Exhibit 10.7
Execution Counterpart
═══════════════════════════════════════
$130,000,000
REVOLVING CREDIT
AGREEMENT
Dated as of December 1, 2005
Among
CAM NORTH AMERICA, LLC
as Borrower
CITICORP NORTH AMERICA,
INC.,
as Lender
═══════════════════════════════════════
1
T A B L E
O F C O N T
E N T S
Section
Page
SECTION 1.
DEFINITIONS
1
SECTION 2. The loans,
Etc.
4
2.01. The Loans
4
2.02. Making the Loans,
Evidence of Debt
4
2.03. Reductions of the
Commitments
4
2.04. Repayment
5
2.05. Interest
5
2.06. Additional Interest on
Eurodollar Rate Loans
5
2.07. Interest Rate
Determinations
5
2.08. Prepayments of
Loans
6
2.09. Payments; Computations;
Etc
6
2.10. Increased
Costs
7
2.11. Taxes
8
2.12. Mitigation
Obligations
9
2.13. Break Funding
Payments
9
SECTION 3. CONDITIONS OF
LENDING
10
3.01. Closing
10
3.02. Conditions Precedent to
Each Borrowing
11
SECTION 4. REPRESENTATIONS AND
WARRANTIES
11
SECTION 5.
COVENANTS
12
SECTION 6. EVENTS OF
DEFAULT
13
SECTION 7.
MISCELLANEOUS
14
7.01. Amendments,
Etc.
14
7.02. Notices,
Etc.
14
7.03. No Waiver; Remedies;
Setoff .
15
7.04. Expenses; Indemnity;
Damage Waiver .
15
7.05. Binding Effect,
Successors and Assigns .
16
7.06. Governing Law;
Jurisdiction; Etc.
17
7.07. Severability
.
17
7.08. Counterparts;
Integration; Effectiveness; Execution
18
7.09. Survival
18
7.10. Waiver of Jury
Trial
18
7.11. No Fiduciary
Relationship
18
7.12. Headings
19
7.13. USA PATRIOT
Act
19
EXHIBITS
Exhibit A
Form of Note
Exhibit B
Form of Notice of Borrowing
2
REVOLVING CREDIT AGREEMENT
dated as of December 1, 2005 (this "
Agreement ") between CAM North America, LLC, a Delaware
limited liability company (the " Borrower "), and CITICORP
NORTH AMERICA, INC., as Lender (the " Lender ").
Pursuant to Section 6.22 of the
Transaction Agreement dated as of June 23, 2005 (as amended,
the " Transaction Agreement ") between Citigroup Inc. and
Legg Mason, Inc. (the " Guarantor "), a Maryland
corporation, the Lender has agreed to provide a Subsidiary of the
Guarantor a $130,000,000 364-day revolving credit
facility.
The parties hereto hereby agree as
follows:
SECTION 1.
DEFINITIONS
. Capitalized terms used herein
have the same respective meanings as the corresponding terms as
defined in the Syndicated Revolving Credit Agreement (as
hereinafter defined), as in effect on the date hereof and without
regard to whether said agreement is modified or amended or remains
in effect among the parties thereto, provided that
references in such definitions in the Syndicated Revolving Credit
Agreement to any “Loans” shall, for purposes hereof, be
deemed to refer to any Loan hereunder. In addition, the
following terms shall have the meanings specified below:
" Borrowing " means a borrowing by
the Borrower pursuant to Section 2.01.
" Closing Date " has the meaning
specified in Section 3.01.
" Commitment " means the
commitment of the Lender to make Loans to the Borrower hereunder in
an aggregate amount at any one time outstanding up to
$130,000,000.
" Default " means an event that,
with notice or lapse of time or both, would become an Event of
Default.
" Eurodollar Rate " means, for
each Loan, the rate appearing on Telerate Page 3750 at
approximately 11:00 A.M., London time, two Business Days prior
to the date of such Loan, as the rate for U.S. Dollar deposits with
a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then
the " Eurodollar Rate " with respect to such Loan for such
Interest Period shall be the rate equal to the rate per annum at
which U.S. Dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal
office of the Lender in London, England to prime banks in the
London interbank market at approximately 11:00 a.m., London
time, two Business Days prior to the making of such
Loan.
" Events of Default " has the
meaning specified in Section 6.01.
" Guarantee Agreement " means the
guarantee agreement dated as of the date hereof between the
Guarantor and the Lender relating to (among other things) this
Agreement, as from time to time amended.
3
" Guarantor " has the meaning
specified in the introduction hereto.
