FIRST AMENDMENT AND WAIVER
THIS FIRST AMENDMENT AND WAIVER (this “ Amendment ”) dated as of June 30, 2011 is entered into among REGAL-BELOIT CORPORATION (the “ Company ”), various financial institutions and BANK OF AMERICA, N.A., as Administrative Agent.
W I T N E S S E T H :
WHEREAS, the Company, various financial institutions (the “ Banks ”) and the Administrative Agent are parties to a Term Loan Agreement dated as of June 16, 2008 (the “ Loan Agreement ”; capitalized terms used but not defined herein have the respective meanings given to them in the Loan Agreement); and
WHEREAS, the parties hereto desire to (a) amend the Loan Agreement to conform certain provisions thereof to the provisions of a revolving credit facility that the Company is entering into concurrently with this Amendment and (b) waive certain defaults under the Loan Agreement, as more fully set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO LOAN AGREEMENT . Effective on the Amendment Effective Date (as defined below), the Loan Agreement is amended in its entirety to read as set forth on the attached Exhibit A .
SECTION 2. WAIVER . Subject to the conditions precedent set forth in Section 4 , the Required Banks waive any Event of Default resulting from the Company’s failure to comply with Section 10.17 of the Loan Agreement, as in effect prior to the effectiveness of this Amendment.
SECTION 3. REPRESENTATIONS AND WARRANTIES . The Company represents and warrants to the Banks and the Administrative Agent on the date hereof that:
3.1 Authorization; No Conflict . The execution and delivery by the Company of this Amendment and the performance by the Company of its obligations under the Loan Agreement as amended hereby (as so amended, the “ Amended Loan Agreement ”) are within the corporate powers of the Company, have been duly authorized by all necessary corporate action on the part of the Company (including any necessary shareholder action), have received all necessary governmental and other third-party approvals (if any shall be required), and do not and will not (a) violate any provision of law or any order, decree or judgment of any court or other government agency that is binding on the Company or any other Loan Party, (b) contravene or conflict with, or result in a breach of, any provision of the certificate of incorporation, partnership agreement, by-laws or other organizational documents of the Company or any other Loan Party or (c) contravene or conflict with, or result in a Lien under, any material agreement, indenture, instrument or other document that is binding on the Company or any other Loan Party.
3.2 Validity and Binding Nature . This Amendment has been duly executed and delivered by the Company, and this Amendment and the Amended Loan Agreement are legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.
3.3 Reaffirmation of Representations and Warranties . After giving effect to this Amendment, the representations and warranties contained in Section 9 of the Amended Loan Agreement are true and correct in all material respects on the date of this Amendment (except to the extent stated to relate to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date).
SECTION 4. CONDITIONS PRECEDENT . This Amendment shall become effective on the date (the “ Amendment Effective Date ”) on which the Administrative Agent has received the following:
4.1 Counterparts . Executed counterparts of this Amendment from the Company and the Banks.
4.2 Confirmation . A confirmation, substantially in the form of Exhibit B hereto, executed by each Loan Party.
4.3 Fees and Expenses . Evidence that the Company has paid all accrued and invoiced fees and expenses of the Administrative Agent (including reasonable attorneys’ fees and charges), to the extent previously billed.
4.4 Resolutions . Certified copies of resolutions of the Board of Directors of the Company authorizing or ratifying the execution, delivery and performance of this Amendment and the Amended Loan Agreement;
4.5 Joinder . Evidence that each of Unico, Inc., Jakel Motors Incorporated, Morrill Electric Inc., Regal Beloit Logistics, LLC, RBC Power Electronics, Inc., RBC Holding LLC and Ramu Inc. has executed and delivered all documents necessary to become Subsidiary Guarantors.
4.6 Opinion . An opinion of legal counsel to the Company, in form and substance reasonably acceptable to the Administrative Agent.
4.7 Miscellaneous . Such other documents as the Administrative Agent may reasonably request.
SECTION 5. Miscellaneous .
5.1 Expenses . The Company agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent (including reasonable and documented fees, charges and expenses of counsel for the Administrative Agent) in connection with the preparation, negotiation, execution and delivery of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith. All obligations provided in this Section 4.1 shall survive any termination of this Amendment and the Amended Loan Agreement.
5.2 Captions . Section captions used in this Amendment are for convenience only and shall not affect the construction of this Amendment.
5.3 Governing Law . THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. Wherever possible each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable laws, but if any provision of this Amendment shall be prohibited by or invalid under such laws, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment.
5.4 Counterparts . This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment. A counterpart hereof (or a signature page hereto) delivered by facsimile or in .pdf or similar electronic format shall be effective as an original.
5.5 References to Loan Agreement . Except as herein amended, the Loan Agreement shall remain in full force and effect and is hereby ratified in all respects. After the effectiveness of this Amendment, each reference in the Amended Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference to the Loan Agreement in any Loan Document and in any other agreement, document or other instrument executed and delivered pursuant to the Loan Agreement, shall mean and be a reference to the Amended Loan Agreement.
5.6 Successors and Assigns . This Amendment shall be binding upon the parties hereto and their respective successors and assigns, and shall inure to the sole benefit of the parties hereto and the successors and assigns of the Administrative Agent and the Banks.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the day and year first above written.
Unpublished CUSIP Number: [_________]
TERM LOAN AGREEMENT
dated as of June 16, 2008
VARIOUS FINANCIAL INSTITUTIONS,
U.S. BANK, NATIONAL ASSOCIATION
JPMORGAN CHASE BANK, N.A.
BANK OF AMERICA, N.A.,
J.P. MORGAN SECURITIES LLC
Co-Lead Arrangers and Joint Book Managers
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT dated as of June 16, 2008 (this “ Agreement ”) is among REGAL-BELOIT CORPORATION, a Wisconsin corporation (the “ Company ”), various financial institutions (together with their respective successors and assigns, the “ Banks ”), BANK OF AMERICA, N.A. (in its individual capacity, “ Bank of America ”), as administrative agent, and JPMORGAN CHASE BANK, N.A., as syndication agent.
WHEREAS, subject to the terms and conditions set forth herein, the Banks have agreed to make term loans to the Company in an aggregate principal amount up to $165,000,000.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
2007 Note Purchase Agreement means the Note Purchase Agreement dated as of August 23, 2007 among the Company and the purchasers of notes issued pursuant thereto.
2011 Note Purchase Agreement means the Note Purchase Agreement, substantially in the form of the most recent draft delivered to the Administrative Agent prior to the First Amendment Effective Date, expected to be entered into during Fiscal Year 2011 by the Company and various purchasers of notes.
Acquisition means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person; provided that the Company or a Subsidiary is the surviving entity.
Administrative Agent means Bank of America in its capacity as administrative agent for the Banks hereunder and any successor thereto in such capacity.
Administrative Questionnaire means an administrative questionnaire substantially in a form supplied by the Administrative Agent.
