5-YEAR REVOLVING CREDIT AGREEMENT

Exhibit 10.2

 

EXECUTION COPY

 

 

$500,000,000

 

5-YEAR REVOLVING CREDIT AGREEMENT

 

Dated as of October 14, 2005

 

Among

 

LEGG MASON, INC.,

as Borrower

 

THE LENDERS PARTY HERETO

 

CITIBANK, N.A.,

as Administrative Agent

 

CITIGROUP GLOBAL MARKETS INC.,

as Lead Arranger and Book Manager

 

BANK OF AMERICA, N.A.,

JPMORGAN CHASE BANK, N.A.,

THE BANK OF NEW YORK and

DEUTSCHE BANK AG NEW YORK BRANCH,

as Co-Syndication Agents

 

 

TABLE OF CONTENTS

 

 

i

 

ii

SCHEDULES

 

 

EXHIBITS

 

 

iii

 

REVOLVING CREDIT AGREEMENT dated as of October 14, 2005 (this “ Agreement ”) among LEGG MASON, INC., a Maryland corporation (the “ Borrower ”), each of the Lenders (as defined below) party hereto, and CITIBANK, N.A., as administrative agent for such Lenders (in such capacity, the “ Administrative Agent ”).

 

Pursuant to the Transaction Agreement dated as of June 23, 2005 (the “ Transaction Agreement ”) by and between Citigroup Inc. and the Borrower, the Borrower has agreed to acquire (directly or through one of its wholly-owned subsidiaries) the shares of capital stock of certain subsidiaries of Citigroup Inc. known collectively as the business unit Citigroup Asset Management (the “ Acquisition ”).

 

The Borrower has requested that the Lenders make revolving credit loans to it in aggregate amount at any one time outstanding up to but not exceeding $500,000,000, and the Lenders are willing to make such loans on and subject to the terms and conditions set forth herein.

 

Accordingly, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

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

 

“ Acquisition ” has the meaning specified in the recitals hereto.

 

“ Administrative Agent ” has the meaning specified in the introduction hereto.

 

“ Administrative Agent’s Account ” means the account of the Administrative Agent maintained by the Administrative Agent at Citibank, N.A., 2 Penns Way, Suite 200, New Castle, Delaware 19720, ABA No.: 021-00-0089, Account No.: 36852248, Account Name: Medium Term Finance, Reference: Legg Mason, Attention: John Davidson, or such other account as may be designated by the Administrative Agent from time to time.

 

“ 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.

 

“ Applicable Lending Office ” means, with respect to any Lender, such Lender’s Domestic Lending Office in the case of a Base Rate Loan and such Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

 

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“ Applicable Facility Fee Rate ” means, while any particular Rating Level applies, the rate per annum set forth below opposite the reference to such Rating Level:

 

 

provided that if at any time the Debt Ratings of Moody’s and S&P would lead to different Rating Levels, the “Applicable Facility Fee Rate” will be determined based on the Rating Level one above the lower Rating Level (Rating Level 1 being the highest and Rating Level 5 being the lowest). Each change in the Applicable Facility Fee Rate resulting from a Rating Level Change shall be effective on the date on which such Rating Level Change is first announced by Moody’s or S&P, as the case may be.

 

“ Applicable Margin ” means:

 

(a) for any Base Rate Loan, 0.000% per annum; and

 

(b) for any Eurodollar Rate Loan and while any particular Rating Level applies, the rate per annum set forth below opposite the reference to such Rating Level:

 

 

provided that if at any time the Debt Ratings of Moody’s and S&P would lead to different Rating Levels, the “Applicable Margin” will be determined based on the Rating Level one above the lower Rating Level (Rating Level 1 being the highest and Rating Level 5 being the lowest). Each change in the Applicable Margin resulting from a Rating Level Change shall be effective on the date on which such Rating Level Change is first announced by Moody’s or S&P, as the case may be.

 

“ 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.

 

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“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 8.06), and accepted by the Administrative Agent, in substantially the form of Exhibit C or any other form approved by the Administrative Agent.

 

“ Assignment Date ” has the meaning specified in Section 8.06(b).

 

“ Base Rate ” means a fluctuating interest rate per annum which shall at any time be equal to the higher of:

 

(a) the rate of interest announced publicly by Citibank in New York, New York from time to time as Citibank’s base rate; and

 

(b) 1/2 of 1% per annum above the Federal Funds Rate.

 

“ Base Rate Loan ” means a Loan which bears interest at rates based upon the Base Rate.

 

“ Borrower ” has the meaning specified in the introduction hereto.

 

“ Borrowing ” means a borrowing consisting of simultaneous Loans of the same Type made by each of the Lenders to the Borrower pursuant to Section 2.01.

 

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

 

“ 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) 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.

 

“ 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 from time to time, and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) of Equity Interests representing more than 51% of the issued and outstanding Voting Shares of the Borrower or (b) 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 or a committee thereof nor (ii) appointed by directors so nominated.

 

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“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

 

“ Citibank ” means Citibank, N.A., a national banking association.

 

“ Closing Date ” means the date on which the Administrative Agent confirms to the Borrower that the conditions precedent to the initial Borrowing set forth in Section 3.01 have been satisfied (or waived in accordance with Section 8.01).

 

“ 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 to the Borrower in an aggregate amount at any one time outstanding up to the amount set forth opposite such Lender’s name on Schedule I or, if such Lender has entered into an Assignment and Assumption, set forth for such Lender in the Register, as such amount may be reduced pursuant to Section 2.04(b). The initial aggregate amount of the Lenders’ Commitments is $500,000,000.

 

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

 

“ Commitment Termination Date ” means the Maturity Date.

 

“ Consolidated ” refers to the consolidation of accounts of any Person and its Subsidiaries without duplication in accordance with GAAP.

 

“ Consolidated EBITDA ” means, for any period, for the Borrower and its Consolidated Subsidiaries on a Consolidated basis, 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 with respect to 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 expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such Consolidated net income for such period, losses on sales of assets outside of the ordinary course of business), and (f) any other non-cash charges, and minus , to the extent included in the statement of such Consolidated net income for such period, the sum of (a) any extraordinary income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated net income for such period, gains on the sales of assets outside of the ordinary course of business) and (b) any other non-cash income, all as determined

 

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without duplication on a Consolidated basis in accordance with GAAP, in each case exclusive of the cumulative effect of foreign currency gains or losses. For the purposes of calculating Consolidated EBITDA for any period in connection with any determination of the Leverage Ratio, if during such period the Borrower or any Subsidiary shall have made an acquisition or incurred or assumed any Indebtedness (without duplication of any Indebtedness incurred to refinance such assumed Indebtedness), Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such acquisition occurred and such Indebtedness had been incurred or assumed or refinanced on the first day of such period.

 

“ Continuation ”, “ Continue ” and “ Continued ” each refers to a continuation of Eurodollar Rate Loans from one Interest Period to the next Interest Period pursuant to Section 2.09(b).

 

“ 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.

 

“ Convert ”, “ Conversion ” and “ Converted ” each refers to a conversion of Loans of one Type into Loans of the other Type pursuant to Section 2.08 or Section 2.09(a).

 

“ Debt Rating ” means the long-term, senior unsecured non-credit-enhanced debt ratings of the Borrower by Moody’s and/or S&P.

 

“ Default ” means an event that, with notice or lapse of time or both, would become an Event of Default.

 

“ Domestic Lending Office ” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” in the Administrative Questionnaire of such Lender or in the Assignment and Assumption pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent.

 

“ Eligible Assignee ” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by the Administrative Agent and, unless an Event of Default has occurred and is continuing, by the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

“ 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.

 

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“ 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.

 

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

 

“ 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 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 existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (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 of its ERISA Affiliates 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 of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower or any of its ERISA Affiliates 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.

 

“ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“ Eurodollar Lending Office ” means, with respect to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” in the Administrative Questionnaire

 

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of such Lender or in the Assignment and Assumption pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent.

 

“ Eurodollar Rate ” means, for any Interest Period for each Eurodollar Rate Loan, the rate appearing on Telerate Page 3750 at approximately 11:00 A.M., London time, two Business Days prior to the commencement of such Interest Period, 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 Eurodollar Rate Loan for such Interest Period shall be the rate equal to the average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of the respective rates notified to the Administrative Agent by the Reference Banks as the rate at which U.S. Dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by such Reference Banks in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, subject , however , to the provisions of Section 2.08.

 

“ Eurodollar Rate Loan ” means a Loan which bears interest at rates based upon the Eurodollar Rate.

 

“ Eurodollar Rate Reserve Percentage ” of any Lender, for any Interest Period for any Eurodollar Rate Loan, means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.

 

“ Events of Default ” has the meaning specified in Section 6.01.

 

“ Excluded Representations ” means the representations and warranties set forth in the last sentence of Section 4.01(e) and in Section 4.01(f)(i).

 

“ 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) Taxes imposed on or measured by its overall net income, overall gross income or overall gross receipts (however denominated), and franchise taxes imposed on it (in lieu of net income taxes) or capital taxes, by the jurisdiction (or any political subdivision thereof) 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 branch profits taxes imposed by the United States 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

 

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Borrower under Section 2.16(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 2.15(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.15(a).

 

“ Federal Funds Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

 

“ Fee Letter ” means the Fee Letter dated June 22, 2005, between the Borrower and Citigroup Global Markets Inc., providing for, among other things, the payment of certain fees in connection with this Agreement.

 

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

 

“ Foreign Lender ” means a Lender that is organized under the laws of a jurisdiction other than the United States. For purposes of this definition, the United States, 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 business.

 

“ GAAP ” means generally accepted accounting principles in the United States as in effect from time to time.

 

“ Governmental Authority ” means the government of the United States, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“ 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 of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor,

 

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direct or indirect, (a) to purchase or pay (or to 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 guarantee 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.

 

“ 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 (the amount of such Indebtedness at any time to be deemed to be an amount equal to the fair market value of the property subject to such Lien if such Indebtedness has not been assumed), (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guarantee, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) the net liability of such Person in respect of Hedging Agreements. 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.

 

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“ Indemnitee ” has the meaning specified in Section 8.04(b).

 

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

 

“ Interest Expense ” means, for any period, for the Borrower and its Subsidiaries on a Consolidated basis, the sum of all cash interest payable in respect of Indebtedness of the kinds referred to in clauses (a), (b) and (h) of the definition of Indebtedness herein (and of the kind referred to in clause (g) of such definition to the extent it relates to Indebtedness of the kinds referred to in clauses (a), (b) and (h) of the definition thereof).

 

“ Interest Period ” means, with respect to any Eurodollar Rate Loan, the period beginning on the date such Eurodollar Rate Loan is made, or Continued or Converted from a Base Rate Loan, and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each Interest Period shall be one, two, three, six or, with the consent of all of the Lenders, nine or twelve months, as the Borrower may, upon notice received by the Administrative Agent 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; provided , however , that:

 

(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.

 

“ Lead Arranger ” means Citigroup Global Markets Inc. in its capacity as Lead Arranger and Book Manager.

 

“ Lender ” means each bank or other financial institution listed on the signature pages hereof and each Person that shall become a party hereto pursuant to Section 2.16(b) or 8.06(b).

 

“ Leverage Ratio ” means, at any time, the ratio of (a) the aggregate outstanding principal amount of all Indebtedness of the kinds referred to in clauses (a), (b) and (h) of the definition of “Indebtedness” herein (and of the kind referred to in clause (g) of such definition to the extent it relates to Indebtedness of the kinds referred to in clauses (a), (b) and (h) of the definition thereof) of the Borrower and its Subsidiaries at such time to

 

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(b) Consolidated EBITDA for the then most recently concluded period of four consecutive fiscal quarters of the Borrower.

 

“ Lien ” means, with respect to any asset, any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset.

 

“ Loan ” means each loan by a Lender to the Borrower as part of a Borrowing under Section 2.01(a) and refers to a Base Rate Loan or a Eurodollar Rate Loan.

 

“ Loan Documents ” means, collectively, this Agreement, the Notes and the Fee Letter.

 

“ Majority Lenders ” means at any time (a) Lenders holding more than 50% of the Commitments, or (b) if the Commitments have terminated, Lenders having more than 50% of the aggregate amount of the unpaid principal amount of the Loans.

 

“ Margin Stock ” means “margin stock” within the meaning of Regulation U.

 

“ Material Adverse Effect ” means a material adverse effect on (i) the business, financial condition or operations of the Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the Borrower to perform any of its material obligations under any Loan Document or (iii) the rights of or benefits available to the Lenders under any Loan Document.

 

“ Material Indebtedness ” means Indebtedness issued or incurred under any agreement or instrument (or series of related agreements or instruments) in an aggregate outstanding principal amount of $50,000,000 or more. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of a Person in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Person would be required to pay if such Hedging Agreement were terminated at such time.

 

“ Maturity Date ” means the date five (5) years after the Closing Date, provided that if such date is not a Business Day, the Maturity Date shall be the immediately preceding Business Day.

 

“ 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.

 

“ Note ” has the meaning specified in Section 2.02(g).

 

“ Notice of Borrowing ” has the meaning specified in Section 2.02(a).

 

“ Other Taxes ” means 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 any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

 

“ Participant ” has the meaning assigned to such term in Section 8.06(d).

 

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

 

“ Permitted Encumbrances ” means:

 

(a) Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.01(d);

 

(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 60 days or are being contested in compliance with Section 5.01(d);

 

(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) judgment liens in respect of judgments that do not constitute an Event of Default under Section 6.01(k); and

 

(f) 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 thereof;

 

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

 

“ Permitted 12b-1 Recourse Financing Transaction ” means a pledge by the Borrower or a Subsidiary of 12b-1 Fees to a third party in order to secure Indebtedness extended by such third party to the Borrower or such Subsidiary, provided that the aggregate principal amount of such Indebtedness does not exceed $250,000,000.

 

“ Permitted 12b-1 Transactions ” means a Permitted 12b-1 True Sale Transaction or a Permitted 12b-1 Recourse Financing Transaction.

 

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“ Permitted 12b-1 True Sale Transaction ” means a sale by the Borrower or a Subsidiary of 12b-1 Fees to a 12b-1 Purchaser in a true sale transaction without recourse based upon the collectibility of the 12b-1 Fees sold and the sale or pledge of such 12b-1 Fees (or an interest therein) by such 12b-1 Purchaser, in each case without any Guarantee by, or other recourse to or credit support by, the Borrower or any Subsidiary or recourse to any assets of the Borrower or any Subsidiary other than customary recourse in similar transactions.

 

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

 

“ 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.

 

“ Process Agent ” has the meaning specified in Section 8.07(d).

 

“ Rating Level ” means Rating Level 1, Rating Level 2, Rating Level 3, Rating Level 4 or Rating Level 5.

 

“ Rating Level 1 ” means that the Debt Rating is A1 or better by Moody’s or A+ or better by S&P.

 

“ Rating Level 2 ” means that Rating Level 1 does not apply and the Debt Rating is A2 by Moody’s or A by S&P.

 

“ Rating Level 3 ” means that Rating Level 1 and Rating Level 2 do not apply and the Debt Rating is A3 by Moody’s or A- by S&P.

 

“ Rating Level 4 ” means that Rating Level 1, Rating Level 2 and Rating Level 3 do not apply and the Debt Rating is Baa1 by Moody’s or BBB+ by S&P.

 

“ Rating Level 5 ” means that Rating Level 1, Rating Level 2, Rating Level 3 and Rating Level 4 do not apply and the Debt Rating is Baa2 or lower by Moody’s or BBB or lower by S&P, and shall include any period during which neither Moody’s nor S&P shall have in effect a Debt Rating.

 

“ Rating Level Change ” means a change in the Debt Rating by either or both of Moody’s or S&P (other than as a result of a change in the rating system of such rating agency) that results in the change from one Rating Level to another, which Rating Level Change shall be effective on the date on which the relevant change in the Debt Rating is first announced by Moody’s or S&P, as the case may be.

 

“ Reference Banks ” means the principal London office of each of Bank of America, N.A., Citibank and JPMorgan Chase Bank, N.A.

 

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“ Registe r” has the meaning specified in Section 8.06(c).

 

“ Regulations T, U and X ” means Regulations T, U and X issued by the Board of Governors of the Federal Reserve System, as from time to time amended.

 

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

 

“ Responsible Officer ” of the Borrower means the Chief Financial Officer, the Treasurer, any Executive Vice President, any Senior Vice President, any Vice President, any Director and any Counsel to the Borrower.

 

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

 

“ Securities Laws ” means the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the U.S. Securities and Exchange Commission or the Public Company Accounting Oversight Board.

 

“ Significant Subsidiary ” shall mean, at any time, a Subsidiary that as of such time meets the definition of a “significant subsidiary” contained in Regulation S-X of the Securities and Exchange Commission as in effect on the date hereof.

 

“ Subsidiary ” means any corporation, partnership, limited liability company or other entity of which at least a majority of the Voting Shares are at the time directly or indirectly owned or controlled by the Borrower or one or more Subsidiaries of the Borrower, or by the Borrower and one or more Subsidiaries of the Borrower.

 

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

 

“ Telerate Page 3750 ” means Page 3750 of the Telerate Service or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market.

 

“ Transaction Agreement ” has the meaning specified in the recitals hereto.

 

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“ 12b-1 Fees ” means certain charges and fees, permitted by Rule 12b-1 of the Investment Company Act of 1940, payable by an investor in a fund offered by the Borrower or any Subsidiary.

 

“ 12b-1 Purchaser ” means a Subsidiary or a financial institution or trust that purchases 12b-1 Fees in connection with a Permitted 12b-1 True Sale Transaction.

 

“ Type ” refers to whether a Loan is a Base Rate Loan or a Eurodollar Rate Loan.

 

“ United States ” means the United States of America.

 

“ U.S. Dollars ” and “ $ ” means the lawful currency of the United States.

 

“ Voting Shares ” means, with respect to any Person, Equity Interests having by terms thereof voting power to elect a majority of the board of directors, or other individuals performing similar functions, of such Person.

 

“ Wholly-Owned Subsidiary ” means, with respect to any Person, any Subsidiary of which all of the Equity Interests (other than, in the case of a corporation, directors’ qualifying shares) are directly or indirectly owned or controlled by such Person or one or more Wholly-Owned Subsidiaries of such Person or by such Person and one or more Wholly-Owned Subsidiaries of such Person.

 

“ 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. 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, (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.

 

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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 it 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 Majority 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. To enable the ready and consistent determination of compliance with the covenants set forth in Section 5.03, the Borrower will cause the last day of its fiscal year to be March 31 or, with prior written notice to the Administrative Agent, December 31.

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE ADVANCES

 

SECTION 2.01. The Loans; Application of Proceeds .

 

(a) The Loans . The Lenders severally agree, 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 Commitment Termination Date, in an aggregate amount up to but not exceeding the aggregate amount of the Commitments. Within the limits of each Lender’s Commitment, the Borrower may from time to time borrow under this Section 2.01, prepay Loans in whole or in part pursuant to Section 2.10 and reborrow under this Section 2.01, all on the terms and conditions of this Agreement.

 

(b) Use of Proceeds . The Borrower shall use the proceeds of the Loans solely for working capital and general corporate purposes.

 

SECTION 2.02. Making the Loans, Evidence of Debt .

 

(a) (i) Each Borrowing by the Borrower shall be in a minimum amount of $10,000,000 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 third Business Day prior to the date of such Borrowing (in the case of a Borrowing consisting of Eurodollar Rate Loans) or given not later than 11:00 a.m. (New York City time) on the Business Day of such Borrowing (in the case of a Borrowing consisting of Base Rate Loans), by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof.

 

(ii) 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

 

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of Exhibit B, specifying therein the requested (1) date of such Borrowing, (2) Type of Loans comprising such Borrowing, (3) aggregate amount of such Borrowing, and (4) in the case of a Borrowing consisting of Eurodollar Rate Loans, initial Interest Period for each such Loan.

 

(iii) Each Lender shall, before 2:00 p.m. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing.

 

(iv) After the Administrative Agent’s receipt of such funds, and subject to the satisfaction of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by promptly crediting the amounts so received, in like funds, to the account of the Borrower maintained at the Administrative Agent’s address referred to in Section 8.02(a)(iii).

 

(b) Each Borrowing and each Conversion or Continuation thereof shall consist of Loans of the same Type (and, if such Loans are Eurodollar Rate Loans, having the same Interest Period) made, Continued or Converted on the same day by the Lenders ratably according to their respective Commitments. Anything in subsection (a) above to the contrary notwithstanding, (i) if no election as to the Type of Loans is specified, then the requested Loans shall be comprised of Base Rate Loans, and (ii) if no Interest Period is specified with respect to any Eurodollar Rate Loans, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

(c) 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. The Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

 

(d) 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.

 

(e) 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.

 

(f) The entries made in the accounts maintained pursuant to subsection (d) or (e) 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 affect the obligation of the Borrower to repay the Loans made to the Borrower in accordance with the terms of this Agreement.

 

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(g) Any Lender may, through the Administrative Agent, request that the Loans to be made by it to the Borrower be evidenced by a promissory note of the Borrower. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or its registered assigns), substantially in the form of Exhibit A (each such promissory note, a “ Note ”), in the amount of the Commitment of such Lender and dated the Closing Date.

 

SECTION 2.03. Fees . (a) The Borrower agrees to pay to the Administrative Agent, for the Administrative Agent’s own account, an administrative agency fee at the times and in the amounts set forth in the Fee Letter.

 

(b) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee on the daily average amount of such Lender’s Commitment, whether or not utilized, for each day during the period from the date hereof until the Commitment Termination Date, at a rate per annum equal to the Applicable Facility Fee Rate in effect from time to time, payable in arrears on the last Business Day of each March, June, September and December of each year, on the Commitment Termination Date and on the date of termination of the Commitments.

 

SECTION 2.04. Reductions of the Commitments .

 

(a) The Commitment of each Lender shall be automatically reduced to zero on the Commitment Termination Date.

 

(b) In addition, the Borrower shall have the right, upon at least three Business Days’ notice to the Administrative Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Lenders, 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 Commitments may not be reinstated.

 

SECTION 2.05. Repayment . The Borrower agrees to repay the full principal amount of each Loan by each Lender, and each such Loan shall mature, on the Maturity Date.

 

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SECTION 2.06. 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 the following rates per annum:

 

(i) Base Rate Loans . While such Loan is a Base Rate Loan, a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin for Base Rate Loans as in effect from time to time, payable quarterly in arrears on the last Business Day of each March, June, September and December and on the date such Base Rate Loan shall be Converted or paid in full.

 

(ii) Eurodollar Rate Loans . While such Loan is a Eurodollar Rate Loan, a rate per annum for each Interest Period for such Loan equal to the sum of the Eurodollar Rate for such Interest Period plus the Applicable Margin for Eurodollar Rate Loans as in effect from time to time, payable on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day prior to the last day of such Interest Period that occurs at intervals of three months after the first day of such Interest Period, and on each date on which such Eurodollar Rate Loan shall be Continued, Converted or paid in full.

 

(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 owing to each Lender, payable on demand (and in any event in arrears on the dates referred to in Section 2.06(a)(i) or (a)(ii) above), 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 said Section 2.06(a)(i) or (a)(ii), as applicable, provided that any Eurodollar Rate Loan shall be Converted into a Base Rate Loan pursuant to Section 2.08(g)(i) and then bear interest as aforesaid in this Section 2.06(b)(i); 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 Base Rate Loans pursuant to Section 2.06(a)(i) above.

 

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SECTION 2.07. Additional Interest on Eurodollar Rate Loans . The Borrower shall pay to each Lender additional interest on the unpaid principal amount of each Eurodollar Rate Loan of such Lender, 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 Eurodollar Rate for each Interest Period for such Loan from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Loan. Such additional interest shall be determined by such Lender and notified to the Borrower through the Administrative Agent.

 

SECTION 2.08. Interest Rate Determinations; Changes in Rating Systems .

 

(a) Each Reference Bank agrees to furnish to the Administrative Agent timely information for the purpose of determining each Eurodollar Rate. If any one or more of the Reference Banks shall not furnish such timely information to the Administrative Agent for the purpose of determining any such interest rate, the Administrative Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks (subject to the provisions set forth in the definition of “Eurodollar Rate” in Section 1.01 and to clause (c) below).

 

(b) The Administrative Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rates determined by the Administrative Agent for the purposes of Section 2.06.

 

(c) If (1) fewer than two Reference Banks furnish timely information to the Administrative Agent for determining the Eurodollar Rate for any Interest Period for any Eurodollar Rate Loans and (2) the relevant rates do not appear on Telerate Page 3750,

 

(i) the Administrative Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Loans for such Interest Period;

 

(ii) each Eurodollar Rate Loan will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Loan; and

 

(iii) the obligation of the Lenders to make or Continue, or to Convert Loans into, Eurodollar Rate Loans shall be suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.

 

(d) If, with respect to any Eurodollar Rate Loans, the Majority Lenders notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Loans will not adequately and fairly reflect the cost to such Majority Lenders of making, funding or maintaining their respective Eurodollar Rate Loans for such Interest Period, the Administrative Agent shall so notify the Borrower and the Lenders, whereupon:

 

(i) any Notice of Borrowing requesting a Borrowing comprised of Eurodollar Rate Loans shall be ineffective;

 

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(ii) each Eurodollar Rate Loan will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Loan; and

 

(iii) the obligation of the Lenders to make or Continue, or to Convert Loans into, Eurodollar Rate Loans shall be suspended until the Administrative Agent shall notify the Borrower and such Lenders that the circumstances causing such suspension no longer exist.

 

(e) If the Borrower shall fail to select the duration of any Interest Period following the initial Interest Period for any Eurodollar Rate Loans in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent shall so notify the Borrower and the Lenders and such Loans will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Loans.

 

(f) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Loans comprising any Borrowing shall be reduced, by prepayment or otherwise, to less than $5,000,000, such Loans shall automatically Convert into Base Rate Loans.

 

(g) Upon the occurrence and during the continuance of any Event of Default, (i) each Eurodollar Rate Loan will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Loan and (ii) the obligation of the Lenders to make or Continue, or to Convert Loans into, Eurodollar Rate Loans shall be suspended.

 

(h) If the rating system of either Moody’s or S&P shall change, or if either such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Administrative Agent (on behalf of the Lenders) shall negotiate in good faith to amend the references to specific ratings in this Agreement to reflect such changed rating system or the non-availability of ratings from such rating agency ( provided that any such amendment to such specific ratings shall not be effective without the approval of the Majority Lenders).

 

SECTION 2.09. Voluntary Conversion and Continuation of Loans .

 

(a) The Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the date of the proposed Conversion, and subject to the provisions of Sections 2.08 and 2.14, Convert all or any portion of the outstanding Loans of one Type comprising part of the same Borrowing into Loans of the other Type; provided that in the case of any such Conversion of a Eurodollar Rate Loan into a Base Rate Loan on a day other than the last day of an Interest Period therefor, the Borrower shall reimburse the Lenders in respect thereof pursuant to Section 2.17. Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Loans to be Converted, and (z) if such Conversion is into Eurodollar Rate Loans, the duration of the initial Interest Period for each such Loan. Each notice of Conversion shall be irrevocable and binding on the Borrower.

 

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(b) The Borrower may, on any Business Day, upon notice given to the Administrative Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the date of the proposed Continuation, and subject to the provisions of Sections 2.08 and 2.14, Continue all or any portion of the outstanding Eurodollar Rate Loans comprising part of the same Borrowing for one or more Interest Periods; provided that in the case of any such Continuation on a day other than the last day of an Interest Period therefor, the Borrower shall reimburse the Lenders in respect thereof pursuant to Section 2.17. Each such notice of a Continuation shall, within the restrictions specified above, specify (i) the date of such Continuation, (ii) the Eurodollar Rate Loans to be Continued and (y) the duration of the initial Interest Period (or Interest Periods) for the Eurodollar Rate Loans subject to such Continuation. Each notice of Continuation shall be irrevocable and binding on the Borrower.

 

SECTION 2.10. Prepayments of Loans .

 

(a) The Borrower shall have no right to prepay any principal amount of any Loan other than as provided in subsection (b) below.

 

(b) 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 (in the case of an Eurodollar Rate Loans) or given not later than 11:00 a.m. (New York City time) on the Business Day of the proposed prepayment of Loans (in the case of Base Rate 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 comprising part of the same Borrowing 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) in the case of any such prepayment of a Eurodollar Rate Loan on a day other than the last day of an Interest Period therefor, the Borrower shall reimburse the Lenders in respect thereof pursuant to Section 2.17.

 

SECTION 2.11. Payments; Computations; Etc .

 

(a) Payments . The Borrower shall make each payment hereunder and under each other Loan Document to which it is a party 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 Administrative Agent at the Administrative Agent’s Account in same day funds. The Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest ratably (other than amounts payable pursuant to Section 2.13, 2.15 or 2.17) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Assumption and recording of the information contained therein in the Register pursuant to Section 8.06(c), from and after the Assignment Date set forth therein, the Administrative Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender assignee thereunder,

 

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and the parties to such Assignment and Assumption shall make all appropriate adjustments in such payments for periods prior to such Assignment Date directly between themselves.

 

(b) Computations . All computations of interest based on Citibank’s base rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, 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. All computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of facility fee shall be made by the Administrative Agent, and any computations of interest pursuant to Section 2.07 shall be made by a 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 Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(c) Payment Dates . Whenever any payment hereunder or under the Notes 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 Eurodollar Rate Loans to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

 

(d) Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time 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 at such time in accordance with Section 2.02(a)(iii) and may, 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 a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate 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 its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(e) Payments by Borrower; Presumptions by Administrative Agent . 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

 

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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 the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

SECTION 2.12. Sharing of Payments, Etc . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, 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 and other amounts owing them, 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 subsection shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans other than to the Borrower or any Subsidiary thereof (as to which the provisions of this subsection 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 setoff 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.

 

SECTION 2.13. 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, any Lender (except any reserve requirement reflected in the Eurodollar Rate Reserve Percentage); or

 

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(ii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate 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 Rate 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