Borrower, the Administrative Agent and the Arranger.

 

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

 

“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“ Fund ” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

 

“ GAAP ” means generally accepted accounting principles in the United States of America.

 

“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body (including self-regulatory body), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or

 

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administrative powers or functions of or pertaining to government, including, in any event, the SEC and any applicable state securities commission or similar body.

 

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

 

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“ Hedging Agreement ” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

 

“ Increase Effective Date ” has the meaning specified in Section 2.16(a) .

 

“ Increasing Lender ” has the meaning specified in Section 2.16(a) .

 

“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Capital Lease Obligations of such Person (but, for the avoidance of doubt, excluding any operating lease obligations), (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) net liabilities of such Person under Hedging Agreements, and (k) all Guarantees by such Person in

 

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respect of any of the foregoing.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

 

“ Interest Payment Date ” means (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December and the Revolving Credit Termination Date, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to such Loan and the Revolving Credit Termination Date and, in the case of a Eurodollar Loan with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration, after the first day of such Interest Period.

 

“ Interest Period ” means, with respect to any Eurodollar Loan, the period commencing on the date such Eurodollar Loan is disbursed or converted to or continued as a Eurodollar Loan and ending on the date that is one, two, three or six months thereafter, as the Borrower may elect; provided , that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (c) any Interest Period that would otherwise extend beyond the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date or such date of final payment, as the case may be.

 

“ Lenders ” has the meaning specified in the introductory paragraph hereto.

 

“ LIBO Rate ” means, with respect to any Eurodollar Loan for any Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “LIBO Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

 

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“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset, and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

 

“ Loan Documents ” means this Agreement, each Note and the Fee Letter.

 

“ Management Contract ” means an agreement, written or oral, pursuant to which the Borrower or any Subsidiary of the Borrower provides (a) investment advisory, management or administrative services to a W&R Fund, or (b) investment advisory or management services to any Person, including, without limitation, unregistered investment companies and personal or corporate investment accounts.

 

“ Material Adverse Effect ” means a material adverse effect on (a) the business, assets, property, prospects or condition, financial or otherwise, of the Borrower and its Subsidiaries taken as a whole, or (b) the validity or enforceability of this Agreement or the other Loan Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

 

“ Material Indebtedness ” means Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $5,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

 

“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

 

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“ Net Asset Value ” means, at any date of determination and with respect to any investment company or account manager, the “current net asset” value (as defined in Rule 2a-4 under the Investment Company Act of 1940, as amended), in the aggregate, of all outstanding redeemable securities issued by such investment company at such date.

 

“ Note ” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit B .

 

“ Other Taxes ” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made

 

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under the Loan Documents or from the execution, delivery or enforcement of, or otherwise with respect to, the Loan Documents.

 

“ Participant ” has the meaning specified in Section 9.04(d) .

 

“ Participating Lender ” has the meaning specified in Section 2.16(a) .

 

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

 

“ Permitted Acquisition ” means an acquisition of a Person, or the assets of a Person or a line of business of a Person, in the same or a related line of business as the Borrower, provided that after giving effect to such acquisition (a) no Default or Event of Default shall have occurred and be continuing, (b) the Borrower shall be in compliance, on a pro forma basis, as of the end of the most recent fiscal quarter of the Borrower with the provisions of Section 6.01 after giving effect to such acquisition and the incurrence of any Indebtedness in connection therewith, and (c) in the case of an acquisition involving aggregate consideration valued at $20,000,000 or more, at least three Business Days prior to the date of such acquisition, the Borrower shall have furnished to the Administrative Agent and the Lenders a compliance certificate to the effect of clauses (a)  and (b)  showing in reasonable detail the calculations supporting the determination of compliance, on such a pro forma basis, with such provisions.