Affected Bank means any Bank (a) that is a Non-Consenting Bank or (b) that has given notice to the Company (which has not been rescinded) of (i) any obligation by the Company to pay any amount pursuant to Section 7.7 or 8.1 or (ii) the occurrence of any circumstances of the nature described in Section 8.2 or 8.3 .
Affiliate of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person.
Agent-Related Persons means the Administrative Agent and any successor administrative agent arising under Section 13.8 , and the Related Parties of the foregoing.
Agreement — see the Preamble .
Approved Fund means any Person (other than a natural person) that (a) 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 and (b) is administered or managed by (i) a Bank, (ii) an Affiliate of a Bank or (iii) an entity or an Affiliate of an entity that administers or manages a Bank.
Assignee — see Section 14.8.1 .
Assignment Agreement — see Section 14.8.1 .
Bank — see the Preamble .
Bank of America — see the Preamble .
Base Rate means at any time a fluctuating rate per annum equal to the greatest of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate and (c) the Eurodollar Rate for a Eurodollar Loan with a one month Interest Period commencing on such day (or, if such day is not a Business Day, the immediately preceding Business Day) plus 1.00%.
Base Rate Tranche — see Section 2.2 .
Borrower Materials — see Section 10.1 .
Business Day means any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required to be closed in Chicago, Illinois or Charlotte, North Carolina and, if such day relates to a Eurodollar Tranche, means any such day on which dealings in Dollar deposits are carried on in the applicable interbank eurodollar market.
Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.
Change in Law means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or phase-in of any applicable law, rule or regulation regarding capital adequacy, or (b) any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or (c) compliance by any Bank (or any Eurodollar Office of such Bank) or any Person controlling such Bank with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or
comparable agency made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith by any Governmental Authority and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
Closing Date — see Section 11.1
Code means the Internal Revenue Code of 1986.
Commitment means, as to any Bank, such Bank’s commitment to make a Loan hereunder. The amount of the Commitment of each Bank as in effect on the date of this Agreement is set forth opposite such Bank’s name on Schedule 2.1 .
Commitment Amount means $165,000,000, as such amount may be reduced from time to time pursuant to Section 6 or 12 .
Company — see the Preamble .
Computation Period means each period of four consecutive Fiscal Quarters ending on the last day of a Fiscal Quarter.
Consolidated Net Income means, with respect to the Company and its Subsidiaries for any period, the consolidated net income (or loss) of the Company and its Subsidiaries for such period, excluding, to the extent included in such net income (or loss) for such period, (a) any extraordinary gains or losses, (b) non-recurring or unusual losses, charges or expenses arising out of any Acquisition or disposition permitted hereunder consummated on or after the First Amendment Effective Date to the extent described in reasonable detail in the compliance certificate delivered pursuant to Section 10.1.3 for such period (and first so described in such a compliance certificate delivered within 12 months after the date of such Acquisition or disposition), in an aggregate amount not exceeding $17,500,000, (c) up to $5,000,000 of other non-recurring or unusual losses, charges or expenses, but only to the extent incurred after the First Amendment Effective Date and described in reasonable detail in the compliance certificate delivered pursuant to Section 10.1.3 for such period, and (d) the amount of “net income attributable to noncontrolling interests, net of tax” (as such term is used in the Company’s financial statements referred to in Section 9.4 ).
Controlled Group means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with the Company, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, whether or not evidenced by bonds, debentures, notes or similar instruments, (b) all obligations of such Person as lessee under Capital Leases which have been or should be recorded as liabilities on a balance sheet of such Person, (c) all obligations of such Person to pay the deferred purchase price of property or services (excluding (i) trade and similar accounts payable and accrued expenses in the ordinary course of business and (ii) accrued pension costs and other employee benefit and compensation obligations arising in the ordinary course of business), (d) all indebtedness secured by a Lien on the property of such Person, whether or not such indebtedness shall have been assumed by such Person (it being understood that if such Person has not assumed or otherwise become personally liable for any such indebtedness, the amount of the Debt of such Person in connection therewith shall be limited to the lesser of the face amount of such indebtedness and the fair market value of all property of such Person securing such indebtedness), (e) all obligations, contingent or otherwise, under letters of credit (whether or not drawn), excluding trade letters of credit, and banker’s acceptances issued for the account of such Person, (f) all Securitization Obligations of such Person, to the extent such obligations would be required to be included on the consolidated balance sheet of the Company in accordance with GAAP, (g) the net obligations of such Person under Hedging Agreements, (h) all Suretyship Liabilities of such Person with respect to obligations of the type described in any of the foregoing clauses (a) through (g) and (i) all Debt of any partnership in which such Person is a general partner. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date. If any of the foregoing Debt is limited to recourse against a particular asset or assets of such Person, the amount of the corresponding Debt shall be equal to the lesser of the amount of such Debt and the fair market value of such asset or assets at the date for determination of the amount of such Debt. The amount of Debt of the Company and its Subsidiaries hereunder shall be calculated without duplication of Suretyship Liabilities of the Company or any Subsidiary in respect thereof. “Debt” shall not include (1) indebtedness owing to the Company by any Subsidiary or indebtedness owing to any Subsidiary by the Company or another Subsidiary, (2) any customary earnout or holdback in connection with Acquisitions permitted hereunder, (3) any obligations of the Company or its Subsidiaries in respect of customer advances received and held in the ordinary course of business or (4) performance bonds or performance guaranties (or bank guaranties or letters of credit in lieu thereof) entered into in the ordinary course of business.
Designated Debt means “Debt” as defined in the Note Purchase Agreement.
Dollar and the sign “ $ ” mean lawful money of the United States of America.
Domestic Subsidiary means a Subsidiary organized under the laws of (a) the United States or any political subdivision thereof, or any agency, department or instrumentality thereof, or (b) any state of the United States.
EBITDA means, for any period, Consolidated Net Income for such period plus , to the extent deducted in determining such Consolidated Net Income but without duplication, Interest Expense, interest or similar costs and expenses relating to Permitted Securitizations, taxes on or measured by income, depreciation and amortization and other non-cash charges for such period, minus , to the extent included in determining such Consolidated Net Income, non-cash income for such period; provided that EBITDA for each relevant period shall be calculated giving effect on a pro forma basis to Acquisitions and dispositions consummated during such period (assuming, for purposes of such pro forma calculation, that the consummation of (i) each such Acquisition occurred on the first day of such period and (ii) each such disposition occurred on the last day of the previous period).
Environmental Claims means all claims, however asserted, by any governmental, regulatory or judicial authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release of Hazardous Substances or injury to the environment.
Environmental Laws means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed and enforceable duties, licenses, authorizations and permits of, and agreements with, any governmental authority, in each case relating to environmental matters.
ERISA means the Employee Retirement Income Security Act of 1974.
