Document:

Exhibit 10.1

 

 

 

CREDIT AGREEMENT

 

 

Dated as of November 30, 2012

 

among

 

KKR FINANCIAL HOLDINGS LLC

 

as the Borrower

 

CITIBANK, N.A.

as Administrative Agent

 

and

 

CITIBANK, N.A.

as Swingline Lender and Issuing Bank

 

and

 

The Other Lenders Party Hereto

 

and

 

CITIGROUP GLOBAL MARKETS INC.

as Sole Lead Arranger and Sole Book Manager

 

and

 

BANK OF AMERICA, N.A.

and

DEUTSCHE BANK SECURITIES INC.

as Syndication Agents

 

 

TABLE OF CONTENTS

 

	
Section
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I. DEFINITIONS AND   ACCOUNTING TERMS
    	
 
    	
1
    
	
1.01
    	
Defined Terms
    	
 
    	
1
    
	
1.02
    	
Other Interpretive Provisions
    	
 
    	
21
    
	
1.03
    	
Accounting Terms
    	
 
    	
21
    
	
1.04
    	
Rounding
    	
 
    	
22
    
	
1.05
    	
Times of Day
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II. THE COMMITMENTS   AND BORROWINGS
    	
 
    	
22
    
	
2.01
    	
Revolving Loans
    	
 
    	
22
    
	
2.02
    	
Borrowings, Conversions and Continuations of Revolving   Loans
    	
 
    	
22
    
	
2.03
    	
Swingline Loans
    	
 
    	
24
    
	
2.04
    	
Letters of Credit
    	
 
    	
26
    
	
2.05
    	
Prepayments
    	
 
    	
31
    
	
2.06
    	
Termination or Reduction of Commitments
    	
 
    	
31
    
	
2.07
    	
Repayment of Loans
    	
 
    	
32
    
	
2.08
    	
Interest
    	
 
    	
32
    
	
2.09
    	
Fees
    	
 
    	
33
    
	
2.10
    	
Computation of Interest and Fees
    	
 
    	
33
    
	
2.11
    	
Evidence of Debt
    	
 
    	
34
    
	
2.12
    	
Payments Generally; Administrative Agent’s Clawback
    	
 
    	
34
    
	
2.13
    	
Sharing of Payments by Lenders
    	
 
    	
36
    
	
2.14
    	
Increase in Commitments
    	
 
    	
36
    
	
2.15
    	
Defaulting Lender Provisions
    	
 
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III. TAXES, YIELD   PROTECTION AND ILLEGALITY
    	
 
    	
41
    
	
3.01
    	
Taxes
    	
 
    	
41
    
	
3.02
    	
Illegality
    	
 
    	
44
    
	
3.03
    	
Inability to Determine Rates
    	
 
    	
44
    
	
3.04
    	
Increased Costs; Reserves on Eurodollar Loans
    	
 
    	
44
    
	
3.05
    	
Compensation for Losses
    	
 
    	
46
    
	
3.06
    	
Mitigation Obligations
    	
 
    	
46
    
	
3.07
    	
Survival
    	
 
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV. CONDITIONS PRECEDENT   TO BORROWINGS
    	
 
    	
47
    
	
4.01
    	
Conditions to Effectiveness
    	
 
    	
47
    
	
4.02
    	
Conditions of Initial Borrowing
    	
 
    	
47
    
	
4.03
    	
Conditions to all Extensions of Credit
    	
 
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V. REPRESENTATIONS   AND WARRANTIES
    	
 
    	
49
    
	
5.01
    	
Existence, Qualification and Power
    	
 
    	
49
    
	
5.02
    	
Authorization; No Contravention
    	
 
    	
49
    
	
5.03
    	
Governmental Authorization; Other Consents
    	
 
    	
49
    
	
5.04
    	
Binding Effect
    	
 
    	
49
    
	
5.05
    	
Financial Statements; No Material Adverse Effect
    	
 
    	
50
    
	
5.06
    	
Litigation
    	
 
    	
50
    

 

i

 

	
5.07
    	
No Default
    	
 
    	
50
    
	
5.08
    	
Insurance
    	
 
    	
50
    
	
5.09
    	
Taxes
    	
 
    	
50
    
	
5.10
    	
ERISA Compliance
    	
 
    	
50
    
	
5.11
    	
Properties
    	
 
    	
50
    
	
5.12
    	
Investment Company Act
    	
 
    	
51
    
	
5.13
    	
Disclosure
    	
 
    	
51
    
	
5.14
    	
Compliance with Laws
    	
 
    	
51
    
	
5.15
    	
Solvency
    	
 
    	
51
    
	
5.16
    	
Perfected Security Interest
    	
 
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI. AFFIRMATIVE   COVENANTS
    	
 
    	
52
    
	
6.01
    	
Financial Statements
    	
 
    	
52
    
	
6.02
    	
Certificates; Other Information
    	
 
    	
52
    
	
6.03
    	
Notices
    	
 
    	
54
    
	
6.04
    	
Payment of Obligations
    	
 
    	
54
    
	
6.05
    	
Preservation of Existence, Etc.
    	
 
    	
54
    
	
6.06
    	
Maintenance of Properties
    	
 
    	
54
    
	
6.07
    	
Maintenance of Insurance
    	
 
    	
54
    
	
6.08
    	
Compliance with Laws
    	
 
    	
54
    
	
6.09
    	
Books and Records
    	
 
    	
55
    
	
6.10
    	
Inspection Rights
    	
 
    	
55
    
	
6.11
    	
Use of Proceeds
    	
 
    	
55
    
	
6.12
    	
Investment Policies
    	
 
    	
55
    
	
6.13
    	
Fiscal Year
    	
 
    	
55
    
	
6.14
    	
Lines of Business
    	
 
    	
55
    
	
6.15
    	
Further Assurances
    	
 
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII. NEGATIVE COVENANTS
    	
 
    	
56
    
	
7.01
    	
Liens
    	
 
    	
56
    
	
7.02
    	
Investments
    	
 
    	
56
    
	
7.03
    	
Indebtedness
    	
 
    	
56
    
	
7.04
    	
Fundamental Changes
    	
 
    	
57
    
	
7.05
    	
Dispositions
    	
 
    	
58
    
	
7.06
    	
Restricted Payments
    	
 
    	
59
    
	
7.07
    	
Transactions with Affiliates
    	
 
    	
59
    
	
7.08
    	
Burdensome Agreements
    	
 
    	
59
    
	
7.09
    	
Financial Covenants
    	
 
    	
60
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII. EVENTS OF   DEFAULT AND REMEDIES
    	
 
    	
60
    
	
8.01
    	
Events of Default
    	
 
    	
60
    
	
8.02
    	
Remedies Upon Event of Default
    	
 
    	
62
    
	
8.03
    	
Application of Funds
    	
 
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX. ADMINISTRATIVE   AGENT
    	
 
    	
63
    
	
9.01
    	
Appointment and Authority
    	
 
    	
63
    
	
9.02
    	
Rights as a Lender
    	
 
    	
63
    
	
9.03
    	
Exculpatory Provisions
    	
 
    	
63
    
	
9.04
    	
Reliance by Administrative Agent
    	
 
    	
64
    
	
9.05
    	
Delegation of Duties
    	
 
    	
64
    
	
9.06
    	
Resignation of Administrative Agent
    	
 
    	
65
    

 

ii

 

	
9.07
    	
Non-Reliance on Administrative Agent and Other Lenders
    	
 
    	
65
    
	
9.08
    	
No Other Duties, Etc.
    	
 
    	
66
    
	
9.09
    	
Administrative Agent May File Proofs of Claim
    	
 
    	
66
    
	
9.10
    	
Collateral Matters
    	
 
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X. MISCELLANEOUS
    	
 
    	
67
    
	
10.01
    	
Amendments, Etc.
    	
 
    	
67
    
	
10.02
    	
Notices; Effectiveness; Electronic Communication
    	
 
    	
68
    
	
10.03
    	
No Waiver; Cumulative Remedies
    	
 
    	
70
    
	
10.04
    	
Expenses; Indemnity; Damage Waiver
    	
 
    	
70
    
	
10.05
    	
Payments Set Aside
    	
 
    	
71
    
	
10.06
    	
Successors and Assigns
    	
 
    	
72
    
	
10.07
    	
Treatment of Certain Information; Confidentiality
    	
 
    	
76
    
	
10.08
    	
Right of Setoff
    	
 
    	
76
    
	
10.09
    	
Interest Rate Limitation
    	
 
    	
77
    
	
10.10
    	
Counterparts; Integration; Effectiveness
    	
 
    	
77
    
	
10.11
    	
Survival of Representations and Warranties
    	
 
    	
77
    
	
10.12
    	
Severability
    	
 
    	
77
    
	
10.13
    	
Replacement of Lenders
    	
 
    	
77
    
	
10.14
    	
Governing Law; Jurisdiction; Etc.
    	
 
    	
78
    
	
10.15
    	
No Advisory or Fiduciary Responsibility
    	
 
    	
79
    
	
10.16
    	
U.S. PATRIOT Act Notice
    	
 
    	
80
    
	
10.17
    	
Entire Agreement
    	
 
    	
80
    
	
10.18
    	
Judgment Currency
    	
 
    	
80
    

 

iii

 

	
SCHEDULES
    
	
 
    	
 
    
	
2.01
    	
Commitments   and Applicable Percentages
    
	
5.06
    	
Litigation
    
	
7.01
    	
Existing   Liens
    
	
7.03
    	
Existing   Indebtedness
    
	
7.08
    	
Burdensome   Agreements
    
	
10.02
    	
Administrative   Agent’s Office; Certain Addresses for Notices
    
	
10.06
    	
Processing   and Recordation Fees
    
	
 
    	
 
    
	
EXHIBITS
    
	
 
    	
 
    
	
A
    	
Form of   Revolving Loan Notice
    
	
B
    	
Form of   Swingline Loan Notice
    
	
C
    	
Form of   Promissory Note
    
	
D
    	
Form of   Compliance Certificate
    
	
E
    	
Form of   Assignment and Assumption
    
	
F-1
    	
Form of   Opinion of Simpson Thacher & Bartlett LLP
    
	
F-2
    	
Form of   Opinion of In-house General Counsel for the Borrower
    
	
G
    	
Form of   Closing Certificate
    
	
H
    	
Form of   Officer’s Certificate
    
	
I
    	
Form of   Pledge Agreement
    

 

iv

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (this “Agreement”) is entered into as of November 30, 2012, among KKR FINANCIAL HOLDINGS LLC, a Delaware limited liability company (the “Borrower”); each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”); CITIBANK, N.A., as Swingline Lender and Issuing Bank; and CITIBANK, N.A., as Administrative Agent.

 

W I T N E S S E T H:

 

The Borrower, the Lenders, the Administrative Agent, the Issuing Bank and the Swingline Lender agree as follows:

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

1.01                        Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Adjusted Consolidated Tangible Net Worth” means, as of any date of determination, an amount equal to (a) the Consolidated Net Worth for the Borrower and its consolidated Subsidiaries (as of such date of determination, and calculated without regard to any accumulated other comprehensive income or loss), less (b) the Intangible Assets for the Borrower and its consolidated Subsidiaries (as of such date of determination), excluding accumulated other comprehensive income or loss (a component of shareholders’ equity) plus (c) Trust Preferred Indebtedness.

 

“Adjusted Consolidated Total Assets” means, as of any date of determination, Consolidated Total Assets less the sum of (i) Non-Recourse secured Indebtedness issued or incurred by the Borrower, (ii) Indebtedness issued or incurred by Subsidiaries of the Borrower (other than such Indebtedness that is not Non-Recourse to the Borrower) and (iii) Indebtedness issued or incurred by CLOs (other than such Indebtedness that is issued to or held by the Borrower, any of its Subsidiaries or any other CLO).

 

“Adjusted Total Liabilities” means, as of any date of determination, Consolidated Total Liabilities less the sum of (i) all liabilities of the consolidated GAAP balance sheet of the Borrower arising from the required application of GAAP that are Non-Recourse to the Borrower and (ii) Trust Preferred Indebtedness.

 

“Administrative Agent” means Citibank, N.A. in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

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

 

“Affiliate” means, with respect to any 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 

 

1

 

specified; provided, however, that neither Maples Finance Limited nor any special purpose companies for which it provides corporate administrative services shall be deemed to be an affiliate of KKR TRS Holdings, Ltd.

 

“Affiliated Debt Fund” means any investment fund managed or advised by Affiliates of Kohlberg Kravis Roberts & Co. L.P. that is a bona fide debt fund.

 

“Agent Parties” has the meaning specified in Section 10.02(c).

 

“Aggregate Commitments” means, collectively, all Commitments of all Lenders at any time outstanding.

 

“Aggregate Commitment Amount” means the aggregate principal amount of the Aggregate Commitments from time to time.  On the date hereof, the Aggregate Commitment Amount equals $150,000,000.  The Aggregate Commitment Amount may be increased to an amount up to $350,000,000 in accordance with Section 2.14.

 

“Agreement” means this Credit Agreement, as further amended, restated, extended, supplemented or otherwise modified in writing from time to time.

 

“Agreement Currency” has the meaning specified in Section 10.18.

 

“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitment Amount represented by such Lender’s Commitment at such time.  If the commitment of each Lender to make Loans has been terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Applicable Rate” means a per annum rate equal to (a) 1.25%, in the case of Base Rate Loans and (b) 2.25%, in the case of Eurodollar Loans.

 

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

 

“Arranger” means Citigroup Global Markets Inc., in its capacity as sole lead arranger and sole book manager.

 

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

 

“Assignment and 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 10.06(b), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized 

 

2

 

amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2011, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

 

“Availability” shall mean, at any time, an amount equal to the Aggregate Commitment Amount minus the Total Revolving Credit Exposure.

 

“Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Loans pursuant to Section 8.02.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Citibank, N.A. as its “base rate” and (c) the Eurodollar Rate for loans with an Interest Period of one (1) month in effect on such date plus 1%.  The “prime rate” is a rate set by Citibank, N.A. based upon various factors including Citibank, N.A.’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Citibank, N.A. shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Base Rate Loan” means a Loan that bears interest at a per annum rate equal to the Base Rate plus the Applicable Rate.

 

“BBA LIBOR” has the meaning specified in the definition of “Eurodollar Rate”.

 

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

 

“Borrowing” means (i) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (ii) Swingline Loans of the same duration, as applicable.

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and if such day relates to any interest rate settings as to a Eurodollar Loan, any fundings, disbursements, settlements and payments in respect of any such Eurodollar Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Eurodollar Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank Eurodollar 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 

 

3

 

the capitalized amount thereof determined in accordance with GAAP; provided that the adoption or issuance of any accounting standards after the Closing Date will not cause any lease that was not or would not have constituted a Capital Lease Obligation prior to such adoption or issuance to be deemed a Capital Lease Obligation.

 

“Cash Collateralize” means, in respect of an obligation, to provide and pledge (as a first priority perfected security interest) cash collateral in Dollars, at a location and pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent (and “Cash Collateralization” has a corresponding meaning).

 

“Cash Management Agreement” means any agreement entered into from time to time by the Borrower or any of its Subsidiaries in connection with cash management services for collections, other Cash Management Services and for operating, payroll and trust accounts of such Person, including automatic clearing house services, controlled disbursement services, electronic funds transfer services, information reporting services, lockbox services, stop payment services and wire transfer services.

 

“Cash Management Bank” means (a) any third party financial institution that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender or (b) with respect to any Cash Management Agreement entered into prior to the Closing Date, any third party financial institution that is a Lender or an Affiliate of a Lender on the Closing Date.

 

“Cash Management Services” shall mean (a) commercial credit cards, merchant card services, purchase or debit cards, including non-card e-payables services, (b) treasury management services (including controlled disbursement, overdraft automatic clearing house fund transfer services, return items and interstate depository network services) and (c) any other demand deposit or operating account relationships or other cash management services, including any Cash Management Agreements.

 

“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 (provided, for avoidance of doubt, that Change in Law shall include any such adoption, taking effect, change, making or issuance under (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith 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 or foreign regulatory authorities, in each case pursuant to Basel III, in each case, so long as it is the applicable Lender’s general policy or practice to demand compensation in similar circumstances under comparable provisions of other financing agreements).

 

“Change of 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 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; (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 nor (ii) appointed by directors so nominated; or (c) the acquisition of direct or indirect Control of the Borrower by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) not in Control of the Borrower on the Closing Date.

 

4

 

“CLO” means a special purpose entity managed by KKR Financial Advisors II, LLC, the Borrower or any of their respective Affiliates that is formed for the purpose of securitizing corporate debt instruments and of which at least one Person unaffiliated with the Borrower holds any of the issued and outstanding notes.

 

“Closing Date” means the earliest date on which each of the conditions precedent set forth in Sections 4.01, 4.02 and 4.03 have either been satisfied or waived.

 

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

 

“Collateral” has the meaning specified in the Pledge Agreement.

 

“Commitment” means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.01 and (b) purchase participations in Swingline Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

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

 

“Consolidated Net Worth” means, as of any date of determination, the aggregate sum of all amounts which would be included on a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries under shareholders’ equity as of such date in accordance with GAAP.

 

“Consolidated Total Assets” means, as of any date of determination, the sum of (a) all assets (“consolidated balance sheet assets”) of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, plus (b) without duplication, all assets leased by the Borrower or any Subsidiary as lessee under any Synthetic Lease to the extent that such assets would have been consolidated balance sheet assets had the Synthetic Lease been treated for accounting purposes as a capital lease, plus (c) without duplication, all proceeds of sold receivables in respect of sales of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables (collectively “receivables”), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Persons relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Persons to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith, to the extent that such receivables would have been consolidated balance sheet assets had they not been sold.

 

“Consolidated Total Liabilities” means, as of any date of determination, all liabilities of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP and classified as such on the consolidated balance sheet of the Borrower and its Subsidiaries and, without duplication, all other Indebtedness of the Borrower and its Subsidiaries, whether or not so classified; provided that for purposes of this definition, in the case of a Trust Preferred Securities Transaction of the Borrower or any Subsidiary, only the Trust Preferred Indebtedness issued or incurred by the Borrower or any Subsidiary in connection therewith, excluding Trust Preferred Indebtedness relating solely to the common equity securities of the applicable Trust Preferred Financing Vehicle, shall be included in determining the liabilities and other Indebtedness of the Borrower and its Subsidiaries.  Notwithstanding the foregoing, Consolidated Total Liabilities shall not include liabilities arising out of any Disposition by

 

5

 

the Borrower of all of its residential real estate assets as contemplated by Section 7.05(b) (i) that are Non-Recourse to the Borrower and (ii) are recorded by the Borrower based on required application of GAAP.

 

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

 

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

 

“Debt Fund Affiliate” means any investment fund managed or advised by Affiliates of Kohlberg Kravis Roberts & Co. L.P. that is a bona fide debt fund and that extends credit or buys loans in the ordinary course of business.

 

“Debt Securities” means securities evidencing debt obligations, including, without limitation, certificates representing an interest in a trust, the principal assets of which consist of debt obligations.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means, when used with respect to Obligations, (i) with respect to Base Rate Loans, an interest rate equal to (A) the Base Rate plus (B) the Applicable Rate plus (C) 2% per annum; and (ii) with respect to Eurodollar Loans, an interest rate equal to (A) the Eurodollar Rate plus (B) the Applicable Rate plus (C) 2% per annum.

 

“Defaulting Lender” means, at any time, a Lender (i) that has failed for three or more Business Days to comply with its obligations under this Agreement to make a Loan, make a payment to the Issuing Bank in respect of an LC Payment and/or make a payment to the Swingline Lender in respect of a Swingline Loan (each a “funding obligation”), (ii) that has notified the Administrative Agent, or has stated publicly, that it will not comply with any such funding obligation hereunder, or has defaulted on its funding obligations under any other loan agreement or credit agreement or other financing agreement, (iii) that has, for three or more Business Days, failed to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (iii) upon receipt of such written confirmation by the Administrative Agent), or (iv) in respect of which a Lender Insolvency Event has occurred and is continuing, in the case of clauses (i) through (iv) above unless the subject of a good faith dispute and such Lender has notified the Administrative Agent in writing of such (provided that neither the reallocation of funding obligations provided for in Section 2.15(c) as a result of a Lender’s being a Defaulting Lender nor the performance by Non-Defaulting Lenders of such reallocated funding obligations will by themselves cause the relevant Defaulting Lender to become a Non-Defaulting Lender).  Any determination that a Lender is a Defaulting Lender under clauses (i) through (iv) above will be made by the Administrative Agent in its reasonable discretion acting in good faith.  The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.

 

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“Disposition” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

“Dollar” and “$” mean the lawful currency of the United States.

 

“Eligible Assignee” means (a) any Person that meets the requirements to be an assignee under Sections 10.06(b)(iii), 10.06(b)(v) and 10.06(b)(vi), (b) a commercial bank organized under the laws of the United States, or any State thereof, having total assets in excess of $500,000,000 or any commercial finance or asset based lending affiliate of any such commercial bank, (c) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, having a net worth of at least $250,000,000 calculated in accordance with GAAP, (d) any Lender (or any Affiliate of any Lender) listed on the signature page of this Agreement, (e) other financial institutions with a net worth of at least $250,000,000 and (f) any Affiliated Debt Fund; provided that the aggregate Commitments of all Affiliated Debt Funds taken as a whole shall not exceed 25% of the Aggregate Commitment Amount at any time.

 

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

“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 of its respective Subsidiaries 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, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a

 

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cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

“Eurodollar Loan” means any Revolving Loan that bears interest at a per annum rate equal to the Eurodollar Rate plus the Applicable Rate.

 

“Eurodollar Rate” means, for any day, a fixed rate equal to the British Bankers Association LIBOR Rate, or the successor thereto if the British Bankers Association is no longer making a LIBOR Rate available, (“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 U.S. dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “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 U.S. dollars for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurodollar Loan being made, continued or converted by Citibank, N.A. and with a term equivalent to such Interest Period would be offered by Citibank, N.A.’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“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 or under any other Loan Document, (a) taxes imposed on or measured by its overall gross or net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), in each case, by the jurisdiction (or any political subdivision thereof including, without limitation, a state of the United States and any political subdivision of such state) under the laws of which such recipient is organized (or political subdivision thereof) 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 (or political subdivision thereof) in which the Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 10.13), any and all Taxes (including withholding tax) that are imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office), 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 3.01(a), or are attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e), (d) any and all Taxes imposed on it as a result of a trade or business, a permanent establishment, or a present or former connection between such Lender or the Administrative Agent (as the case may be) and the jurisdiction of the Governmental Authority imposing such tax or any taxing authority thereof or therein (other than connections arising from the relevant Lender or the Administrative Agent having executed, delivered, become a party to, performed its obligations under,

 

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received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document) and (e) any Taxes that are imposed by reason of FATCA.

 

“Existing Credit Agreement” means that certain Credit Agreement, dated as of May 3, 2010 (as amended) among the Borrower, certain of its Subsidiaries and the lenders and agents party thereto.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average (rounded upwards, if necessary, to a whole multiple of 1/100 of 1%) 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 Citibank, N.A. on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” means the fee letter agreement, dated October 4, 2012 between the Borrower and the Administrative Agent, as amended.

 

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

 

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

 

“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 set forth 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 such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Governmental Authority” means the government of the United States or any other nation, or of 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 (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable

 

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or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

“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.

 

“Increase Effective Date” has the meaning specified in Section 2.14(d).

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a)                                 all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)                                 all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)                                  net obligations of such Person under any Swap Contract;

 

(d)                                 all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and, in each case, not past due for more than 60 days after the date on which such trade account payable was created);

 

(e)                                  indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)                                   Capital Lease Obligations and Synthetic Lease Obligations;

 

(g)                                  all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a

 

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redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

 

(h)                                 all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership, joint venture (other than a joint venture that is itself a corporation or limited liability company) or other business venture (collectively with a partnership and a joint venture, referred to hereinafter as a “Venture”), but only to the extent that such Person is directly or indirectly liable for such Indebtedness, whether by reason of its status as general partner, joint venturer or otherwise, unless, and only to the extent that, such Indebtedness is Non-Recourse to such Person or Venture.