 

“ Permitted Encumbrances ” means:

 

(a)           Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04 ;

 

(b)           Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04 ;

 

(c)           pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

 

(d)           deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(e)           easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary; and

 

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(f)            judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k)  of Article VII , so long as such judgment Liens are not in effect for more than 45 days;

 

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

 

“ Permitted Investments ” means:

 

(a)           direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

 

(b)           investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, an investment-grade credit rating from S&P or from Moody’s;

 

(c)           investments in certificates of deposit, banker’s acceptances and time deposits maturing within 540 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

(d)           investments in newly created funds or investments intended for sale to newly created funds advised or managed by the Borrower and its Subsidiaries, in an aggregate amount (based upon book value on the books of the Borrower and its Subsidiaries) of not more than $40,000,000 at any time;

 

(e)           investments in funds advised or managed by the Borrower and its Subsidiaries for the benefit of the Borrower’s and its Subsidiaries’ senior executives and portfolio management personnel in conjunction with various nonqualified deferral compensation arrangements adopted by the Borrower and its Subsidiaries, in an aggregate amount (based on book value on the books of the Borrower and its Subsidiaries) of not more than $25,000,000 at any time;

 

(f)            fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a)  above and entered into with a financial institution satisfying the criteria described in clause (c)  above; and

 

(g)           other than those contained in clauses (a) , (b) , (c)  and (e)  above, United States dollar denominated fixed income securities and syndicated bank loans not to exceed $7,500,000 per issuer, with the exception of United States government securities, and not to exceed $7,500,000 per country, with the exception of the United States of America.

 

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

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“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“ Prime Rate ” means the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“ Reference Period ” means, at any date of determination, the most recently completed four fiscal quarters of the Borrower.

 

“ Register ” has the meaning set forth in Section 9.04 .

 

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

 

“ Required Lenders ” means Lenders having Revolving Credit Exposures and unused Commitments representing at least 51% of the sum of the aggregate Revolving Credit Exposures and unused Commitments of all Lenders at such time; provided that the unused Commitment of, and the portion of the aggregate Revolving Credit Exposures held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

“ Requirement of Law ” means, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination, order, injunction, writ or decree of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“ Restricted Payment ” means (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of the Borrower or any Subsidiary, or (b) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, for (i) the purchase, redemption, retirement, acquisition, cancellation or termination of any shares of the Borrower’s capital stock, or (ii) any option, warrant or other right to acquire any shares of the Borrower’s capital stock.

 

“ Revenue Base ” means the sum of (a) the product of (i) with respect to each W&R Fund, the Net Asset Value of the W&R Fund on the date of calculation and with respect to assets managed for other entities, the market value or Net Asset Value of such assets on the date of calculation, and (ii) the rate provided for in the applicable Management Contract for

 

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determining the annual fee required for such advisory, management or administrative services on such date, and (b) Distribution Fees for such W&R Fund.

 

“ Revolving Borrowing Request ” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Loans, pursuant to Section 2.03 , which, if in writing, shall be substantially in the form of Exhibit D .

 

“ Revolving Credit Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Loans at such time.

 

“ Revolving Credit Termination Date ” means October 4, 2010 or such earlier date as the Commitments shall terminate pursuant to the terms hereof (or, if such day is not a Business Day, the next preceding Business Day).

 

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“ Subsidiary ” means any subsidiary of the Borrower.

 

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“ Transactions ” means the execution, delivery and performance by the Borrower of the Loan Documents, the borrowing of Loans and the use of the proceeds thereof.

 

“ Type ” when used in reference to any Loan, refers to whether the rate of interest on such Loan is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“ W&R Fund ” means all closed-end funds and open-end mutual funds sponsored by the Borrower or any of its Subsidiaries or for which the Borrower or any of its Subsidiaries provides investment advisory, management, administrative, supervisory, consulting, underwriting or similar services.

 

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“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02.  Terms Generally .  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

SECTION 1.03.  Accounting Terms; GAAP .  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

ARTICLE II

 

The Credits

 

SECTION 2.01.  Commitments .  Subject to the terms and conditions set forth herein, each Lender severally agrees to make Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment; provided , however , that after giving effect to any Borrowing, the aggregate Revolving Credit Exposures of all Lenders shall not exceed the aggregate Commitments of all Lenders then in effect.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.  Loans may be ABR Loans or Eurodollar Loans, as further provided herein.

 

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SECTION 2.02.  Loans and Borrowings.   (a)  Each Loan to be made as a part of a Borrowing, continuation or conversion of Loans shall be made by the Lenders ratably in accordance with their Applicable Percentage.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder.

 

(b)           Subject to Section 2.10 , each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

 

(c)           Each Borrowing of, conversion to, or continuation of Eurodollar Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Each Borrowing of or conversion to ABR Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided that a Borrowing of ABR Loans may be in an aggregate amount that is equal to the entire unused balance of the aggregate Commitments.  Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of ten (10) Interest Periods in effect with respect to Eurodollar Loans.