" Interest Period " means (a) the
period beginning on the date the Loans are made and ending on the
last day of the period selected by the Borrower, subject to the
provisions below. The duration of each Interest Period shall
be one, two, three, six or, with the consent of the Lender, nine or
twelve months, as the Borrower may, upon notice received by the
Lender not later than 12:00 noon (New York City time) on
the third Business Day prior to the first day of such Interest
Period, select. Anything in herein to the contrary
notwithstanding:
(i) the Borrower may not
select any Interest Period that ends after the Maturity
Date;
(ii) each Interest Period that
begins on the last Business Day of a calendar month (or on any day
for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month;
and
(iii) whenever the last day of
any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day of
such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next
preceding Business Day.
" Loan " has the meaning specified
in Section 2.01.
" Loan Documents " means,
collectively, this Agreement, the Guarantee Agreement and the
Note.
" Material Adverse Effect " means
a material adverse effect on (i) the business, financial condition
or operations of the Guarantor and its Subsidiaries, taken as a
whole, (ii) the ability of the Guarantor to perform any of its
material obligations under the Guarantee Agreement or
(iii) the rights of or benefits available to the Lender under
any Loan Document.
" Maturity Date " means the date
364 days after the Closing Date (as defined in the Transaction
Agreement), provided that if such date is not a Business
Day, the Maturity Date shall be the immediately preceding Business
Day.
" Note " has the meaning specified
in Section 2.02.
" Notice of Borrowing " has the
meaning specified in Section 2.02.
" Process Agent " has the meaning
specified in Section 7.06(d).
4
" Syndicated Revolving Credit
Agreement " means the $500,000,000 Revolving Credit Agreement
dated as of October 14, 2005 among the Guarantor, the lenders party
thereto, and Citibank, N.A., as administrative agent for such
lenders.
The definitions of terms herein shall
apply equally to the singular and plural forms of the terms
defined. In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" mean "to but
excluding". 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, and
(d) all references herein to Sections and Exhibits shall be
construed to refer to Sections of, and Exhibits to, this
Agreement.
5
SECTION 2. THE LOANS,
ETC.
2.01. The
Loans
. The Lender agrees, on the terms
and conditions hereinafter set forth, to make loans to the Borrower
(each, a " Loan ") from time to time on any Business Day
from the Closing Date until the Maturity Date, in an aggregate
amount at any one time outstanding up to but not exceeding the
amount of the Commitment. Within the limits of the
Commitment, the Borrower may from time to time borrow under this
Section 2.01, prepay Loans in whole or in part pursuant to
Section 2.08 and reborrow under this Section 2.01, all on
the terms and conditions of this Agreement. The Borrower
shall apply the proceeds of the Loans solely for working capital
and general corporate purposes.
2.02. Making the Loans, Evidence of
Debt
. Each Borrowing by the Borrower
shall be in a minimum amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof, and shall be made on notice, given
not later than 11:00 a.m. (New York City time) on the
second Business Day prior to the date of such Borrowing by the
Borrower to the Lender. Each such notice of a Borrowing (a "
Notice of Borrowing ") shall be irrevocable and binding
on the Borrower and shall be in writing in substantially the form
of Exhibit B, specifying therein the requested date and amount
of such Borrowing. The Lender shall, subject to the
satisfaction of the applicable conditions set forth in Section 3,
before 2:00 p.m. (New York City time) on the date of such
Borrowing, make the amount of such Borrowing available to the
Borrower, in same day funds, to the account of the Borrower
maintained at the Lender's address referred to in Section 7.
The Lender shall maintain in accordance with its usual
practice an account evidencing the indebtedness of the Borrower to
the Lender resulting from each Loan made by the Lender, including
the amounts of principal and interest payable and paid to the
Lender from time to time hereunder. The entries made in the
account maintained pursuant to this Section 2.02 shall be
prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure
of the Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement. The
Lender may request that the Loans be evidenced by a promissory note
of the Borrower substantially in the form of Exhibit A (the "
Note ") in the amount of the Commitment and dated the
Closing Date, in which case the Borrower will execute and deliver
the same on or prior to the Closing Date.
Section 2.03. Fees
. The Borrower agrees to pay to the
Lender a facility fee on the daily average amount of the
Commitment, whether or not utilized, for each day during the period
from the date which is 90 days from the date hereof until the
Maturity Date, at a rate per annum equal to 0.09%, payable in
arrears on the last Business Day of each March, June, September and
December of each year, on the Maturity Date and on the date of
termination of the Commitment.
2.03. Reductions of the
Commitments
.
(a) The Commitment shall be
automatically reduced to zero on the Maturity Date.
(b) In addition, the Borrower
shall have the right, upon at least three Business Days' notice to
the Lender, to terminate in whole or reduce ratably in part the
unused portions of
6
the Commitment, provided that each
partial reduction shall be in a minimum aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Once terminated or reduced, the Commitment may not be
reinstated.
2.04. Repayment
. The Borrower agrees to repay the
full principal amount of each Loan, and each Loan shall mature, on
the Maturity Date.
2.05. Interest
.
(a) Ordinary Interest
. The Borrower agrees to pay interest on the unpaid principal
amount of each Loan, from the date of such Loan until such
principal amount shall be paid in full, at a rate per annum equal
to the sum of the Eurodollar Rate for such Loan (i) until the date
which is 90 days after the date hereof, minus 0.25% and (ii)
from and after the date which is 90 days after the date hereof,
plus 0.18% per annum, payable on the last day of each
Interest Period and on the Maturity Date.
(b) Default Interest .
Notwithstanding the foregoing, if any Event of Default under
Section 6.01(a) or (b) shall have occurred and be
continuing, the Borrower shall pay interest on:
(i) the unpaid principal
amount of each Loan, payable on demand, at a rate per annum equal
at all times to two percent (2%) per annum above the rate per
annum required to be paid on such Loan pursuant to
Section 2.05(a); and
(ii) the amount of any
interest, fee or other amount payable by the Borrower hereunder
that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable on demand (and in
any event in arrears on the date such amount shall be paid in
full), at a rate per annum equal at all times to two percent
(2%) per annum above the rate per annum required to be paid on
Loans pursuant to Section 2.05(a).
2.06. Additional Interest on Eurodollar
Rate Loans
. The Borrower shall pay to the
Lender additional interest on the unpaid principal amount of each
Loan, from the date of such Loan until such principal amount is
paid in full, at an interest rate per annum equal at all times to
the remainder obtained by subtracting (i) the interest rate
for such Loan from (ii) the rate obtained by dividing such
interest rate by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of the Lender, payable on each
date on which interest is payable on such Loan. Such
additional interest shall be determined by the Lender and notified
to the Borrower.
2.07. Interest Rate
Determinations
.
(a) The Lender shall give
prompt notice to the Borrower of the applicable interest rates
determined by it for the purposes of Section 2.05.
(b) If, with respect to any
Loan, the Lender determines that the interest rate for such Loan
will not adequately and fairly reflect the cost to the Lender of
making, funding or maintaining the Loans, the Lender shall so
notify the Borrower, whereupon the Lender and the Borrower shall
negotiate in good faith with a view to agreeing upon a substitute
interest rate
7
basis for the Loans which shall reflect
the cost to the Lender of funding the Loans from alternative
sources (a " Substitute Basis "), and such Substitute Basis
shall apply in lieu of such interest rate to all Loans made on or
after the date upon which the Lender so notified the Borrower,
until the circumstances giving rise to such notice have ceased to
apply. If a Substitute Basis is not agreed upon within five
days of the delivery of any notice to the Borrower pursuant to this
Section 2.07(b), the Borrower may elect to prepay the Loan pursuant
to Section 2.08, provided , however , that if
the Borrower does not elect so to prepay, the Lender shall
determine (and shall certify from time to time in a certificate
delivered by the Lender setting forth in reasonable detail the
basis of the computation of such amount, which certification shall
be presumptively correct and binding on the Borrower in the absence
of manifest error) the rate basis reflecting the cost to the Lender
of funding the Loans for any period commencing on or after the date
upon which notice was delivered to the Borrower, until the
circumstances giving rise to such notice have ceased to apply, and
such rate basis shall be binding upon the Borrower and shall apply
in lieu of the Eurodollar Rate.
2.08. Prepayments of Loans
. The Borrower may, on notice
(given not later than 11:00 a.m. (New York City time) on
the second Business Day prior to the date of the proposed
prepayment of Loans), stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amounts of the
Loans in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount prepaid;
provided , however , that (i) each partial
prepayment shall be in an aggregate principal amount not less than
$5,000,000 or integral multiples of $1,000,000 in excess thereof
and (ii) the Borrower shall reimburse the Lender in respect
thereof pursuant to Section 2.13.
2.09.
Payments; Computations; Etc
.
(a) The Borrower shall make each
payment hereunder and under the Note without set-off or
counterclaim not later than 11:00 a.m. (New York City
time) on the day when due in U.S. Dollars to the Lender at its
office at 388 Greenwich Street, New York, NY 10013 in same day
funds.
(b) All computations of interest
and of facility fee shall be made by the Lender on the basis of a
year of 360 days, for the actual number of days (including the
first day but excluding the last day) occurring in the period
for which such interest is payable. Each determination by the
Lender of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder
or under any Note would be due on a day other than a Business Day,
such due date shall be extended to the next succeeding Business
Day, and any such extension of such due date shall in such case be
included in the computation of payment of interest; provided
, however , that if such extension would cause payment of
interest on or principal of the Loans to be made in the next
following calendar month, such payment shall be made on the next
preceding Business Day.
8
2.10. Increased
Costs
.
(a) Increased Costs
Generally . 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 or participated in by, the
Lender (except any reserve requirement reflected in the Eurodollar
Rate Reserve Percentage); or
(ii) impose on the Lender or
the London interbank market any other condition, cost or expense
affecting this Agreement or the Loans;
and the result of any of the foregoing
shall be to increase the cost to the Lender of making or
maintaining any Loan (or of maintaining its obligation to make any
Loan), or to increase the cost to the Lender, or to reduce the
amount of any sum received or receivable by the Lender hereunder
(whether of principal, interest or any other amount) then,
upon request of the Lender, the Borrower will pay to the Lender
such additional amount or amounts as will compensate the Lender for
such additional costs incurred or reduction suffered.
(b) Capital
Requirements . If the Lender determines that any Change
in Law affecting the Lender or any lending office of the Lender or
the Lender's holding company regarding capital requirements has or
would have the effect of reducing the rate of return on the
Lender's capital or on the capital of the Lender's holding company
as a consequence of this Agreement, the Commitment or the Loans to
a level below that which the Lender or the Lender's holding company
could have achieved but for such Change in Law (taking into
consideration the Lender's policies and the policies of the
Lender's holding company with respect to capital adequacy), then
from time to time the Borrower will pay to the Lender such
additional amount or amounts as will compensate the Lender or the
Lender's holding company for any such reduction
suffered.
(c) Certificates for
Reimbursement . A certificate of the Lender setting forth
the amount or amounts necessary to compensate the Lender or its
holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest
error. The Borrower shall pay the Lender the amount
shown as due on any such certificate within 10 days after
receipt thereof.
(d) Delay in Requests
. Failure or delay on the part of the Lender to demand
compensation pursuant to this Section shall not constitute a
waiver of the Lender's right to demand such compensation,
provided that the Borrower shall not be required to
compensate the Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than 270 days
prior to the date that the Lender notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and
of the Lender's intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 270-day period referred to
above shall be extended to include the period of retroactive effect
thereof).
9
2.11. Taxes
.
(a) Payments Free of
Taxes . Any and all payments by or on account of any
obligation of the Borrower hereunder or under the Note shall be
made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if the
Borrower shall be required by applicable law to deduct any
Indemnified Taxes (including any Other Taxes) from such
payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions for
Indemnified Taxes or Other Taxes (including deductions for
Indemnified Taxes or Other Taxes applicable to additional sums
payable under this Section ) the Lender receives an
amount equal to the sum it would have received had no such
deductions for Indemnified Taxes or Other Taxes been made,
(ii) the Borrower shall make such deductions and
(iii) the Borrower shall timely pay the full amount deducted
to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes
by the Borrower . Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any
Other Taxes that arise from any payment made by it hereunder or
under the Note to the relevant Governmental Authority in accordance
with applicable law. The Lender shall notify the Borrower on
or before the Closing Date of any Other Taxes that to its knowledge
are imposed with respect to any Loan Document by the jurisdiction
in which the Lender is organized or in which its applicable lending
office is located.
(c) Indemnification by the
Borrower . The Borrower shall indemnify the Lender,
within 30 days after 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) attributable to the Borrower under any
Loan Document and paid by the Lender 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. A certificate as to the amount of such payment or
liability delivered to the Borrower by the Lender shall be
conclusive absent manifest error, provided that if the Borrower has
satisfied its indemnity obligation and delivers to the Lender an
opinion of nationally recognized counsel to the effect that it is
more likely than not that such assertion by the Governmental
Authority is incorrect as a matter of law, the Lender shall
reasonably assist the Borrower in contesting such Taxes (at the
sole expense of the Borrower) and seeking refund thereof and,
provided further that such assistance shall not be construed to
impose on the Lender an obligation to disclose information it
reasonably considers confidential or proprietary or arrange its tax
affairs other than as the Lender sees fit.
(d) Evidence of
Payments . 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 Lender 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 Lender.
(e) Treatment of Certain
Refunds . If the Lender determines, in good faith and its
reasonable 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 (including, in
lieu of an actual refund, a credit
10
against taxes provided by the taxing
authority that imposed such Indemnified Taxes or Other Taxes), it
shall pay to the Borrower an amount equal to such refund or the
value of the credit in lieu thereof (but only to the extent of
indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Indemnified
Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Lender, as the case may be, and
without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund or credit in
lieu thereof), provided that the Borrower, upon the request
of the Lender, agrees to repay the amount paid over to the Borrower
to the Lender in the event the Lender is required to repay or
return such refund (or credit in lieu thereof) to such Governmental
Authority. This subsection shall not be construed to
require the 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.
2.12. Mitigation Obligations
. If the Lender requests
compensation under Section 2.10, or requires the Borrower
to