 

The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.  The amount of any Capital Lease Obligation or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning specified in Section 10.04(b).

 

“Information” has the meaning specified in Section 10.07.

 

“Intangible Assets” means, as of any date of determination, (to the extent included in Consolidated Total Assets) the total book value of all assets of the Borrower and its Subsidiaries properly classified as intangible assets under GAAP, including such items as goodwill, the purchase price of acquired assets in excess of the fair market value thereof, trademarks, trade names, service marks, brand names, copyrights, patents and licenses, and rights with respect to the foregoing.

 

“Interest Payment Date” means, (a) as to any Eurodollar Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swingline Loan), the last Business Day of each March, June, September and December and the Maturity Date.

 

“Interest Period” means, as to each Eurodollar Loan, the period commencing on the date such Eurodollar Loan is disbursed or converted to or continued as a Eurodollar Loan and ending on the date, one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice; provided that:

 

(a)                                 any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

(b)                                 any Interest Period that begins on the last Business Day of a calendar month (or 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

 

(c)                                  no Interest Period shall extend beyond the Maturity Date.

 

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“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

“Investment Company Act” means the Investment Company Act of 1940, as amended.

 

“IRS” means the United States Internal Revenue Service.

 

“Issuing Bank” means (i) Citibank, N.A., in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity or (ii) or any other Lender that, at the request of the Borrower and with the consent of the Administrative Agent, agrees, in such Lender’s sole discretion, to become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section 2.04.

 

“Judgment Currency” has the meaning specified in Section 10.18.

 

“L/C Maturity Date” means the date that is five Business Days prior to the Maturity Date.

 

“L/C Participant” has the meaning specified in Section 2.04(c).

 

“L/C Participation” has the meaning specified in Section 2.04(c).

 

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Swingline Lender.

 

“Lender Insolvency Event” means that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) such Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment; provided that a Lender Insolvency Event shall not result solely by virtue of the ownership or acquisition of any equity interest in such Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

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“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

 

“Letter of Credit Commitment” means $25,000,000.

 

“Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all payments made by the Issuing Bank pursuant to Letter of Credits that have not yet been reimbursed by or on behalf of the Borrower at such time.

 

“Letter of Credit Request” has the meaning specified in Section 2.04(b).

 

“Letters of Credit Outstanding” shall mean, at any time, the sum of, without duplication, (a) the aggregate stated amount of all outstanding Letters of Credit and (b) the aggregate amount of all unreimbursed drawings or payments in respect of all Letters of Credit.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Loan” means any Revolving Loan or Swingline Loan.

 

“Loan Documents” means this Agreement, the Security Documents, and each Note, if any, issued hereunder.

 

“Loan Notice” means either a Revolving Loan Notice or a Swingline Loan Notice.

 

“Management Agreement” means that certain Amended and Restated Management Agreement, dated as of May 4, 2007, between the Borrower and KKR Financial Advisors LLC, as amended.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or condition, financial or otherwise, of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of its obligations under this Agreement or any other Loan Document or (c) the rights of or benefits available to the Administrative Agent or the Lenders under this Agreement or any other Loan Document.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Indebtedness in respect of Swap Contracts and Repurchase Agreement) of the Borrower and, except for Indebtedness that is Non-Recourse to the Borrower, its Subsidiaries in an aggregate principal amount exceeding $25,000,000.

 

“Maturity Date” means November 30, 2015, and, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

 

“Maximum Rate” has the meaning specified in Section 10.09.

 

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

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“Non-Defaulting Lender” means, at any time, a Lender that is not a Defaulting Lender or a Potential Defaulting Lender.

 

“Non-Recourse” means, with respect to any Indebtedness and to any Person, that such Person has not Guaranteed such Indebtedness, and is not otherwise liable, directly or indirectly, for such Indebtedness, and that no default on such Indebtedness would permit (upon notice or lapse of time) any holder thereof to declare a default on such Person’s own Indebtedness.

 

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

 

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to any Loan hereunder or under any Secured Cash Management Agreement or Secured Swap Contract, in each case, entered into with the Borrower or any of its Subsidiaries, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“Organizational Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Letter of Credit Obligations” means reimbursement obligations of the Borrower in respect of letters of credit issued for the benefit of the Borrower or any of its Subsidiaries, which reimbursement obligations may be unsecured or may be collateralized by means of a deposit of cash with the issuer of any such letter of credit.

 

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any political subdivision thereof (including, without limitation, any state in the United States and any political subdivision of any such state) (including interest, fines, penalties and additions to tax) arising from the execution, delivery, performance or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

 

“Outstanding Amount” means with respect to all Loans hereunder, on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans occurring on such date.

 

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“Parent Company” means, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“Participant Register” has the meaning specified in Section 10.06(d).

 

“Patriot Act” has the meaning specified in Section 10.16.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor entity performing similar functions.

 

“PCAOB” means the Public Company Accounting Oversight Board.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

 

“Permitted Encumbrances” means:

 

(a)                                 Liens imposed by law for taxes that are not yet due or are being contested in good faith by the Borrower or a Subsidiary thereof and for which adequate reserves have been set aside;

 

(b)                                 landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in good faith by the Borrower or a Subsidiary thereof;

 

(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 and deposits securing liability to insurance carriers in relation to the foregoing;

 

(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; 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 interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

 

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

 

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

 

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“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

 

“Platform” has the meaning specified in Section 6.02.

 

“Pledge Agreement” means the Pledge Agreement, substantially in the form of Exhibit I, executed and delivered in connection with this Agreement, between the Borrower and the Administrative Agent, as further amended, amended and restated, supplemented or otherwise modified from time to time.

 

“Potential Defaulting Lender” means, at any time, a Lender (i) as to which the Administrative Agent has notified the Borrower that an event of the kind referred to in the definition of “Lender Insolvency Event” has occurred and is continuing in respect of any Subsidiary of such Lender, (ii) as to which the Administrative Agent, the Issuing Bank or the Swingline Lender has in good faith determined and notified the Borrower and (in the case of the Issuing Bank or the Swingline Lender) the Administrative Agent that such Lender or its Parent Company or a Subsidiary thereof has notified the Administrative Agent, or has stated publicly, that it will not comply with its funding obligations under any other loan agreement or credit agreement or other similar financing agreement or (iii) that has, or whose Parent Company has, a non-investment grade rating from Moody’s or S&P or another nationally recognized rating agency.  Any determination that a Lender is a Potential Defaulting Lender under any of clauses (i) through (iii) above will be made by the Administrative Agent or, in the case of clause (ii), the Issuing Bank or the Swingline Lender, as the case may be, in its reasonable discretion acting in good faith.  The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.

 

“Public Lender” has the meaning specified in Section 6.02.

 

“Recourse Indebtedness” means the sum of (i) senior secured Indebtedness issued or incurred by the Borrower (other than Non-Recourse secured Indebtedness of the Borrower) and (ii) any unsecured Indebtedness issued or incurred by Subsidiaries of the Borrower that is not Non-Recourse to the Borrower.

 

“Register” has the meaning specified in Section 10.06(c).

 

“Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of the Borrower as prescribed by the Securities Laws.

 

“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.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

“Repurchase Agreement” means any agreement involving the sale or purchase of financial or other assets whereby the seller of such assets agrees to repurchase such assets at an agreed upon price and at a stated time.

 

“Request for Borrowing” means (a) with respect to a Borrowing, conversion or continuation of Revolving Loans, a Revolving Loan Notice and (b) with respect to a Swingline Loan, a Swingline Loan Notice.

 

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“Required Lenders” means, as of any date of determination, the Lenders having Commitments in the aggregate representing more than 50% of the Aggregate Commitments at such time or, if the commitment of each Lender to make Loans has been terminated pursuant to Section 8.02, at least two Lenders holding in the aggregate more than 50% of the Total Revolving Credit Exposure (with the aggregate amount of each Lender’s risk participation in Swingline Loans being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Revolving Credit Exposure held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief financial officer, chief operating officer, treasurer, assistant treasurer or controller of the Borrower or any other officer of the Borrower (i) so designated by any of the foregoing officers in a notice to the Administrative Agent or (ii) so authorized by resolutions of the Borrower’s board of directors.  Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower’s stockholders, partners or members (or the equivalent Person thereof).

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of (a) the Outstanding Amount of the Revolving Loans of such Lender, (b) such Lender’s Applicable Percentage of Letter of Credit Exposure then outstanding and (c) such Lender’s Applicable Percentage of the Outstanding Amount of all Swingline Loans.

 

“Revolving Credit Facility” means the credit facility pursuant to which Revolving Loans are made available to the Borrower in accordance with this Agreement.

 

“Revolving Loan” means an extension of credit made by a Lender to the Borrower pursuant to Section 2.01 of this Agreement.

 

“Revolving Loan Notice” means a notice of (a) a Borrowing of a Revolving Loan, (b) a conversion of Revolving Loans from one Type to another, or (c) a continuation of Eurodollar Loans pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

 

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

 

“Same Day Funds” means with respect to disbursements and payments in Dollars, immediately available funds.

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002, as amended.

 

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

 

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“Secured Cash Management Agreement” shall mean any Cash Management Agreement that is entered into by and between the Borrower or any of its Subsidiaries and any Cash Management Bank.

 

“Secured Indebtedness” means secured Indebtedness incurred by the Borrower or any Subsidiary in the ordinary course of its business, including any such Indebtedness incurred pursuant to or in connection with any loan warehouse agreement, Repurchase Agreement, Swap Contract, collateralized bond obligation, collateralized loan obligation, collateralized debt obligation or Securitization.

 

“Secured Swap Contract” shall mean any Swap Contract that is entered into by and between the Borrower or any of its Subsidiaries and any Swap Contract Bank.

 

“Securitization” means the issuance by a bankruptcy-remote special purpose entity of evidences of debt obligations or Equity Interests to holders which are third party institutional investors and which entitle the holders to receive payments that depend primarily on the cash flow of accounts, chattel paper, instruments, investment property or payment intangibles owned by the special purpose entity.

 

“Security Documents” means the Pledge Agreement and all other instruments and documents, including without limitation, Uniform Commercial Code financing statements, which (a) are required to be executed, delivered or filed pursuant to the Pledge Agreement or any other Loan Document or (b) are necessary for the creation or perfection of any Lien in favor of the Administrative Agent for the benefit of the Lenders to secure any of the Obligations.

 

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB.

 

“Solvent” means, with respect to any Person as of a particular date, that, on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, and (e) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Special Event” means, in connection with a Trust Preferred Financing Vehicle, the receipt by the Borrower (or its Subsidiary) of an opinion of counsel that as a result of certain changes in or interpretations of the tax law or the Investment Company Act or, in each case, regulations thereunder, there is more than an insubstantial risk that the Trust Preferred Vehicle will be considered an “investment company” under the Investment Company Act or that the Trust Preferred Vehicle will be subject to United States federal income tax or subject to more than a de minimus amount of other taxes or governmental charges or that interest payable by the maker of the Trust Preferred Indebtedness will not be eligible as a tax deduction by such maker.

 

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“Stated Amount” of any Letter of Credit shall mean, at any time, the maximum amount available to be drawn thereunder at such time, determined without regard to whether any conditions to drawing could then be met.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person; provided that none of the CLOs shall be considered a Subsidiary of the Borrower for so long as any Person other than the Borrower or a Subsidiary or any affiliate thereof holds any Indebtedness of such CLO.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Swap Contract Bank” shall mean (a) any Person that, at the time it enters into a Swap Contract, is a Lender or an Affiliate of a Lender or (b) with respect to any Swap Contract entered into prior to the Closing Date, any person that is a Lender or an Affiliate of a Lender on the Closing Date.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts 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 Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Swingline Borrowing” means a borrowing of a Swingline Loan pursuant to Section 2.03.

 

“Swingline Lender” means Citibank, N.A. in its capacity as provider of Swingline Loans, or any successor swingline lender hereunder.

 

“Swingline Loan” has the meaning specified in Section 2.03(a).

 

“Swingline Loan Notice” means a notice of a Swingline Borrowing pursuant to Section 2.03(b), which, if in writing, shall be substantially in the form of Exhibit B.

 

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“Swingline Sublimit” means, at any time, an amount equal to the lesser of (a) $25,000,000 and (b) the Aggregate Commitment Amount.  The Swingline Sublimit is part of, and not in addition to, the Aggregate Commitment Amount.

 

“Syndication Agents” means, collectively, Bank of America, N.A. and Deutsche Bank Securities Inc.

 

“Synthetic Lease” means any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under a Synthetic Lease.

 

“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.

 

“Total Revolving Credit Exposure” means, at any date, the sum of the Revolving Credit Exposures of all Lenders.

 

“Trust Preferred Financing Vehicle” has the meaning assigned to such term in the definition of Trust Preferred Securities Transaction.

 

“Trust Preferred Guaranty” has the meaning assigned to such term in the definition of Trust Preferred Securities Transaction.

 

“Trust Preferred Indebtedness” has the meaning assigned to such term in the definition of Trust Preferred Securities Transaction.

 

“Trust Preferred Securities” has the meaning assigned to such term in the definition of Trust Preferred Securities Transaction.

 

“Trust Preferred Securities Transaction” means a transaction pursuant to which (i) the Borrower (or any Subsidiary) issues unsecured, subordinated, Debt Securities to, or borrows on an unsecured, subordinated basis from, any trust or other entity that, as its primary purpose, provides financing to the Borrower (or any Subsidiary) (a “Trust Preferred Financing Vehicle”; such indebtedness of the Borrower or any of its Subsidiaries owing to a Trust Preferred Financing Vehicle, “Trust Preferred Indebtedness”) and (ii) the Trust Preferred Financing Vehicle funds such financing of the Borrower (or such Subsidiary) by issuing and selling preferred securities having a mandatory redemption date no earlier than 30 years and not subject to redemption in less than 5 years from the date of their issuance (other than at the option of the Borrower or applicable Subsidiary upon the occurrence of a Special Event) (“Trust Preferred Securities”), which securities may be guaranteed on an unsecured, subordinated basis by the Borrower or such Subsidiary to the extent that the trustee has failed to make distributions from payments received from the Borrower or such Subsidiary (each such guaranty, a “Trust Preferred Guaranty”, collectively, “Trust Preferred Guarantees”).

 

“Type” means, with respect to any Loan, its characterization as a Base Rate Loan or a Eurodollar Loan.

 

“UCC” and “Uniform Commercial Code” mean the Uniform Commercial Code as from time to time in effect in the State of New York; provided, however, that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Administrative Agent’s and the

 

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Lenders’ security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the terms “UCC” and “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

 

“United States” and “U.S.” mean the United States of America.

 

“Unpaid Drawing” has the meaning specified in Section 2.04(d).

 

“Unsecured Indebtedness” means unsecured Indebtedness incurred by the Borrower or any Subsidiary in the ordinary course of its business.

 

“Withholding Agent” means the Borrower and the Administrative Agent.

 

1.02        Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)                                 The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organizational Document) 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 or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) 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.

 

(b)                                 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.”

 

(c)                                  Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.03                        Accounting Terms.  (a)  Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner

 

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consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

 

(b)                                 Changes in GAAP.  The Borrower shall provide a written summary of material changes in GAAP or in the consistent application thereof in accordance with Section 6.02(a).  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

(c)                                  Consolidation of Variable Interest Entities.  All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to GAAP as if such variable interest entity were a Subsidiary as defined herein.

 

1.04                        Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05                        Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

ARTICLE II.
 THE COMMITMENTS AND BORROWINGS

 

2.01                        Revolving Loans.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make Revolving Loans to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided that, after giving effect to any Revolving Loan, (i) the Total Revolving Credit Exposure does not exceed the Aggregate Commitment Amount, and (ii) the aggregate amount of such Lender’s Revolving Credit Exposure does not exceed such Lender’s Commitment.  Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01.  Revolving Loans may be Base Rate Loans or Eurodollar Loans, as further provided herein.

 

2.02                        Borrowings, Conversions and Continuations of Revolving Loans.

 

(a)                                 Each Revolving Loan, each conversion of Revolving Loans from one Type to another, and each continuation of Eurodollar Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Loans or of any conversion of Eurodollar

 

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Loans to Base Rate Loans and (ii) on the requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Revolving Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower.  Each Borrowing of, conversion to or continuation of Eurodollar Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Section 2.03(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Revolving Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Revolving Loan, a conversion of Revolving Loans from one Type to the other, or a continuation of Eurodollar Loans, (ii) the requested date of the Revolving Loan, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Revolving Loans to be borrowed, converted or continued, (iv) the Type of Revolving Loans to be borrowed or to which existing Revolving Loans are to be converted or continued and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Revolving Loan in a Revolving Loan Notice then the applicable Revolving Loans shall be made as Eurodollar Loans with an Interest Period of one month.  If the Borrower requests a Borrowing of Eurodollar Loans in any such Revolving Loan Notice, but fails to specify an Interest Period (or fails to give a timely notice requesting a continuation of Eurodollar Loans), it will be deemed to have specified an Interest Period of one month.  If the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made or continued as the same Type of Loan, which if a Eurodollar Loan, shall have a one-month Interest Period.  Any such automatic continuation shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Loans.  If the Borrower requests a conversion to, or continuation of Eurodollar Loans in any such Revolving Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month’s duration.

 

(b)                                 Following receipt of a Revolving Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Revolving Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall promptly notify each Lender of the details of any automatic conversion as described in the preceding subsection.  In the case of a Revolving Loan, each Lender shall make the amount of its Revolving Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Revolving Loan Notice.  Upon satisfaction of the applicable conditions set forth in ARTICLE IV (and, if such Borrowing is the initial Borrowing, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent by wire transfer of such funds to the account specified by the Borrower.

 

(c)                                  Except as otherwise provided herein, a Eurodollar Loan may be continued or converted only on the last day of an Interest Period for such Loan.  If during the existence of a Default the Required Lenders have determined in their sole discretion not to permit such conversion or continuation, then no Loans may be converted to or continued as Eurodollar Loans.

 

(d)                                 The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Loans upon determination of such interest rate.  At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Citibank, N.A.’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

 

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(e)                                  After giving effect to all Revolving Loans, all conversions of Revolving Loans from one Type to the other, and all continuations of Revolving Loans as the same Type, there shall not be more than ten (10) Interest Periods in effect with respect to Revolving Loans.

 

2.03                        Swingline Loans.

 

(a)                                 The Swingline.  Subject to the terms and conditions set forth herein, the Swingline Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, to make swingline loans (each such loan, a “Swingline Loan”) to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swingline Sublimit, notwithstanding the fact that such Swingline Loans, when aggregated with such Lender’s Applicable Percentage of Letter of Credit Exposure then outstanding and the Applicable Percentage of the Outstanding Amount of Revolving Loans of the Lender acting as Swingline Lender, may exceed the amount of such Lender’s Commitment; provided, however, that after giving effect to any Swingline Loan, (i) the Total Revolving Credit Exposure does not exceed the Aggregate Commitment Amount and (ii) the aggregate amount of such Lender’s Revolving Credit Exposure does not exceed such Lender’s Commitment, and provided, further, that the Borrower shall not use the proceeds of any Swingline Loan to refinance any outstanding Swingline Loan.  Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.03, prepay under Section 2.05, and reborrow under this Section 2.03.  Each Swingline Loan shall be a Base Rate Loan.  Immediately upon the making of a Swingline Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swingline Lender a risk participation in such Swingline Loan in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Swingline Loan.

 

(b)                                 Borrowing Procedures.  Each Swingline Borrowing shall be made upon the Borrower’s irrevocable notice to the Swingline Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Swingline Lender and the Administrative Agent not later than 3:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $1,000,000, and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the Swingline Lender and the Administrative Agent of a written Swingline Loan Notice, which shall specify (i) the requested date of the Swingline Borrowing, (ii) the principal amount of Swingline Loan and (iii) the duration with respect thereto.  Promptly after receipt by the Swingline Lender of any telephonic Swingline Loan Notice, the Swingline Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swingline Loan Notice and, if not, the Swingline Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the Swingline Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 4:00 p.m. on the date of the proposed Swingline Borrowing (A) directing the Swingline Lender not to make such Swingline Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.03(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swingline Lender will, not later than 4:00 p.m. on the borrowing date specified in such Swingline Loan Notice, make the amount of its Swingline Loan available to the Borrower at its office by wire transfer to the account specified by the Borrower.

 

(c)                                  Refinancing of Swingline Loans.

 

(i)                                     The Swingline Lender, at any time in its sole and absolute discretion, may request, on behalf of the Borrower (each of which hereby irrevocably authorizes the Swingline Lender to so request on its behalf), that each Lender make a Base Rate Loan or Eurodollar Loan,

 

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as applicable, in an amount equal to such Lender’s Applicable Percentage of the amount of Swingline Loans then outstanding.  Such request shall be made in writing (which written request shall be deemed to be a Revolving Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans or Eurodollar Loans, but subject to the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.03.  The Swingline Lender shall furnish the Borrower with a copy of the applicable Revolving Loan Notice promptly after delivering such notice to the Administrative Agent.  Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Revolving Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swingline Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Revolving Loan Notice, whereupon, subject to Section 2.03(c)(ii), each Lender that so makes funds available shall be deemed to have made a Base Rate Loan or Eurodollar Loan, as applicable, to the Borrower in such amount.  The Administrative Agent shall remit the funds so received to the Swingline Lender.

 

(ii)                                  If for any reason any Swingline Loan cannot be refinanced by such a Revolving Loan in accordance with Section 2.03(c)(i), the request for Base Rate Loans or Eurodollar Loans, as applicable, submitted by the Swingline Lender as set forth herein shall be deemed to be a request by the Swingline Lender that each of the Lenders fund its risk participation in the relevant Swingline Loan and each Lender’s payment to the Administrative Agent for the account of the Swingline Lender pursuant to Section 2.03(c)(i) shall be deemed payment in respect of such participation.

 

(iii)                               If any Lender fails to make available to the Administrative Agent for the account of the Swingline Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(i), the Swingline Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swingline Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swingline Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swingline Lender in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Loan included in the relevant Borrowing or funded participation in the relevant Swingline Loan, as the case may be.  A certificate of the Swingline Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

(iv)                              Each Lender’s obligation to make Revolving Loans or to purchase and fund risk participations in Swingline Loans pursuant to this Section 2.03(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Revolving Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.03.  No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swingline Loans, together with interest as provided herein.

 

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(d)                                 Repayment of Participations.

 

(i)                                     At any time after any Lender has purchased and funded a risk participation in a Swingline Loan, if the Swingline Lender receives any payment on account of such Swingline Loan, the Swingline Lender will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Swingline Lender.

 

(ii)                                  If any payment received by the Swingline Lender in respect of principal or interest on any Swingline Loan is required to be returned by the Swingline Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swingline Lender in its discretion), each Lender shall pay to the Swingline Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such demand upon the request of the Swingline Lender.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

 

(e)                                  Interest for Account of Swingline Lender.  The Swingline Lender shall be responsible for invoicing the Borrower for interest on the Swingline Loans.  Until each Lender funds its Base Rate Loan or Eurodollar Loan, as applicable, or risk participation pursuant to this Section 2.03 to refinance such Lender’s Applicable Percentage of any Swingline Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swingline Lender.

 

2.04                        Letters of Credit.  (a) Subject to and upon the terms and conditions herein set forth, at any time and from time to time after the Closing Date and prior to the L/C Maturity Date, the Borrower may request that the Issuing Bank issue for the account of the Borrower or any Subsidiary a Letter of Credit or Letters of Credit in such form as may be approved by the Issuing Bank in its reasonable discretion (all of which Letters of Credit, for the avoidance of doubt, shall be Obligations of the Borrower).

 

Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the Stated Amount of which, when added to the Letters of Credit Outstanding at such time, would exceed the Letter of Credit Commitment then in effect; (ii) no Letter of Credit shall be issued, amended (to increase the Stated Amount thereof), extended or renewed if, after giving effect to such issuance, amendment, extension or renewal, the Total Revolving Credit Exposure would exceed the Aggregate Commitment Amount; (iii) each Letter of Credit shall have an expiration date occurring no later than one year after the date of issuance thereof, unless otherwise agreed upon by the Administrative Agent and the Issuing Bank, provided that in no event shall such expiration date occur later than the L/C Maturity Date; (iv) no Letter of Credit shall be issued if it would be illegal under any applicable law for the beneficiary of the Letter of Credit to have a Letter of Credit issued in its favor; and (v) no Letter of Credit shall be issued by an Issuing Bank after it has received a written notice from the Borrower or any Lender stating that a Default has occurred and is continuing until such time as the Issuing Bank shall have received a written notice of (x) rescission of such notice from the party or parties originally delivering such notice or (y) the waiver of such Default in accordance with the provisions of Section 10.01.

 

Upon at least one Business Day’s prior written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent and the Issuing Bank (which notice the Administrative Agent shall promptly transmit to each of the applicable Lenders), the Borrower shall have the right, on any day, permanently to terminate or reduce the Letter of Credit Commitment in whole or in part, provided that, after giving effect to such termination or reduction, the Letters of Credit Outstanding shall not exceed the Letter of Credit Commitment.

 

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(b)                                 Letter of Credit Requests.

 

(i)                                     Whenever the Borrower desires that a Letter of Credit be issued for its account or for the account of a Subsidiary, it shall give the Administrative Agent and the Issuing Bank at least five (or such lesser number as may be agreed upon by the Administrative Agent and the Issuing Bank) Business Days’ written notice thereof.  Each notice shall be executed by the Borrower and shall be in a form reasonably acceptable to the Issuing Bank and the Administrative Agent (each a “Letter of Credit Request”).  The Administrative Agent shall promptly transmit copies of each Letter of Credit Request to each Lender.

 

(ii)                                  The making of each Letter of Credit Request shall be deemed to be a representation and warranty by the Borrower that the Letter of Credit may be issued in accordance with, and will not violate the requirements of, Section 2.04(a).

 

(c)                                  Letter of Credit Participations.

 

(i)                                     Immediately upon the issuance by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred to each other Lender that has a Commitment (each such other Lender, in its capacity under this Section 2.04(c), an “L/C Participant”), and each such L/C Participant shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Bank, without recourse or warranty, an undivided interest and participation (each an “L/C Participation”), to the extent of such L/C Participant’s Applicable Percentage of such Letter of Credit, each substitute letter of credit, each drawing made thereunder and the obligations of the Borrower under this Agreement with respect thereto, and any security therefor or guaranty pertaining thereto (although Letter of Credit Fees will be paid directly to the Administrative Agent for the ratable account of the L/C Participants as provided in Section 2.09(b) and the L/C Participants shall have no right to receive any portion of any Fronting Fees).

 

(ii)                                  In determining whether to pay under any Letter of Credit, the Issuing Bank shall have no obligation relative to the L/C Participants other than to confirm that any documents required to be delivered under such Letter of Credit have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit.  Any action taken or omitted to be taken by the Issuing Bank under or in connection with any Letter of Credit issued by it, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for the Issuing Bank any resulting liability.

 

(iii)                               In the event that the Issuing Bank makes any payment under any Letter of Credit issued by it and the Borrower shall not have repaid such amount in full to the respective Issuing Bank pursuant to Section 2.04(d), the Issuing Bank shall promptly notify the Administrative Agent and each L/C Participant of such failure, and each L/C Participant shall promptly and unconditionally pay to the Administrative Agent, for the account of the Issuing Bank, the amount of such L/C Participant’s Applicable Percentage of such unreimbursed payment in Dollars and in immediately available funds; provided, however, that no L/C Participant shall be obligated to pay to the Administrative Agent for the account of the Issuing Bank its Applicable Percentage of such unreimbursed amount arising from any wrongful payment made by the Issuing Bank under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Bank.  If the Issuing Bank so notifies, prior to 11:00 a.m. (New York time) on any Business Day, any L/C Participant required to fund a payment under a Letter of Credit, such L/C Participant shall make available to the Administrative Agent for the account of the Issuing Bank such L/C Participant’s Applicable Percentage of the amount of such

 

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payment on such Business Day in immediately available funds.  If and to the extent such L/C Participant shall not have so made its Applicable Percentage of the amount of such payment available to the Administrative Agent, for the account of the Issuing Bank, such L/C Participant agrees to pay to the Administrative Agent, for the account of the Issuing Bank, forthwith on demand, such amount, together with interest thereon for each day from such date until the date such amount is paid to the Administrative Agent, for the account of the Issuing Bank at a rate equal to the greater of (x) the Federal Funds Effective Rate and (y) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.  The failure of any L/C Participant to make available to the Administrative Agent, for the account of the Issuing Bank its Applicable Percentage of any payment under any Letter of Credit shall not relieve any other L/C Participant of its obligation hereunder to make available to the Administrative Agent, for the account of the Issuing Bank its Applicable Percentage of any payment under such Letter of Credit on the date required, as specified above, but, except as provided in Section 2.15, no L/C Participant shall be responsible for the failure of any other L/C Participant to make available to the Administrative Agent such other L/C Participant’s Applicable Percentage of any such payment.

 

(iv)                              Whenever the Issuing Bank receives a payment in respect of an unpaid reimbursement obligation as to which the Administrative Agent has received for the account of the Issuing Bank any payments from the L/C Participants pursuant to paragraph (iii) above, the Issuing Bank shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each L/C Participant that has paid its Applicable Percentage of such reimbursement obligation, in Dollars and in immediately available funds, an amount equal to such L/C Participant’s share (based upon the proportionate aggregate amount originally funded by such L/C Participant to the aggregate amount funded by all L/C Participants) of the principal amount of such reimbursement obligation and interest thereon accruing after the purchase of the respective L/C Participations.

 

(v)                                 The obligations of the L/C Participants to make payments to the Administrative Agent for the account of the Issuing Bank with respect to Letters of Credit shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including under any of the following circumstances:

 

(A)                               any lack of validity or enforceability of this Agreement or any of the other Loan Documents;

 

(B)                               the existence of any claim, set-off, defense or other right that the Borrower may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the Issuing Bank, any Lender or other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower and the beneficiary named in any such Letter of Credit);

 

(C)                               any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

 

(D)                               the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents; or

 

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(E)                                the occurrence of any Default;

 

provided, however, that no L/C Participant shall be obligated to pay to the Administrative Agent for the account of the Issuing Bank its Applicable Percentage of any unreimbursed amount arising from any wrongful payment made by the Issuing Bank under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Bank.

 

(d)                                 Agreement to Repay Letter of Credit Drawings.

 

(i)                                     The Borrower hereby agrees to reimburse the Issuing Bank, by making payment in Dollars to the Administrative Agent in immediately available funds for any payment or disbursement made by the Issuing Bank under any Letter of Credit (the amount of each such amount so paid until reimbursed, an “Unpaid Drawing”) immediately after, and in any event within two Business Days of, such payment, with interest on the amount so paid or disbursed by the Issuing Bank, to the extent not reimbursed prior to 5:00 p.m. (New York time) on the second Business Day following such payment or disbursement, from and including the date paid or disbursed to but excluding the date the Issuing Bank is reimbursed therefor at a rate per annum that shall at all times be the Applicable Rate for Base Rate Loans plus the Base Rate as in effect from time to time, provided that, notwithstanding anything contained in this Agreement to the contrary, (i) unless the Borrower shall have notified the Administrative Agent and the Issuing Bank prior to 10:00 a.m. (New York time) on the date of such drawing that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing with funds other than the proceeds of Loans, the Borrower be shall be deemed to have given a Request for Borrowing requesting that the Lenders with Commitments make Revolving Loans (which shall be Base Rate Loans) on the date on which such drawing is honored in an amount equal to the amount of such drawing and (ii) the Administrative Agent shall promptly notify each relevant L/C Participant of such drawing and the amount of its Revolving Loan to be made in respect thereof, and, subject to the conditions set forth in Section 2.01, each L/C Participant shall be irrevocably obligated to make a Revolving Loan to the Borrower in the manner deemed to have been requested in the amount of its Applicable Percentage of the applicable Unpaid Drawing by 12:00 noon (New York time) on such Business Day by making the amount of such Revolving Loan available to the Administrative Agent.  Such Revolving Loans shall be made without regard to the minimum Borrowing amount for Base Rate Loans.  The Administrative Agent shall use the proceeds of such Revolving Loans solely for purpose of reimbursing the Issuing Bank for the related Unpaid Drawing.

 

(ii)                                  The obligations of the Borrower under this Section 2.04(d) to reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment that the Borrower or any other Person may have or have had against the Issuing Bank, the Administrative Agent or any Lender (including in its capacity as an L/C Participant), including any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing, provided that the Borrower shall not be obligated to reimburse the Issuing Bank for any wrongful payment made by the Issuing Bank under the Letter of Credit issued by it as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Bank.

 

(e)                                  Increased Costs.  If after the date hereof, the adoption of any applicable law, rule or regulation, or 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 actual compliance by the Issuing Bank or any L/C Participant with any request

 

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or directive made or adopted after the date hereof (whether or not having the force of law), by any such authority, central bank or comparable agency shall either (a) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against letters of credit issued by the Issuing Bank, or any L/C Participant’s L/C Participation therein, or (b) impose on the Issuing Bank or any L/C Participant any other conditions affecting its obligations under this Agreement in respect of Letters of Credit or L/C Participations therein or any Letter of Credit or such L/C Participant’s L/C Participation therein, and the result of any of the foregoing is to increase the cost to the Issuing Bank or such L/C Participant of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or receivable by the Issuing Bank or such L/C Participant hereunder (other than any such increase or reduction attributable to taxes) in respect of Letters of Credit or L/C Participations therein, then, promptly after receipt of written demand to the Borrower by the Issuing Bank or such L/C Participant, as the case may be, (a copy of which notice shall be sent by the Issuing Bank or such L/C Participant to the Administrative Agent), the Borrower shall pay to the Issuing Bank or such L/C Participant such additional amount or amounts as will compensate the Issuing Bank or such L/C Participant for such increased cost or reduction, it being understood and agreed, however, that the Issuing Bank or a L/C Participant shall not be entitled to such compensation as a result of such Person’s compliance with, or pursuant to any request or directive to comply with, any such law, rule or regulation as in effect on the date hereof.  A certificate submitted to the Borrower by the relevant Issuing Bank or a L/C Participant, as the case may be, (a copy of which certificate shall be sent by the Issuing Bank or such L/C Participant to the Administrative Agent) setting forth in reasonable detail the basis for the determination of such additional amount or amounts necessary to compensate the Issuing Bank or such L/C Participant as aforesaid shall be conclusive and binding on the Borrower absent clearly demonstrable error.

 

(f)                                   Successor Issuing Bank.  An Issuing Bank may resign as Issuing Bank upon 60 days’ prior written notice to the Administrative Agent, the Lenders and the Borrower.  If the Issuing Bank shall resign as Issuing Bank under this Agreement, then the Borrower shall appoint from among the Lenders (with the consent of such Lender) with Commitments a successor issuer of Letters of Credit, whereupon such successor issuer shall succeed to the rights, powers and duties of the Issuing Bank, and the term “Issuing Bank” shall mean such successor issuer effective upon such appointment (except with respect to Letters of Credit issued by the resigning Issuing Bank).  After the resignation of the Issuing Bank hereunder, the resigning Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit.  After any retiring Issuing Bank’s resignation as Issuing Bank, the provisions of this Agreement relating to the Issuing Bank shall inure to its benefit as to any actions taken or omitted to be taken by it (a) while it was Issuing Bank under this Agreement or (b) at any time with respect to Letters of Credit issued by such Issuing Bank.

 

(g)                                  Cash Collateral.

 

(i)                                     Upon the request of the Required Lenders if, as of the L/C Maturity Date, there are any Letters of Credit Outstanding, the Borrower shall immediately Cash Collateralize the then Letters of Credit Outstanding.

 

(ii)                                  The Administrative Agent acting in its reasonable discretion, may, at any time and from time to time after the initial deposit of Cash Collateral, request that additional Cash Collateral be provided in the event such Cash Collateral previously provided is inadequate as a result of exchange rate fluctuations.

 

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(iii)                               If any Event of Default shall occur and be continuing, the Administrative Agent or the Lenders with Letter of Credit Exposure representing greater than 50% of the total Letter of Credit Exposure may require that the L/C Obligations be Cash Collateralized.

 

2.05                        Prepayments.

 

(a)                                 Optional.

 

(i)                                     The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment Type of Revolving Loans to be prepaid and, if Eurodollar Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Any prepayment of a Eurodollar Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the Revolving Loans of the Lenders in accordance with their respective Applicable Percentages.

 

(ii)                                  The Borrower may, upon notice to the Swingline Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swingline Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swingline Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $1,000,000.  Each such notice shall specify the date and amount of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

 

(b)                                 Mandatory.

 

(i)                                     If for any reason, at any time, the Total Revolving Credit Exposure exceeds the Aggregate Commitment Amount at such time, the Borrower shall immediately prepay the applicable Loans in an aggregate amount of such excess, as applicable.

 

(ii)                                  The Borrower shall prepay Revolving Loans in amounts and at such times so as to cause there to be a period of at least 15 consecutive calendar days in each calendar year during which the Outstanding Amount of the Revolving Loans is less than or equal to 50% of the Aggregate Commitment Amount.

 

2.06                        Termination or Reduction of Commitments.  The Borrower may, upon notice to the Administrative Agent, terminate the Commitments hereunder, and, from time to time, permanently (except pursuant to Section 2.14) reduce the Aggregate Commitment Amount; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. two (2) Business Days

 

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prior to the date of termination or reduction, (ii) any such partial reduction or termination shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Exposure would exceed the Aggregate Commitment Amount and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Swingline Sublimit exceeds the Aggregate Commitment Amount, such Sublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments.  Any reduction of the Aggregate Commitment Amount shall be applied to the Commitment of each Lender according to its Applicable Percentage.  All fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

 

2.07                        Repayment of Loans.

 

(a)                                 The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of Revolving Loans outstanding on such date.

 

(b)                                 The Borrower shall repay each Swingline Loan on the earliest to occur of (i) the Maturity Date or (ii) the date requested by the Swingline Lender which shall not be earlier than the Business Day on which the Borrower may request Base Rate Loans pursuant to Section 2.02.

 

2.08                        Interest.

 

(a)                                 Subject to the provisions of subsection (b) below, (i) each Eurodollar Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the relevant Applicable Rate, (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the Base Rate plus the relevant Applicable Rate; and (iii) each Swingline Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date to the date of payment thereof at a rate per annum equal to the Base Rate plus the relevant Applicable Rate.

 

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

 

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

 

(iii)                               Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)                                  Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

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2.09                        Fees.

 

(a)                                 Commitment Fee.  The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a commitment fee equal to 0.375% per annum times the average daily unused amount of Commitments of such Lender during the period from and including the Closing Date to but excluding the earlier of the date such Commitment terminates and the Commitment Termination Date.  The Commitment Fee shall accrue at all times during the Availability Period and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period.

 

(b)                                 Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative Agent in Dollars for the account of the Lenders pro rata on the basis of their respective LC Exposure, a fee in respect of each Letter of Credit (the “Letter of Credit Fee”), for the period from the date of issuance of such Letter of Credit to the termination date of such Letter of Credit computed at the per annum rate for each day equal to the Applicable Rate for Eurodollar Loans minus 0.125% per annum on the average daily stated amount of such Letter of Credit (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure and (ii) to the Issuing Bank a fronting fee (the “Fronting Fee”), which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder; provided that, no fees will accrue under this Section 2.09 on any Defaulting Lender’s portion of a Letter of Credit that the Borrower has Cash Collateralized pursuant to Section 2.04(g).  Letter of Credit Fees and Fronting Fees shall accrue during the Availability Period and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, provided that Letter of Credit Fees and Fronting Fees shall be payable on the date on which the Commitments terminate.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 20 business days after demand.  Letter of Credit Fees and Fronting Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(c)                                  Other Fees.  (i)  The Borrower shall pay to the Arranger and the Administrative Agent for their own respective accounts fees in the amounts and at the times set forth in the Fee Letter or as otherwise separately agreed between such parties.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

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

 

2.10                        Computation of Interest and Fees.  All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear 

 

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interest for one day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

2.11                        Evidence of Debt.

 

(a)                                 The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower 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 Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Swingline Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

2.12                        Payments Generally; Administrative Agent’s Clawback.

 

(a)                                 General.  All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars in Same Day Funds not later than 2:00 p.m. on the date specified herein.  Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due under this Agreement be made in the United States.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. may, at the discretion of the Administrative Agent, be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.  Unless otherwise expressly stated, all payments hereunder shall be made in Dollars.

 

(b)                                 (i)  Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Loans (or, in the case of any Revolving Loan of Base Rate Loans, prior to 12:00 noon on the date of such Revolving Loan) that such Lender will not make available to the Administrative Agent such Lender’s share of such Revolving Loan, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at 

 

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the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower in Dollars a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Revolving Loan available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent in Dollars forthwith on demand such corresponding amount in immediately available funds 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 (A) 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, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) 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 Revolving Loan to the Administrative Agent, then the amount so paid shall constitute such Lender’s Revolving 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.

 

(ii)                                  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 has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds 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.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

 

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

 

(d)                                 Obligations of Lenders Several.  All obligations of the Lenders pursuant to this Agreement (including obligations to make Revolving Loans, to fund participations in Swingline Loans and to make payments pursuant to Section 10.04(c)) are several and not joint.  The failure of any Lender to make any Revolving Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Revolving Loan, to purchase its participation or to make its payment under Section 10.04(c).

 

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

 

2.13                        Sharing of Payments by Lenders.  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 the Revolving Loans made by it, or the participations in Swingline Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Revolving Loans or participations and accrued interest thereon 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 participations in the Revolving Loans and subparticipations in Swingline Loans 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 Revolving Loans and other amounts owing them, provided that:

 

(i)                                     if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)                                  the provisions of this Section 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 Revolving Loans or subparticipations in Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section 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.

 

2.14                        Increase in Commitments.

 

(a)                                 Request for Increase.  Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request an increase in the Aggregate Commitment Amount (a “Commitment Increase”) by amounts such that immediately after giving effect to any such Commitment Increase, the total Commitments of all of the Lenders hereunder shall not exceed $350,000,000; provided that (i) any such request for a Commitment Increase shall be in a minimum amount of $10,000,000 and integral multiples of $2,500,000 in excess thereof, (ii) the Borrower may make a maximum of four such requests in any 12 month period and (iii) the Borrower may seek such Commitment Increase from existing Lenders (it being understood that no Lender shall be obligated to increase its Commitment hereunder) or by any other bank, financial institution, other institutional lender or other investor that would otherwise constitute an Eligible Assignee.  At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify whether it is seeking the Commitment Increase from existing Lenders and, if so, the time period within which each existing Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders).

 

(b)                                 Lender Elections to Increase.  To the extent the Borrower is seeking a Commitment Increase from existing Lenders, each Lender shall notify the Administrative Agent within such time 

 

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period whether or not it agrees to the Commitment Increase and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase.  Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.  No Lender shall be obligated to increase its Commitment hereunder.

 

(c)                                  Notification by Administrative Agent; Additional Lenders.  The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent and the Swingline Lender (which approvals shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent.

 

(d)                                 Effective Date and Allocations.  If the Aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

 

(e)                                  Conditions to Effectiveness of Increase.  As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of the Borrower (i) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such increase, and (ii) certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.14, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (B) no Default exists.

 

(f)                                   Loans; Reallocation of Outstanding Amounts.

 

(i)                                     Except as set forth in subsection (ii) of this subsection (f), if any Eligible Assignee becomes a Lender hereunder or any Lender’s Commitment is increased pursuant to this Section, Loans made on or after the applicable Increase Effective Date shall be made in accordance with the Applicable Percentages of each Lender in effect on and after such Increase Effective Date (except to the extent that any such Loan would result in any Lender making an aggregate principal amount of Loans in excess of its Commitment, in which case such excess amount will be allocated to and made by, any new Lenders and Lenders with increased Commitments pursuant to subsection (b) above, in each case, in accordance with their Applicable Percentages).

 

(ii)                                  Upon any increase in the Aggregate Commitment Amount pursuant to this Section 2.14 (a) each of the Lenders with an existing Commitment (each, an “Existing Lender”) shall assign to each Lender with a new Commitment (each, a “New Lender”) and each of the New Lenders shall purchase from each of the Existing Lenders, at the principal amount thereof, such interests in the Loans outstanding on such Increase Effective Date as shall be necessary in order that, after giving effect to all such assignments and purchases, the Loans will be held by Existing Lenders and New Lenders ratably in accordance with their Commitments after giving effect to the addition of the Commitments of the New Lenders, (b) each new Commitment of a New Lender shall be deemed for all purposes a Commitment hereunder and each Loan made thereunder (a 

 

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“New Loan”) shall be deemed, for all purposes, a Loan and (c) each New Lender shall become a Lender with respect to the Commitments and all matters relating thereto.

 

(g)                                  Conflicting Provisions.  This Section shall supersede any provisions in Section 2.13 or 10.01 to the contrary.

 

2.15                        Defaulting Lender Provisions.

 

(a)                                 Conditions Precedent.  In addition to the other conditions precedent herein set forth, if any Lender becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, the Issuing Bank will not be required to issue any Letter of Credit or to amend any outstanding Letter of Credit to increase the face amount thereof, alter the drawing terms thereunder or extend the expiry date thereof, and the Swingline Lender will not be required to make any Swingline Loan, unless the Issuing Bank or the Swingline Lender, as the case may be, is satisfied that any exposure that would result therefrom is fully covered or eliminated by any combination satisfactory to the Issuing Bank or Swingline Lender of the following:

 

(i)                                     in the case of a Defaulting Lender, the LC Exposure and the Swingline Exposure of such Defaulting Lender is reallocated, as to outstanding and future Letters of Credit and Swingline Loans, to the Non-Defaulting Lenders as provided in clause (1) of Section 2.15(c);

 

(ii)                                  in the case of a Defaulting Lender or a Potential Defaulting Lender, without limiting the provisions of Section 2.15(b), the Borrower Cash Collateralizes the obligations of the Borrower in respect of such Letter of Credit or Swingline Loan in an amount at least equal to the aggregate amount of the unreallocated obligations (contingent or otherwise) of such Defaulting Lender or Potential Defaulting Lender in respect of such Letter of Credit or Swingline Loan, or makes other arrangements satisfactory to the Administrative Agent, the Issuing Bank and the Swingline Lender in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender or Potential Defaulting Lender; and

 

(iii)                               in the case of a Defaulting Lender or a Potential Defaulting Lender, then in the case of a proposed issuance of a Letter of Credit or making of a Swingline Loan, by an instrument or instruments in form and substance satisfactory to the Administrative Agent, and to the Issuing Bank and the Swingline Lender, as the case may be, the Borrower agrees that the face amount of such requested Letter of Credit or the principal amount of such requested Swingline Loan will be reduced by an amount equal to the unreallocated, non-Cash Collateralized portion thereof as to which such Defaulting Lender or Potential Defaulting Lender would otherwise be liable, in which case the obligations of the Non-Defaulting Lenders in respect of such Letter of Credit or Swingline Loan will, subject to the first proviso below, be on a pro rata basis in accordance with the Commitments of the Non-Defaulting Lenders, and the pro rata payment provisions of Section 2.13 will be deemed adjusted to reflect this provision;

 

provided that (a) the sum of each Non-Defaulting Lender’s total Revolving Credit Exposure, total Swingline Exposure and total LC Exposure may not in any event exceed the Commitment of such Non-Defaulting Lender, and (b) neither any such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto nor any such Cash Collateralization or reduction will constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender may have against such Defaulting Lender, or cause such Defaulting Lender or Potential Defaulting Lender to be a Non-Defaulting Lender.

 

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(b)           Cash Collateral Call.  If any Lender becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, if any Letter of Credit or Swingline Loan is at the time outstanding, the Issuing Bank and the Swingline Lender, as the case may be, may (except, in the case of a Defaulting Lender, to the extent the Commitments have been fully reallocated pursuant to Section 2.15(c)), by notice to the Borrower and such Defaulting Lender or Potential Defaulting Lender through the Administrative Agent, require the Borrower to Cash Collateralize the obligations of the Borrower to the Issuing Bank and the Swingline Lender in respect of such Letter of Credit or Swingline Loan in an amount at least equal to the aggregate amount of the unreallocated obligations (contingent or otherwise) of such Defaulting Lender or such Potential Defaulting Lender in respect thereof, or to make other arrangements satisfactory to the Administrative Agent, and to the Issuing Bank and the Swingline Lender, as the case may be, in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender or Potential Defaulting Lender.

 

(c)           Reallocation of Defaulting Lender Commitment, Etc.  If a Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply with respect to any outstanding LC Exposure and any outstanding Swingline Exposure of such Defaulting Lender:

 

(i)            the LC Exposure and the Swingline Exposure of such Defaulting Lender will, subject to the limitation in the first proviso below, automatically be reallocated (effective on the day such Lender becomes a Defaulting Lender) among the Non-Defaulting Lenders pro rata in accordance with their respective Commitments (without giving effect to the Commitment of any Defaulting Lender); provided that (a) the sum of each Non-Defaulting Lender’s total Revolving Credit Exposure, total Swingline Exposure and total LC Exposure may not in any event exceed the Commitment of such Non-Defaulting Lender as in effect at the time of such reallocation and (b) neither such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto will constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender; and

 

(ii)           to the extent that any portion (the “unreallocated portion”) of the Defaulting Lender’s LC Exposure and Swingline Exposure cannot be so reallocated, whether by reason of the first proviso in clause (i) above or otherwise, the Borrower will, not later than 10 Business Days after demand by the Administrative Agent (at the direction of the Issuing Bank and/or the Swingline Lender, as the case may be), (a) Cash Collateralize the obligations of the Borrower to the Issuing Bank and the Swingline Lender in respect of such LC Exposure or Swingline Exposure, as the case may be, in an amount at least equal to the aggregate amount of the unreallocated portion of such LC Exposure or Swingline Exposure, or (b) in the case of such Swingline Exposure, prepay (subject to clause (iii) below) and/or Cash Collateralize in full the unreallocated portion thereof, or (c) make other arrangements satisfactory to the Administrative Agent, and to the Issuing Bank and the Swingline Lender, as the case may be, in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender; and

 

(iii)          any amount (other than fees that would otherwise be payable by the Borrower pursuant to Section 2.09(a), which for avoidance of doubt, shall cease to accrue or be payable on the Commitments of such Defaulting Lender) paid by the Borrower for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, indemnity payments or other amounts) will not be paid or distributed to such Defaulting Lender, but will instead be retained by the Administrative Agent in a segregated non-interest bearing account until (subject to Section 2.15(h)) the termination of the Commitments and payment in full of all obligations of the Borrower hereunder and will be applied by the Administrative Agent, to the fullest extent permitted by law, to the making of payments from time to time in the following 

 

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order of priority:  first to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement, second to the payment of any amounts owing by such Defaulting Lender to the Issuing Bank or the Swingline Lender (pro rata as to the respective amounts owing to each of them) under this Agreement, third to the payment of post-default interest and then current interest due and payable to the Lenders hereunder other than Defaulting Lenders, ratably among them in accordance with the amounts of such interest then due and payable to them, fourth to the payment of fees then due and payable to the Non-Defaulting Lenders hereunder, ratably among them in accordance with the amounts of such fees then due and payable to them, fifth to pay principal and unreimbursed LC Disbursements then due and payable to the Non-Defaulting Lenders hereunder ratably in accordance with the amounts thereof then due and payable to them, sixth to the ratable payment of other amounts then due and payable to the Non-Defaulting Lenders, and seventh after the termination of the Commitments and payment in full of all obligations of the Borrower hereunder, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.

 

(d)           Right to Give Drawdown Notices.  In furtherance of the foregoing, if any Lender becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, each of the Issuing Bank and the Swingline Lender is hereby authorized by the Borrower (which authorization is irrevocable and coupled with an interest) to give, in its discretion, through the Administrative Agent, Revolving Loan Notices pursuant to Section 2.02 in such amounts and in such times as may be required to (i) reimburse an outstanding LC Disbursement, (ii) repay an outstanding Swingline Loan, and/or (iii) Cash Collateralize the obligations of the Borrower in respect of outstanding Letters of Credit or Swingline Loans in an amount at least equal to the aggregate amount of the obligations (contingent or otherwise) of such Defaulting Lender or Potential Defaulting Lender in respect of such Letter of Credit or Swingline Loan.

 

(e)           Fees.  Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to Sections 2.09(a) and 2.09(b) (without prejudice to the rights of the Lenders other than Defaulting Lenders in respect of such fees), provided that (a) to the extent that a portion of the LC Exposure or the Swingline Exposure of such Defaulting Lender is reallocated to the Non-Defaulting Lenders pursuant to Section 2.15(c), such fees that would have accrued for the benefit of such Defaulting Lender will instead accrue for the benefit of and be payable to such Non-Defaulting Lenders, pro rata in accordance with their respective Commitments, and (b) to the extent any portion of such LC Exposure or Swingline Exposure cannot be so reallocated, such fees will instead accrue for the benefit of and be payable to the Issuing Bank and the Swingline Lender as their interests appear (and the pro rata payment provisions of Section 2.13 will automatically be deemed adjusted to reflect the provisions of this Section).

 

(f)            Removal of Administrative Agent.  Anything herein to the contrary notwithstanding, if at any time the Required Lenders determine that the Person serving as Administrative Agent is (without taking into account any provision in the definition of “Defaulting Lender” or “Potential Defaulting Lender” requiring notice from the Administrative Agent or any other party) a Defaulting Lender or a Potential Defaulting Lender, the Required Lenders (determined after giving effect to Section 10.01) may by notice to the Borrower and such Person remove such Person as Administrative Agent and appoint a replacement Administrative Agent reasonably acceptable to the Borrower.  Such removal will, to the fullest extent permitted by applicable law, be effective on the earlier of (i) the date a replacement Administrative Agent is appointed and (ii) the date 60 Business Days after the giving of such notice by the Requisite Lenders (regardless of whether a replacement Administrative Agent has been appointed).

 

(g)           Termination of Defaulting Lender Commitment.  The Borrower may terminate the unused amount of the Commitment of a Defaulting Lender upon not less than two Business Days’ prior

 

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notice to the Administrative Agent (which will promptly notify the Lenders thereof), and in such event the provisions of Section 2.15(c)(iii) will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts), provided that such termination will not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender may have against such Defaulting Lender.

 

(h)           Cure.  If the Borrower, the Administrative Agent, the Issuing Bank and the Swingline Lender agree in writing in their discretion that a Lender that is a Defaulting Lender or a Potential Defaulting Lender should no longer be deemed to be a Defaulting Lender or Potential Defaulting Lender, as the case may be, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any amounts then held in the segregated account referred to in Section 2.15(c)), such Lender will, to the extent applicable, purchase such portion of outstanding Loans of the other Lenders and/or make such other adjustments as the Administrative Agent may determine to be necessary to cause the Revolving Credit Exposure, LC Exposure and Swingline Exposure of the Lenders to be on a pro rata basis in accordance with their respective Commitments, whereupon such Lender will cease to be a Defaulting Lender or Potential Defaulting Lender and will be a Non-Defaulting Lender (and such Exposure of each Lender will automatically be adjusted on a prospective basis to reflect the foregoing); provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender or Potential Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender or Potential Defaulting Lender.

 

ARTICLE III.
 TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

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

 

(b)           Payment of Other Taxes by the Borrower.  Without limiting the provisions of subsection (a) above, the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it pursuant to Section 3.01(c) for the payment of, Other Taxes.

 

(c)           Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent and each Lender, within 15 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on 

 

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or attributable to amounts payable under this Section) paid by the Administrative Agent or any such Lender, as the case may be, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided, however, the Borrower shall not indemnify the Administrative Agent or any Lender for any penalties or interest that are imposed either solely as a result of the gross negligence or willful misconduct of the Administrative Agent or any Lender or a failure by the Administrative Agent or any Lender to provide the Borrower with timely notice of the imposition of any Indemnified Taxes or Other Taxes.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)           Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Administrative Agent or any Lender to a Governmental Authority, the Administrative Agent or Lender shall, upon request from the Borrower, following receipt of any such item, deliver to the Borrower the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment or other reasonable evidence of such payment; provided that in no event shall the Administrative Agent or any Lender be required to deliver to the Borrower its tax returns or any other information regarding its tax affairs or computations or any information that is confidential, proprietary, or constitutes internal work product.

 

(e)           Status of Lenders.

 

(i)            Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  In addition, each Foreign Lender shall, upon reasonable request from the Borrower, deliver new forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender.  Each Foreign Lender shall notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower.

 

(ii)           Any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

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(A)          duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(B)          duly completed copies of Internal Revenue Service Form W-8ECI,

 

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

 

(D)          any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

 

(iii) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender 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 Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower 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 Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(f)            Treatment of Certain Refunds.  If the Administrative Agent or any Lender determines, in its sole discretion, which shall be exercised in a commercially reasonable manner, that it has received a refund of any Taxes or Other Taxes from the governmental authority to which such Taxes or Other Taxes were paid and as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (f), in no event will the Administrative Agent or any Lender be required to pay any amount to the Borrower pursuant to this paragraph (f) the payment of which would place the Administrative Agent or any such Lender in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This subsection shall not be construed to require

 

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the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

(g)           Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent, within 15 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (g).

 

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

 

3.03        Inability to Determine Rates.  If the Administrative Agent or the Required Lenders determine that for any reason in connection with any request for a Eurodollar Loan or a conversion to or continuation thereof that (a)  deposits in Dollars are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period, or (c) the Eurodollar Rate for any requested Interest Period does not adequately and fairly reflect the cost of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Loans in the affected currency or currencies shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrower may revoke any pending Request for Borrowing of, conversion to or continuation of Eurodollar Loans or, failing that, will be deemed to have converted such request into a request for a Base Rate Loan in the amount specified therein.

 

3.04        Increased Costs; Reserves on Eurodollar Loans.

 

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

 

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(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 contemplated by Section 3.04(e));

 

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

 

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

 

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

 

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

 

(d)           Delay in Requests.  Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than 180 days prior to the date that such Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180 days period referred to above shall be extended to include the period of retroactive effect thereof).

 

(e)           Reserves on Eurodollar Loans.  The Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided that the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10

 

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days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.

 

3.05        Compensation for Losses.  Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(a)           any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)           any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or

 

(c)           any assignment of a Eurodollar Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;

 

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.  The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.  Notwithstanding the foregoing, if, during the 120 day period following the Closing Date, the Administrative Agent incurs any breakage costs on account of the syndication of the credit facility established hereunder, the Borrower shall immediately reimburse the Administrative Agent for any such breakage costs.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Loan made by it at the Eurodollar Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Loan was in fact so funded.

 

3.06        Mitigation Obligations.  If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

3.07        Survival.  All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

 

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ARTICLE IV.
 CONDITIONS PRECEDENT TO BORROWINGS

 

4.01        Conditions to Effectiveness.  The parties hereto acknowledge and agree that this Agreement shall become effective upon receipt by each party hereto of this Agreement, executed and delivered by a Responsible Officer of the Borrower and each Lender; provided, however, that the obligation of any Lender to make any Loans, or of the Issuing Bank to issue any Letters of Credit, hereunder is subject to the satisfaction of the conditions set forth in Sections 4.02 and 4.03 hereunder.

 

4.02        Conditions of Initial Borrowing.  The obligation of each Lender to make its initial Revolving Loans hereunder, and of the Issuing Bank to initially issue any Letters of Credit, is subject to satisfaction of the following conditions precedent:

 

(a)           The Administrative Agent shall have received:

 

(i)            this Agreement as provided in Section 4.01;

 

(ii)           the other Loan Documents (other than Notes), executed and delivered by a duly authorized officer or signatory of each grantor party thereto; and

 

(iii)          a Note executed by the Borrower in favor of each Lender that has requested a Note at least three Business Days prior to the date on which the initial Revolving Loans are to be made.

 

(b)           Collateral.  All documents and instruments, including Uniform Commercial Code or other applicable personal property and financing statements, reasonably requested by the Administrative Agent to be filed, registered or recorded to create the Liens on the Collateral intended to be created by the Pledge Agreement and perfect such Liens to the extent required by, and with the priority required by, the Pledge Agreement shall have been delivered to the Administrative Agent for filing, registration or recording and none of the Collateral shall be subject to any other pledges, security interests or mortgages, except for liens permitted hereunder.

 

(c)           Legal Opinions.  The Administrative Agent shall have received the executed legal opinions of (a) Simpson Thacher & Bartlett LLP, special New York counsel to the Borrower, substantially in the form of Exhibit F-1 and (b) the in-house general counsel for the Borrower, substantially in the form of Exhibit F-2.  The Borrower hereby requests such counsel to deliver such opinions.

 

(d)           Closing Certificates.  The Administrative Agent shall have received a certificate of the Borrower substantially in the form of Exhibit G, dated as of the Closing Date, with appropriate insertions, executed by a Responsible Officer and the Secretary or any Assistant Secretary or any other Responsible Officer or duly authorized signatory of the Borrower, and attaching the documents referred to in clause (e) below.

 

(e)           Authorization of Proceedings of the Borrower; Incumbency; Due Organization; Good Standing.

 

(i)            The Administrative Agent shall have received a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the board of directors or other managers of the Borrower (or a duly authorized committee thereof) authorizing (x) the 

 

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execution, delivery and performance of the Loan Documents (and any agreements relating thereto) to which it is a party and (y) the extensions of credit contemplated hereunder.

 

(ii)           The Administrative Agent shall have received such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents;

 

(iii)          The Administrative Agent shall have received such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower is duly organized or formed and that the Borrower is validly existing, in good standing and qualified to engage in business in each jurisdiction where the Borrower’s ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

(f)            Fees. The Administrative Agent shall have received the fees in the amounts previously agreed in writing to be received on the Closing Date and all expenses (including the reasonable fees, disbursements and other charges of counsel) payable by the Borrower for which invoices have been presented prior to the Closing Date shall have been paid.

 

(g)           Existing Credit Agreement. The Administrative Agent shall have received customary evidence indicating that the Existing Credit Agreement has been, or concurrently with the Closing Date is being, terminated and all amounts outstanding thereunder are being repaid in full and all liens securing obligations thereunder have been, or concurrently with the Closing Date are being, released.

 

(h)           Representations; No Default. The Administrative Agent shall have received a certificate signed by a Responsible Officer of the Borrower, substantially in the form of Exhibit H.

 

4.03        Conditions to all Extensions of Credit.  The obligation of each Lender to honor any Request for Borrowing (other than a Revolving Loan Notice requesting only a conversion of Revolving Loans to another Type, or a continuation of Eurodollar Loans) and the obligation of the Issuing Bank to issue a Letter of Credit (or to amend or extend any Letter of Credit if the effect of such amendment or extension is to increase the Stated Amount of such Letter of Credit) are subject to the following conditions precedent:

 

(a)           The representations and warranties of the Borrower contained in Article V and any other Loan Document shall be true and correct in all material respects on and as of the date of such Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall have been true and correct in all material respects as of such earlier date.

 

(b)           No Default shall exist, or would result from such proposed Borrowing, issuance, amendment or extension of a Letter of Credit, as the case may be, or from the application of the proceeds thereof.

 

(c)           The Administrative Agent and, if applicable, the Swingline Lender shall have received a Request for Borrowing in accordance with the requirements hereof.

 

Each Request for Borrowing (other than a Revolving Loan Notice requesting only a conversion of Revolving Loans to another Type or a continuation of Eurodollar Loans) and each request for the issuance of a Letter of Credit (or for the amendment or extension of any Letter of Credit if the effect of such

 

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amendment or extension is to increase the Stated Amount of such Letter of Credit) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections  4.03(a) and 4.03(b) have been satisfied on and as of the date of the applicable Borrowing or Letter of Credit issuance, amendment or extension.

 

ARTICLE V.
 REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

 

5.01        Existence, Qualification and Power.  The Borrower (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite and relevant governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed where applicable and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

5.02        Authorization; No Contravention.  The execution, delivery and performance by the Borrower of each Loan Document to which it is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of the Borrower’s Organizational Documents; (b) conflict with or result in any breach or contravention of, or require any payment to be made under (i) any Contractual Obligation to which the Borrower is a party or affecting the Borrower or the properties of the Borrower or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or its property is subject; (c) violate any Law; except, in each case referred to in clause (b) or (c) to the extent such conflict, breach, contravention, payment or violation would not reasonably be expected to have a Material Adverse Effect or (d) result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries other than the Liens created pursuant to the Loan Documents.

 

5.03        Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Agreement or any other Loan Document except (i) for the filing of UCC financing statements and (ii) such approvals, consents, exemptions, authorizations or other actions, notices or filings as have been obtained or made and are in full force and effect or where the failure to obtain or make such approvals, consents, exemptions, authorizations or other actions, notices or filings would not have a Material Adverse Effect.

 

5.04        Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by the Borrower.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

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5.05        Financial Statements; No Material Adverse Effect.

 

(a)           The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (ii) fairly present the financial condition of the Borrower and its consolidated Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.

 

(b)           The unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries dated June 30, 2012, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

 

(c)           Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.

 

5.06        Litigation.  Except as set forth on Schedule 5.06, there are no actions, suits, proceedings, formal investigations, claims or disputes pending or, to the knowledge of the Borrower, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

5.07        No Default.  Neither the Borrower nor any Subsidiary thereof is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

 

5.08        Insurance.  The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates.

 

5.09        Taxes.  The Borrower and its Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (i) those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and (ii) to the extent that the failure to do so could not reasonably be expected to  have a Material Adverse Effect.

 

5.10        ERISA Compliance.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect.

 

5.11        Properties.  (i) The Borrower and each of its Subsidiaries has good title to, or valid leasehold, easement or other property interests in, all its real and personal property necessary to its

 

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business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and except where the failure to have such title would not have a Material Adverse Effect.

 

(ii)           Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business, and the use thereof by such Person does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

5.12        Investment Company Act.  Neither the Borrower nor any of its Subsidiaries is or is required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

5.13        Disclosure.  No report, financial statement, certificate or other written information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading as of the date furnished; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

5.14        Compliance with Laws.  The Borrower and each Subsidiary is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.15        Solvency.  As of the Closing Date, the Borrower, together with its Subsidiaries on a consolidated basis, is and, after consummation of the transactions contemplated by the Loan Documents, will be Solvent.

 

5.16        Perfected Security Interest.  The Pledge Agreement is effective to create in favor of the Administrative Agent, for the benefit of the Lenders and the Issuing Bank, a legal, valid and enforceable security interest in the Collateral and, in the case of Pledged Stock (as defined in the Pledge Agreement) constituting certificated securities, upon delivery of such Collateral to the Administrative Agent in the State of New York, and in the case of Collateral in which a security interest may be perfected by filing a financing statement under the UCC, upon the filing of financing statements naming the Borrower as “debtor” and the Administrative Agent as “secured party” and describing the Collateral in the applicable filing offices as described in the Pledge Agreement, shall constitute a fully perfected first priority Lien on, and security interest in, all rights, title and interest of the Borrower in such Collateral, as security for the Obligations, in each case, except as enforceability thereof may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights generally and subject to general principles of equity.

 

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ARTICLE VI.
 AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation (other than contingent indemnification obligations and Obligations in respect of any Secured Cash Management Agreement and any Secured Swap Contract) hereunder shall remain unpaid or unsatisfied or any Letter of Credit is outstanding (except to the extent Cash Collateralized or back-stopped in a manner reasonably satisfactory to the applicable Issuing Bank), the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Subsidiary to:

 

6.01        Financial Statements.  Deliver to the Administrative Agent and each Lender:

 

(a)           as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth, in each case, in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of Deloitte & Touche LLP or another Registered Public Accounting Firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and applicable Securities Laws and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit or with respect to the absence of any material misstatement; and

 

(b)           as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes.

 

As to any information contained in materials furnished pursuant to Section 6.02(d), the Borrower shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (b) above at the times specified therein.

 

6.02        Certificates; Other Information.  Deliver to the Administrative Agent and each Lender, in form and detail reasonably satisfactory to the Administrative Agent:

 

(a)           concurrently with the delivery of the financial statements referred to in Section 6.01(a), (i) a certificate of the Registered Public Accounting Firm certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default or, if any such Default shall exist, stating the nature and status of such event (which certificate may be limited to the extent required by accounting rules, guidelines or practices), (ii) setting forth reasonably detailed calculations demonstrating compliance with the financial covenants contained in Section 7.09 and (iii) stating whether any change in GAAP or in the application thereof which is material in any respect to the Borrower’s financial statements has occurred since the date of the Audited Financial Statements and,

 

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if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

 

(b)           concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, chief operating officer, treasurer or controller of the Borrower;

 

(c)           promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto; and

 

(d)           promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a) or 6.01(b) or Section 6.02(c) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on Debtdomain or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that (x) all Borrower Materials that the Borrower has indicated contains only non-material or publicly available information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws may be posted on that portion of the Platform designated for Public Lenders, and by so indicating, the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); and (y) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that the Borrower has not indicated contains only non-material or publicly available information with respect to the Borrower or its securities for purposes of United States Federal and state

 

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securities laws  as being suitable only for posting on a portion of the Platform other than that which is designated “Public Investor.”

 

6.03        Notices.  Promptly notify the Administrative Agent and each Lender upon a Responsible Officer of the Borrower obtaining knowledge thereof:

 

(a)           of the occurrence of any Default;

 

(b)           of the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $25,000,000; and

 

(c)           any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect; including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or (iii) the filing or commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws;

 

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

6.04        Payment of Obligations.  Pay and discharge its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

 

6.05        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; and (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

6.06        Maintenance of Properties.  (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

6.07        Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

 

6.08        Compliance with Laws.  Comply in all material respects with the requirements of all relevant Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, 

 

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except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.09        Books and Records.  Maintain proper books of record and account, in conformity with GAAP consistently applied.

 

6.10        Inspection Rights.  Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower (subject to reasonable requirements of confidentiality); provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

 

6.11        Use of Proceeds.  Use the proceeds of the Loans for working capital requirements and other general corporate purposes, including the acquisition and funding (either directly or through one or more wholly owned subsidiaries) of secured and unsecured leveraged loans, mezzanine loans, high-yield securities, mortgage bonds and other portfolio investments.  No part of the proceeds of any Loan will be used, whether directly or indirectly, to purchase or carry Margin Stock or for any purpose that entails a violation of any of the Regulations of the FRB, including Regulations T, U and X.

 

6.12        Investment Policies.  Comply with the investment policies adopted by the board of directors of the Borrower as in effect on the Closing Date (as such policies may be amended, supplemented or modified from time to time), except to the extent that the failure to so comply could not reasonably be expected to result in a Material Adverse Effect.

 

6.13        Fiscal Year.  Cause the fiscal year of the Borrower to end on December 31 and the fiscal quarters to end on dates in a manner consistent with Borrower’s current practice; provided, however, that the Borrower may, upon written notice to the Administrative Agent change the financial reporting convention specified above to any other financial reporting convention reasonably acceptable to the Administrative Agent.

 

6.14        Lines of Business.  Not alter in a fundamental manner the character of the business, taken as a whole, from the business conducted on the Closing Date and other business activities incidental or reasonably related to any of the foregoing.

 

6.15        Further Assurances.  Take such action from time to time as shall reasonably be requested by the Administrative Agent to effectuate the purposes and objectives of this Agreement. Without limiting the generality of the foregoing, the Borrower shall take such action from time to time (including filing appropriate Uniform Commercial Code financing statements and executing and delivering such assignments, security agreements and other instruments) as shall be reasonably requested by the Administrative Agent to create, in favor of the Administrative Agent for the benefit of the Lenders, perfected security interests and Liens in the Collateral.

 

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ARTICLE VII.
 NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation (other than contingent indemnification obligations and Obligations in respect of any Secured Cash Management Agreement and any Secured Swap Contract) hereunder shall remain unpaid or unsatisfied or any Letter of Credit is outstanding (except to the extent Cash Collateralized or back-stopped in a manner reasonably satisfactory to the applicable Issuing Bank), the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

 

7.01        Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

 

(a)           Liens pursuant to or as contemplated in any Loan Document;

 

(b)           Permitted Encumbrances;

 

(c)           Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the property or asset covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased except as contemplated by Section 7.03(b), (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);

 

(d)           Liens securing Indebtedness permitted under Section 7.03(k);

 

(e)           Liens on cash deposits with issuers of letters of credit in support of Other Letter of Credit Obligations permitted under Section 7.03(i);

 

(f)            any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be; and

 

(g)           Liens on any property or asset that secures any Swap Contract (including any total rate of return Swap Contract) or any other Secured Indebtedness or any related obligation incurred in connection with the transactions contemplated thereby.

 

For the avoidance of doubt, except to the extent that the Borrower grants a Lien to the trustee of any Trust Preferred Financing Vehicle, the parties agree that the rights of such trustee in respect of any Trust Preferred Indebtedness permitted under this Agreement shall not be deemed a Lien hereunder.

 

7.02        Investments.  Make any Investments, except Investments made in the ordinary course of the Borrower’s or a Subsidiary’s business and other Investments incidental or reasonably related thereto (including by way of the purchase or other acquisition of property and assets or businesses of any Person or of assets constituting a business unit, a line of business or division of such Person or Equity Interests in a Person that, upon the consummation thereof, will be a Subsidiary).

 

7.03        Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:

 

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(a)           Indebtedness under the Loan Documents;

 

(b)           Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof; provided that (i) the terms and conditions of such refinancings, renewals or extensions of such Indebtedness (A) would not reasonably be expected to materially impair the prospects of repayment of the Obligations by the Borrower and (B) taken as a whole, are not materially less favorable to the Lenders than the terms and conditions of the Indebtedness being refinanced, renewed or extended and (ii) such refinancings, renewals or extensions of such Indebtedness do not result in an increase, or shorten the maturity, of the principal amount of such Indebtedness so refinanced, renewed or extended;

 

(c)           Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary;

 

(d)           Guarantees of the Borrower or any Subsidiary in respect of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary;

 

(e)           obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract (including any total rate of return Swap Contract);

 

(f)            Indebtedness owed to (including obligations in respect of letters of credit for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such person;

 

(g)           Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case, provided in the course of ordinary business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;

 

(h)           Unsecured Indebtedness;

 

(i)            Other Letter of Credit Obligations, up to a maximum amount outstanding at any time not greater than $10,000,000;

 

(j)            Indebtedness arising from the occasional honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business and not from an overdraft credit facility granted by the bank or other financial institution;

 

(k)           other Secured Indebtedness and any other Indebtedness that is secured by assets not comprising Collateral; and

 

(l)            Trust Preferred Indebtedness and related Trust Preferred Guarantees and Trust Preferred Securities incurred, executed or issued respectively, as part of a Trust Preferred Securities Transaction.

 

7.04        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

 

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(a)           any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 7.02;

 

(b)           any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;

 

(c)           any Subsidiary may liquidate or dissolve if the Borrower which is the parent of such Subsidiary determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; and

 

(d)           the Borrower may effect a Disposition permitted by Section 7.05.

 

Notwithstanding the foregoing, the Borrower will not, nor will it permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement, businesses reasonably related thereto or that is a reasonable extension, development or expansion thereof.  It is understood that a Trust Preferred Securities Transaction consummated for purposes of financing the type of business of the Borrower or Subsidiary as of the date of execution of this Agreement shall not be deemed to violate the foregoing restriction.

 

For the avoidance of doubt, the transfer of legal ownership of any Trust Preferred Indebtedness permitted under this Agreement to a trustee pursuant to a Trust Preferred Securities Transaction shall not be deemed to be a sale, transfer, lease or other disposition of any assets to such trustee.

 

7.05        Dispositions.  Make any Disposition, except:

 

(a)           Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b)           Dispositions (without recourse or indemnification for credit losses, provided that ordinary and customary indemnification is permitted in accordance with prevailing market practices) of residential real estate assets of the Borrower (including, without limitation, the Disposition of mortgage-backed securities), so long as no Default or Event of Default has occurred and is continuing or would be caused thereby;

 

(c)           Dispositions of assets of the Borrower or any Subsidiary in the ordinary course of business;

 

(d)           Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

 

(e)           Dispositions of property by the Borrower or a Subsidiary to the Borrower or to a Subsidiary;

 

(f)            Dispositions of any assets or Equity Interests held by the Borrower (including Equity Interests constituting Collateral) or any Subsidiary, provided that after giving effect to any such Disposition, the Borrower shall be in compliance on a pro forma basis with each of the financial covenants set forth in Section 7.09; and

 

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(g)           Dispositions permitted by Section 7.04.

 

For the avoidance of doubt, the transfer of legal ownership of any Trust Preferred Indebtedness permitted under this Agreement to a trustee pursuant to a Trust Preferred Securities Transaction shall not be deemed to be a sale, transfer, lease or other disposition of any assets to said trustee.

 

7.06        Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that:

 

(a)           so long as (A) (i) no event constituting a Default under Sections 8.01(a), 8.01(f) or 8.01(g) shall have occurred and be continuing and (ii) no Event of Default shall have occurred and be continuing, in each case, at the time of or would result therefrom, or (B) the Total Revolving Credit Exposure is zero at the time of such Restricted Payments, the Borrower may declare and make Restricted Payments to any Person that owns an Equity Interest in the Borrower;

 

(b)           each Subsidiary may declare and make Restricted Payments to the Borrower, and to any other Person that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest of the applicable class or series in respect of which such Restricted Payment is being made;

 

(c)           the Borrower and each Subsidiary may declare and make dividend payments or any other Restricted Payments (including, for avoidance of doubt, any distributions for purposes of settling the conversion of Convertible Securities) payable solely in the common stock or other common Equity Interests of such Person; and

 

(d)           the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries.

 

7.07        Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of the Borrower involving aggregate payments or consideration in excess of $10,000,000 except (a) in the ordinary course of business at prices and on terms and conditions not materially less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and its wholly owned Subsidiaries not involving any other Affiliate, (c) transactions for which the Borrower or such Subsidiary is obligated under the Management Agreement and (d) any Restricted Payment permitted by Section 7.06.

 

7.08        Burdensome Agreements.  Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that restricts or imposes any condition upon (a) the ability of the Borrower to create, incur or permit to exist any Lien upon any of its property or assets or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any Subsidiary; provided that the foregoing shall not apply to (i) contractual encumbrances or restrictions in effect on the Closing Date and identified on Schedule 7.08; (ii) in the case of clause (b) above, purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property so acquired; (iii) agreements entered into under any requirement of Law or any applicable rule, regulation or order; (iv) any agreement or other instrument of a Person acquired by or merged or consolidated with or into the Borrower or any Subsidiary, or that is assumed in connection with the acquisition of assets from such Person, in each case  to the extent that such agreement (1) applies only to such Person or assets and (2) is in existence at the time of such transaction (but not created in contemplation thereof); (v) customary restrictions under contracts for the sale of assets, including those with respect to a Subsidiary of the Borrower pursuant to an

 

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agreement that has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets of such Subsidiary; (vi) Secured Indebtedness otherwise permitted hereunder that limits the right of the debtor to dispose of the assets securing such Indebtedness; (vii) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; (viii) other Indebtedness of Subsidiaries permitted to be incurred subsequent to the Closing Date pursuant to Section 7.03 and either (A) the provisions relating to such encumbrance or restriction contained in such Indebtedness are no less favorable to the Borrower, taken as a whole, as determined by the board of directors of the Borrower in good faith, than the provisions contained in this Agreement as in effect on the Closing Date or (B) in the case of clause (b) above, any such encumbrance or restriction contained in such Indebtedness does not prohibit (except upon a default or an event of default thereunder) the payment of dividends in an amount sufficient, as determined by the board of directors of the Borrower in good faith, to make scheduled payments of cash interest on the notes when due; (ix) customary provisions in joint venture agreements or arrangements and other similar agreements or arrangements relating solely to such joint venture; and (x) in the case of clause (a) above, customary provisions contained in leases, sub-leases, licenses, sub-licenses or similar agreements, in each case, entered into in the ordinary course of business and relating only to such property or assets as are subject to such lease, sub-lease, license, sub-license or similar agreement, as the case may be.

 

For the avoidance of doubt, except to the extent that the Borrower grants a Lien to the trustee of any Trust Preferred Financing Vehicle, the parties agree that the rights of such trustee in respect of any Trust Preferred Indebtedness permitted under this Agreement shall not be deemed a Lien hereunder.

 

7.09        Financial Covenants.

 

(a)           Consolidated Tangible Net Worth.  Permit Adjusted Consolidated Tangible Net Worth, at any time, to be less than $1,000,000,000, plus an amount equal to 25% of the net cash proceeds received from the issuance and sale, at any time after the Closing Date, of Equity Interests (including Trust Preferred Securities) of the Borrower or any Subsidiary (other than (x) issuances to the Borrower or a wholly-owned Subsidiary and (y) issuances of Debt Securities of the Borrower convertible into Equity Interests).

 

(b)           Leverage Ratio.  Permit the ratio of Adjusted Total Liabilities to Adjusted Consolidated Tangible Net Worth, at any time, to exceed the ratio of 1.50 to 1.00.

 

(c)           Consolidated Total Assets.  Permit the ratio of (I) Adjusted Consolidated Total Assets to (II) Recourse Indebtedness, at any time, to be less than the ratio of 8.00 to 1.00.

 

ARTICLE VIII.
 EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events of Default.  Any of the following shall constitute an Event of Default:

 

(a)           Non-Payment.  The Borrower fails to pay (i) when due or as required to be paid herein, any amount of principal of any Loan or (ii) within five Business Days after the same becomes due, any interest on any Loan, or any fee due hereunder, or any other amount payable hereunder (including, for avoidance of doubt, any amounts payable pursuant to Section 2.05(b)) or under any other Loan Document; or

 

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(b)           Specific Covenants.  The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.03, Section 6.05(a) or Article VII.  The Borrower fails to perform or observe any covenant contained in Section 6.02 (Certificates; Other Information) (other than the proviso in the first sentence of the penultimate paragraph thereof) or Section 6.11 and such failure continues for five (5) Business Days after notice thereof from the Administrative Agent; or

 

(c)           Other Defaults.  The Borrower fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 20 Business Days after notice thereof from the Administrative Agent to the Borrower; or

 

(d)           Representations and Warranties.  Any representation or warranty made or deemed made by or on behalf of the Borrower in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement, any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall, after taking into account any materiality or other qualification contained therein, prove to have been incorrect when made or deemed made; or

 

(e)           Cross-Default.  (i) The Borrower or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (with all applicable grace periods having expired), or (ii) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity (other than, with respect to Indebtedness consisting of any Swap Contracts, due to a termination event or equivalent event pursuant to the terms of such Swap Contracts); provided that this Section 8.01(e)(ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; or

 

(f)            Insolvency Proceedings, Etc.  (i) The Borrower (A) voluntarily commences any proceeding or files any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (B) consents to the institution of, or fails to contest in a timely and appropriate manner, any proceeding or petition described in sub-part (ii) of this Section 8.01(f), (C) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of its assets, (D) files an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) makes a general assignment for the benefit of creditors or (F) takes any action for the purpose of effecting any of the foregoing, or (ii) an involuntary proceeding is commenced or an involuntary petition is filed seeking (A) liquidation, reorganization or other relief in respect of the Borrower or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

 

(g)           Inability to Pay Debts; Attachment.  The Borrower becomes unable, admits in writing its inability or fails generally to pay its debts as they become due; or

 

(h)           Judgments.  One or more judgments for the payment of money in an aggregate amount in excess of $25,000,000 is rendered against the Borrower and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action is 

 

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legally taken by a judgment creditor to attach or levy upon any assets of the Borrower to enforce any such judgment; or

 

(i)            ERISA.  An ERISA Event occurs that, when taken together with all other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect; or

 

(j)            Invalidity of Loan Documents.  Any Loan Document shall cease to be valid and binding on, or enforceable against, the Borrower, or the Borrower shall so assert in writing; or

 

(k)           Change of Control.  There occurs any Change of Control.

 

8.02        Remedies Upon Event of Default.  If any Event of Default occurs and is continuing (other than an event with respect to the Borrower described in Section 8.01(f)), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times:

 

(b)           terminate the Commitments, and thereupon the Commitments shall terminate immediately, and;

 

(c)           declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

 

provided, however, that in case of any event with respect to the Borrower described in Section 8.01(f), the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

 

8.03        Application of Funds.  In the event that, following the occurrence or during the continuance of any Event of Default, the Administrative Agent or any Lender, as the case may be, receives any monies in connection the exercise of remedies provided for in (i) Section 8.02 (or after the Loans have automatically become immediately due and payable) or (ii) the Pledge Agreement, such monies shall be distributed for application as follows:

 

First, to the payment of, or (as the case may be) the reimbursement of, the Administrative Agent for or in respect of all reasonable costs, expenses, disbursements and losses which shall have been incurred or sustained by the Administrative Agent in connection with the collection of such monies by the Administrative Agent, for the exercise, protection or enforcement by the Administrative Agent of all or any of the rights, remedies, powers and privileges of the Administrative Agent under this Agreement or any of the other Loan Documents or in respect of the Collateral or in support of any provision of adequate indemnity to the Administrative Agent against any taxes or liens which by law shall have, or may have, priority over the rights of the Administrative Agent to such monies;

 

Second, to all other Obligations in such order or preference as the Required Lenders may determine; provided, however, that (i) distributions shall be made (A) pari  passu among Obligations with respect to any fees payable to the Administrative Agent and all other Obligations and (B) with respect to 

 

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each type of Obligation owing to the Lenders, such as interest, principal, fees and expenses, among the Lenders pro  rata, and (ii) the Administrative Agent may in its discretion make proper allowance to take into account any Obligations not then due and payable;

 

Third, upon payment and satisfaction in full or other provisions for payment in full satisfactory to the Lenders and the Administrative Agent of all of the Obligations, to the payment of any obligations required to be paid pursuant to §9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial Code of the State of New York;

 

Fourth, the excess, if any, shall be returned to the Borrower or to such other Persons as are entitled thereto;

 

ARTICLE IX.
 ADMINISTRATIVE AGENT

 

9.01        Appointment and Authority.  Each of the Lenders hereby irrevocably appoints Citibank, N.A. to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent.  No Lender or Borrower shall have rights as a third party beneficiary of any of such provisions.

 

9.02        Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

9.03        Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)           shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

 

(c)           shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the

 

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Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower or a Lender.

 

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

9.04        Reliance by Administrative Agent.

 

(a)           The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, that by its terms must be fulfilled to the satisfaction of a Lender or the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

(b)           For purposes of determining compliance with the conditions specified in Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

9.05        Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

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9.06        Resignation of Administrative Agent.  The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, subject to the consent of the Borrower (not to be unreasonably withheld or delayed) so long as no Event of Default under Section 8.01(a), 8.01(f) or 8.01(g) is continuing, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

 

Any resignation by Citibank, N.A. as Administrative Agent pursuant to this Section shall also constitute its resignation as Swingline Lender.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Swingline Lender and (b) the retiring Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents.

 

In addition to the foregoing, if a Lender becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, the Issuing Bank and/or the Swingline Lender may, upon prior written notice to the Borrower and the Administrative Agent, resign as Issuing Bank or Swingline Lender, respectively, effective at the close of business New York time on a date specified in such notice (which date may not be less than 20 Business Days after the date of such notice); provided that such resignation by the Issuing Bank will have no effect on the validity or enforceability of any Letter of Credit then outstanding or on the obligations of the Borrower or any Lender under this Agreement with respect to any such outstanding Letter of Credit or otherwise to the Issuing Bank; and provided, further, that such resignation by the Swingline Lender will have no effect on its rights in respect of any outstanding Swingline Loans or on the obligations of the Borrower or any Lender under this Agreement with respect to any such outstanding Swingline Loan.

 

9.07        Non-Reliance on Administrative Agent and Other Lenders.  Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other

 

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Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

9.08        No Other Duties, Etc.  Anything herein to the contrary notwithstanding, the Syndication Agents and the Arranger listed on the cover page hereof shall not have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

 

9.09        Administrative Agent May File Proofs of Claim.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(i)            to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.09 and 10.05) allowed in such judicial proceeding; and

 

(ii)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

 

9.10        Collateral Matters.  The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations, Obligations in respect of any Secured Cash Management Agreement and any Secured Swap Contract, and Obligations in respect of Letters of Credit that have been Cash Collateralized or back-stopped in a manner reasonably satisfactory to the applicable Issuing Bank), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document or where the Borrower is permitted to obtain

 

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such release pursuant to the terms of the Security Documents, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders.

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property.

 

ARTICLE X.
 MISCELLANEOUS

 

10.01      Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(a)           waive any condition set forth in Section 4.01 without the written consent of each Lender;

 

(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

 

(c)           postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

 

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan or (subject to clause (iii) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenants hereunder (or any defined term used therein);

 

(e)           change Section 2.13 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby , or change any provision relating to the pro rata disbursement of funds to the Lenders, in each case, without the written consent of each Lender;

 

(f)            change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender;

 

(g)           amend, modify or waive the provisions of Section 2.04(c)  without the written consent of each Lender; or

 

(h)           release all or substantially all of the Collateral or terminate the Pledge Agreement without the written consent of each Lender.

 

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and, provided  further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders required above, affect the rights or duties of the Swingline Lender under this Agreement and (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document.

 

Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, to the fullest extent permitted by applicable law, such Lender will not be entitled to vote in respect of amendments and waivers hereunder and the Commitment and the outstanding Loans or other extensions of credit of such Lender hereunder will not be taken into account in determining whether the Required Lenders or all of the Lenders, as required, have approved any such amendment or waiver (and the definition of “Required Lenders” will automatically be deemed modified accordingly for the duration of such period); provided, that any such amendment or waiver that would increase or extend the term of the Commitment of such Defaulting Lender, extend the date fixed for the payment of principal or interest owing to such Defaulting Lender hereunder, reduce the principal amount of any obligation owing to such Defaulting Lender, reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting Lender or of any fee payable to such Defaulting Lender hereunder, or alter the terms of this proviso, will require the consent of such Defaulting Lender.

 

10.02      Notices; Effectiveness; Electronic Communication.

 

(a)           Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)            if to the Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

 

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

 

(b)           Electronic Communications.  Notices and other communications to the Lenders may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to service of process notices pursuant to Section 10.14, notices that are prohibited from being so delivered under applicable law, and notices to any Lender pursuant to Article II if such Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

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Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (each an “Agent Party”, or collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)           Change of Address, Etc.  The Borrower, the Administrative Agent and the Swingline Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and the Swingline Lender.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

 

(e)           Reliance by Administrative Agent and Lenders.  The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Revolving Loan Notices and Swingline Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrower shall jointly and severally indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

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10.03      No Waiver; Cumulative Remedies.  No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

10.04      Expenses; Indemnity; Damage Waiver.

 

(a)           Costs and Expenses.  The Borrower shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Security Document (or other document referenced therein) and (iii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent and any Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

 

(b)           Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower arising out of, in connection with, or as a result of any actual or prospective claim, litigation, investigation or proceeding relating to (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom or (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any such Subsidiaries, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  Unless an Event of Default shall have occurred and be continuing, the Borrower shall be entitled to assume the defense of any action for which indemnification

 

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is sought hereunder with counsel of its choice at its expense (in which case the Borrower shall not thereafter be responsible for the fees and expenses of any separate counsel retained by an Indemnitee except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to each such Indemnitee.  Notwithstanding the Borrower’s election to assume the defense of such action, each Indemnitee shall have the right to employ separate counsel and to participate in the defense of such action, and the Borrower shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent such Indemnitee would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include the Borrower and such Indemnitee and such Indemnitee shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the Borrower; (iii) the Borrower shall not have employed counsel reasonably satisfactory to such Indemnitee to represent it within a reasonable time after notice of the institution of such action; or (iv) the Borrower shall authorize such Indemnitee to employ separate counsel at the Borrower’s expense.  The Borrower will not be liable under this Agreement for any amount paid by an Indemnitee to settle any claims or actions if the settlement is entered into without the Borrower’s consent, which consent may not be unreasonably withheld or delayed.

 

(c)           Reimbursement by Lenders.  To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

 

(d)           Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

 

(e)           Payments.  All amounts due under this Section shall be payable not later than ten (10) Business Days after demand therefor.

 

(f)            Survival.  The agreements in this Section shall survive the resignation of the Administrative Agent and the Swingline Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

 

10.05      Payments Set Aside.  To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its

 

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right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

 

10.06      Successors and Assigns.

 

(a)           Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in Swingline Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)            Minimum Amounts.

 

(A)          in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)          in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be

 

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unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

 

(ii)           Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not apply to the Swingline Lender’s rights and obligations in respect of Swingline Loans;

 

(iii)          Required Consents.  No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

 

(A)          the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless an Event of Default under Section 8.01(a), 8.01(f) or 8.01(g) has occurred and is continuing at the time of such assignment;

 

(B)          the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and

 

(C)          the consent of the Issuing Bank (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding) and the consent of the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.

 

(iv)          Assignment and Assumption.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500 plus any additional amount required as set forth in Schedule 10.06; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.  The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)           Assignment to Borrower.  Assignments to the Borrower and Affiliates of the Borrower shall be permitted subject to the following limitations (which, for the avoidance of doubt, are not applicable in the case of assignments to Affiliated Debt Funds):

 

(A)          any such Loans acquired by the Borrower or any Subsidiary shall be cancelled promptly upon the acquisition thereof;

 

(B)          Lenders that are Affiliates of the Borrower shall have no right to consent to any amendment, modification, waiver, consent or other such action with respect to any of the terms of this Agreement or any other Loan Document, or otherwise vote on any matter related to this Agreement or any other Loan Document, and the definition of “Required Lenders” shall be construed accordingly for purposes of giving effect to this clause (v)(B).

 

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(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural person.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment.  Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary and the transfer of any Loan shall not be recognized except to the extent reflected on the Register.  The Register shall be available for inspection by the Borrower and, with respect to itself, any Lender, at any reasonable time and from time to time upon reasonable prior notice.  This Section 10.06 is intended to cause the Loans to be treated as being in registered form within the meaning of U.S. Treasury Regulation Section 103-1(c) and will be interpreted in accordance with that intention.

 

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank, sell participations to any Person (other than a natural person or the Borrower or any of its Affiliates (other than any Debt Fund Affiliate) or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in Swingline Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders, Issuing Bank and Swingline Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.01 that affects such Participant.  Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each

 

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Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender.  Each Lender that sells a participation, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Loans or other obligations under this Agreement) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the U.S. Treasury Regulations.  The entries in the Participant Register shall be conclusive, and such Lender, each Loan Party and the Administrative Agent shall treat each person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such participation for all purposes of this Agreement, notwithstanding notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Sections 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.

 

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(g)           Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

(h)           Resignation as Swingline Lender after Assignment.  Notwithstanding anything to the contrary contained herein, if at any time Citibank, N.A. assigns all of its Commitment and Loans pursuant to subsection (b) above, Citibank, N.A. may upon 30 days’ notice to the Borrower, resign as Swingline Lender.  In the event of any such resignation as Swingline Lender, the Borrower shall be entitled to appoint from among the Lenders a successor Swingline Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Citibank, N.A. as Swingline Lender, as the case may be.  If Citibank, N.A. resigns as Swingline Lender, it shall retain all the rights of the Swingline Lender provided for hereunder with respect to Swingline Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swingline Loans.  Upon the appointment of a successor Swingline Lender, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Swingline Lender, as the case may be.

 

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10.07      Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent, the Lenders and the Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement executed and delivered to and for the benefit of the Borrower containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (ii) any actual or prospective party (or its managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (iii) any rating agency or (iv) the CUSIP Service Bureau or any similar organization, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.

 

For purposes of this Section, “Information” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries, provided that, in the case of information received from the Borrower or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential or is material non-public information.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information, (c) it will handle such material non-public information in accordance with applicable Law, including Federal and state securities Laws and (d) the confidentiality provisions contained herein, in so far as such provisions relate to material proprietary Information, shall survive for 12 months following the Maturity Date and, in so far as such provisions relate to material non-public information, shall survive in accordance with applicable law.

 

10.08      Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, after providing prior written notice to the Administrative Agent, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under

 

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this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or their respective Affiliates may have.  Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

10.09      Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

10.10      Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of an original executed counterpart of this Agreement.

 

10.11      Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

 

10.12      Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10.13      Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, if any Lender gives a notice pursuant to Section 3.02

 

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or if any Lender is a Defaulting Lender or if any other circumstance exists hereunder that gives the Borrower the right to replace a Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(b)           such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

(c)           in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

 

(d)           such assignment does not conflict with applicable Laws; and

 

(e)           such assignment is made in accordance with Section 10.06(b)(iii)(B).

 

(f)            A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

10.14      Governing Law; Jurisdiction; Etc.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

(b)           SUBMISSION TO JURISDICTION.  THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN 

 

78

 

DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           WAIVER OF VENUE.  THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

(e)           WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.15      No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby, the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) the credit facility provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Arranger and the Lenders, on the other hand, and the Borrower is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent, the Arranger and each Lender each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent nor the Arranger nor any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, the Arranger or any Lender has advised or is currently advising the Borrower or any of its Affiliates on other matters) and neither the Administrative Agent nor the Arranger nor any Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the

 

79

 

Administrative Agent, the Arranger, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor the Arranger nor any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent, the Arranger and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  The Borrower hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Arranger and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty.

 

10.16      U.S. PATRIOT Act Notice.  Each Lender that is subject to the Patriot Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the U.S. Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Patriot Act.

 

10.17      Entire Agreement.  This Agreement and the other Loan Documents represent the final agreement among the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.  There are no unwritten oral agreements among the parties.

 

10.18      Judgment Currency.  If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given.  The obligation of the Borrower in respect of any such sum due from it to the Administrative Agent or the Lenders hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent from the Borrower in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or the Person to whom such obligation was owing against such loss.

 

[Remainder of page intentionally left blank; signature pages follow]

 

80

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

 

	
 
    	
KKR   FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ MICHAEL R. MCFERRAN
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   Michael R. McFerran
    
	
 
    	
 
    	
Title:   Chief Financial Officer
    

 

[Credit Agreement]

 

 

	
 
    	
CITIBANK,   N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ MICHAEL VONDRISKA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   Michael Vondriska
    
	
 
    	
 
    	
Title:   Vice President
    

 

[Credit Agreement]

 

 

	
 
    	
BANK   OF AMERICA, N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ LAURA WARNER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   Laura Warner
    
	
 
    	
 
    	
Title:   Director
    

 

[Credit Agreement]

 

 

	
 
    	
DEUTSCHE   BANK AG NEW YORK BRANCH, AS LENDER
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ EVELYN THIERRY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   Evelyn Thierry
    
	
 
    	
 
    	
Title:  Director
    

 

 

	
 
    	
By:
    	
/s/ COURTNEY MEEHAN
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   Courtney Meehan
    
	
 
    	
 
    	
Title:  Vice President
    

 

[Credit Agreement]

 

 

	
 
    	
SOCIÉTÉ   GÉNÉRALE
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   WILLIAM AISHTON
    
	
 
    	
 
    
	
 
    	
Name:   William Aishton
    
	
 
    	
Title:   Director
    

 

[Credit Agreement]

 

 

 

	
 
    	
MORGAN   STANLEY BANK, N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   MICHAEL KING
    
	
 
    	
 
    
	
 
    	
Name:   Michael King
    
	
 
    	
Title:   Authorized Signatory
    

 

[Credit Agreement]

 

 

	
 
    	
ROYAL   BANK OF CANADA
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   TIM STEPHENS
    
	
 
    	
 
    
	
 
    	
Name:   Tim Stephens
    
	
 
    	
Title:   Director
    

 

[Credit Agreement]

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   LISA D. BUETOW
    
	
 
    	
 
    	
 
    
	
 
    	
Name:   Lisa D. Buetow
    
	
 
    	
Title:   Vice President
    

 

[Credit Agreement]

 

 

SCHEDULE 2.01

 

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

	
Lender
    	
 
    	
Commitment
    	
 
    	
Applicable
   Percentage
    	
 
    
	
Citibank, N.A.
    	
 
    	
$
    	
31,200,000
    	
 
    	
20.800000000
    	
%
    
	
Bank of America, N.A.
    	
 
    	
$
    	
31,200,000
    	
 
    	
20.800000000
    	
%
    
	
Deutsche Bank AG New York Branch
    	
 
    	
$
    	
31,200,000
    	
 
    	
20.800000000
    	
%
    
	
Société Générale
    	
 
    	
$
    	
20,800,000
    	
 
    	
13.866666667
    	
%
    
	
Morgan Stanley Bank, N.A.
    	
 
    	
$
    	
15,600,000
    	
 
    	
10.400000000
    	
%
    
	
Royal Bank of Canada
    	
 
    	
$
    	
10,000,000
    	
 
    	
6.666666667
    	
%
    
	
Wells Fargo Bank, National Association
    	
 
    	
$
    	
10,000,000
    	
 
    	
6.666666667
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
$
    	
150,000,000.00
    	
 
    	
100.000000000
    	
%
    

 

 

SCHEDULE 5.06

 

LITIGATION

 

[None.]

 

 

SCHEDULE 7.01

 

EXISTING LIENS

 

[None.]

 

 

SCHEDULE 7.03

 

EXISTING INDEBTEDNESS

 

[None.]

 

 

SCHEDULE 7.08

 

BURDENSOME AGREEMENTS

 

[None.]

 

 

SCHEDULE 10.02

 

ADMINISTRATIVE AGENT’S OFFICE;
 CERTAIN ADDRESSES FOR NOTICES

 

KKR FINANCIAL HOLDINGS LLC

555 California Street, 50th Floor

San Francisco, CA 94104

 

Attention: CFO

Telephone: 415-315-6512

 

Attention: Treasurer

Telephone: 415-315-6536

 

Attention: General Counsel

Telephone: 415-315-3620

 

Telecopier:  415-391-3330

 

Electronic Mail: treasury@kkr.com

 

 

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

For payments and Requests for Borrowings:

Citibank, N.A.

1615 Brett Road, OPS 3

New Castle, Delaware 19720

Attention:  Annemarie Pavco

Telephone:  (302) 323-2475

Telecopier:  (212) 994-0961

Electronic Mail:  annemarie.e.pavco@citi.com

Copy to:  global.loans.support@citi.com

 

Other Notices as Administrative Agent:

Citibank, N.A.

388 Greenwich Street, 35th Floor

New York, NY 10013

Attention:  Alex Duka

Telephone:  (212) 816-3260

Telecopier:  (646) 291-1703

Electronic Mail:  alexander.f.duka@citi.com

 

SWINGLINE LENDER:

Citibank, N.A.

1615 Brett Road, OPS 3

New Castle, Delaware 19720

Attention:  Annemarie Pavco

Telephone:  (302) 323-2475

Telecopier:  (212) 994-0961

Electronic Mail:  annemarie.e.pavco@citi.com

Copy to:  global.loans.support@citi.com

 

 

ISSUING BANK:

Citibank, N.A.

1615 Brett Road, OPS 3

New Castle, Delaware 19720

Attention:  Annemarie Pavco

Telephone:  (302) 323-2475

Telecopier:  (212) 994-0961

Electronic Mail:  annemarie.e.pavco@citi.com

Copy to:  global.loans.support@citi.com

 

With a copy to:

 

Citibank, N.A.

c/o its Servicer, Citicorp North America, Inc.

Citigroup Center Bldg B, 3rd Floor

3800 Citigroup Center Drive

Tampa, FL 33610-9122

Attention:  US Standby LC Unit

Telephone:  (866) 945-6284

Telecopier:  (813) 604-7187

Electronic Mail:  us.standby@citi.com

 

 

SCHEDULE 10.06

 

PROCESSING AND RECORDATION FEES

 

The Administrative Agent will charge a processing and recordation fee (an “Assignment Fee”) in the amount of $3,500 for each assignment; provided, however, that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the Assignment Fee will be $3,500 plus the amount set forth below:

 

	
Transaction
    	
 
    	
Assignment Fee
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
First four concurrent assignments or   suballocations to members of an Assignee Group (or from members of an   Assignee Group, as applicable)
    	
 
    	
-0-
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Each additional concurrent assignment or   suballocations to a member of such Assignee Group (or from a member of such   Assignee Group, as applicable)
    	
 
    	
$
    	
500
    	
 
    
					

 

 

EXHIBIT A

 

FORM OF REVOLVING LOAN NOTICE

 

Date:                   ,          

 

To:          Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of November [30], 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; the terms defined therein being used herein as therein defined), among KKR Financial Holdings LLC (the “Borrower”), the Lenders from time to time party thereto, Citibank, N.A., as Swingline Lender and Issuing Bank, and Citibank, N.A., as Administrative Agent.

 

The undersigned hereby requests (select one):

 

o  A Borrowing of Revolving Loans

 

o  A conversion of Loans

 

o  A continuation of Loans

 

1.                                      On                                                                 (a Business Day).

 

2.                                      In the amount of $                                        .

 

3.                                      Comprised of                                               .

[Type of Revolving Loan requested (Base Rate Loan or Eurodollar Loan)]

 

4.                                      For Eurodollar Loans:  with an Interest Period of          months.

 

The following are Borrower’s instructions for distribution of loan proceeds (appropriate wire instructions, deposit account information, etc.):

 

[                                ]

 

[                                ]

 

 

	
 
    	
KKR FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

A-1

 

EXHIBIT B

 

FORM OF SWINGLINE LOAN NOTICE

 

Date:                   ,          

 

To:                             Citibank, N.A., as Swingline Lender
 Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of November [30], 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among KKR Financial Holdings LLC (the “Borrower”), the Lenders from time to time party thereto, Citibank, N.A., as Swingline Lender and Issuing Bank, and Citibank, N.A., as Administrative Agent.

 

The undersigned hereby requests a Swingline Loan:

 

1.                                      On                                                                  (a Business Day).

 

2.                                      In the amount of $                                         .

 

The following are Borrower’s instructions for distribution of loan proceeds (appropriate wire instructions, deposit account information, etc.):

 

[                             ]

 

[                             ]

 

 

	
 
    	
KKR   FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

B-1

 

EXHIBIT C

 

FORM OF PROMISSORY NOTE

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to                                            (the “Lender”) or registered assigns, in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each [Revolving][Swingline] Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of November [30], 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among KKR Financial Holdings LLC, the Lenders from time to time party thereto, Citibank, N.A., as Swingline Lender and Issuing Bank, and Citibank, N.A., as Administrative Agent.

 

The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement.  [For Revolving Loan Notes: All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s Office.]  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.

 

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement.  Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

 

[signature page follows]

 

C-1

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

	
 
    	
KKR   FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

C-2

 

LOANS AND PAYMENTS WITH RESPECT THERETO

 

	
Date
    	
 
    	
Type of
   Loan
   Made
    	
 
    	
Amount of
   Loan
   Made
    	
 
    	
End of
   Interest
   Period
    	
 
    	
Amount of
   Principal or
   Interest
   Paid This
   Date
    	
 
    	
Outstanding
   Principal
   Balance This
   Date
    	
 
    	
Notation
   Made By
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

C-3

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

 

Date of Compliance Certificate:                       ,        

 

Financial Statement Date:                       ,        

 

To:          Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of November [30], 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among KKR Financial Holdings LLC (the “Borrower”), the Lenders from time to time party thereto, Citibank, N.A., as Swingline Lender and Issuing Bank, and Citibank, N.A., as Administrative Agent.

 

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the [       ] of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.             The Borrower has made available to the Lenders the year-end audited financial statements required by Section 6.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of a Registered Public Accounting Firm, as required by such section.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

1.             The Borrower has made available to the Lenders the unaudited financial statements required by Section 6.01(b) of the Credit Agreement for the fiscal quarter of the Borrower ended as of the above date.  Such financial statements fairly present the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

 

2.             The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a review in reasonable detail of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by the financial statements referred to above.  Such review did not disclose the existence during or at the end of the accounting period covered by the Financial Statements, and the undersigned has no knowledge of the existence, as of the date of this Officer’s Certificate, of any Default or Event of Default[, except as set forth below:  [                  ]].

 

3.             Attached hereto as Schedule I are reasonably detailed calculations demonstrating compliance with the financial covenants contained in Section 7.09 of the Credit Agreement.

 

D-1

 

4.             Attached hereto as Schedule II is a list of each direct Subsidiary of the Borrower as of the Statement Date (as defined below), setting forth the percentage of Total Investments (as defined in the Pledge Agreement) held directly or (through Subsidiaries of such Subsidiary) indirectly by such Subsidiary as of the Statement Date and indicating whether as of the Statement Date the Capital Stock (as defined in the Pledge Agreement) of such Subsidiary was pledged by the Borrower pursuant to the Pledge Agreement.

 

[Remainder of page intentionally left blank]

 

D-2

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date first written above.

 

 

	
 
    	
 
    	
KKR FINANCIAL   HOLDINGS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
by
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    

 

D-3

 

For the Quarter/Year ended                          (“Statement Date”)

 

SCHEDULE I
  to the Compliance Certificate
 ($ in 000’s)

 

	
I.
    	
Section   7.09(a) — Adjusted Consolidated Tangible Net Worth
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
A.
    	
Adjusted   Consolidated Tangible Net Worth:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
1.
    	
Consolidated   Net Worth (calculated without regard to any accumulated other comprehensive   income or loss):
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.
    	
Intangible   Assets:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.
    	
Trust Preferred Indebtedness:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.
    	
Adjusted   Consolidated Tangible Net Worth (Line I.A.1 less   Line I.A.2 plus Line I.A.3):
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
B.
    	
Minimum   required Adjusted Consolidated Tangible Net Worth ($1,000,000,000 plus 25% of   the net cash proceeds received from the issuance and sale, at any time after   the Closing Date, of Equity Interests (including Trust Preferred Securities)   of the Borrower or any Subsidiary (other than issuances to the Borrower or a   wholly-owned Subsidiary and issuances of Debt Securities of the Borrower   convertible into Equity Interests):
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
C.
    	
Excess   (deficient) for covenant compliance (Line I.A.4 less   Line I.B):
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
II.
    	
Section   7.09(b) — Leverage Ratio
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
A.
    	
Adjusted   Total Liabilities:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
1.
    	
Consolidated   Total Liabilities:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.
    	
All   liabilities of the consolidated GAAP balance sheet of the Borrower arising   from the required application of GAAP that are Non-Recourse to the Borrower:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.
    	
Trust   Preferred Indebtedness:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.
    	
Adjusted   Total Liabilities
   (Line II.A.1 less Line II.A.2 less Line II.A.3):
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
B.
    	
Adjusted   Consolidated Tangible Net Worth:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
C.
    	
Ratio   of Line II.A. to Line II.B (not to exceed 1.50 to 1.00):
    	
 
    	
 
    

 

D-4

 

	
III.
    	
Section   7.09(c) — Consolidated Total Assets to Recourse Indebtedness
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
A.
    	
Adjusted   Consolidated Total Assets:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
1.
    	
Consolidated   Total Assets:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.
    	
Non-Recourse   secured Indebtedness issued or incurred by the Borrower:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.
    	
Indebtedness   issued or incurred by Subsidiaries of the Borrower (other than such   Indebtedness that is not Non-Recourse to the Borrower):
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.
    	
Indebtedness   issued or incurred by CLOs (other than such Indebtedness that is issued to or   held by the Borrower, any of its Subsidiaries or any other CLO)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.
    	
Adjusted   Consolidated Total Assets
   (Line III.A.1 less Line III.A.2 less Line III.A.3 less Line   III.A.4):
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
B.
    	
Recourse   Indebtedness:
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
C.
    	
Ratio   of Line III.A to Line III.B (not to be less than 8.00 to 1.00):
    	
 
    	
 
    

 

D-5

 

SCHEDULE II
  to the Compliance Certificate

 

	
Subsidiary
    	
 
    	
Foreign/Domestic
    	
 
    	
$ Investments
   Directly Held
    	
 
    	
$ Investments
   Indirectly Held
    	
 
    	
Total Investments
   Held
    	
 
    	
Percentage of
   Total
   Investments
    	
 
    	
Pledged / Not
   Pledged
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

D-6

 

EXHIBIT E

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each] Assignee identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] hereunder are several and not joint.]  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, the Swingline Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

 

1.                                      Assignor[s]:

 

2.                                      Assignee[s]:

 

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

3.                                      Borrower:

 

4.                                      Administrative Agent: Citibank, N.A., as the administrative agent under the Credit Agreement

 

E-1

 

5.                                      Credit Agreement:                                             Credit Agreement, dated as of November [30], 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; the terms defined therein being used herein as therein defined) among KKR Financial Holdings LLC, the Lenders from time to time party thereto, Citibank, N.A., as Swingline Lender and Issuing Bank, and Citibank, N.A., as Administrative Agent.

 

6.                                      Assigned Interest[s]:

 

	
Assignor[s]
    	
 
    	
Assignee[s]
    	
 
    	
Facility
   Assigned
    	
 
    	
Aggregate
   Amount of
   Commitment /
   Loans
   for all Lenders
    	
 
    	
Amount of
   Commitment
   / Loans
   Assigned
    	
 
    	
Percentage
   Assigned of
   Commitment/
   Loans
    	
 
    	
CUSIP
   Number
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    

 

[7.                                  Trade Date:                                                                   ]

 

Effective Date:                                     , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
[NAME OF ASSIGNOR]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
ASSIGNEE
    
	
 
    	
[NAME OF ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
[Consented   to and] Accepted:
    	
 
    
	
 
    	
 
    
	
CITIBANK,   N.A., as
    	
 
    
	
Administrative Agent
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

E-2

 

[Consented to:]

 

 

	
KKR FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    
	
by
    	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

E-3

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

[                                      ]

 

STANDARD TERMS AND CONDITIONS FOR
 ASSIGNMENT AND ASSUMPTION

 

1.                          Representations and Warranties.

 

1.1.                Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of KKR Financial Holdings LLC, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

1.2.                Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Sections 10.06(b)(iii), 10.06(b)(v) and 10.06(b)(vi) of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

2.                          Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the

 

E-4

 

Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

 

3.                          General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

E-5

 

EXHIBIT F-1

 

[FORM OF OPINION OF SIMPSON THACHER & BARTLETT LLP]

 

 

EXHIBIT F-2

 

[FORM OF OPINION OF IN-HOUSE GENERAL COUNSEL FOR THE BORROWER]

 

 

EXHIBIT G

 

[FORM OF CLOSING CERTIFICATE]

 

KKR FINANCIAL HOLDINGS LLC

 

SECRETARY’S CERTIFICATE

 

November [30], 2012

 

I, [           ], being the Secretary of KKR Financial Holdings LLC, a Delaware limited liability company, (the “Company”), hereby certify as follows:

 

1.                                      The persons identified on Schedule I attached hereto are duly appointed authorized signatories of the Company holding the offices indicated next to their respective names, and the signatures appearing opposite their respective names are the true and genuine signatures of such officers.

 

2.                                      Attached hereto as Exhibit A is a true and correct copy of resolutions (the “Resolutions”) duly adopted by the Board of Directors of the Company on [•], 2012.  The Resolutions have not been amended, annulled, rescinded or revoked and are in full force and effect on and as of the date hereof.  The Resolutions are the only corporate proceedings of the Company now in force relating to or affecting the matters referred to therein.

 

3.                                      Attached hereto as Exhibit B is a certified copy of the Certificate of Formation of the Company, as filed in the Office of the Secretary of State of the State of Delaware and as in effect on the date of this Certificate.

 

4.                                      Attached hereto as Exhibit C is a true and correct copy of the Operating Agreement of the Company as in effect on the date of this Certificate.

 

5.                                      Attached hereto as Exhibit D is a true and correct copy of the certificate of good standing with respect to the Company issued by the Secretary of State of the State of Delaware, dated [•], 2012.

 

[Signature page follows]

 

G-1

 

                IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the first date above written.

 

	
 
    	
KKR FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:      Secretary
    

 

I, the undersigned, [             ], do hereby certify that I am an Authorized Signatory for the Company, that [             ] is the Secretary of the Company and that the signature above is such person’s authentic and genuine signature.

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the first date above written.

 

	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:   Authorized Signatory
    

 

G-2

 

SCHEDULE I

 

Certificate of Incumbency

 

	
Name
    	
 
    	
Title
    	
 
    	
Specimen Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
William   C. Sonneborn
    	
 
    	
Chief   Executive Officer; 
   Authorized Signatory
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Michael   McFerran
    	
 
    	
Chief   Operating Officer; 
   Authorized Signatory
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Nicole   J. Macarchuk
    	
 
    	
Secretary;   General Counsel 
   Authorized Signatory
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

G-3

 

EXHIBIT A

 

Resolutions

 

[See attached]

 

G-4

 

EXHIBIT B

 

Certificate of Formation

 

[See attached]

 

G-5

 

EXHIBIT C

 

Operating Agreement

 

[See attached]

 

G-6

 

EXHIBIT D

 

Good Standing Certificate

 

[See attached]

 

G-7

 

EXHIBIT H

 

[FORM OF OFFICER’S CERTIFICATE]

 

Date:             ,      

 

To:                             Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of November [30], 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among KKR Financial Holdings LLC (the “Borrower”), the Lenders from time to time party thereto, Citibank, N.A., as Swingline Lender and Issuing Bank, and Citibank, N.A., as Administrative Agent.

 

The undersigned Responsible Officer of the Borrower, solely in [his/her] capacity as a Responsible Officer and not individually, hereby certifies as follows:

 

1.              The representations and warranties of the Borrower contained in Article V of the Credit Agreement and each other Loan Document are true and correct in all material respects on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such earlier date.

 

2.              No Default exists as of the date hereof.

 

H-1

 

	
 
    	
KKR FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:      Responsible   Officer
    

 

H-2

 

EXHIBIT I

 

[FORM OF PLEDGE AGREEMENT]

 

THIS PLEDGE AGREEMENT, dated as of November [·], 2012, by and between KKR Financial Holdings LLC, a Delaware limited liability company (the “Company”), and Citibank, N.A., as Administrative Agent (the “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Company is party to the Credit Agreement, dated as of November 30, 2012 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”), Citibank, N.A., as Swingline Lender and Issuing Bank, and Citibank, N.A., as Agent.

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make Loans to the Company and the Issuing Bank has agreed to issue Letters of Credit upon the terms and subject to the conditions set forth therein;

 

WHEREAS, the Company acknowledges that it will derive substantial direct and indirect benefit from the making of the Loans and the issuance of Letters of Credit; and

 

WHEREAS, it is a condition precedent to the continuing availability of the Loans and Letters of Credit under the Credit Agreement that the Company shall have executed and delivered this Pledge Agreement to the Agent for the benefit of the Lenders and the Issuing Bank.

 

NOW, THEREFORE, the Company hereby agrees with the Agent, for the benefit of the Lenders and the Issuing Bank, as follows:

 

1.             Defined Terms.

 

(a)           Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

(b)           Terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC, including the term Securities (which is capitalized herein).

 

(c)           The following terms shall have the following meanings:

 

“Agent” shall have the meaning provided in the preamble to this Pledge Agreement.

 

“Capital Stock” shall mean (1) in the case of a corporation, corporate stock, (2) in the case of an association or other business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited), and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Collateral” shall have the meaning provided in Section 2.

 

I-1

 

“Domestic Subsidiary” shall mean each Subsidiary of the Company that is organized under the laws of the United States, any state or territory thereof, or the District of Columbia.

 

“Excluded Stock” shall any voting Capital Stock of any Foreign Subsidiary in excess of 66% of the outstanding voting Capital Stock of such class (such percentage to be adjusted upon any Change in Law as may be required to avoid adverse U.S. federal income tax consequences to the Company or any Subsidiary).

 

“Foreign Subsidiary” shall mean each Subsidiary of the Company that is not a Domestic Subsidiary.

 

“Material Subsidiary” means any direct wholly owned Subsidiary of the Company that (i) directly or (through the Subsidiaries of such Subsidiary) indirectly holds more than 10% of the Total Investments owned by the Company and its Subsidiaries or (ii) is designated as a Material Subsidiary pursuant to Section 3.3.