 

(d)           Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Eurodollar Loan if the Interest Period requested with respect thereto would end after the Revolving Credit Termination Date.

 

SECTION 2.03.  Requests for Borrowings, Conversions and Continuations of Loans .  Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 10:00 a.m., New York City time (a) three (3) Business Days before the date of the proposed Borrowing of, conversion to or continuation of Eurodollar Loans or of any conversion of Eurodollar Loans to ABR Loans, or (b) one (1) Business Day before the date of the proposed Borrowing of any ABR Loans.  Each telephonic notice by the Borrower pursuant to this Section 2.03 must be confirmed promptly by delivery to the Administrative Agent of a written Revolving Borrowing Request, appropriately completed and signed by a Financial Officer of the Borrower.  Each such telephonic and written Revolving Borrowing Request shall specify the following information in compliance with Section 2.02 :

 

(i)            whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Loans;

 

(ii)           the aggregate amount of the Loans to be borrowed, converted or continued;

 

(iii)          the date (which shall be a Business Day) of such Borrowing, conversion or continuation, as the case may be;

 

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(iv)          the Type of Loans to be borrowed or to which existing Loans are to be converted;

 

(v)           in the case of a Borrowing of, conversion to, or continuation of Eurodollar Loans, the duration of the Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

 

(vi)          the location and number of the Borrower’s account to which Loans are to be disbursed, which shall comply with the requirements of Section 2.04 .

 

If no election as to the Type of Loan is specified in a Revolving Borrowing Request or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loan shall be made as, or converted to, an ABR Loan.  Any such automatic conversion to an ABR Loan shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Loan.  If the Borrower requests a Borrowing of, conversion to, or continuation of a Eurodollar Loan, but fails to specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

After the occurrence and during the continuance of an Event of Default, no Loans may be requested as, converted to or continued as Eurodollar Loans without the consent of the Required Lenders.

 

Promptly following receipt of a Revolving Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing, conversion or continuation, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to ABR Loans described in this Section.

 

SECTION 2.04.  Funding of Borrowings .  (a)  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof in immediately available funds by 12:00 noon, New York City time, at the Administrative Agent’s Office.  Upon satisfaction of the applicable conditions set forth in Section 4.02 , the Administrative Agent will make such Loans available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of the Administrative Agent with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower in the applicable Revolving Borrowing Request.

 

(b)           The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Loans upon determination of such interest rate.  At any time that ABR Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in the Prime Rate used in determining the Alternate Base Rate promptly following the public announcement of such change.

 

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(c)           Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in its sole discretion, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.  A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (c)  shall be conclusive, absent manifest error.

 

(d)           If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Section 2.04 , and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(e)           Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 

SECTION 2.05.  Termination and Reduction of Commitments .  (a)  Unless previously terminated, the Commitments shall terminate on the Revolving Credit Termination Date.

 

(b)           The Borrower may, upon notice to the Administrative Agent pursuant to Section 2.05(c) , at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $10,000,000, and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.07 , the aggregate Revolving Credit Exposures of all Lenders would exceed the aggregate Commitments of all Lenders then in effect.

 

(c)           The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three (3) 

 

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Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their Applicable Percentage.  All fees accrued until the effective date of any termination of the Commitments shall be paid on the effective date of such termination.

 

SECTION 2.06.  Repayment of Loans; Evidence of Debt .  (a)  The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan on the Revolving Credit Termination Date (or such earlier date on which the Loans become due and payable pursuant to Article VII ).

 

(b)           Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(c)           The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)           The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner limit or otherwise affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

(e)           Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records maintained pursuant to paragraph (b).  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

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SECTION 2.07.  Prepayment of Loans .  (a)  The Borrower shall have the right at any time and from time to time to prepay any Loans in whole or in part, subject to prior notice in accordance with paragraph (b) of this Section.

 

(b)                                  The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Loan, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Loan, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of the Loans to be prepaid and the Type(s) of Loans to be prepaid and, if Eurodollar Loans are to be prepaid, the Interest Period(s) of such Loans; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.05 , then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.05 .  Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof and of the amount of such Lender’s ratable share of such prepayment.  Each partial prepayment of any Loans shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02 .  Any prepayment of a Eurodollar Loan shall be accompanied by all accrued interest on the amount prepaid as required pursuant to Section 2.09(d) , together with any additional amounts required pursuant to Section 2.12 .  Each such prepayment shall be applied to the Loans of the Lenders ratably in accordance with their respective Revolving Credit Exposure.

