Document:

Exhibit 10.1

 

 

Published CUSIP Numbers:

Deal:

Domestic Commitment:

Canadian Commitment:

 

FOURTH AMENDED AND RESTATED
 CREDIT AGREEMENT

 

Dated as of May 17, 2012

 

among

 

CORINTHIAN COLLEGES, INC.,

a Delaware corporation,
 as the Domestic Borrower,

 

EVEREST COLLEGES CANADA, INC.,

a Canadian corporation,
 as the Canadian Borrower,

 

BANK OF AMERICA, N.A.,

as Domestic Administrative Agent, Domestic Swing Line Lender
 and Domestic L/C Issuer,

 

BANK OF AMERICA, N.A., acting through its Canada Branch,

as Canadian Administrative Agent, Canadian Swing Line Lender
 and Canadian L/C Issuer,

 

U.S. BANK NATIONAL ASSOCIATION,
 as Syndication Agent,

 

and

 

UNION BANK, N.A.,

 

as Documentation Agent,

 

and

 

The Other Lenders Party Hereto

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

and
  U.S. BANK NATIONAL ASSOCIATION,
 as
 Joint Lead Arrangers and Joint Book Managers

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I
    	
 
    
	
DEFINITIONS AND ACCOUNTING   TERMS
    	
 
    
	
 
    	
 
    	
 
    
	
1.01
    	
Defined   Terms
    	
1
    
	
 
    	
 
    	
 
    
	
1.02
    	
Other   Interpretive Provisions
    	
32
    
	
 
    	
 
    	
 
    
	
1.03
    	
Accounting   Terms
    	
33
    
	
 
    	
 
    	
 
    
	
1.04
    	
Rounding
    	
33
    
	
 
    	
 
    	
 
    
	
1.05
    	
References   to Agreements and Laws and Environmental Laws
    	
34
    
	
 
    	
 
    	
 
    
	
1.06
    	
Times   of Day
    	
34
    
	
 
    	
 
    	
 
    
	
1.07
    	
Letter   of Credit Amounts
    	
34
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
 
    
	
THE COMMITMENTS AND CREDIT   EXTENSIONS
    	
 
    
	
 
    	
 
    	
 
    
	
2.01
    	
Committed   Loans
    	
34
    
	
 
    	
 
    	
 
    
	
2.02
    	
Borrowings,   Conversions and Continuations of Committed Loans
    	
35
    
	
 
    	
 
    	
 
    
	
2.03
    	
Acceptances
    	
37
    
	
 
    	
 
    	
 
    
	
2.04
    	
Letters   of Credit
    	
42
    
	
 
    	
 
    	
 
    
	
2.05
    	
Swing   Line Loans
    	
51
    
	
 
    	
 
    	
 
    
	
2.06
    	
Prepayments
    	
57
    
	
 
    	
 
    	
 
    
	
2.07
    	
Reduction   or Termination of Commitments
    	
58
    
	
 
    	
 
    	
 
    
	
2.08
    	
Repayment   of Loans
    	
59
    
	
 
    	
 
    	
 
    
	
2.09
    	
Interest
    	
59
    
	
 
    	
 
    	
 
    
	
2.10
    	
Fees
    	
60
    
	
 
    	
 
    	
 
    
	
2.11
    	
Computation   of Interest and Fees; Retroactive Adjustments of Applicable Rate
    	
60
    
	
 
    	
 
    	
 
    
	
2.12
    	
Evidence   of Debt
    	
61
    
	
 
    	
 
    	
 
    
	
2.13
    	
Payments   Generally
    	
62
    
	
 
    	
 
    	
 
    
	
2.14
    	
Sharing   of Payments
    	
64
    
	
 
    	
 
    	
 
    
	
2.15
    	
Increase   in Aggregate Domestic Commitments
    	
66
    
	
 
    	
 
    	
 
    
	
2.16
    	
Cash   Collateral for an L/C Issuer or a Swing Line Lender
    	
67
    
	
 
    	
 
    	
 
    
	
2.17
    	
Defaulting   Lenders
    	
68
    
	
 
    	
 
    	
 
    
	
2.18
    	
Defaulting   Lender Cure
    	
70
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE III
    	
 
    
	
TAXES, YIELD PROTECTION   AND ILLEGALITY
    	
 
    
	
 
    	
 
    	
 
    
	
3.01
    	
Taxes
    	
70
    
	
 
    	
 
    	
 
    
	
3.02
    	
Illegality
    	
72
    
	
 
    	
 
    	
 
    
	
3.03
    	
Inability   to Determine Rates
    	
72
    
	
 
    	
 
    	
 
    
	
3.04
    	
Increased   Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans
    	
73
    
	
 
    	
 
    	
 
    
	
3.05
    	
Funding   Losses
    	
74
    
	
 
    	
 
    	
 
    
	
3.06
    	
Matters   Applicable to all Requests for Compensation
    	
74
    
	
 
    	
 
    	
 
    
	
3.07
    	
Survival
    	
75
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
 
    
	
CONDITIONS PRECEDENT TO   CREDIT EXTENSIONS
    	
 
    
	
 
    	
 
    	
 
    
	
4.01
    	
Conditions   of Initial Credit Extension
    	
75
    
	
 
    	
 
    	
 
    
	
4.02
    	
Conditions   to all Credit Extensions
    	
78
    
	
 
    	
 
    	
 
    
	
4.03
    	
Conditions   to Acceptances
    	
79
    
	
 
    	
 
    	
 
    
	
4.04
    	
Conditions   Subsequent to the Closing Date
    	
79
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
 
    
	
REPRESENTATIONS AND   WARRANTIES
    	
 
    
	
 
    	
 
    	
 
    
	
5.01
    	
Existence,   Qualification and Power; Compliance with Laws
    	
80
    
	
 
    	
 
    	
 
    
	
5.02
    	
Authorization;   No Contravention
    	
81
    
	
 
    	
 
    	
 
    
	
5.03
    	
Governmental   Authorization; Other Consents
    	
81
    
	
 
    	
 
    	
 
    
	
5.04
    	
Binding   Effect
    	
81
    
	
 
    	
 
    	
 
    
	
5.05
    	
Financial   Statements; No Material Adverse Effect
    	
81
    
	
 
    	
 
    	
 
    
	
5.06
    	
Litigation
    	
82
    
	
 
    	
 
    	
 
    
	
5.07
    	
No   Default
    	
82
    
	
 
    	
 
    	
 
    
	
5.08
    	
Ownership   of Property; Liens
    	
82
    
	
 
    	
 
    	
 
    
	
5.09
    	
Environmental   Compliance
    	
82
    
	
 
    	
 
    	
 
    
	
5.10
    	
Insurance
    	
82
    
	
 
    	
 
    	
 
    
	
5.11
    	
Taxes
    	
83
    
	
 
    	
 
    	
 
    
	
5.12
    	
ERISA   and Canadian Pension Plan Compliance
    	
83
    
	
 
    	
 
    	
 
    
	
5.13
    	
Subsidiaries
    	
84
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
5.14
    	
Margin   Regulations; Investment Company Act
    	
85
    
	
 
    	
 
    	
 
    
	
5.15
    	
Disclosure
    	
85
    
	
 
    	
 
    	
 
    
	
5.16
    	
Intellectual   Property; Licenses, Etc.
    	
85
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
 
    
	
AFFIRMATIVE COVENANTS
    	
 
    
	
 
    	
 
    	
 
    
	
6.01
    	
Financial   Statements
    	
86
    
	
 
    	
 
    	
 
    
	
6.02
    	
Certificates;   Other Information
    	
87
    
	
 
    	
 
    	
 
    
	
6.03
    	
Notices
    	
89
    
	
 
    	
 
    	
 
    
	
6.04
    	
Payment   of Obligations
    	
90
    
	
 
    	
 
    	
 
    
	
6.05
    	
Preservation   of Existence, Etc.
    	
90
    
	
 
    	
 
    	
 
    
	
6.06
    	
Maintenance   of Properties
    	
90
    
	
 
    	
 
    	
 
    
	
6.07
    	
Maintenance   of Insurance
    	
90
    
	
 
    	
 
    	
 
    
	
6.08
    	
Compliance   with Laws and Environmental Laws
    	
90
    
	
 
    	
 
    	
 
    
	
6.09
    	
Books   and Records
    	
91
    
	
 
    	
 
    	
 
    
	
6.10
    	
Inspection   Rights
    	
91
    
	
 
    	
 
    	
 
    
	
6.11
    	
Use   of Proceeds
    	
91
    
	
 
    	
 
    	
 
    
	
6.12
    	
Additional   Guarantors
    	
91
    
	
 
    	
 
    	
 
    
	
6.13
    	
Acquisitions
    	
91
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
 
    
	
NEGATIVE COVENANTS
    	
 
    
	
 
    	
 
    	
 
    
	
7.01
    	
Liens
    	
92
    
	
 
    	
 
    	
 
    
	
7.02
    	
Investments
    	
92
    
	
 
    	
 
    	
 
    
	
7.03
    	
Indebtedness
    	
93
    
	
 
    	
 
    	
 
    
	
7.04
    	
Fundamental   Changes
    	
95
    
	
 
    	
 
    	
 
    
	
7.05
    	
Dispositions
    	
96
    
	
 
    	
 
    	
 
    
	
7.06
    	
Restricted   Payments
    	
97
    
	
 
    	
 
    	
 
    
	
7.07
    	
Change   in Nature of Business
    	
97
    
	
 
    	
 
    	
 
    
	
7.08
    	
Transactions   with Affiliates
    	
97
    
	
 
    	
 
    	
 
    
	
7.09
    	
Burdensome   Agreements
    	
97
    
	
 
    	
 
    	
 
    
	
7.10
    	
Use   of Proceeds
    	
98
    
	
 
    	
 
    	
 
    
	
7.11
    	
Financial   Covenants
    	
98
    

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
7.12
    	
Restrictive   Agreements, etc.
    	
99
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    	
 
    
	
EVENTS OF DEFAULT AND   REMEDIES
    	
 
    
	
 
    	
 
    	
 
    
	
8.01
    	
Events   of Default
    	
99
    
	
 
    	
 
    	
 
    
	
8.02
    	
Remedies   Upon Event of Default
    	
101
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    	
 
    
	
ADMINISTRATIVE AGENTS
    	
 
    
	
 
    	
 
    	
 
    
	
9.01
    	
Appointment   and Authority
    	
102
    
	
 
    	
 
    	
 
    
	
9.02
    	
Rights   as a Lender
    	
102
    
	
 
    	
 
    	
 
    
	
9.03
    	
Exculpatory   Provisions
    	
102
    
	
 
    	
 
    	
 
    
	
9.04
    	
Reliance   by Administrative Agents
    	
103
    
	
 
    	
 
    	
 
    
	
9.05
    	
Delegation   of Duties
    	
104
    
	
 
    	
 
    	
 
    
	
9.06
    	
Resignation   of an Administrative Agent
    	
104
    
	
 
    	
 
    	
 
    
	
9.07
    	
Non-Reliance   on Administrative Agents and Other Lenders
    	
105
    
	
 
    	
 
    	
 
    
	
9.08
    	
No   Other Duties, Etc.
    	
105
    
	
 
    	
 
    	
 
    
	
9.09
    	
Administrative   Agents May File Proofs of Claim
    	
105
    
	
 
    	
 
    	
 
    
	
9.10
    	
Collateral   and Guaranty Matters
    	
106
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    	
 
    
	
MISCELLANEOUS
    	
 
    
	
 
    	
 
    	
 
    
	
10.01
    	
Amendments,   Etc.
    	
107
    
	
 
    	
 
    	
 
    
	
10.02
    	
Notices;   Effectiveness; Electronic Communication
    	
108
    
	
 
    	
 
    	
 
    
	
10.03
    	
No   Waiver; Cumulative Remedies
    	
110
    
	
 
    	
 
    	
 
    
	
10.04
    	
Expenses;   Indemnity; Damage Waiver
    	
110
    
	
 
    	
 
    	
 
    
	
10.05
    	
Payments   Set Aside
    	
112
    
	
 
    	
 
    	
 
    
	
10.06
    	
Successors   and Assigns
    	
112
    
	
 
    	
 
    	
 
    
	
10.07
    	
Confidentiality
    	
117
    
	
 
    	
 
    	
 
    
	
10.08
    	
Set-off
    	
117
    
	
 
    	
 
    	
 
    
	
10.09
    	
Interest   Rate Limitation
    	
118
    
	
 
    	
 
    	
 
    
	
10.10
    	
Counterparts
    	
118
    
	
 
    	
 
    	
 
    
	
10.11
    	
Integration
    	
118
    
	
 
    	
 
    	
 
    
	
10.12
    	
Survival   of Representations and Warranties
    	
118
    

 

iv

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
10.13
    	
Severability
    	
118
    
	
 
    	
 
    	
 
    
	
10.14
    	
Tax   Forms
    	
119
    
	
 
    	
 
    	
 
    
	
10.15
    	
Replacement   of Lenders
    	
121
    
	
 
    	
 
    	
 
    
	
10.16
    	
Governing   Law
    	
121
    
	
 
    	
 
    	
 
    
	
10.17
    	
Waiver   of Right to Trial by Jury; California Judicial Reference
    	
122
    
	
 
    	
 
    	
 
    
	
10.18
    	
USA   PATRIOT Act Notice
    	
122
    

 

v

 

	
SCHEDULES
    	
 
    
	
 
    	
 
    	
 
    
	
2.01
    	
Commitments   and Pro Rata Shares
    	
 
    
	
 
    	
 
    	
 
    
	
2.04
    	
Existing   Letters of Credit
    	
 
    
	
 
    	
 
    	
 
    
	
5.09
    	
Environmental   Matters
    	
 
    
	
 
    	
 
    	
 
    
	
5.13
    	
Subsidiaries   and Other Equity Investments
    	
 
    
	
 
    	
 
    	
 
    
	
7.01
    	
Existing   Liens
    	
 
    
	
 
    	
 
    	
 
    
	
7.03
    	
Existing   Indebtedness
    	
 
    
	
 
    	
 
    	
 
    
	
7.05
    	
Sale   of Campuses
    	
 
    
	
 
    	
 
    	
 
    
	
10.02
    	
Eurodollar   and Domestic Lending Offices, Addresses for Notices
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    
	
 
    	
 
    	
 
    
	
Form of
    	
 
    
	
 
    	
 
    	
 
    
	
A
    	
Committed   Loan Notice
    	
 
    
	
 
    	
 
    	
 
    
	
B
    	
Swing   Line Loan Notice
    	
 
    
	
 
    	
 
    	
 
    
	
C
    	
Note
    	
 
    
	
 
    	
 
    	
 
    
	
D
    	
Compliance   Certificate
    	
 
    
	
 
    	
 
    	
 
    
	
E
    	
Assignment   and Assumption
    	
 
    
	
 
    	
 
    	
 
    
	
F
    	
Drawing   Notice
    	
 
    
	
 
    	
 
    	
 
    
	
G
    	
Form of   Legal Opinion
    	
 
    

 

vi

 

 

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of May 17, 2012, among Corinthian Colleges, Inc., a Delaware corporation (the “Domestic Borrower”), Everest Colleges Canada, Inc., a Canadian corporation and wholly-owned subsidiary of the Domestic Borrower (the “Canadian Borrower” and together with the Domestic Borrower, collectively, the “Borrowers” and individually, a “Borrower”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), U.S. Bank National Association, as Syndication Agent, and Union Bank, N.A., as Documentation Agent, Bank of America, N.A., as Domestic Administrative Agent, Domestic Swing Line Lender and Domestic L/C Issuer, and Bank of America, N.A., acting through its Canada Branch, as Canadian Administrative Agent, Canadian Swing Line Lender and Canadian L/C Issuer.

 

The Borrowers, certain of the Lenders, Documentation Agent, Syndication Agent and Administrative Agents are parties to that certain Third Amended and Restated Credit Agreement dated as of September 30, 2009, as amended prior to the date hereof (as so amended, the “Existing Credit Agreement”).

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree that the Existing Credit Agreement is hereby amended and restated in its entirety 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:

 

“Acceptance” has the meaning assigned to that term in Section 2.03(a).

 

“Acceptance Usage” means, as at any date, the sum (without duplication) of the aggregate Face Amount of all Acceptances accepted by Canadian Lenders pursuant to Section 2.03 which have not been repaid by the Canadian Borrower, whether or not due and whether or not held by any Lender.  For purposes of this definition, all Acceptances shall be valued in Dollar Equivalents as of any date of determination.

 

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any line or segment of business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity (or securities convertible into or exchangeable for such capital stock, partnership interests, membership interests or equity) of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger, amalgamation or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that (i) a Borrower or its Subsidiary is the surviving entity or (ii) after giving effect to such merger, amalgamation or consolidation, such other Person has become a Subsidiary of a Borrower; provided, further, that in no event shall the formation or establishment of a Subsidiary or the capitalization of or

 

1

 

transfer to such Subsidiary of any existing assets or business of a Borrower or any Subsidiary constitute an Acquisition.

 

“Act” has the meaning assigned to that term in Section 10.18.

 

“Administrative Agents” means Domestic Administrative Agent and Canadian Administrative Agent.

 

“Administrative Agent’s Office” means, with respect to any Administrative Agent, such Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as such Administrative Agent may from time to time notify the Borrowers 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 specified.  “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.  Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.

 

“Agent Parties” has the meaning assigned to that term in Section 10.02(c).

 

“Aggregate Canadian Commitments” means the Commitments of all the Canadian Lenders with respect to the Canadian Loans, the Canadian Letters of Credit and the Acceptances, which shall not exceed $10,000,000 in the aggregate.

 

“Aggregate Domestic Commitments” means the Commitments of all the Domestic Lenders with respect to the Domestic Loans and the Domestic Letters of Credit, which shall not exceed $130,000,000 in the aggregate, subject to Section 2.15.

 

“Aggregate Pro Rata Share” means at any time, with respect to each Lender, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is such Lender’s aggregate Commitments and the denominator of which is the sum of the Aggregate Domestic Commitments and the Aggregate Canadian Commitments, in each case immediately prior to any termination of the Commitments.

 

“Agreement” means this Credit Agreement.

 

“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time, subject to adjustment as provided in Section 2.17.  If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C

 

2

 

Credit Extensions have 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, from time to time, the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agents pursuant to Section 6.02(b):

 

Applicable Rate

 

	
Pricing
   Level
    	
 
    	
Consolidated
   Leverage Ratio
    	
 
    	
Commitment
   Fee
    	
 
    	
Acceptances
     Eurodollar Rate + 
   Letters of Credit
    	
 
    	
Base Rate +
    	
 
    
	
1
    	
 
    	
>1.25:1
    	
 
    	
0.40%
    	
 
    	
3.00%
    	
 
    	
2.00%
    	
 
    
	
2
    	
 
    	
>0.75:1 but <1.25:1
    	
 
    	
0.35%
    	
 
    	
2.75%
    	
 
    	
1.75%
    	
 
    
	
3
    	
 
    	
<0.75:1
    	
 
    	
0.30%
    	
 
    	
2.50%
    	
 
    	
1.50%
    	
 
    

 

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day of the month immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if no Compliance Certificate is delivered when due in accordance with such Section, then upon the request of the Required Lenders, Pricing Level 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered until the first Business Day after the delivery of a Compliance Certificate demonstrating that a different Pricing Level is required.  The Applicable Rate in effect from the Closing Date through the date of delivery of the Compliance Certificate for the fiscal year ended on June 30, 2012 shall be based on Pricing Level 2.

 

“Approved Debt Issuance” means an issuance after the Closing Date by a Borrower of Indebtedness not otherwise permitted under Section 7.03 on terms reasonably acceptable to the Required Lenders.

 

“Approved Fund” has the meaning specified in Section 10.06(h).

 

“Arrangers” means MLPFS and U.S. Bank, in their capacity as joint lead arrangers and joint book managers.

 

“ASFG Agreements” means, collectively, the Tuition Loan Program Agreement, dated as of June 29, 2011, by and between the Domestic Borrower and ASFG, LLC, and the Backup Loan Purchase Agreement, dated as of June 29, 2011, by and between the Domestic Borrower and ASFG, Inc., as amended, supplemented or otherwise modified prior to the date hereof.

 

“Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit E.

 

3

 

“Attorney Costs” means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel and the reasonable allocated cost of internal legal services and all reasonable expenses and disbursements of internal counsel.

 

“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 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 Domestic Borrower and its Subsidiaries for the fiscal year ended June 30, 2011, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Domestic Borrower and its Subsidiaries, including the notes thereto.

 

“Auto-Renewal Letter of Credit” has the meaning specified in Section 2.04(b)(iii).

 

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

 

“Average Effective Discount Rate” means the lesser of (a) the applicable CDOR Rate plus seven and one-half one hundredths of one percent (0.075%) per annum and (b)(i) in respect of any Acceptances to be purchased by a Schedule I Lender pursuant hereto, the arithmetic average of the discount rates (calculated on an annual basis and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by each Schedule I Reference Bank at or about 10:00 a.m. (Toronto time) on the relevant Drawing Date as the discount rate at which such Schedule I Reference Bank would purchase its own bankers’ acceptances having an aggregate Face Amount equal to and with a term to maturity the same as the Acceptances to be acquired by such Schedule I Reference Bank on such Drawing Date or (ii) in respect of any Acceptances to be purchased by any Canadian Lender other than a Schedule I Lender pursuant hereto, the arithmetic average of the discount rates (calculated on an annual basis and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by each Other Reference Lender at or about 10:00 a.m. (Toronto time) on the relevant Drawing Date as the discount rate at which such Other Reference Lender would purchase its own bankers’ acceptances having an aggregate Face Amount equal to and with a term to maturity the same as the Acceptances to be acquired by such Other Reference Lender on such Drawing Date.  If any Schedule I Reference Bank or Other Reference Lender fails to provide its quotation to the Canadian Administrative Agent, the Average Effective Discount Rate shall be determined on the basis of the quotation by the other Schedule I Reference Bank(s) or Other Reference Lender(s), as applicable.

 

“BA Equivalent Loan” has the meaning assigned to that term in Section 2.03(a).

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Bank of America Canada” means Bank of America, N.A., acting through its Canada Branch, and its successors.

 

4

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) in the case of Domestic Loans, the Federal Funds Rate plus 1/2 of 1%, and in the case of Canadian Loans, the average rate for one month Canadian Dollar bankers’ acceptances that appears on the Reuters Screen CDOR Page at 10:00 a.m. (Toronto time) on that day, plus 0.75% per annum, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America (in the case of Domestic Loans) as its “prime rate” for loans in Dollars or Bank of America Canada (in the case of Canadian Loans) as its “prime rate” for loans in Canadian Dollars and (c) the Eurodollar Rate plus 1.00%.  The “prime rate” is a rate set by Bank of America or Bank of America Canada (as applicable) based upon various factors including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America or Bank of America Canada (as applicable) shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

 

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

 

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

 

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

 

“Borrower Account” has the meaning specified in Section 2.13(h).

 

“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.

 

“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 of the Domestic Administrative Agent is located and, if such day relates to any Canadian Loan or Canadian Letter of Credit, means any such day other than a day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York City or the province where the Administrative Agent’s Office of the Canadian Administrative Agent is located, and, in either case, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Canadian Administrative Agent” means Bank of America Canada in its capacity as Canadian administrative agent under any of the Loan Documents, or any Canadian Lender which is a successor Canadian administrative agent hereunder.

 

“Canadian Borrower” means Everest Colleges Canada, Inc.

 

“Canadian Collateral” means all of the capital stock of each direct Material Subsidiary of the Canadian Borrower and each Canadian Guarantor and all personal and intangible property of the Canadian Borrower and each Canadian Guarantor, other than Excluded Property.

 

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“Canadian Dollar” and “Cdn.$” mean lawful money of Canada.

 

“Canadian Guarantors” means collectively, (i) the Domestic Borrower, each Domestic Subsidiary thereof that is a Material Subsidiary and any other Domestic Subsidiary that directly owns a Material Subsidiary; (ii) each Canadian Subsidiary (other than the Canadian Borrower) of a Borrower that is a Material Subsidiary and any other Canadian Subsidiary that directly owns a Material Subsidiary, whether now existing or hereafter existing, subject (in the case of a new Material Subsidiary) to the time delays set forth in the first parenthetical of Section 6.12; and (iii) any other Canadian Subsidiary and Domestic Subsidiary that is a “Guarantor” under the Third Amended and Restated Guaranty (Canadian Borrower Obligations) from time to time; provided that, notwithstanding anything in this Agreement or any other Loan Document to the contrary, no Canadian Subsidiary shall be required to provide any guarantee, or grant any lien or other security interest, in support of any Loan Party’s obligations with respect to any Domestic Loan or Domestic Letter of Credit.

 

“Canadian L/C Issuer” means Bank of America Canada in its capacity as issuer of Canadian Letters of Credit hereunder, or if Bank of America Canada shall have resigned as Canadian Administrative Agent, any other Canadian Lender and any successor issuer of Canadian Letters of Credit hereunder.

 

“Canadian Lender” means any Lender identified as a Canadian Lender on Schedule 2.01 as amended or modified from time to time in accordance with this Agreement.

 

“Canadian Letter of Credit” means any Letter of Credit issued by the Canadian L/C Issuer for the account of the Canadian Borrower.

 

“Canadian Loan” means any Loan extended by a Canadian Lender to the Canadian Borrower.

 

“Canadian Pension Plan” means (i) a “registered pension plan,” as defined under the Income Tax Act (Canada) which is subject to applicable pension benefits standards legislation in any jurisdiction of Canada or (ii) a pension plan which is not registered under the Income Tax Act (Canada) that is subject to the funding requirements under applicable pension benefits standards legislation of a Canadian jurisdiction and is applicable to employees resident in Canada of a Borrower or a Subsidiary.

 

“Canadian Pledge and Security Agreement” has the meaning specified in Section 4.01(a)(iv).

 

“Canadian Subsidiary” means any Subsidiary that is organized under the laws of Canada or any political subdivision of Canada.

 

“Canadian Swing Line” means the revolving credit facility made available by the Canadian Swing Line Lender pursuant to Section 2.05(a)(ii).

 

“Canadian Swing Line Borrowing” means a borrowing of a Canadian Swing Line Loan pursuant to Section 2.05(b)(ii).

 

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“Canadian Swing Line Lender” means Bank of America Canada in its capacity as provider of Canadian Swing Line Loans, or any Canadian Lender which is a successor swing line lender hereunder.

 

“Canadian Swing Line Loan” has the meaning specified in Section 2.05(a)(ii).

 

“Canadian Swing Line Loan Notice” means a notice of a Canadian Swing Line Borrowing pursuant to Section 2.05(b)(ii), which, if in writing, shall be substantially in the form of Exhibit B.

 

“Canadian Swing Line Sublimit” means an amount equal to Five Million Dollars ($5,000,000).  The Canadian Swing Line Sublimit is part of, and not in addition to, the Aggregate Canadian Commitments.

 

“Canadian Welfare Plan” means any medical, health, hospitalization, insurance or other employee benefit or welfare plan, agreement or arrangement applicable to employees resident in Canada of a Borrower or a Subsidiary.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the applicable Administrative Agent, for the benefit of the applicable L/C Issuer and the applicable Lenders, as collateral for the L/C Obligations and/or the Obligations respecting the Acceptances, cash or deposit account balances pursuant to documentation in form and substance satisfactory to such Administrative Agent and L/C Issuer (which documents are hereby consented to by such Lenders).  Derivatives of such term have corresponding meanings.  The applicable Borrower hereby grants to such Administrative Agent, for the benefit of such L/C Issuer and Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America (in the case of Domestic Letters of Credit) or Bank of America Canada (in the case of Canadian Letters of Credit and Acceptances).

 

“CDOR Rate” means, on any day, (a)  for Acceptances which have a term to maturity of 1, 2, 3 or 6 months, the annual rate of interest determined by the Canadian Administrative Agent which is equal to the average of the yield rates per annum applicable to Cdn.$ bankers’ acceptances with a term to maturity the same as the Acceptances proposed to be issued by the Canadian Borrower, displayed and identified as such on the Reuters Screen Page CDOR at approximately 10:00 a.m. (Toronto time) on such day, or if such day is not a Business Day, then on the immediately preceding Business Day; and (b) for Acceptances which do not have a term to maturity of 1, 2, 3 or 6 months, the discount rate calculated by the Canadian Administrative Agent by a linear interpolation between the rates determined in (a) above for the closest maturity dates ending before and after the maturity date of the Acceptances proposed to be issued by the Canadian Borrower; provided, however if such rates do not appear on the Reuters Screen Page CDOR, then the “CDOR Rate” shall be the arithmetic average of the discount rates (calculated on an annual basis and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by each Schedule I Reference Bank at or about 10:00 a.m. (Toronto time) as the discount rate at which such Schedule I Reference Bank would purchase, on such day, its own bankers’ acceptances having a Face Amount equal to and with a term to maturity the same as the Acceptances proposed to be issued by the Canadian Borrower.

 

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“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) 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, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means, with respect to any Person, an event or series of events by which:

 

(a)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or

 

(b)           during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors).

 

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of Section 4.01(b), waived by the Person entitled to receive the applicable payment).

 

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

 

“Collateral” means the Domestic Collateral and the Canadian Collateral.

 

“Commitment” means, as to each Domestic Lender with respect to Domestic Loans and Domestic Letters of Credit, and as to each Canadian Lender with respect to Canadian Loans, Canadian Letters of Credit and Acceptances, its obligation to (a) make Committed Loans to a Borrower pursuant to Section 2.01, (b) purchase participations in L/C Obligations, (c) purchase participations in Swing Line Loans, and (d) in the case of the Canadian Lenders, purchase and discount Acceptances, in an aggregate principal amount at any one time outstanding not to exceed the amount(s) set forth opposite such Lender’s name on Schedule 2.01, as such amount(s) may be adjusted from time to time in accordance with this Agreement.

 

“Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same Type and, in the case of Eurodollar Rate Committed Loans, having the same Interest Period.

 

“Committed Canadian Loan” has the meaning specified in Section 2.01(b).

 

“Committed Domestic Loan” has the meaning specified in Section 2.01(a).

 

“Committed Loan” means a Committed Domestic Loan or a Committed Canadian Loan.

 

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

 

“Compensation Period” has the meaning specified in Section 2.13(d)(ii).

 

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

 

“Consolidated Adjusted EBITDA” means, for any period, an amount equal to Consolidated EBITDA for any Person and its Subsidiaries, as the same has been adjusted to give effect to factually supportable and identifiable cost savings and expenses which have been approved by the Required Lenders and, in addition and without duplication, such other cost savings and expenses which would otherwise be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Exchange Act of 1934, as amended, as if such cost savings or expenses were realized on the first day of the applicable period (collectively, the “S-X Adjustments”), it being understood that any S-X Adjustments are not subject to the approval of Required Lenders.

 

“Consolidated EBITDA” means, for any period, for any Person and its Subsidiaries on a consolidated basis, an amount equal to the sum of (a) Consolidated Net Income, (b) Consolidated Interest Charges deducted in determining such Consolidated Net Income, (c) the amount of taxes, based on or measured by income used or included in the determination of such Consolidated Net Income, (d) the amount of depreciation and amortization expense deducted in determining such Consolidated Net Income, including amortization of deferred debt financing

 

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fees and expenses, (e) all non-cash charges and extraordinary charges deducted in determining such Consolidated Net Income, and (f)  all charges, costs and expenses incurred in connection with any school closures and dispositions of schools and severance charges, costs and expenses, to the extent classified as “impairment, facility closing and severance charges” on the Domestic Borrower’s financial statements minus all nonrecurring gains and extraordinary gains included in such Consolidated Net Income.  For the avoidance of doubt, Student Note Program Charges, including related amortization, shall not constitute an add-back for Consolidated EBITDA calculation purposes; provided, however, that amortization of up to $12,000,000 of Student Note Program Charges shall be allowed to the extent that such charges have been paid in cash prior to the Closing Date.

 

“Consolidated Fixed Charges” means, for any period, for the Domestic Borrower and its Subsidiaries on a consolidated basis, the sum of, without duplication, (a) all cash interest expense (excluding (i) fees and expenses payable in connection with the closing of the Loan Documents and (ii) any Student Note Program Charges), (b) all rental expense, including all real estate rental expense (determined in accordance with GAAP), (c) the current portion of long-term debt (excluding current outstanding debt in connection with the Loans) and (d) in any single fiscal quarter, on a trailing twelve-month basis, the absolute value of the aggregate amount, if any, by which the aggregate principal amount of purchases of student loans by the Domestic Borrower under the ASFG Agreements (and any other Student Note Program) during such period exceeds the aggregate amount of principal payments by ASFG (and the counterparty or counterparties to any other Student Note Program) to the Domestic Borrower or any Subsidiary thereunder during such period).

 

“Consolidated Fixed Charges Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Pro Forma Adjusted EBITDAR minus deemed maintenance capital expenditures in an amount equal to 2% of revenue (regardless of any actual amount of such expenditures) minus consolidated tax expense minus cash expenditures applied to share repurchases minus cash dividends, in each case, for the period of the four prior fiscal quarters ending on such date to (b) Consolidated Fixed Charges for such period.

 

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Domestic Borrower and its Subsidiaries on a consolidated basis, the sum of, without duplication, (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including the Loans hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments that support Indebtedness in respect of borrowed money or capital leases that have been funded and not repaid, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) all Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Domestic Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Domestic Borrower or such Subsidiary, (f) Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations, (g) the net amount of all accrued liability under the Student Note Program Obligations, as carried on the balance sheet of the Domestic Borrower and its Subsidiaries in

 

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accordance with GAAP, and (h) without duplication, all Guarantees with respect to Indebtedness of the types specified in subsections (a) through (g) above of Persons other than the Domestic Borrower or any Subsidiary.

 

“Consolidated Interest Charges” means, for any period, for any Person and its Subsidiaries on a consolidated basis, the sum of (a) all interest expense of such Person and its Subsidiaries for such period (net of all interest income), and, without duplication, (b) the portion of rent expense of such Person and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP, excluding fees and expenses payable in connection with the closing of the Loan Documents and the amortization of debt financing fees and expenses.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated Pro Forma Adjusted EBITDA of the Domestic Borrower and its Subsidiaries for the period of the four fiscal quarters ending on such date.

 

“Consolidated Net Income” means, for any period, for any Person and its Subsidiaries on a consolidated basis, the net income of such Person and its Subsidiaries from continuing operations (such net income to be exclusive of (a) non-cash charges comprising (i) impairment of assets, (ii) cumulative effects of changes in accounting principles (all of which are to be in accordance with GAAP) and (iii) any non-cash stock compensation, including, without limitation, any effects arising from the application of rule 123(R) of the Financial Accounting Standards Board; and (b) extraordinary gains or losses).

 

“Consolidated Net Worth” means, as of any date of determination, for the Domestic Borrower and its Subsidiaries on a consolidated basis, Shareholders’ Equity of the Domestic Borrower and its Subsidiaries on that date minus (a)(i) the net amount of the Domestic Borrower’s student loan receivables, and note receivables and other assets pursuant to Section 7.02(f), and (ii) the net amount of receivables or other assets owed to the Domestic Borrower and its Subsidiaries, in each case in connection with any Student Note Program, plus (b) up to $100,000,000 of non-cash charges to the Domestic Borrower’s goodwill incurred after December 31, 2011.

 

“Consolidated Pro Forma Adjusted EBITDA” means, for any period, an amount equal to Consolidated Adjusted EBITDA of the Domestic Borrower and its Subsidiaries, as the same has been adjusted by the Domestic Borrower (any such adjustment to be approved by the Domestic Administrative Agent, it being understood that any S-X Adjustments by the Domestic Borrower shall not be subject to the Domestic Administrative Agent’s approval) on a pro  forma basis to give effect to the Consolidated Adjusted EBITDA of any Person or assets acquired during such period (for which, and to the extent, financial statements either audited or acceptable to the Domestic Administrative Agent are available) pursuant to a Permitted Acquisition (and not subsequently sold or otherwise disposed of by the Domestic Borrower or any of its Subsidiaries during such period) as if the Person or assets so acquired were owned by the Domestic Borrower for such period.

 

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“Consolidated Pro Forma Adjusted EBITDAR” means, for any period, an amount equal to Consolidated Pro Forma Adjusted EBITDA of the Domestic Borrower and its Subsidiaries, plus, without duplication, the consolidated rental expense, including without limitation all real estate-related rental expense, of the Domestic Borrower and its Subsidiaries (determined in accordance with GAAP) for such period.

 

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

 

“Control” has the meaning specified in the definition of “Affiliate.”

 

“Credit Extension” means a Borrowing, an L/C Credit Extension or, in the case of the Canadian Borrower, the creation of Acceptances by the Canadian Lenders.

 

“DBNA” means the Depository Bills and Notes Act (Canada), as amended from time to time, and any successor statute.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada) 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, Canada or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Deemed Interest Period” has the meaning specified in Section 2.11(a).

 

“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 an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws.

 

“Defaulting Lender” means, subject to Section 2.18, any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agents and the Borrowers in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agents, the L/C Issuers, the Swing Line Lenders or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Borrowers, the Administrative Agents, the L/C Issuers or the Swing Line Lenders in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s

 

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obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified to the Borrowers, the Administrative Agents, the L/C Issuers and the Swing Line Lenders contemporaneously with such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the applicable Administrative Agent or the applicable Borrower, to confirm in writing to such Administrative Agent and such Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by such Administrative Agent and such Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that 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.  Any determination by either Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) as of the date established therefor by such Administrative Agent in a written notice of such determination, which shall be delivered by such Administrative Agent to the Borrowers, the L/C Issuers, the Swing Line Lenders and each other Lender promptly following such determination.

 

“Disposition” or “Dispose” means the sale by a Borrower or any of its Subsidiaries to any Person other than any of its wholly-owned Subsidiaries of (i) any of the stock of any of Subsidiaries, (ii) substantially all of the assets of any division or line of business of a Borrower or any of its Subsidiaries, (iii) any notes or accounts receivable or any rights associated therewith, or (iv) any assets (whether tangible or intangible) of a Borrower or any of its Subsidiaries outside of the ordinary course of business.

 

“DOE” means the United States Department of Education.

 

“DOE Ratio” means the Domestic Borrower’s composite score as of any fiscal year end, as determined by the Secretary of the DOE pursuant to Section 668.172 of the regulations promulgated by the DOE under Title IV (subject to Section 1.03(c) hereof).

 

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

 

“Dollar Equivalents” means, with respect to any amounts of Canadian Dollars, an equivalent amount of Dollars determined at the rate of exchange quoted by the Canadian Administrative Agent on the date of determination for the spot purchase in the foreign exchange market of Canadian Dollars with Dollars.

 

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“Domestic Administrative Agent” means Bank of America in its capacity as domestic administrative agent under any of the Loan Documents, or any successor domestic administrative agent.

 

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

 

“Domestic Collateral” means (i) all of the capital stock of each direct Domestic Subsidiary and each Domestic Guarantor, (ii) 65% of the capital stock of each direct Canadian Subsidiary and Foreign Subsidiary of the Domestic Borrower and each Domestic Guarantor, (iii) all owned real estate with a fair market value, for each individual property, in excess of $5,000,000 at the Closing Date (other than the property located in Blairsville, Pennsylvania subject to Section 4.04(a)) and any subsequently acquired owned real estate with a fair market value, for each individual property, in excess of $5,000,000, subject to Permitted Dispositions, and (iv) all personal and intangible property of the Domestic Borrower and each Domestic Guarantor, other than Excluded Property.

 

“Domestic Guarantors” means collectively, (i) each Domestic Subsidiary of the Domestic Borrower that is a Material Subsidiary and any other Domestic Subsidiary that directly owns a Material Subsidiary, whether now existing or hereafter arising, subject (in the case of a new Material Subsidiary) to the time delays set forth in the first parenthetical of Section 6.12; and (ii) any other Domestic Subsidiary that is a “Guarantor” under the Third Amended and Restated Guaranty (Domestic Borrower Obligations) from time to time.

 

“Domestic L/C Issuer” means Bank of America in its capacity as issuer of Domestic Letters of Credit hereunder, or if Bank of America shall have resigned as Domestic Administrative Agent, any other Domestic Lender and any successor issuer of Domestic Letters of Credit hereunder.

 

“Domestic Lender” means any Lender identified as a Domestic Lender on Schedule 2.01 as amended or modified from time to time in accordance with this Agreement.

 

“Domestic Letter of Credit” means any Letter of Credit issued by the Domestic L/C Issuer for the account of the Domestic Borrower.

 

“Domestic Loan” means any Loan extended by a Domestic Lender to the Domestic Borrower.

 

“Domestic Pledge and Security Agreement” has the meaning specified in Section 4.01(a)(iii).

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

 

“Domestic Swing Line” means the revolving credit facility made available by the Domestic Swing Line Lender pursuant to Section 2.05(a)(i).

 

“Domestic Swing Line Borrowing” means a borrowing of a Domestic Swing Line Loan pursuant to Section 2.05(b)(i).

 

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“Domestic Swing Line Lender” means Bank of America in its capacity as provider of Domestic Swing Line Loans, or any successor domestic swing line lender hereunder.

 

“Domestic Swing Line Loan” has the meaning specified in Section 2.05(a)(i).

 

“Domestic Swing Line Loan Notice” means a notice of a Domestic Swing Line Borrowing pursuant to Section 2.05(b)(i), which, if in writing, shall be substantially in the form of Exhibit B.

 

“Domestic Swing Line Sublimit” means an amount equal to Ten Million Dollars ($10,000,000).  The Domestic Swing Line Sublimit is part of, and not in addition to, the Aggregate Domestic Commitments.

 

“Drafts” means, at any time, either a depository bill within the meaning of the DBNA or a blank bill of exchange, within the meaning of the Bills of Exchange Act (Canada), drawn by the Canadian Borrower on a Canadian Lender and bearing such distinguishing letters and numbers as such Canadian Lender may determine, but which at such time, except as otherwise provided herein, has not been completed or accepted by such Canadian Lender.

 

“Drawing” means the acceptance of Acceptances by a Canadian Lender pursuant to Section 2.03.

 

“Drawing Date” means any Business Day fixed pursuant to Section 2.03(b) for a Drawing.

 

“Drawing Fee” means, with respect to the Drafts drawn by the Canadian Borrower hereunder and accepted by any Canadian Lender as provided herein on any Drawing Date, an amount equal to the Applicable Rate per annum on the aggregate Face Amount of such Drafts calculated on the basis of the term to maturity of such Draft and a year of 365 days.

 

“Drawing Notice” has the meaning assigned to that term in Section 2.03(b).

 

“Drawing Purchase Price” means, in respect of Acceptances to be purchased by a Canadian Lender, the difference between (i) the result (rounded to the nearest whole cent, with one-half of one cent being rounded up) obtained by dividing the aggregate Face Amount of such Acceptances by the sum of one plus the product of (x) the applicable Average Effective Discount Rate multiplied by (y) a fraction the numerator of which is the term of such Acceptances and denominator of which is 365; and (ii) the applicable Drawing Fee.

 

“Eligible Assignee” has the meaning specified in Section 10.06(h).

 

“Environmental Laws” means any and all federal, state, provincial, 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.

 

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“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrowers, any other Loan Party or any of their 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.

 

“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 any 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 any 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 cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any 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 Sections 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 would reasonably be expected to constitute 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 PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower or any ERISA Affiliate.

 

“Eurodollar Rate” means,

 

(a)           for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated from time to time by the Domestic Administrative Agent in the case of Domestic Loans and the Canadian Administrative Agent in the case of Canadian Loans) at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period, for deposits in Dollars in the case of Domestic Loans and Canadian Dollars in the case of Canadian Loans (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 applicable Administrative Agent to be the rate at which deposits in Dollars or Canadian Dollars as applicable for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America or Bank of America Canada as applicable and with a term equivalent to such Interest

 

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Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; and

 

(b)           for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar or Canadian Dollar deposits, as applicable, being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the applicable Administrative Agent to be the rate at which deposits in Dollars or Canadian Dollars, as applicable, for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.

 

“Eurodollar Rate Committed Loan” means a Committed Loan that bears interest at a rate based on the Eurodollar Rate.

 

“Eurodollar Rate Loan” means a Eurodollar Rate Committed Loan.

 

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

 

“Excluded Property” means (a) vehicles and other assets subject to certificates of title, (b) leasehold mortgages (including that there shall be no requirements to deliver landlord waivers, estoppels, bailee waivers and collateral access letters, except in connection with the Borrower’s headquarters and such other properties as the Administrative Agents shall determine in their reasonable discretion), (c) certain assets to the extent the burden or cost of obtaining or perfecting a security interest therein is excessive in relation to the benefit of the security afforded thereby as determined by the Administrative Agents in their reasonable discretion, (d) certain assets if the granting of a security interest in such asset would be prohibited by enforceable anti-assignment provisions of contracts (after giving effect to relevant provisions of the UCC or the PPSA, as applicable), (e) any “intent to use” trademark applications, or (f) any property or asset owned by either Borrower or any Guarantor that is subject to a purchase money lien or a capital lease permitted hereunder if the documents pursuant to which such lien is granted (or in the document providing for such capital lease) prohibit or require the consent of any person or entity which has not been obtained as a condition to the creation of any other lien on such property or asset.

 

“Existing Credit Agreement” has the meaning specified in second introductory paragraph hereto.

 

“Existing Letters of Credit” means the letters of credit issued for the account of the Borrowers by the L/C Issuers and listed on Schedule 2.04 annexed hereto which will, as of the Closing Date, be deemed outstanding as Letters of Credit issued pursuant to Section 2.04.

 

“Face Amount” means, in respect of a Draft or an Acceptance, as the case may be, the amount payable to the holder thereof on its maturity.

 

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

 

“Fee Letters” means the letter agreements dated April 16, 2012(1), among the Domestic Borrower, Bank of America and MLPFS and between the Domestic Borrower and U.S. Bank.

 

“Foreign Lender” has the meaning specified in Section 10.14(a).

 

“Foreign Subsidiary” means any Subsidiary that is organized under the laws of any jurisdiction other than a political subdivision of the United States, Canada or a political subdivision of Canada.

 

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

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

 

“Fund” has the meaning specified in Section 10.06(h).

 

“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.

 

“GAAP Consolidated Net Income” means, for any period, for any Person and its Subsidiaries on a consolidated basis, the net income of such Person and its Subsidiaries as determined in accordance with GAAP.

 

(1)  Each of the fee letters are dated April 16 as agreed by Corinthian and each of Bank of America and U.S. Bank to coincide with the date of the Commitment Letter.  Copies of the letters were sent to D. King and C. Kirkham on April 17.

 

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

 

“Granting Lender” has the meaning assigned to that term in Section 10.06(i).

 

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

 

“Guarantors” means collectively, the Domestic Guarantors and the Canadian Guarantors.

 

“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.

 

“Honor Date” has the meaning assigned to that term in Section 2.04(c)(i).

 

“ICC” has the meaning assigned to that term in Section 2.04(h).

 

“Impacted Lender” means (a) a Defaulting Lender or (b) a Lender (i) that has defaulted in fulfilling its monetary obligations generally under other syndicated credit facilities and such defaults are continuing or (ii) as to which an entity that controls such Lender has been deemed insolvent (by a Governmental Authority) or become subject to a bankruptcy or other similar proceeding.

 

“Increase Effective Date” has the meaning assigned to that term in Section 2.15(b).

 

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“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, bankers’ acceptances 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 in an amount equal to the Swap Termination Value thereof;

 

(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);

 

(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)                                   Attributable Indebtedness of such Person in respect of capital leases and Synthetic Lease Obligations;

 

(g)                                  the net amount of all accrued liability under the Student Note Program Obligations, as carried on the balance sheet of the Domestic Borrower and its Subsidiaries in accordance with GAAP; 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 or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any capital lease 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.

 

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

 

“Interbank Reference Rate” means the interest rate expressed as a percentage per annum which is customarily used by the Canadian Administrative Agent when calculating interest due by it or owing to it arising from correction of errors between it and other chartered banks.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate 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 Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest

 

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Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.

 

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

 

(i)                                     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, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

(ii)                                  any Interest Period pertaining to a Eurodollar Rate Loan 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

 

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

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person of any of the following:  (a) the purchase or other acquisition of 50% or less of the capital stock, partnership interests, membership interests or equity (or securities convertible into or exchangeable for such capital stock, partnership interests, membership interests or equity) of any 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, or (c) the purchase or other acquisition of assets of another Person that does not constitute an Acquisition; provided that in no event shall an Acquisition constitute an Investment.  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.

 

“IP Rights” has the meaning set forth in Section 5.16.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

 

“Laws” means, collectively (but excluding Environmental Laws), all international, foreign, federal, state, provincial 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.

 

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“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Committed Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

 

“L/C Issuers” means, collectively, the Domestic L/C Issuer and the Canadian L/C Issuer.

 

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”  in the amount so remaining available to be drawn.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the L/C Issuers and the Swing Line Lenders.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such on Schedule 10.02, or such other office or offices as a Lender may from time to time notify the Borrowers and the Administrative Agents.

 

“Letter of Credit” means any letter of credit issued hereunder.  A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.

 

“Letter of Credit Expiration Date” means the first anniversary of the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

 

“Letter of Credit Fee” has the meaning assigned to that term in Section 2.04(i).

 

“Letter of Credit Sublimit” means, with respect to the Domestic Letters of Credit, an amount equal to $50,000,000 and, with respect to the Canadian Letters of Credit, an amount equal to $7,500,000.  The applicable Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Domestic Commitments and the Aggregate Canadian Commitments, respectively.

 

“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 of any kind or nature whatsoever (including any conditional sale or

 

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other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Loan” means an extension of credit by a Lender to a Borrower under Article II in the form of a Committed Loan or a Swing Line Loan.

 

“Loan Documents” means this Agreement, each Note, the Fee Letters, the Security Documents and any Swap Contracts executed with a Lender or any of its Affiliates.

 

“Loan Parties” means, collectively, each Borrower and each Guarantor.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the business, results of operation or condition (financial or otherwise) of the Loan Parties taken as a whole; (b) a material impairment of the ability of the Loan Parties, taken as a whole, to perform their obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

 

“Material Subsidiary” means, at any time, any Subsidiary of a Borrower that owns more than $1,000,000 of assets or that had more than $1,000,000 of revenue for the four prior fiscal quarters; provided that the total consolidated assets of Subsidiaries that are not Material Subsidiaries shall not exceed $2,000,000 at any time, and provided, further, that the total consolidated revenue for the prior four fiscal quarters of all Subsidiaries that are not Material Subsidiaries shall not exceed $2,000,000.

 

“Maturity Date” means July 1, 2015.

 

“Maximum Rate” has the meaning assigned to that term in Section 10.09.

 

“MLPFS” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

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

 

“New Program” means any amendment, amendment and restatement, supplement or modification to the ASFG Agreements or other Student Note Program, or any refinancing or replacement thereof; provided, however, that before any New Program shall become effective, (a) the Borrowers shall have provided to the Lenders (1) a summary of the substantive terms thereof or, if available, a copy of the definitive documentation for such New Program and (2) a certificate of a Responsible Officer certifying that both before and after giving effect thereto, (A) no Default has occurred, (B) the Borrowers will be in compliance on a pro forma basis with each of the financial covenants following commencement of such New Program and shall provide updated projections in a format acceptable to the Administrative Agents through the remainder of the term of this Agreement which include/incorporate the effects of such New Program and (C) the Domestic Borrower will be in compliance on a pro forma basis with all applicable regulatory requirements of the DOE; (b) loan purchases required of the Borrowers under such

 

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New Program would be generally consistent with the existing requirements under the ASFG Agreements and would not include an acceleration clause; and (c) the Arrangers shall have reviewed the foregoing, confirmed that the financial statement impact of the New Program does not alter the financial covenant calculations as such calculations were originally intended and/or materially change the financial risk of the Lenders and provided their approval of such New Program as it relates to this sub-clause (c); provided, however, that to the extent that the Domestic Administrative Agent determines in its reasonable discretion that any amendment, amendment and restatement, supplement or modification to the ASFG Agreements or other Student Note Program is not a material revision or will not effect a material change to such ASFG Agreements or other Student Note Program, such amendment, amendment and restatement, supplement or modification, as the case may be, shall not be subject to satisfaction by the Borrowers of the foregoing conditions.

 

“Non BA Lender” has the meaning assigned to that term in Section 2.03(a).

 

“Non-Defaulting Lenders” has the meaning assigned to that term in Section 2.17(b).

 

“Nonrenewal Notice Date” has the meaning specified in Section 2.04(b)(iii).

 

“Note” means a promissory note made by a 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, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Acceptance or Letter of Credit, 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 any Loan Party 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.

 

“Organization 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 Reference Lenders” means each of the Canadian Lenders identified as an Other Reference Lender on Schedule 2.01.

 

“Other Taxes” has the meaning assigned to that term in Section 3.01(b).

 

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“Outstanding Amount” means (i) with respect to Committed Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on such date; (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date; and (iii) with respect to Acceptances on any date, the aggregate Acceptance Usage.

 

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

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“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 any Borrower or any ERISA Affiliate or to which any Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years.

 

“Permitted Acquisitions” means Acquisitions by any Borrower or any of its Subsidiaries, in an aggregate amount of up to $60,000,000 (inclusive of, and not in addition to, all such Acquisitions referred to in clause (ix) of this definition), of Persons and/or assets that meet each of the following criteria:

 

(i)                                     for each such Acquisition, the prior, effective written consent or approval to such Acquisition of the board of directors or equivalent governing body of the other party or parties has been obtained;

 

(ii)                                  the Borrowers shall have complied with the requirements of Section 6.13;

 

(iii)                               the Persons or assets to be acquired are in (or used in) the Post-Secondary Education Business or other businesses permitted under Section 7.07 hereof;

 

(iv)                              if the Person to be acquired is required to be accredited, it must, and immediately following the consummation of such Acquisition must continue to, be accredited by any applicable Governmental Authorities and accrediting agencies and in full regulatory compliance therewith in all material respects;

 

(v)                                 immediately before and after giving effect to the proposed Acquisition, no Default or Event of Default shall have occurred and be continuing and each Borrower and each other Loan Party must be in compliance with the terms of the Loan Documents and with all material regulatory requirements;

 

(vi)                              within 30 days following consummation of such Acquisition or, in the case of an Acquisition of a publicly-held Canadian Subsidiary, within four months

 

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following the consummation of such Acquisition, the acquired Person (if any) shall execute the documents described in Section 6.12 and the Borrowers shall execute or cause the execution of a pledge agreement in substantially the form of the Domestic Pledge and Security Agreement or the Canadian Pledge and Security Agreement, as applicable, with respect to the acquired Person’s capital stock, membership interest or partnership interest, if applicable;

 

(vii)                           immediately after giving effect to the Acquisition, (a) the pro forma Consolidated Leverage Ratio of the Domestic Borrower and its Subsidiaries shall be less than 1.75 to 1.00 and (b) there shall be at least $25,000,000 of unused Commitments and cash hereunder;

 

(viii)                        for any Acquisition for which the consideration paid is in the form of cash, equity or assumed Indebtedness, the Borrowers must promptly notify the Lenders thereof; and

 

(ix)                              for all Acquisitions made after the date hereof by the Domestic Borrower or any Domestic Subsidiary of any non-Domestic Subsidiary, the aggregate amount of the total consideration (excluding equity) paid less any distributions received by the Domestic Borrower or any Domestic Subsidiary on account of such non-Domestic Subsidiary shall not exceed $30,000,000.

 

“Permitted Liens” means the following types of Liens (excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA):

 

(i)                                     Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time, required by Section 6.04;

 

(ii)                                  statutory Liens of landlords, statutory Liens of banks and rights of set-off, statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law, in each case incurred in the ordinary course of business (a) for amounts not yet overdue or (b) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of 30 days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts;

 

(iii)                               Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

 

(iv)                              any attachment or judgment Lien not constituting an Event of Default under Section 8.01(h);

 

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(v)                                 leases or subleases granted to third parties and not interfering in any material respect with the ordinary conduct of the business of a Borrower or any of its Subsidiaries;

 

(vi)                              easements, rights-of-way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the business of a Borrower or any of its Subsidiaries;

 

(vii)                           any (a) interest or title of a lessor or sublessor under any lease permitted by this Agreement, (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to, or (c) subordination of the interest of the lessee or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause (b);

 

(viii)                        Liens arising from filing UCC or PPSA financing statements relating solely to leases permitted by this Agreement;

 

(ix)                              Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

 

(x)                                 any zoning or similar Law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property;

 

(xi)                              Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement or similar agreements entered into in the ordinary course of business of a Borrower and its Subsidiaries;

 

(xii)                           licenses of patents, trademarks and other intellectual property rights granted by a Borrower or any of its Subsidiaries in the ordinary course of business and not interfering in any material respect with the ordinary conduct of the business of such Borrower or such Subsidiary;

 

(xiii)                        Liens or reservations contained in the original grant from the Crown in respect of Canadian real property; and

 

(xiv)                       Liens securing cash-collateralized surety bonds in an amount not to exceed $10,000,000.

 

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

 

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.  For greater certainty, “Plan” does not include a Canadian Pension Plan or Canadian Welfare Plan.

 

“Platform” has the meaning specified in Section 6.02.

 

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“Post-Secondary Education Business” means the business of operating eligible institutions of higher education in the U.S. as defined in the Higher Education Act of 1965, as amended, and the business of operating similar institutions of higher education in Canada.

 

“PPSA” means the Personal Property Security Act (Ontario), as in effect from time to time; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by a Personal Property Security Act as in effect in a Canadian jurisdiction other than the Province of Ontario or is governed by the Civil Code of Quebec, “PPSA” means the Personal Property Security Act as in effect from time to time in such other jurisdiction or the Civil Code of Quebec, as applicable, for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority in such Collateral.

 

“Pro Rata Share” means at any time, with respect to each Domestic Lender in regard to the Domestic Loans and the Domestic Letters of Credit, or with respect to each Canadian Lender in regard to the Canadian Loans, the Canadian Letters of Credit and the Acceptances, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender at such time in regard to the Domestic Loans and the Domestic Letters of Credit or in regard to the Canadian Loans, the Canadian Letters of Credit and the Acceptances, and the denominator of which is the amount of the Aggregate Domestic Commitments or the Aggregate Canadian Commitments as applicable at such time.  The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.01.

 

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

 

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

 

“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.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, (c) with respect to a Domestic Swing Line Loan, a Domestic Swing Line Loan Notice, (d) with respect to a Canadian Swing Line Loan, a Canadian Swing Line Loan Notice and (e) with respect to an Acceptance, a Drawing Notice.

 

“Required Lenders” means, as of any date of determination, Lenders (a) of which there shall be at least three in number and (b) having more than 50% of the sum of the Aggregate Domestic Commitments and the Aggregate Canadian Commitments or, if the Commitments have been terminated, Lenders holding in the aggregate more than 50% of the Total Outstandings (taking into account funded participations in L/C Obligations and Swing Line Loans); provided that the Commitment of, and the outstanding principal amount of the Total Outstandings (taking into account funded participations in L/C Obligations and Swing Line Loans) held by, any

 

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Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, executive vice president, senior vice president, chief financial officer, treasurer or assistant treasurer of a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“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 Domestic 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 of any option, warrant or other right to acquire any such capital stock or other equity interest.

 

“Schedule I Lender” means any Canadian Lender that is a bank referred to in Schedule I to the Bank Act (Canada), S.C. 1991, c.46, as amended.

 

“Schedule I Reference Banks” means those Canadian Lenders identified as a Schedule I Reference Bank on Schedule 2.01.

 

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

 

“Security Documents” means the Third Amended and Restated Guaranty (Canadian Borrower Obligations), the Third Amended and Restated Guaranty (Domestic Borrower Obligations), the Domestic Pledge and Security Agreement, the Canadian Pledge and Security Agreement, and all other collateral security documents including, without limitation, landlord waivers and collateral access letters, hereafter executed in favor of any Administrative Agent for the benefit of the Lenders.

 

“Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Domestic Borrower and its Subsidiaries as of that date determined in accordance with GAAP.

 

“Sharing Event” has the meaning assigned to that term in Section 2.14(c).

 

“Solvent” means, as to any Person at any time, that (i) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (whether subordinated, contingent, unmatured, unliquidated or otherwise); (ii) the present fair saleable value of the property 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; (iii) such Person is able to pay its debts and other liabilities as they mature in the normal course of business; (iv) 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; and (v) such Person is

 

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not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital.

 

“SPC” has the meaning assigned to that term in Section 10.06(i).

 

“Student Note Program” means any program under which education loans are provided to current or former students to fund a student’s cost of attendance at any school owned or operated by any Loan Party or any of its Subsidiaries (including, without limitation, pursuant to the ASFG Agreements) and any amendments, amendments and restatements, refinancings, replacements, supplements or other modifications thereto, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereinafter arising.

 

“Student Note Program Charges” means all fees, charges, expenses and other cash payments paid by the Domestic Borrower or any of its Subsidiaries in conjunction with any Student Note Program.  For covenant calculation purposes, all Student Note Program Charges shall reduce Consolidated Net Income (when recognized) within the Domestic Borrower’s consolidated income statement regardless of income statement classification by the Domestic Borrower and/or its auditors.  In addition, Student Note Program Charges will be excluded from the denominator of the Consolidated Fixed Charges Coverage Ratio.  All amendments or modifications to any Student Note Program Charges shall be subject to the conditions set forth in connection with the effectiveness of New Programs as set forth in the definition of the term “New Program”, as applicable.

 

“Student Note Program Obligations” means any liabilities, debts, guarantees, and obligations arising under or otherwise with respect to any Student Note Program.

 

“Student Note Receivables” means, the aggregate outstanding principal amount of loans to students or former students of any Borrower and its Subsidiaries.

 

“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.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Domestic Subsidiary, Canadian Subsidiary or Foreign Subsidiary or Subsidiaries of a 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

 

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(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 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).

 

“Swing Line Borrowing” means a Domestic Swing Line Borrowing or a Canadian Swing Line Borrowing.

 

“Swing Line Lenders” means the Domestic Swing Line Lender and the Canadian Swing Line Lender.

 

“Swing Line Loan” means a Domestic Swing Line Loan or a Canadian Swing Line Loan.

 

“Swing Line Loan Notice” means a Domestic Swing Line Loan Notice or Canadian Swing Line Loan Notice.

 

“Syndication Agent” means U.S. Bank, in its sole capacity as syndication agent hereunder.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).  For the avoidance of doubt, no obligation arising under or otherwise with respect to the ASFG Agreements and no Student Note Program Obligation shall be deemed to be a “Synthetic Lease Obligation” under this definition.

 

“S-X Adjustment” has the meaning set forth in the definition of the term “Consolidated Adjusted EBITDA”.

 

“Taxes” has the meaning specified in Section 3.01(a).

 

“Third Amended and Restated Guaranty (Canadian Borrower Obligations)” means that certain Third Amended and Restated Guaranty (Canadian Borrower Obligations) of even date herewith from the Guarantors of the Obligations of the Canadian Borrower, as the same may be amended, restated or otherwise modified from time to time.

 

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“Third Amended and Restated Guaranty (Domestic Borrower Obligations)” means that certain Third Amended and Restated Guaranty (Domestic Borrower Obligations) from the Guarantors of the Obligations of the Domestic Borrower, as the same may be amended, restated or otherwise modified from time to time.

 

“Title IV” means Title IV of the Higher Education Action of 1965, as amended, or any successor legislation thereto.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans, all L/C Obligations and Acceptances.

 

“Type” means with respect to a Committed Loan to a particular Borrower, its character as a Base Rate Loan or a Eurodollar Rate Loan.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of California, or any other State, the laws of which govern the creation or perfection (and the effect thereof) of security interests in any Collateral for the Obligations.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

 

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

 

“Unreimbursed Amount” has the meaning set forth in Section 2.04(c)(i).

 

“U.S. Bank” means U.S. Bank National Association.

 

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 meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)                                 (i)                   The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

 

(ii)                                  Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

 

(iii)                               The term “including” is by way of example and not limitation.

 

(iv)                              The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

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(c)                                  In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(d)                                 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.

 

(e)                                  Any limitations herein expressed in terms of Dollars shall, to the extent such limitations apply to the sums of Canadian Loans, Canadian Letters of Credit or Acceptances available hereunder (as denominated in Canadian Dollars), be calculated upon the Dollar Equivalents of such sums.

 

1.03                        Accounting Terms.  (a)  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 consistent with that used in preparing the Audited Financial Statements (subject to adjustment as provided in Section 1.03(b)).

 

(b)                                 If at any time after the date hereof any change in GAAP (or in the Borrower’s application of GAAP) would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrowers or the Required Lenders shall so request, the Administrative Agents, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (or in the Borrower’s application of 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 Borrowers shall provide to the Administrative Agents 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)                                  If at any time any regulatory or interpretive change relating to or affecting the DOE Ratio would affect the computation of the DOE Ratio or Section 7.11(d), and either the Borrowers or the Domestic Administrative Agent shall so request, the Administrative Agents, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change relating to or affecting the DOE Ratio; provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with regulations referred to in the definition of the DOE Ratio and related interpretive guidance, in each case, as in effect prior to such regulatory or interpretive change therein.

 

1.04                        Rounding.  Any financial ratios required to be maintained by the Borrowers 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

 

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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                        References to Agreements and Laws and Environmental Laws.  Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law or Environmental Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law or Environmental Law, as applicable.

 

1.06                        Times of Day.  Unless otherwise specified, all references to times of day herein shall be references to Pacific time (daylight or standard, as applicable), except where such references pertain to Canadian Loans, Canadian Letters of Credit or Acceptances, in which case such references shall be to Eastern time (daylight or standard, as applicable).

 

1.07                        Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

ARTICLE II
 THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01                        Committed Loans.

 

(a)                                 Subject to the terms and conditions set forth herein, each Domestic Lender severally agrees to make loans (each such loan, a “Committed Domestic Loan”) to the Domestic 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 Domestic Lender’s Commitment with respect to Domestic Loans and Domestic Letters of Credit; provided, however, that after giving effect to any Committed Borrowing, (i) the Total Outstandings with respect to Domestic Loans and Domestic Letters of Credit shall not exceed the Aggregate Domestic Commitments, and (ii) the aggregate Outstanding Amount of the Committed Domestic Loans of any Domestic Lender, plus such Domestic Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations with respect to Domestic Letters of Credit, plus such Domestic Lender’s Pro Rata Share of the Outstanding Amount of all Domestic Swing Line Loans shall not exceed such Lender’s Commitment with respect to Domestic Loans and Domestic Letters of Credit.  Within the limits of each Domestic Lender’s Commitment, and subject to the other terms and conditions hereof, the Domestic Borrower may borrow under this Section 2.01(a), prepay under Section 2.06, and reborrow under this Section 2.01(a).  Committed Domestic Loans may be Base Rate Loans or Eurodollar Rate

 

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Loans, as further provided herein.  Committed Domestic Loans shall be funded and repaid in Dollars.

 

(b)                                 Subject to the terms and conditions set forth herein, each Canadian Lender severally agrees to make loans in Canadian Dollars (each such loan, a “Committed Canadian Loan”) to the Canadian 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 Canadian Lender’s Commitment with respect to Canadian Loans and Canadian Letters of Credit; provided, however, that after giving effect to any Committed Borrowing, (i) the sum of (A) Total Outstandings with respect to Canadian Loans and Canadian Letters of Credit and (B) the aggregate Acceptance Usage shall not exceed the Aggregate Canadian Commitments, and (ii) the aggregate Outstanding Amount of the Committed Canadian Loans of any Canadian Lender, plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations with respect to Canadian Letters of Credit, plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all Canadian Swing Line Loans, plus such Canadian Lender’s Pro Rata Share of the aggregate Acceptance Usage shall not exceed such Lender’s Commitment with respect to Canadian Loans, Canadian Letters of Credit and Acceptances.  Within the limits of each Canadian Lender’s Commitment, and subject to the other terms and conditions hereof, the Canadian Borrower may borrow under this Section 2.01(b), prepay Committed Canadian Loans under Section 2.06, reborrow Committed Canadian Loans under this Section 2.01(b) and request the Canadian Lenders to create Acceptances pursuant to Section 2.03.  Committed Canadian Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.  Committed Canadian Loans shall be funded and repaid in Canadian Dollars, and the aggregate sum of Committed Canadian Loans available hereunder shall be determined upon their Dollar Equivalents.

 

(c)                                  If the Dollar Equivalent of the sum of Outstanding Amounts of Canadian Loans, L/C Obligations in respect of Canadian Letters of Credit and the aggregate Acceptance Usage for any reason shall exceed 103% of the Aggregate Canadian Commitments, the Canadian Borrower shall within ten (10) Business Days after notice from the Canadian Administrative Agent of such excess repay Canadian Loans and/or Cash Collateralize the L/C Obligations in respect of Canadian Letters of Credit and/or Acceptances in an aggregate amount equal to such excess.  Amounts repaid in accordance with this Section 2.01(c) may be reborrowed in accordance with the terms and conditions of this Agreement.

 

2.02                        Borrowings, Conversions and Continuations of Committed Loans.

 

(a)                                 The Domestic Borrower may request Committed Domestic Loans by notice to the Domestic Administrative Agent, and the Canadian Borrower may request Committed Canadian Loans by notice to the Canadian Administrative Agent, all as provided below.  Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Committed Loans as the same Type shall be made upon the applicable Borrower’s irrevocable notice to the applicable Administrative Agent, which may be given by telephone.  Each such notice from the Domestic Borrower must be received by the Domestic Administrative Agent not later than 10:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate Committed Loans to Base Rate Committed Loans,

 

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and (ii) on the requested date of any Borrowing of Base Rate Committed Loans.  Each such notice from the Canadian Borrower must be received by the Canadian Administrative Agent not later than (i) 1:00 p.m. three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate Committed Loans to Base Rate Committed Loans, and (ii) 11:30 a.m. on the requested date of any Borrowing of Base Rate Committed Loans.  Each such telephonic notice must be confirmed promptly by delivery to the applicable Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the applicable Borrower.  Each Committed Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Each Committed Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the applicable Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Committed Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto.  If the applicable Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if such Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Committed Loans.  If the applicable Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Committed Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

 

 

(b)                                 Following receipt of a Committed Loan Notice, the applicable Administrative Agent shall promptly notify each applicable Lender of its Pro Rata Share of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the applicable Borrower, such Administrative Agent shall notify each such Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection.  In the case of a Committed Borrowing, each applicable Lender shall make the amount of its Committed Loan available to the applicable Administrative Agent in immediately available funds at the applicable Administrative Agent’s Office not later than 11:00 a.m. in the case of Domestic Loans and Canadian Eurodollar Rate Committed Loans and 1:00 p.m. in the case of Canadian Base Rate Committed Loans on the Business Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the applicable Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by such Administrative Agent by crediting the account of such Borrower on the books of Bank of America or Bank of America Canada (as applicable) with the amount of such funds or otherwise disbursing such funds in accordance with the applicable Borrower’s written instructions; provided, however, that if, on the date of a Committed Borrowing there are L/C Borrowings by such Borrower outstanding, then the

 

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proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowings, and second, to such Borrower as provided above.

 

(c)                                  Except as otherwise provided herein, a Eurodollar Rate Committed Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Committed Loan.  During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Committed Loans without the consent of the Required Lenders.

 

(d)                                 The applicable Administrative Agent shall promptly notify the applicable Borrower and the applicable Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Committed Loans upon determination of such interest rate.  The determination of the Eurodollar Rate by such Administrative Agent shall be conclusive in the absence of manifest error.  The applicable Administrative Agent shall notify the applicable Borrower and the applicable Lenders of any change in the prime rate of Bank of America or Bank of America Canada (as applicable) used in determining the Base Rate promptly following the public announcement of such change if any Base Rate Loans are then outstanding.

 

(e)                                  After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than eight Interest Periods in effect with respect to Domestic Loans and not more than five Interest Periods in effect with respect to Canadian Loans.

 

2.03                        Acceptances.

 

(a)                                 In addition to requesting Committed Canadian Loans pursuant to Section 2.01(b), the Canadian Borrower may request pursuant to this Section 2.03(a), from time to time during the Availability Period, that the Canadian Lenders create bankers’ acceptances (each, an “Acceptance”) by accepting Drafts from the Canadian Borrower in an aggregate amount not exceeding each of the Canadian Lender’s Commitments; provided that the Canadian Borrower shall not request the creation and purchase of any Acceptance if, after giving effect thereto, the sum of (i) Total Outstandings with respect to Canadian Loans, Canadian Letters of Credit and Acceptance Usage would exceed the Aggregate Canadian Commitments then in effect, and no Canadian Lender shall have any obligation to create and purchase any Acceptance if, after giving effect thereto, the sum of (i) Total Outstandings with respect to Canadian Loans and Canadian Letters of Credit of such Canadian Lender, plus (ii) such Canadian Lender’s Pro Rata Share of all Canadian Swing Line Loans, plus (iii) the aggregate Acceptance Usage of such Canadian Lender would exceed its Commitment with respect to Canadian Loans, Canadian Letters of Credit and Acceptances.

 

Each Drawing shall be in an aggregate Face Amount of not less than Cdn.$3,000,000 and in integral multiples of Cdn.$100,000 and shall consist of the creation and purchase of Acceptances by Canadian Lenders on the same day in accordance with Section 2.03, ratably in accordance with their respective Pro Rata Shares; provided that if apportionment of Acceptances among the Canadian Lenders cannot be made on a pro rata basis in even multiples of Cdn.$100,000, the Canadian Administrative Agent shall round the allocations among Canadian

 

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Lenders consistent with the Canadian Administrative Agent’s money market practices.  There shall not be more than eight Drawings in effect with respect to Acceptances.

 

Whenever the Canadian Borrower requests the Canadian Lenders to create Acceptances, each Canadian Lender that is not permitted by applicable law or by customary market practice to accept an Acceptance (a “Non BA Lender”) shall, in lieu of accepting its pro rata amount of such Acceptances, make available to the Canadian Borrower on the Drawing Date a loan (a “BA Equivalent Loan”) in Canadian Dollars and in an amount equal to the Drawing Purchase Price of the Acceptances that the Non BA Lender would have been required to accept on the Drawing Date if it were able to accept Acceptances.  To the extent not otherwise deducted in the calculation of the amount of the BA Equivalent Loan, each Non BA Lender shall also be entitled to deduct from the BA Equivalent Loan an amount equal to the Drawing Fee that would have been applicable had it been able to accept Acceptances.  The BA Equivalent Loan shall have a term equal to the term of the Acceptances that the Non BA Lender would otherwise have accepted and the Canadian Borrower shall, at the end of that term, be obligated to pay the Non BA Lender an amount equal to the aggregate face amount of the Acceptances that it would otherwise have accepted.  All provisions of this Agreement applicable to Acceptances and Canadian Lenders that accept Acceptances shall apply mutatis mutandis to BA Equivalent Loans and Non BA Lenders.

 

(b)                                 Each Drawing shall be made on two Business Days prior written notice, given not later than 1:00 p.m. (Toronto time), by the Canadian Borrower to the Canadian Administrative Agent, which shall give each Canadian Lender prompt notice thereof and of such Canadian Lender’s ratable portion of the aggregate Face Amount of the Drafts to be accepted under the Drawing.  Each such notice of a Drawing (a “Drawing Notice”) shall be given in substantially the form of Exhibit F hereto or by telephone confirmed promptly in writing in substantially the form of Exhibit F, and shall specify therein (i) the Drawing Date; (ii) the aggregate Face Amount of Drafts to be accepted; and (iii) the maturity date for such Drafts (it being agreed and understood that the Canadian Borrower shall not request a maturity date for Drafts that would be subsequent to the Maturity Date).

 

Neither the Canadian Administrative Agent nor any Canadian Lender shall incur any liability to the Canadian Borrower in acting on the telephonic notice referred to above which the Canadian Administrative Agent or such Canadian Lender believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of the Canadian Borrower or for otherwise acting in good faith under this Section 2.03, and upon the creation and purchase or delivery of Acceptances pursuant to any such telephonic notice, the Canadian Borrower shall be liable with respect thereto as provided herein.

 

Each Drawing Notice shall be irrevocable and binding on the Canadian Borrower.  The Canadian Borrower shall indemnify each Canadian Lender against any loss or expense incurred by such Canadian Lender as a result of any failure by the Canadian Borrower to fulfill or honor before the date specified for any Drawing, the applicable conditions set forth in this Section 2.03 if the Drawing, as a result of such failure, is not made on such date.

 

(c)                                  Each Draft presented by the Canadian Borrower shall (i) be in an integral multiple of Cdn.$100,000; (ii) be dated the date of the Drawing; (iii) mature and be payable

 

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by the Canadian Borrower (in common with all other Drafts presented in connection with such Drawing) on a Business Day which occurs approximately 1, 2, 3 or 6 months after the date thereof or such shorter period than 6 months as agreed by the Canadian Borrower and the Canadian Administrative Agent; and (iv) be otherwise consistent with the provisions of this Agreement relating to the amounts and maturity dates thereof.

 

The Canadian Borrower hereby renounces, and shall not claim, any days of grace for the payment of any Acceptances.

 

(d)                                 Not later than 11:00 a.m. (Toronto time) on an applicable Drawing Date, each Canadian Lender shall complete one or more Drafts dated the date of such Drawing, with the maturity date specified in the applicable Drawing Notice, accept such Drafts, and following fulfillment of any applicable conditions and as specified in the applicable Drawing Notice, purchase the Acceptances thereby created for the Drawing Purchase Price.

 

The failure of any Canadian Lender to create and purchase or deliver Acceptances as part of any Drawing shall not relieve any other Canadian Lender of its obligation, if any, to create and purchase or deliver Acceptances hereunder, but a Canadian Lender shall not be responsible for the failure of any other Canadian Lender to create and purchase or deliver Acceptances on the Drawing Date for any Drawing.

 

(e)                                  Subject to Section 2.03(b) and satisfaction of the conditions set forth in Section 4.03, each Canadian Lender shall, before 12:00 noon (Toronto time) on the applicable Drawing Date, pay or cause to be paid the Drawing Purchase Price in respect of any Acceptances to be purchased by such Canadian Lender by depositing or causing to be deposited such amount to such account maintained by the Canadian Administrative Agent at its Administrative Agent’s Office as shall have been notified to such Canadian Lender by the Canadian Administrative Agent, in Canadian Dollars in same day funds.  Promptly upon receipt of such funds, the Canadian Administrative Agent shall make such funds available to the Canadian Borrower by debiting such account (or causing such account to be debited), and (a) by crediting the Canadian Borrower’s account, as specified by the Canadian Borrower in writing to the Canadian Administrative Agent prior thereto, maintained by the Canadian Administrative Agent at its Administrative Agent’s Office (or causing such account to be credited) with like funds in the aggregate amount of such funds or (b) by wiring such funds in such amount to the account of the Canadian Borrower with another financial institution specified prior thereto by the Canadian Borrower in writing to the Canadian Administrative Agent.

 

Acceptances purchased by a Canadian Lender hereunder may be held by it for its own account until maturity or sold by it at any time prior thereto in any relevant market therefor in Canada, in such Canadian Lender’s sole discretion.

 

(f)                                   Each Schedule I Reference Bank or Other Reference Lender, as the case may be, agrees to furnish to the Canadian Administrative Agent timely information for the purpose of determining each Average Effective Discount Rate.  If any one or more of the Schedule I Reference Banks or Other Reference Lenders shall not furnish such information to the Canadian Administrative Agent, the Canadian Administrative Agent shall determine such

 

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Average Effective Discount Rate on the basis of timely information furnished by the remaining Schedule I Reference Bank or Other Reference Lender, as applicable.

 

The Canadian Administrative Agent shall give prompt notice to the Canadian Borrower and the Canadian Lenders of each Average Effective Discount Rate determined by the Canadian Administrative Agent for an applicable Drawing Date and the applicable discount rates, if any, furnished by each Schedule I Reference Bank and Other Reference Lender for determining any applicable Average Effective Discount Rate.

 

(g)           The Canadian Borrower unconditionally hereby agrees to pay to the Canadian Administrative Agent for the account of each Canadian Lender, on the maturity date for each Acceptance an amount in Canadian Dollars in same day funds equal to the Face Amount of such then-maturing Acceptance.

 

The obligation of the Canadian Borrower set forth above to pay to the Canadian Administrative Agent the Face Amount of any then-maturing Acceptance may be satisfied by paying to the Canadian Administrative Agent at or before 12:00 noon (Toronto time) on the maturity date for such Acceptance an amount in Canadian Dollars in same day funds equal to the Face Amount of such Acceptance; provided that the Canadian Borrower shall have given not less than one Business Day’s prior notice to the Canadian Administrative Agent (which shall promptly notify each Canadian Lender thereof) of its intent to pay the Canadian Administrative Agent in the manner contemplated by this sentence.  The Canadian Borrower shall make each payment hereunder in respect of Acceptances by deposit of the required funds to the Canadian Administrative Agent at its Administrative Agent’s Office.  Upon receipt of such payment, the Canadian Administrative Agent will promptly thereafter cause such payment to be distributed in like funds in payment of Acceptances ratably (based on the proportion that the aggregate Face Amount of Acceptances accepted by any Canadian Lender maturing on the relevant date bears to the aggregate Face Amount of Acceptances accepted by all Canadian Lenders maturing on such date) to Canadian Lenders for their account.  Such payment to the Canadian Administrative Agent shall satisfy the Canadian Borrower’s obligations under any Acceptances to which it relates and each Canadian Lender that has accepted such Acceptances shall thereafter be solely responsible for the payment of such Acceptances.

 

The obligation of the Canadian Borrower set forth in the first paragraph of this Section 2.03(g) to pay to the Canadian Administrative Agent the Face Amount of any then-maturing Acceptance may be satisfied by the Canadian Borrower requesting that new Drafts in an amount sufficient to repay any then-maturing Acceptances be accepted and discounted by the Canadian Lenders in the manner contemplated by Section 2.03 in substitution for any then-maturing Acceptance (to the extent that such amount is otherwise available hereunder); provided that no Default or Event of Default shall have occurred and be continuing and the Canadian Borrower shall have delivered to the Canadian Administrative Agent (which shall promptly provide a copy thereof to each Canadian Lender) a duly completed Drawing Notice not later than 12:00 noon (Toronto time) one Business Day prior to such maturity date, together with any other documents, instruments, certificates and other information contemplated by Section 2.03.

 

In the event the Canadian Borrower does not or cannot for any reason comply with the provisions of the two previous paragraphs with respect to the obligation of the Canadian

 

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Borrower to pay to the Canadian Administrative Agent the Face Amount of any then-maturing Acceptance, the unpaid amount due and payable in respect thereof shall be converted as of such date, and without any necessity for the Canadian Borrower to request a Committed Borrowing in accordance with Section 2.02, to, and thereafter be outstanding as, a Base Rate Committed Loan made by Canadian Lenders in accordance with their Pro Rata Shares, and shall bear interest calculated and payable as provided in Section 2.09.

 

(h)           The Canadian Borrower hereby appoints each Canadian Lender, acting by any authorized signatory of such Canadian Lender, the attorney of the Canadian Borrower:

 

(i)            to execute, for and on behalf and in the same name of the Canadian Borrower as drawer, and to endorse on its behalf, drafts in a form in accordance with Section 2.03(c) and which constitute depository bills for the purpose of the DBNA;

 

(ii)           to complete the amount, date and maturity of such Acceptances; and

 

(iii)          to deposit such Acceptances that have been accepted by such Canadian Lender with a clearing house (as defined in the DBNA);

 

provided that such acts in each case are to undertaken by such Canadian Lender in accordance with instructions given to such Canadian Lender by the Canadian Borrower as provided in this Section 2.03(h).  For certainty, signatures of any authorized signatory of such Canadian Lender may be mechanically reproduced in facsimile on Acceptances issued in accordance with this Section 2.03(h) and such facsimile signatures will be binding and effective as if they had been manually executed by such authorized signatory of such Canadian Lender.  Instructions from the Canadian Borrower to such Canadian Lender relating to the execution, completion, endorsement and/or discount by such Canadian Lender on behalf of the Canadian Borrower of Acceptances will be communicated by delivery of a Drawing Notice to the Canadian Administrative Agent.

 

(i)            If the Canadian Administrative Agent determines in good faith, which determination shall be final, conclusive and binding upon the Canadian Borrower, and notifies the Canadian Borrower and each Canadian Lender that, by reason of circumstances affecting the money market (i) there is no market for Acceptances; or (ii) the demand for Acceptances is insufficient to allow the sale or trading of the Acceptances created and purchased hereunder; then:

 

(i)            the right of the Canadian Borrower to request a Drawing shall be suspended until the Canadian Administrative Agent determines that the circumstances causing such suspension no longer exist and the Canadian Administrative Agent so notifies the Canadian Borrower and each Canadian Lender; and

 

(ii)           any Drawing Notice which is outstanding shall be cancelled and the Drawing requested therein shall not be made.

 

The Canadian Administrative Agent shall promptly notify the Canadian Borrower and each Canadian Lender of the suspension of its right to request a Drawing and of the termination of any such suspension.

 

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(j)            No repayment of an Acceptance shall be made by the Canadian Borrower to a Canadian Lender prior to the maturity date thereof except that the Canadian Borrower may prepay the Canadian Administrative Agent an amount in Canadian Dollars in same day funds equal to the aggregate Face Amount of any outstanding Acceptances.  The Canadian Administrative Agent shall pay each Canadian Lender its Pro Rata Share of the amount received.  Any scheduled repayment shall be made (unless such repayment has been rescinded or otherwise is required to be returned by such Canadian Lender to the Canadian Borrower for any reason) in accordance with the provisions of the second paragraph of Section 2.03(g).  Any such payment or prepayment by the Canadian Borrower to the Canadian Administrative Agent shall satisfy the Canadian Borrower’s obligations under the Acceptance to which it relates and any such Canadian Lender which has accepted such Acceptance shall thereafter be solely responsible for the payment of such Acceptance and shall indemnify and hold the Canadian Borrower harmless against any liabilities, costs or expenses incurred by the Canadian Borrower as a result of any failure by such Canadian Lender to pay such Acceptance in accordance with its terms.  Following the maturity and indefeasible payment of all Acceptances, each Canadian Lender shall pay to the Canadian Borrower an amount equal to the interest that would have accrued had the amount paid to that Canadian Lender been held in an account bearing interest at the rate customarily paid by that Canadian Lender on deposits of similar size and term pending payment of the Acceptances as they matured.

 

(k)           The proceeds of any Acceptance created under this Section 2.03 shall be used in the manner and for the purposes set forth in Section 6.11 with respect to the use of proceeds of Loans.

 

2.04        Letters of Credit.

 

(a)           The Letter of Credit Commitment.

 

(i)            The Domestic Borrower may request Domestic Letters of Credit by notice to the Domestic L/C Issuer and the Domestic Administrative Agent, and the Canadian Borrower may request Canadian Letters of Credit upon notice to the Canadian L/C Issuer and the Canadian Administrative Agent, all as provided below.  Subject to the terms and conditions set forth herein, (A) the applicable L/C Issuer agrees, in reliance upon the agreements of the other applicable Lenders set forth in this Section 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Maturity Date, to issue Letters of Credit for the account of the applicable Borrower, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit as required under applicable law; and (B) such Lenders severally agree to participate in Letters of Credit issued for the account of such Borrower; provided that the Domestic L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Domestic Letter of Credit, and no Domestic Lender shall be obligated to participate in, any Domestic Letter of Credit if as of the date of such L/C Credit Extension, (x) the Total Outstandings with respect to Domestic Loans and Domestic Letters of Credit would exceed the Aggregate Domestic Commitments, (y) the aggregate Outstanding Amount of the Committed Domestic Loans of any Domestic Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Domestic L/C Obligations, plus such Domestic Lender’s Pro Rata Share of the Outstanding

 

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Amount of all Domestic Swing Line Loans would exceed such Lender’s Commitment with respect to Domestic Loans and Domestic Letters of Credit, or (z) the Outstanding Amount of the Domestic L/C Obligations would exceed the Letter of Credit Sublimit; provided, further, the Canadian L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Canadian Letter of Credit, and no Canadian Lender shall be obligated to participate in any Canadian Letter of Credit if as of the date of such L/C Credit Extension (x) the Total Outstandings with respect to Canadian Loans, Canadian Letters of Credit and Acceptances would exceed the Aggregate Canadian Commitments, (y) the aggregate Outstanding Amount of the Committed Canadian Loans of any Canadian Lender, plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all Canadian L/C Obligations, plus such Canadian Lender’s Pro Rata Share of all Acceptance Usage plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all Canadian Swing Line Loans would exceed such Lender’s Commitment with respect to Canadian Loans, Canadian Letters of Credit and Acceptances or (z) the Outstanding Amount of Canadian L/C Obligations would exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

 

(ii)           An L/C Issuer shall be under no obligation to issue any Letter of Credit if:

 

(A)          any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

 

(B)          the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance, unless the Required Lenders have approved such expiry date;

 

(C)          the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date;

 

(D)          the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;

 

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(E)           such Letter of Credit is in a face amount less than $50,000, in the case of a commercial Letter of Credit, or $25,000, in the case of a standby Letter of Credit, or is to be denominated in a currency other than Dollars in the case of Domestic Letters of Credit and Canadian Dollars in the case of Canadian Letters of Credit; or

 

(F)           a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time an Impacted Lender hereunder, unless the applicable L/C Issuer has been provided cash collateral as contemplated by Section 2.16 or has entered into satisfactory arrangements with the applicable Borrower or such Lender to eliminate such L/C Issuer’s risk with respect to such Lender.

 

(iii)          An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

(b)           Procedures for Issuance and Amendment of Letters of Credit.

 

(i)            Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the applicable Borrower delivered to the applicable L/C Issuer (with a copy to the applicable Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of such Borrower.  Such Letter of Credit Application must be received by the applicable L/C Issuer and the applicable Administrative Agent not later than 8:00 a.m. in the case of Domestic Letters of Credit and 12:00 noon in the case of Canadian Letters of Credit at least two Business Days (or such later date and time as such L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer:  (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as such L/C Issuer may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such L/C Issuer may require.

 

(ii)           Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the applicable Administrative Agent (by telephone or in writing) that such Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower and, if not, such L/C Issuer will provide such Administrative Agent with a copy thereof.  Upon receipt by such L/C Issuer of

 

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confirmation from such Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the applicable Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Domestic Letter of Credit, each Domestic Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Domestic L/C Issuer a risk participation in such Domestic Letter of Credit in an amount equal to the product of such Domestic Lender’s Pro Rata Share times the amount of such Domestic Letter of Credit.  Immediately upon the issuance of each Canadian Letter of Credit, each Canadian Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Canadian L/C Issuer a risk participation in such Canadian Letter of Credit in an amount equal to the product of such Canadian Lender’s Pro Rata Share times the amount of such Canadian Letter of Credit.

 

(iii)          If the applicable Borrower so requests in any Letter of Credit Application, the applicable L/C Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”); provided that any such Auto-Renewal Letter of Credit must permit such L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Nonrenewal Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the applicable L/C Issuer, the applicable Borrower shall not be required to make a specific request to such L/C Issuer for any such renewal.  Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the renewal of such Letter of Credit at any time prior to a date not later than the Letter of Credit Expiration Date; provided, however, that such L/C Issuer shall not permit any such renewal if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven (7) Business Days before the Nonrenewal Notice Date from the applicable Administrative Agent, any applicable Lender or the applicable Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied.

 

(iv)          Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the applicable Borrower and the applicable Administrative Agent a true and complete copy of such Letter of Credit or amendment.

 

(c)           Drawings and Reimbursements; Funding of Participations.

 

(i)            Upon any drawing under any Letter of Credit, the applicable L/C Issuer shall notify the applicable Borrower and the applicable Administrative Agent thereof.  Not later than 11:00 a.m. on the Business Day following the date of any payment by the applicable L/C Issuer under a Letter of Credit (each such payment date by the L/C Issuer,

 

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an “Honor Date”), the applicable Borrower shall reimburse the applicable L/C Issuer through the applicable Administrative Agent in an amount equal to the amount of such drawing, plus, unless such reimbursement shall be made on the Honor Date, interest on such amount at the rate payable on Base Rate Loans.  If such Borrower fails to so reimburse such L/C Issuer by such time, such Administrative Agent shall promptly notify each applicable Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and such Lender’s Pro Rata Share thereof.  In such event, such Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Domestic Commitments or Aggregate Canadian Commitments as applicable and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice).  Any notice given by an L/C Issuer or Administrative Agent pursuant to this Section 2.04(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii)           Each Lender (including any Lender acting as an L/C Issuer) shall upon any notice pursuant to Section 2.04(c)(i) make funds available to the applicable Administrative Agent for the account of the applicable L/C Issuer at the applicable Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by such Administrative Agent, whereupon, subject to the provisions of Section 2.04(c)(iii), each Lender that so makes funds available shall be deemed to have made a Committed Base Rate Loan to the applicable Borrower in such amount.  The applicable Administrative Agent shall remit the funds so received to the applicable L/C Issuer.

 

(iii)          With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the applicable Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Lender’s payment to the applicable Administrative Agent for the account of such L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.04.

 

(iv)          Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.04(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of such L/C Issuer.

 

(v)           Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the applicable L/C Issuer for amounts drawn under Letters of Credit, as

 

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contemplated by this Section 2.04(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against such L/C Issuer, the Borrowers 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 Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02.  Any such reimbursement shall not relieve or otherwise impair the obligation of the applicable Borrower to reimburse the applicable L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

 

(vi)          If any Lender fails to make available to the applicable Administrative Agent for the account of the applicable L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(ii), such L/C Issuer shall be entitled to recover from such Lender (acting through such 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 such L/C Issuer at a rate per annum equal to the Federal Funds Rate (in the case of the Domestic L/C Issuer) or the Interbank Reference Rate (in the case of the Canadian L/C Issuer) from time to time in effect.  A certificate of an L/C Issuer submitted to any Lender (through the applicable Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)           Repayment of Participations.

 

(i)            At any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.04(c), if the applicable Administrative Agent receives for the account of such L/C Issuer any payment related to such Letter of Credit (whether directly from the applicable Borrower or otherwise, including proceeds of cash collateral applied thereto by such Administrative Agent), or any payment of interest thereon, such Administrative Agent will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by such Administrative Agent.

 

(ii)           If any payment received by an Administrative Agent for the account of an L/C Issuer pursuant to Section 2.04(c)(i) is required to be returned, each applicable Lender shall pay to such Administrative Agent for the account of such L/C Issuer its Pro Rata Share thereof on demand of such Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate (in the case of the Domestic L/C Issuer) or the Interbank Reference Rate (in the case of the Canadian L/C Issuer) from time to time in effect.

 

(e)           Obligations Absolute.  The obligation of each Borrower to reimburse the applicable L/C Issuer for each drawing under a Letter of Credit, and to repay each L/C

 

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Borrowing and each drawing under a Letter of Credit that is refinanced by a Borrowing of Committed Loans, shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i)            any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

 

(ii)           the existence of any claim, counterclaim, set-off, defense or other right that such Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)          any draft, demand, certificate or other document presented under such 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; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv)          any payment by such L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(v)           any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, such Borrower;

 

provided that if the payment by such L/C Issuer under the applicable Letter of Credit shall have constituted gross negligence or willful misconduct of such L/C Issuer under the circumstances in question, such Borrower shall retain its right to bring a separate action against such L/C Issuer after such Borrower has made such reimbursement.

 

The applicable Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with such Borrower’s instructions or other irregularity, such Borrower will immediately notify the applicable L/C Issuer.  Such Borrower shall be conclusively deemed to have waived any such claim against such L/C Issuer and its correspondents unless such notice is given as aforesaid.

 

(f)            Role of L/C Issuers.  Each Lender and the Borrowers agree that, in paying any drawing under a Letter of Credit, the L/C Issuers shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document

 

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or the authority of the Person executing or delivering any such document.  None of the L/C Issuers, the Administrative Agents, any of their respective Related Parties, nor any of the respective correspondents, participants or assignees of the L/C Issuers shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application.  Each Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude such Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuers, the Administrative Agents, any of their respective Related Parties, nor any of the respective correspondents, participants or assignees of the L/C Issuers, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.04(e); provided, however, that anything in such clauses to the contrary notwithstanding, a Borrower may have a claim against an L/C Issuer, and an L/C Issuer may be liable to a Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by such Borrower which such Borrower proves were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, the L/C Issuers may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuers shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral.  Upon the request of the applicable Administrative Agent, (i) if an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Maturity Date, (A) any Letter of Credit issued by such L/C Issuer may for any reason remain outstanding and partially or wholly undrawn, or (B) any amount remains available to be drawn under any Letter of Credit by reason of the operation of Section 3.14 of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance), the applicable Borrower shall immediately Cash Collateralize the then Outstanding Amount of all such L/C Borrowings or Letters of Credit, as the case may be (in an amount equal to such Outstanding Amount of such Letter of Credit Borrowings or Letters of Credit, as applicable, determined as of the date of such L/C Borrowing or the Maturity Date, as the case may be).

 

(h)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the applicable L/C Issuer and Borrower when a Letter of Credit is issued, (i) the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice

 

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for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ICC”) at the time of issuance shall apply to each commercial Letter of Credit.

 

(i)            Letter of Credit Fees.  Each Borrower shall pay to the applicable Administrative Agent for the account of each applicable Lender (other than Defaulting Lenders) in accordance with its Pro Rata Share a Letter of Credit fee for each Letter of Credit issued for such Borrower’s account equal to the Applicable Rate times the average daily maximum amount available to be drawn under each such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit) (“Letter of Credit Fee”).  Such Letter of Credit Fees shall be computed on a quarterly basis in arrears.  Such Letter of Credit Fees shall be due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, and on the Letter of Credit Expiration Date.  If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

 

(j)            Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers.  Each Borrower shall pay directly to the applicable L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued for such Borrower’s account in the amounts and at the times specified in the Fee Letters.  Fronting fees with respect to commercial Letters of Credit shall be paid upon the issuance thereof and at the time of any increase in the amount available to be drawn thereunder, and fronting fees with respect to standby Letters of Credit shall be paid quarterly in arrears.  In addition, each Borrower shall pay directly to the applicable L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect.  Such fees and charges are due and payable on demand and are nonrefundable.

 

(k)           Conflict with Letter of Credit Application.  In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

 

(l)            Existing Letters of Credit.  Notwithstanding anything to the contrary herein, as of the Closing Date, all of the Existing Letters of Credit shall be deemed to be Letters of Credit issued hereunder and shall be subject to all of the terms and provisions of this Agreement, including all terms and provisions applicable to Letters of Credit under this Agreement.  Each Lender agrees that its obligations with respect to Letters of Credit pursuant to this Section 2.04 shall include the Existing Letters of Credit as of the Closing Date.  With respect to each Existing Letter of Credit, for the period commencing on the Closing Date to and including the expiration date of any such Existing Letter of Credit, the applicable Borrower shall pay all fees and commissions set forth in Section 2.04(i) at the times and in the manner set forth therein.

 

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2.05        Swing Line Loans.

 

(a) (i)      The Domestic Swing Line.  Subject to the terms and conditions set forth herein, the Domestic Swing Line Lender agrees to make loans (each such loan, a “Domestic Swing Line Loan”) to the Domestic 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 the Domestic Swing Line Sublimit, notwithstanding the fact that such Domestic Swing Line Loans, when aggregated with the Outstanding Amount of Committed Loans of the Domestic Swing Line Lender in its capacity as a Domestic Lender of Committed Domestic Loans, may exceed the amount of such Lender’s Commitment regarding Committed Domestic Loans; provided, however, that after giving effect to any Domestic Swing Line Loan, (i) the aggregate Outstanding Amount of all Domestic Loans and L/C Obligations regarding Domestic Letters of Credit shall not exceed the Aggregate Domestic Commitments, and (ii) the aggregate Outstanding Amount of the Committed Domestic Loans of any Domestic Lender, plus such Domestic Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations regarding Domestic Letters of Credit, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Domestic Swing Line Loans shall not exceed such Domestic Lender’s Commitment regarding Domestic Loans and Domestic Letters of Credit.  Within the foregoing limits, and subject to the other terms and conditions hereof, the Domestic Borrower may borrow under this Section 2.05, prepay under Section 2.06, and reborrow under this Section 2.05.  Each Domestic Swing Line Loan shall be a Base Rate Loan.  Immediately upon the making of a Domestic Swing Line Loan, each Domestic Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Domestic Swing Line Lender a risk participation in such Domestic Swing Line Loan in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Domestic Swing Line Loan.  The Domestic Swing Line Lender shall not be under any obligation to make any Domestic Swing Line Loan if any Domestic Lender is at such time an Impacted Lender hereunder, unless the Domestic Swing Line Lender has been provided cash collateral as contemplated by Section 2.16 or has entered into satisfactory arrangements with the Domestic Borrower or such Domestic Lender to eliminate the Domestic Swing Line Lender’s risk with respect to such Domestic Lender.

 

(ii)           The Canadian Swing Line.  Subject to the terms and conditions set forth herein, the Canadian Swing Line Lender agrees to make loans (each such loan, a “Canadian Swing Line Loan”) to the Canadian 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 the Canadian Swing Line Sublimit, notwithstanding the fact that such Canadian Swing Line Loans, when aggregated with the Outstanding Amount of Committed Loans of the Canadian Swing Line Lender in its capacity as a Canadian Lender of Committed Canadian Loans, may exceed the amount of such Lender’s Commitment regarding Committed Canadian Loans; provided, however, that after giving effect to any Canadian Swing Line Loan, (i) the aggregate Outstanding Amount of all Canadian Loans, L/C Obligations regarding Canadian Letters of Credit and aggregate Acceptance Usage shall not exceed the Aggregate Canadian Commitments, and (ii) the aggregate Outstanding Amount of the Committed Canadian Loans of any

 

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Canadian Lender, plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations regarding Canadian Letters of Credit, plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all Canadian Swing Line Loans plus such the aggregate Acceptance Usage of such Canadian Lender shall not exceed such Canadian Lender’s Commitment regarding Canadian Loans, Acceptances and Canadian Letters of Credit.  Within the foregoing limits, and subject to the other terms and conditions hereof, the Canadian Borrower may borrow under this Section 2.05, prepay under Section 2.06, and reborrow under this Section 2.05.  Each Canadian Swing Line Loan shall be a Base Rate Loan.  Immediately upon the making of a Canadian Swing Line Loan, each Canadian Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Canadian Swing Line Lender a risk participation in such Canadian Swing Line Loan in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Canadian Swing Line Loan.  The Canadian Swing Line Lender shall not be under any obligation to make any Canadian Swing Line Loan if any Canadian Lender is at such time an Impacted Lender hereunder, unless the Canadian Swing Line Lender has been provided cash collateral as contemplated by Section 2.16 or has entered into satisfactory arrangements with the Canadian Borrower or such Canadian Lender to eliminate the Canadian Swing Line Lender’s risk with respect to such Canadian Lender.

 

(b)           (i)            Domestic Borrowing Procedures.  Each Domestic Swing Line Borrowing shall be made upon the Domestic Borrower’s irrevocable notice to the Domestic Swing Line Lender and the Domestic Administrative Agent, which may be given by telephone. Each such notice must be received by the Domestic Swing Line Lender and the Domestic Administrative Agent not later than 11:00 a.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the Domestic Swing Line Lender and the Domestic Administrative Agent of a written Domestic Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Domestic Borrower.  Promptly after receipt by the Domestic Swing Line Lender of any telephonic Domestic Swing Line Loan Notice, the Domestic Swing Line Lender will confirm with the Domestic Administrative Agent (by telephone or in writing) that the Domestic Administrative Agent has also received such Domestic Swing Line Loan Notice and, if not, the Domestic Swing Line Lender will notify the Domestic Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the Domestic Swing Line Lender has received notice (by telephone or in writing) from the Domestic Administrative Agent (including at the request of any Domestic Lender) prior to 11:00 a.m. on the date of the proposed Domestic Swing Line Borrowing (A) directing the Domestic Swing Line Lender not to make such Domestic Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.05(a)(i), or (B) that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to the terms and conditions hereof, the Domestic Swing Line Lender will, not later than 12:00 noon on the borrowing date specified in such Domestic Swing Line Loan Notice, make the amount of its Domestic Swing Line Loan available to the Domestic Borrower at its office by crediting the account of the Domestic Borrower on the books of the Domestic Swing Line Lender in immediately available funds.

 

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(ii)           Canadian Borrowing Procedures.  Each Canadian Swing Line Borrowing shall be made upon the Canadian Borrower’s irrevocable notice to the Canadian Swing Line Lender and the Canadian Administrative Agent, which may be given by telephone. Each such notice must be received by the Canadian Swing Line Lender and the Canadian Administrative Agent not later than 2:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the Canadian Swing Line Lender and the Canadian Administrative Agent of a written Canadian Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Canadian Borrower.  Promptly after receipt by the Canadian Swing Line Lender of any telephonic Canadian Swing Line Loan Notice, the Canadian Swing Line Lender will confirm with the Canadian Administrative Agent (by telephone or in writing) that the Canadian Administrative Agent has also received such Canadian Swing Line Loan Notice and, if not, the Canadian Swing Line Lender will notify the Canadian Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the Canadian Swing Line Lender has received notice (by telephone or in writing) from the Canadian Administrative Agent (including at the request of any Canadian Lender) prior to 2:00 p.m. on the date of the proposed Canadian Swing Line Borrowing (A) directing the Canadian Swing Line Lender not to make such Canadian Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.05(a)(ii), or (B) that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to the terms and conditions hereof, the Canadian Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Canadian Swing Line Loan Notice, make the amount of its Canadian Swing Line Loan available to the Canadian Borrower at its office by crediting the account of the Canadian Borrower on the books of the Canadian Swing Line Lender in immediately available funds.

 

(c)                                  (i)                   Refinancing of Domestic Swing Line Loans.

 

(A)          The Domestic Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Domestic Borrower (which hereby irrevocably requests the Domestic Swing Line Lender to so request on its behalf), that each Domestic Lender make a Committed Base Rate Loan in an amount equal to such Lender’s Pro Rata Share of the amount of Domestic Swing Line Loans then outstanding.  Such request shall be made 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, but subject to the unutilized portion of the Aggregate Domestic Commitments and the conditions set forth in Section 4.02.  The Domestic Swing Line Lender shall furnish the Domestic Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Domestic Administrative Agent.  Each Domestic Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Committed Loan Notice available to the Domestic Administrative Agent in immediately available funds for the account of the Domestic Swing Line Lender at the Administrative Agent’s Office of the Domestic Administrative Agent not later than 11:00 a.m. on the day specified in

 

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such Committed Loan Notice, whereupon, subject to Section 2.05(c)(i)(B), each Domestic Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Domestic Borrower in such amount.  The Domestic Administrative Agent shall remit the funds so received to the Domestic Swing Line Lender.

 

(B)          If for any reason any Committed Borrowing cannot be requested in accordance with Section 2.05(c)(i)(A) or any Domestic Swing Line Loan cannot be refinanced by such a Committed Borrowing, the Committed Loan Notice submitted by the Domestic Swing Line Lender shall be deemed to be a request by the Domestic Swing Line Lender that each of the Domestic Lenders fund its risk participation in the relevant Domestic Swing Line Loan and each Domestic Lender’s payment to the Domestic Administrative Agent for the account of the Domestic Swing Line Lender pursuant to Section 2.05(c)(i)(A) shall be deemed payment in respect of such participation.

 

(C)          If any Domestic Lender fails to make available to the Domestic Administrative Agent for the account of the Domestic Swing Line Lender any amount required to be paid by such Domestic Lender pursuant to the foregoing provisions of this Section 2.05(c)(i) by the time specified in Section 2.05(c)(i)(A), the Domestic Swing Line Lender shall be entitled to recover from such Domestic Lender (acting through the Domestic 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 Domestic Swing Line Lender at a rate per annum equal to the Federal Funds Rate from time to time in effect.  A certificate of the Domestic Swing Line Lender submitted to any Domestic Lender (through the Domestic Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

(D)          Each Domestic Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Domestic Swing Line Loans pursuant to this Section 2.05(c)(i) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Domestic Lender may have against the Domestic Swing Line Lender, the Domestic 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 Domestic Lender’s obligation to make Committed Domestic Loans pursuant to this Section 2.05(c)(i) is subject to the conditions set forth in Section 4.02.  Any such purchase of participations shall not relieve or otherwise impair the obligation of the Domestic Borrower to repay Domestic Swing Line Loans, together with interest as provided herein.

 

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(ii)           Refinancing of Canadian Swing Line Loans.

 

(A)          The Canadian Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Canadian Borrower (which hereby irrevocably requests the Canadian Swing Line Lender to so request on its behalf), that each Canadian Lender make a Committed Base Rate Loan in an amount equal to such Lender’s Pro Rata Share of the amount of Canadian Swing Line Loans then outstanding.  Such request shall be made 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, but subject to the unutilized portion of the Aggregate Canadian Commitments and the conditions set forth in Section 4.02.  The Canadian Swing Line Lender shall furnish the Canadian Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Canadian Administrative Agent.  Each Canadian Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Committed Loan Notice available to the Canadian Administrative Agent in immediately available funds for the account of the Canadian Swing Line Lender at the Administrative Agent’s Office of the Canadian Administrative Agent not later than 11:00 a.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.05(c)(ii)(B), each Canadian Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Canadian Borrower in such amount.  The Canadian Administrative Agent shall remit the funds so received to the Canadian Swing Line Lender.

 

(B)          If for any reason any Committed Borrowing cannot be requested in accordance with Section 2.05(c)(ii)(A) or any Canadian Swing Line Loan cannot be refinanced by such a Committed Borrowing, the Committed Loan Notice submitted by the Canadian Swing Line Lender shall be deemed to be a request by the Canadian Swing Line Lender that each of the Canadian Lenders fund its risk participation in the relevant Canadian Swing Line Loan and each Canadian Lender’s payment to the Canadian Administrative Agent for the account of the Canadian Swing Line Lender pursuant to Section 2.05(c)(ii) shall be deemed payment in respect of such participation.

 

(C)          If any Canadian Lender fails to make available to the Canadian Administrative Agent for the account of the Canadian Swing Line Lender any amount required to be paid by such Canadian Lender pursuant to the foregoing provisions of this Section 2.05(c)(ii) by the time specified in Section 2.05(c)(ii)(A), the Canadian Swing Line Lender shall be entitled to recover from such Canadian Lender (acting through the Canadian 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 Canadian Swing Line Lender at a rate per annum equal to the Interbank Reference Rate from time to time in effect.  A certificate of the Canadian Swing Line Lender submitted to any Canadian Lender (through the

 

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Canadian Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

(D)          Each Canadian Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Canadian Swing Line Loans pursuant to this Section 2.05(c)(ii) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Canadian Lender may have against the Canadian Swing Line Lender, the Canadian 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 Canadian Lender’s obligation to make Committed Canadian Loans pursuant to this Section 2.05(c)(ii) is subject to the conditions set forth in Section 4.02.  Any such purchase of participations shall not relieve or otherwise impair the obligation of the Canadian Borrower to repay Canadian Swing Line Loans, together with interest as provided herein.

 

(d)           (i)                   Repayment of Domestic Participations.

 

(A)          At any time after any Domestic Lender has purchased and funded a participation in a Domestic Swing Line Loan, if the Domestic Swing Line Lender receives any payment on account of such Domestic Swing Line Loan, the Domestic Swing Line Lender will distribute to such Domestic Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Domestic Lender’s participation was outstanding and funded) in the same funds as those received by the Domestic Swing Line Lender.

 

(B)          If any payment received by the Domestic Swing Line Lender in respect of principal or interest on any Domestic Swing Line Loan is required to be returned by the Domestic Swing Line Lender, each Domestic Lender shall pay to the Domestic Swing Line Lender its Pro Rata Share thereof on demand of the Domestic 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 Domestic Administrative Agent will make such demand upon the request of the Domestic Swing Line Lender.

 

(ii)                                  Repayment of Canadian Participations.

 

(A)          At any time after any Canadian Lender has purchased and funded a participation in a Canadian Swing Line Loan, if the Canadian Swing Line Lender receives any payment on account of such Canadian Swing Line Loan, the Canadian Swing Line Lender will distribute to such Canadian Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Canadian Lender’s participation was outstanding and funded) in the same funds as those received by the Canadian Swing Line Lender.

 

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(B)          If any payment received by the Canadian Swing Line Lender in respect of principal or interest on any Canadian Swing Line Loan is required to be returned by the Canadian Swing Line Lender, each Canadian Lender shall pay to the Canadian Swing Line Lender its Pro Rata Share thereof on demand of the Canadian 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 Interbank Reference Rate.  The Canadian Administrative Agent will make such demand upon the request of the Canadian Swing Line Lender.

 

(e) (i)      Interest for Account of Domestic Swing Line Lender.  The Domestic Swing Line Lender shall be responsible for invoicing the Domestic Borrower for interest on the Domestic Swing Line Loans.  Until each Domestic Lender funds its Committed Base Rate Loan or participation pursuant to this Section 2.05 to refinance such Lender’s Pro Rata Share of any Domestic Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Domestic Swing Line Lender.

 

(ii)           Interest for Account of Canadian Swing Line Lender.  The Canadian Swing Line Lender shall be responsible for invoicing the Canadian Borrower for interest on the Canadian Swing Line Loans.  Until each Canadian Lender funds its Committed Base Rate Loan or participation pursuant to this Section 2.05 to refinance such Lender’s Pro Rata Share of any Canadian Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Canadian Swing Line Lender.

 

(f)  (i)      Payments Directly to Domestic Swing Line Lender.  The Domestic Borrower shall make all payments of principal and interest in respect of the Domestic Swing Line Loans directly to the Domestic Swing Line Lender.

 

(ii)           Payments Directly to Canadian Swing Line Lender.  The Canadian Borrower shall make all payments of principal and interest in respect of the Canadian Swing Line Loans directly to the Canadian Swing Line Lender.

 

2.06        Prepayments.

 

(a)           Each Borrower may, upon notice to the applicable Administrative Agent, at any time or from time to time voluntarily prepay Committed Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by such Administrative Agent not later than 10:00 a.m. (Pacific time) (A) three Business Days prior to any date of prepayment of Eurodollar Rate Committed Loans, and (B) on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate Committed 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 Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each such notice shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to be prepaid.  Such Administrative Agent will promptly notify each applicable Lender of its receipt of each such notice, and of such Lender’s Pro Rata Share of such prepayment.  If such notice is given by a 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

 

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Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the applicable Committed Loans of the applicable Lenders in accordance with their respective Pro Rata Shares.

 

(b)           Each Borrower may, upon notice to the applicable Swing Line Lender (with a copy to the applicable Administrative Agent), at any time or from time to time, voluntarily prepay its Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the applicable Swing Line Lender and the applicable Administrative Agent not later than 10:00 a.m. (Pacific time) on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000.  Each such notice shall specify the date and amount of such prepayment.  If such notice is given, the applicable Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

 

(c)           If for any reason the Outstanding Amount of all Domestic Loans and L/C Obligations in respect of Domestic Letters of Credit at any time exceeds the Aggregate Domestic Commitments then in effect, the Domestic Borrower shall within ten (10) Business Days after notice from the Domestic Administrative Agent of such excess prepay Domestic Loans and/or Cash Collateralize the Domestic L/C Obligations in an aggregate amount equal to such excess.  If for any reason the Outstanding Amount of all Canadian Loans, L/C Obligations in respect of Canadian Letters of Credit and Acceptances at any time exceeds 103% of the Aggregate Canadian Commitments then in effect, the Canadian Borrower shall within ten (10) Business Days after notice from the Canadian Administrative Agent of such excess prepay Canadian Loans and/or Cash Collateralize the L/C Obligations in respect of Canadian Letters of Credit and/or Acceptances in an aggregate amount equal to such excess.

 

2.07        Reduction or Termination of Commitments.

 

(a)           Each Borrower may, upon notice to the applicable Administrative Agent, terminate the Aggregate Domestic Commitments or Aggregate Canadian Commitments as applicable, or permanently reduce the sum thereof to an amount not less than the then Outstanding Amount of all Loans to, and L/C Obligations and Acceptance Usage of, such Borrower; provided that (i) any such notice shall be received by such Administrative Agent not later than 10:00 a.m. (Pacific time) two Business Days prior to the date of termination or reduction, and (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof;

 

(b)           There shall be a mandatory reduction by a Borrower of the Aggregate Domestic Commitments or Aggregate Canadian Commitments (without duplication), as applicable, by the following amounts:

 

(i)            not later than twelve months following a Disposition by such Borrower permitted under Section 7.05(l), by 100% of the net cash proceeds (net of all sale expenses and taxes actually paid) realized therefrom and not reinvested in property or assets in the Post-Secondary Education Business or other businesses permitted under Section 7.07 hereof of the Borrowers and their respective Subsidiaries; and

 

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(ii)           not later than three Business Days following an Approved Debt Issuance, by 100% of the net cash proceeds received by such Borrower and any Subsidiary from the issuance thereof to the extent such proceeds exceed any available basket in Section 7.03.

 

(c)           The applicable Administrative Agent shall promptly notify the applicable Lenders of any such notice of reduction or termination of the Aggregate Domestic Commitments or Aggregate Canadian Commitments.  Once reduced in accordance with this Section, the Aggregate Domestic Commitments or Aggregate Canadian Commitments as applicable, may not be increased.  Any such reduction shall be applied to the Commitment of each applicable Lender according to its Pro Rata Share.  All fees accrued on the Aggregate Domestic Commitments or Aggregate Canadian Commitments that are terminated, until the effective date of any termination, shall be paid on the effective date of such termination.

 

2.08        Repayment of Loans.

 

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

 

(b)           The Domestic Borrower shall repay each Domestic Swing Line Loan on or before the Maturity Date.

 

(c)           The Canadian Borrower shall repay each Canadian Swing Line Loan on or before the Maturity Date.

 

2.09        Interest.

 

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

 

(b)           If any amount payable by any Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), upon election by Requisite Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law.  Furthermore, while any Event of Default exists or after acceleration, upon election by Administrative Agent or Requisite Lenders the Borrowers shall pay interest on the principal amount of all of their outstanding Obligations at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law.  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

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(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.

 

2.10                        Fees.

 

In addition to certain fees described in subsections (i) and (j) of Section 2.04:

 

(a)                                 Commitment Fee.  Each Borrower shall pay to the applicable Administrative Agent for the account of each applicable Lender (other than Defaulting Lenders) in accordance with its Pro Rata Share, a commitment fee equal to the Applicable Rate times the actual daily amount by which the Aggregate Domestic Commitments or Aggregate Canadian Commitments as applicable, exceed the sum of (i) the Outstanding Amount of Committed Loans to such Borrower (excluding for the avoidance of doubt any Swing Line Loans), (ii) the Outstanding Amount of L/C Obligations of such Borrower and (iii) in the case of the Canadian Borrower, the Outstanding Amount of Acceptance Usage.  The commitment fee shall be due and payable quarterly in arrears on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Maturity Date.  The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.  The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met.

 

(b)                                 Other Fees.  Each Borrower shall pay to the Arrangers, the Administrative Agents and the Syndication Agent fees in the amounts and at the times specified in the Fee Letters.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.  The Borrowers 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.

 

2.11                        Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

 

(a)                                 Interest on Base Rate Loans, Acceptances and BA Equivalent Loans shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed.  Computation of all other types of interest and all fees shall be calculated on the basis of a year of 360 days and the actual number of days elapsed, which results in a higher yield to the payee thereof than a method based on a year of 365 or 366 days.  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 bear interest for one day.  Each rate of interest which is calculated with reference to a period (the “Deemed Interest Period”) that is less than the actual number of days in the calendar year of calculation is, for

 

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the purposes of the Interest Act (Canada), equivalent to a rate based on a calendar year calculated by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing by the number of days in the Deemed Interest Period.

 

(b)                                 Subject to Section 1.03(b), if, as a result of any restatement of or other adjustment to the financial statements of the Borrowers for any reason (other than solely for comparative purposes), the Domestic Borrower or the Lenders determine that (i) the Consolidated Leverage Ratio as calculated by the Domestic Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would have resulted in higher pricing for such period, the Domestic Borrower and the Canadian Borrower shall immediately and retroactively be obligated to pay to the Administrative Agents for the account of the applicable Lenders or L/C Issuer, as the case may be, promptly on demand by the Administrative Agents (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Domestic Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agents, any Lender or L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period.  This paragraph shall not limit the rights of the Administrative Agents, any Lender or L/C Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(i) or 2.09(b) or under Article VIII.  The Borrowers’ obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder for the period of one year.

 

2.12                        Evidence of Debt.

 

(a)                                 The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the applicable Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agents and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers 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 Borrowers hereunder to pay any amount owing with respect to the Loans, L/C Obligations or Acceptances.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agents in respect of such matters, the accounts and records of the Administrative Agents shall control in the absence of manifest error.  Upon the request of any Lender made through the applicable Administrative Agent, such Lender’s Loans may be evidenced by a Note 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 the applicable Loans and payments with respect thereto.

 

(b)                                 In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agents shall maintain in accordance with their usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agents and the accounts and records of any

 

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Lender in respect of such matters, the accounts and records of the Administrative Agents shall control.

 

2.13                        Payments Generally.

 

(a)                                 All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrowers hereunder shall be made to the applicable Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office of such Administrative Agent in Dollars or, in the case of payments regarding Canadian Loans or Canadian Letters of Credit, in Canadian Dollars, and, in all cases, in immediately available funds not later than 12:00 noon on the date specified herein.  Such Administrative Agent will promptly distribute to each applicable Lender its Pro Rata Share (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 Agents after 12:00 noon shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

 

(b)                                 Subject to the definition of “Interest Period,” 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.

 

(c)                                  If at any time insufficient funds are received by and available to the Administrative Agents to pay fully all amounts of principal, L/C Borrowings, Acceptance Usage, interest and fees then due hereunder, such funds shall be applied (i) first, toward costs and expenses (including Attorney Costs and amounts payable under Article III) incurred by the Administrative Agents and each Lender that are subject to reimbursement by the Borrowers pursuant to the terms of the Loan Documents, (ii) second, toward repayment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (iii) third, toward repayment of principal, L/C Borrowings and Acceptance Usage then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal, L/C Borrowings and Acceptance Usage then due to such parties.

 

(d)                                 Unless a Borrower or any Lender has notified the applicable Administrative Agent prior to the date any payment is required to be made by it to such Administrative Agent hereunder, that such Borrower or Lender, as the case may be, will not make such payment, such Administrative Agent may assume that such Borrower or Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to such Administrative Agent in immediately available funds, then:

 

(i)                                     if the Borrower failed to make such payment, each applicable Lender shall forthwith on demand repay to such Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together

 

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with interest thereon in respect of each day from and including the date such amount was made available by such Administrative Agent to such Lender to the date such amount is repaid to such Administrative Agent in immediately available funds, at the Federal Funds Rate in the case of the Domestic Administrative Agent and the Interbank Reference Rate in the case of the Canadian Administrative Agent, from time to time in effect; and

 

(ii)                                  if any Lender failed to make such payment, such Lender shall forthwith on demand pay to such Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by such Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum equal to the Federal Funds Rate in the case of the Domestic Administrative Agent and the Interbank Reference Rate in the case of the Canadian Administrative Agent, from time to time in effect. If such Lender pays such amount to the applicable Administrative Agent, then such amount shall constitute such Lender’s Committed Loan, included in the applicable Borrowing.  If such Lender does not pay such amount forthwith upon the applicable Administrative Agent’s demand therefor, such Administrative Agent may make a demand therefor upon the applicable Borrower, and such Borrower shall pay such amount to such Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the applicable Administrative Agent or Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

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

 

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

 

(f)                                   The obligations of the Lenders hereunder to make Committed Loans, to fund participations in Letters of Credit and Swing Line Loans, to accept Acceptances and to make payments pursuant to Section 10.04(c) are several and not joint.  The failure of any Lender to make any Committed Loan, to fund any such participation, to accept any such Acceptance or to make any such 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 Committed Loan, to accept Acceptances, to purchase its participation or to make its payments under Section 10.04(c).

 

(g)                                  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.

 

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(h)                                 On each date when the payment of any principal, interest or fees are due under any Loan Document, the applicable Borrower agrees to maintain on deposit in an ordinary checking account maintained by such Borrower with the applicable Administrative Agent (as such account shall be designated by such Borrower in a written notice to such Administrative Agent from time to time, the “Borrower Account”) an amount sufficient to pay such principal, interest or fees in full.  Each Borrower hereby authorizes the applicable Administrative Agent (i) to deduct automatically all principal, interest or fees when due under any Loan Document from its Borrower Account, and (ii) if and to the extent any payment under any Loan Document is not made when due, to deduct automatically any such amount from any or all of the accounts of such Borrower maintained with such Administrative Agent.  The Administrative Agent agrees to provide timely notice to the applicable Borrower of any automatic deduction made pursuant to this Section 2.13(h).

 

2.14                        Sharing of Payments.

 

(a)                                 If, other than as expressly provided elsewhere herein, any Domestic Lender shall obtain on account of the Committed Domestic Loans made by it, its participations in L/C Obligations regarding Domestic Letters of Credit or in Domestic Swing Line Loans held by it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Domestic Lender shall immediately (a) notify the Domestic Administrative Agent of such fact, and (b) purchase from the other Domestic Lenders such participations in the Committed Domestic Loans made by them and/or such subparticipations in the participations in L/C Obligations regarding Domestic Letters of Credit or Domestic Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Domestic Lender to share the excess payment in respect of such Committed Domestic Loans or such participations, as the case may be, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Domestic Lender, such purchase shall to that extent be rescinded and each such other Domestic Lender shall repay to the purchasing Domestic Lender the purchase price paid therefor, together with an amount equal to such paying Domestic Lender’s ratable share (according to the proportion of (i) the amount of such paying Domestic Lender’s required repayment to (ii) the total amount so recovered from the purchasing Domestic Lender) of any interest or other amount paid or payable by the purchasing Domestic Lender in respect of the total amount so recovered.  The Domestic Borrower agrees that any Domestic Lender so purchasing a participation from another Domestic Lender may, to the fullest extent permitted by law, exercise all of its rights of payment (including the right of set-off, but subject to Section 10.08) with respect to such participation as fully as if such Domestic Lender were the direct creditor of the Domestic Borrower in the amount of such participation.  The Domestic Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Domestic Lenders following any such purchases or repayments.  Each Domestic Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Domestic Lender were the original owner of the Obligations purchased.

 

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(b)                                 If, other than as expressly provided elsewhere herein, any Canadian Lender shall obtain on account of the Committed Canadian Loans made by it, Acceptances accepted by it or its participations in L/C Obligations regarding Canadian Letters of Credit or in Canadian Swing Line Loans held by it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Canadian Lender shall immediately (a) notify the Canadian Administrative Agent of such fact, and (b) purchase from the other Canadian Lenders such participations in the Committed Canadian Loans made by them or the Acceptances accepted by them and/or such subparticipations in the participations in L/C Obligations or Canadian Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Canadian Lender to share the excess payment in respect of such Committed Canadian Loans or such participations, as the case may be, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Canadian Lender, such purchase shall to that extent be rescinded and each such other Canadian Lender shall repay to the purchasing Canadian Lender the purchase price paid therefor, together with an amount equal to such paying Canadian Lender’s ratable share (according to the proportion of (i) the amount of such paying Canadian Lender’s required repayment to (ii) the total amount so recovered from the purchasing Canadian Lender) of any interest or other amount paid or payable by the purchasing Canadian Lender in respect of the total amount so recovered.  The Canadian Borrower agrees that any Canadian Lender so purchasing a participation from another Canadian Lender may, to the fullest extent permitted by law, exercise all of its rights of payment (including the right of set-off, but subject to Section 10.08) with respect to such participation as fully as if such Canadian Lender were the direct creditor of the Canadian Borrower in the amount of such participation.  The Canadian Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Canadian Lenders following any such purchases or repayments.  Each Canadian Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Canadian Lender were the original owner of the Obligations purchased.

 

(c)                                  From and after the earlier of (i) the occurrence of an Event of Default under Section 8.01(f) or (g) or (ii) the occurrence of any Event of Default and the acceleration of the Obligations hereunder (each such occurrence, a “Sharing Event”), each Lender (x) agrees to purchase from each other Lender, and each such other Lender agrees to sell, a risk participation in such other Lender’s outstanding Loans such that, after giving effect to such purchase and sale, each Lender holds a risk participation in each outstanding Loan in an amount equal to such Lender’s Aggregate Pro Rata Share and (y) agrees that its risk participation in each Swing Line Loan, L/C Obligation and Acceptance shall be adjusted (through purchase and sale or otherwise) to an amount equal to such Lender’s Aggregate Pro Rata Share thereof.  It is the intention of the Lenders that after giving effect to the foregoing, each Lender shall hold an interest in each outstanding Loan, L/C Obligation, Swing Line Loan and Acceptance equal to such Lender’s Aggregate Pro Rata Share, and each Lender agrees to take such actions as may be reasonably requested by the Administrative Agent to effect the foregoing.  Notwithstanding anything to the contrary in Section 2.14(a) or (b), if, from and

 

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after a Sharing Event, any Lender shall obtain on account of the Committed Loans made by it, the Acceptances accepted by it, or its participations in L/C Borrowings regarding Letters of Credit or in Swing Line Loans, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its Aggregate Pro Rata Share thereof, such Lender shall immediately (a) notify the Administrative Agents of such fact, and (b) purchase from the other Lenders such participations in the Committed Loans made by them, the Acceptances accepted by them and/or such subparticipations in the participations in L/C Borrowings regarding Letters of Credit or Swing Line Loans, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Committed Loans, Acceptances or such participations, as the case may be, with each of them according to each such Lender’s Aggregate Pro Rata Share; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each such other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrowers agree that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all of its rights of payment (including the right of set-off, but subject to Section 10.08) with respect to such participation as fully as if such Lender were the direct creditor of the applicable Borrower in the amount of such participation.  The Administrative Agents will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments.  Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

 

2.15                        Increase in Aggregate Domestic Commitments.

 

(a)                                 Provided there exists no Default, upon notice to the Domestic Administrative Agent (who shall promptly notify the Domestic Lenders), the Borrowers may from time to time request an increase in the Aggregate Domestic Commitments by an amount (for all such requests) not exceeding $75,000,000; provided, however, that (i) the Domestic Borrower may make a maximum of one request per year that results in an increased Domestic Commitment and (ii) the minimum amount of any single increase in Aggregate Domestic Commitments shall be $10,000,000.  At the time of sending such notice, the Domestic Borrower (in consultation with the Domestic Administrative Agent) shall specify the time period within which each Domestic Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Domestic Lenders).  Each Domestic Lender shall notify the Domestic Administrative Agent within such time period whether or not it agrees to increase its Domestic Commitment, and, if so, whether by an amount equal to, greater than, or less than its Pro Rata Share of such requested increase.  Any Domestic Lender not responding within such time period shall be deemed to have declined to increase such Domestic Commitment.  The Domestic Administrative Agent shall notify the

 

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Domestic Borrower and each Domestic Lender of the Domestic Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested increase, the Domestic Borrower may also invite additional Eligible Assignees to become Domestic Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Domestic Administrative Agent and its counsel.

 

(b)                                 If the Aggregate Domestic Commitments are increased in accordance with this Section, the Domestic Administrative Agent and the Domestic Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase.  The Domestic Administrative Agent shall promptly notify the Domestic Borrower and the Domestic Lenders of the final allocation of such increase and the Increase Effective Date.  As a condition precedent to such increase, the Domestic Borrower shall deliver to the Domestic Administrative Agent a certificate of each Loan Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Domestic Borrower, 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 in all material respects 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 in all material respects as of such earlier date, and except that for purposes of this Section 2.15, the representations and warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01, and (B) no Default exists.  The Domestic Borrower shall prepay any Committed Domestic Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep such outstanding Committed Domestic Loans ratable with any revised Pro Rata Shares arising from any nonratable increase in the Domestic Commitments under this Section.

 

(c)                                  This Section shall supersede any provisions in Sections 2.14 or 10.01 to the contrary.

 

2.16                        Cash Collateral for an L/C Issuer or a Swing Line Lender.  At any time that any Lender is an Impacted Lender, upon the request of the applicable L/C Issuer or Swing Line Lender to the applicable Administrative Agent and Borrower, such Borrower shall, within ten (10) Business Days of such request, pledge and deposit with or deliver to the applicable Administrative Agent as collateral, for the benefit of the applicable L/C Issuer or Swing Line Lender, cash or deposit account balances, in an aggregate amount not less than such Impacted Lender’s applicable Pro Rata Share of the then Outstanding Amount of all such L/C Obligations or Swing Line Loans, as applicable, pursuant to documentation in form and substance reasonably satisfactory to the applicable Administrative Agent and the applicable L/C Issuer or Swing Line Lender, which arrangements and documents are hereby consented to by the Lenders.  The Domestic Borrower hereby grants to the Domestic Administrative Agent, for the benefit of the Domestic L/C Issuer and the Domestic Swing Line Lender, as applicable, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing, and the Canadian Borrower hereby grants to the Canadian Administrative Agent, for the benefit of the Canadian L/C Issuer and the Canadian Swing Line Lender, as applicable, a security interest in all

 

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such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Such collateral shall be maintained in blocked, interest bearing deposit accounts at Bank of America.  This Section and any agreements or other documents delivered in connection with this Section shall not be prohibited by, or otherwise conflict with, any contrary provision herein, including Sections 2.13, 2.14 and 7.01.

 

2.17                        Defaulting Lenders.  Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(a)                                 Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.

 

(b)                                 Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agents for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agents from a Defaulting Lender pursuant to Section 10.08 shall be applied at such time or times as may be determined by the Administrative Agents as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agents hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuers or Swing Line Lenders hereunder; third, to Cash Collateralize the L/C Issuers’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.16; fourth, as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agents; fifth, if so determined by the Administrative Agents and the Borrowers, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuers’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.16; sixth, to the payment of any amounts owing to the Lenders, the L/C Issuers or the Swing Line Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuers or the Swing Line Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Lenders that are not Defaulting Lenders (such Lenders, “Non-Defaulting Lenders”) on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until

 

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such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.17(d).  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.17(b) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(c)                                  Certain Fees.

 

(i)                                     No Defaulting Lender shall be entitled to receive any fee payable under Section 2.10(a) for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(ii)                                  Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided cash collateral pursuant to Section 2.16.

 

(iii)                               With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (i) or (ii) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (d) below, (y) pay to the L/C Issuers and the Swing Line Lenders, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuers’ or Swing Line Lenders’ Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

(d)                                 Reallocation of Applicable Percentages to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.02 are satisfied at the time of such reallocation (and, unless the Borrowers shall have otherwise notified the Administrative Agents at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations with respect to Letters of Credit, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

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(e)           Cash Collateral, Repayment of Swing Line Loans.  If the reallocation described in clause (d) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.16.

 

2.18        Defaulting Lender Cure.  If the Borrower, the Administrative Agent, Swing Line Lender and the L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, 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 cash collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Committed Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.17(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that 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 to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender..

 

ARTICLE III
 TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)           Any and all payments by the Borrowers to or for the account of the Administrative Agents or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, except as required by applicable Laws.  If any Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable by such Borrower under any Loan Document to any Administrative Agent or any Lender (excluding, in the case of an Administrative Agent and each Lender, taxes imposed on or measured by its overall net income or capital, franchise taxes imposed on it (in lieu of net income taxes), any branch profits or similar tax imposed by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or maintains a lending office or is deemed to be doing business on all or part of its net income, profits or gains, and any taxes imposed on amounts payable by the Borrowers under Sections 1471 through 1474 of the Code and regulations promulgated thereunder (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as “Taxes”): (i) subject to Section 10.14, the sum payable by such Borrower shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), each of such Administrative Agent and Lender receives an amount equal to the sum

 

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it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, such Borrower shall furnish to such Administrative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof (or such other evidence reasonably acceptable to such Administrative Agent); provided that no amount shall be required to be paid to any Lender or any Administrative Agent under this Section 3.01(a) except to the extent that any change after the date hereof (in the case of each Lender listed on the signature pages hereof) or after the date of the Assignment and Assumption pursuant to which such Lender became a Lender (in the case of each other Lender) in any such requirement for a deduction, withholding or payment as is mentioned therein shall result in an increase in the rate of such deduction, withholding or payment from that in effect at the date of this Agreement or at the date of such Assignment and Assumption, as the case may be, in respect of payments to such Lender.

 

(b)           In addition, each Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made by it under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as “Other Taxes”).

 

(c)           If any Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to an Administrative Agent or any Lender, such Borrower shall also pay to such Administrative Agent or to such Lender, as the case may be, at the time interest is paid, such additional amount if any that such Administrative Agent or such Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Administrative Agent or such Lender would have received if such Taxes or Other Taxes had not been imposed, it being understood that this Section 3.01(c) shall only apply to the extent that the relevant Borrower is required to pay additional amounts to the applicable Administrative Agent or Lender under Section 3.01(a) or Section 3.01(b).

 

(d)           Each Borrower agrees to indemnify the applicable Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes that are payable by such Borrower pursuant to Section 3.01(a) or Section 3.01(b) (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable by such Borrower under this Section) and are paid by the Administrative Agent and such Lender, and (ii) any liability (including additions to tax, penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Domestic Borrower shall not be obligated under this Section 3.01(d) to any Domestic Lender to the extent that the Domestic Borrower is not required to pay additional amounts with respect to such Taxes under the third paragraph of Section 10.14(a) or Section 10.14(b).  Payment under this subsection (d) shall be made within 30 days after the date the Lender or the Administrative Agent makes a demand therefor.

 

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(e)           If a Borrower determines in good faith that a reasonable basis exists for contesting a Tax or Other Tax with respect to which the Borrower has paid an additional amount under this Section 3.01, the relevant Lender or Administrative Agent, as applicable, shall cooperate with the Borrower (but shall have no obligation to disclose any confidential information, unless arrangements satisfactory to the relevant Lender have been made to preserve the confidential nature of such information) in challenging such Tax or Other Tax at the Borrower’s expense if requested by the Borrower (it being understood and agreed that none of the Administrative Agents or any Lender shall have any obligation to contest, or any responsibility for contesting, any Tax).

 

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 Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the applicable Borrower through the applicable Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate Committed 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 Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.  Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

 

3.03        Inability to Determine Rates.  If the Required Lenders determine that for any reason adequate and reasonable means do not exist for (a) determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Committed Loan, or that the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Committed Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan or (b) determining the rate with respect to a proposed Acceptance or BA Equivalent Loan, as applicable, or that the rate with respect to a proposed Acceptance or BA Equivalent Loan, as applicable, does not adequately and fairly reflect the cost to such Lenders of funding such Acceptance or BA Equivalent Loan, as applicable, the Administrative Agents will promptly so notify the Borrowers and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans, Acceptances or BA Equivalent Loans, as applicable, shall be suspended until the Administrative Agents (upon the instruction of the Required Lenders) revoke such notice.  Upon receipt of such notice, the Borrowers may revoke any pending request for a Borrowing, conversion or continuation of Eurodollar Rate Committed Loans, Acceptances or BA Equivalent Loans, as applicable, or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in Dollars or Canadian Dollars, as applicable, in the amount specified therein.

 

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3.04        Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.

 

(a)           If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender or L/C Issuer; or

 

(ii)           impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

(excluding for purposes of this subsection (a) any such increased costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) the imposition of, or changes or rate of any tax or other amount excluded from the application of Section 3.01(a), and (iii) reserve requirements contemplated by Section 3.04(c), then from time to time upon demand of such Lender (with a copy of such demand to the applicable Administrative Agent), and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or L/C Issuer, the applicable Borrower will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)           If any Lender or L/C Issuer determines that any Change in Law affecting such Lender or L/C Issuer or any lending office of such Lender or such Lender’s or L/C Issuer’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or L/C Issuer’s capital or on the capital of such Lender’s or L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or L/C Issuer or such Lender’s or L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or L/C Issuer’s policies and the policies of such Lender’s or L/C Issuer’s holding company with respect to capital adequacy), then from time to time the applicable Borrower will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer or such Lender’s or L/C Issuer’s holding company for any such reduction suffered.

 

(c)           Each Borrower shall pay to each applicable Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or

 

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including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate 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 15 days’ prior notice (with a copy to the applicable Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 15 days from receipt of such notice.

 

3.05        Funding Losses.  Upon demand of any Lender (with a copy to the applicable Administrative Agent) from time to time, the applicable 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 such 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;

 

(c)           any failure by such Borrower (for a reason other than the failure of such Lender to create or purchase an Acceptance) to repay or draw any Acceptance on any relevant date or in any relevant amount; or

 

(d)           any assignment of a Eurodollar Rate 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 10.15;

 

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.  Such Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by a Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Committed Loan made by it at 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 Rate Committed Loan was in fact so funded.

 

3.06        Matters Applicable to all Requests for Compensation.

 

(a)           A certificate of an Administrative Agent or any Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error.  In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.

 

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(b)           Upon any Lender’s making a claim for compensation under Section 3.01 or 3.04, the applicable Borrower may replace such Lender in accordance with Section 10.15.

 

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

 

ARTICLE IV
 CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01        Conditions of Initial Credit Extension.  The obligation of each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

 

(a)           Unless waived by all the Lenders, the Administrative Agents’ receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agents and their legal counsel:

 

(i)            executed counterparts of this Agreement, sufficient in number for distribution to the Administrative Agents, each Lender and the Borrowers;

 

(ii)           a Note executed by the applicable Borrower in favor of each Lender (whereupon each Lender under the Existing Credit Agreement shall, within a reasonable time, return any note executed by the Borrowers thereunder in favor of such Lender, to the applicable Borrower for cancellation);

 

(iii)          a pledge and security agreement (the “Domestic Pledge and Security Agreement”), duly executed by the Domestic Borrower and each Domestic Guarantor, together with:

 

(A)          certificates representing the pledged equity referred to therein, together with stock powers duly executed in blank for each certificate pledged thereunder,

 

(B)          proper financing statements in form appropriate for filing under the UCC of all jurisdictions that the Domestic Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Domestic Pledge and Security Agreement, covering the Collateral described in the Domestic Pledge and Security Agreement,

 

(C)          completed requests for information, dated on or before the date of the initial Credit Extension, listing all effective financing statements filed in the jurisdictions referred to in clause (B) above that name the Domestic Borrower or any Domestic Guarantor as debtor, together with copies of such financing statements,

 

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(D)          evidence of the completion of all other actions, recordings and filings of or with respect to the Domestic Pledge and Security Agreement that the Domestic Administrative Agent may deem necessary or desirable in order to perfect the Liens created thereby, and

 

(E)           evidence that all other actions that the Domestic Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Domestic Pledge and Security Agreement have been taken;

 

(iv)          a pledge and security agreement (the “Canadian Pledge and Security Agreement”), duly executed by the Canadian Borrower and each Canadian Guarantor, together with:

 

(A)          certificates representing the pledged equity referred to therein, together with stock powers duly executed in blank for each certificate pledged thereunder,

 

(B)          proper financing statements filed under the PPSA and the UCC, if applicable, of all jurisdictions that the Canadian Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Canadian Security Agreement, covering the Collateral described in the Canadian Security Agreement,

 

(C)          evidence of the completion of all other actions, recordings and filings of or with respect to the Canadian Security Agreement that the Canadian Administrative Agent may deem necessary or desirable in order to perfect the Liens created thereby, and

 

(D)          evidence that all other actions that the Canadian Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Canadian Security Agreement have been taken;

 

(v)           executed counterparts of the Third Amended and Restated Guaranty (Canadian Borrower Obligations), sufficient in number for distribution to the Administrative Agents and each Lender;

 

(vi)          executed counterparts of the Third Amended and Restated Guaranty (Domestic Borrower Obligations), sufficient in number for distribution to the Administrative Agents and each Lender;

 

(vii)         executed counterparts of each of the other documents including, without limitation, all filings, recordations, searches and other documents necessary to perfect the security interests in favor of the relevant Administrative Agent for the benefit of the Lenders in the Collateral;

 

(viii)        there shall not exist any order, decree, judgment, ruling or injunction which restrains the consummation of any transaction contemplated hereby or any pending or threatened action, suit, investigation or proceeding, which, if adversely determined,

 

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could reasonably be expected to materially and adversely affect any Borrower and its subsidiaries, any transaction contemplated hereby or the ability of any Borrower, any of its Subsidiaries or any Guarantor to perform its obligations under the Loan Documents or the ability of the Lenders to exercise their rights thereunder;

 

(ix)          there shall have not occurred a material adverse change since June 30, 2011 in the business, results of operations or condition (financial or otherwise) of the Borrowers and their Subsidiaries taken as a whole, or in the facts and information regarding such entities as represented to date, other than as disclosed in the Domestic Borrower’s public filings with the SEC prior to the Closing Date;

 

(x)           evidence reasonably satisfactory to the Administrative Agents that there shall not have occurred any adverse change since June 30, 2011 to the corporate and ownership structure (including articles of incorporation and bylaws, shareholder agreements and management of the Borrowers and their Subsidiaries);

 

(xi)          such certificates of resolutions or other action, incumbency certificates including specimen signatures and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agents may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with the Loan Documents to which such Loan Party is a party;

 

(xii)         such documents and certifications as the Administrative Agents may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Borrower and each Guarantor is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent permitted under Section 6.05 hereof;

 

(xiii)        a favorable opinion of Kirkland & Ellis, LLP and Osler, Hoskin & Harcourt LLP, counsel to the Loan Parties, addressed to the Administrative Agents and each Lender, as to the matters set forth in Exhibit G and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

 

(xiv)        a certificate of a Responsible Officer of each Borrower either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by the respective Loan Parties and the validity against such Persons of the Loan Documents, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

 

(xv)         a certificate signed by a Responsible Officer of each Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in

 

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the aggregate, a Material Adverse Effect, other than as disclosed in the Domestic Borrower’s public filings with the SEC prior to the Closing Date;

 

(xvi)        a certificate from the Domestic Borrower’s chief financial officer certifying that the Domestic Borrower and each of its Subsidiaries are Solvent;

 

(xvii)       insurance certificates naming the applicable Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies to be maintained with respect to all properties of the Loan Parties constituting part of the Collateral; and

 

(xviii)      such other assurances, certificates, documents, consents or opinions as the Administrative Agents, the L/C Issuers, the Swing Line Lenders or the Required Lenders reasonably may require.

 

(b)           Any fees required to be paid on or before the Closing Date shall have been paid.

 

(c)           The Borrowers shall have paid all Attorney Costs of the Administrative Agents to the extent invoiced prior to or on the Closing Date, plus such additional amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrowers, the Administrative Agents and the Administrative Agents’ counsel).

 

(d)           The Closing Date shall have occurred on or before May     , 2012.

 

4.02        Conditions to all Credit Extensions.  The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type, or a continuation of Eurodollar Rate Committed Loans) is subject to the following conditions precedent:

 

(a)           The representations and warranties of any Borrower contained in Article V or any other Loan Document, or which are contained in any document furnished by any Borrower at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to subsection (a) and (b), respectively, of Section 6.01.

 

(b)           No Default shall exist, or would result from such proposed Credit Extension.

 

(c)           The Administrative Agents and, if applicable, the L/C Issuers or the Swing Line Lenders shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

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Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type or a continuation of Eurodollar Rate Committed Loans) submitted by any Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

 

4.03        Conditions to Acceptances.  The creation of any Acceptance hereunder is subject to the following conditions precedent:

 

(a)           On or before the date of the creation of any Acceptance, the Canadian Administrative Agent shall have received, in accordance with the provisions of Section 2.03(b), an originally executed Drawing Notice, in each case signed by a Responsible Officer of the Canadian Borrower.

 

(b)           On the date of the creation of any Acceptance, all conditions precedent described in Section 4.02 shall be satisfied to the same extent as if the creation of such Acceptance were the making of a Loan and the Drawing Date were a Borrowing date.

 

4.04        Conditions Subsequent to the Closing Date.  The obligation of each Lender to maintain its Committed Loans and its Commitments hereunder is subject to satisfaction of the following conditions subsequent:

 

(a)           With respect to the Blairsville, Pennsylvania property, the Domestic Administrative Agent shall have received, within 60 days after the Closing Date (or such later date as the Domestic Administrative Agent may agree):

 

(i)            a mortgage for such property (in form and substance reasonably acceptable to the Domestic Administrative Agent),

 

(ii)           a title insurance policy with respect to such property (in form and substance reasonably acceptable to the Domestic Administrative Agent),

 

(iii)          an environmental assessment report with respect to such property (in form and substance satisfactory to the Lenders) from an environmental consulting firm acceptable to the Lenders, which report shall identify known and potential environmental conditions, and shall provide the consulting firm’s reasonable estimate of the costs and liabilities associated with any such conditions with respect to such property, and the Lenders shall be satisfied with the nature and amount of any such matters and with the Borrowers’ plans with respect thereto, and

 

(iv)          a favorable opinion of Pennsylvania counsel to the Loan Parties, addressed to the Administrative Agents and each Lender as to enforceability of the mortgage on such property and such other matters related to the property as the Required Lenders may reasonably request;

 

provided that, if during such 60-day period (or such period ending on a later date as the Domestic Administrative Agent may agree), the Borrowers (A) secure and execute a mortgage with another lender on the Blairsville, Pennsylvania property or (B)

 

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perform a sale-leaseback transaction with respect to such property, each as otherwise permitted hereunder, the Administrative Agents hereby agree that the conditions set forth in this Section 4.04(a) shall no longer be required.

 

(b)           The Domestic Administrative Agent shall have received, within 45 days after the Closing Date (or such later date as the Domestic Administrative Agent may agree), insurance endorsements (in form and substance reasonably acceptable to the Domestic Administrative Agent) in connection with all insurance policies to be maintained with respect to the properties of the Domestic Borrower and any Domestic Subsidiaries forming part of the Collateral.

 

(c)           The Domestic Administrative Agent shall have (i) received, within 90 days after the Closing Date (or such later date as the Domestic Administrative Agent may agree), an ALTA as-built survey, dated no earlier than the Closing Date and in form and substance reasonably acceptable to the Domestic Administrative Agent, with respect to the Blairsville, Pennsylvania property and (ii) deliver any amendments and obtain any additional title coverages reasonably required by the Domestic Administrative Agent upon receipt of such surveys to address all issues raised therein; provided that, if during the 60-day period (or such period ending on a later date as the Domestic Administrative Agent may agree) referred to in Section 4.04(a), the Borrowers (A) secure and execute a mortgage with another lender on the Blairsville, Pennsylvania property or (B) perform a sale-leaseback transaction with respect to such property, each as otherwise permitted hereunder, the Administrative Agents hereby agree that the conditions set forth in this Section 4.04(c) shall no longer be required

 

(d)           The Borrowers shall use commercially reasonable efforts to deliver to the applicable Administrative Agent, within 45 days after the Closing Date (or such later date as the applicable Administrative Agent may agree), all landlord waivers and collateral access letters with respect to the Domestic Borrower’s headquarters and such other properties as the Administrative Agents shall determine in their reasonable discretion.

 

ARTICLE V
 REPRESENTATIONS AND WARRANTIES

 

Each Borrower represents and warrants to the Administrative Agents and the Lenders that (which representations and warranties in the case of the Canadian Borrower shall be limited to the Canadian Borrower and its Subsidiaries and shall exclude the representations and warranties set forth in Sections 5.12(a), (b) and (c)):

 

5.01        Existence, Qualification and Power; Compliance with Laws.  Each Loan Party (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite corporate or other organizational power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own 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, (c) is duly qualified and is licensed and 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, and (d) is in compliance with all Laws and

 

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all orders, writs, injunctions and decrees applicable to it or its properties; except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect, other than as disclosed in the Domestic Borrower’s public filings with the SEC prior to the Closing Date.

 

5.02        Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person 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 such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority or arbitral award to which such Person or its property is subject; or (c) violate any Law, except for such approvals or consents which will be obtained on or before the Closing Date.

 

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, any Loan Party of this Agreement, any other Loan Document, except for filings in connection with the Liens granted pursuant hereto or thereto.

 

5.04        Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

5.05        Financial Statements; No Material Adverse Effect.

 

(a)                 The consolidated financial statements of the Domestic Borrower and its Subsidiaries most recently delivered to the Administrative Agent (i) were prepared in all material respects in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and, in the case of unaudited financial statements, subject to the absence of footnotes and to normal year-end audit adjustments; (ii) fairly present in all material respects the financial condition of the Borrower and its 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, and, in the case of unaudited financial statements, subject to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Domestic Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness, in each case, to the extent required to be shown thereon in accordance with GAAP.

 

(b)           Since the date of the Audited Financial Statements, (i) there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be

 

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expected to have a Material Adverse Effect, other than as disclosed in the Domestic Borrower’s public filings with the SEC prior to the Closing Date; and (ii) there has been no change after the Closing Date with respect to any matter so disclosed in the Domestic Borrower’s public filings with the SEC that has had or could reasonably be expected to have a Material Adverse Effect.

 

5.06        Litigation.  (a) There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Borrower or any of its Subsidiaries or against any of their properties or revenues that (i) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (ii) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect, other than as disclosed in the Domestic Borrower’s public filings with the SEC prior to the Closing Date; and (b) there has been no change after the Closing Date with respect to any matter so disclosed in the Domestic Borrower’s public filings with the SEC that has had or could reasonably be expected to have a Material Adverse Effect.

 

5.07        No Default.  Neither any Borrower nor any Subsidiary 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        Ownership of Property; Liens.  Each of the Borrowers and each Subsidiary has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  None of the property of each Borrower and its Subsidiaries is subject to any Liens, other than Liens permitted by Section 7.01.

 

5.09        Environmental Compliance.  Each Borrower and its Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrowers have reasonably concluded that, except as specifically disclosed in Schedule 5.09, (a) each of the Borrowers is in compliance with all Environmental Laws and all orders, writs, injunctions and decrees applicable to it or its properties and (b) any such claims or non-compliance with Environmental Laws, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.10        Insurance.  The properties of each Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of a Borrower, 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 each Borrower or the applicable Subsidiary operates.

 

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5.11        Taxes.  Each Borrower and its Subsidiaries have filed all federal, state, provincial and other material tax returns and reports required to be filed, and have paid, collected, withheld and remitted to the appropriate Governmental Authorities all federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets or otherwise due and payable, or required to be collected, withheld or remitted, except (a) 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 (b) those relating to the notice of state tax lien set forth on Schedule 7.01 filed by the State of California Employment Development Department against Heald College, LLC that is under current investigation, and subject to a good faith contest, by the Borrower.  There is no proposed tax assessment against any Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.

 

5.12        ERISA and Canadian Pension Plan Compliance.

 

(a)           Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Domestic Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification, in each case that has not resulted in an Event of Default under Section 8.01(i) and that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  The Borrowers and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

 

(b)           There are no pending or, to the best knowledge of the Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

 

(c)           (i)  No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither any Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither any Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither any Borrower nor any ERISA Affiliate has engaged in a transaction that could reasonably be expected to be subject to Sections 4069 or 4212(c) of ERISA; in each case for sub-clauses (i) through (v) above, that has not resulted in an Event of Default under Section 8.01(i) and that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

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(d)           During the twelve consecutive month period before the date of the execution and delivery of this Agreement and before the date of any Credit Extension hereunder, (i) no steps have been taken to terminate any Canadian Pension Plan (wholly or in part), which could reasonably be expected to result in a Borrower or a Subsidiary being required to make an additional contribution to a Canadian Pension Plan in excess of $5,000,000; (ii) no contribution failure has occurred with respect to any Canadian Pension Plan under any applicable pension benefits laws of any jurisdiction that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (iii) no condition exists and no event or transaction has occurred with respect to any Canadian Pension Plan which could reasonably be expected to result in the incurrence by a Borrower or a Subsidiary of any fine or statutory penalty in excess of $5,000,000; (iv) except as disclosed in the financial statements required to be provided pursuant to this Agreement or as otherwise disclosed in writing from time to time to the Administrative Agents, no Borrower or Subsidiary has any liability, including without limitation a contingent liability, with respect to any benefit under a Canadian Welfare Plan that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; and (v) except as disclosed in the financial statements required to be provided pursuant to this Agreement or as otherwise disclosed in writing from time to time to the Administrative Agents, no Borrower or Subsidiary has any liability in relation to a Canadian Pension Plan as disclosed in an actuarial valuation filed with applicable regulatory authorities that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

(e)           (i) Each Canadian Pension Plan is in compliance in all material respects with all applicable pension benefits and tax laws; (ii) all contributions (including employee contributions made by authorized payroll deductions or other withholdings) required to be made to the appropriate funding agency in accordance with all applicable Laws and the terms of each Canadian Pension Plan have been made in accordance with all applicable Laws and the terms of each Canadian Pension Plan; (iii) to the knowledge of the Canadian Borrower after due inquiry, all liabilities under each Canadian Pension Plan are fully funded, on a going concern and solvency basis, in accordance with the terms of the respective Canadian Pension Plan, the requirements of applicable pension benefits laws and of applicable regulatory authorities and the most recent actuarial report filed with respect to such Canadian Pension Plan; and (iv) to the knowledge of the Canadian Borrower, after due inquiry, no event has occurred and no conditions exist with respect to any Canadian Pension Plan that has resulted or could reasonably be expected to result in any Canadian Pension Plan having its registration revoked or refused for the purposes of any applicable pension benefits or tax laws or being placed under the administration of any relevant pension benefits regulatory authority or being required to pay any taxes or statutory penalties under any applicable pension benefits or tax laws, except for any exceptions to clauses (ii) through (iv) above that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.13        Subsidiaries.  As of the date hereof, the Borrowers have no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13 and have no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13.

 

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5.14        Margin Regulations; Investment Company Act.

 

(a)           Each Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

 

(b)           None of the Borrowers, any Person Controlling a Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

5.15        Disclosure.  Each Borrower has disclosed to the Administrative Agents and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, other than as disclosed in the Domestic Borrower’s public filings with the SEC prior to the Closing Date; and there has been no change after the Closing Date with respect to any matter so disclosed in the Domestic Borrower’s public filings with the SEC that has had or could reasonably be expected to have a Material Adverse Effect.  No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to any Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact (known to any Borrower in the case of any document not furnished by it) necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, each Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ significantly from the projected results.

 

5.16        Intellectual Property; Licenses, Etc.  The Borrowers and their Subsidiaries own, or possess the right to use, all of the material trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, taken as a whole, without conflict with the rights of any other Person which could reasonably be expected to have a Material Adverse Effect.  To the best knowledge of the Borrowers, no slogan or other advertising device, product, process, method, substance, part or other material that is material to the business of the Borrowers and their Subsidiaries, taken as a whole, now employed, or now contemplated to be employed, by any Borrower or any Subsidiary infringes upon any rights held by any other Person which could reasonably be expected to have a Material Adverse Effect.  No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Borrowers, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

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ARTICLE VI
 AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, each Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to (which covenants and agreements in the case of the Canadian Borrower shall be limited to those covenants and agreements that are within the control and discretion of the Canadian Borrower and its Subsidiaries):

 

6.01        Financial Statements.  Deliver to each Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agents and the Required Lenders:

 

(a)           Beginning with the fiscal year ending June 30, 2012, as soon as available, but in any event within 95 days after the end of each fiscal year of the Domestic Borrower, a consolidated balance sheet of the Domestic 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, audited and accompanied by a report and opinion of Ernst & Young LLP or an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with GAAP 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;

 

(b)           as soon as available, but in any event within 50 days after the end of each of the first three fiscal quarters of each fiscal year of the Domestic Borrower, a consolidated balance sheet of the Domestic 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 Domestic 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 and certified by a Responsible Officer of the Domestic Borrower as fairly presenting in all material respects the financial condition, results of operations, shareholders’ equity and cash flows of the Domestic Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes;

 

(c)           as soon as available, but in any event (i) within 95 days after the end of each fiscal year of the Domestic Borrower, projected financial statements for the Domestic Borrower and its Subsidiaries from the end of such fiscal year through the Maturity Date, prepared on an annual basis and showing projections for income, shareholders’ equity and cash flows for such period and (ii) within 30 days after consummation of any Permitted Acquisition for which the total consideration (including assumed indebtedness) given by the Borrowers exceeded $15,000,000, one year of projected financial statements for the Domestic Borrower and its Subsidiaries, prepared on an annual basis and showing projections for income, shareholders’ equity and cash flows for such year; and

 

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(d)           as soon as available, but in any event within 50 days after the end of each of the first three fiscal quarters of each fiscal year, or 95 days after the end of each fiscal year, of the Domestic Borrower or upon the Domestic Administrative Agent’s request, a statement of activity related to the ASFG Agreements and each other Student Note Program, if any, as at the end of such fiscal quarter including (i) total loan fundings made by ASFG or pursuant to such other Student Note Program, (ii) detail of assets (including off balance sheet assets) and liabilities (including contingent recourse liabilities) to the extent this information is not included in the statements provided pursuant to Section 6.01(a) and (b), and (iii) a detailed schedule of principal payments and any other advances received by the Borrowers and recourse payments or any purchases of loans made by the Borrowers.

 

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

 

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

 

(a)           within 95 days after the end of each fiscal year of the Domestic Borrower, a certificate of its independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default under the financial covenants set forth herein or, if any such Default shall exist, stating the nature and status of such event;

 

(b)           within 50 days after the end of each of the first three fiscal quarters of each fiscal year of the Domestic Borrower and within 95 days after the end of each fiscal year of the Domestic Borrower, a duly completed Compliance Certificate signed by a Responsible Officer of the Domestic Borrower;

 

(c)           promptly after any request by any Administrative Agent or any Lender (unless restricted by applicable Law), copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Borrower by independent accountants in connection with the accounts or books of any Borrower or any Subsidiary, or any audit of any of them;

 

(d)           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 any 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 Agents pursuant hereto;

 

(e)           within 95 days after the end of each fiscal year of the Domestic Borrower, an internally prepared consolidated balance sheet of the Canadian Borrower and its Subsidiaries

 

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as at the end of such fiscal year and the related consolidated statements of income or operations for such fiscal year certified by a Responsible Officer of the Domestic Borrower or the Canadian Borrower as fairly presenting in all material respects the financial condition and results of operations of the Canadian Borrower and its Subsidiaries in accordance with GAAP; and

 

(f)            promptly, such additional information regarding the business, financial or corporate affairs of any Borrower or any Subsidiary as any Administrative Agent, at the request of any Lender, may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such financial statements, reports or proxy statements 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 a Borrower posts such documents, or provides a link thereto on a Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on a Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and each Administrative Agent have access (whether a commercial, third-party website or whether sponsored by an Administrative Agent); provided that: (i) the Borrowers shall deliver paper copies of such documents to the Administrative Agents or any Lender who requests the Borrowers to deliver such paper copies until written request to cease delivering paper copies is given by the Administrative Agents or such Lender and (ii) the Borrowers shall notify (which may be by facsimile or electronic mail) the Administrative Agents and each Lender of the posting of any such documents and provide to the Administrative Agents by email electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in every instance the Borrowers shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(c) to the Administrative Agents and each of the Lenders.  Except for such Compliance Certificates, the Administrative Agents 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 Borrowers 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.

 

Each Borrower hereby acknowledges that (a) the Administrative Agents and/or the Arrangers will make available to the Lenders and the L/C Issuers materials and/or information provided by or on behalf of such Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks 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 any Borrower or its securities) (each, a “Public Lender”).  Each Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agents, the Arrangers, the L/C Issuers and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrowers or their respective securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such

 

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Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agents and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”  Notwithstanding the foregoing, no Borrower shall be under any obligation to mark any Borrower Materials “PUBLIC.”

 

6.03        Notices.  Promptly notify the Administrative Agents and each Lender:

 

(a)           of the occurrence of any Default;

 

(b)           of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including any of the following such matters: (i) breach or non-performance of, or any default under, a Contractual Obligation of any Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between any Borrower or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting any Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws;

 

(c)           of the occurrence of any ERISA Event;

 

(d)           of any material change in accounting policies or financial reporting practices by any Borrower or any Subsidiary;

 

(e)           of any Permitted Acquisition where the consideration paid is in the form of cash, equity or assumed Indebtedness;

 

(f)            of any Student Note Program (other than the ASFG Agreements) and any New Program; and

 

(g)           of (i) the institution of any steps by a Borrower, a Subsidiary or any applicable regulatory authority to terminate any Canadian Pension Plan (wholly or in part) which could result in the Borrower or Subsidiary being required to make an additional contribution to the Canadian Pension Plan in excess of $1,000,000; (ii) the failure to make a required contribution to any Canadian Pension Plan that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (iii) the taking of any action with respect to a Canadian Pension Plan which could reasonably be expected to result in the requirement that a Borrower or a Subsidiary furnish a bond or other security to such Canadian Pension Plan or any applicable regulatory authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (iv) the occurrence of any event with respect to any Canadian Pension Plan which could reasonably be expected to result in the incurrence by a Borrower or Subsidiary of any fine or statutory penalty in excess of $1,000,000 with respect to any Canadian Pension Plan or Canadian Welfare Plan.

 

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Domestic Borrower setting forth details of the occurrence referred to therein and stating what action the Borrowers have taken and propose to take with respect

 

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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 as the same shall become due and payable, all of its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets or required to be collected or withheld by it, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by such Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien (other than a Permitted Lien) upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by such Borrower or such Subsidiary.

 

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 except that a Borrower shall not be required to maintain the existence or good standing of any Subsidiary that is not a Material Subsidiary to the extent the preservation thereof is no longer desirable in the conduct of business of such Borrower and its Subsidiaries; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable 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; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could 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 not Affiliates of a Borrower, 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 and Environmental Laws.  Comply in all material respects with the requirements of all Laws and Environmental Laws applicable to it or to its business or property, except in such instances in which (i) such requirement of Law or Environmental Law is being contested in good faith by appropriate proceedings diligently conducted or a bona fide dispute exists with respect thereto; or (ii) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

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6.09        Books and Records.  Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Borrower or such Subsidiary, as the case may be, in all material respects; and maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over such Borrower or such Subsidiary, as the case may be.

 

6.10        Inspection Rights.  Permit representatives and independent contractors of each 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 (provided that such Borrower may, if it so chooses, be present and participate in any such discussions), all at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to such Borrower; provided, however, that when an Event of Default exists any 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 Borrowers at any time during normal business hours and without advance notice.

 

6.11        Use of Proceeds.  Use the proceeds of the Credit Extensions for Permitted Acquisitions, the refinancing of Indebtedness under the Existing Credit Agreement, working capital and other general corporate purposes not in contravention of any Law or of any Loan Document.

 

6.12        Additional Guarantors.  Notify the Administrative Agents at the time that any Person that either is a Material Subsidiary or directly owns a Material Subsidiary becomes a Domestic Subsidiary or a Canadian Subsidiary, and promptly thereafter (and in any event within 30 days or in the case of an Acquisition of a publicly-held Canadian Subsidiary, within four months), cause (a) such Person to become a Guarantor by executing and delivering to the Administrative Agents a counterpart of the Third Amended and Restated Guaranty (Canadian Borrower Obligations) or Third Amended and Restated Guaranty (Domestic Borrower Obligations), as applicable, or such other document as the Administrative Agents shall deem appropriate for such purpose, and (b) the appropriate Person to deliver to the Administrative Agents an agreement or supplement, as the case may be, in substantially the form of Annex I to the Domestic Pledge and Security Agreement or Annex I to the Canadian Pledge and Security Agreement, as applicable, in respect of the shares and/or other assets of such Material Subsidiary and other documents required pursuant thereto and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in this Section 6.12), all in form, content and scope reasonably satisfactory to the Administrative Agents.

 

6.13        Acquisitions.  Prior to consummating any Acquisition, the Borrowers shall have delivered to the Administrative Agents (in form and detail reasonably satisfactory to each Lender and in sufficient copies for each Lender) the following:

 

(i)            Simultaneously with, or as soon as practicable after, the first public announcement of a Borrower’s intention to consummate an Acquisition, a brief summary

 

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of the substantive terms thereof, or if available, a copy of the executed purchase or merger agreement, together with a copy of such announcement; and

 

(ii)           An officer’s certificate, executed by a Responsible Officer of each Borrower, dated the date of consummation of such Acquisition, certifying that immediately before and after giving effect to such Acquisition (A) no Default has occurred and is continuing or will exist, (B) that the Borrowers will be in compliance on a pro forma basis with each of the financial ratios specified in clauses (a), (b) and (c) of Section 7.11 as of the end of the fiscal quarter immediately preceding such Acquisition for which financial statements have been delivered pursuant to Section 6.01 for the twelve-month period preceding such fiscal quarter end, together with, in the case of all such Acquisitions, a reasonably detailed worksheet setting forth the calculation of such ratios and (C) that the Acquisition is a Permitted Acquisition.

 

ARTICLE VII
 NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, each Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly (which covenants and agreements in the case of the Canadian Borrower shall be limited to those covenants and agreements that are within the control and discretion of the Canadian Borrower and its Subsidiaries):

 

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 any Security Document;

 

(b)           Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions or refinancings thereof, provided that the property covered thereby is not increased and any renewal or extension or refinancing of the obligations secured or benefited thereby is permitted by Section 7.03(b);

 

(c)           Permitted Liens; and

 

(d)           Liens securing Indebtedness permitted under Section 7.03(g); provided that (i) such Liens do not at any time encumber any property other than the property financed or refinanced by such Indebtedness (or, in the case of Indebtedness assumed in connection with any Permitted Acquisition, such Liens do not encumber any property other than property that was encumbered at the time of such Permitted Acquisition), and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, in the case of the property being acquired on the date of acquisition.

 

7.02        Investments.  Make any Investments, except:

 

(a)           Investments held by such Borrower or such Subsidiary in the form of cash equivalents or short-term marketable securities;

 

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(b)           advances to officers, directors and employees of the Borrowers and Subsidiaries in an aggregate amount not to exceed $1,500,000 at any time outstanding, for travel, entertainment, relocation and other customary purposes;

 

(c)           Investments of such Borrower in another Borrower or any Guarantor (including any new publicly-held Canadian Subsidiary or any of its Subsidiaries that is required to become a Guarantor within four months of the Acquisition thereof pursuant to Section 6.12) and Investments of any Guarantor in a Borrower or in another Guarantor (including any new publicly-held Canadian Subsidiary or any of its Subsidiaries that is required to become a Guarantor within four months of the Acquisition thereof pursuant to Section 6.12);

 

(d)           Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, including in connection with any Student Note Program, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(e)           Investments that constitute consolidated capital expenditures;

 

(f)            Investments (i) consisting of Student Note Receivables and other receivables and notes received from students in the ordinary course of business and (ii) in any Person whose primary purpose is to own Student Note Receivables in order to facilitate monetization thereof, including, without limitation, pursuant to direct loans by the Borrowers to their students consistent with past practices or pursuant to the prior program with Genesis Lending Services, Inc. or any other similar program that facilitates the creation of notes receivable by the Borrowers that will be recorded on the Borrowers’ balance sheets consistent with past practices;

 

(g)           Guarantees permitted by Section 7.03;

 

(h)           other Investments not to exceed $20,000,000 in the aggregate; and

 

(i)            Permitted Acquisitions (including any Investments then held by the Person so acquired) and any other Investments permitted by Section 7.04.

 

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

 

(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 the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder;

 

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(c)           Guarantees of such Borrower or any Guarantor in respect of Indebtedness otherwise permitted hereunder of a Borrower or a Guarantor (including any new publicly-held Canadian Subsidiary or any of its Subsidiaries that is required to become a Guarantor within four months of the Acquisition thereof pursuant to Section 6.12);

 

(d)           such Borrower may become and remain liable with respect to Indebtedness to the other Borrower or any Guarantor, and any Guarantor (including any new publicly-held Canadian Subsidiary or any of its Subsidiaries that is required to become a Guarantor within four months of the Acquisition thereof pursuant to Section 6.12) may become and remain liable with respect to Indebtedness to a Borrower or any other Guarantor;

 

(e)           obligations (contingent or otherwise) of such Borrower or any Subsidiary existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

 

(f)            Indebtedness in an aggregate principal amount not to exceed $40,000,000 at any time outstanding with respect to surety bonds issued in the ordinary course of business, provided that no more than $10,000,000 of such Indebtedness with respect to surety bonds may be cash-collateralized;

 

(g)           Indebtedness in respect of real property mortgages, capital leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets and Indebtedness assumed in connection with any Permitted Acquisition within the limitations set forth in Section 7.01(d) and any refinancings, refundings, renewals or extensions of such Indebtedness (provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $25,000,000 (for the avoidance of doubt, capital leases set forth on Schedule 7.03 hereto and any refinancings, refundings, renewals or extensions thereof permitted under Section 7.03(b) shall not be counted in the calculation of the aggregate dollar amount under this Section 7.03(g));

 

(h)           subordinated Indebtedness which shall either (i) (A) be unsecured, (B) mature at least six months after (and have no scheduled principal payments prior to) the Maturity Date, (C) have (1) covenants no more restrictive than those provided in this Agreement and (2) have thresholds and baskets relating specifically to events of default that are no more restrictive than those relating to the corresponding Events of Default provided in this Agreement, (D) provide as a matter of contract that the holders of the obligations under this Agreement are to receive cash payment in full before the holders of such subordinated Indebtedness are entitled to receive any cash or non-cash distribution in a foreclosure, insolvency or bankruptcy, (E) require the repayment in full in cash of all obligations (and

 

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termination of all Commitments under) this Agreement prior to any turnover or other consideration (cash or non-cash, junior or otherwise) provided to the holders of the subordinated Indebtedness and (F) contain such other subordination and standstill provisions as are consistent with then current market practice or (ii) have terms and conditions acceptable to the Administrative Agents in all respects;

 

(i)            recourse liability and net liabilities, as carried on the balance sheet of the Domestic Borrower and its Subsidiaries in accordance with GAAP, under the Student Note Program Obligations (or any other securitization, factoring, discount or similar arrangement relating to monetizing student loan obligations and/or maintaining regulatory compliance that is otherwise permitted hereunder); and

 

(j)            contingent recourse liability under the Student Note Program Obligations (or any other securitization, factoring, discount or similar arrangement relating to monetizing student loan obligations and/or maintaining regulatory compliance that is otherwise permitted hereunder).

 

7.04        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with or into, or convey, transfer, lease or otherwise 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 or make any Acquisition, except that, so long as no Default exists or would result therefrom:

 

(a)           any Subsidiary (other than the Canadian Borrower) may merge or amalgamate with (i) such Borrower, provided that such Borrower shall be the continuing or surviving Person, or (ii) any one or more Subsidiaries, provided that when any Guarantor is merging with another Subsidiary, the Guarantor shall be the continuing or surviving Person, and provided, further, that no Guarantor that is a Domestic Subsidiary may merge with a Canadian Subsidiary or Foreign Subsidiary where such Canadian Subsidiary or Foreign Subsidiary is the continuing or surviving Person;

 

(b)           any Subsidiary may sell all or substantially all of its assets (upon voluntary liquidation or otherwise) to a Borrower or to another Subsidiary; provided that if the seller in such a transaction is a wholly-owned Subsidiary, then the purchaser must also be a wholly-owned Subsidiary, and provided, further, that no Guarantor that is a Domestic Subsidiary may sell all or substantially all of its assets (upon voluntary liquidations or otherwise) to a Foreign Subsidiary;

 

(c)           such Borrower or any Subsidiary may make a Permitted Acquisition;

 

(d)           such Borrower or any Subsidiary may make a Disposition permitted by Section 7.05; and

 

(e)           any Subsidiary that is not a Material Subsidiary may be liquidated, wound up or dissolved.

 

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7.05        Dispositions.  Make any Disposition or enter into any agreement to 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 of inventory in the ordinary course of business;

 

(c)           Dispositions of equipment 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 applied within 180 days of such Disposition to the purchase price of assets or property used or useful in the business of the Borrowers and their Subsidiaries (provided that, to the extent the book value of any such equipment has been fully depreciated at the time of Disposition thereof, such Disposition shall be permitted regardless of whether any proceeds thereof are used to purchase assets or property used or useful to the business);

 

(d)           Dispositions of property by any Subsidiary to a Borrower or to a wholly-owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof shall also be a Guarantor;

 

(e)           Dispositions permitted by Section 7.04;

 

(f)            Dispositions of Student Notes Receivables and other notes and receivables in the ordinary course of business or consistent with past practices so long as each such Disposition is in an arm’s-length transaction and such Borrower or the respective Subsidiary receives at least fair market value (as determined in good faith by such Borrower or such Subsidiary, as the case may be);

 

(g)           Dispositions of account receivables after write-off by the Domestic Borrower or any Subsidiary;

 

(h)           Dispositions of non-exclusive licenses of intellectual property;

 

(i)            Dispositions of assets and property in connection with (i) school closures and (ii) the sale of campuses set forth on Schedule 7.05;

 

(j)            Dispositions constituting (i) leases and subleases of real property and (ii) sale-leaseback transactions with respect to real property;

 

(k)           Dispositions of real property; and

 

(l)            other Dispositions by such Borrower and its Subsidiaries, so long as (i) no Default or Event of Default then exists or would result therefrom, (ii) each such Disposition is in an arm’s-length transaction and such Borrower or the respective Subsidiary receives at least fair market value (as determined in good faith by such Borrower or such Subsidiary, as the case may be), (iii) the total consideration received by such Borrower or such Subsidiary is at least 70% cash and is paid at the time of the closing of such Disposition, (iv) the net cash proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section

 

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2.07(b) and (v) the aggregate amount of the proceeds received from all assets so Disposed of in any fiscal year shall not exceed $10,000,000.

 

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)           each Subsidiary may make Restricted Payments to a Borrower and to wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a non-wholly-owned Subsidiary, to a Borrower and any Subsidiary and to each other owner of capital stock or other equity interests of such Subsidiary on a pro rata basis based on their relative ownership interests);

 

(b)           such Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common equity interests of such Person;

 

(c)           such Borrower and each Subsidiary may purchase, redeem or otherwise acquire shares of its common stock or other common equity interests or warrants or options to acquire any such shares with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common equity interests;

 

(d)           the Domestic Borrower may purchase, redeem or otherwise acquire shares of its common stock or other common equity interests or warrants or options to acquire any such shares so long as (i) both before and after giving effect thereto, there shall not exist a Default, and (ii) after giving effect thereto, the Domestic Borrower shall be in pro forma compliance with the financial covenants in Section 7.11; and

 

(e)           in addition to the Restricted Payments permitted under clauses (a) through (d) above, the Domestic Borrower may make Restricted Payments (other than purchases, redemptions or acquisitions permitted under clause (d) above) so long as (i) both before and after giving effect thereto, there shall not exist a Default, and (ii) after giving effect thereto, the Domestic Borrower shall be in pro  forma compliance with the financial covenants in Section 7.11.

 

7.07        Change in Nature of Business.  Engage in any material line of business substantially different from Post-Secondary Education Business, educational or vocational book publishing, educational or vocational training or any business substantially related or incidental thereto.

 

7.08        Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of a Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to such Borrower or any Subsidiary as would be obtainable by such Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate.

 

7.09        Burdensome Agreements.  Enter into any Contractual Obligation (other than (x) this Agreement or any other Loan Document and (y) the ASFG Agreements or any other Student Note Program) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to any

 

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Borrower or any Guarantor or to otherwise transfer property to any Borrower or any Guarantor; provided, however, that this clause (i) shall not prohibit customary restrictions in connection with an agreement to make a Disposition permitted hereunder, (ii) of any Subsidiary (other than a Foreign Subsidiary or, with respect to the Indebtedness of the Domestic Borrower, a Canadian Subsidiary) to Guarantee the Indebtedness of any Borrower or (iii) of any Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Sections 7.03(b), 7.03(e), 7.03(f) or 7.03(g) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness, any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.03(h) that is no more restrictive than those provided in this Agreement and that does not restrict the creation of Liens to secure the Obligations, any customary restrictions in connection with an agreement to make a Disposition permitted hereunder or any agreement prohibiting the incurrence of Liens securing subordinated Indebtedness; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

 

7.10        Use of Proceeds.  Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, in any manner that might cause the Borrowing or the application of such proceeds to violate Regulation U of the FRB.

 

7.11        Financial Covenants.

 

(a)           Consolidated Net Worth.  Permit the Consolidated Net Worth of the Domestic Borrower and its Subsidiaries as of the end of any fiscal quarter to be less than the sum (without duplication) of (i) $349,500,000, (ii) an amount equal to 50% of the GAAP Consolidated Net Income earned in each full fiscal quarter ending after December 31, 2011 (with no deduction for a net loss in any such fiscal quarter) and (iii) an amount equal to 100% of the aggregate increases in Shareholders’ Equity of the Domestic Borrower and its Subsidiaries after the date hereof by reason of the issuance and sale of capital stock or other equity interests of the Domestic Borrower or any Subsidiary (other than issuances to the Domestic Borrower or a wholly-owned Subsidiary and other than issuances of stock to officers, employees or directors or equity in connection with the exercise thereof), including upon any conversion of debt securities of the Domestic Borrower or a Subsidiary into such capital stock or other equity interests.

 

(b)           Consolidated Fixed Charges Coverage Ratio.  Permit the Consolidated Fixed Charges Coverage Ratio of the Domestic Borrower and its Subsidiaries as of the end of any fiscal quarter of the Domestic Borrower to be less than 1.50:1.00.

 

(c)           Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio of the Domestic Borrower and its Subsidiaries as of the end of any fiscal quarter to be greater than 2.00:1.00.

 

(d)           DOE Financial Responsibility Composite Ratio.  Permit the DOE Ratio as of the last day of any fiscal year to be less than 1.50:1.00.

 

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7.12        Restrictive Agreements, etc.  Enter into any agreement (excluding this Agreement, any other Loan Document and any agreement governing any Indebtedness permitted by Section 7.01(b) as in effect on the Closing Date) restricting the ability of any Borrower or any other Loan Party to amend or otherwise modify this Agreement or any other Loan Document.

 

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.  Any Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, any Acceptance or any L/C Obligation, or (ii) within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

 

(b)           Specific Covenants.  Any Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10 or 6.12 or Article VII; or

 

(c)           Other Defaults.  Any Loan Party 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 30 days after the earlier of (i) knowledge by an executive officer of such Loan Party or (ii) notice thereof has been received by the Borrowers from any Administrative Agent or any Lender; or

 

(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Borrower or any other Loan Party herein or in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

 

(e)           Cross-Default.  (i) Any Borrower or any Subsidiary (A) fails to make any payment in an amount in excess of $10,000,000 within 15 days of the date due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee under, pursuant to or in connection with the ASFG Agreements or any other Student Note Program; (B) fails to make any other payment within 15 days of the date due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness referred to in clause (A) above, Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of $10,000,000 or more, or (C) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on

 

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behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which any Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which any Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by any Borrower or Subsidiary as a result thereof is $10,000,000 or more; or

 

(f)            Insolvency Proceedings, Etc.  Any Loan Party or any of its Material Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

 

(g)           Inability to Pay Debts; Attachment.  (i) Any Borrower or any Material Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

 

(h)           Judgments.  There is entered against any Borrower or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount greater than or equal to $20,000,000 (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of ten (10) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)            ERISA; Canadian Pension Plans.  (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of any Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000, or (ii) any Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section

 

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4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $10,000,000, or (iii) the institution of any steps by a Borrower, a Subsidiary or any applicable regulatory authority to terminate any Canadian Pension Plan (wholly or in part) which could reasonably be expected to result in the Borrower or Subsidiary being required to make an additional contribution to the Canadian Pension Plan in excess of $10,000,000, or (iv) the failure to make a required contribution to any Canadian Pension Plan that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (v) the taking of any action with respect to a Canadian Pension Plan which could reasonably be expected to result in the requirement that a Borrower or a Subsidiary furnish a bond or other security to such Canadian Pension Plan or any applicable regulatory authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (vi) the occurrence of any event with respect to any Canadian Pension Plan which could reasonably be expected to result in the incurrence by the Borrower or Subsidiary of any fine or statutory penalty in excess of $10,000,000 with respect to any Canadian Pension Plan or Canadian Welfare Plan; or

 

(j)            Invalidity of Loan Document.  Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

 

(k)           Regulatory Noncompliance.  Any Borrower or any Material Subsidiary fails to comply in any material respect with any of the terms and provisions of any material license, permit or regulation issued by the DOE or of any Governmental Authority; or

 

(l)            Change of Control.  There occurs any Change of Control with respect to any Borrower.

 

8.02        Remedies Upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agents shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

 

(a)           declare the commitment of each Lender to make Loans, the obligation of each Canadian Lender to create or purchase any Acceptance and any obligation of each L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

 

(b)           declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;

 

(c)           require that each Borrower Cash Collateralize the L/C Obligations of such Borrower (in an amount equal to the then Outstanding Amount thereof);

 

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(d)           require that the Canadian Borrower Cash Collateralize the Face Amount of all unmatured Acceptances; and

 

(e)           exercise on behalf of themselves and the Lenders all rights and remedies available to them and the Lenders under the Loan Documents or applicable law;

 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under any Debtor Relief Laws, the obligation of each Lender to make Loans, the obligation of each Canadian Lender to create or purchase any Acceptance and any obligation of the L/C Issuers to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrowers to Cash Collateralize the L/C Obligations and the Face Amount of all unmatured Acceptances as aforesaid shall automatically become effective, in each case without further act of any Administrative Agent or any Lender.

 

ARTICLE IX
 ADMINISTRATIVE AGENTS

 

9.01        Appointment and Authority.  Each of the Domestic Lenders and the Domestic L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Domestic Administrative Agent hereunder and under the other Loan Documents and authorizes the Domestic Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Domestic Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  Each of the Canadian Lenders and the Canadian L/C Issuer hereby irrevocably appoints Bank of America Canada to act on its behalf as the Canadian Administrative Agent hereunder and under the other Loan Documents and authorizes the Canadian Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Canadian 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 Agents, the Lenders and the L/C Issuers, and neither the Borrowers nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

 

9.02        Rights as a Lender.  Each Person serving as an 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 an Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each Person serving as an 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 Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not an Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

9.03        Exculpatory Provisions.  The Administrative Agents 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 Agents:

 

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(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 an 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 neither Administrative Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose it 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 Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving as an Administrative Agent or any of its Affiliates in any capacity.

 

Neither Administrative Agent shall 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 such 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.  Neither Administrative Agent shall be deemed to have knowledge of any Default unless and until notice describing such Default is given to such Administrative Agent by a Borrower, a Lender or an L/C Issuer.

 

Neither Administrative Agent shall 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 such Administrative Agent.

 

9.04        Reliance by Administrative Agents.  Each 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.  Each 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, the creation of an Acceptance, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, each Administrative Agent may presume that such condition is satisfactory to such Lender or L/C Issuer unless such

 

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Administrative Agent shall have received notice to the contrary from such Lender or L/C Issuer prior to the making of such Loan, the creation of such Acceptance, or the issuance of such Letter of Credit.  Each Administrative Agent may consult with legal counsel (who may be counsel for a 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.

 

9.05        Delegation of Duties.  Each 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 such Administrative Agent.  Each 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 each 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.

 

9.06        Resignation of an Administrative Agent.  Either Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Borrowers; provided that any notice of resignation by the Domestic Administrative Agent shall be deemed to constitute notice of resignation by the Canadian Administrative Agent, but notice of resignation by the Canadian Administrative Agent shall not be deemed to constitute notice of resignation by the Domestic Administrative Agent.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, subject, so long as no Event of Default is continuing, to the approval of the Borrowers (such approval not to be unreasonably withheld or delayed), 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 (in respect of the replacement of the Domestic Administrative Agent) or which shall be a bank with an office in Canada or an Affiliate of any such bank with an office in Canada (in respect of the replacement of the Canadian Administrative Agent).  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 and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if such Administrative Agent shall notify the Borrowers and the Lenders that no qualifying Person has accepted such appointment or a successor has not been appointed within 40 days after the retiring Administrative Agent gives notice of resignation, then the Borrowers shall have the right to appoint a successor meeting the qualifications set forth above and the retiring Administrative Agent’s 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 such Administrative Agent on behalf of the Lenders or the L/C Issuers 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 retiring Administrative Agent shall instead be made by or to each applicable Lender and L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this

 

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Section.  Upon the acceptance of a successor’s appointment as an 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 a Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between such 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 Bank of America or Bank of America Canada as Administrative Agent pursuant to this Section shall also constitute its resignation as an L/C Issuer and as a Swing Line Lender.  Upon the acceptance of a successor’s appointment as an Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangement satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

 

9.07        Non-Reliance on Administrative Agents and Other Lenders.  Each Lender and L/C Issuer acknowledges that it has, independently and without reliance upon either Administrative Agent or any other 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 and L/C Issuer also acknowledges that it will, independently and without reliance upon either 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, none of the Persons listed on the cover page hereof as a “syndication agent”, “documentation agent”, “lead arranger” or “book manager” shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as an Administrative Agent, a Lender or an L/C Issuer hereunder.

 

9.09        Administrative Agents May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agents (irrespective of whether the principal of any Loan, Acceptance or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether

 

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the Administrative Agents shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise

 

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Acceptance L/C Obligations 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, the L/C Issuers and the Administrative Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agents and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuers and the Administrative Agents under Sections 2.04(i) and (j), 2.10 and 10.04) allowed in such judicial proceeding; and

 

(b)           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 and L/C Issuer to make such payments to the Administrative Agents and, in the event that either Administrative Agent shall consent to the making of such payments directly to the Lenders and L/C Issuers, to pay to such Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of such Administrative Agent and its agents and counsel, and any other amounts due such Administrative Agent under Sections 2.10 and 10.04.

 

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

 

9.10        Collateral and Guaranty Matters.  The Lenders and the L/C Issuers irrevocably authorize each Administrative Agent, at its option and in its discretion,

 

(a)           to release any Lien on any property granted to or held by such Administrative Agent under any Loan Document (i) upon termination of the Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is sold, to be sold, otherwise transferred or, in the case of pledged equity interests, cancelled or redeemed, as part of or in connection with any transaction permitted hereunder or under any other Loan Document, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders;

 

(b)           to subordinate any Lien on any property granted to or held by such Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Sections 7.01(b) or (c); and

 

(c)           to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

 

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Upon request by either Administrative Agent at any time, the Required Lenders will confirm in writing such Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

 

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 any Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrowers or the applicable Loan Party, as the case may be, and acknowledged by the applicable 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, unless in writing and signed by each of the Lenders directly affected thereby (it being understood that only those Lenders that elect to increase their Commitments under Section 2.15 shall be deemed to be directly affected by any increase under Section 2.15) and by the Borrowers, and acknowledged by the Administrative Agents, do any of the following:

 

(a)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02);

 

(b)           postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment (other than a mandatory prepayment under Section 2.07) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document;

 

(c)           reduce the principal of, or the rate of interest specified herein on, any Loan, Acceptance or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document, provided, however, that only the consent of the Required Lenders shall be necessary to amend any financial covenant hereunder even if the effect of such amendment would be to reduce the rate of interest on any Loan, Acceptance or L/C Borrowing or to reduce any fee payable hereunder;

 

(d)           change the percentage of the Aggregate Domestic Commitments or the Aggregate Canadian Commitments or of the aggregate unpaid principal amount of the Loans, Acceptances and L/C Obligations which is required for the Lenders or any of them to take any action hereunder;

 

(e)           amend this Section 10.01, or Section 2.14, or any provision herein providing for consent or other action by all the Lenders;

 

(f)            release all or substantially all of the Guarantors from the Guaranty except as provided in Section 9.10 hereof; or

 

(g)           release all or substantially all of the collateral security for the Obligations.

 

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and, provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the applicable L/C Issuer in addition to the Required Lenders or each directly-affected Lender, as the case may be, affect the rights or duties of an L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the applicable Swing Line Lender in addition to the Required Lenders or each directly-affected Lender, as the case may be, affect the rights or duties of such Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the applicable Administrative Agent in addition to the Required Lenders or each directly-affected Lender, as the case may be, affect the rights or duties of such Administrative Agent under this Agreement or any other Loan Document; (iv) Section 10.06(i) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (v) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such 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 Borrowers, the Administrative Agents, the L/C Issuers or the Swing Line Lenders, 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 and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agents, provided that the foregoing shall not apply to notices to any Lender or

 

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L/C Issuer pursuant to Article II if such Lender or L/C Issuer, as applicable, has notified the Administrative Agents that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agents or the Borrowers may, in their 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.

 

Unless the Administrative Agents otherwise prescribe, (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 Agents or any of their Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Borrower’s or 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 any Borrower, any Lender, any L/C Issuer or any other Person for indirect, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)           Change of Address, Etc.  Each of the Borrowers, the Administrative Agents, the L/C Issuers and the Swing Line Lenders 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 Borrowers, the Administrative Agents, the L/C Issuers and the Swing Line Lenders.

 

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(e)           Reliance by Administrative Agents, L/C Issuers and Lenders.  The Administrative Agents, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices, Drawing Notices and Swing Line Loan Notices) purportedly given by or on behalf of any 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 Borrowers shall indemnify each Administrative Agent, each L/C Issuer, 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 any Borrower.  All telephonic notices to and other communications with any Administrative Agent may be recorded by such Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

10.03      No Waiver; Cumulative Remedies.  No failure by any Lender, L/C Issuer or 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.  Each Borrower jointly and severally agrees to pay (i) all reasonable out of pocket expenses incurred by the Administrative Agents and their Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agents), 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 reasonable out of pocket expenses incurred by the L/C Issuers in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out of pocket expenses incurred by any Administrative Agent, any Lender or any L/C Issuer (including the fees, charges and disbursements of any counsel for any Administrative Agent, any Lender or any L/C Issuer), and shall pay all fees and time charges for attorneys who may be employees of any Administrative Agent, Lender or L/C Issuer, 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, Acceptances created or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans, Acceptances or Letters of Credit.

 

(b)           Indemnification by the Borrowers.  Each Borrower shall jointly and severally indemnify each Administrative Agent (and any sub-agent thereof), each Lender and each L/C Issuer, 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,

 

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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 a Borrower or any other Loan Party arising out of, in connection with, or as a result of (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 or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan, Acceptance or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by a Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to a Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by a Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; 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 a Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if a Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  For greater certainty, this Section 10.04(b) shall not apply to any claims on account of any tax or other amounts governed by (or excluded from the application) of Sections 3.01 or 3.04.

 

(c)           Reimbursement by Lenders.  To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by them to an Administrative Agent (or any sub-agent thereof), an L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to such Administrative Agent (or any such sub-agent), such L/C Issuer or such Related Party, as the case may be, such Lender’s Pro Rata Share (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 such Administrative Agent (or any such sub-agent) or such L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for such Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.13(f).

 

(d)           Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, the Borrowers shall not assert, and hereby waive, any claim against any Indemnitee, on any theory of liability, for indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this

 

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Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan, Acceptance or Letter of Credit 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 by it 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 except to the extent that such damages 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 Indemnitee.

 

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

 

(f)            Survival.  The agreements in this Section shall survive the resignation of any Administrative Agent and L/C Issuer, the replacement of any Lender, the termination of the 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 any Borrower is made to any Administrative Agent or any Lender, or any Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off 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 such 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 set-off had not occurred, and (b) each Lender severally agrees to pay to such Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by such 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 in the case of the Domestic Administrative Agent and the Interbank Reference Rate in the case of the Canadian Administrative Agent from time to time in effect.

 

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 neither the Borrowers nor any other Loan Party may assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of the Administrative Agents and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) 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

 

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than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agents, the LC Issuers 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), Acceptances, participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that

 

(i)            except 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 or an Affiliate of a Lender or an Approved Fund (as defined in subsection (h) of this Section) with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the 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 applicable 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 such Administrative Agent and, so long as no Event of Default has occurred and is continuing, the applicable Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed);

 

(ii)           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 Loans or the Commitment assigned, except that this clause (ii) shall not apply to rights in respect of Swing Line Loans;

 

(iii)          any assignment of a Commitment must be approved by the applicable Borrower (which approval shall not be unreasonably withheld and shall not be required during the continuance of any Default), the applicable Administrative Agent, the applicable L/C Issuer and the applicable Swing Line Lender (each such approval not to be unreasonably withheld or delayed) unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and

 

(iv)          the parties to each assignment shall execute and deliver to such Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to such Administrative Agent an Administrative Questionnaire.

 

Subject to acceptance and recording thereof by the applicable Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement

 

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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 applicable 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 subsection 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 subsection (d) of this Section.

 

(c)           Register.  Each Administrative Agent, acting solely for this purpose as an agent of the applicable Borrower, shall maintain at the Administrative Agent’s Office of such Administrative Agent a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the applicable Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each such Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agents and the Lenders may 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.  The Register shall be available for inspection by each Borrower and L/C Issuer at any reasonable time and from time to time upon reasonable prior notice.

 

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, any Borrower or Administrative Agent, sell participations to any Person (other than a natural person or the Borrowers or any of the Borrowers’ Affiliates 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 and Acceptances (including such Lender’s participations in L/C Obligations and/or Swing Line 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 Borrowers, the Administrative Agents, the Lenders and the L/C Issuers 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, waiver or other modification described in the first proviso to Section 10.01 that directly affects such Participant.  Subject to subsection (e) of this Section, each 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 subsection (b) of this Section.  To the extent permitted by law, each Participant also

 

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shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.14 as though it were a Lender.

 

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section 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 Borrowers’ 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 each Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 10.14 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)           As used herein, the following terms have the following meanings:

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agents, the L/C Issuers and the Swing Line Lenders, and (ii) unless an Event of Default has occurred and is continuing, the Borrowers (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include a Borrower or any of its Affiliates or Subsidiaries.

 

“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.

 

“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.

 

(i)            Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agents and the

 

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Borrowers (an “SPC”) the option to provide all or any part of any Committed Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Committed Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Committed Loan, the Granting Lender shall be obligated to make such Committed Loan pursuant to the terms hereof.  Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrowers under this Agreement (including their obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder.  The making of a Committed Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Committed Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Borrowers and the Administrative Agents and with the payment of a processing fee of $2,500, assign all or any portion of its right to receive payment with respect to any Committed Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Committed Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

 

(j)            Notwithstanding anything to the contrary contained herein, if at any time Bank of America or Bank of America Canada assigns all of its Commitment and Loans pursuant to subsection (b) above, it may, (i) upon 30 days’ notice to the Borrowers and the Lenders, resign as an L/C Issuer and/or (ii) upon five Business Days’ notice to the Borrowers, terminate the applicable Swing Line Loans.  In the event of any such resignation as an L/C Issuer or termination of such Swing Line Loans, the Borrowers shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Borrowers to appoint any such successor shall affect the resignation of Bank of America or Bank of America Canada as L/C Issuer or the termination of any Swing Line Loan, as the case may be.  Bank of America and Bank of America Canada shall retain all the rights and obligations of an L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Committed Loans or fund participations in Unreimbursed Amounts pursuant to Section 2.04(c)).  If Bank of America or Bank of America Canada terminates its Swing Line Loans, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such termination, including the right to require the Lenders to make Base Rate Committed Loans or fund participations in outstanding Swing Line Loans pursuant to Section 2.05(a).

 

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10.07      Confidentiality.  Each of the Administrative Agents and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (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; (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or prospective counterparty’s professional advisor) to any credit derivative transaction relating to obligations of the Loan Parties; (g) with the consent of the Borrowers; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Administrative Agent or any Lender on a nonconfidential basis from a source other than a Borrower; or (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender’s or its Affiliates’ investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates.  In addition, the Administrative Agents and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to any Administrative Agent and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions.

 

For the purposes of this Section, “Information” means all information received from the Loan Parties relating to the Loan Parties or their businesses, other than any such information that is available to any Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Loan Party; provided that, in the case of information received from a Loan Party after the date hereof, such information is clearly identified in writing at the time of delivery as confidential.  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.

 

10.08      Set-off.  In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrowers (on their own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to such Lender, now or hereafter existing, irrespective of whether or not the Administrative Agents or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations

 

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may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or indebtedness.  Each Lender agrees promptly to notify the Borrowers and the Administrative Agents after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off 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 any 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 an 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.

 

10.10      Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

10.11      Integration.  This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter.  In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agents or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

 

10.12      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 each Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agents or any Lender or on their behalf and notwithstanding that any Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

10.13      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

 

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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.

 

10.14      Tax Forms.  (a)  Each Domestic Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to the Domestic Administrative Agent, prior to receipt of any payment subject to withholding under the Code (or upon accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Foreign Lender by the Domestic Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Foreign Lender by the Domestic Borrower pursuant to this Agreement) or such other evidence satisfactory to the Domestic Borrower and the Domestic Administrative Agent that such Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax.  Thereafter and from time to time, each such Foreign Lender shall (i) promptly submit to the Domestic Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to the Domestic Borrower and the Domestic Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Foreign Lender by the Domestic Borrower pursuant to this Agreement, (ii) promptly notify the Domestic Administrative Agent and the Domestic Borrower of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that the Domestic Borrower make any deduction or withholding for taxes from amounts payable to such Foreign Lender.

 

Each Foreign Lender, to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender), shall deliver to the Domestic Administrative Agent on the date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the Domestic Administrative Agent (in the reasonable exercise of its discretion), (i) two duly signed completed copies of the forms or statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account that is not subject to U.S. withholding tax, and (ii) two duly signed completed copies of IRS Form W-8IMY (or any successor forms), together with any information such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Code, to establish that such Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender.

 

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The Domestic Borrower shall not be required to pay any additional or other amount to any Foreign Lender under Section 3.01 (i) with respect to any Taxes required to be deducted or withheld on the basis of the information, certificates or statements of exemption or reduction such Lender transmits with any IRS Form required to be provided pursuant to this Section 10.14(a) or (ii) if such Foreign Lender shall have failed to satisfy the requirements of this Section 10.14(a); provided that if such Lender shall have satisfied the requirement of this Section 10.14(a) on the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this Section 10.14(a) shall relieve the Domestic Borrower of its obligation to pay any amounts pursuant to Section 3.01 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, (y) such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate as described in Section 3.01 or (z) the rate of any such deduction or withholding is increased.  The Domestic Administrative Agent may, without reduction, withhold any Taxes required to be deducted and withheld from any payment under any of the Loan Documents with respect to which the Domestic Borrower is not required to pay additional amounts under this Section 10.14(a).

 

(b)           Upon the request of the Domestic Administrative Agent, each Domestic Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Domestic Administrative Agent two duly signed completed copies of IRS Form W-9.  If such Lender fails to deliver such forms, then the Domestic Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Code, without reduction, and the Borrowers shall not be responsible for any of those Taxes or other sums payable on account of such Lender’s failure to deliver such forms.

 

(c)           Each Foreign Lender shall deliver to the Borrowers and the Administrative Agents a certification signed by its chief financial officer, principal accounting officer, treasurer or controller and other documentation reasonably requested by the Borrowers or any Administrative Agent sufficient for the Borrowers and the Administrative Agents to comply with their obligations under Sections 1471 through 1474 of the Code and regulations promulgated thereunder and to determine whether such Foreign Lender is exempt from withholding under Sections 1471 through 1474 of the Code and regulations promulgated thereunder.

 

(d)           If any Governmental Authority asserts that any Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify such Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to such Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of such Administrative Agent.  If any Governmental Authority asserts that any Borrower or any Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, and such improper failure to withhold or

 

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backup withhold occurred as a result of such Lender’s failure to comply with the applicable provisions of this Section 10.14, such Lender shall indemnify such Borrower therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable, and costs and expenses (including Attorney Costs) of such Borrower.  The obligation of the Lenders under this Section shall survive the termination of the Commitments, repayment of all Obligations and the resignation of such Administrative Agent.

 

10.15      Replacement of Lenders.  Under any circumstances set forth herein providing that the Borrowers shall have the right to replace a Lender as a party to this Agreement, or if any Lender is a Defaulting Lender or an Impacted Lender, the Borrowers may, upon notice to such Lender and the Administrative Agents, replace such Lender by causing such Lender to assign its Commitment (with the assignment fee to be paid by the Borrowers in such instance) pursuant to Section 10.06(b) to one or more other Lenders or Eligible Assignees procured by the Borrowers; provided, however, that if any Borrower elects to exercise such right with respect to any Lender pursuant to Section 3.06(b), it shall be obligated to replace all Lenders that have made similar requests for compensation pursuant to Section 3.01 or 3.04.  The assignee Lender shall pay in full all principal, interest and fees owing to the assignor Lender through the effective date of the assignment and the applicable Borrower shall (x) pay in full any and all amounts owing to such Lender through the effective date of the assignment (including any amounts payable pursuant to Section 3.05), (y) provide appropriate assurances and indemnities (which may include letters of credit) to the applicable L/C Issuer and (as applicable) the Domestic Swing Line Lender as each may reasonably require with respect to any continuing obligation to purchase participation interests in any L/C Obligations or any Domestic Swing Line Loans then outstanding, and (z) release such Lender from its obligations under the Loan Documents.  Any Lender being replaced shall execute and deliver an Assignment and Assumption with respect to such Lender’s Commitment and outstanding Credit Extensions.

 

10.16      Governing Law.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT EACH ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN LOS ANGELES OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER, EACH ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH BORROWER, EACH ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY

 

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LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.  EACH BORROWER, EACH ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

10.17      Waiver of Right to Trial by Jury; California Judicial Reference.  (a)  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

(b)           If any action or proceeding is filed in a court of the State of California by or against any party hereto in connection with any of the transactions contemplated by this Agreement or any other Loan Document, (i) the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision, provided that at the option of any party to such proceeding, any such issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure Section 12281.8 shall be heard and determined by the court, and (ii) without limiting the generality of Section 10.04, the Borrowers shall be solely responsible to pay all fees and expenses of any referee appointed in such action or proceeding.

 

10.18      USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as hereinafter defined) and each Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender or Administrative Agent, as applicable, to identify the Borrowers in accordance with the Act.  The Borrowers shall, promptly following a request by an Administrative Agent or any Lender, provide all documentation and other information that such Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and antimoney laundering rules and regulations, including the Act.

 

122

 

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

 

	
 
    	
CORINTHIAN   COLLEGES, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert C. Owen
    
	
 
    	
Name:
    	
Robert   C. Owen
    
	
 
    	
Title:
    	
Executive   Vice President and Chief Financial Officer
    

 

S-1

 

	
 
    	
EVEREST   COLLEGES CANADA, INC.,
    
	
 
    	
a   Canadian corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert C. Owen
    
	
 
    	
Name:
    	
Robert   C. Owen
    
	
 
    	
Title:
    	
Senior   Vice President and Chief Accounting Officer
    

 

S-2

 

	
 
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
as   Domestic Administrative Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brenda H. Little
    
	
 
    	
Name:
    	
Brenda   H. Little
    
	
 
    	
Title:
    	
Vice   President
    

 

S-3

 

	
 
    	
BANK   OF AMERICA, N.A., acting through its Canada Branch,
    
	
 
    	
as   Canadian Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Medina Sales De Andrade
    
	
 
    	
Name:
    	
Medina   Sales De Andrade
    
	
 
    	
Title:
    	
Vice   President
    

 

S-4

 

	
 
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
as   a Domestic Lender, Domestic L/C Issuer and Domestic Swing Line Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Karen Polak
    
	
 
    	
Name:
    	
Karen   Polak
    
	
 
    	
Title:
    	
SVP
    

 

S-5

 

	
 
    	
BANK   OF AMERICA, N.A., acting through its Canada Branch,
    
	
 
    	
as   a Canadian Lender, Canadian L/C Issuer and Canadian Swing Line Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Medina Sales De Andrade
    
	
 
    	
Name:
    	
Medina   Sales De Andrade
    
	
 
    	
Title:
    	
Vice   President
    

 

S-6

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION,
    
	
 
    	
as   Syndication Agent and a Domestic Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Blake Malia
    
	
 
    	
Name:
    	
Blake   Malia
    
	
 
    	
Title:
    	
Vice   President
    

 

S-7

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION,
    
	
 
    	
as   a Canadian Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joseph Rauhala
    
	
 
    	
Name:
    	
Joseph   Rauhala
    
	
 
    	
Title:
    	
Principal   Officer
    

 

S-8

 

	
 
    	
UNION   BANK, N.A.,
    
	
 
    	
as   a Domestic Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen W. Dunne
    
	
 
    	
Name:
    	
Stephen   W. Dunne
    
	
 
    	
Title:
    	
Vice   President
    

 

S-9

 

	
 
    	
BANK   OF THE WEST,
    
	
 
    	
as   a Domestic Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Cecile Segovia
    
	
 
    	
Name:
    	
Cecile   Segovia
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

S-10

 

	
 
    	
ONEWEST   BANK, FSB
    
	
 
    	
as   a Domestic Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John Farrace
    
	
 
    	
Name:
    	
John   Farrace
    
	
 
    	
Title:
    	
EVP
    

 

S-11Exhibit 4.1

 

EXECUTION VERSION

 

CAMERON INTERNATIONAL CORPORATION

 

and

 

UNION BANK, N.A.,

 

as Trustee

 

INDENTURE

 

DATED AS OF

 

MAY 17, 2012

 

DEBT SECURITIES

 

 

Reconciliation and tie between Trust Indenture Act of 1939
 and Indenture, dated as of May 17, 2012

 

	
Section of Trust Indenture
   Act of 1939
    	
 
    	
 
    	
 
    	
Section(s) of Indenture
    
	
Section 310
    	
 
    	
(a)(1)
    	
 
    	
609
    
	
 
    	
 
    	
(a)(2)
    	
 
    	
609
    
	
 
    	
 
    	
(a)(3)
    	
 
    	
Not   Applicable
    
	
 
    	
 
    	
(a)(4)
    	
 
    	
Not   Applicable
    
	
 
    	
 
    	
(b)
    	
 
    	
608,   610
    
	
Section 311
    	
 
    	
(a)
    	
 
    	
613
    
	
 
    	
 
    	
(b)
    	
 
    	
613
    
	
 
    	
 
    	
(c)
    	
 
    	
Not   Applicable
    
	
Section 312
    	
 
    	
(a)
    	
 
    	
701,   702(a)
    
	
 
    	
 
    	
(b)
    	
 
    	
702(b)
    
	
 
    	
 
    	
(c)
    	
 
    	
702(c)
    
	
Section 313
    	
 
    	
(a)
    	
 
    	
703(a)
    
	
 
    	
 
    	
(b)
    	
 
    	
703(b)
    
	
 
    	
 
    	
(c)
    	
 
    	
703(c)
    
	
 
    	
 
    	
(d)
    	
 
    	
703(d)
    
	
Section 314
    	
 
    	
(a)
    	
 
    	
704,   1005
    
	
 
    	
 
    	
(b)
    	
 
    	
Not   Applicable
    
	
 
    	
 
    	
(c)(1)
    	
 
    	
103
    
	
 
    	
 
    	
(c)(2)
    	
 
    	
103
    
	
 
    	
 
    	
(c)(3)
    	
 
    	
Not   Applicable
    
	
 
    	
 
    	
(d)
    	
 
    	
Not   Applicable
    
	
 
    	
 
    	
(e)
    	
 
    	
103
    
	
Section 315
    	
 
    	
(a)
    	
 
    	
601(a)
    
	
 
    	
 
    	
(b)
    	
 
    	
602
    
	
 
    	
 
    	
(c)
    	
 
    	
601(b)
    
	
 
    	
 
    	
(d)
    	
 
    	
601(c)
    
	
 
    	
 
    	
(d)(1)
    	
 
    	
601(a)(1)
    
	
 
    	
 
    	
(d)(2)
    	
 
    	
601(a)(2)
    
	
 
    	
 
    	
(d)(3)
    	
 
    	
601(c)(3)
    
	
 
    	
 
    	
(e)
    	
 
    	
514
    
	
Section 316
    	
 
    	
(a)(1)(A)
    	
 
    	
512
    
	
 
    	
 
    	
(a)(1)(B)
    	
 
    	
513
    
	
 
    	
 
    	
(a)(2)
    	
 
    	
Not   Applicable
    
	
 
    	
 
    	
(a)(last   sentence)
    	
 
    	
101
    
	
 
    	
 
    	
(b)
    	
 
    	
508
    
	
Section 317
    	
 
    	
(a)(1)
    	
 
    	
503
    
	
 
    	
 
    	
(a)(2)
    	
 
    	
504
    
	
 
    	
 
    	
(b)
    	
 
    	
1003
    
	
Section 318
    	
 
    	
(a)
    	
 
    	
108
    

 

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
Article One   Definitions and Other Provisions of General Application
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 101.
    	
Definitions
    	
1
    
	
 
    	
Section 102.
    	
Incorporation by Reference of Trust Indenture Act
    	
10
    
	
 
    	
Section 103.
    	
Compliance Certificates and Opinions
    	
10
    
	
 
    	
Section 104.
    	
Form of Documents Delivered to Trustee
    	
11
    
	
 
    	
Section 105.
    	
Acts of Holders; Record Dates
    	
11
    
	
 
    	
Section 106.
    	
Notices, Etc., to Trustee and Company
    	
13
    
	
 
    	
Section 107.
    	
Notice to Holders; Waiver
    	
13
    
	
 
    	
Section 108.
    	
Conflict With Trust Indenture Act
    	
13
    
	
 
    	
Section 109.
    	
Effect of Headings and Table of Contents
    	
14
    
	
 
    	
Section 110.
    	
Successors and Assigns
    	
14
    
	
 
    	
Section 111.
    	
Separability Clause
    	
14
    
	
 
    	
Section 112.
    	
Benefits of Indenture
    	
14
    
	
 
    	
Section 113.
    	
Governing Law; Waiver of Jury Trial
    	
14
    
	
 
    	
Section 114.
    	
Legal Holidays
    	
14
    
	
 
    	
Section 115.
    	
Corporate Obligation
    	
15
    
	
 
    	
Section 116.
    	
Force Majeure
    	
15
    
	
 
    	
Section 117.
    	
U.S.A. Patriot Act
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
Article Two   Security Forms
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 201.
    	
Forms Generally
    	
15
    
	
 
    	
Section 202.
    	
Form of Trustee’s Certificate of Authentication
    	
16
    
	
 
    	
Section 203.
    	
Securities in Global Form
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
Article Three   The Securities
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 301.
    	
Amount Unlimited; Issuable in Series
    	
19
    
	
 
    	
Section 302.
    	
Denominations
    	
21
    
	
 
    	
Section 303.
    	
Execution, Authentication, Delivery and Dating
    	
21
    
	
 
    	
Section 304.
    	
Temporary Securities
    	
23
    
	
 
    	
Section 305.
    	
Registration, Registration of Transfer and Exchange
    	
23
    
	
 
    	
Section 306.
    	
Mutilated, Destroyed, Lost and Stolen Securities
    	
24
    
	
 
    	
Section 307.
    	
Payment of Interest; Interest Rights Preserved
    	
25
    
	
 
    	
Section 308.
    	
Persons Deemed Owners
    	
26
    
	
 
    	
Section 309.
    	
Cancellation
    	
26
    
	
 
    	
Section 310.
    	
Computation of Interest
    	
27
    
	
 
    	
Section 311.
    	
CUSIP Numbers
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
Article Four   Satisfaction and Discharge; Defeasance
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 401.
    	
Satisfaction and Discharge of Indenture; Defeasance
    	
27
    
	
 
    	
Section 402.
    	
Application of Trust Money
    	
29
    
	
 
    	
Section 403.
    	
Indemnity for U.S. Government Obligations
    	
30
    
	
 
    	
Section 404.
    	
Reinstatement
    	
30
    

 

i

 

	
 
    	
 
    	
 
    	
 
    
	
Article Five   Remedies
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 501.
    	
Events of Default
    	
30
    
	
 
    	
Section 502.
    	
Acceleration of Maturity; Rescission and Annulment
    	
32
    
	
 
    	
Section 503.
    	
Collection of Indebtedness and Suits for Enforcement by   Trustee
    	
34
    
	
 
    	
Section 504.
    	
Trustee May File Proofs of Claim
    	
34
    
	
 
    	
Section 505.
    	
Trustee May Enforce Claims Without Possession of   Securities or Coupons
    	
35
    
	
 
    	
Section 506.
    	
Application of Money Collected
    	
35
    
	
 
    	
Section 507.
    	
Limitation on Suits
    	
36
    
	
 
    	
Section 508.
    	
Unconditional Right of Holders to Receive Principal,   Premium and Interest
    	
37
    
	
 
    	
Section 509.
    	
Restoration of Rights and Remedies
    	
37
    
	
 
    	
Section 510.
    	
Rights and Remedies Cumulative
    	
37
    
	
 
    	
Section 511.
    	
Delay or Omission Not Waiver
    	
37
    
	
 
    	
Section 512.
    	
Control by Holders
    	
38
    
	
 
    	
Section 513.
    	
Waiver of Past Defaults
    	
38
    
	
 
    	
Section 514.
    	
Undertaking for Costs
    	
38
    
	
 
    	
Section 515.
    	
Waiver of Stay or Extension Laws
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
Article Six   The Trustee
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 601.
    	
Certain Duties and Responsibilities
    	
39
    
	
 
    	
Section 602.
    	
Notice of Defaults
    	
40
    
	
 
    	
Section 603.
    	
Certain Rights of Trustee
    	
40
    
	
 
    	
Section 604.
    	
Not Responsible for Recitals or Issuance of Securities
    	
42
    
	
 
    	
Section 605.
    	
May Hold Securities
    	
42
    
	
 
    	
Section 606.
    	
Money Held in Trust
    	
42
    
	
 
    	
Section 607.
    	
Compensation and Reimbursement
    	
42
    
	
 
    	
Section 608.
    	
Disqualification; Conflicting Interests
    	
43
    
	
 
    	
Section 609.
    	
Corporate Trustee Required; Eligibility
    	
43
    
	
 
    	
Section 610.
    	
Resignation and Removal; Appointment of Successor
    	
44
    
	
 
    	
Section 611.
    	
Acceptance of Appointment by Successor
    	
45
    
	
 
    	
Section 612.
    	
Merger, Conversion, Consolidation or Succession to Business
    	
46
    
	
 
    	
Section 613.
    	
Preferential Collection of Claims Against Company
    	
46
    
	
 
    	
Section 614.
    	
Appointment of Authenticating Agent
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
Article Seven   Holder’s Lists and Reports by Trustee and Company
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 701.
    	
Company to Furnish Trustee Names and Addresses of Holders
    	
48
    
	
 
    	
Section 702.
    	
Preservation of Information; Communications to Holders
    	
49
    
	
 
    	
Section 703.
    	
Reports by Trustee
    	
49
    
	
 
    	
Section 704.
    	
Reports by Company
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
Article Eight   Consolidation, Merger, Conveyance, Transfer or Lease
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 801.
    	
Company May Consolidate, Etc., Only on Certain   Terms
    	
51
    
	
 
    	
Section 802.
    	
Successor Person Substituted
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
Article Nine   Supplemental Indentures
    	
52
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 901.
    	
Supplemental Indentures Without Consent of Holders
    	
52
    

 

ii

 

	
 
    	
Section 902.
    	
Supplemental Indentures With Consent of Holders
    	
53
    
	
 
    	
Section 903.
    	
Execution of Supplemental Indentures
    	
54
    
	
 
    	
Section 904.
    	
Effect of Supplemental Indentures
    	
54
    
	
 
    	
Section 905.
    	
Conformity With Trust Indenture Act
    	
54
    
	
 
    	
Section 906.
    	
Reference in Securities to Supplemental Indentures
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
Article Ten   Covenants
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1001.
    	
Payment of Principal, Premium and Interest
    	
55
    
	
 
    	
Section 1002.
    	
Maintenance of Office or Agency
    	
55
    
	
 
    	
Section 1003.
    	
Money for Securities Payments to be Held in Trust
    	
55
    
	
 
    	
Section 1004.
    	
Existence
    	
57
    
	
 
    	
Section 1005.
    	
Statement by Officers as to Default
    	
57
    
	
 
    	
Section 1006.
    	
Waiver of Certain Covenants
    	
57
    
	
 
    	
Section 1007.
    	
Additional Amounts
    	
57
    
	
 
    	
Section 1008.
    	
Limitation on Liens
    	
58
    
	
 
    	
Section 1009.
    	
Restriction on Sale-Leaseback Transactions
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
Article Eleven   Redemption of Securities
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1101.
    	
Applicability of Article
    	
60
    
	
 
    	
Section 1102.
    	
Election to Redeem; Notice to Trustee
    	
60
    
	
 
    	
Section 1103.
    	
Selection by Trustee of Securities to be Redeemed
    	
61
    
	
 
    	
Section 1104.
    	
Notice of Redemption
    	
61
    
	
 
    	
Section 1105.
    	
Deposit of Redemption Price
    	
62
    
	
 
    	
Section 1106.
    	
Securities Payable on Redemption Date
    	
62
    
	
 
    	
Section 1107.
    	
Securities Redeemed in Part
    	
62
    
	
 
    	
Section 1108.
    	
Purchase of Securities
    	
63
    
	
 
    	
 
    	
 
    	
 
    
	
Article Twelve   Sinking Funds
    	
63
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1201.
    	
Applicability of Article
    	
63
    
	
 
    	
Section 1202.
    	
Satisfaction of Sinking Fund Payments with Securities
    	
63
    
	
 
    	
Section 1203.
    	
Redemption of Securities for Sinking Fund
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
Article Thirteen   Meetings of Holders of Securities
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1301.
    	
Purposes for Which Meetings May Be Called
    	
64
    
	
 
    	
Section 1302.
    	
Call, Notice and Place of Meetings
    	
64
    
	
 
    	
Section 1303.
    	
Persons Entitled to Vote at Meetings
    	
65
    
	
 
    	
Section 1304.
    	
Quorum; Action
    	
65
    
	
 
    	
Section 1305.
    	
Determination of Voting Rights; Conduct and Adjournment of   Meetings
    	
66
    
	
 
    	
Section 1306.
    	
Counting Votes and Recording Action of Meetings
    	
66
    

 

iii

 

INDENTURE dated as of May 17, 2012, between CAMERON INTERNATIONAL CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), having its principal office at 1333 West Loop South, Suite 1700, Houston, Texas 77027, and UNION BANK, N.A., a national banking association having a corporate trust office at 120 South San Pedro Street, 4th Floor, Los Angeles, California 90012, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.

 

This Indenture is subject to the provisions of the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder that are required to be part of this Indenture and, to the extent applicable, shall be governed by such provisions.

 

All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

 

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 101.                            Definitions.

 

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

(1)                                 the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

 

(2)                                 all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States at the date of such computation; and

 

(3)                                 the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

1

 

Certain terms, used principally in Article One, are defined in Section 102.

 

“Act,” when used with respect to any Holder, has the meaning specified in Section 105.

 

“Additional Amounts” means any additional amounts that are required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to such Holders.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent Members” has the meaning specified in Section 203.

 

“Attributable Indebtedness” means with respect to a Sale-Leaseback Transaction, at the time of determination, the lesser of:

 

(1)                                 the present value of the total net amount of rent required to be paid under the lease involved in such Sale-Leaseback Transaction during the remaining term thereof (including any renewal term exercisable at the lessee’s option or period for which such lease has been extended), discounted at the rate of interest set forth or implicit in the terms of such lease or, if not practicable to determine such rate, the weighted average interest rate per annum borne by the Securities Outstanding compounded semiannually; and

 

(2)                                 if the obligation with respect to the Sale-Leaseback Transaction constitutes an obligation that is required to be accounted for as a capital lease obligation in accordance with generally accepted accounting principles, the amount equal to the capitalized amount of such obligation determined in accordance with generally accepted accounting principles and included in the financial statements of the lessee.

 

For purposes of the foregoing definition, rent will not include amounts required to be paid by the lessee, whether or not designated as rent or additional rent, on account of or contingent upon maintenance and repairs, insurance, taxes, assessments, utilities, water rates, operating charges, labor costs and similar charges. In the case of any lease that is terminable by the lessee upon the payment of a penalty, the total net amount of rent shall be the lesser of the net amount determined assuming termination upon the first date such lease may be terminated (in which case the net amount shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) or the total net amount of rent determined assuming no such termination.

 

2

 

“Authenticating Agent” means any Person, which may include the Company, authorized by the Trustee to act on behalf of the Trustee pursuant to Section 614 to authenticate Securities of one or more series.

 

“Authorized Newspaper” means a newspaper, in the English language or in an official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which the term is used or in the financial community of such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.

 

“Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Business Day,” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

 

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

 

“Company” means the Person named as the “Company” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

 

“Company Request” and “Company Order” mean, respectively, a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee.

 

“Consolidated Net Tangible Assets” means the aggregate amount of assets included in the most recent consolidated balance sheet of the Company and its Subsidiaries less (i) current liabilities of the Company and its Subsidiaries, and (ii) the net book amount of all intangible assets of the Company and its Subsidiaries.

 

“Conversion Event” has the meaning specified in Section 501.

 

“Corporate Trust Office” means the designated office of the Trustee in Los Angeles, California at which at any particular time its corporate trust business shall be administered, which office at the date hereof is that indicated in the introductory paragraph of this Indenture.

 

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“Defaulted Interest” has the meaning specified in Section 307.

 

“Depositary” means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person designated as Depositary by the Company pursuant to Section 301 with respect to the Securities of such series until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Securities of any series shall mean the Depositary with respect to the Securities of that series.

 

“Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debts.

 

“Event of Default” has the meaning specified in Section 501.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute.

 

“Exchange Rate” has the meaning specified in Section 501.

 

“Holder,” when used with respect to any Security, means the Person in whose name the Security is registered in the Security Register.

 

“Indebtedness” means (i) long-term liabilities representing borrowed money or purchase money obligations as shown on the liability side of a balance sheet, other than liabilities evidenced by obligations under leases, (ii) indebtedness secured by any Lien existing on property owned subject to that Lien, whether or not the same indebtedness has been assumed and (iii) contingent obligations in respect of, or to purchase or otherwise acquire, any indebtedness of others described in the foregoing clauses (i) or (ii) above, including guarantees and endorsements, other than for purposes of collection in the ordinary course of business of any indebtedness.

 

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 301 and the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument.

 

“Interest,” when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

“Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

 

“Judgment Currency” has the meaning specified in Section 506.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien, charge or adverse claim affecting title or resulting in an encumbrance against real or personal property or a

 

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security interest of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar statute other than to reflect ownership by a third party of property leased to the Company or any of its Subsidiaries under a lease that is not in the nature of a conditional sale or title retention agreement).

 

“Maturity,” when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

 

“Officers’ Certificate” means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer, the Controller, the Secretary or an Assistant Treasurer, Assistant Controller or Assistant Secretary, of the Company, and delivered to the Trustee, which certificate shall comply with Section 103.

 

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for or an employee of the Company, rendered, if applicable, in accordance with Section 314(c) of the Trust Indenture Act, which opinion shall comply with Section 103.

 

“Original Issue Discount Security” means any Security which is issued at a price lower than the principal amount payable upon the Stated Maturity thereof and which provides for an amount less than the principal amount thereof to be due and payable upon redemption thereof or upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

 

“Outstanding,” when used with respect to Securities of a series, means, as of the date of determination, all Securities of such series theretofore authenticated and delivered under this Indenture, except:

 

(1)                                 Securities of that series theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

(2)                                 Securities of that series for whose payment or redemption money in the necessary amount has been theretofore irrevocably deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

 

(3)                                 Securities of that series that have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

 

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provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, or whether a quorum is present at a meeting of Holders of Securities, (a) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the principal amount thereof that would be due and payable as of the date of such determination if the Maturity thereof were accelerated on such date pursuant to Section 502, (b) the principal amount of a Security denominated in a foreign currency shall be the U.S. dollar equivalent, determined by the Company on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent, determined on the date of original issuance of such Security, of the amount determined as provided in (a) above), of such Security and (c) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver or upon any such determination as to the presence of a quorum, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

 

“Paying Agent” means any Person, which may include the Company, authorized by the Company to pay the principal of (and premium, if any) and interest on or Additional Amounts with respect to any one or more series of Securities on behalf of the Company.

 

“Permitted Liens” means:

 

(1)                                 any statutory or governmental Lien or a Lien arising by operation of law, or any mechanics’, repairmen’s, materialmen’s, supplier’s, carrier’s, landlord’s, warehousemen’s or similar Lien incurred in the ordinary course of business which is not yet due or is being contested in good faith by appropriate proceedings and any undetermined Lien which is incidental to construction, development, improvement or repair;

 

(2)                                 the right reserved to, or vested in, any municipality or public authority by the terms of any right, power, franchise, license, permit or by any provision of law, to purchase or to recapture or to designate a purchaser of, any property;

 

(3)                                 Liens for taxes and assessments which are for the current year, and are not at the time delinquent or are delinquent but the validity of which are being contested at the time by the Company or any of its Subsidiaries in good faith;

 

(4)                                 Liens on, or to secure the performance of, leases;

 

(5)                                 Liens upon, or deposits of, any assets in favor of any surety company or clerk of court for the purpose of obtaining indemnity or stay of judicial proceedings;

 

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(6)                                 Liens upon property or assets acquired or sold by the Company or any of its Subsidiaries resulting from the exercise of any rights arising out of defaults on receivables;

 

(7)                                 Liens incurred in the ordinary course of business in connection with workmen’s compensation, unemployment insurance, temporary disability, social security, retiree health or similar laws or regulations or to secure obligations imposed by statute or governmental regulations;

 

(8)                                 Liens upon or deposits of any assets to secure performance and Liens in favor of issuers of surety or performance bonds, letters of credit, banker’s acceptances or guarantees pursuant to the request of and for the account of the Company or any of its Subsidiaries; and

 

(9)                                 Liens arising or imposed by reason of any attachment, judgment, decree or order of any regulatory, governmental or court authority or proceeding, so long as any proceeding initiated to review same shall not have been terminated or the period within which such proceeding may be initiated shall not have expired, or such attachment, judgment, decree or order shall otherwise be effectively stayed.

 

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof, or any other entity of any kind.

 

“Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and interest on and any Additional Amounts with respect to the Securities of that series are payable as specified in accordance with Section 301, subject to the provisions of Section 1002.

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

 

“Principal Property” means any real property, manufacturing plant, warehouse, office building or other physical facility, or any other like depreciable assets owned or leased by the Company or any of its Subsidiaries, except for any such property which, in the opinion of the Board of Directors as set forth in a Board Resolution adopted in good faith, is not material to the total business conducted by the Company and its Subsidiaries taken as a whole; provided, that any such individual property shall be deemed not be a Principal Property (without the need for any board resolution) if such property does not have a fair value in excess of 0.25% of the total assets included in the most recent consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with generally accepted accounting principles, provided further that the aggregate fair value of properties excluded pursuant to the preceding proviso shall not exceed $100,000,000.

 

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“Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to the terms of the Security and this Indenture.

 

“Redemption Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to the terms of the Security and this Indenture.

 

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301, or, if not so specified, the last day of the calendar month preceding such Interest Payment Date if such Interest Payment Date is the fifteenth day of the calendar month or the fifteenth day of the calendar month preceding such Interest Payment Date if such Interest Payment Date is the first day of a calendar month, whether or not such day shall be a Business Day.

 

“Required Currency” has the meaning specified in Section 506.

 

“Responsible Officer,” when used with respect to the Trustee, means any vice president, any trust officer or assistant trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject and who shall have primary responsibility for the administration of this Indenture.

 

“Sale-Leaseback Transaction” means any arrangement with any Person providing for the leasing by the Company or any of its Subsidiaries of any Principal Property, which Principal Property has been or is to be sold or transferred by the Company or such Subsidiary to such Person, other than:

 

(1)                                 any such transaction involving a lease for a term (including renewals or extensions exercisable by the Company or any of its Subsidiaries) of not more than three years;

 

(2)                                 any such transaction between the Company and any of its Subsidiaries or between any of the Company’s Subsidiaries; or

 

(3)                                 any such transaction entered into at the time of, or within 12 months after the latest of, the acquisition, the completion of construction or improvement, or the commencement of commercial operation of the Principal Property.

 

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

 

“Security Custodian” means, with respect to Securities of a series issued in global form, the Trustee for Securities of such series, acting in its capacity as custodian with respect to the Securities of such series, or any successor entity thereto.

 

“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.

 

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“Special Record Date” for the payment of any Defaulted Interest on the Securities of any series means a date fixed by the Trustee pursuant to Section 307.

 

“Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

 

“Subsidiary” of a Person means (i) a corporation, a majority of whose Voting Stock is at the time, directly or indirectly, owned by that Person, by one or more subsidiaries of that Person or by that Person and one or more subsidiaries of that Person, (ii) a partnership in which that Person or a subsidiary of that Person is, at the date of determination, a general or limited partner of that partnership, but only if that Person or its subsidiary is entitled to receive more than 50% of the assets of that partnership upon its dissolution or more than 50% of the net income of that partnership, or (iii) any other Person, other than a corporation or partnership, in which that Person, directly or indirectly, at the date of determination, has (a) a majority ownership interest or (b) the power to elect or direct the election of a majority of the directors (or persons performing similar functions) of that Person and control the policies of that Person.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 905; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act as so amended.

 

“United States” means the United States of America (including the states and the District of Columbia) and its “possessions,” which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

 

“United States Alien” means any Person who, for United States federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien or foreign fiduciary of an estate or trust, or a foreign partnership.

 

“U.S. Government Obligations” has the meaning specified in Section 401.

 

“Vice President,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

 

“Voting Stock” means, with respect to any Person, capital stock of any class or kind the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

 

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“Wholly Owned Subsidiary” means a corporation or other Person that is an entity all the outstanding Voting Stock (other than any directors’ qualifying shares) of which is owned, directly or indirectly, by the Company or by one or more other Wholly Owned Subsidiaries, or by the Company and one or more other Wholly Owned Subsidiaries.

 

“Yield to Maturity,” when used with respect to any Original Issue Discount Security, means the yield to maturity, if any, set forth on the face thereof.

 

Section 102.                            Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms used in this Indenture have the following meanings:

 

“Bankruptcy Act” means the United States Bankruptcy Code of or Title 11 of the United States Code, as amended from time to time.

 

“Indenture securities” means the Securities.

 

“Indenture security holder” means a Holder.

 

“Indenture to be qualified” means this Indenture.

 

“Indenture trustee” or “institutional trustee” means the Trustee.

 

“Obligor” on the indenture securities means the Company or any other obligor on the Securities.

 

All terms used in this Indenture that are defined by the Trust Indenture Act, defined by the Trust Indenture Act by reference to another statute or defined by Commission rule under the Trust Indenture Act and not otherwise defined herein have the meanings assigned to them therein.

 

Section 103.                            Compliance Certificates and Opinions.

 

Except as otherwise expressly provided by this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any (including any covenants the compliance with which constitutes a condition precedent) provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any (including any covenants the compliance with which constitutes a condition precedent) have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

 

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Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(1)           a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

(2)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)           a statement that, in the opinion of each such Person, such Person has made such examination or investigation as is necessary to enable such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)           a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.

 

Section 104.                            Form of Documents Delivered to Trustee.

 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters is or are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 105.                            Acts of Holders; Record Dates.

 

(a)           Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount of the Securities may take action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (i) by any instrument or any number of instruments of similar tenor executed by Holders in Person or by agent or proxy appointed in writing, (ii) by the record of the Holders voting in favor thereof at any meeting of Holders duly

 

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called and held in accordance with Article Thirteen hereof, (iii) by a combination of such instrument or instruments and any such record of such a meeting of Holders or (iv) in the case of Securities evidenced by a global Security, by any electronic transmission or other message, whether or not in written format, that complies with the Depositary’s applicable procedures. Such evidence (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the relevant Holders. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding of any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 1306.

 

The Company may set in advance a record date for purposes of determining the identity of Holders of Securities entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture. If a record date is fixed, those Persons who were Holders of Outstanding Securities at such record date (or their duly designated proxies), and only those Persons, shall be entitled with respect to such Securities to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such Persons continue to be Holders after such record date. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice thereof to be given to the Trustee in writing in the manner provided in Section 106 and to the relevant Holders as set forth in Section 107.

 

(b)           The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

 

(c)           The principal amount and serial numbers of Securities held by any Person, and the date of holding the same, shall be proved by the Security Register.

 

(d)           Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. Any Holder or subsequent Holder may revoke the request, demand, authorization, direction, notice, consent or other Act as to his Security or portion of his Security; provided, however, that such revocation shall be effective only if the Trustee receives the notice of revocation before the date the Act becomes effective.

 

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Section 106.                            Notices, Etc., to Trustee and Company.

 

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

 

(1)           the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including facsimile) to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Department, or

 

(2)           the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing (including facsimile) and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this Indenture or at any other address previously furnished in writing to the Trustee by the Company, Attention: Corporate Secretary.

 

Section 107.                            Notice to Holders; Waiver.

 

Where this Indenture provides for notice to Holders of Securities of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.

 

In case by reason of the suspension of regular mail service, or by reason of any other cause it shall be impracticable to give such notice to Holders of Securities by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case in which notice to Holders of Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Security, shall affect the sufficiency of such notice with respect to other Holders of Securities.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

Section 108.                            Conflict With Trust Indenture Act.

 

If any provision hereof limits, qualifies or conflicts with any provision of the Trust Indenture Act (or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the Trust Indenture Act), such provision of the Trust Indenture Act (or such other provision hereof which is required by the Trust Indenture Act) shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the former provision shall be deemed to apply to this Indenture as so modified or to be excluded.

 

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Section 109.                            Effect of Headings and Table of Contents.

 

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 110.                            Successors and Assigns.

 

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 111.                            Separability Clause.

 

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 112.                            Benefits of Indenture.

 

Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any Authenticating Agent, Paying Agent and Security Registrar, and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 113.                            Governing Law; Waiver of Jury Trial.

 

This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.

 

EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 114.                            Legal Holidays.

 

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities) payment of principal and interest (and premium and Additional Amounts, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

 

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Section 115.                            Corporate Obligation.

 

No recourse may be taken, directly or indirectly, against any incorporator, subscriber to the capital stock, stockholder, officer, director or employee of the Company or the Trustee or of any predecessor or successor of the Company or the Trustee with respect to the Company’s obligations on the Securities or the obligations of the Company or the Trustee under this Indenture or any certificate or other writing delivered in connection herewith.

 

Section 116.                            Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 117.                            U.S.A. Patriot Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

ARTICLE TWO

 

SECURITY FORMS

 

Section 201.                            Forms Generally.

 

The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. If temporary Securities of any series are issued in global form as permitted by Section 304, the form thereof shall be established as provided in the preceding sentence. A copy of the Board Resolution establishing the form or forms of Securities of any series (or any such temporary global Security) shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities (or any such temporary global Security).

 

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The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution thereof.

 

Section 202.                            Form of Trustee’s Certificate of Authentication.

 

The Trustee’s certificate of authentication shall be in substantially the following form:

 

“This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	
 
    	
UNION   BANK, N.A.
    
	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized Signatory”
    

 

Section 203.                            Securities in Global Form.

 

If Securities of a series are issuable in global form, as contemplated by Section 301, then, notwithstanding clause (10) of Section 301 and the provisions of Section 302, any such Security shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and that the aggregate amount of Outstanding Securities represented thereby may from time to time be reduced to reflect exchanges. Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee (i) in such manner and upon instructions given by such Person or Persons as shall be specified in such Security or in a Company Order to be delivered to the Trustee pursuant to Section 303 or Section 304, or (ii) otherwise in accordance with written instructions as is customary for the Depositary for such Security, from such Depositary or its nominee on behalf of any Person having a beneficial interest in such Security. Subject to the provisions of Section 303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Security or in the applicable Company Order. With respect to the Securities of any series that are represented by a Security in global form, the Company authorizes the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by the Depositary appointed with respect to such global Security. Any Security in global form may be deposited with the Depositary or its nominee, or may remain in the custody of the Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary. If a Company Order pursuant to Section 303 or Section 304 has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 103 and need not be accompanied by an Opinion of Counsel.

 

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Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Security issued in global form held on their behalf by the Depositary, or the Security Custodian as its custodian, or under such global Security, and the Depositary may be treated by the Company, the Security Custodian and any agent of the Company or the Trustee as the absolute owner of such global Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of a Security of any series issued in global form may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder of such series is entitled to take under this Indenture or the Securities of such series and (ii) nothing herein shall prevent the Company, the Security Custodian or any agent of the Company or the Security Custodian, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or shall impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a beneficial owner of any Security.

 

Notwithstanding Section 305, except as otherwise specified as contemplated by Section 301, any permanent global Security shall be exchangeable only as provided in this paragraph. If the beneficial owners of interests in a permanent global Security are entitled to exchange such interest for Securities of such series and of like tenor and principal amount of another authorized form and denomination, as specified as contemplated by Section 301, then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Securities of that series in an aggregate principal amount equal to the principal amount of such permanent global Security, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such permanent global Security shall be surrendered from time to time in accordance with instructions given to the Trustee and the Depositary (which instructions shall be in writing but need not comply with Section 103 or be accompanied by an Opinion of Counsel) by the Depositary or such other depositary as shall be specified in the Company Order with respect thereto to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or in part, for definitive Securities of the same series without charge and the Trustee shall authenticate and deliver, in exchange for each portion of such permanent global Security, a like aggregate principal amount of other definitive Securities of the same series of authorized denominations and of like tenor as the portion of such permanent global Security to be exchanged; provided, however, that no such exchanges may occur during a period beginning at the opening of business 15 days before any Securities of that series are to be redeemed and ending on the relevant Redemption Date. Promptly following any such exchange in part, such permanent global Security marked to evidence the partial exchange shall be returned by the Trustee to the Depositary or such other depositary referred to above in accordance with the instructions of the Company referred to above. If a definitive Security is issued in exchange for any portion of a permanent global Security after the close of business at the office or agency where such exchange occurs on (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of Defaulted Interest, interest or Defaulted Interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Security, but will be payable on such Interest Payment Date or proposed date for

 

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payment, as the case may be, only to the Person to whom interest in respect of such portion of such permanent global Security is payable in accordance with the provisions of this Indenture.

 

Notwithstanding Section 305, except as otherwise specified as contemplated by Section 301, transfers of a Security issued in global form shall be limited to transfers of such global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Security issued in global form may be transferred in accordance with the rules and procedures of the Depositary. Securities of any series shall be transferred to all beneficial owners of a global Security of such series in exchange for their beneficial interests in that global Security if, and only if, (1) (A) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the global Security of such series or (B) the Depositary has ceased to be a clearing agency registered under applicable law, and in either case (A) or (B) a successor Depositary is not appointed by the Company within 90 days, (2) an Event of Default has occurred with respect to such series and is continuing and the Security Registrar has received a request from the Depositary or the Trustee to issue Securities of such series in lieu of all or a portion of that global Security (in which case the Company shall deliver Securities of such series within 30 days of such request) or (3) the Company determines not to have the Securities of such series represented by a global Security.

 

In connection with any transfer of a portion of the beneficial interest in a global Security of any series to beneficial owners pursuant to this Section 203, the Security Registrar shall reflect on its books and records the date and a decrease in the principal amount of the global Security of that series in an amount equal to the principal amount of the beneficial interest in the global Security of that series to be transferred, and the Company shall execute, and the Trustee upon receipt of a Company Order for the authentication and delivery of Securities of that series shall authenticate and deliver, one or more Securities of the same series of like tenor and amount.

 

In connection with the transfer of all the beneficial interests in a global Security of any series to beneficial owners pursuant to this Section 203, the global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the global Security, an equal aggregate principal amount of Securities of that series of authorized denominations.

 

Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities of any series by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Securities. Neither the Company nor the Trustee shall be liable for any delay by the related global Security Holder or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such global Security Holder or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued).

 

The provisions of the last sentence of Section 303 shall apply to any Security in global form if such Security was never issued and sold by the Company and the Company delivers to the Trustee the Security in global form together with written instructions (which need not comply with Section 103 and need not be accompanied by an Opinion of Counsel) with regard to the

 

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reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of Section 303.

 

Notwithstanding the provisions of Section 201 and Section 307, unless otherwise specified as contemplated by Section 301, payment of principal of (and premium, if any) and interest on and any Additional Amounts with respect to any Security in permanent global form shall be made to the Person or Persons specified therein.

 

Notwithstanding the provisions of Section 308 and except as provided in the preceding paragraph, the Company, the Trustee and any agent of the Company or of the Trustee shall treat a Person as the Holder of such principal amount of Outstanding Securities represented by a global Security as shall be specified in a written statement, if any, of the Holder of such global Security, which is produced to the Security Registrar by such Holder.

 

Global Securities may be issued in either temporary or permanent form. Permanent global Securities will be issued in definitive form.

 

ARTICLE THREE

 

THE SECURITIES

 

Section 301.                            Amount Unlimited; Issuable in Series.

 

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

 

(1)           the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);

 

(2)           any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, Section 305, Section 306, Section 906 or Section 1007);

 

(3)           whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in permanent global form, and, if so, whether beneficial owners of interests in any such global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 203, and the Depositary for any global Security or Securities of such series;

 

(4)           the manner in which any interest payable on a temporary global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 304;

 

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(5)           the date or dates on which the principal of (and premium, if any, on) the Securities of the series is payable or the method of determination thereof;

 

(6)           the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and, if other than as set forth in Section 101, the Regular Record Date for the interest payable on any Securities on any Interest Payment Date;

 

(7)           the place or places where, subject to the provisions of Section 1002, the principal of (and premium, if any), any interest on and any Additional Amounts with respect to the Securities of the series shall be payable;

 

(8)           the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option, and the manner in which the Company must exercise any such option if different from those set forth herein;

 

(9)           the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased in whole or in part pursuant to such obligation;

 

(10)         the denomination in which any Securities of that series shall be issuable, if other than denominations of $1,000 and any integral multiple thereof;

 

(11)         the currency or currencies (including composite currencies) if other than Dollars, or the form, including equity securities, other debt securities (including Securities) warrants or any other securities or property of the Company or any other Person, in which payment of the principal of (and premium, if any), any interest on and any Additional Amounts with respect to the Securities of the series shall be payable;

 

(12)         if the principal of (and premium, if any) or interest on or any Additional Amounts with Respect to the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies (including composite currencies) other than that in which the Securities are stated to be payable, the currency or currencies (including composite currencies) in which payment of the principal of (and premium, if any) and interest on, and any Additional Amounts with respect to, Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made;

 

(13)         if the amount of payments of principal of (and premium, if any), any interest on and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined;

 

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(14)         if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;

 

(15)         any changes or additions to Article Four, including the addition of additional covenants that may be subject to the covenant defeasance option pursuant to Section 401;

 

(16)         any deletions or modifications of or additions to the definitions set forth in Section 101, the Events of Default set forth in Section 501 or covenants of the Company set forth in Article Ten pertaining to the Securities of the series;

 

(17)         if the Securities of the series are to be convertible into or exchangeable for equity securities, other debt securities (including Securities), warrants or any other securities or property of the Company or any other Person, at the option of the Company or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange; and

 

(18)         any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture except as permitted by Section 901(9)).

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action together with such Board Resolution shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series.

 

Section 302.                            Denominations.

 

The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in denominations of $1,000 and any integral multiple thereof. Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, any Securities of a series denominated in a currency other than Dollars shall be issuable in denominations that are the equivalent, as determined by the Company by reference to the noon buying rate in The City of New York for cable transfers for such currency, as such rate is reported or otherwise made available by the Federal Reserve Bank of New York, on the applicable issue date for such Securities, of $1,000 and any integral multiple thereof.

 

Section 303.                            Execution, Authentication, Delivery and Dating.

 

The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President, its Treasurer or one of its Vice Presidents. The signature of any of these officers on the Securities may be manual or facsimile. The seal of the Company, if any, may be in the form

 

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of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Securities.

 

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise.

 

If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions or any other method permitted by Section 201 and Section 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,

 

(a)           if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture;

 

(b)           if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and

 

(c)           that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except as such enforcement is subject to the effect of (i) bankruptcy, insolvency, fraudulent conveyance, reorganization or other laws relating to or affecting creditors’ rights and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

 

If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

 

Each Security shall be dated the date of its authentication.

 

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security, a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security

 

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shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309 together with a written statement (which need not comply with Section 103 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

Section 304.                            Temporary Securities.

 

Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in registered form and with such appropriate insertions, omissions, substitutions and other variations as the officers of the Company executing such Securities may determine, as evidenced by their execution of such Securities.

 

Except in the case of temporary Securities in global form (which shall be exchanged in accordance with the provisions of the following paragraphs), if temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series.

 

All Outstanding temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder.

 

Section 305.                            Registration, Registration of Transfer and Exchange.

 

The Company shall cause to be kept for each series of Securities at one of the offices or agencies maintained pursuant to Section 1002 a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities of such series. The Trustee is hereby initially appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

 

Except as set forth in Section 203 or as may be provided pursuant to Section 301, upon surrender for registration of transfer of any Security of any series at the office or agency in a

 

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Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series and of like tenor, of any authorized denominations and of a like aggregate principal amount.

 

At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series and of like tenor, of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

 

All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

 

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

 

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchange pursuant to Section 304, Section 906 or Section 1107 not involving any transfer.

 

The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series selected for redemption and ending at the close of business on the day of the mailing of the relevant notice of redemption or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

Section 306.                            Mutilated, Destroyed, Lost and Stolen Securities.

 

If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of

 

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the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fee and expenses of the Trustee) connected therewith.

 

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

 

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

Section 307.                            Payment of Interest; Interest Rights Preserved.

 

Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Unless otherwise provided with respect to the Securities of any series, payment of interest may be made at the option of the Company by check mailed or delivered to the address of any Person entitled thereto as such address shall appear in the Security Register.

 

Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

 

(1)           The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest

 

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which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. The Trustee may, in its discretion, in the name and at the expense of the Company, cause a similar notice to be published at least once in an Authorized Newspaper, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).

 

(2)           The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture, upon registration of transfer of, in exchange for or in lieu of, any other Security, shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

 

Section 308.                            Persons Deemed Owners.

 

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 305 and Section 307) interest on or any Additional Amounts with respect to such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Section 309.                            Cancellation.

 

All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. All Securities so delivered shall be promptly cancelled by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance with the Trustee’s customary procedures.

 

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Section 310.                            Computation of Interest.

 

Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year of twelve 30-day months.

 

Section 311.                            CUSIP Numbers.

 

The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Company shall promptly notify the Trustee of any change in the “CUSIP” numbers.

 

ARTICLE FOUR

 

SATISFACTION AND DISCHARGE; DEFEASANCE

 

Section 401.                            Satisfaction and Discharge of Indenture; Defeasance.

 

The following provisions of this Section 401 shall apply to the Securities of each series except as otherwise specified pursuant to Section 301 for Securities of such series:

 

(a)           If at any time the Company shall have delivered to the Trustee for cancellation all Securities of any series theretofore authenticated and delivered (other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 306 and Securities for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company as provided in Section 1003) or all Securities of such series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit with the Trustee as trust funds the entire amount in cash sufficient to pay at the date of Stated Maturity of the principal amount of the Securities or upon redemption all Securities of such series not theretofore delivered to the Trustee for cancellation, including principal and premium, if any, and interest due or to become due on such date of Stated Maturity or Redemption Date, as the case may be, and if in either case the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of such Securities herein expressly provided for) with respect to the Securities of such series, and the Trustee, on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to the Securities of such series.

 

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(b)           Subject to Sections 401(c), 401(d) and 404, the Company at any time may terminate, with respect to Securities of a particular series, all its obligations under the Securities of such series and this Indenture with respect to the Securities of such series (“legal defeasance option”) or the operation of any covenant or additional Event of Default made applicable to such Securities pursuant to Section 301(15) (“covenant defeasance option”). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.

 

If the Company exercises its legal defeasance option, payment of the Securities of the defeased series may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance option, payment of the Securities of the defeased series may not be accelerated because of an Event of Default specified in Section 501(4) or 501(7).

 

Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.

 

(c)           Notwithstanding clauses (a) and (b) above, the Company’s obligations in Sections 305, 306, 401, 403, 404, 610(e), 607, 701, 1002 and 1003 shall survive until the Securities of the defeased series have been paid in full. Thereafter, the Company’s obligations in Sections 607 and 403 shall survive.

 

(d)           The Company may exercise its legal defeasance option or its covenant defeasance option with respect to Securities of a particular series only if:

 

(i)            the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations for the payment of principal of, and premium, if any, and interest on, and any Additional Amounts with respect to, the Securities of such series to the date of Stated Maturity of the principal amount of the Securities or the Redemption Date, as the case may be;

 

(ii)           the Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay the principal, premium, if any, and interest and any Additional Amounts when due on all the Securities of such series to such date of Stated Maturity or the Redemption Date, as the case may be;

 

(iii)          91 days pass after the deposit is made and during the 91-day period no Default specified in Section 501(5) or (6) occurs which is continuing at the end of the period;

 

(iv)          no Default has occurred and is continuing on the date of such deposit and after giving effect thereto;

 

(v)           the deposit does not constitute a default under any other agreement binding on the Company;

 

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(vi)          the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940;

 

(vii)         in the event of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that the Company has received from the Internal Revenue Service a ruling, or since the date of this Indenture there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;

 

(viii)        in the event of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and

 

(ix)          the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Securities of such series as contemplated by this Article Four have been complied with.

 

Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Securities of such series at a future date in accordance with Article Eleven.

 

For the purposes of this Indenture, “U.S. Government Obligations” means direct non-callable obligations of, or non-callable obligations the payment of principal of and interest on which is guaranteed by, the United States of America, or to the payment of which obligations or guarantees the full faith and credit of the United States of America is pledged, or beneficial interests in a trust the corpus of which consists exclusively of money or such obligations or a combination thereof.

 

Section 402.                            Application of Trust Money.

 

Subject to the provisions of the last paragraph of Section 1003, all money or U.S. Government Obligations deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest and any Additional Amounts for the payment of which such money has been deposited with the Trustee.

 

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Section 403.                            Indemnity for U.S. Government Obligations.

 

The Company shall pay and shall indemnify the Trustee and the Holders against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

 

Section 404.                            Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations deposited with respect to Securities of any series in accordance with Section 401 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture with respect to the Securities of such series and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 401 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 401; provided, however, that if the Company has made any payment of principal of (or premium, if any), or interest on or any Additional Amounts with respect to any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE FIVE

 

REMEDIES

 

Section 501.                            Events of Default.

 

“Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless it is either inapplicable to a particular series or it is specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution establishing such series of Securities or in the form of Security for such series:

 

(1)                                 default in the payment of any interest on or any Additional Amounts with respect to any Security of that series when such interest or Additional Amounts become due and payable, and continuance of such default for a period of 30 days; or

 

(2)                                 default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or

 

(3)                                 default in the deposit of any mandatory sinking fund payment, when and as due by the terms of a Security of that series and continuance of such default for a period of 30 days; or

 

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(4)                                 default in the performance or breach of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of all Outstanding Securities of all series having the benefit of such covenant or warranty a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

 

(5)                                 the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or

 

(6)                                 the commencement by the Company of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it, of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or

 

(7)                                 any other Event of Default provided with respect to Securities of that series.

 

Notwithstanding the foregoing provisions of this Section 501, if the principal of (and premium, if any) or any interest on, or Additional Amounts with respect to, any Security is payable in a currency or currencies (including a composite currency) other than Dollars and such currency (or currencies) is (or are) not available to the Company for making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of the Company (a “Conversion Event”), the Company will be entitled to satisfy its obligations to Holders of the Securities by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by the Company by reference to the noon buying rate in The City of New York for cable transfers for such currency (“Exchange Rate”), as such Exchange Rate is certified for customs purposes by the Federal

 

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Reserve Bank of New York on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions of this Section 501, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under this Indenture.

 

Promptly after the occurrence of a Conversion Event with respect to Securities of any series, the Company shall give written notice thereof to the Trustee; and the Trustee, promptly after receipt of such notice, shall give notice thereof in the manner provided in Section 107 to the Holders of such series. Promptly after the making of any payment in Dollars as a result of a Conversion Event with respect to Securities of any series, the Company shall give notice in the manner provided in Section 107 to the Holders of such series, setting forth the applicable Exchange Rate and describing the calculation of such payments.

 

Section 502.                            Acceleration of Maturity; Rescission and Annulment.

 

If an Event of Default with respect to any Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of (i) the series affected by such default (in the case of an Event of Default described in clause (1), (2), (3) or (7) of Section 501) or (ii) all series of Securities affected by such default (subject to the immediately following sentence, in the case of an Event of Default described in clause (4) of Section 501) may declare the principal amount (or, if any such Securities are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all of the Securities of the series affected by such default or all series, as the case may be, together with any accrued but unpaid interest or any premium thereon or Additional Amount with respect thereto, to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount), together with any accrued but unpaid interest or any premium thereon or Additional Amount with respect thereto, shall become immediately due and payable. If an Event of Default described in clause (5) or (6) of Section 501 shall occur, the principal amount of the Outstanding Securities of all series, together with any accrued but unpaid interest or any premium thereon or Additional Amount with respect thereto, ipso facto shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

Notwithstanding the foregoing to the extent elected by the Company, the sole remedy for an Event of Default relating to the failure by the Company to comply with the provisions of Section 704 shall, for the first 120 days after the occurrence of such an Event of Default, consist exclusively of the right to receive additional interest (“Special Interest”) on the Securities at an annual rate equal to 0.50% of the principal amount of the Securities. Such Special Interest shall be paid semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date following the date on which such Special Interest began to accrue on the Securities. Special Interest shall accrue on all Outstanding Securities from and including the date on which an Event of Default relating to a failure to comply with the provisions of Section 704 shall first occur to but not including the 120th day thereafter (or such earlier date on which such Event of Default shall have been cured or waived). On such 120th day (or earlier, if the Event of Default relating to the failure to comply with Section 704 is cured or waived prior to such 120th

 

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day), such Special Interest shall cease to accrue and, if the Event of Default relating to the failure to comply with Section 704 shall not have been cured or waived prior to such 120th day, the Securities shall be subject to acceleration as provided in this Section 502. The provisions of this paragraph shall not affect the rights of holders in the event of the occurrence of any other Event of Default.

 

If the Company shall elect to pay Special Interest in connection with an Event of Default relating to its failure to comply with the requirements of Section 704, (1) the Company shall notify all Holders and the Trustee and Paying Agent of such election in writing on or before the close of business on the date on which such Event of Default shall first occur, and (2) all references herein to interest accrued or payable as of any date shall include any Special Interest accrued or payable as of such date as provided in this Section 502. Upon the Company’s failure to timely give such notice, the Securities will be subject to acceleration as provided above in this Section 502.

 

At any time after such a declaration of acceleration with respect to Securities of any series (or of all series, as the case may be) has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series (or of all series, as the case may be), by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if

 

(1)                                 the Company has paid or deposited with the Trustee a sum sufficient to pay

 

(A)                               all overdue interest on, and any Additional Amounts with respect to, all Securities of that series (or of all series, as the case may be),

 

(B)                               the principal of (and premium, if any, on) any Securities of that series (or of all series, as the case may be) which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities (in the case of Original Issue Discount Securities, the Securities’ Yield to Maturity),

 

(C)                               to the extent that payment of such interest is lawful, interest upon overdue interest and any Additional Amounts at the rate or rates prescribed therefor in such Securities (in the case of Original Issue Discount Securities, the Securities’ Yield to Maturity), and

 

(D)                               all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

 

(2)                                 all Events of Default with respect to Securities of that series (or of all series, as the case may be), other than the non-payment of the principal of Securities of that series (or of all series, as the case may be) which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

 

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No such rescission shall affect any subsequent default or impair any right consequent thereon.

 

Section 503.                            Collection of Indebtedness and Suits for Enforcement by Trustee.

 

The Company covenants that if

 

(1)                                 default is made in the payment of any installment of interest on, or any Additional Amounts with respect to, any Security of any series when such interest or Additional Amounts shall have become due and payable and such default continues for a period of 30 days, or

 

(2)                                 default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,

 

the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest and Additional Amounts and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest and Additional Amounts, at the rate or rates prescribed therefor in such Securities (or in the case of Original Issue Discount Securities, the Securities’ Yield to Maturity), and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.

 

If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

Section 504.                            Trustee May File Proofs of Claim.

 

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal (or lesser amount in the case of Original Issue Discount Securities) of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and

 

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premium, if any), interest or any Additional Amounts) shall be entitled and empowered, by intervention in such proceeding or otherwise,

 

(i)                                     to file and prove a claim for the whole amount of principal (or lesser amount in the case of Original Issue Discount Securities) (and premium, if any) and interest and any Additional Amounts owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders 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 Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceedings; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official.

 

Section 505.                            Trustee May Enforce Claims Without Possession of Securities or Coupons.

 

All rights of action and claim under this Indenture or the Securities may be prosecuted and enforced by the Trustee without possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

 

Section 506.                            Application of Money Collected.

 

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any), interest or any Additional Amounts, upon presentation of the Securities, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

FIRST: To the payment of all amounts due the Trustee under Section 607;

 

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SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on and any Additional Amounts with respect to the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) interest and Additional Amounts, respectively; and

 

THIRD: The balance, if any, to the Person or Persons entitled thereto.

 

To the fullest extent allowed under applicable law, if for the purpose of obtaining judgment against the Company in any court it is necessary to convert the sum due in respect of the principal of (or premium, if any) or interest on or any Additional Amounts with respect to the Securities of any series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Business Day next preceding that on which final judgment is given. Neither the Company nor the Trustee shall be liable for any shortfall nor shall it benefit from any windfall in payments to Holders of Securities under this Section caused by a change in exchange rates between the time the amount of a judgment against it is calculated as above and the time the Trustee converts the Judgment Currency into the Required Currency to make payments under this Section to Holders of Securities, but payment of such judgment shall discharge all amounts owed by the Company on the claim or claims underlying such judgment.

 

Section 507.                            Limitation on Suits.

 

Subject to Section 508, no Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

 

(1)                                 an Event of Default with respect to Securities of such series shall have occurred and be continuing and such Holder has previously given written notice to the Trustee of such continuing Event of Default;

 

(2)                                 the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

(3)                                 such Holder or Holders have offered to the Trustee such indemnity or security as it may reasonably require against the costs, expenses and liabilities to be incurred in compliance with such request;

 

(4)                                 the Trustee for 60 days after its receipt of such notice, request and offer of indemnity or security has failed to institute any such proceeding; and

 

(5)                                 no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;

 

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it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).

 

Section 508.                            Unconditional Right of Holders to Receive Principal, Premium and Interest.

 

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest on and any Additional Amounts with respect to such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired or affected without the consent of such Holder.

 

Section 509.                            Restoration of Rights and Remedies.

 

If the Trustee or any Holder of any Security has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, then and in every such case the Company, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

Section 510.                            Rights and Remedies Cumulative.

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 511.                            Delay or Omission Not Waiver.

 

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

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Section 512.                            Control by Holders.

 

With respect to Securities of any series, the Holders of a majority in principal amount of the Outstanding Securities of such series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, relating to or arising under an Event of Default described in clause (1), (2), (3) or (7) of Section 501, and with respect to all Securities the Holders of a majority in principal amount of all Outstanding Securities shall have the right to direct the time, method and place of conducting any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, not relating to or arising under such an Event of Default, provided that in each such case

 

(1)                                 such direction shall not be in conflict with any rule of law or with this Indenture, and

 

(2)                                 the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

 

Section 513.                            Waiver of Past Defaults.

 

The Holders of a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, and the Holders of a majority in principal amount of all Outstanding Securities may on behalf of the Holders of all Securities waive any other past default hereunder and its consequences, except in each case a default

 

(1)                                 in the payment of the principal of (or premium, if any) or interest on, or any Additional Amounts with respect to, any Security, or

 

(2)                                 in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

 

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

 

Section 514.                            Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding

 

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Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on, or any Additional Amounts with respect to, any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date).

 

Section 515.                            Waiver of Stay or Extension Laws.

 

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

ARTICLE SIX

 

THE TRUSTEE

 

Section 601.                            Certain Duties and Responsibilities.

 

(a)                                 Except during the continuance of an Event of Default with respect to the Securities of any series,

 

(1)                                 the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(2)                                 in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

(b)                                 In case an Event of Default has occurred and is continuing with respect to the Securities of any series, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

 

(c)                                  No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that

 

(1)                                 this Subsection shall not be construed to limit the effect of Subsection (a) of this Section;

 

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(2)                                 the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(3)                                 the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series or of all series, determined as provided in Section 512, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and

 

(4)                                 no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity or security reasonably satisfactory to it against such risk or liability is not assured to it.

 

(d)                                 Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

Section 602.                            Notice of Defaults.

 

Within 90 days after the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall give notice of such default hereunder known to the Trustee to all Holders of Securities of such series in the manner provided in Section 107, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on, or any Additional Amounts with respect to, any Security of such series or in the payment of any sinking fund installment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interest of the Holders of Securities of such series; and provided, further, that in the case of any default of the character specified in Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event, act or condition which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

 

Section 603.                            Certain Rights of Trustee.

 

Subject to the provisions of Section 601:

 

(a)                                 the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

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(b)                                 any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;

 

(c)                                  whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;

 

(d)                                 the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

 

(e)                                  the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

(f)                                   the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney;

 

(g)                                  the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and, except for any Affiliates of the Trustee, the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

 

(h)                                 in no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

 

(i)                                     the Trustee shall not be deemed to have notice of any default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture;

 

(j)                                    the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder;

 

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(k)                                 the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder; and

 

(l)                                     the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

 

Section 604.                            Not Responsible for Recitals or Issuance of Securities.

 

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities (including any documents related to the offering and sale of the Securities). The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.

 

Section 605.                            May Hold Securities.

 

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Section 608 and Section 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

 

Section 606.                            Money Held in Trust.

 

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.

 

Section 607.                            Compensation and Reimbursement.

 

The Company agrees

 

(1)                                 to pay to the Trustee from time to time such compensation as shall be agreed in writing for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(2)                                 except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the compensation and the reasonable expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct; and

 

(3)                                 to indemnify the Trustee and each of its directors, officers, employees, agents and/or representatives for, and to hold each of them harmless against, any loss, liability, damage, claim or expense incurred without negligence or willful misconduct on each of their part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder,

 

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including the costs and expenses of defending themselves against any claim (whether asserted by the Company, a Holder or any other Person) or liability in connection with the exercise or performance of any of the Trustee’s powers or duties hereunder.

 

As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, premium, if any, or interest, if any, on, or any Additional Amounts with respect to, particular Securities.

 

Any expenses and compensation for any services rendered by the Trustee after the occurrence of an Event of Default specified in clause (5) or (6) of Section 501 shall constitute expenses and compensation for services of administration under all applicable federal or state bankruptcy, insolvency, reorganization or other similar laws.

 

The provisions of this Section shall survive the termination of this Indenture.

 

Section 608.                            Disqualification; Conflicting Interests.

 

(a)                                 If the Trustee has or shall acquire any conflicting interest, as defined in this Section, with respect to the Securities of any series, it shall, within 90 days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign with respect to the Securities of that series in the manner and with the effect hereinafter specified in this Article.

 

(b)                                 In the event that the Trustee shall fail to comply with the provisions of Subsection (a) of this Section with respect to the Securities of any series, the Trustee shall, within 10 days after the expiration of such 90-day period, transmit by mail to all Holders of Securities of that series, as their names and addresses appear in the Security Register, notice of such failure.

 

(c)                                  For the purposes of this Section, the term “conflicting interest” shall have the meaning specified in Section 310(b) of the Trust Indenture Act and the Trustee shall comply with Section 310(b) of the Trust Indenture Act; provided that there shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act with respect to the Securities of any series any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Company are outstanding, if the requirements for such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met. For purposes of the preceding sentence, the optional provision permitted by the second sentence of Section 310(b)(9) of the Trust Indenture Act shall be applicable.

 

Section 609.                            Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall

 

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be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

The Indenture shall always have a Trustee who satisfies the requirements of Sections 310(a)(1), 310(a)(2) and 310(a)(5) of the Trust Indenture Act.

 

Section 610.                            Resignation and Removal; Appointment of Successor.

 

(a)                                 No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

 

(b)                                 The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the resigning Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

(c)                                  The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.  If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

(d)                                 If at any time:

 

(1)                                 the Trustee shall fail to comply with Section 608(a) after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

 

(2)                                 the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder of Securities, or

 

(3)                                 the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

 

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(e)                                  If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and such successor Trustee or Trustees shall comply with the applicable requirements of Section 611. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

(f)                                   The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

 

Section 611.                            Acceptance of Appointment by Successor.

 

(a)                                 In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

 

(b)                                 In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one

 

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Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

(c)                                  Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

 

(d)                                 No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

 

Section 612.                            Merger, Conversion, Consolidation or Succession to Business.

 

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

Section 613.                            Preferential Collection of Claims Against Company.

 

The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent indicated therein.

 

Section 614.                            Appointment of Authenticating Agent.

 

The Trustee may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange, registration of transfer or partial redemption or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is

 

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made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia having a combined capital and surplus of not less than $50,000,000 or equivalent amount expressed in a foreign currency and subject to supervision or examination by Federal or State or District of Columbia authority or authority of such country. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

 

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If an appointment is made pursuant to this Section, the Securities may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

 

“This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	
 
    	
UNION   BANK, N.A.
    
	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
as Authenticating Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized Signatory”
    

 

Notwithstanding any provision of this Section 614 to the contrary, if at any time any Authenticating Agent appointed hereunder with respect to any series of Securities shall not also be acting as the Security Registrar hereunder with respect to any series of Securities, then, in addition to all other duties of an Authenticating Agent hereunder, such Authenticating Agent shall also be obligated: (i) to furnish to the Security Registrar promptly all information necessary to enable the Security Registrar to maintain at all times an accurate and current Security Register; and (ii) prior to authenticating any Security denominated in a foreign currency, to ascertain from the Company the units of such foreign currency that are required to be determined by the Company pursuant to Section 302.

 

ARTICLE SEVEN

 

HOLDER’S LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

Section 701.                            Company to Furnish Trustee Names and Addresses of Holders.

 

With respect to each series of Securities, the Company will furnish or cause to be furnished to the Trustee:

 

(a)                                 semi-annually, not more than 15 days after each Regular Record Date relating to that series (or, if there is no Regular Record Date relating to that series, on January 1 and July 1) a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of that series as of such dates, and

 

(b)                                 at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content, such list to be dated as of a date not more than 15 days prior to the time such list is furnished;

 

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provided, that so long as the Trustee is the Security Registrar, the Company shall not be required to furnish or cause to be furnished such a list to the Trustee. The Company shall otherwise comply with Section 312(a) of the Trust Indenture Act.

 

Section 702.                            Preservation of Information; Communications to Holders.

 

(a)                                 The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders of each series contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders of each series received by the Trustee in its capacity as Security Registrar, if applicable. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. The Trustee shall otherwise comply with Section 310(a) of the Trust Indenture Act.

 

(b)                                 Holders of Securities may communicate pursuant to Section 312(b) of the Trust Indenture Act with other Holders with respect to their rights under this Indenture or under the Securities.

 

(c)                                  Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 702(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 702(b). The Company, the Trustee, the Security Registrar and any other Person shall have the protection of Section 312(c) of the Trust Indenture Act.

 

Section 703.                            Reports by Trustee.

 

(a)                                 Within 60 days after May 15 of each year after the execution of this Indenture, the Trustee shall transmit by mail to Holders a brief report dated as of such May 15 that complies with Section 313(a) of the Trust Indenture Act.

 

(b)                                 The Trustee shall comply with Section 313(b) of the Trust Indenture Act.

 

(c)                                  Reports pursuant to this Section shall be transmitted by mail as required by Sections 313(c) and 313(d) of the Trust Indenture Act:

 

(1)                                 to all Holders of Securities, as the names and addresses of such Holders appear in the Security Register;

 

(2)                                 to such Holders of Securities as have, within the two years preceding such transmissions, filed their names and addresses with the Trustee for that purpose; and

 

(3)                                 except in the case of reports pursuant to Subsection (b) of this Section, to each Holder of a Security whose name and address is preserved at the time by the Trustee, as provided in Section 702(a).

 

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(d)                                 A copy of each report pursuant to Subsection (a) or (b) of this Section 703 shall, at the time of its transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will promptly notify the Trustee in writing when any Securities are listed on any stock exchange or of any delisting thereof.

 

Section 704.                            Reports by Company.

 

For so long as any Securities are outstanding, if the Company is subject to the periodic reporting requirements of the Exchange Act, the Company shall file with the Commission and furnish to the Trustee (unless such reports are available on the Commission’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system or any successor thereto; provided, however, that the Trustee shall have no responsibility whatsoever to determine if such reports are available on EDGAR), within the time periods specified in the Commission’s rules and regulations:

 

(1)                                 all quarterly and annual reports on Forms 10-Q and 10-K required to be filed by companies that are subject to the periodic reporting requirements of the Exchange Act; and

 

(2)                                 all current reports on Form 8-K required to be filed by companies that are subject to the periodic reporting requirements of the Exchange Act.

 

Each annual report on Form 10-K shall include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants. In addition, the Company shall post a copy of each of the reports referred to in clauses (1) and (2) above on its website for public availability as soon as reasonably practicable after such reports are filed with the Commission.

 

If, at any time, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company shall nevertheless continue to prepare the financial statements and a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” substantially similar to that which would have been required to be included in each of the reports specified in clause (1) of the preceding paragraph of this section had the Company been subject to such Exchange Act reporting requirements (with all such financial statements prepared in accordance with Regulation S-X promulgated by the Commission and all such annual financial statements including a report thereon from the Company’s certified independent accountants) and post copies thereof to the Company’s website for public availability within the time periods that would have been applicable to filing such reports with the Commission in the rules and regulations applicable to such reports if the Company had been required to file those reports with the Commission; provided, however, that if the Company is no longer subject to the periodic reporting requirements of the Exchange Act, the Company will not be required to comply with Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 and 308 of Regulation S-K promulgated by the SEC, or Item 10(e) of Regulation S-K (with respect to any non-GAAP financial measures contained therein).

 

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the

 

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Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

ARTICLE EIGHT

 

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 801.                            Company May Consolidate, Etc., Only on Certain Terms.

 

The Company shall not convert into or consolidate, amalgamate, merge or enter into a scheme of arrangement with or into any other Person or sell, convey, transfer or lease all or substantially all of its properties and assets to any Person, unless:

 

(1)                                 Either (a) the Company is the surviving corporation or (b) the Person or entity formed by or surviving any such conversion, consolidation, amalgamation, merger or scheme of arrangement (if other than the Company) or the Person or entity to which such sale, conveyance, lease or transfer is made (i) shall expressly assume by an indenture supplemental hereto, in form satisfactory to the Trustee, executed and delivered to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on and any Additional Amounts with respect to all of the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed, and (ii) is organized under the laws of a country that is a member of the Organisation for Economic Co-operation and Development including the United States or any state thereof (including the District of Columbia); provided that, unless such Person referred to in clause (b) is a corporation, a corporate co-issuer of the securities will be added to the applicable indenture by agreements reasonably satisfactory to the Trustee;

 

(2)                                 immediately after giving effect to such transaction, no Event of Default, and no event, act or condition which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

 

(3)                                 the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such conversion, consolidation, amalgamation, merger, scheme of arrangement, sale, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

Section 802.                            Successor Person Substituted.

 

Upon any conversion into or consolidation, amalgamation or entering into a scheme of arrangement by the Company with, or merger by the Company into, any other Person or any sale, conveyance, transfer or lease of all or substantially all of the properties and assets (on a consolidated basis) of the Company substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation, amalgamation or scheme of arrangement or into which the Company is merged or converted or to which such sale, conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been

 

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named as the Company herein, and thereafter, except in the case of such lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section 901.                            Supplemental Indentures Without Consent of Holders.

 

Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(1)                                 to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or

 

(2)                                 to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series), to convey, transfer, assign, mortgage or pledge any property to or with the Trustee or otherwise secure any series of the Securities or to surrender any right or power herein conferred upon the Company; or

 

(3)                                 to add any additional Events of Default with respect to all or any series of the Securities (and, if such Event of Default is applicable to less than all series of Securities, specifying the series to which such Event of Default is applicable); or

 

(4)                                 to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is adversely affected by such change in or elimination of such provision; or

 

(5)                                 to establish the form or terms of Securities of any series as permitted by Section 201 and Section 301; or

 

(6)                                 to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance or satisfaction and discharge of any series of Securities pursuant to Section 401; provided, however, that any such action shall not adversely affect the interest of the Holders of Securities of such series or any other series of Securities in any material respect; or

 

(7)                                 to evidence or provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); or

 

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(8)                                 to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided such other provisions as may be made shall not adversely affect the interests of the Holders of Securities of any series in any material respect;

 

(9)                                 to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provisions nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or

 

(10)                          to secure the Securities of any series; or

 

(11)                          to comply with any requirement in order to effect or maintain qualification of this Indenture under the Trust Indenture Act.

 

Section 902.                            Supplemental Indentures With Consent of Holders.

 

With the consent of the Holders of a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

 

(1)                                 change the Stated Maturity of the principal of, any premium payable upon redemption thereof or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon, any Additional Amounts with respect thereto or any premium payable upon the redemption thereof, or change any obligation of the Company to pay Additional Amounts (except as contemplated by Section 801(1)) and permitted by Section 901(1)), or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency or currencies (including composite currencies) in which, any Security or any premium or any interest thereon or Additional Amounts with respect thereto is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

 

(2)                                 reduce the percentage in principal amount of Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

 

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(3)                                 modify any of the provisions of this Section, Section 512 or Section 1106, except to increase any such percentage or to provide with respect to any particular series the right to condition the effectiveness of any supplemental indenture as to that series on the consent of the Holders of a specified percentage of the aggregate principal amount of Outstanding Securities of such series (which provision may be made pursuant to Section 301 without the consent of any Holder) or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this proviso, in accordance with the requirements of Section 611(b) and Section 901(7).

 

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

 

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

Section 903.                            Execution of Supplemental Indentures.

 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and, subject to customary exceptions, such supplemental indenture is a valid and binding obligation. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties, immunities or liabilities under this Indenture or otherwise.

 

Section 904.                            Effect of Supplemental Indentures.

 

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 905.                            Conformity With Trust Indenture Act.

 

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

 

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Section 906.                            Reference in Securities to Supplemental Indentures.

 

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

 

ARTICLE TEN

 

COVENANTS

 

Section 1001.                     Payment of Principal, Premium and Interest.

 

The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any), interest on and any Additional Amounts with respect to the Securities of that series in accordance with the terms of the Securities and this Indenture.

 

Section 1002.                     Maintenance of Office or Agency.

 

The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

Section 1003.                     Money for Securities Payments to be Held in Trust.

 

If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, before 10:00 a.m., New York City time, on each due date of the principal of (and premium, if any) or interest on or any Additional Amounts with respect to any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest or any Additional Amounts

 

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so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

 

Whenever the Company shall have one or more Paying Agents for any series of Securities, the Company will, before 10:00 a.m., New York City time, on each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of its action or failure so to act.

 

The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

 

(1)                                 hold all sums held by it for the payment of the principal of (and premium, if any), interest on or any Additional Amounts with respect to Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

 

(2)                                 give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal (and premium, if any), interest on or any Additional Amounts with respect to the Securities of that series; and

 

(3)                                 at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

 

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on or any Additional Amounts with respect to any Security of any series and remaining unclaimed for three years after such principal (and premium, if any) or interest or Additional Amounts have become due and payable shall, unless otherwise required by mandatory provisions of applicable escheat, or abandoned or unclaimed property law, be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Company cause to be published once, in an Authorized Newspaper in The

 

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Borough of Manhattan, The City of New York and in such other Authorized Newspapers as the Trustee shall deem appropriate, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will, unless otherwise required by mandatory provisions of applicable escheat, or abandoned or unclaimed property law, be repaid to the Company.

 

Section 1004.                     Existence.

 

Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

 

Section 1005.                     Statement by Officers as to Default.

 

The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof so long as any Security is outstanding hereunder, an Officers’ Certificate complying with Section 314(a) of the Trust Indenture Act, stating that a review of the activities of the Company during such year and of performance under this Indenture has been made under the supervision of the signers thereof and whether or not, to the best of their knowledge based upon such review, the Company is in default in the performance, observance or fulfillment of any of its covenants and other obligations under this Indenture, and if the Company shall be in default, specifying each such default known to them and the nature and status thereof. One of the officers signing the Officers’ Certificate delivered pursuant to this Section 1005 shall be the principal executive, financial or accounting officer of the Company.

 

For purposes of this Section, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture.

 

Section 1006.                     Waiver of Certain Covenants.

 

The Company may omit in any particular instance to comply with any covenant or condition set forth in Section 1004, or any covenant added for the benefit of any series of Securities as contemplated by Section 301 (unless otherwise specified pursuant to Section 301) if before or after the time for such compliance the Holders of a majority in principal amount of the Outstanding Securities of all series affected by such omission (acting as one class) shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect.

 

Section 1007.                     Additional Amounts.

 

If the Securities of a series expressly provide for the payment of Additional Amounts, the Company will pay to the Holder of any Security of such series Additional Amounts as expressly provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received from the sale or exchange of any Security of any series, such mention shall

 

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be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.

 

If the Securities of a series provide for the payment of Additional Amounts, at least 10 days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least 10 days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers’ Certificate, the Company shall furnish the Trustee and the Company’s principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers’ Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers’ Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities and the Company will pay to such Paying Agent the Additional Amounts required by this Section. The Company covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers’ Certificate furnished pursuant to this Section 1007.

 

Section 1008.                     Limitation on Liens.

 

The Company will not, nor will it permit any of its Subsidiaries to, incur, create, assume or suffer to exist any Lien on any Principal Property or any securities or indebtedness of any Subsidiary that owns or leases any Principal Property (whether such Principal Property, securities or indebtedness are now existing or owned or subsequently created or acquired) to secure any Indebtedness, without effectively providing that all of the Securities Outstanding hereunder shall be secured equally and ratably with or prior to such secured Indebtedness until such time as such Indebtedness is no longer secured by a Lien. This restriction shall not apply to:

 

(1)                                 Liens existing on, or provided for under the terms of agreements existing on, the date that any Securities are issued under this Indenture;

 

(2)                                 Liens on property, shares of stock, indebtedness or other assets existing at the time of acquisition thereof (including Liens on any property, shares of stock, indebtedness or other assets acquired from or held by a Person which is consolidated or amalgamated with, or merged with or into, the Company or a Subsidiary of the Company) and Liens on property, shares of stock, indebtedness or other assets existing at the time any Person becomes a Subsidiary of the Company that are not incurred in anticipation of such Person becoming a Subsidiary of the Company;

 

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(3)                                 Liens on property acquired, constructed, altered or improved by the Company or any of its Subsidiaries after the date of this Indenture which are created or assumed contemporaneously with, or within one year after, such acquisition (or in the case of property constructed, altered or improved, after the completion and commencement of commercial operation of such property, whichever is later) to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction, alteration or improvement, it being understood that if a commitment for such a financing is obtained prior to or within such one year period, the applicable Lien shall be deemed to be included in this clause (3) whether or not such Lien is created within such one year period; provided that in the case of any such construction, alteration or improvement the Lien shall not apply to any property theretofore owned by the Company or any of its Subsidiaries other than (i) the property so altered or improved and (ii) any theretofore unimproved real property on which the property so constructed or altered, or the improvement, is located;

 

(4)                                 Liens in favor of the Company or any of its Subsidiaries;

 

(5)                                 Liens on any current assets that secure current liabilities;

 

(6)                                 Liens in favor of the United States or any state, territory or possession thereof (or the District of Columbia), any foreign country or any department, agency, instrumentality or political subdivision of any such jurisdiction to secure partial, progress, advance or other payments pursuant to any contract or statute;

 

(7)                                 Liens to secure any Indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing, developing, repairing or improving the property subject to such Liens, including without limitation, Liens to secure Indebtedness of the pollution control or industrial revenue bond type;

 

(8)                                 Liens to secure Indebtedness issued or guaranteed by the United States or any state, territory or possession thereof (or the District of Columbia), any foreign country or any department, agency or instrumentality of any such jurisdiction;

 

(9)                                 Permitted Liens; and

 

(10)                          Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements), in whole or in part, of any Lien referred to in the foregoing clauses (1) through (9); provided, however, that the principal amount of Indebtedness secured thereby shall not exceed the principal amount of Indebtedness so secured at the time of such refinancing, refunding, extension, renewal or replacement (plus the aggregate amount of premiums, other payments, costs and expenses related to such refinancing, refunding, extension, renewal or replacement), and that such refinancing, refunding, extension, renewal or replacement shall be limited to all or a part of the property which secured the Lien so refinanced, refunded, extended, renewed or replaced (plus improvements on such property).

 

Notwithstanding the foregoing provisions of this Section 1008 or Section 1009, the Company and any of its Subsidiaries may incur, issue, assume or guarantee Indebtedness secured by a Lien not otherwise permitted by this Indenture, or may enter into Sale-Leaseback Transactions

 

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without complying with Section 1009, or enter into a combination of such transactions, in an aggregate amount which, together with all other such secured Indebtedness then outstanding and together with the aggregate amount of Attributable Indebtedness of the Company and its Subsidiaries deemed to be outstanding in respect of all Sale-Leaseback Transactions (to the extent not included in Indebtedness secured by Liens not otherwise permitted by this Indenture and excluding any Sale-Leaseback Transactions the proceeds of which have been applied in accordance with clause (b) of Section 1009) does not exceed 15% of Consolidated Net Tangible Assets.

 

Section 1009.                     Restriction on Sale-Leaseback Transactions.

 

The Company shall not, and shall not permit any of its Subsidiaries to, enter into any Sale-Leaseback Transaction with respect to any Principal Property unless:

 

(a)           at the time of entering into such Sale-Leaseback Transaction, the Company or such Subsidiary would be entitled to incur Indebtedness secured by a Lien on the Principal Property subject to such Sale-Leaseback Transaction in a principal amount at least equal to the Attributable Indebtedness with respect to such Sale-Leaseback Transaction pursuant to Section 1008 without equally and ratably securing the Securities pursuant to such Section; or

 

(b)           within 12 months after the effective date of such Sale-Leaseback Transaction, the Company or its Subsidiary, as the case may be, applies an amount equal to not less than the Attributable Indebtedness with respect to such Sale-Leaseback Transaction either to:

 

(1)           the voluntary defeasance or the prepayment, repayment, redemption or retirement of senior or pari passu Indebtedness of the Company;

 

(2)           the acquisition, construction, development or improvement of any Principal Property used or useful in the business of the Company and its Subsidiaries; or

 

(3)           any combination of applications referred to in clauses (1) and (2) above.

 

ARTICLE ELEVEN

 

REDEMPTION OF SECURITIES

 

Section 1101.                     Applicability of Article.

 

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article.

 

Section 1102.                     Election to Redeem; Notice to Trustee.

 

Unless otherwise provided with respect to the Securities of a series as contemplated by Section 301, the election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption of Securities of any series, the Company shall, at least 35 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be

 

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satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.

 

Any notice may be cancelled at any time prior to the mailing of that notice of redemption to any Holder of any Security of that Series and shall thereupon be void and of no effect.

 

Section 1103.                     Selection by Trustee of Securities to be Redeemed.

 

If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series or of the principal amount of global Securities of such series.

 

The Trustee shall promptly notify the Company and the Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

 

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

 

Section 1104.                     Notice of Redemption.

 

Notice of redemption shall be given in the manner provided in Section 107 to each Holder of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date.

 

All notices of redemption shall state:

 

(1)           the Redemption Date;

 

(2)           the Redemption Price (or, if the Redemption Price is not determinable when the notice of redemption is given, then the method of calculating it);

 

(3)           if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed;

 

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(4)           that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date;

 

(5)           the place or places where such Securities are to be surrendered for payment of the Redemption Price;

 

(6)           that the redemption is for a sinking fund, if such is the case; and

 

(7)           the “CUSIP” number, if applicable.

 

At the Company’s written request, the Trustee shall give the notice of redemption in the name and at the expense of the Company; provided, however, that the Company makes such request at least five Business Days prior (unless a shorter notice shall be satisfactory to the Trustee) to the date by which such notice of redemption must be given to Holders in accordance with this Section 1104.

 

Section 1105.                     Deposit of Redemption Price.

 

On or before 10:00 a. m., New York City time, on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, and any Additional Amounts with respect to, all the Securities which are to be redeemed on that date.

 

Section 1106.                     Securities Payable on Redemption Date.

 

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest (and any Additional Amounts) to the Redemption Date; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security or, in the case of Original Issue Discount Securities, the Securities’ Yield to Maturity.

 

Section 1107.                     Securities Redeemed in Part.

 

Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a

 

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written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and Stated Maturity, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

 

Section 1108.                     Purchase of Securities.

 

Unless otherwise specified as contemplated by Section 301, the Company and any Affiliate of the Company may at any time purchase or otherwise acquire Securities in the open market or by private agreement. Such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Securities. Any Securities purchased or acquired by the Company may be delivered to the Trustee and, upon such delivery, the indebtedness represented thereby shall be deemed to be satisfied. Section 309 shall apply to all Securities so delivered.

 

ARTICLE TWELVE

 

SINKING FUNDS

 

Section 1201.                     Applicability of Article.

 

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series.

 

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment.” Unless otherwise provided by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

 

Section 1202.                     Satisfaction of Sinking Fund Payments with Securities.

 

The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption), and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking payment shall be reduced accordingly.

 

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Section 1203.                     Redemption of Securities for Sinking Fund.

 

Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivery of or by crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 1106 and Section 1107.

 

ARTICLE THIRTEEN

 

MEETINGS OF HOLDERS OF SECURITIES

 

Section 1301.                     Purposes for Which Meetings May Be Called.

 

A meeting of Holders of Securities of any or all series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series.

 

Section 1302.                     Call, Notice and Place of Meetings.

 

(a)           The Trustee may at any time call a meeting of Holders of Securities of any series for any purpose specified in Section 1301, to be held at such time and at such place in Houston, Texas or in New York, New York, or in any other location, as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 107, not less than 20 nor more than 180 days prior to the date fixed for the meeting.

 

(b)           In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% in aggregate principal amount of the Outstanding Securities of any series, shall have requested the Trustee for any such series to call a meeting of the Holders of Securities of such series for any purpose specified in Section 1301, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 30 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in Houston, Texas or in New York, New York, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in Subsection (a) of this Section and shall provide a copy to the Trustee.

 

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Section 1303.                     Persons Entitled to Vote at Meetings.

 

To be entitled to vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of such series, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

 

Section 1304.                     Quorum; Action.

 

The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of Securities of such series. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In any other case, the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Subject to Section 1305(d), notice of the reconvening of any adjourned meeting shall be given as provided in Section 1302(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly that Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series shall constitute a quorum.

 

Except as limited by the first proviso to Section 902, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted by the affirmative vote of the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series; provided, however, that, except as limited by the first proviso to Section 902, any resolution with respect to any request, demand, authorization, direction, notice, consent or waiver which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage that is less than a majority in aggregate principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in aggregate principal amount of the Outstanding Securities of that series.

 

Except as limited by the first proviso to Section 902, any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series, whether or not present or represented at the meeting.

 

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Section 1305.                     Determination of Voting Rights; Conduct and Adjournment of Meetings.

 

(a)           The holding of Securities shall be proved in the manner specified in Section 105 and the appointment of any proxy shall be proved in the manner specified in Section 105. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 105 or other proof.

 

(b)           The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 1302(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of such series represented at the meeting.

 

(c)           At any meeting each Holder of a Security of such series and each proxy shall be entitled to one vote for each $1,000 principal amount of the Outstanding Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or as a proxy.

 

(d)           Any meeting of Holders of Securities of any series duly called pursuant to Section 1302 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of such series represented at the meeting; and the meeting may be held as so adjourned without further notice.

 

Section 1306.                     Counting Votes and Recording Action of Meetings.

 

The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to such record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that such notice was given as provided in Section 1302 and, if applicable, Section 1304. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.

 

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This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.  The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

 

	
 
    	
CAMERON   INTERNATIONAL CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   H. Keith Jennings
    
	
 
    	
Name:
    	
H.   Keith Jennings
    
	
 
    	
Title:
    	
Vice   President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
UNION   BANK, N.A.,
    
	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Hugo Gindraux
    
	
 
    	
Name:
    	
Hugo   Gindraux
    
	
 
    	
Title:
    	
Vice   President
    

 

Indenture

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