Eurocurrency Reserve Percentage means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Bank, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Tranche shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
Eurodollar Margin — see Schedule 1.1 .
Eurodollar Office means with respect to any Bank the office or offices of such Bank which shall be making or maintaining the Eurodollar Tranches of such Bank hereunder or, if applicable, such other office or offices through which such Bank determines the Eurodollar Rate. A Eurodollar Office of any Bank may be, at the option of such Bank, either a domestic or foreign office.
Eurodollar Rate means, (a) for any Interest Period with respect to a Eurodollar Tranche, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period, for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars (for delivery on the first day of such Interest Period) in immediately available funds in the approximate amount of the Eurodollar Tranche being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank market for such currency at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; and
(b) for any interest calculation with respect to a Base Rate Tranche on any date, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m. (London time) two Business Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in immediately available funds in the approximate amount of the Base Rate Tranche being made or maintained and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank market at their request at the date and time of determination.
Eurodollar Rate (Reserve Adjusted) means, with respect to any Eurodollar Tranche for any Interest Period, a rate per annum determined pursuant to the following formula:
Eurodollar Tranche — see Section 2.2 .
Event of Default means any of the events described in Section 12.1 .
Excluded Subsidiary means each Securitization Subsidiary and each other Subsidiary having assets with a value of less than $1,000,000.
Executive Officer means the chief financial officer, the chief executive officer, the president or any vice president of the Company.
Exemption Representation — see Section 7.7 .
FATCA means Sections 1471 through 1474 of the Code, as of the date of this Agreement, and any current or future regulations or official interpretations thereof; provided that “FATCA” shall also include any amendments to Sections 1471 through 1474 of the Code that are substantively comparable, but only if the requirements in such amended version for avoiding the withholding are not materially more onerous than the requirements in the current version.
Federal Funds Rate means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.
First Amendment Effective Date means June 30, 2011.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its Subsidiaries, which period shall be the 52- or 53-week fiscal year ending on the Saturday closest to December 31 of each year or, at the Company’s election, the calendar year (so long as such election is consistent with the Company’s filings with the SEC).
Foreign Subsidiary means each Subsidiary of the Company other than any Domestic Subsidiary.
FRB means the Board of Governors of the Federal Reserve System or any successor thereto.
Funded Debt means all Debt of the Company and its Subsidiaries, excluding (i) contingent obligations in respect of undrawn letters of credit, bank guarantees and banker’s acceptances and Suretyship Liabilities in respect of obligations not constituting Debt, (ii) Hedging Obligations, (iii) Securitization Obligations to the extent such obligations would not be required to be included on the consolidated balance sheet of the Company in accordance with GAAP and (iv) obligations to pay the deferred purchase price of services.
Funded Debt to EBITDA Ratio means, for any Computation Period, the ratio of (i) Funded Debt as of the last day of such Computation Period to (ii) EBITDA for such Computation Period.
GAAP means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination; provided that, with respect to the financial statements of Foreign Subsidiaries (except to the extent included in the consolidated financial statements of the Company), “GAAP” shall mean the generally accepted accounting principles in the relevant foreign jurisdiction which are set forth from time to time in the opinions and pronouncements of the applicable accounting standards board (or similar agency) of such foreign jurisdiction which are applicable to the circumstances as of the date of determination.
Governmental Authority means (a) any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing) and (b) the National Association of Insurance Commissioners.
Group — see Section 2.2 .
Hazardous Substances means any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substance as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) or any toxic substance, oil or hazardous material or other chemical or substance regulated by any Environmental Law, excluding household hazardous waste.
Hedging Agreement means any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect against fluctuations in interest rates, currency exchange rates or commodity prices.
Hedging Obligations means, with respect to any Person, all liabilities of such Person under Hedging Agreements.
Intercreditor Agreement means the Intercreditor Agreement dated as of August 23, 2007 among various creditors of the Company and its Subsidiaries (including the Banks) and Bank of America, N.A., as Designated Agent.
Interest Coverage Ratio means, for any Computation Period, the ratio of (a) EBITDA for such Computation Period to (b) Interest Expense for such Computation Period.
Interest Expense means, for any Computation Period, the consolidated interest expense of the Company and its Subsidiaries for such Computation Period.
Interest Period means, for any Eurodollar Group, the period commencing on the Closing Date (if applicable), or on the date that such Group is continued as, or converted into, a Eurodollar Tranche and ending on the date one, two, three or six months thereafter (or such other period as the Company may request and all Banks may agree) as selected by the Company pursuant to Section 2.3 or 2.4 ; provided that:
(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;
(ii) any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(iii) the Company may not select any Interest Period that would extend beyond the scheduled Maturity Date.
IRS means the Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions under the Code.
Lead Arrangers means J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated in their capacities as the co-arrangers of, and joint book managers for, the facilities hereunder.
Lien means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned or being purchased or acquired by such Person which secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise, excluding the interest of a lessor under an operating lease.
Loan — see Section 2.1 .
Loan Document means this Agreement, the Notes and the Subsidiary Guaranty.
Loan Parties means the Company and the Subsidiary Guarantors, and Loan Party means any of them.
Margin Stock means any “margin stock” as defined in Regulation U of the FRB.
Material Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the business, assets, liabilities (actual or contingent), operations or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole or (b) a material adverse effect upon the legality, validity, binding effect or enforceability against the Company or any other Loan Party of any Loan Document.
Maturity Date means the earlier to occur of (a) June 16, 2013 and (b) such other date on which the obligations of the Company hereunder become due and payable accordance with Section 12.01 .
Moody’s means Moody’s Investors Service, Inc. and any successor thereto.
Multiemployer Pension Plan means a multiemployer plan, as such term is defined in Section 4001(a)(3) of ERISA, and to which the Company or any member of the Controlled Group may have any liability.
Net Cash Proceeds means, with respect to any sale of assets, the aggregate cash proceeds (including cash proceeds received by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by the Company or any other Loan Party pursuant to such sale, net of (a) the direct costs relating to such sale (including sales commissions and legal, accounting and investment banking fees), (b) taxes paid or reasonably estimated by the Company to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), (c) the amount of any reserve established in accordance with GAAP in respect of (i) the sale price of the asset subject to such sale or (ii) liabilities associated with such asset that are retained by the Company or such other Loan Party and (d) amounts required to be applied to the repayment of any Debt secured by a Lien on the asset subject to such sale.
Non-Consenting Bank — see Section 14.1 .
Note — see Section 3.1 .
Note Purchase Agreement means (a) the 2007 Note Purchase Agreement, (b) the 2011 Note Purchase Agreement and (c) any other Note Purchase Agreement (as defined in the Intercreditor Agreement) entered into after the First Amendment Effective Date.
Participant — see Section 14.8.2 .
PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.
Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Pension Plan), and to which the Company or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
Percentage means, as to any Bank, the percentage that (a) the Commitment of such Bank (or, after termination of the Commitments, the principal amount of such Bank’s Loan) is of (b) the aggregate amount of the Commitments (or after termination of the Commitments, the aggregate principal amount of all Loans. The Percentage of each Bank as in effect on the date of this Agreement is set forth opposite such Bank’s name on Schedule 2.1 .
Permitted Acquisition means any Acquisition by the Company or a Subsidiary which satisfies each of the following requirements: (a) no Event of Default or Unmatured Event of Default has occurred and is continuing at the time of, or immediately after giving effect to, such Acquisition; (b) the Person to be acquired is in, or the assets to be acquired are for use in, the same or a similar line of business as the Company and its Subsidiaries or a reasonable extension thereof; (c) if the aggregate consideration to be paid by the Company and its Subsidiaries in connection with such Acquisition (including Debt assumed, but excluding capital stock of the Company or any Subsidiary) exceeds $150,000,000, the Company shall have delivered to the Administrative Agent a certificate demonstrating that, after giving effect to such Acquisition, the Company will be in pro forma compliance with the covenants in Section 10.6; and (d) in the case of the Acquisition of a Person, the Board of Directors (or equivalent governing body) of the Person being acquired shall have approved such Acquisition.
Permitted Securitization means any program providing for (a) the direct or indirect sale, contribution and/or transfer to a Securitization Subsidiary, in one or more related and substantially concurrent transactions, of accounts receivable, general intangibles, chattel paper or other financial assets (including rights in respect of capitalized leases) and related rights of the Company or any Subsidiary in transactions intended to constitute (and opined by nationally-recognized outside legal counsel in connection therewith to constitute) true sales or true contributions to such Securitization Subsidiary and (b) the provision of financing secured by the assets so sold, contributed and/or transferred, whether in the form of secured loans or the acquisition of undivided interests in such assets.
Person means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit, or other entity, whether acting in an individual, fiduciary or other capacity.
Plan Asset Regulation means the U.S. Department of Labor regulation located at 29 C.F.R. Section 2510.3-101, or any successor regulation thereto, as in effect at the time of reference, as modified by Section 3(42) of ERISA.
Plan Assets means “plan assets” as defined in the Plan Asset Regulation.
Prime Rate means, for any day, the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”. (The “prime rate” is a rate set by Bank of America based upon various factors, including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate.) Any change in the “prime rate” announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.
Public Bank — see Section 10.1 .
Related Parties means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, trustees, agents and advisors of such Person and of such Person’s Affiliates.
Required Banks means Banks having combined Percentages of more than 50%.
S&P means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
SEC means the Securities and Exchange Commission.
Securitization Obligations means the aggregate investment or claim (as opposed to the value of the underlying assets subject to the applicable Permitted Securitization) held at any time by all purchasers, assignees or transferees of (or of interests in), or holders of obligations that are supported or secured by, accounts receivable, general intangibles, chattel paper or other financial assets (including rights in respect of capitalized leases) and related rights of the Company or any Subsidiary in connection with Permitted Securitizations.
Securitization Subsidiary means a special purpose, bankruptcy remote, directly or indirectly wholly-owned Subsidiary of the Company that is formed for the sole and exclusive purpose of engaging in activities in connection with the purchase, contribution, transfer, sale and financing of assets and related rights in connection with and pursuant to one or more Permitted Securitizations.
Senior Notes means any note issued pursuant to a Note Purchase Agreement.
Significant Subsidiary means, at any time, any Subsidiary having (a) assets (after intercompany eliminations) with a value not less than 10% of the total value of the consolidated assets of the Company and its Subsidiaries, taken as a whole, or (b) revenues (after elimination of intercompany revenues) not less than 10% of the consolidated revenues of the Company and its Subsidiaries, taken as a whole, in each case for, or as of the end of, the most recently ended Computation Period, as the case may be.
Subordinated Debt means any Debt of the Company or any Subsidiary that (a) is subordinated to the obligations of the Company and its Subsidiaries under the Loan Documents in a manner approved in writing by the Required Banks and (b) has (i) no amortization prior to the date that is at least 91 days after the scheduled Maturity Date, (ii) financial covenants and events of default (and related definitions) that are acceptable to the Required Banks and (iii) no limitation on senior Debt (or any guaranty thereof) that is unacceptable to the Required Banks.
Subsidiary means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person and/or its other Subsidiaries own, directly or indirectly, such number of outstanding shares or other ownership interests as have more than 50% of the ordinary voting power for the election of directors or other managers of such entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Company.
Subsidiary Guarantor means, at any time, each Subsidiary that has executed a counterpart of the Subsidiary Guaranty at or prior to such time (or is required to execute a counterpart of the Subsidiary Guaranty at such time), excluding any such Person which has been released from its obligations under the Subsidiary Guaranty in accordance with the terms hereof.
Subsidiary Guaranty means, collectively, the guaranty substantially in the form of Exhibit C issued by the Subsidiary Guarantors.
Suretyship Liability means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation or other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person’s obligation in respect of any Suretyship Liability shall (subject to any limitation set forth therein) be deemed to be equal to the lesser of (i) the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Suretyship Liability is incurred or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof, and (ii) the stated amount of such Suretyship Liability.
Swap Termination Value means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) , the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include a Bank or any Affiliate of a Bank).
Syndication Agent means JPMorgan Chase Bank, N.A. in its capacity as the sole and exclusive syndication agent for the facility hereunder.
Taxes — see Section 7.7 .
Tranche — see Section 2.2 .
Type of Tranche means the characterization of a Tranche as a Base Rate Tranche or a Eurodollar Tranche.
Unmatured Event of Default means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of Default.
1.2 Other Interpretive Provisions . (1) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(b) Section , Schedule and Exhibit references are to this Agreement unless otherwise specified.
(c) (a) The term “including” is not limiting and means “including without limitation.”
(ii) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.”
(d) Unless otherwise expressly provided herein, (i) references in any Loan Document to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, (ii) references in any Loan Document to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such statute or regulation and (iii) references in any Loan Document to any Person shall be construed to include such Person’s successors and assigns, subject to any restriction upon assignment contained in any Loan Document.
(e) This Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are independent and each shall be performed in accordance with its terms.
(f) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Administrative Agent, the Company, the Banks and the other parties hereto and thereto and are the products of all parties. Accordingly, they shall not be construed against the Administrative Agent or the Banks merely because of the Administrative Agent’s or the Banks’ involvement in their preparation.
(g) Unless otherwise expressly provided herein, any reference to a particular time means such time in Chicago, Illinois.