 

(c)                                   If for any reason the aggregate Revolving Credit Exposures of all Lenders at any time exceeds the aggregate Commitments of all Lenders then in effect, the Borrower shall immediately prepay Loans in an aggregate amount equal to such excess.

 

SECTION 2.08.  Fees .  (a)  The Borrower agrees to pay to the Administrative Agent for the account of each Lender, a facility fee which shall accrue at the Applicable Rate on the daily amount of the Commitment of such Lender (whether used or unused), during the Availability Period, including at any time during which one or more of the conditions in Section 4.02 is not met; provided , however , that (i) if such Lender continues to have any outstanding Loans after the Availability Period, then such facility fee shall continue to accrue on the daily amount of the outstanding Loans of such Lender from and including the date on which the aggregate Commitments of all Lenders are terminated to, but excluding, the date on which such Lender ceases to have any outstanding Loans and (ii) if such Lender is a Defaulting Lender at any time, such facility fee shall cease to accrue on, and the Borrower shall not be required to pay a facility fee with respect to, the daily unused amount of the Commitment of such Lender during such period of time such Lender is a Defaulting Lender.  Accrued facility fees shall be payable in arrears on the last Business Day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the Closing Date; provided that any facility fees accruing after the date on which the aggregate Commitments terminate shall be payable on demand.  The facility fee owing with respect to each Lender shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.  All

 

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facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(b)                                  The Borrower shall pay to the Arranger and the Administrative Agent, for their own respective accounts, fees in the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

(c)                                   The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

SECTION 2.09.  Interest .  (a)  Subject to the provisions of subsection (c)  below, the ABR Loans shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.

 

(b)                                  Subject to the provisions of subsection (c)  below, each Eurodollar Loan shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Eurodollar Loan plus the Applicable Rate.

 

(c)                                   (i)                                      If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable law.

 

(ii)                                   If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable law.

 

(iii)                                Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Loans or any fee or other amount payable by the Borrower hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable law.

 

(d)                                  Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to subsection (c)  of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion, and (iv) all accrued interest shall be payable upon the Revolving Credit Termination Date.

 

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(e)                                   All interest hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and shall be payable for the actual number of days elapsed (including the first day but excluding the last day); provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.14(a) , bear interest for one day.  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

SECTION 2.10.  Alternate Rate of Interest .  (a)  If, in connection with any request for a Eurodollar Loan or a conversion to or continuation thereof, the Required Lenders determine that for any reason (which determination shall be conclusive absent manifest error) that (a) dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Loan, (b) adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for any requested Interest Period with respect to a proposed Eurodollar Loan; or (c) the Adjusted LIBO Rate or the LIBO Rate, as applicable, for any requested Interest Period with respect to a proposed Eurodollar Loan will not adequately and fairly reflect the cost to such Lenders of funding such Loan, then the Administrative Agent shall give notice thereof to the Borrower and each Lender by telephone or telecopy as promptly as practicable thereafter.  Until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice, (i) any Revolving Borrowing Request that requests the conversion of any Loan to, or continuation of any Loan as, a Eurodollar Loan shall be ineffective, and (ii) if any Revolving Borrowing Request requests a Borrowing of Eurodollar Loans, such Borrowing shall be made as an ABR Loan.

 

(b)                                  If any Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Eurodollar Loans, or to determine or charge interest rates based upon the LIBOR Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Loans or to convert ABR Loans to Eurodollar Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to ABR Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans.

 

SECTION 2.11.  Increased Costs .  (a)  If any Change in Law shall:

 

(i)                                      impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or

 

(ii)                                   subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any Eurodollar Loan made by it, or change the basis of taxation of

 

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payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.13 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender); or

 

(iii)                                impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount), then, upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

 

(b)                                  If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made hereunder, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

 

(c)                                   A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

(d)                                  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than six (6) months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof.

 

(e)                                   Subject to Section 2.11(d) , all of the Borrower’s obligations under this Section 2.11 shall survive termination of the Commitments, repayment of all Loans and other obligations hereunder, and resignation of the Administrative Agent.