 

“Non-Material Subsidiary” means any direct wholly owned Subsidiary of the Company that is not a Material Subsidiary.

 

“Pledge Agreement” shall mean this Pledge Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Pledged Stock” shall mean the Capital Stock issued by the Material Subsidiaries and held by the Company, including the Capital Stock described on Schedule 1 hereto and issued by the Material Subsidiaries named therein and any other Capital Stock issued by a Material Subsidiary after the date of this Pledge Agreement, and the certificates representing such Capital Stock and any interest of the Company in the entries on the books of the issuer of such Capital Stock or any financial intermediary pertaining to such Capital Stock and all dividends, cash, warrants, rights, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Capital Stock.

 

“Secured Obligations” shall mean the “Obligations” under and as defined in the Credit Agreement.

 

“Secured Parties” shall mean the Agent, each Lender, the Issuing Bank, each Swap Contract Bank that is party to any Secured Swap Contract, and each Cash Management Bank that is party to any Secured Cash Management Agreement.

 

“Security Interest” shall have the meaning provided in Section 2.

 

“Total Investments” means the aggregate combined investments of the Company and its Subsidiaries, including investments in securities, loan assignments and participations, derivative instruments (excluding derivatives that are used for hedging purposes), investments in joint ventures and partnerships, and ownership of physical assets or interests in physical assets that are acquired as part of the Company’s investment strategy (e.g., working and royalty interests in oil and gas wells); provided, however, that while any notes issued by the Company’s CLOs and held by the Company or its Subsidiaries shall be included in Total Investments, any such investments held directly by such CLOs will be excluded from Total Investments; provided, further, that, for purposes of determining Total Investments, investments shall be valued at (i) in the case of notes issued by CLOs, the fair market value of such notes as determined by the Company and (ii) in the case of all other investments, the carrying value of such investments determined in accordance with GAAP.

 

I-2

 

(d)           The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar import when used in this Pledge Agreement shall refer to this Pledge Agreement as a whole and not to any particular provision of this Pledge Agreement, and Section, subsection, clause and Schedule references are to this Pledge Agreement unless otherwise specified.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  Section 1.02 of the Credit Agreement is incorporated herein by reference.

 

(e)           The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(f)            The terms of this Pledge Agreement shall not operate or be construed so as to prohibit or restrict any transaction, matter or other step not prohibited by the Credit Agreement and the Agent shall promptly enter into such documentation and/or take such other action as is required by the Company (acting reasonably) in order to facilitate any such transaction, matter or other step, including by way of executing any confirmation, consent to dealing, release or other similar or equivalent document, provided that any costs and expenses incurred by the Agent entering into such documentation and/or taking such other action at the request of the Company pursuant to this clause (f) shall be for the account of the Company, subject to Section 10.04(a) of the Credit Agreement.

 

2.             Grant of Security Interest.

 

(a)           The Company hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Agent, for the benefit of the Secured Parties, and grants to the Agent, for the benefit of the Secured Parties, a Lien on and security interest in (the “Security Interest”), all of its right, title and interest in, to and under all of the following property now owned or at any time hereafter acquired by the Company or in which the Company now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations:

 

(i)            all Pledged Stock; and

 

(ii)           to the extent not otherwise included, all proceeds of any and all of the foregoing;

 

provided that the Collateral for any Secured Obligations shall not include any Excluded Stock; and provided, further, that this Pledge Agreement shall not constitute a grant of a security interest in any property to the extent that such grant of a security interest is prohibited by any applicable Law.

 

(b)           The Company hereby irrevocably authorizes the Agent and its Affiliates, counsel and other representatives, at any time and from time to time, to file or record financing statements, amendments to financing statements and, with notice to the Company, other filing or recording documents or instruments with respect to the Collateral in such form and in such offices as the Agent reasonably determines appropriate to perfect the Security Interests of the Agent under this Pledge Agreement.  The Company hereby also authorizes the Agent and its Affiliates, counsel and other representatives, at any time and from time to time, to file continuation statements with respect to previously filed financing statements.

 

(c)           The Security Interests are granted as security only and shall not subject the Agent or any Lender or other Secured Party to, or in any way alter or modify, any obligation or liability of the Company with respect to or arising out of the Collateral.

 

I-3

 

(d)           The Company shall as soon as reasonably practicable after the date of this Pledge Agreement or, in the case of Pledged Stock acquired or pledged hereunder (including, without limitation, pursuant to designation of Material Subsidiaries pursuant to Section 3.3) after the date of this Pledge Agreement, as soon as reasonably practicable after such acquisition or pledge, deliver to the Agent (or procure delivery of), (i) all certificates representing Pledged Stock accompanied by duly executed instruments of transfer or assignment in blank relating to such Pledged Stock and (ii) in the case of Pledged Stock acquired or pledged after the date of this Pledge Agreement, supplements to Schedule 1 reflecting such Pledged Stock.

 

3.             Certain Matters Relating to Pledged Stock.

 

3.1          Certification of Limited Liability Company, Limited Partnership Interests.  In the event that any Equity Interest in any Material Subsidiary that is organized as a limited liability company or limited partnership and pledged hereunder shall be represented by a certificate, the Company shall cause the issuer of such interests to elect to treat such interests as a “security” within the meaning of Article 8 of the Uniform Commercial Code of its jurisdiction of organization or formation, as applicable, by including in its organizational documents language substantially similar to the following and, accordingly, such interests shall be governed by Article 8 of the Uniform Commercial Code:

 

“The Partnership/Company hereby irrevocably elects that all membership interests in the Partnership/Company shall be securities governed by Article 8 of the Uniform Commercial Code of [jurisdiction of organization or formation, as applicable].  Each certificate evidencing partnership/membership interests in the Partnership/Company shall bear the following legend:  “This certificate evidences an interest in [name of Partnership/LLC] and shall be a security for purposes of Article 8 of the Uniform Commercial Code.”  No change to this provision shall be effective until all outstanding certificates have been surrendered for cancellation and any new certificates thereafter issued shall not bear the foregoing legend.”

 

3.2          Voting Rights; Dividends and Distributions; Etc.

 

(a)           So long as no Event of Default shall have occurred and be continuing:

 

(i)            The Company shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Stock or any part thereof for any purpose not prohibited by the terms of this Pledge Agreement or the other Loan Documents.

 

(ii)           The Agent shall execute and deliver (or cause to be executed and delivered) to the Company all such proxies and other instruments as the Company may reasonably request for the purpose of enabling the Company to exercise the voting and other rights that it is entitled to exercise pursuant to paragraph (i) above.

 

(b)           Subject to paragraph (c) below, the Company shall be entitled to receive and retain and use, free and clear of the Lien created by this Pledge Agreement, any and all dividends, distributions, principal and interest made or paid in respect of the Collateral to the extent permitted by the Credit Agreement, as applicable; provided, however, that any and all non-cash dividends, interest, principal, securities or other property and distributions that would constitute Pledged Stock, whether resulting from a subdivision, combination or reclassification of the outstanding Capital Stock of the issuer of any Pledged Stock or received in exchange for Pledged Stock or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be forthwith delivered to the Agent to hold as, Collateral and

 

I-4

 

shall, if received by the Company, be received in trust for the benefit of the Agent, be segregated from the other property or funds of the Company and be forthwith delivered to the Agent as Collateral in the same form as so received (with any necessary endorsements).

 

(c)           Upon written notice to the Company by the Agent following the occurrence and during the continuance of an Event of Default:

 

(i)            all rights of the Company to exercise or refrain from exercising the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Section 3.2(a)(i) shall cease, and all such rights shall thereupon become vested in the Agent, which shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights during the continuance of such Event of Default, provided that, unless otherwise directed by the Required Lenders, the Agent shall have the right from time to time following the occurrence and during the continuance of an Event of Default, to permit the Company to exercise such rights.  After all Events of Default have been cured or waived pursuant to the terms of the Credit Agreement, the Company will have the right to exercise the voting and consensual rights that the Company would otherwise be entitled to exercise pursuant to the terms of Section 3.2(a)(i) (and the obligations of the Agent under Section 3.2(a)(ii) shall be reinstated);

 

(ii)           all rights of the Company to receive the dividends, distributions and principal and interest payments that the Company would otherwise be authorized to receive and retain pursuant to Section 3.2(b) shall cease, and all such rights shall thereupon become vested in the Agent, which shall thereupon have the sole right to receive and hold as Collateral such dividends, distributions and principal and interest payments during the continuance of such Event of Default.  After all Events of Default have been cured or waived pursuant to the terms of the Credit Agreement, the Agent shall repay to the Company (without interest) all dividends, distributions and principal and interest payments that the Company would otherwise be permitted to receive, retain and use pursuant to the terms of Section 3.2(b);

 

(iii)          all dividends, distributions and principal and interest payments that are received by the Company contrary to the provisions of Section 3.2(b) shall be received in trust for the benefit of the Agent, shall be segregated from other property or funds of the Company and shall forthwith be delivered to the Agent as Collateral in the same form as so received (with any necessary endorsements); and

 

(iv)          in order to permit the Agent to receive all dividends, distributions and principal and interest payments to which it may be entitled under Section 3.2(b) above, to exercise the voting and other consensual rights that it may be entitled to exercise pursuant to Section 3.2(c)(i) above, and to receive all dividends, distributions and principal and interest payments that it may be entitled to under Sections 3.2(c)(ii) and 3.2(c)(iii) above, the Company shall from time to time execute and deliver to the Agent appropriate proxies, dividend payment orders and other instruments as the Agent (acting reasonably) may request in writing.

 

3.3          Designation of Material Subsidiaries.  If, at any time, all Non-Material Subsidiaries hold, directly or (through their respective Subsidiaries) indirectly, in the aggregate, more than 10% of the Total Investments of the Company and its Subsidiaries, the Company shall immediately, by written notice to the Agent, designate one or more Non-Material Subsidiaries as Material Subsidiaries hereunder to the extent required such that all Non-Material Subsidiaries hold, directly or (through their respective Subsidiaries) indirectly, in the aggregate, no more than 10% of the Total Investments of the Company and its Subsidiaries.

 

I-5

 

4.             Remedial Provisions.

 

4.1          Application of Proceeds.  The Agent shall apply the proceeds of any collection or sale of the Collateral as well as any Collateral consisting of cash, at any time after receipt as provided in Section 8.03 of the Credit Agreement.

 

4.2          Code and Other Remedies.  If an Event of Default shall have occurred and be continuing, the Agent may exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a Lender upon default under the UCC or any other applicable law and also may, with notice to the Company, sell the Collateral or any part thereof in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Agent or any Lender or elsewhere for cash or on credit or for future delivery irrespective of the impact of any such sales on the market price of the Collateral.  The Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers of Collateral to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and, upon consummation of any such sale, the Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of the Company, and the Company hereby waives (to the extent permitted by law) all rights of redemption, stay and/or appraisal that it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.  The Agent and any Lender shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, and the Agent or such Lender may pay the purchase price by crediting the amount thereof against the Secured Obligations.  The Company agrees that, to the extent notice of sale shall be required by law, at least five Business Days’ notice to the Company of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification.  The Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given.  The Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  To the extent permitted by law, the Company hereby waives any claim against the Agent arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale, even if the Agent accepts the first offer received and does not offer such Collateral to more than one offeree.

 

4.3          Deficiency.  The Company shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Secured Obligations and the fees and disbursements of any attorneys employed by the Agent or any Lender to collect such deficiency.

 

4.4          Amendments, etc. with Respect to the Secured Obligations; Waiver of Rights.  The Company shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Company and without notice to or further assent by the Company, (a) any demand for payment of any of the Secured Obligations made by the Agent or any Lender may be rescinded by such party and any of the Secured Obligations continued, (b) the Secured Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Agent or any Lender, (c) the Credit Agreement, the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the requisite Lenders pursuant to the terms of the Credit Agreement, as the case may be) may deem advisable from time to time, (d) any Cash Management Agreement, any Swap

 

I-6

 

Contract and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Company and such applicable Cash Management Bank or Swap Contract Bank, as applicable, may deem advisable from time to time and (e) any collateral security, guarantee or right of offset at any time held by the Agent or any Lender for the payment of the Secured Obligations may be sold, exchanged, waived, surrendered or released.  Neither the Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Security at any time held by it as security for the Secured Obligations or for this Pledge Agreement or any property subject thereto.

 

5.             The Agent.

 

5.1          Agent’s Appointment as Attorney-in-Fact, etc.  The Company hereby appoints, which appointment is irrevocable and coupled with an interest, the Agent as the Company’s attorney-in-fact, with full authority in the place and stead of the Company and in the name of the Company or otherwise, to take any action and to execute any instrument, in each case after the occurrence and during the continuance of an Event of Default, and with notice to the Company, that the Agent may deem reasonably necessary or advisable to accomplish the purposes of this Pledge Agreement, including, without limitation, to receive, indorse and collect all instruments made payable to the Company representing any dividend, distribution or principal or interest payment in respect of the Collateral or any part thereof and to give full discharge for the same.

 

5.2          Duty of Agent.  The Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Agent deals with similar property for its own account.  The Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Agent accords its own property.  Neither the Agent nor any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Company or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Agent and the Lenders hereunder are solely to protect the Agent’s and the Lenders’ interests in the Collateral and shall not impose any duty upon the Agent or any Lender to exercise any such powers.  The Agent and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Company for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as determined by a final and nonappealable judgment of a court of competent jurisdiction.

 

5.3          Authority of Agent.  The Company acknowledges that the rights and responsibilities of the Agent under this Pledge Agreement with respect to any action taken by the Agent or the exercise or non-exercise by the Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Pledge Agreement shall, as between the Agent and the Lenders, be governed by the Credit Agreement, and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Agent and the Company, the Agent shall be conclusively presumed to be acting as agent for the applicable Lenders with full and valid authority so to act or refrain from acting, and the Company shall not be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

5.4          Security Interest Absolute.  All rights of the Agent hereunder, the Security Interest and all obligations of the Company hereunder shall be absolute and unconditional.

 

I-7

 

5.5          Continuing Security Interest; Assignments Under the Credit Agreement; Release.

 

(a)           This Pledge Agreement shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Company and the successors and assigns thereof and shall inure to the benefit of the Agent and the Lenders and their respective successors, indorsees, transferees and assigns until all Secured Obligations (other than any contingent indemnity obligations not then due and other than any obligations under Secured Cash Management Agreements and Secured Swap Contracts) shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Credit Agreement, the Company may be free from any Secured Obligations.

 

(b)           (i) Upon any sale, transfer or other disposition by the Company of any Collateral that is permitted under the Credit Agreement and (ii) upon the effectiveness of any written consent to the release of the Security Interest granted in such Collateral pursuant to Section 9.10 of the Credit Agreement, such Collateral shall be automatically released from the Security Interest granted under this Pledge Agreement.  Any such release in connection with any sale, transfer or other disposition of such Collateral shall result in such Collateral being sold, transferred or disposed of, as applicable, free and clear of the Liens and Security Interest created hereby.

 

(c)           In connection with any termination or release pursuant to paragraph (a) or (b), the Agent shall execute and deliver to the Company, at the Company’s expense, all documents that the Company shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section 5.5 shall be without recourse to or warranty by the Agent.

 

5.6          Reinstatement.  The Company further agrees that, if any payment made by it or another Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of Collateral are required to be returned by any Lender to the Company or such other Person, its estate, trustee, receiver or any other Person, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made or, if prior thereto the Liens granted hereby or other Collateral securing such liability hereunder shall have been released or terminated by virtue of such cancellation or surrender, such Liens or other Collateral shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect any Liens or other Collateral securing the obligations of the Company in respect of the amount of such payment.

 

6.             Citibank, N.A. as Agent.

 

(a)           Citibank, N.A. has been appointed to act as the Administrative Agent under the Credit Agreement, by the Lenders under the Credit Agreement and, by their acceptance of the benefits hereof, the other Secured Parties.  The Agent shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action (including the release or substitution of Collateral), solely in accordance with this Pledge Agreement and the Credit Agreement.  In furtherance of the foregoing provisions of this Section 6(a), each Lender, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed by such Lender that all rights and remedies hereunder may be exercised solely by the Agent for the ratable benefit of the applicable Lenders in accordance with the terms of this Section 6(a).

 

(b)           The Agent shall at all times be the same Person that is the Administrative Agent under the Credit Agreement.  Written notice of resignation by the Administrative Agent pursuant to the

 

I-8

 

Credit Agreement shall also constitute notice of resignation as Agent under this Pledge Agreement; removal of the Administrative Agent shall also constitute removal under this Pledge Agreement; and appointment of an Administrative Agent pursuant to the Credit Agreement shall also constitute appointment of a successor Agent under this Pledge Agreement.  Upon the acceptance of any appointment as Administrative Agent under the Credit Agreement by a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent under this Pledge Agreement, and the retiring or removed Agent under this Pledge Agreement shall promptly (i) transfer to such successor Agent all sums, securities and other items of Collateral held hereunder, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Agent under this Pledge Agreement and (ii) execute and deliver to such successor Agent or otherwise authorize the filing of such amendments to financing statements and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Agent of the Security Interests created hereunder, whereupon such retiring or removed Agent shall be discharged from its duties and obligations under this Pledge Agreement.  After any retiring or removed Agent’s resignation or removal hereunder as Agent, the provisions of this Pledge Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it under this Pledge Agreement while it was Agent hereunder.

 

(c)           Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be liable to any party for any action taken or omitted to be taken by any of them under or in connection with this Pledge Agreement or any Loan Document (except for its or such Person’s own gross negligence or willful misconduct as determined by a final and nonappealable judgment of a court of competent jurisdiction).

 

7.             Miscellaneous.

 

7.1          Amendments in Writing.  None of the terms or provisions of this Pledge Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Company and the Agent in accordance with Section 10.01 of the Credit Agreement.

 

7.2          Notices.  All notices, requests, demands and communications pursuant hereto shall be made in accordance with Section 10.02 of the Credit Agreement.  All communications and notices hereunder to (i) the Company may be given to it as provided in the Credit Agreement or (ii) the Agent shall be given to it as provided in the Credit Agreement.

 

7.3          No Waiver by Course of Conduct; Cumulative Remedies.  Neither the Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in exercising, on the part of the Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Agent or such Lender would otherwise have on any future occasion.  The rights, remedies, powers and privileges herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

7.4          Successors and Assigns.  The provisions of this Pledge Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted by the Credit Agreement, except that the Company may not assign, transfer or delegate any of

 

I-9

 

its rights or obligations under this Pledge Agreement except pursuant to a transaction permitted by, and pursuant to the terms of, Section 10.06 of the Credit Agreement.

 

7.5          Counterparts.  This Pledge Agreement may be executed by one or more of the parties to this Pledge Agreement on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  A set of the copies of this Pledge Agreement signed by all the parties shall be lodged with the Agent and the Company.

 

7.6          Severability.  Any provision of this Pledge Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

7.7          Section Headings.  The Section headings used in this Pledge Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

7.8          Integration.  This Pledge Agreement together with the other Loan Documents represents the agreement of the Company with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by the Agent or any Lender relative to the subject matter hereof not expressly set forth herein or in the other Loan Documents.

 

7.9          Governing Law, Submission to Jurisdiction, Waiver of Jury Trial, etc.  The terms of Section 10.06 of the Credit Agreement shall apply to this Pledge Agreement.

 

[SIGNATURE PAGES FOLLOW]

 

I-10

 

IN WITNESS WHEREOF, each of the undersigned has caused this Pledge Agreement to be duly executed and delivered as of the date first above written.

 

 

	
 
    	
KKR   FINANCIAL HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
 
    	
CITIBANK, N.A., as Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

Schedule 1 to 
 Pledge Agreement

 

Pledged Stock

 

	
Pledgor / Record Owner
    	
 
    	
Issuer
    	
 
    	
Issuer’s Jurisdiction
   of Formation
    	
 
    	
Certificate
   No(s)
    	
 
    	
Number and Class
   of Shares/Interests
    	
 
    	
Percentage of Issued and
   Outstanding Shares/Interests
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

I-1Exhibit 10.01

 

THIS SUBSCRIPTION AGREEMENT IS
EXECUTED IN RELIANCE UPON (1) THE EXEMPTION PROVIDED BY SECTION 4(2) AND REGULATION D, RULE 506 FOR TRANSACTIONS NOT INVOLVING
A PUBLIC OFFERING UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR (2) THE EXEMPTION TO AN
OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO RULE 903
OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT. THIS OFFERING IS BEING MADE ONLY TO ACCREDITED INVESTORS OR TO NON-U.S.
PERSONS PURSUANT TO RULE 903 OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT. NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION
RELATES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION D OR REGULATION S UNDER THE
SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN ACCORDANCE WITH THE SECURITIES ACT. 

 

 

SUBSCRIPTION AGREEMENT

 

 

THIS SUBSCRIPTION AGREEMENT (this
“Subscription”) has been executed by Tonix Pharmaceuticals Holding Corp., a corporation organized under the laws of
the State of Nevada (the “Company”) and the purchaser set forth in the Signature Page (the “Signature Page”)
attached hereto (the “Purchaser”).

 

WHEREAS, the purchasers (“Purchasers”)
will be purchasing from the Company (the “Offering”), severally and not jointly with the other Purchasers, a minimum
of 1,000,000 units (“Minimum Offering”) and up to a maximum of 5,000,000 Units (“Maximum Offering”) at
a purchase price of $0.40 per Unit, to be issued by the Company, in one or more Closings, on each Closing Date as set forth herein,
with each Unit (the “Units”) consisting of one share (“Share”) of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), one five-year Class A warrant substantially in the form attached as
Exhibit B (the “Class A Warrant”) to purchase one share of Common Stock with an exercise price of $0.60
per share and one one-year Class B warrant substantially in the form attached as Exhibit C (the “Class B Warrant”
and together with the Class A Warrant, the “Warrants”) to purchase one share of Common Stock with an exercise price
of $0.40 per share. The Units, Shares, Warrants and Common Stock issuable upon exercise of the Warrants are collectively referred
to as the “Securities”;

 

    	 

    	 

    

 

WHEREAS, the Company shall grant
the Purchasers certain registration rights regarding the Common Stock included in the Units, as well as the shares of Common Stock
underlying the Class A Warrants pursuant to the Registration Rights Agreement substantially in the form attached as Exhibit
G (the “Registration Rights Agreement”); and

 

WHEREAS, the offer of the Units
and, if this Subscription is accepted by the Company, the sale of Units, is being made in reliance upon Section 4(2) and/or Rule
506 of Regulation D of the Securities Act or Rule 903 of Regulation S promulgated under the Securities Act; and

 

WHEREAS, the Company will allow
holders of the Old Notes (as hereinafter defined) to exchange their Old Notes for Units in this Offering (the “Exchanged
Units”). In November 2012, the Company sold convertible notes (the “Old Notes”) to 10 accredited investors in
a private placement transaction pursuant to Rule 506 of Regulation D for aggregate proceeds of $710,000. Pursuant to the terms
of the Old Notes, the Old Notes, including accrued interest, are convertible into Units at a discount of 25% of the purchase price,
or a price of $0.30 per Unit. The Exchanged Units will count towards the Minimum and Maximum Offering.

 

NOW, THEREFORE,
for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as
follows:

 

ARTICLE 1

SUBSCRIPTION

 

Subscription

 

1.1          The undersigned
Purchaser, as principal, hereby subscribes to purchase the amount of Units set forth on the Signature Page attached hereto,
at an aggregate purchase price as set forth on the Signature Page (the “Subscription Funds”).

 

Minimum
Subscription

 

1.2          A minimum of $25,000 of Units must
be purchased by the Purchaser, unless a lower amount is agreed to by the Company, in its sole discretion.

 

Method of
Payment

 

1.3          The Purchaser shall pay the Subscription
Funds by delivering good funds in United States Dollars by way of wire transfer of funds to the escrow account, established pursuant
to the escrow agreement in the form attached hereto as Exhibit F (the “Escrow Agreement”) (or for holders
of the Old Notes, by delivering the original Old Note to counsel to the Company). The wire transfer and overnight delivery instructions
for the Old Notes are as set forth in Exhibits D and E, respectively, attached hereto and made a part hereof.

 

Upon receipt of the
Subscription Funds and acceptance of this Subscription by the Company, the Company shall take up the Subscription Funds (the “Closing
Date”) and issue to the Purchaser such number of Units represented by the amount of the accepted Subscription Funds. The
Purchaser and the Company acknowledge and agree that the initial closing of the Offering shall be subject to the Minimum Offering
having been subscribed for.

 

    	 

    	 

    

 

The Purchaser acknowledges
that the subscription for Units hereunder may be rejected in whole or in part by the Company in its sole discretion and for any
reason, notwithstanding prior receipt by the Purchaser of notice of acceptance of such subscription. The Company shall have no
obligation hereunder until the Company shall execute and deliver to the Purchaser an executed copy of this Subscription. If this
Subscription is rejected in whole, or the offering of Units is terminated, all funds (or Old Notes) received from the Purchaser
will be returned without interest or offset, and this Subscription shall thereafter be of no further force or effect. If this Subscription
is rejected in part, the funds (or Old Notes) for the rejected portion of this subscription will be returned without interest or
offset, and this Subscription will continue in full force and effect to the extent this Subscription was accepted.

 

Term; Termination

 

1.4          If the Minimum
Offering is not subscribed for on or prior to December 31, 2012, all funds (and Old Notes) received from the Purchaser will be
returned without interest or offset, and this Subscription shall thereafter be of no further force or effect, which may be extended
to January 31, 2013 at the discretion of the Company (the “Offering Period”).

 

1.5          All funds received
from the Purchaser will held in a non-interest-bearing escrow account, pending the earlier of (a) one or more closings after reaching
the Minimum Offering, (b) completion of the Maximum Offering or (c) the end of the Offering Period.

 

ARTICLE
2

REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

 

Representations
and Warranties

 

2.1          The Purchaser
represents and warrants to the Company, with the intent that the Company will rely thereon in accepting this Subscription, that:

 

		(a)	Accredited or Non-U.S. Purchaser. The Purchaser is either (i) an “accredited investor”
as that term is defined in Regulation D promulgated under the Securities Act and as set forth in Exhibit A attached
hereto and made a part hereof, or (ii) not a U.S. Person as defined in Rule 902 of Regulation S promulgated under the Securities
Act and as set forth in Exhibit A attached hereto and made a part hereof;

 

		(b)	Experience. The Purchaser is sufficiently experienced in financial and business matters
to be capable of evaluating the merits and risks of its investments, and to make an informed decision relating thereto, and to
protect its own interests in connection with the purchase of the Units;

 

    	 

    	 

    

 

		(c)	Own Account. The Purchaser is purchasing the Units as principal for its own account. The
Purchaser is purchasing the Units for investment purposes only and not with an intent or view towards further sale or distribution
(as such term is used in Section 2(11) of the Securities Act) thereof, and has not pre-arranged any sale with any other purchaser
and has no plans to enter into any such agreement or arrangement;

 

		(d)	Exemption. The Purchaser understands that the offer and sale of the Units is not being registered
under the Securities Act or any state securities laws and is intended to be exempt from registration provided by either (i) in
the case of U.S. person, Rule 506 promulgated under Regulation D and/or Section 4(2) of the Securities Act or (ii) in the case
of a Non-U.S. Person, Rule 903 of Regulation S promulgated under Regulation S of the Securities Act;

 

		(e)	Importance of Representations. The Purchaser understands that the Units are being offered
and sold to it in reliance on an exemption from the registration requirements of the Securities Act, and that the Company is relying
upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Purchaser
set forth herein in order to determine the applicability of such safe harbor and the suitability of the Purchaser to acquire the
Units;

 

		(f)	No Registration. The Units have not been registered under the Securities Act or any state
securities laws and may not be transferred, sold, assigned, hypothecated or otherwise disposed of unless registered under the Securities
Act and applicable state securities laws or unless an exemption from such registration is available (including, without limitation,
under Rule 144 of the Securities Act, as such rule may be amended, or any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect (“Rule 144”)). The Purchaser represents and warrants and hereby agrees that all
offers and sales of the Units shall be made only pursuant to such registration or to such exemption from registration;

 

		(g)	Risk. The Purchaser acknowledges that the purchase of the Units involves a high degree of
risk, is aware of the risks and further acknowledges that it can bear the economic risk of the Units, including the total loss
of its investment. The Purchaser has adequate means of providing for its financial needs and foreseeable contingencies and has
no need for liquidity of its investment in the Units for an indefinite period of time;

 

		(h)	Information. The Purchaser and its purchaser representatives, if any, have received documents
requested by the Purchaser, have carefully reviewed them and understand the information contained therein;

 

		(i)	Independent Investigation. The Purchaser, in making the decision to purchase the Units subscribed
for, has relied upon independent investigations made by it and its purchaser representatives, if any, and the Purchaser and such
representatives, if any, have prior to any sale to it been given access and the opportunity to examine all material contracts and
documents relating to this Offering and an opportunity to ask questions of, and to receive answers from, the Company or any person
acting on its behalf concerning the terms and conditions of this Offering. The Purchaser and its advisors, if any, have been furnished
with access to all materials relating to the business, finances and operation of the Company and materials relating to the offer
and sale of the Units that have been requested. The Purchaser and its advisors, if any, have received complete and satisfactory
answers to any such inquiries;

 

    	 

    	 

    

 

		(j)	No Recommendation or Endorsement. The Purchaser understands that no federal, state or other
regulatory authority has passed on or made any recommendation or endorsement of the Units. Furthermore, the foregoing authorities
have not confirmed the accuracy or determined the adequacy of this Subscription. Any representation to the contrary is a criminal
offense;

 

		(k)	No Representation. In evaluating the suitability of an investment in the Company, the Purchaser
has not relied upon any representation or information (oral or written) other than as stated in this Subscription;

 

		(l)	No Tax, Legal, Etc. Advice. The Purchaser is not relying on the Company or any of its respective
employees or agents with respect to the legal, tax, economic and related considerations of an investment in the Units, and the
Purchaser has relied on the advice of, or has consulted with, only its own advisers;

 

		(m)	The Purchaser. The Purchaser (i) if a natural person, represents that the Purchaser has
reached the age of 21 and has full power and authority to execute and deliver this Subscription and all other related agreements
or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company
or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity
was not formed for the specific purpose of acquiring the Units, such entity is duly organized, validly existing and in good standing
under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and
will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority
to execute and deliver this Subscription and all other related agreements or certificates and to carry out the provisions hereof
and thereof and to purchase and hold the Units, the execution and delivery of this Subscription has been duly authorized by all
necessary action, this Subscription has been duly executed and delivered on behalf of such entity and is a legal, valid and binding
obligation of such entity; or (iii) if executing this Subscription in a representative or fiduciary capacity, represents that it
has full power and authority to execute and deliver this Subscription in such capacity and on behalf of the subscribing individual,
ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Purchaser
is executing this Subscription, and such individual, partnership, ward, trust, estate, corporation, or limited liability company
or partnership, or other entity has full right and power to perform pursuant to this Subscription and make an investment in the
Company, and represents that this Subscription constitutes a legal, valid and binding obligation of such entity. The execution
and delivery of this Subscription will not violate or be in conflict with any order, judgment, injunction, agreement or controlling
document to which the Purchaser is a party or by which it is bound;

 

    	 

    	 

    

 

 

		(n)	No Advertisement or General Solicitation. If the Purchaser is a U.S. Person, such Purchaser
acknowledges that it is not aware of, is in no way relying on, and did not become aware of the offering of the Units through or
as a result of any form of general solicitation or general advertising, including, without limitation, any article, notice, advertisement
or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or through
any seminar or meeting whose attendees have been invited by any general solicitation or general advertising; and

 

		(o)	Foreign Purchaser. If the Purchaser is not a United States person, such Purchaser hereby
represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation
to subscribe for the Units or any use of this Subscription, including: (a) the legal requirements within its jurisdiction for the
purchase of the Units; (b) any foreign exchange restrictions applicable to such purchase; (c) any governmental or other consents
that may need to be obtained; and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Units. Such Purchaser’s subscription and payment for, and its continued beneficial
ownership of the Units, will not violate any applicable securities or other laws of the Purchaser’s jurisdiction.
	 	 	 

		(p)	Short Sales and Confidentiality after the Date Hereof. The Purchaser covenants that neither
it, nor any Affiliate acting on its behalf or pursuant to any understanding with it, will execute any “short sales”
as defined in Rule 200 of Regulation SHO under the Securities Exchange Act of 1934, as amended (“Short
Sales”, which shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock)
during the period commencing at the time it first became aware of this Offering and ending at the time that the transactions contemplated
by this Subscription are first publicly announced.  The Purchaser covenants that until such time as the transactions contemplated
by this Subscription are publicly disclosed by the Company such Purchaser will maintain the confidentiality of the existence and
terms of this Offering and the information included in this Subscription.  The Purchaser acknowledges the positions of the
Securities and Exchange Commission (“Commission”) set forth in Item 65, Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporation Finance. Notwithstanding
the foregoing, Purchaser makes no representation, warranty or covenant hereby that it will not engage in Short Sales in the securities
of the Company after the time that the Offering is publicly announced.  Notwithstanding the foregoing, if Purchaser is a multi-managed
investment vehicle whereby separate portfolio managers manage separate portions of Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Units covered by this Subscription.

 

    	 

    	 

    

 

2.2Each Purchaser
who is exchanging Old Notes in this Offering represents and warrants to the Company, with the intent that the Company will rely
thereon in accepting this Subscription, that Purchaser owns and holds, beneficially and of record, the entire right, title, and
interest in and to the Old Note (including, without limitation, accrued and unpaid interest thereon) set forth on the Signature
Page attached hereto, free and clear of all rights and Encumbrances (as defined below).  Holder has full power and authority
to transfer and dispose of the Old Note (including, without limitation, accrued and unpaid interest thereon) set forth on the Signature
Page attached hereto, free and clear of any right or Encumbrance other than restrictions under the Securities Act and applicable
state securities laws.  Other than the transactions contemplated by this Subscription, there is no outstanding vote, plan,
pending proposal, or other right of any person to acquire all or any of the Old Note set forth on the Signature Page attached hereto.
“Encumbrances” shall mean any security or other property interest or right, claim, lien, pledge, option, charge, security
interest, contingent or conditional sale, or other title claim or retention agreement, interest or other right or claim of third
parties, whether perfected or not perfected, voluntarily incurred or arising by operation of law, and including any agreement (other
than this Subscription) to grant or submit to any of the foregoing in the future.

 

Survival

 

2.3          The representations and warranties
of the Purchaser contained herein will be true at the date of execution of this Subscription by the Purchaser and as of the Closing
Date in all material respects as though such representations and warranties were made as of such times and shall survive the Closing
Date and the delivery of the Units. The Purchaser agrees that it will notify and supply corrective information to the Company immediately
upon the occurrence of any change therein occurring prior to the Company’s issuance of the Units.

 

ARTICLE 3

REPRESENTATIONS AND
WARRANTIES OF THE COMPANY

 

3.1          The Company, upon
taking up and accepting this Subscription, represents and warrants in all material respects to the Purchaser, with the intent that
the Purchaser will rely thereon in making this Subscription, that:

 

		(a)	Legality. The Company has the requisite corporate power and authority to take up and accept
this Subscription and to issue, sell and deliver the Units; this Subscription and the issuance, sale and delivery of the Units
hereunder and the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action by the
Company; this Subscription and the Units have been duly and validly executed and delivered by and on behalf of the Company, and
are valid and binding agreements of the Company, enforceable in accordance with their respective terms, except as enforceability
may be limited by general equitable principles, bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or other
laws affecting creditors’ rights generally;

 

    	 

    	 

    

 

		(b)	Proper Organization. The Company and its subsidiaries (“Subsidiaries”) are corporations
duly organized, validly existing and in good standing under the laws of their respective jurisdiction of incorporation and are
duly qualified as a foreign corporation in all jurisdictions where the failure to be so qualified would have a materially adverse
effect on their business, taken as whole;

 

		(c)	No Legal Proceedings. There is no action, suit or proceeding before or by any court or any
governmental agency or body, domestic or foreign, now pending or to the knowledge of the Company, threatened, against or affecting
the Company or its Subsidiaries, or any of their properties or assets, which might result in (i) a material adverse effect on the
legality, validity or enforceability of this Subscription, the related Registration Rights Agreement, the Escrow Agreement or the
Units (collectively, the “Transaction Documents”), (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”);

 

		(d)	Non-Default. Neither the Company nor any of its Subsidiaries is in default in the performance
or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust
or other material instrument or agreement to which it is a party or by which it or its property may be bound;

 

		(e)	Non-Contravention. The acceptance of this Subscription and the consummation of the issuance
of the Units and the transactions contemplated by this Subscription do not and will not conflict with or result in a breach by
the Company of any of the terms or provisions of, or constitute a default under the Articles of Incorporation or By-laws of the
Company, or any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of its properties or assets are bound, or any existing applicable decrees, judgment
or order of any court, federal, state or provincial regulatory body, administrative agency or other domestic governmental body
having jurisdiction over the Company or any of its properties or assets;

 

		(f)	Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filing with the Commission of the registration statement required by the Registration
Rights Agreement and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable
state securities laws;

 

    	 

    	 

    

 

		(g)	Issuance of the Units. The Units are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
liens, charges, security interests, encumbrances, preemptive rights or other restrictions (collectively, “Liens”) imposed
by the Company other than restrictions on transfer provided for in the Transaction Documents. The Units, when issued in accordance
with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common Stock issuable upon exercise of the Warrants;

 

		(h)	Title to Assets. The Company and its Subsidiaries have good and marketable title to the
leasehold interest owned by it and good and marketable title in all personal property owned by it that is material to the business
of the Company and the Subsidiaries in each case free and clear of all Liens, except for Liens as do not materially affect the
value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries is held by them under
valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance;

 

		(i)	No General Solicitation. Neither the Company nor any person acting on behalf of the Company
has offered or sold any of the Units by any form of general solicitation or general advertising. The Company has offered the Units
for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities
Act and non- “U.S. person” within the meaning of Rule 902 of Regulation S promulgated under the Securities Act;

 

		(j)	Foreign Corrupt Practices. Neither the Company nor, to the knowledge of the Company, any
agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt
Practices Act of 1977, as amended;

 

    	 

    	 

    

 

		(k)	Capitalization.  The capitalization of the Company is as set forth on Schedule
3.1(k), which includes the number of shares of common stock owned beneficially, and of record, by Affiliates of the Company
as of the date hereof.  Except as contemplated by the Transaction Documents, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of
common stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to issue additional shares of common stock.  No further approval or authorization of any stockholder, the Board
of Directors or others is required for the issuance and sale of the Units.  There are no stockholders agreements, voting
agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders;

 

		(l)	Tax Status.  Except for
matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid
or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened
against the Company or any Subsidiary; and

 

		(m)	Bankruptcy. The Company has no knowledge of any facts or circumstances which lead it to
believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within
one year from the date hereof. Schedule 3.1(m) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Subscription,
“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than
trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (c) the present value of any lease payments in excess of $100,000 due under leases required
to be capitalized in accordance with generally accepted accounting principles. Neither the Company nor any Subsidiary is in default
with respect to any Indebtedness.

 

Survival

 

3.2          The representations and warranties
of the Company will be true and correct as of the Closing Date in all material respects and shall survive the Closing Date and
the delivery of the Securities.

 

    	 

    	 

    

 

ARTICLE 4

COVENANTS OF THE COMPANY

 

Covenants of the Company

 

4.1          The Company covenants
and agrees with the Purchaser that:

 

		(a)	Filings. The Company shall make all necessary filings in connection with the sale of the
Securities as required by the laws and regulations of all appropriate jurisdictions and securities exchanges, including but not
limited to “Form D”;

 

		(b)	Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or
sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to
the Purchasers; and

 

		(c)	Non-Public Information. Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it nor any other Person acting
on its behalf, will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company.

 

Survival

 

4.2          The covenants
set forth in this Article shall survive the Closing Date for the benefit of the Purchaser.

 

ARTICLE 5

ISSUANCE OF SECURITIES

 

5.1          As soon as practicable
after the Closing Date, the Company shall issue and deliver, or shall cause the issuance and delivery of, the Units in the name
or names specified by the Purchaser purchased in the Offering. Such Units shall bear a legend in substantially one of the following
forms:

 

    	 

    	 

    

 

For U.S. Persons:

 

THESE SECURITIES
HAVE BEEN ISSUED PURSUANT TO THE EXEMPTION FROM THE REGISTRATION PROVISIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED PROVIDED
BY RULE 506 OF REGULATION D UNDER SUCH ACT AND/OR SECTION 4(2) OF SUCH ACT. THESE SECURITIES CANNOT BE TRANSFERRED, OFFERED, OR
SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT IS AVAILABLE.

 

For Non-U.S.
Persons:

 

THESE SECURITIES WERE ISSUED IN
AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE
RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED
OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND
IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.

 

5.2          The Purchaser
agrees that such Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including
any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a registration
statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of
the restrictive legend from certificates representing Securities as set forth in this Article 5 is predicated upon the Company’s
reliance upon this understanding.

 

ARTICLE 6

CLOSING

 

Closing Deliverables

 

6.1          On or prior to the Closing Date,
the Company shall deliver or cause to be delivered to Purchaser the following:

 

		(a)	this Subscription, duly executed by the Company; and

 

		(b)	the Escrow Agreement, duly executed by the Company and the Escrow Agent.

 

    	 

    	 

    

 

6.2          On or prior to the Closing Date,
Purchaser shall deliver or cause to be delivered to the Company the following:

 

		(a)	this Subscription, duly executed by Purchaser;

 

		(b)	the purchase price by wire transfer to the Escrow Account (or delivery of the Old Note to counsel
to the Company);

 

		(c)	the Escrow Agreement, duly executed by the Purchaser; and

 

		(d)	the Confidential Investor Questionnaire, in the form attached hereto as Exhibit A,
duly executed by the Purchaser.

 

6.3          The obligations of the Company and
Purchaser hereunder in connection with the Closing are subject to the waiver or satisfaction of the deliverables to each party
by the other of the items specified in Sections 7.1 and 7.2.

 

ARTICLE 7

INDEMNIFICATION

 

Indemnification of the Company

 

7.1          The Purchaser agrees to indemnify
and hold harmless the Company against and in respect of any and all loss, liability, claim, damage, deficiency, and all actions,
suits, proceedings, demands, assessments, judgments, costs and expenses whatsoever (including, but not limited to, attorneys' fees
reasonably incurred in investigating, preparing, or defending against any litigation commenced or threatened or any claim whatsoever
through all appeals) arising out of or based upon any false representation or warranty or breach or failure by the Purchaser to
comply with any covenant, representation or other provision made by it herein or in any other document furnished by it in connection
with this Subscription, provided, however, that such indemnity, when taken together with any other indemnity provided to the Company
pursuant to the Registration Rights Agreement, shall in no event exceed the net proceeds received by the Company from the Purchaser
as a result of the sale of Securities to the Purchaser.

 

Indemnification of the Purchaser

 

7.2          The Company agrees to indemnify
and hold harmless the Purchaser against and in respect of any and all loss, liability, claim, damage, deficiency, and all actions,
suits, proceedings, demands, assessments, judgments, costs and expenses whatsoever (including, but not limited to, attorneys' fees
reasonably incurred in investigating, preparing, or defending against any litigation commenced or threatened or any claim whatsoever
through all appeals) arising out of or based upon any false representation or warranty or breach or failure by the Company to comply
with any covenant, representation or other provision made by it herein or in any other document furnished by it in connection with
this Subscription, provided, however, that such indemnity, shall in no event exceed the net proceeds received by the Company from
the Purchaser as a result of the sale of Securities to the Purchaser.

 

    	 

    	 

    

 

ARTICLE 8

GENERAL PROVISIONS

 

Governing Law

 

8.1          This Subscription shall be governed
by and construed under the law of the State of New York without regard to its choice of law provision. Any disputes arising out
of, in connection with, or with respect to this Subscription, the subject matter hereof, the performance or non-performance of
any obligation hereunder, or any of the transactions contemplated hereby shall be adjudicated in a court of competent civil jurisdiction
sitting in New York, New York and nowhere else. The parties hereby consent to the service of process in any such action or legal
proceeding by means of registered or certified mail, return receipt requested. The address for service of process shall be (a)
to the Company, at 509 Madison Avenue, Suite 306, Attn: Seth Lederman, and (b) to the Purchaser, at the address set forth on the
Signature Page hereto, or, in each case, to such other address as each party shall subsequently furnish in writing to the other.
In any action, suit or proceeding brought by any party against any other party, the parties each knowingly and intentionally,
to the greatest extent permitted by applicable law, hereby absolutely, unconditionally, irrevocably and expressly waive forever
trial by jury.

 

Successors and Assigns

 

8.2          This Subscription
shall inure to the benefit of and be binding on the respective successors and assigns of the parties hereto.

 

Execution by Counterparts and Facsimile

 

8.3          This Subscription
may be executed in counterparts and by facsimile, each of which when executed by any party will be deemed to be an original and
all of which counterparts will together constitute one and the same Subscription.

 

Independent Legal Advice

 

8.4          The parties hereto
acknowledge that they have each received independent legal advice with respect to the terms of this Subscription and the transactions
contemplated herein or have knowingly and willingly elected not to do so.

 

Severability

 

8.5          If any term, provision,
covenant or restriction of this Subscription is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find
and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction.

 

    	 

    	 

    

 

Omnibus Signature
Page

 

8.6          This Subscription Agreement is intended
to be read and construed in conjunction with the other documents pertaining to the issuance by the Company of the Units to Purchasers.
Accordingly, it is hereby agreed that the execution by the Purchaser and the Company of this Subscription Agreement, in the place
set forth herein, shall constitute an agreement to be bound by the terms and conditions of both this Subscription Agreement and
the Registration Rights Agreement with the same effect as if both this Subscription Agreement and the Registration Rights Agreement
were separately signed.

 

[Remainder of page intentionally
left blank]

 

    	 

    	 

    

 

TONIX PHARMACEUTICALS HOLDING CORP.

OMNIBUS SIGNATURE PAGE TO

SUBSCRIPTION AGREEMENT

AND

REGISTRATION RIGHTS AGREEMENT

 

Purchaser hereby elects to subscribe
under the Subscription Agreement for a total of ___________ Units, at a cost of $0.40 per Unit. 

 

AND/OR

 

Purchaser hereby elects to subscribe
under the Subscription Agreement by the exchange of Old Notes on a dollar-for-dollar basis of, in the principal face amount of
Old Notes of $_____________, evidenced by Note Number ______, for a total of ___________ Units, at a cost of $0.30 per Unit. 

 

Purchaser’s signature below constitutes
execution of both the Subscription Agreement and the Registration Rights Agreement. 

 

Date:  ___________, 201__.

 

If the purchaser is an INDIVIDUAL, and
if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY:

 

	Print Purchaser Name	 	Print Co-Purchaser Name (if applicable)
	 	 	 
	Signature of Purchaser	 	Signature of Co-Purchaser (if applicable)

 

	Address	 

 

If the purchaser is a PARTNERSHIP, CORPORATION,
LIMITED LIABILITY COMPANY or TRUST:

 

	Name of Partnership,	 	Country of Organization
	Corporation, Limited	 	 
	Liability Company or Trust	 	 

 

	By:	 	 	By:	 
	 	Name:	 	 	Name:
	 	Title:	 	 	Title:

 

	Address	 

 

    	 

    	 

    

 

TONIX PHARMACEUTICALS HOLDING CORP.

OMNIBUS SIGNATURE PAGE TO

SUBSCRIPTION AGREEMENT

AND

REGISTRATION RIGHTS AGREEMENT

 

The Company’s signature below
constitutes execution of both the Subscription Agreement and the Registration Rights Agreement. 

 

ACCEPTED AND AGREED TO

this ___ day of ___________, 201__.

 

TONIX PHARMACEUTICALS HOLDING CORP.

 

	By:	 	 
	 	Name:	 
	 	Title:

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