(h) Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, consistently applied; provided that (i) notwithstanding any provision of any Loan Document to the contrary, for purposes of this Agreement and each other Loan Document (other than covenants to deliver financial statements), the determination of whether a lease constitutes a capital lease or an operating lease and whether obligations arising under a lease are required to be capitalized on the balance sheet of the lessee thereunder and/or recognized as interest expense in the lessee’s financial statements shall be determined under generally accepted accounting principles in the United States as of the First Amendment Effective Date, notwithstanding any modifications or interpretive changes thereto that may occur thereafter and (ii) if the Company notifies the Administrative Agent that the Company wishes to amend any covenant in Section 10 to eliminate or to take into account the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Company that the Required Banks wish to amend Section 10 for such purpose), then the Company’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Company and the Required Banks.
SECTION 2. COMMITMENTS OF THE BANKS; BORROWING AND CONVERSION PROCEDURES;.
2.1 Amount and Terms of Commitments . On and subject to the terms and conditions of this Agreement, each Bank, severally and for itself alone, agrees to make a loan to the Company (each such loan, a “ Loan ”) on the Closing Date in the amount of such Bank’s Percentage of the aggregate amount of all Loans requested by the Company. Amounts borrowed under this Section 2.1 that are repaid or prepaid by the Company may not be reborrowed.
2.2 Tranches and Groups of Loans . Each Bank’s Loan may be divided into tranches (each a “ Tranche ”) that bear interest based upon the Base Rate (a “ Base Rate Tranche ”) or the Eurodollar Rate for a particular Interest Period (a “ Eurodollar Tranche ”). Tranches of the same Type and, in the case of Eurodollar Tranches, having the same Interest Period are sometimes called “ Groups ”. Multiple Groups may be outstanding at the same time; provided that (a) not more than three Eurodollar Groups shall be in effect at any time; (b) the aggregate principal amount of each Group shall be at least $5,000,000 or a higher integral multiple of $1,000,000; and (c) each Bank shall have a pro rata share (according to its Percentage) of each Group.
2.3 Borrowing Procedure . The Company shall give written notice or telephonic notice (followed promptly by written confirmation thereof) to the Administrative Agent of the proposed Closing Date not later than (a) if any portion of the Loans initially is to be a Eurodollar Group, 10:00 a.m. at least two Business Days prior to the Closing Date, and (b) otherwise, 12:00 (noon) on the Closing Date. Such notice shall be effective upon receipt by the Administrative Agent, shall be irrevocable and shall specify (i) the proposed Closing Date (which shall be a Business Day), (ii) the aggregate amount of Loans requested, (iii) the type of Groups and, if more than one Group is requested, the principal amount of each Group and (iv) in the case of a Eurodollar Group, the initial Interest Period therefor. Promptly upon receipt of such notice, the Administrative Agent shall advise each Bank thereof. Not later than 2:00 p.m. on the Closing Date, each Bank shall provide the Administrative Agent at the office specified by the Administrative Agent with immediately available funds in the amount of such Bank’s Loan and, so long as the Administrative Agent has not received written notice that the conditions precedent set forth in Section 11 have not been satisfied, the Administrative Agent shall promptly pay over the requested amount to the Company.
2.4 Conversion/Continuation Procedures . (2) The Company shall give written or telephonic (followed promptly by written confirmation thereof) notice to the Administrative Agent of each proposed conversion or continuation not later than (i) in the case of conversion into a Base Rate Group, 1:30 p.m. on the proposed date of such conversion; and (ii) in the case of a conversion into or continuation of a Eurodollar Group, 10:00 a.m. at least two Business Days prior to the proposed date of such conversion or continuation. Each such notice shall specify (A) the proposed date of conversion or continuation; (B) the Group (or, subject to subsection 2.2(b) , the relevant portion thereof) to be converted or continued; (C) the Type of Group resulting from the proposed conversion or continuation; and (D) in the case of conversion into, or continuation of, a Eurodollar Group, the duration of the requested Interest Period therefor.
(b) If the Company fails to give timely notice of the continuation of a Eurodollar Group, then the Company shall be deemed to have elected to continue such Eurodollar Loan with a one-month Interest Period effective on the last day of the applicable Interest Period therefor.
(c) The Administrative Agent will promptly notify each Bank of its receipt of a notice of conversion or continuation pursuant to this Section 2.4 or, if no timely notice is provided by the Company, of the details of any automatic continuation.
(d) Unless the Required Banks otherwise consent, during the existence of an Event of Default or an Unmatured Event of Default, the Company may not elect to convert any Base Rate Group into a Eurodollar Group or to continue any Eurodollar Group for a new Interest Period.
2.5 Commitments Several . The failure of any Bank to make its Loan on the Closing Date shall not relieve any other Bank of its obligation (if any) to make its Loan on such date, but no Bank shall be responsible for the failure of any other Bank to make the Loan to be made by such other Bank.
2.6 Additional Loans . So long as no Event of Default or Unmatured Event of Default exists or would result therefrom, any Bank may increase the amount of its Loan by making an additional advance to the Company (it being understood that no Bank shall have any obligation to make any such additional advance) or any other Person may make a loan to the Company hereunder (any such additional advance by an existing Bank or loan by a Person that is not a Bank, an “ Additional Loan ”); provided that (a) no Person
shall be added as a party hereto without the written consent of the Administrative Agent and the Lead Arrangers (which consents shall not be unreasonably withheld); (b) in no event shall the aggregate amount of all Additional Loans pursuant to this Section 2.6 exceed $75,000,000; and (c) the aggregate amount of all Additional Loans made on any date shall not be less that $15,000,000. Any Additional Loan shall be made three Business Days (or such other period of time as may be agreed upon by the Company, the Administrative Agent and the Bank or other Persons making such Additional Loan) after the date on which the Administrative Agent has (i) received evidence that the Board of Directors of the Company has authorized the borrowing of such Additional Loan and (ii) received and accepted a letter in the form of Annex I to Exhibit E (in the case of an Additional Loan to be made by a Bank) or Annex II to Exhibit E-2 (in the case of an Additional Loan to be made by a Person that will become a Bank upon the making of such Loan). Any Additional Loan shall be pari passu in all respects with the original Loans made hereunder. The Administrative Agent shall promptly notify the Banks of the making of any Additional Loan pursuant to this Section 2.6 and of the Percentage of each Bank after giving effect thereto. The Company acknowledges that, in order to maintain Groups in accordance with each Bank’s Percentage, the making of Additional Loans may require conversion of portions of one or more Groups of Eurodollar Tranches on the date of the making of such Additional Loans (and any such conversion shall be subject to the provisions of Section 8.4 ).
SECTION 3. REPAYMENT; EVIDENCE OF DEBT.
3.1 Repayment . Each Loan shall be paid in full on or before the Maturity Date.
3.2 Bank Records . The Loan made by each Bank shall be evidenced by one or more accounts or records maintained by such Bank and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Bank shall be conclusive absent manifest error of the amount of the Loans made by the Banks to the Company and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any amount owing hereunder or under any other Loan Document. In the event of any conflict between the accounts and records maintained by any Bank and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Bank made through the Administrative Agent, the Company shall execute and deliver to such Bank (through the Administrative Agent) a promissory note substantially in the form of Exhibit A (“ Note ”), which shall evidence such Bank’s Loan in addition to such accounts or records. Each Bank may attach schedules to its Note and endorse thereon the date and amount of its Loan and payments with respect thereto.
SECTION 4. INTEREST.
4.1 Interest on Loans . The Company promises to pay interest on the unpaid principal amount of each Loan made to it for the period commencing on the date such Loan is made until such Loan is paid in full as follows:
(a) with respect to any portion of such Loan that is part of a Base Rate Tranche, at a rate per annum equal to the Base Rate from time to time in effect; and
(b) with respect to any portion of such Loan that is part of a Eurodollar Tranche, at a rate per annum equal to the sum of the Eurodollar Rate (Reserve Adjusted) applicable to each Interest Period for such Loan plus the Eurodollar Margin from time to time in effect;
provided that, upon the written request of the Required Banks during the existence of an Event of Default, the interest rate applicable to all Loans shall be increased by 2% per annum.
4.2 Interest Payment Dates . Accrued interest on each Base Rate Tranche shall be payable in arrears on the last Business Day of each calendar quarter and at maturity. Accrued interest on each Eurodollar Tranche shall be payable on the last day of each Interest Period relating to such Loan (and, in the case of a Eurodollar Tranche with an Interest Period of six months or longer, on each three-month anniversary of the first day of such Interest Period) and at maturity. After maturity, accrued interest on all Loans shall be payable on demand.
4.3 Setting and Notice of Eurodollar Rates . The applicable Eurodollar Rate for each Interest Period shall be determined by the Administrative Agent, which shall give notice thereof to the Company and each Bank. Each determination of the applicable Eurodollar Rate by the Administrative Agent shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. The Administrative Agent shall, upon written request of the Company or any Bank, deliver to the Company or such Bank a statement showing the computations used by the Administrative Agent in determining any applicable Eurodollar Rate hereunder.
4.4 Computation of Interest . All determinations of interest for Base Rate Tranches when the Base Rate is determined by the Prime Rate shall be made for the actual number of days elapsed on the basis of a year of 365 or 366 days, as the case may be. All other determinations of interest shall be made for the actual number of days elapsed on the basis of a year of 360 days. The applicable interest rate for each Base Rate Tranche shall change simultaneously with each change in the Base Rate.
SECTION 5. FEES.
5.1 Up-Front Fees . The Company agrees to pay to the Administrative Agent for the account of the Banks such up-front and funding fees as are mutually agreed to by the Company and the Banks.
5.2 Administrative Agent’s and Lead Arranger’s Fees . The Company agrees to pay to (a) the Administrative Agent such fees as are mutually agreed to from time to time by the Company and the Administrative Agent and (b) the Lead Arrangers such fees as are mutually agreed to from time to time by the Company and the Lead Arrangers.
SECTION 6. REDUCTIONS IN COMMITMENT AMOUNT; PREPAYMENTS.
6.1 Voluntary Reduction or Termination of the Commitments . The Company may at any time prior to the making of the Loans, on at least two Business Days’ prior written notice received by the Administrative Agent (which shall promptly advise each Bank thereof), permanently reduce the Commitment Amount by an amount not less than $10,000,000 or a higher integral multiple of $1,000,000. Once reduced pursuant to this Section, no Commitment may be increased. All reductions of the Commitment Amount shall reduce the Commitments pro rata among the Banks according to their respective Percentages.
6.2 Mandatory Termination of the Commitments . The Commitments will automatically reduce to zero after the making of the Loans on the Closing Date.
6.3 Prepayments . The Company may from time to time prepay Loans in whole or in part, without premium or penalty, provided that the Company shall give the Administrative Agent (which shall promptly advise each Bank) notice thereof not later than (a) 2:30 p.m. on the date of such prepayment (which shall be a Business Day), in the case of Base Rate Tranches, and (b) two Business Days prior to the date of such prepayment, in the case of Eurodollar Tranches, in each case specifying the Tranches to be prepaid and the date and amount of prepayment. Subject to Section 2.2 , each partial prepayment of a Loan shall be in an integral multiple of $1,000,000. Prepayments of Loans shall be applied pro rata to the Loans of all Banks in accordance with their Percentages. Any prepayment of a Eurodollar Tranche on a day other than the last day of an Interest Period therefor shall include interest on the principal amount being repaid and shall be subject to Section 8.4 . Each notice of prepayment under this Section 3 shall be irrevocable; provided that a notice delivered by the Company of the prepayment of Loans in full may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Company (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.
SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments . All payments of principal of or interest on the Loans shall be made by the Company to the Administrative Agent at its principal office in Chicago in immediately available funds, in Dollars and without set-off, counterclaim or deduction of any kind, not later than noon on the date due, and funds received after that hour shall be deemed to have been received by the Administrative Agent on the next following Business Day. The Administrative Agent shall promptly remit to each Bank its share (if any) of all such payments received in collected funds by the Administrative Agent. All payments under Section 8.1 shall be made by the Company directly to the Bank entitled thereto.
7.2 Application of Certain Payments . Each payment of principal shall be applied as the Company shall direct by notice to be received by the Administrative Agent on or before the date of such payment or, in the absence of such notice, first , to repay Base Rate Tranches and then , to repay Eurodollar Tranches, with those Eurodollar Tranches having earlier expiring Interest Periods being repaid prior to those having later expiring Interest Periods. Concurrently with each remittance to any Bank of its share of any such payment, the Administrative Agent shall advise such Bank as to the application of such payment.
7.3 Due Date Extension or Reduction . If any payment of principal or interest with respect to any of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date shall be extended to the immediately following Business Day (unless, in the case of a payment of interest on a Eurodollar Tranche, the result of such extension would be to extend the due date for such payment into another calendar month, in which case such due date shall be the immediately preceding Business Day) and any extension or reduction of time shall be reflected in computing interest and fees.
7.4 Failure to Make Payments . Unless the Company has notified the Administrative Agent, prior to the date any payment to be made by it is due, that it does not intend to remit such payment, the Administrative Agent may, in its sole and absolute discretion, assume that the Company has timely remitted such payment and may, in its sole and absolute discretion and in reliance thereon, make available such payment to the Person entitled thereto. If such payment was not in fact remitted to the Administrative Agent in immediately available funds, then each Bank shall forthwith on demand repay to the Administrative Agent the amount of such assumed payment made available to such Bank, together with interest thereon in respect of each day from the date such amount was made available by the Administrative Agent to such Bank to the date such amount is repaid to the Administrative Agent at a rate per annum equal to (a) for the first three days after demand, the Federal Funds Rate from time to time in effect and (b) thereafter, the Base Rate from time to time in effect.
7.5 Setoff . The Company agrees that the Administrative Agent and each Bank have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, the Company agrees that at any time any Event of Default exists, the Administrative Agent, each Bank and, to the extent permitted by applicable law, any Affiliate thereof, may apply to the payment of any obligations of the Company hereunder, whether or not then due, any and all balances, credits, deposits, accounts or moneys of the Company then or thereafter with the Administrative Agent, such Bank or such Affiliate. Each Bank agrees promptly to notify the Company and the Administrative Agent after any such set-off and application made by such Bank or such Affiliate; provided that the failure to give such notice shall not affect the validity of such set-off and application.
7.6 Proration of Payments . If any Bank shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise, but excluding any payment pursuant to Section 8.7 or in connection with an assignment or participation pursuant to Section 14.8 , or any other payment or recovery made on a non-ratable basis pursuant to the express provisions of this Agreement or any other Loan Document) on account of principal of or interest on its Loan in excess of its pro rata share (or other share specified hereunder or under any other applicable Loan Document) of payments and other recoveries obtained by all Banks on account of principal of and interest on Loans (or such participations) then held by them, such Bank shall purchase from the other Banks such participation in the Loans held by them as shall be necessary to cause such purchasing Bank to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Bank, the purchase shall be rescinded and the purchase price restored to the extent of such recovery.
7.7 Taxes . (a) All payments of principal of, and interest on, the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Bank’s net income or receipts and any United States withholding taxes imposed by FATCA (all non-excluded items being called “ Taxes ”). If any withholding or deduction from any payment to be made by the Company hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Company will:
(i) pay directly to the relevant authority the full amount required to be so withheld or deducted;
(ii) promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such authority; and
(iii) (except to the extent such withholding or deduction would not be required if such Bank’s Exemption Representation were true) pay to the Administrative Agent for the account of the Banks such additional amount or amounts as are necessary to ensure that the net amount actually received by each Bank will equal the full amount such Bank would have received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Administrative Agent or any Bank with respect to any payment received by the Administrative Agent or such Bank hereunder, the Administrative Agent or such Bank may pay such Taxes and the Company will (except to the extent such Taxes are payable by a Bank and would not have been payable if such Bank’s Exemption Representation were true), promptly pay such additional amounts (including any penalty, interest and expense) as is necessary in order that the net amount received by such Person after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such Person would have received had such Taxes not been asserted.
(b) If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent, for the account of the respective Banks, the required receipts or other required documentary evidence, the Company shall indemnify the Banks for any incremental Taxes, interest or penalties that may become payable by any Bank as a result of any such failure. For purposes of this Section 7.7 , a distribution hereunder by the Administrative Agent or any Bank to or for the account of any Bank shall be deemed a payment by the Company.
(c) Each Bank represents and warrants (such Bank’s “ Exemption Representation ”) to the Company and the Administrative Agent that, as of the date of this Agreement (or, in the case of an Assignee, the date it becomes a party hereto), it is entitled to receive payments hereunder without any deduction or withholding for or on account of any Taxes imposed by the United States of America or any political subdivision or taxing authority thereof.
(d) Upon the request from time to time of the Company or the Administrative Agent, each Bank that is organized under the laws of a jurisdiction other than the United States of America shall execute and deliver to the Company and the Administrative Agent one or more (as the Company or the Administrative Agent may reasonably request) United States Internal Revenue Service Forms W-8ECI or Forms W-8BEN or such other forms or documents, appropriately completed, as may be applicable to establish the extent, if any, to which a payment to such Bank is exempt from withholding or deduction of Taxes. Without limiting the foregoing, if a payment made to a Bank under a Loan Document would be subject to U.S. Federal withholding tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in section 1471(b) or 1472(b) of the
Code, as applicable), such Bank shall deliver to the Company and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Comapny or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Company or the Administrative Agent as may be necessary for such Person to comply with its obligations under FATCA, to determine that such Bank has or has not complied with its obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 7.7(d) , “FATCA” shall include any amendments made to FATCA after the First Amendment Effective Date, whether or not such amendments are included in the definition set forth in Section 1 . Each Bank agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company and the Administrative Agent in writing of its legal inability to do so.
(e) If, and to the extent that, any Bank shall obtain a credit or other tax benefit with respect to any Taxes indemnified or paid by the Company pursuant to this Section 7.7 , such Bank agrees to promptly notify the Company thereof and thereupon to use reasonable efforts to provide the Company the benefit of such credit or other tax benefit.
(f) Each Bank shall, promptly upon request by the Company, deliver to the Company copies of all completed and executed forms reasonably deemed necessary by the Company in connection with the payment of amounts demanded by such Bank pursuant to the foregoing clause (a) .
SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES.
8.1 Increased Costs . (a) If any Change in Law:
(i) shall subject any Bank (or any Eurodollar Office of such Bank) to any tax, duty or other charge with respect to any portion of its Loan being maintained as a Eurodollar Tranche, its Note or its obligation to make a Loan, or shall change the basis of taxation of payments to any Bank of the principal of or interest on any Eurodollar Tranche or any other amount due under this Agreement in respect of any Eurodollar Tranche Loans or its obligation to maintain portions of its Loan as Eurodollar Tranches (except for changes in the rate of tax on the overall net income of such Bank or its Eurodollar Office imposed by the jurisdiction in which such Bank’s principal executive office or Eurodollar Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including any reserve imposed by the FRB, but excluding any reserve included in the determination of interest rates pursuant to Section 4 ), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by any Bank (or any Eurodollar Office of such Bank); or
(iii) shall impose on any Bank (or its Eurodollar Office) any other condition affecting its Loan or its Note or its obligation to maintain Eurodollar Tranches;
and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D of the FRB, to impose a cost on) such Bank (or any Eurodollar Office of such Bank) of making or maintaining any portion of its Loan as part of a Eurodollar Tranche, or to reduce the amount of any sum received or receivable by such Bank (or its Eurodollar Office) under this Agreement or under its Note with respect thereto (in each case after giving effect to any interest earned or to be earned on any reserve or special deposit of the type described in clause (ii) above), then within 10 Business Days after written demand by such Bank (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to the Administrative Agent) to the Company, so long as such demand is substantially consistent with demands made by such Bank with similarly situated customers of such Bank under agreements having provisions similar to this Section 8.1(a) , the Company shall pay to such Bank such additional amount or amounts as will compensate such Bank or such controlling Person for such increased cost or such reduction.
(b) If any Bank shall reasonably determine that any Change in Law regarding capital adequacy has or would have the effect of reducing the rate of return on such Bank’s or its controlling Person’s capital as a consequence of such Bank’s obligations hereunder to a level below that which such Bank or such controlling Person could have achieved but for such Change in Law (taking into consideration such Bank’s or such controlling Person’s policies with respect to capital adequacy) by an amount reasonably deemed by such Bank or such controlling Person to be material, then from time to time, within 10 Business Days after written demand by such Bank (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to the Administrative Agent) to the Company, so long as such demand is substantially consistent with demands made by such Bank with similarly situated customers of such Bank under agreements having provisions similar to this Section 8.1(b) , the Company shall pay to such Bank such additional amount or amounts as will compensate such Bank or such controlling Person for such reduction.
8.2 Inability to Determine Rates, etc. If with respect to any Interest Period:
(a) the Administrative Agent determines (which determination shall be binding and conclusive on the Company) that by reason of circumstances affecting the interbank eurodollar market adequate and reasonable means do not exist for ascertaining the applicable Eurodollar Rate; or
(b) Banks having an aggregate Percentage of 40% or more advise the Administrative Agent that the Eurodollar Rate (Reserve Adjusted) will not adequately and fairly reflect the cost to such Banks of maintaining or funding such Eurodollar Tranches for such Interest Period (taking into account any amount to which such Banks may be entitled under Section 8.1 ) or that the making or funding of Eurodollar Tranches has become impracticable as a result of an event occurring after the date of this Agreement which in the opinion of such Banks materially affects such Loans;
then the Administrative Agent shall promptly notify the other parties thereof and, so long as such circumstances shall continue, (i) no Bank shall be under any obligation to make or convert into Eurodollar Tranches, (ii) with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended and (iii) on the last day of the current Interest Period for each Eurodollar Tranche, such Loan shall, unless then repaid in full, automatically convert to a Base Rate Tranche. The Administrative Agent shall promptly revoke any such notice at such time as the applicable circumstances shall no longer continue; provided that, in the case of any such notice made pursuant to clause (b) above, the Required Banks shall have consented to such revocation.
8.3 Changes in Law Rendering Eurodollar Lending Unlawful . In the event that any change after the date hereof in (including the adoption of any new) applicable laws or regulations, or any change after the date hereof in the interpretation of applicable laws or regulations by any governmental or other regulatory body charged with the administration thereof, should make it (or in the good faith judgment of any Bank cause a substantial question as to whether it is) unlawful for any Bank to make, maintain or fund any portion of its Loan based on the Eurodollar Rate, then such Bank shall promptly notify each of the other parties hereto and, so long as such circumstances shall continue, any portion of such Bank’s Loan that otherwise would be made or continued as, or converted into, a Eurodollar Tranche (and, beginning on such date as may be required by the relevant law, regulation or interpretation, each portion of such Bank’s Loan that is maintained as a Eurodollar Tranche) shall bear interest as if it were a Base Rate Tranche.
8.4 Funding Losses . The Company hereby agrees that upon demand by any Bank (which demand shall be accompanied by a statement setting forth the basis in reasonable detail for the amount being claimed, a copy of which shall be furnished to the Administrative Agent), the Company will indemnify such Bank against any net loss or expense which such Bank may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Bank to fund or maintain any Eurodollar Tranche), as reasonably determined by such Bank, as a result of (a) any payment, prepayment or conversion of any Eurodollar Tranche of such Bank on a date other than the last day of an Interest Period for such Loan (including any conversion pursuant to Section 8.3 ) or (b) any failure of the Company to borrow the Loans, or to prepay or continue, or to convert into, a Eurodollar Tranche on a date specified therefor in a notice of borrowing, prepayment, continuation or conversion pursuant to this Agreement. For this purpose, all notices to the Administrative Agent pursuant to this Agreement shall be deemed to be irrevocable.
8.5 Right of Banks to Fund through Other Offices . Each Bank may, if it so elects, fulfill its commitment as to any Eurodollar Tranche by causing a foreign branch or affiliate of such Bank to make the relevant portion of its Loan; provided that in such event for the purposes of this Agreement, such portion of such Loan shall be deemed to have been made by such Bank and the obligation of the Company to repay the Loan shall nevertheless be to such Bank and shall be deemed held by it, to the extent of the applicable Tranche, for the account of such branch or affiliate.
8.6 Discretion of Banks as to Manner of Funding . Notwithstanding any provision of this Agreement to the contrary, each Bank shall be entitled to fund and maintain its funding of all or any part of its Loan in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Bank had actually funded and maintained each Eurodollar Tranche during each Interest Period for its Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the Eurodollar Rate for such Interest Period.
8.7 Mitigation of Circumstances; Replacement or Removal of Affected Bank . (a) Each Bank shall promptly notify the Company and the Administrative Agent of any event of which it has knowledge which will result in, and will use reasonable commercial efforts available to it (and not, in such Bank’s good faith judgment, otherwise disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the Company to pay any amount pursuant to Section 7.7 or 8.1 or (ii) the occurrence of any circumstance of the nature described in Section 8.2 or 8.3 (and, if any Bank has given notice of any such event described in clause (i) or (ii) above and thereafter such event ceases to exist, such Bank shall promptly so notify the Company and the Administrative Agent). Without limiting the foregoing, (x) each Bank will designate a different funding office if such designation will avoid (or reduce the cost to the Company of) any event described in clause (i) or (ii) of the preceding sentence and such designation will not, in such Bank’s good faith judgment, be otherwise disadvantageous to such Bank; and (y) if any Bank fails to notify the Company of any event or circumstance which will entitle such Bank to compensation pursuant to Section 7.7 or 8.1 within 90 days after such Bank obtains knowledge (or reasonably should have obtained knowledge) of such event or circumstance, then such Bank shall not be entitled to compensation from the Company for any amount arising prior to the date which is 90 days before the date on which such Bank notifies the Company of such event or circumstance.
(b) At any time any Bank is an Affected Bank, the Company may replace such Affected Bank as a party to this Agreement with one or more other bank(s) or financial institution(s) reasonably satisfactory to the Administrative Agent (and upon notice from the Company such Affected Bank shall assign pursuant to an Assignment Agreement, and without recourse or warranty, its Loan, its Note and all of its other rights and obligations hereunder to such replacement bank(s) or other financial institution(s) for a purchase price equal to the sum of the principal amount of the Loan (or portion thereof) so assigned, all accrued and unpaid interest thereon, any amounts payable under Section 8.4 as a result of such Bank receiving payment of any Eurodollar Tranche prior to the end of an Interest Period therefor and all other obligations then owed to such Affected Bank hereunder).
In addition to the foregoing, and notwithstanding any other provision of this Agreement to the contrary, if (i) a Bank demands any payment pursuant to Section 8.1(a) and/or Section 8.1(b) and (ii) the payment so demanded is disproportionately greater than the amount of compensation (if any) that the Company is generally obligated to pay to other Banks arising out of the same event or circumstance giving rise to such demand (a “ Trigger Event ”), then the Company may prepay the Loan of such Bank hereunder in full, provided that (w) no Event of Default or Unmatured Event of Default shall have occurred and be continuing at the time of such prepayment, (x) the Company concurrently prepays in full the Loans of each other Bank that has made a demand for payment under Section 8.1(a) and/or 8.1(b) that arises out of such Trigger Event and that is similarly dispropor