 

SECTION 2.12.  Break Funding Payments .  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (whether voluntary, mandatory, by reason of acceleration, or otherwise), (b) the

 

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conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise), (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.07(b)  and is revoked in accordance herewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.15 , then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.  In the case of a Eurodollar Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted LIBO Rate (in the case of a Eurodollar Loan) for such Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for dollar deposits from other banks in the eurodollar market at the commencement of such period.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.  All of the Borrower’s obligations under this Section 2.12 shall survive termination of the Commitments, repayment of all Loans and other obligations hereunder, and resignation of the Administrative Agent.

 

SECTION 2.13.  Taxes .  (a)  Any and all payments by or an account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)                                  In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)                                   (i) The Borrower shall indemnify the Administrative Agent and each Lender within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative

 

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Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within ten (10) days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required by clause (ii)  of this subsection.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(ii)                                   Without limiting the provisions of subsection (a) , (b)  or (c)  above, each Lender shall, and does hereby, indemnify the Borrower and the Administrative Agent, and shall make payment in respect thereof within ten (10) days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrower or the Administrative Agent) incurred by or asserted against the Borrower or the Administrative Agent by any Governmental Authority as a result of the failure by such Lender to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender to the Borrower or the Administrative Agent pursuant to subsection (e) .  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii) .  The agreements in this clause (ii)  shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender.

 

(d)                                  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)                                   (i)  Each Lender shall deliver to the Borrower and to the Administrative Agent, at the time or times prescribed by applicable laws or when reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction.

 

(ii)                                   Without limiting the generality of the foregoing, if the Borrower is resident for tax purposes in the United States,

 

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(A)                               any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent executed originals of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable laws or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements; and

 

(B)                                 each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

(I)                                     properly completed and executed originals of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(II)                                 properly completed and executed originals of Internal Revenue Service Form W-8ECI,

 

(III)                             properly completed and executed originals of Internal Revenue Service Form W-8IMY and all required supporting documentation,

 

(IV)                             in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate, in form and substance reasonably acceptable to the Borrower, to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) properly completed and executed originals of  Internal Revenue Service Form W-8BEN, or

 

(V)                                 properly completed and executed originals of any other form prescribed by applicable laws as a basis for

 

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claiming exemption from or a reduction in United States Federal withholding tax together with such supplementary documentation as may be prescribed by applicable laws to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

 

(iii)                                Each Lender shall promptly (A) notify the Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its lending office) to avoid any requirement of applicable laws of any jurisdiction that the Borrower or the Administrative Agent make any withholding or deduction for taxes from amounts payable to such Lender.

 

(f)                                     Unless required by applicable laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender.

 

(g)                                  All of the Borrower’s obligations under this Section 2.13 shall survive termination of the Commitments, repayment of all Loans and other obligations hereunder, and resignation of the Administrative Agent.

 

(h)                                  If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

SECTION 2.14.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs .  (a)  All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees, or under Sections 2.11 , 2.12 or 2.13 , or otherwise) to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office prior to 12:00 noon, New

 

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York City time, on the date when due, in immediately available funds.  Any amounts received after such time on any date shall be deemed to have been received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender (or as otherwise directed by such Lender).  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.

 

(b)                                  If at any time the funds received by the Administrative Agent hereunder are insufficient to pay fully all principal, interest, fees and other amounts then due and payable under this Agreement or any other Loan Document, such funds shall be applied as set forth in Article VII .

 

(c)                                   If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall (i) notify the Administrative Agent of such fact and (ii) purchase (for cash at face value) participations in the Loans of other Lenders, or make such other adjustments as shall be equitable, to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

(d)                                  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at

 

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the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.  A notice of the Administrative Agent to any Lender with respect to any amount owing under this subsection (d)  shall be conclusive, absent manifest error.

 

(e)                                   The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 9.03(c)  are several and not joint.  The failure of any Lender to make any Loan or to make any payment under Section 9.03(c)  on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under Section 9.03(c) .

 

(f)                                     If any Lender shall fail to make any payment required to be made by it pursuant to Sections 2.04(c) , 2.14(d)  or 9.03(c) , then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid .

 

SECTION 2.15.  Mitigation Obligations; Replacement of Lenders .  (a)  If any Lender requests compensation under Section 2.11 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.13 , or if the Borrower is required to pay any additional amount as a result of a Lender, pursuant to Section 2.02(b) , making its Loans through a particular domestic or foreign branch of such Lender or through an Affiliate of such Lender, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.11 or 2.13 or as a result of the exercise of its discretion under Section 2.02(b) , as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasona