Document:

Exhibit 10.1

 

FIRST AMENDMENT TO THREE-YEAR REVOLVING CREDIT AGREEMENT

 

This FIRST AMENDMENT TO THREE-YEAR REVOLVING CREDIT AGREEMENT (this “Amendment”) is entered into as of January 28, 2014, by and among International Lease Finance Corporation, a California corporation (the “Company”), the Banks party hereto (such Banks, the “Consenting Banks”) and Citibank, N.A., as administrative agent under the Credit Agreement, as hereinafter defined (herein, in such capacity, together with its successors and permitted assigns in such capacity, the “Agent” or “Administrative Agent”).  Unless otherwise specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them in the Credit Agreement, as hereinafter defined and as in effect on the date hereof.

 

RECITALS

 

WHEREAS, the Company, the Banks and the Administrative Agent have entered into that certain Three-Year Revolving Credit Agreement, dated as of October 9, 2012 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”);

 

WHEREAS, the Company’s 100% direct owner, AIG Capital Corporation, a Delaware corporation (“AIG Capital”), and its direct parent, American International Group, Inc. (“AIG”) have agreed to sell 100% of the common stock of the Company to AerCap Ireland Limited, an Ireland private limited liability company (the “Purchaser”), pursuant to that certain Share Purchase Agreement by and among AIG, AIG Capital and Purchaser, dated as of December 16, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”);

 

WHEREAS, the Company has requested that the Administrative Agent and the Banks amend certain provisions of the Credit Agreement to become effective upon the Completion (as defined in the Purchase Agreement); and

 

WHEREAS, the Administrative Agent and the Consenting Banks have agreed to provide such amendments on the terms and subject to the conditions set forth herein.

 

NOW THEREFORE, in consideration of the mutual execution hereof and other good and valuable consideration, the parties hereto agree as follows:

 

SECTION 1.           Amendment to Credit Agreement.  Subject to the satisfaction of the conditions precedent set forth in Section 4 hereof:

 

(a)                                           the Credit Agreement (excluding Exhibits and Schedules thereto) is hereby amended to delete the stricken text (indicated textually in the same manner as the following example:  stricken text) and to add the bold and double-underlined text (indicated textually in the same manner as the following example:  double underlined text) as set forth in the pages of the Credit Agreement attached as Annex I hereto;

 

(b)                                          Exhibit G attached hereto as Annex II is added to the Credit Agreement;

 

 

(c)                                           Schedule 1 to Exhibit C of the Credit Agreement is replaced with Annex III attached hereto; and

 

(d)                                         Schedule 2 to Exhibit C of the Credit Agreement is replaced with Annex IV attached hereto.

 

SECTION 2.           Representations and Warranties of the Company.  The Company represents and warrants as of the date hereof that:

 

(a)                                           The execution and delivery by the Company of this Amendment and the consummation of the transactions contemplated hereby and the performance by the Company of its obligations under this Amendment (a) are within the corporate powers of the Company, (b) have been duly authorized by all necessary corporate action on the part of the Company, (c) have received all necessary approvals, authorizations, consents, registrations, notices, exemptions and licenses (if any shall be required) from Governmental Authorities and other Persons, except for any such approvals, authorizations, consents, registrations, notices, exemptions or licenses non-receipt of which could not reasonably be expected to have a Material Adverse Effect, (d) do not and will not contravene or conflict with any provision of (i) law, (ii) any judgment, decree or order to which the Company or any Subsidiary thereof is a party or by which the Company or any Subsidiary thereof is bound, (iii) the charter, by-laws or other organizational documents of the Company or any Subsidiary thereof or (iv) any provision of any agreement or instrument binding on the Company or any Subsidiary thereof, or any agreement or instrument of which the Company is aware affecting the properties of the Company or any Subsidiary thereof, except with respect to (i), (ii) and (iv) above, for any such contravention or conflict which could not reasonably be expected to have a Material Adverse Effect and (e) do not and will not result in or require the creation or imposition of any Lien on any of the Company’s or its Subsidiaries’ properties;

 

(b)                                          Each of the representations and warranties contained in Section 7 of the Credit Agreement is true and correct in all material respects on and as of the date hereof, with the same effect as though made on the date hereof, except to the extent such representations and warranties expressly related to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date;

 

(c)                                           No Event of Default or Unmatured Event of Default has occurred and is continuing or will result from the execution of this Amendment; and

 

(d)                                         This Amendment is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

 

SECTION 3.           Conditions Precedent to Effectiveness of Amendment.  This Amendment shall become effective (such effective time, the “Effective Date”) upon:

 

(a)                                           execution and delivery of this Amendment by the Company, Consenting Banks constituting the Required Banks, and the Administrative Agent; and

 

(b)                                          the representations and warranties contained in Section 2 hereof shall be true and correct as of the Effective Date, and the Administrative Agent shall have received a certificate to that effect dated such date and executed by an Authorized Officer of the Company.

 

The Administrative Agent shall promptly notify the Company of the occurrence of the Effective Date, and such notice shall be conclusive and binding.

 

SECTION 4.           Conditions Precedent to Effectiveness of Amendments.  The amendments set forth in Section 1 shall become effective upon:

 

(a)                                           the occurrence of the Effective Date and the Completion;

 

(b)                                          receipt by the Administrative Agent, for the ratable benefit of each Consenting Bank, of an amendment fee in an amount equal to 0.25% of such Consenting Bank’s Commitment;

 

(c)                                           payment of all fees and expenses (including the reasonable invoiced fees and expenses of Shearman & Sterling LLP, as counsel to the Administrative Agent) of the Administrative Agent in relation to the execution of this Amendment;

 

(d)                                         AerCap Holdings N.V., an entity organized under the laws of the Netherlands (“AerCap”), AerCap Aviation Solutions B.V., an entity organized under the laws of The Netherlands, the Purchaser and AerCap Ireland Capital Limited (“AICI”), an Ireland private limited liability company shall have entered into and delivered to the Administrative Agent a Guarantee Assumption Agreement substantially in the form attached as Annex II (it being understood that such form shall be amended to specify that such Guarantee and Assumption Agreement shall become effective concurrent with the occurrence of the Completion) and shall have delivered such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is substantially consistent with those delivered by each of these entities to AIG pursuant to Section 9.2 of the Five-Year Revolving Credit Agreement, dated as of December 16, 2013, among AerCap, AICI, various guarantors party thereto, and AIG as Lender and Administrative Agent; and

 

(e)                                           receipt by the Administrative Agent of a certificate executed by an Authorized Officer of the Company showing that, at the end of the most recent calendar month preceding the date of Completion, the aggregate outstanding principal amount of Indebtedness of the Company secured by Liens not listed in clauses (a) through (k) of Section 8.14 of the Credit Agreement does not at such time exceed 30% of the Consolidated Tangible Net Assets of the Company as shown on its audited consolidated

 

 

financial statements as of the end of the most recently ended fiscal year for which audited financial statements have been delivered pursuant to Section 8.1.1 of the Credit Agreement.

 

The amendments to the Credit Agreement set forth in Section 1 shall become effective at the time (and subject only to the satisfaction of the conditions) specified in this Section 4, without any further action or consent on the part of any party hereto or of any of its successors, transferees or assigns to, or of its rights or interest in or arising under, any Committed Loan or under any Loan Document.

 

SECTION 5.           Reference to and Effect Upon the Credit Agreement.

 

(a)                                           All terms, conditions, covenants, representations and warranties contained in the Credit Agreement and other Loan Documents (other than those amended hereby) are ratified and affirmed in all respects and shall remain in full force and effect.

 

(b)                                          Except as expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not directly or indirectly (i) amend, modify or operate as a waiver of any provision of the Credit Agreement or any other Loan Documents or any right, power or remedy of the Administrative Agent or any Bank, or (ii) constitute a course of dealing or other basis for altering any obligations under the Credit Agreement or any other contract or instrument.  Except as expressly set forth herein, each of the Administrative Agent and each Bank reserves all of its rights, powers, and remedies under the Credit Agreement, the other Loan Documents and applicable law.

 

(c)                                           From and after the Effective Date, the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include, without limitation, this Amendment.

 

SECTION 6.           Governing Law.  THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.  THE COMPANY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF SITTING IN NEW YORK COUNTY, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AMENDMENT SHALL AFFECT ANY RIGHT TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AMENDMENT AGAINST THE COMPANY OR ITS

 

 

PROPERTIES IN THE COURTS OF ANY JURISDICTION.  All obligations of the Company and the rights of the Agent, the Banks and any other holders of the Committed Loans expressed herein shall be in addition to and not in limitation of those provided by applicable law.  Whenever possible each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment.

 

SECTION 7.           Waiver of Jury Trial.  THE COMPANY, THE AGENT AND EACH BANK HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AMENDMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AMENDMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

SECTION 8.           Captions.  Section captions used in this Amendment are for convenience only and shall not affect the construction of this Amendment.

 

SECTION 9.           Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.  Delivery of a counterpart via facsimile or electronic mail, including by email with a “.pdf” copy hereof attached, shall constitute delivery of an original counterpart.  When counterparts of this Amendment executed by each party shall have been lodged with the Agent (or, in the case of any Bank as to which an executed counterpart shall not have been so lodged, the Agent shall have received facsimile, electronic mail or other written confirmation of execution of a counterpart hereof by such Bank), this Amendment shall become effective as of the Effective Date and the Agent shall so inform all of the parties.

 

SECTION 10.   Successors and Assigns.  This Amendment (including the amendments set forth in Section 1 hereof), and the Credit Agreement as amended hereby, shall bind and inure to the benefit of each of the parties hereto and each of their respective successors and assigns.

 

 

[signature pages follow]

 

 

IN WITNESS WHEREOF, the parties hereto hereupon set their hands as of the date first written above.

 

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INTERNATIONAL LEASE FINANCE   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Elias Habayeb
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name: Elias Habayeb
    
	
 
    	
Title: Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pamela S. Hendry
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name: Pamela S. Hendry
    
	
 
    	
Title: Senior Vice   President & Treasurer
    

 

 

	
 
    	
ADMINSTRATIVE AGENT:
    
	
 
    	
 
    
	
 
    	
CITIBANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Maureen P. Maroney
    	
 
    
	
 
    	
Name: Maureen P.   Maroney
    
	
 
    	
Title: Authorized   Signatory
    

 

 

	
 
    	
CONSENTING   BANKS:
    
	
 
    	
 
    
	
 
    	
BANK   OF AMERICA N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jason Cassity
    
	
 
    	
Name:   Jason Cassity
    
	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Matthew H. Massie
    
	
 
    	
Name:   Matthew H. Massie
    
	
 
    	
Title:   Managing Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BARCLAYS   BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Irina Dimova
    
	
 
    	
Name:   Irina Dimova
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MORGAN   STANLEY SENIOR FUNDING, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christopher Winthrop
    
	
 
    	
Name:   Christopher Winthrop
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ROYAL   BANK OF CANADA
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kevin Flynn
    
	
 
    	
Name:   Kevin Flynn
    
	
 
    	
Title:   Authorized Signatory
    

 

 

	
 
    	
CREDIT   SUISSE AG, CAYMAN ISLANDS BRANCH
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Chris Day
    
	
 
    	
Name:   Chris Day
    
	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alex Verdone
    
	
 
    	
Name:   Alex Verdone
    
	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DEUTSCHE BANK AG NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Virginia Cosenza
    
	
 
    	
Name:   Virginia Cosenza
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ming K. Chu
    
	
 
    	
Name:   Ming K. Chu
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GOLDMAN   SACHS BANK USA
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michelle Latzoni
    
	
 
    	
Name:   Michelle Latzoni
    
	
 
    	
Title:   Authorized Signatory
    

 

 

Annex I

 

[CONFORMED COPY OF CREDIT AGREEMENT]

 

 

 

$2,300,000,000 Three-Year Revolving Credit Agreement

 

dated as of

 

October 9, 2012

 

among

 

INTERNATIONAL LEASE FINANCE CORPORATION,

 

THE BANKS (as defined herein),

 

CITIBANK, N.A. 
  as Administrative Agent,

 

CITIGROUP GLOBAL MARKETS INC. 
 JPMORGAN SECURITIES LLC
 MERRILL LYNCH, PIERCE FENNER & SMITH INCORPORATED

 

BARCLAYS BANK PLC

 

MORGAN STANLEY SENIOR FUNDING, INC.

 

RBC CAPITAL MARKETS
  as Lead Arrangers and Book Runners,

 

and

 

BANK OF AMERICA, N.A.
 JPMORGAN CHASE BANK, N.A.
  as Syndication Agents

 

BARCLAYS BANK PLC

 

MORGAN STANLEY SENIOR FUNDING, INC.

 

ROYAL BANK OF CANADA

 

as Documentation Agents

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 1.     CERTAIN DEFINITIONS
    	
1
    
	
 
    	
 
    
	
 
    	
Section 1.1.
    	
Terms   Generally
    	
1
    
	
 
    	
Section 1.2.
    	
Specific   Terms
    	
1
    
	
SECTION 2.     COMMITTED LOANS AND COMMITTED NOTES
    	
1418
    
	
 
    	
 
    
	
 
    	
Section 2.1.
    	
Agreement   to Make Committed Loans
    	
1418
    
	
 
    	
Section 2.2.
    	
Procedure   for Committed Loans
    	
1519
    
	
 
    	
Section 2.3.
    	
Maturity   of Committed Loans
    	
1620
    
	
 
    	
Section 2.4.
    	
Optional   Conversion of Committed Loans
    	
1620
    
	
SECTION 3.     INTEREST AND FEES
    	
1621
    
	
 
    	
 
    
	
 
    	
Section 3.1.
    	
Interest   Rates
    	
1621
    
	
 
    	
Section 3.2.
    	
Interest   Payment Dates
    	
1721
    
	
 
    	
Section 3.3.
    	
Setting   and Notice of Committed Loan Rates
    	
1722
    
	
 
    	
Section 3.4.
    	
Commitment   Fee
    	
1822
    
	
 
    	
Section 3.5.
    	
Agent’s   Fees
    	
1822
    
	
 
    	
Section 3.6.
    	
Computation   of Interest and Fees
    	
1822
    
	
SECTION 4.     REDUCTION OR TERMINATION OF THE   COMMITMENTS; REPAYMENT; PREPAYMENTS
    	
1823
    
	
 
    	
 
    
	
 
    	
Section 4.1.
    	
Voluntary   Termination or Reduction of the Commitments
    	
1823
    
	
 
    	
Section 4.2.
    	
Voluntary   Prepayments
    	
1924
    
	
 
    	
Section 4.3.
    	
Defaulting   Banks
    	
2024
    
	
SECTION 5.     MAKING AND PRORATION OF PAYMENTS;   SET-OFF; TAXES
    	
2125
    
	
 
    	
 
    
	
 
    	
Section 5.1.
    	
Making   of Payments
    	
2125
    
	
 
    	
Section 5.2.
    	
Pro   Rata Treatment; Sharing
    	
2125
    
	
 
    	
Section 5.3.
    	
Set-off
    	
2126
    
	
 
    	
Section 5.4.
    	
Taxes, etc.
    	
2226
    
	
SECTION 6.     INCREASED COSTS AND SPECIAL PROVISIONS   FOR LIBOR RATE LOANS
    	
2530
    
	
 
    	
 
    
	
 
    	
Section 6.1.
    	
Increased   Costs
    	
2530
    
	
 
    	
Section 6.2.
    	
Basis   for Determining Interest Rate Inadequate or Unfair
    	
2731
    
	
 
    	
Section 6.3.
    	
Changes   in Law Rendering Certain Loans Unlawful
    	
2732
    
	
 
    	
Section 6.4.
    	
Funding   Losses
    	
2832
    
	
 
    	
Section 6.5.
    	
Discretion   of Banks as to Manner of Funding
    	
2832
    
	
 
    	
Section 6.6.
    	
Conclusiveness   of Statements; Survival of Provisions
    	
2833
    
	
SECTION 7.     REPRESENTATIONS AND WARRANTIES
    	
2833
    
	
 
    	
 
    
	
 
    	
Section 7.1.
    	
Organization, etc.
    	
2933
    
	
 
    	
Section 7.2.
    	
Authorization;   Consents; No Conflict
    	
2933
    
	
 
    	
Section 7.3.
    	
Validity   and Binding Nature
    	
2933
    

 

 

	
 
    	
Section 7.4.
    	
Financial   Statements
    	
2934
    
	
 
    	
Section 7.5.
    	
Litigation   and Contingent Liabilities
    	
3034
    
	
 
    	
Section 7.6.
    	
Employee   Benefit Plans
    	
3034
    
	
 
    	
Section 7.7.
    	
Investment   Company Act
    	
3034
    
	
 
    	
Section 7.8.
    	
Regulation   U
    	
3035
    
	
 
    	
Section 7.9.
    	
Information
    	
3035
    
	
 
    	
Section 7.10.
    	
Compliance   with Applicable Laws, etc.
    	
3135
    
	
 
    	
Section 7.11.
    	
Insurance
    	
3135
    
	
 
    	
Section 7.12.
    	
Taxes
    	
3135
    
	
 
    	
Section 7.13.
    	
Use of   Proceeds
    	
3135
    
	
 
    	
Section 7.14.
    	
Pari   Passu
    	
3136
    
	
 
    	
Section 7.15.
    	
OFAC   and FCPA, Etc.
    	
3136
    
	
SECTION 8.     COVENANTS
    	
3236
    
	
 
    	
 
    
	
 
    	
Section 8.1.
    	
Reports,   Certificates and Other Information
    	
3236
    
	
 
    	
Section 8.2.
    	
Existence
    	
3438
    
	
 
    	
Section 8.3.
    	
Nature   of Business
    	
3439
    
	
 
    	
Section 8.4.
    	
Books,   Records and Access
    	
3539
    
	
 
    	
Section 8.5.
    	
Insurance
    	
3539
    
	
 
    	
Section 8.6.
    	
Repair
    	
3539
    
	
 
    	
Section 8.7.
    	
Taxes
    	
3540
    
	
 
    	
Section 8.8.
    	
Compliance
    	
3540
    
	
 
    	
Section 8.9.
    	
Sale   of Assets
    	
3540
    
	
 
    	
Section 8.10.
    	
Consolidated   Indebtedness to Shareholder’s Equity
    	
3540
    
	
 
    	
Section 8.11.
    	
Interest   Coverage Ratio
    	
3640
    
	
 
    	
Section 8.12.
    	
[Intentionally   Omitted]Unencumbered   Assets
    	
3641
    
	
 
    	
Section 8.13.
    	
Restricted   Payments
    	
3641
    
	
 
    	
Section 8.14.
    	
Liens
    	
3641
    
	
 
    	
Section 8.15.
    	
Use of   Proceeds
    	
3943
    
	
 
    	
Section 8.16.
    	
Additional   Material Indebtedness[Intentionally   Omitted.]
    	
3943
    
	
 
    	
Section 8.17.
    	
Limitation on   Issuances of Guarantees of Indebtedness
    	
43
    
	
 
    	
Section 8.18.
    	
Subsidiary   Guarantors
    	
43
    
	
SECTION 9.     CONDITIONS TO LENDING
    	
3944
    
	
 
    	
 
    
	
 
    	
Section 9.1.
    	
Conditions   Precedent to All Committed Loans
    	
3944
    
	
 
    	
Section 9.2.
    	
Conditions   to the Availability of the Commitments
    	
4044
    
	
SECTION 10.   EVENTS OF DEFAULT AND THEIR EFFECT
    	
4146
    
	
 
    	
 
    
	
 
    	
Section 10.1.
    	
Events   of Default
    	
4146
    
	
 
    	
Section 10.2.
    	
Effect   of Event of Default
    	
4347
    
	
SECTION 11.   THE AGENT
    	
4348
    
	
 
    	
 
    
	
 
    	
Section 11.1.
    	
Authorization   and Authority
    	
4348
    
	
 
    	
Section 11.2.
    	
Agent   Individually
    	
4448
    
	
 
    	
Section 11.3.
    	
Indemnification
    	
4549
    
	
 
    	
Section 11.4.
    	
Action   on Instructions of the Required Banks
    	
4550
    
	
 
    	
Section 11.5.
    	
Payments
    	
4550
    

 

 

	
 
    	
Section 11.6.
    	
Duties   of Agent; Exculpatory Provisions
    	
4651
    
	
 
    	
Section 11.7.
    	
Reliance   by Agent
    	
4752
    
	
 
    	
Section 11.8.
    	
Delegation   of Duties
    	
4852
    
	
 
    	
Section 11.9.
    	
Resignation   of Agent
    	
4852
    
	
 
    	
Section 11.10.
    	
Non-Reliance   on Agent and Other Banks
    	
4953
    
	
 
    	
Section 11.11.
    	
The   Register; the Committed Notes
    	
4954
    
	
 
    	
Section 11.12.
    	
No   Other Duties, etc.
    	
5055
    
	
SECTION 12.   GENERAL
    	
5055
    
	
 
    	
 
    
	
 
    	
Section 12.1.
    	
Waiver;   Amendments
    	
5055
    
	
 
    	
Section 12.2.
    	
Notices
    	
5155
    
	
 
    	
Section 12.3.
    	
Computations
    	
5257
    
	
 
    	
Section 12.4.
    	
Assignments;   Participations
    	
5358
    
	
 
    	
Section 12.5.
    	
Costs,   Expenses and Taxes
    	
5761
    
	
 
    	
Section 12.6.
    	
Confidentiality
    	
5762
    
	
 
    	
Section 12.7.
    	
Indemnification
    	
5863
    
	
 
    	
Section 12.8.
    	
Regulation   U
    	
5964
    
	
 
    	
Section 12.9.
    	
Extension   of Termination Dates; Removal of Banks; Substitution of Banks
    	
5964
    
	
 
    	
Section 12.10.
    	
Captions
    	
6166
    
	
 
    	
Section 12.11.
    	
Governing   Law; Jurisdiction; Severability
    	
6166
    
	
 
    	
Section 12.12.
    	
Counterparts;   Effectiveness
    	
6266
    
	
 
    	
Section 12.13.
    	
Further   Assurances
    	
6266
    
	
 
    	
Section 12.14.
    	
Successors   and Assigns
    	
6267
    
	
 
    	
Section 12.15.
    	
Judgment
    	
6267
    
	
 
    	
Section 12.16.
    	
Waiver   of Jury Trial
    	
6367
    
	
 
    	
Section 12.17.
    	
No   Fiduciary Relationship
    	
6368
    
	
 
    	
Section 12.18.
    	
USA   Patriot Act
    	
6368
    
	
SECTION 13.  GUARANTY
    	
68
    
	
 
    	
 
    
	
 
    	
Section 13.1.
    	
The Guaranty
    	
68
    
	
 
    	
Section 13.2.
    	
Obligations   Unconditional
    	
68
    
	
 
    	
Section 13.3.
    	
Reinstatement
    	
69
    
	
 
    	
Section 13.4.
    	
Subrogation
    	
69
    
	
 
    	
Section 13.5.
    	
Remedies
    	
70
    
	
 
    	
Section 13.6.
    	
Continuing   Guaranty
    	
70
    
	
 
    	
Section 13.7.
    	
Indemnity and   Rights of Contribution
    	
70
    
	
 
    	
Section 13.8.
    	
General   Limitation on Guarantee Obligations
    	
71
    
	
 
    	
Section 13.9.
    	
Releases
    	
71
    

 

 

SCHEDULES AND EXHIBITS

 

	
Schedule I
    	
Schedule of Banks
    
	
 
    	
 
    
	
Schedule II
    	
Fees and Margins
    
	
 
    	
 
    
	
Schedule III
    	
Address for Notices
    
	
 
    	
 
    
	
Exhibit A
    	
Form of Committed Loan Request
    
	
 
    	
 
    
	
Exhibit B
    	
Form of Committed Note
    
	
 
    	
 
    
	
Exhibit C
    	
Form of Compliance and Pricing Certificate
    
	
 
    	
 
    
	
Exhibit D
    	
Form of Assignment and Assumption Agreement
    
	
 
    	
 
    
	
Exhibit E
    	
Form of Request for Extension of Termination   Date
    
	
 
    	
 
    
	
Exhibit F
    	
Form of U.S. Tax Compliance Certificate
    
	
 
    	
 
    
	
Exhibit G
    	
Form of Guarantee Assumption Agreement
    

 

 

THREE-YEAR REVOLVING CREDIT AGREEMENT

 

THREE-YEAR REVOLVING CREDIT AGREEMENT (this “Agreement”), dated as of October 9, 2012, among INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation (herein called the “Company”), the Banks (as defined herein) party hereto from time to time and CITIBANK, N.A. (herein, in its individual corporate capacity, together with its successors and permitted assigns, called “Citibank”), as administrative agent for the Banks (herein, in such capacity, together with its successors and permitted assigns in such capacity, called the “Agent” or “Administrative Agent”).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, the Company has requested the Banks to lend up to $2,300,000,000 to the Company on a three year revolving basis for general corporate purposes;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:

 

SECTION 1.                                   CERTAIN DEFINITIONS.

 

Section 1.1.                            Terms Generally.  The definitions ascribed to terms in this Section 1 and elsewhere in this Agreement shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  Unless expressly provided for herein or the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified, in each case in accordance with its terms and (b) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns. The words “hereby”, “herein”, “hereof”, “hereunder” and words of similar import refer to this Agreement as a whole (including any exhibits and schedules hereto) and not merely to the specific Section, paragraph or clause in which such word appears.  All references herein to Sections, Exhibits and Schedules shall be deemed references to Sections of and Exhibits and Schedules to this Agreement unless the context shall otherwise require.

 

Section 1.2.                            Specific Terms.  When used herein, the following terms shall have the following meanings:

 

“Act” has the meaning set forth in Section 12.18.

 

“Acquired Company Acquisition Facility” means that certain Bridge Credit Agreement dated as of December 16, 2013, among AerCap, AerCap Ireland Capital Limited, UBS AG, Stamford Branch, as administrative agent, and the other parties thereto, as amended, restated, refinanced or replaced from time to time.

 

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the CompanyAerCap or any of

 

 

itsthe AerCap Subsidiaries (i) acquires all or substantially all of the assets of any firm, corporation, limited liability company or other Person, or business unit or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes for the members of the board of directors) of the capital stock of a Person.

 

“Activities” has the meaning set forth in Section 11.2(b).

 

“Additional Indebtedness Lien Covenant” has the meaning set forth in Section 8.16.

 

“Additional Material Indebtedness” has the meaning set forth in Section 8.16.

 

“Administrative Agent” has the meaning set forth in the Preamble.

 

“AerCap” means AerCap Holdings N.V., an entity organized under the laws of the Netherlands.

 

“AerCap Subsidiary” means any Person of which or in which AerCap and the AerCap Subsidiaries own directly or indirectly 50% or more of:

 

(a)                              the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such Person, if it is a corporation,

 

(b)                             the capital interest or profits interest of such Person, if it is a partnership, limited liability company, joint venture or similar entity, or

 

(c)                               the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.

 

“AerCap Wholly-owned Subsidiary” means any Person of which or in which AerCap and the AerCap Wholly-owned Subsidiaries own directly or indirectly 100% of:

 

(a)                              the issued and outstanding shares of stock (except shares required as directors’ qualifying shares),

 

(b)                             the capital interest or profits interest of such Person, if it is a partnership, limited liability company, joint venture or similar entity, or

 

(c)                               the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person.  A Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through ownership of stock, by contract or otherwise.

 

 

“Agent” has the meaning set forth in the Preamble.

 

“Agent’s Group” has the meaning set forth in Section 11.2(b).

 

“Aggregate Commitment” means $2,300,000,000, as reduced by any reduction in the Commitments made from time to time pursuant to Section 4.1 or Section 12.9.

 

“Agreement” has the meaning set forth in the Preamble.

 

“AIG” means American International Group, Inc., a Delaware corporation.

 

“AIG Reorganization Transaction” has the meaning set forth in Section 8.2.

 

“Aircraft Assets” means “Flight Equipment held for Operating Lease [net],” plus “Net Investment in Direct Finance Leases,” plus “Inventory” plus “Lease Premium” plus “End of Lease Assets” (or such substantially similar terms for such substantially similar assets as may be used from time to time).

 

“Anniversary Date” has the meaning set forth in Section 12.9(a).

 

“Arranger” means, each of Citigroup Global Markets Inc., JPMorgan Securities LLC, Merrill Lynch, Pierce Fenner & Smith Incorporated, Barclays Bank PLC, Morgan Stanley Senior Funding, Inc. and RBC Capital Markets in their respective capacities as each of Lead Arranger and Bookrunner, Bank of America, N.A. and JPMorgan Chase Bank, N.A., in their respective capacities as Syndication Agent and Barclays Bank PLC, Morgan Stanley Senior Funding, Inc. and Royal Bank of Canada, in their respective capacities as Documentation Agent.

 

“Assignee” has the meaning set forth in Section 12.4.1.

 

“Authorized Officer” of the Company means any of the following:  the Chairman of the Board, the Chief Executive Officer, the Vice Chairman, the President, the Chief Financial Officer, the Treasurer, the Assistant Treasurer and the Controller of the Company.

 

“Bank Appointment Period” has the meaning set forth in Section 11.9.

 

“Bank Parties” has the meaning set forth in Section 12.7.

 

“Banks” means the financial institutions identified as Banks on the signature pages hereto and their respective successors and permitted assignees.

 

“Base LIBOR” means, with respect to any Loan Period for a LIBOR Rate Loan, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1% per annum) appearing on Reuters Screen LIBOR01 Page (or any successor page, the “Reuters Page”) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Loan Period for a term comparable to such Loan Period or, if for any reason such rate is not available, the average (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such average is not such a multiple) of the rate per

 

 

annum at which deposits in Dollars are offered by the principal office of each of the Reference Banks in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Loan Period in an amount substantially equal to such Reference Bank’s LIBOR Rate Loan to be outstanding during such Loan Period and for a period equal to such Loan Period by (b) a percentage equal to 100% minus the Eurodollar Reserve Percentage for such Loan Period.

 

“Base Rate” means for any day a fluctuating interest rate per annum equal to the applicable rate margin set forth for Base Rate Loans in the row entitled “Margins” on Schedule II plus the highest of (a) the Federal Funds Rate for such day plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Citibank as its “base rate” and (c) the LIBOR Rate that would be payable on such day for a LIBOR Rate Loan with a one-month Loan Period plus 1% less the applicable rate margin set forth for Base Rate Loans in the row entitled “Margins” on Schedule II.  The “base rate” is a rate set by Citibank based upon various factors including Citibank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Citibank shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Base Rate Loan” means any Committed Loan which bears interest at the Base Rate.

 

“Board of Directors” means (a) with respect to a corporation or company, as applicable, the board of directors of the corporation or company, as applicable, or any committee thereof duly authorized to act on behalf of such board, (b) with respect to a partnership, the board of directors of the general partner of the partnership, (c) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof and (d) with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Business Day” means any day of the year on which banks are not required or authorized by law to close in New York City and Los Angeles and, if the applicable Business Day relates to notices, determinations, fundings and payments in connection with any LIBOR Rate Loan, a day on which dealings are carried on in the London interbank market.

 

“Capital Markets Debt” means any debt securities (other than (a) a Qualified Securitization Financing or (b) a debt issuance guaranteed by an export credit agency (including the Eximbank)) issued in the capital markets by AerCap or any AerCap Subsidiary, whether issued in a public offering or private placement, including pursuant to Section 4(2) of the Securities Act or Rule 144A, Regulation S or Regulation D under the Securities Act.

 

“Capital Stock” means (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited liability company, partnership, membership interests (whether general or limited) or shares in the capital of the company and (d) any other interest or participation that confers on a

 

 

Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Capitalized Lease” means any lease under which any obligations of the lessee are, or are required to be, capitalized on a balance sheet of the lessee in accordance with generally accepted accounting principles in the United States of AmericaGAAP; provided, however, that notwithstanding the foregoing, if any change in the generally accepted accounting principles in the United States of AmericaGAAP shall occur after the date hereof, the treatment of Capitalized Leases shall be evaluated as if such change had not been made.

 

“Capitalized Rentals” means, as of the date of any determination, the amount at which the obligations of the lessee, due and to become due under all Capitalized Leases under which the CompanyAerCap or any AerCap Subsidiary is a lessee, are reflected as a liability on a consolidated balance sheet of the Company and itsAerCap and the AerCap Subsidiaries.

 

“Citibank” has the meaning set forth in the Preamble.

 

“Citigroup Parties” has the meaning set forth in Section 12.2(f).

 

“Closing Date” has the meaning set forth in Section 9.2.

 

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

 

“Commitments” means the Banks’ commitments to make Committed Loans hereunder; and “Commitment” as to any Bank means the amount set forth opposite such Bank’s name on Schedule I (as reduced in accordance with Section 4.1, or as periodically revised in accordance with Section 12.4 or Section 12.9).

 

“Committed Loan” means a loan in Dollars that is a Base Rate Loan or LIBOR Rate Loan made pursuant to Section 2 (each of which shall be a “Type” of Committed Loan).

 

“Committed Loan Request” has the meaning set forth in Section 2.2(a).

 

“Committed Note” means a promissory note of the Company, substantially in the form of Exhibit B, duly completed, evidencing Committed Loans to the Company, as such note may be amended, modified or supplemented or supplanted pursuant to Section 12.4.1 from time to time.

 

“Communications” has the meaning set forth in Section 12.2(b).

 

“Company” has the meaning set forth in the Preamble.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profit Taxes.

 

“Consolidated Indebtedness” means, as of the date of any determination, (a) the total amount of Indebtedness less the amount of current and deferred income taxes and rentals

 

 

received in advance of the Company and itsAerCap and the AerCap Subsidiaries (to the extent constituting Indebtedness) determined on a consolidated basis in accordance with generally accepted accounting principles in the United States of AmericaGAAP (but without giving effect to any election to value any Indebtedness at “fair value”, or any other accounting principle, including purchase accounting, that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on a consolidated balance sheet of AerCap to be reflected thereon in any amount other than the stated principal amount of such Indebtedness), and excluding (i) the amount that is (aA) the aggregate amount outstanding of Hybrid Capital Securities multiplied by (bB) the Hybrid Capital Securities Percentage, (ii) adjustments in relation to Indebtedness denominated in any currency other than Dollars and any related derivative liability, in each case to the extent arising from currency fluctuations (such exclusions to apply only to the extent the resulting liability is hedged by the CompanyAerCap or such AerCap Subsidiary), (iii) net obligations of any Person under any swap contracts that are not yet due and payable, and (iv) trade payables outstanding in the ordinary course of business, but not overdue by more than 90 days.  less (b) the lesser of (x) $2,000,000,000 and (y) the aggregate amount of “cash and cash equivalents” or any line item of similar import (but in any event, excluding “restricted cash” or any line item of similar import and excluding “cash and cash equivalents” or any line item of similar import subject to any Lien (other than (A) Liens arising by operation of law and (B) bankers’ Liens arising in the ordinary course of business)) reflected on a consolidated balance sheet of AerCap prepared as of such date of determination in accordance with GAAP.

 

“Consolidated Interest Expense” means for any measurement period, and without duplication, interest expense in respect of all Indebtedness for borrowed money accrued during such measurement period by the Company and itsAerCap and the AerCap Subsidiaries on a consolidated basis, as determined under generally accepted accounting principles in the United States of America.GAAP (but without giving effect to any adjustment to such interest expense resulting from any election to value any Indebtedness at “fair value”, or any other accounting principle, including purchase accounting, that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on a consolidated balance sheet of AerCap to be reflected thereon in any amount other than the stated principal amount of such Indebtedness).

 

“Consolidated Tangible Net Assets” means, as of the date of any determination, the total amount of assets (less depreciation and valuation reserves and other reserves and items deductible from the gross book value of specific asset amounts under generally accepted accounting principles) which under generally accepted accounting principles would be included on a balance sheet of the Company and its Subsidiaries, after deducting therefrom (i) all liability items except Indebtedness (whether incurred, assumed or guaranteed) for borrowed money maturing by its terms more than one year from the date of creation thereof or which is extendible or renewable at the sole option of the obligor in such manner that it may become payable more than one year from the date of creation thereof, shareholder’s equity and amounts of deferred income taxes and (ii) all good will, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, which in each case would be so included on such balance sheet.

 

“Convert”, “Conversion” and “Converted” each refers to a conversion of Committed Loans of one Type into Committed Loans of the other Type pursuant to Section 2.4.

 

 

“Covered Taxes” means all Taxes, including all liabilities (including, without limitation, any penalties, interest and other additions to tax) with respect thereto, imposed on or with respect to any payment made by or on account of any obligation of the Company under any Loan Document other than the following Taxes imposed on or with respect to, or required to be withheld or deducted from a payment to,  the Agent, a Bank, Assignee or Participant, including all liabilities (including, without limitation, any penalties, interest and other additions to tax) with respect thereto:  (i) Taxes imposed on or measured by net income of the Agent, a Bank, Assignee or Participant under this Agreement and franchise taxes, branch profits taxes, minimum taxes and taxes computed under alternative methods (at least one of which is based on net income), in each case, (A) imposed by the jurisdiction under the laws of which such Agent, Bank, Assignee or Participant under this Agreement is organized or resident for tax purposes or any political subdivision thereof or (B) imposed by the jurisdiction of such Agent, Bank, Assignee or Participant’s principal office, or in the case of any Bank, its Funding Office or any political subdivision thereof or (C) that are Other Connection Taxes, (ii) any withholding Taxes imposed by the United States of America or any political subdivision thereof pursuant to a law in effect (1) on the date that such Agent, Bank or Assignee becomes a party to this Agreement, or that such Participant acquires any interest in any Committed Loans, Commitment or any other interest of any Bank hereunder, or (2) on the date of a change in the jurisdiction of such Agent, Bank, Assignee or Participant’s Funding Office, except in each case, to the extent that (A) such Agent, Bank, Assignee or Participant (or its assignor or participating bank, if any) was entitled, immediately before the date of such change in the jurisdiction of such Funding Office or, in the case of an Assignee or Participant the date such Assignee became a party hereto or such Participant acquired its participation, to receive additional amounts from the Company with respect to such Taxes pursuant to Section 5.4 or (B) such change in the jurisdiction of the applicable Funding Office (or assignment) was made pursuant to a request by the Company under Section 5.4(h) or Section 12.9, (iii) any U.S. federal withholding Taxes imposed under FATCA, and (iv) any Taxes that would not have been imposed but for the failure by such Agent, Bank, Assignee or Participant, as applicable, to provide any application forms, certificates, documents or other evidence required under Sections 5.4(b), 5.4(c), 5.4(d) and 5.4(e) (subject to Section 5.4(g)) (items (i)-(iv) of this definition referred to collectively as, “Excluded Taxes”).

 

“Credit Facilities” means one or more debt facilities, or commercial paper facilities with banks or other institutional lenders or investors or indentures providing for revolving credit loans, term loans, receivables financing, including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against receivables, letters of credit or other long-term indebtedness, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof and any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof.

 

“Debtor Relief Law” means title 11 of the United States Code, as in effect from time to time, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor

 

 

relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Defaulted Commitments” has the meaning set forth in Section 4.1(b).

 

“Defaulting Bank” means, at any time, any Bank that at such time (a) has failed to perform any of its funding obligations hereunder, including in respect of its Committed Loans within two Business Days of the date required to be funded by it hereunder, (b) has notified the Company or the Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after written request by the Agent or the Company (based on its reasonable belief that such Bank may not fulfill its funding obligations hereunder), to confirm in writing or a manner satisfactory to the Agent and the Company that it will comply with its funding obligations hereunder, 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, (ii) had a receiver, conservator, trustee, administrator, intervenor, sequestrator, assignee for the benefit of creditors or similar Person under any applicable Debtor Relief Law charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided, that, a Bank shall not be a Defaulting Bank solely by virtue of the control, ownership or acquisition of any equity interest in that Bank 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 Bank 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 Bank (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank.  Any determination that a Bank is a Defaulting Bank under clauses (a) through (d) above will be made by the Agent in its reasonable discretion acting in good faith. If the Company believes in good faith that a Bank should be determined by the Agent to be a Defaulting Bank and so notifies Agent, citing the reasons therefor, the Agent shall determine in its reasonable discretion acting in good faith whether or not such Bank is a Defaulting Bank. The Agent will promptly send to all parties hereto a copy of any notice to the Company provided for in this definition.

 

“Disqualified Person” means any Person engaged primarily in the aircraft leasing business or aviation advisory business or that is an air carrier, in each case to the extent designated in writing as a “Disqualified Person” hereunder by the Company to the Agent from time to time.

 

“Dollar” and “$” refer to the lawful money of the United States of America.

 

“EBITDA” means for any period, (a) the sum, without duplication, of (i) net income (or net loss), (ii) Consolidated Interest Expense, (iii) income tax expense, (iv) depreciation and depletion expense, (v) amortization expense, (vi) extraordinary, unusual or nonrecurring losses to the extent the foregoing have been deducted in determining such net income, (vii) any non-cash items (including without limitation write-downs and impairment of property, plant, equipment and intangibles and other long-lived assets, including aircraft, and the

 

 

impact of purchase accounting, including stock based compensation expense, derivative expense and fair value adjustments) to the extent deducted in determining net income, and (viii) the amount of any extraordinary, unusual or nonrecurring non-cash restructuring charges, less (b) the sum, without duplication, of (i) extraordinary, unusual or nonrecurring gains to the extent added in determining net income, and (ii) all non-cash items to the extent included in determining net income). For the purposes of calculating Consolidated EBITDA for any four quarter period, such calculation shall be made (i) after giving effect to any Acquisition consummated during such period and (ii) assuming that such Acquisition occurred at the beginning of such period; provided, that any pro forma calculation made by the Company either (i) based on Regulation S-X or (ii) as calculated in good faith and set forth in an officer’s certificate of the Company, in reasonable detail, (and in the case of this clause (ii), based on audited financials of the target company) shall be acceptable.

 

“ECA Financing” means any financing provided or supported by one or more government export credit agencies.

 

“Eligible Assignee” means (i) any Bank, and any Affiliate of any Bank and (ii)(a) a commercial bank organized under the laws of the United States or any state thereof, (b) a savings and loan association or savings bank organized under the laws of the United States or any state thereof, (c) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided, that, with respect to clause (c) hereof, (1) such bank is acting through a branch or agency located in the United States or (2) such bank organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country and (d) a finance company, insurance company, mutual fund, leasing company or other financial institution or fund (whether a corporation, partnership or other entity) which is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business, and having total assets in excess of $250,000,000; provided, that, except with the prior written consent of the Company, no Eligible Assignee shall be a Disqualified Person.

 

“Equity Adjustment Amount” means (i) if, on the Transaction Closing Date, the closing price of AerCap’s ordinary shares on the New York Stock Exchange is less than the Expected Equity Amount per share, an amount equal to (x) the Expected Equity Amount less such closing price multiplied by (y) 97,560,976, and (ii) if otherwise, $0; provided that the Equity Adjustment Amount shall not exceed the amount such that at 4:00 p.m., New York City time, on the Transaction Closing Date the aggregate amount of Shareholder’s Equity equals $5,100,000,000.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

 

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

 

“ERISA Affiliate” means any corporation, trade or business that is, along with the Company or any Subsidiary, a member of a controlled group of corporations or a controlled

 

 

group of trades or businesses, as described in Sections 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA (and Sections 414(m) and 414(o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“Eurodollar Reserve Percentage” means for any day in any Loan Period for any LIBOR Rate Loan that percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor thereto) or other U.S. government agency for determining the reserve requirement (including, without limitation, any marginal, basic, supplemental or emergency reserves) for a member bank of the Federal Reserve System in New York City with deposits exceeding one billion dollars in respect of eurocurrency funding liabilities.

 

“Event of Default” means any of the events described in Section 10.1.

 

“Excluded Taxes” has the meaning set forth in the definition of “Covered Taxes”.

 

“Eximbank” means the Export-Import Bank of the United States.

 

“Existing Credit Agreement” means that certain $2,000,000,000 Three-Year Revolving Credit Agreement dated as of January 31, 2011, as amended from time to time, among the Company, certain financial institutions party thereto and Citibank N.A. as administrative agent thereunder.

 

“Expected Equity Amount” has the meaning set forth in the Letter Agreement between the Company and the Agent dated of January 28, 2014.

 

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

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

 

“Financial Indebtedness” of any Person means Indebtedness of the type that appears as “debt” upon a consolidated balance sheet (excluding the footnotes thereto) of such Person and its subsidiaries prepared in accordance with GAAP (but without giving effect to any election to value any such Indebtedness at “fair value”, or any other accounting principle, including purchase accounting, that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on a consolidated balance sheet of such Person to be reflected thereon in any amount other than the stated principal amount of such Indebtedness), excluding, however, any such “debt” that is issued to any holder (or Affiliate of any such holder)

 

 

of Equity Interests in such Person and is fully subordinated (including as to payment and liquidity preference) to the Committed Loans.

 

“First Amendment” means the First Amendment to Three-Year Revolving Credit Agreement, dated as of January 28, 2014 among the Company, the Banks party thereto and the Agent.

 

“Funding Date” means the date on which any Committed Loan is scheduled to be disbursed.

 

“Funding Office” means, with respect to any Bank, any office or offices of such Bank or Affiliate or Affiliates of such Bank through which such Bank shall fund or shall have funded any Committed Loan.  A Funding Office may be, at such Bank’s option, either a domestic or foreign office of such Bank or a domestic or foreign office of an Affiliate of such Bank.

 

“GAAP” means generally accepted accounting principles in the United States which are in effect from time to time. At any time after the Transaction Closing Date, the Company may elect to apply IFRS accounting principles in lieu of GAAP for reporting purposes and for purposes of calculations hereunder.  The Company shall give notice of any such election made in accordance with this definition to the Agent.  Upon receipt of such notice, the Agent and the Company shall negotiate in good faith to amend the financial covenants, requirements and other relevant provisions of this Agreement impacted by such change to preserve the original intent thereof in light of such change.  The change from GAAP to IFRS accounting principles shall become effective once this Agreement has been so amended, and thereafter references herein to GAAP shall be construed to mean IFRS (except as otherwise provided herein); provided that any calculation or determination herein that requires the application of GAAP for periods that include fiscal quarters ended prior to the Company’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Granting Bank” has the meaning set forth in Section 12.4.

 

“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement substantially in the form of Exhibit G (or in such other form as may be agreed between the Company and the Agent) in favor of the Agent.

 

“Guaranteed Obligations” has the meaning set forth in Section 13.1.

 

“Guaranties” by any Person means, without duplication, all obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person (the “Primary Obligor”) in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person:  (a) to purchase such Indebtedness or obligation or any

 

 

property or assets constituting security therefor, (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation or (ii) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (c) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of the Primary Obligor to make payment of the Indebtedness or obligation or (d) otherwise to assure the owner of the Indebtedness or obligation of the Primary Obligor against loss in respect thereof; provided, however, that the obligation described in clause (c) shall not include (i) obligations of a buyer under an agreement with a seller to purchase goods or services entered into in the ordinary course of such buyer’s and seller’s businesses unless such agreement requires that such buyer make payment whether or not delivery is ever made of such goods or services and (ii) remarketing agreements where the remaining debt on an aircraft does not exceed the aircraft’s net book value, determined in accordance with industry standards, except that clause (c) shall apply to the amount of remaining debt under a remarketing agreement that exceeds the net book value of the aircraft.  For the purposes of all computations made under this Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the principal amount of such Indebtedness for borrowed money which has been guaranteed, and a Guaranty in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or dividend.

 

“Guarantor” means, as of and after the Transaction Closing Date, AerCap and each Subsidiary Guarantor.

 

“Hybrid Capital Securities” means any hybrid capital securities issued by the CompanyAerCap or any AerCap Subsidiary from time to time whose proceeds are accorded a percentage of equity treatment by one or more Rating Organizations.

 

“Hybrid Capital Securities Percentage” means the greater of (i) 50% and (ii) the lowest percentage accorded equity treatment for the Company’sAerCap’s or any AerCap Subsidiary’s Hybrid Capital Securities among the Rating Organizations, as determined by such Rating Organizations from time to time.

 

“Indebtedness” of any Person means and includes, without duplication, all obligations of such Person which in accordance with generally accepted accounting principles in the United States of AmericaGAAP shall be classified upon a balance sheet of such Person as liabilities of such Person, and in any event shall include all:

 

(a)                               obligations of such Person for borrowed money or which have been incurred in connection with the acquisition of property or assets (other than security and other deposits on flight equipment),

 

(b)                              obligationsIndebtedness of any other Person secured by any Lien or other charge upon property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such obligationsIndebtedness,

 

 

(c)                               obligations created or arising under any conditional sale, or other title retention agreement with respect to property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or lessor under such agreement in the event of default are limited to repossession or sale of property,

 

(d)                             Capitalized Rentals of such Person under any Capitalized Lease,

 

(e)                               obligations evidenced by bonds, debentures, notes or other similar instruments, and

 

(f)                                Guaranties by such Person of Indebtedness of any other Person, to the extent required pursuant to the definition thereof.;

 

provided, however, that Indebtedness shall in no event include any security deposits, deferred overhaul rental or other customer deposits held by such Person.

 

“Indemnified Liabilities” has the meaning set forth in Section 12.7.

 

“Information” has the meaning set forth in Section 12.6.

 

“Information Memorandum” has the meaning set forth in Section 7.9.

 

“Interest Coverage Ratio” means the ratio of (a) EBITDA of the Company and itsAerCap and the AerCap Subsidiaries, determined on a consolidated basis, to (b) the sum of Consolidated Interest Expense and cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock, for each of the items in clauses (a) and (b) above, of or by the Company and itsAerCap and the AerCap Subsidiaries during the four consecutive fiscal quarters most recently ended for which financial statements have been delivered pursuant to Section 8.1.

 

“IRS” means the United States Internal Revenue Service.

 

“LIBOR Rate” means with respect to Committed Loans that are LIBOR Rate Loans, Base LIBOR plus the applicable rate margin set forth for LIBOR Rate Loans in the row entitled “Margins” on Schedule II.

 

“LIBOR Rate Loan” means any Committed Loan which bears interest at a LIBOR Rate.

 

“Lien” means any mortgage, pledge, lien, security interest or other charge, encumbrance or preferential arrangement, including the retained security title of a conditional vendor or lessor.  For avoidance of doubt, the parties hereto acknowledge that the filing of a financing statement under the Uniform Commercial Code does not, in and of itself, give rise to a Lien.

 

“Litigation Actions” means all litigation, claims and arbitration proceedings, proceedings before any Governmental Authority or investigations which are pending or, to the

 

 

knowledge of the Company, threatened in writing against or affecting, the Company or any Subsidiary.

 

“Loan Documents” means this Agreement and, the Committed Notes, and any Guarantee Assumption Agreement.

 

“Loan Period” means with respect to any LIBOR Rate Loan, the period commencing on such LIBOR Rate Loan’s Funding Date or the date of the Conversion of any Base Rate Loan into such LIBOR Rate Loan and ending 1, 2, 3 or 6 months thereafter as selected by the Company pursuant to Section 2.2(a); provided, however, that:

 

(a)                               if a Loan Period would otherwise end on a day which is not a Business Day, such Loan Period shall end on the next succeeding Business Day (unless, in the case of a LIBOR Rate Loan, such next succeeding Business Day would fall in the next succeeding calendar month, in which case such Loan Period shall end on the next preceding Business Day),

 

(b)                              in the case of a Loan Period for any LIBOR Rate Loan, if there exists no day numerically corresponding to the day such Committed Loan was made in the month in which the last day of such Loan Period would otherwise fall, such Loan Period shall end on the last Business Day of such month, and

 

(c)                               on the date of the making of any Committed Loan by a Bank, the Loan Period for such Committed Loan shall not extend beyond the then-scheduled Termination Date for such Bank; provided, that a Loan Period may be shortened by the Company to end on the then-scheduled Termination Date, regardless of the duration of such Loan Period.

 

“Material Adverse Effect” means (i) any material adverse effect on the business, properties, condition (financial or otherwise) or operations of the Company and its Subsidiaries, taken as a whole since any stated reference date or from and after the date of determination, as the case may be, (ii) any material adverse effect on the ability of the Company to perform its material obligations hereunder and under the Committed Notes or (iii) any material adverse effect on the legality, validity, binding effect or enforceability of any material provision of this Agreement or any Committed Note.

 

“Multiemployer Plan” has the meaning assigned to such term in Section 3(37) of ERISA.

 

“Non-Defaulting Bank” means, at any time, a Bank that is not a Defaulting Bank.

 

“Non-U.S. Bank” has the meaning set forth in Section 5.4(b).

 

“Notice Office” means the office of Citibank which, as of the date hereof, is located at 1615 Brett Road, New Castle, DE 19720; telecopy number 302-894-6005; telephone number 302-894-6120; e-mail address global.loans.support@citi.com.

 

 

“Obligors” means the Company and each Guarantor, and “Obligor” means any one of them.

 

“Other Connection Taxes” means, with respect to any Bank, Agent, Assignee or Participant, Taxes imposed as a result of a present or former connection between such Bank, Agent, Assignee or Participant and the jurisdiction imposing such Tax (other than connections arising solely from such Bank, Agent, Assignee or Participant having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Participant” has the meaning set forth in Section 12.4.2.

 

“Participant Register” has the meaning set forth in Section 5.4(h).

 

“Payment Office” means the office of the Agent which, as of the date hereof, is at 1615 Brett Road, New Castle, DE 19720, account number 36852248.

 

“PBGC” means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

 

“Percentage” means as to any Bank the ratio, expressed as a percentage, that such Bank’s Commitment as set forth opposite such Bank’s name on Schedule I, as periodically revised in accordance with Section 12.4 or 12.9 and, as applicable, from time to time in accordance with Section 4.3(a), bears to the Aggregate Commitment or, if the Commitments have been terminated, the ratio, expressed as a percentage, that the aggregate principal amount of such Bank’s outstanding Committed Loans bears to the aggregate principal amount of all outstanding Committed Loans.

 

“Person” means an individual or a corporation, partnership, trust, incorporated or unincorporated association, limited liability company, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

 

“Plan” means, at any date, any employee pension benefit plan (as defined in Section 3(2) of ERISA) which is subject to Title IV of ERISA (other than a Multiemployer Plan) and to which the Company or any ERISA Affiliate may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

 

“Platform” has the meaning set forth in Section 12.2(c).

 

“Pricing Certificate” means a certificate of an Authorized Officer of the Company certifying the ratio of Consolidated Indebtedness to Shareholder’s Equity as at the last day of any fiscal quarter and setting forth the calculation of such ratio in reasonable detail.

 

“Primary Currency” has the meaning set forth in Section 12.15(c).

 

 

“Primary Obligor” has the meaning set forth in the definition of “Guaranties”.

 

“Public Bank” has the meaning set forth in Section 12.2(d).

 

“Qualified Securitization Financing” means any Securitization Financing of a Securitization Subsidiary, the financing terms, covenants, termination events and other provisions of which, including any Standard Securitization Undertakings, shall be market terms.

 

“Rating Organizations” means the following nationally recognized rating organizations:  Moody’s Investor Service, Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and Fitch Ratings, Inc.

 

“Reference Banks” means Citibank, N.A., Bank of America, N.A. and JPMorgan Chase Bank, N.A.

 

“Register” has the meaning set forth in Section 11.11(a).

 

“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 an event described in Section 4043(c) of ERISA with respect to a Plan other than those events as to which the 30-day notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.

 

“Required Banks” means Non-Defaulting Banks having an aggregate Percentage of more than 50%; provided, that, the Committed Loans and Commitments of any Defaulting Bank shall be excluded from the determination of Required Banks.

 

“Reuters Page” has the meaning set forth in the definition of “Base LIBOR”.

 

“Securitization Assets” means the accounts receivable, lease, royalty or other revenue streams and other rights to payment and all related assets (including contract rights, books and records, all collateral securing any and all of the foregoing, all contracts and all guarantees or other obligations in respect of any and all of the foregoing and other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving any and all of the foregoing) and the proceeds thereof in each case pursuant to a Securitization Financing.

 

“Securitization Financing” means one or more transactions or series of transactions that may be entered into by AerCap and/or any AerCap Subsidiary pursuant to which AerCap or any AerCap Subsidiary may sell, convey or otherwise transfer Securitization Assets to (a) a Securitization Subsidiary (in the case of a transfer by AerCap or any AerCap Subsidiary that is not a Securitization Subsidiary) or (b) any other Person (in the case of a transfer by a Securitization Subsidiary), or may grant a security interest in, any Securitization Assets of AerCap or any AerCap Subsidiary.

 

 

“Securitization Subsidiary” means an AerCap Subsidiary (or another Person formed for the purposes of engaging in a Qualified Securitization Financing in which AerCap or any AerCap Subsidiary makes an investment and to which AerCap or any AerCap Subsidiary transfers Securitization Assets and related assets) that engages in no activities other than in connection with the financing of Securitization Assets of AerCap or an AerCap Subsidiary, all proceeds thereof and all rights (contingent and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of AerCap or such other Person (as provided below) as a Securitization Subsidiary and (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by AerCap or any AerCap Subsidiary, other than another Securitization Subsidiary (excluding guarantees of obligations pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates AerCap or any AerCap Subsidiary, other than another Securitization Subsidiary, in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of AerCap or any AerCap Subsidiary, other than another Securitization Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and (b) to which none of AerCap or any AerCap Subsidiary, other than another Securitization Subsidiary, has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of AerCap or such other Person shall be evidenced by a resolution of the Board of Directors of AerCap or such other Person giving effect to such designation.

 

“Shareholder’s Equity” means, as of any date of determination for the Company and itsAerCap and the AerCap  Subsidiaries on a consolidated basis, (a) shareholders’ equity (including (ai) capital stock, (bii) additional paid-in capital, (ciii) the amount that is (ix) the aggregate amount outstanding of Hybrid Capital Securities multiplied by (iiy) the Hybrid Capital Securities Percentage, and (div) retained earnings after deducting treasury stock) as of such date determined in accordance with generally accepted accounting principles in the United States of America.GAAP, plus (b) to the extent not otherwise included in shareholders’ equity of AerCap, any outstanding market auction preferred stock of the Company, plus (c) if the aggregate amount of Shareholder’s Equity as of 4:00 p.m., New York City time, on the Transaction Closing Date (determined prior to giving effect to this clause (c)) was less than $5,100,000,000, the Equity Adjustment Amount.

 

“Significant Subsidiary” means (i) any Obligor that is a Subsidiary of the Company and (ii) any other Subsidiary which is so defined pursuant to Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange Commission.

 

“SPV” has the meaning set forth in Section 12.4.

 

“Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by AerCap or any AerCap Subsidiary that are customary for a seller or servicer of assets in a Securitization Financing.

 

“Subsidiary” means any Person of which or in which the Company and its other Subsidiaries own directly or indirectly 50% or more of:

 

 

(a)                               the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such Person, if it is a corporation,

 

(b)                              the capital interest or profits interest of such Person, if it is a partnership, limited liability company, joint venture or similar entity, or

 

(c)                               the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.

 

“Subsidiary Guarantor” means each AerCap Subsidiary that becomes a Guarantor on the Transaction Closing Date and each AerCap Subsidiary that becomes a “Subsidiary Guarantor” after the Transaction Closing Date pursuant to Section 8.18.

 

“Successor Bank” has the meaning set forth in Section 12.9(c).

 

“Taxes” means all income, excise and other taxes, and all assessments, fees, imposts, duties and other governmental charges or levies, imposed by any Governmental Authority, including any interest, addition to tax or penalties applicable thereto.

 

“Terminating Bank” has the meaning set forth in Section 12.9(c).

 

“Termination Date” means, with respect to any Bank, the earliest to occur of (i) October 9, 2015 or such later date as may be agreed to by such Bank pursuant to Section 12.9(a), or if such day is not a Business Day, the next preceding Business Day, (ii) the date on which the Commitments shall terminate pursuant to Section 10.2 or the Commitments shall be reduced to zero pursuant to Section 4.1 and (iii) the date specified as such Bank’s Termination Date pursuant to Section 12.9(b), or, if such day is not a Business Day, the next preceding Business Day; in all cases, subject to the provisions of Section 12.9(d).

 

“Transaction Closing Date” means the date of effectiveness of the amendments to this Agreement set forth in the First Amendment.

 

“Type” has the meaning set forth in the definition of “Committed Loan”.

 

“Unencumbered Assets” means, as of the date of any determination, the sum, without duplication, of (a) the difference between (i) the book value (determined in accordance with GAAP) on such date of determination of the Aircraft Assets owned by AerCap and the AerCap Subsidiaries and (ii) the aggregate outstanding principal amount on such date of determination of Financial Indebtedness of AerCap and the AerCap Subsidiaries secured by Liens over such Aircraft Assets or the Equity Interests of the AerCap Subsidiary owning such Aircraft Assets, (b) the lesser of (i) $2,000,000,000 and (ii) the aggregate amount of “cash and cash equivalents” or any line item of similar import (but in any event, excluding “restricted cash” or any line item of similar import and excluding “cash and cash equivalents” or any line item of similar import subject to any Lien (other than (x) Liens arising by operation of law and (y) bankers’ Liens arising in the ordinary course of business)) reflected on a consolidated balance sheet of AerCap prepared as of such date of determination in accordance with GAAP and (c) the Equity Adjustment Amount.

 

 

“Unmatured Event of Default” means any event which if it continues uncured will, with lapse of time or notice or lapse of time and notice, constitute an Event of Default.

 

“U.S. Bank” has the meaning set forth in Section 5.4(c).

 

“U.S. Tax Compliance Certificate” has the meaning set forth in Section 5.4(b).

 

“Wholly-owned Subsidiary” means any Person of which or in which the Company and its other Wholly-owned Subsidiaries own directly or indirectly 100% of:

 

(a)                               the issued and outstanding shares of stock (except shares required as directors’ qualifying shares),

 

(b)                              the capital interest or profits interest of such Person, if it is a partnership, limited liability company, joint venture or similar entity, or

 

(c)                               the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.

 

SECTION 2.                                   COMMITTED LOANS AND COMMITTED NOTES.

 

Section 2.1.                            Agreement to Make Committed Loans.  On the terms and subject to the conditions of this Agreement, each Bank, severally and for itself alone, agrees to make loans (herein collectively called “Committed Loans” and individually each called a “Committed Loan”) on a revolving basis from time to time from the date hereof until such Bank’s Termination Date in such Bank’s Percentage of such aggregate amounts as the Company may from time to time request as provided in Section 2.2; provided, that, (a) the aggregate principal amount of all outstanding Committed Loans of any Bank shall not at any time exceed the amount set forth opposite such Bank’s name on Schedule I (as reduced in accordance with Section 4.1, Section 12.4 or Section 12.9), (b) the aggregate principal amount of all outstanding Committed Loans of all Banks shall not at any time exceed the then Aggregate Commitment, and (c) at no time shall there be more than 15 Committed Loans outstanding.  Within the limits of this Section 2.1, the Company may from time to time borrow, prepay and reborrow Committed Loans on the terms and conditions set forth in this Agreement.

 

Section 2.2.                            Procedure for Committed Loans.

 

(a)                               Committed Loan Requests.  The Company shall give the Agent irrevocable telephonic notice at the Notice Office (promptly confirmed in writing on the same day), not later than 10:30 a.m., New York City time, (i) at least three Business Days prior to the Funding Date in the case of LIBOR Rate Loans or (ii) on the Funding Date in the case of Base Rate Loans, of each requested Committed Loan, and the Agent shall promptly advise each Bank thereof and, in the case of a LIBOR Rate Loan, if the Reuters Page is not available, request each Reference Bank to notify the Agent of its applicable rate (as contemplated in the definition of Base LIBOR).  Each such notice to the Agent (a “Committed Loan Request”) shall be substantially in the form of Exhibit A and shall specify (i) the Funding Date (which shall be a Business Day), (ii) the aggregate amount of the Committed Loans requested (in an amount permitted under clause (b) below), (iii) whether each Committed Loan shall be a LIBOR Rate

 

 

Loan or a Base Rate Loan and (iv) if a LIBOR Rate Loan, the Loan Period therefor (subject to the limitations set forth in the definition of Loan Period).  After giving effect to all Committed Loans and all conversions of Committed Loans from one Type to the other there shall not be more than ten Loan Periods in effect with respect to Committed Loans.

 

(b)                              Amount and Increments of Committed Loans.  Each Committed Loan Request shall contemplate Committed Loans in a minimum aggregate amount of $10,000,000 or a higher integral multiple of $1,000,000, not to exceed in the aggregate (for all requested Committed Loans) the excess of the then Aggregate Commitment over the aggregate principal amount of all outstanding Committed Loans, calculated as of the relevant Funding Date.

 

(c)                               Funding of Committed Loans.

 

(i)                                  Not later than 12:30 p.m., New York City time, on the Funding Date of a Committed Loan, each Bank shall, subject to this Section 2.2(c), provide the Agent at its Notice Office with immediately available funds covering such Bank’s Committed Loan (provided, that, a Bank’s obligation to provide funds to the Agent shall be deemed satisfied by such Bank’s delivery to the Agent at its Notice Office not later than 12:30 p.m., New York City time, of a Federal reserve wire confirmation number covering the proceeds of such Bank’s Committed Loan) and the Agent shall pay over such funds to the Company not later than 2:00 p.m., New York City time, on such day if the Agent shall have received the documents required under Section 9 with respect to such Committed Loan and the other conditions precedent to the making of such Committed Loan shall have been satisfied not later than 10:00 a.m., New York City time, on such day.  If the Agent does not receive such documents or such other conditions precedent have not been satisfied prior to such time, then (A) the Agent shall not pay over such funds to the Company, (B) the Company’s Committed Loan Request related to such Committed Loan shall be deemed cancelled in its entirety, (C) in the case of Committed Loan Requests relative to LIBOR Rate Loans, the Company shall be liable to each Bank in accordance with Section 6.4 and (D) the Agent shall return the amount previously provided to the Agent by each Bank on the next following Business Day.

 

(ii)                              The Company agrees, notwithstanding its previous delivery of any documents required under Section 9 with respect to a particular Committed Loan, immediately to notify the Agent of any failure by it to satisfy the conditions precedent to the making of such Committed Loan.  The Agent shall be entitled to assume, after it has received each of the documents required under Section 9 with respect to a particular Committed Loan, that each of the conditions precedent to the making of such Committed Loan has been satisfied absent actual knowledge to the contrary received by the Agent prior to the time of the receipt of such documents.  Unless the Agent shall have notified the Banks prior to 10:30 a.m., New York City time, on the Funding Date of any Committed Loan that the Agent has actual knowledge that the conditions precedent to the making of such Committed Loan have not been satisfied, the Banks shall be entitled to assume that such conditions precedent have been satisfied.

 

(d)                             Repayment of Committed Loans.  If any Bank is to make a Committed Loan hereunder on a day on which the Company is to repay (or has elected to prepay, pursuant to Section 4.2) all or any part of any outstanding Committed Loan held by such Bank, the proceeds of such new Committed Loan shall be applied to make such repayment and only an amount equal

 

 

to the positive difference, if any, between the amount being borrowed and the amount being repaid shall be requested by the Agent to be made available by such Bank to the Agent as provided in Section 2.2(c).

 

Section 2.3.                            Maturity of Committed Loans.  Except for a Base Rate Loan, which shall mature on the Termination Date, a Committed Loan made by a Bank shall mature on the last day of the Loan Period applicable to such Committed Loan, but in no event later than the Termination Date for such Bank; provided, that, a LIBOR Rate Loan maturing at the end of a Loan Period may at the end of such Loan Period, pursuant to Section 3.1(b), become a Base Rate Loan.

 

Section 2.4.                            Optional Conversion of Committed Loans.  The Company may on any Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 3.1, Convert all Committed Loans of one Type comprising the same Borrowing into Committed Loans of the other Type; provided, however, that any Conversion of LIBOR Rate Loans into Base Rate Loans shall be made only (x) on the last day of an Interest Period for such LIBOR Rate Loans or (y) on any day other than the last day of an Interest Period for such LIBOR Rate Loans so long as the Company pays the amounts payable pursuant to Section 6.4(a), any Conversion of Base Rate Loans into LIBOR Rate Loans shall be in an amount not less than the minimum amount specified in Section 2.2(b) and no Conversion of any Committed Loans shall result in more separate Committed Loans than permitted under Section 2.2(a); provided, further, that upon the occurrence and during the continuance of any Event of Default no Conversion of Base Rate Loans into LIBOR Rate Loans shall be permitted.  Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Committed Loans to be Converted, and (iii) if such Conversion is into LIBOR Rate Loans, the duration of the initial Loan Period for each such Committed Loan.  Each notice of Conversion shall be irrevocable and binding on the Company.

 

SECTION 3.                                   INTEREST AND FEES.

 

Section 3.1.                            Interest Rates.  The Company hereby promises to pay interest on the unpaid principal amount of each Committed Loan for the period commencing on the Funding Date for such Committed Loan until such Committed Loan is paid in full, as follows:

 

(a)                               if such Committed Loan is a Base Rate Loan, at a rate per annum equal to the Base Rate from time to time in effect; provided, however, that upon the occurrence and during the continuance of any Event of Default, such Committed Loan that is a Base Rate Loan shall bear interest on the unpaid principal amount thereof at a rate per annum (calculated on the basis of a 365-day year for the actual number of days elapsed) equal to the Base Rate from time to time in effect plus 2% per annum; and

 

(b)                              if such Committed Loan is a LIBOR Rate Loan, at a rate per annum equal to the LIBOR Rate applicable to the Loan Period for such Loan; provided, however, that upon the occurrence and during the continuance of any Event of Default, such Committed Loan that is a LIBOR Rate Loan shall, at the end of the applicable Loan Period then in effect, bear interest on

 

 

the unpaid principal amount thereof at a rate per annum (calculated on the basis of a 360-day year for the actual number of days involved) equal to the Base Rate from time to time in effect (but not less than the interest rate in effect for such Committed Loan immediately prior to maturity of such Committed Loan) plus 2% per annum.

 

Section 3.2.                            Interest Payment Dates.  Except for Base Rate Loans, as to which accrued interest shall be payable on the last day of each calendar quarter and on the Termination Date, accrued interest on each Committed Loan shall be payable in arrears on the last day of the one, two or three month, as applicable, Loan Period therefor and with respect to each LIBOR Rate Loan with a Loan Period of six months, on the day that is three months after the first day of such Loan Period (or, if there is no day in such third month numerically corresponding to such first day of the Loan Period, on the last Business Day of such month).  Upon the occurrence and during the continuance of any Event of Default, accrued interest on any Committed Loan shall be payable on demand.  If any interest payment date falls on a day that is not a Business Day, such interest payment date shall be postponed to the next succeeding Business Day and the interest paid shall cover the period of postponement (except that if the Committed Loan is a LIBOR Rate Loan and the next succeeding Business Day falls in the next succeeding calendar month, such interest payment date shall be the immediately preceding Business Day).

 

Section 3.3.                            Setting and Notice of Committed Loan Rates.

 

(a)                               The applicable interest rate for each Committed Loan hereunder shall be determined by the Agent in accordance with this Agreement and notice thereof shall be given by the Agent promptly to the Company and to each Bank.  Each determination of the applicable interest rate by the Agent shall be conclusive and binding upon the parties hereto in the absence of demonstrable error.

 

(b)                              In the case of LIBOR Rate Loans, each Reference Bank agrees to use its best efforts to notify the Agent in a timely fashion of its applicable rate after the Agent’s request (if any) therefor under Section 2.2(a) (as contemplated in the definition of Base LIBOR).  If as to any Loan Period the Reuters Page is not available and any one or more of the Reference Banks is unable or for any reason fails to notify the Agent of its applicable rate by 11:30 a.m., New York City time, two Business Days before the Funding Date, then the applicable LIBOR Rate shall be determined on the basis of the rate or rates of which the Agent is given notice by the remaining Reference Bank or Banks by such time.  If the Reuters Page is not available and none of the Reference Banks notifies the Agent of the applicable rate prior to 11:30 a.m., New York City time, two Business Days before the Funding Date, then (i) the Agent shall promptly notify the other parties thereof and (ii) at the option of the Company the Committed Loan Request delivered by the Company pursuant to Section 2.2(a) with respect to such Funding Date shall be cancelled or shall be deemed to have specified a Base Rate Loan.

 

(c)                               The Agent shall, upon written request of the Company or any Bank, deliver to the Company or such Bank a statement showing the computations used by the Agent in determining the interest rate applicable to any LIBOR Rate Loan.

 

 

Section 3.4.                            Commitment Fee.  The Company agrees to pay to the Agent for the accounts of the Banks pro rata in accordance with their respective Percentages an annual commitment fee computed by multiplying the average daily amount of the unused Aggregate Commitment by the applicable percentage determined with respect to such commitment fee in accordance with Schedule II hereto.  Such fee shall be payable quarterly in arrears on the last Business Day of March, June, September and December of each year (beginning with the last Business Day of December, 2012) until the Commitments have expired or have been terminated and on the date of such expiration or termination (and, in the case of any Terminating Bank, such Bank’s Termination Date), in each case for the period then ending for which such commitment fee has not previously been paid; provided, that, no Defaulting Bank shall be entitled to receive any commitment fee in respect of its Commitment for any period during which that Bank is a Defaulting Bank (and the Company shall not be required to pay such fee that otherwise would have been required to have been paid to that Defaulting Bank).

 

Section 3.5.                            Agent’s Fees.  The Company agrees promptly to pay to the Agent such fees as may be agreed from time to time by the Company and the Agent.

 

Section 3.6.                            Computation of Interest and Fees.  Interest on LIBOR Rate Loans, and commitment fees shall be computed for the actual number of days elapsed on the basis of a 360-day year; and interest on Base Rate Loans shall be computed for the actual number of days elapsed on the basis of a 365/366 day year, as the case may be.  The interest rate applicable to each LIBOR Rate Loan and Base Rate Loan shall change simultaneously with each change in the LIBOR Rate or the Base Rate, as applicable.

 

 

SECTION 4.                                   REDUCTION OR TERMINATION OF THE COMMITMENTS; REPAYMENT; PREPAYMENTS.

 

Section 4.1.                            Voluntary Termination or Reduction of the Commitments.  (a) The Company may at any time on at least 3 Business Days’ prior notice received by the Agent (which shall promptly on the same day or on the next Business Day advise each Bank thereof) permanently reduce the amount of the Commitments (such reduction to be pro rata among the Banks according to their respective Percentages) to an amount not less than the aggregate principal amount of all outstanding Committed Loans.  Any such reduction shall be in the amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof.  Concurrently with any such reduction, the Company shall prepay the principal of any Committed Loans outstanding to the extent that the aggregate amount of such Committed Loans outstanding shall then exceed the Aggregate Commitment, as so reduced.  The Company may from time to time on like notice terminate the Commitments upon payment in full of all Committed Loans, all interest accrued thereon, all fees and all other obligations of the Company hereunder. Any notice of reduction or termination in full of the Commitments hereunder may state that such notice is conditioned upon the effectiveness of other credit facilities or capital raising, in which case such notice may be revoked by the Company (by notice to the Agent on or prior to the specified effective date) if such condition is not satisfied.

 

 

(b)                              Termination of Defaulting Bank.  The Company shall be entitled at any time to (i) terminate the unused Commitment of any Bank that is a Defaulting Bank (the “Defaulted Commitments”) upon prior notice of not less than one Business Day to the Agent (which shall promptly notify the Banks thereof), and/or (ii) replace all of the Commitments or the Defaulted Commitments of any Bank that is a Defaulting Bank with Commitments of a Successor Bank, provided, that, (x) each such assignment shall be either an assignment of all of the rights and obligations of the Defaulting Bank under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the Defaulting Bank under this Agreement with respect to all of the Commitments or the Defaulted Commitments, as the case may be, and (y) concurrently with such assignment, either the Company or one or more Successor Banks shall pay for the account of such Defaulting Bank an aggregate amount at least equal to the aggregate outstanding principal amount of the Committed Loans owing to such Defaulting Bank, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Defaulting Bank under this Agreement.  In either such event, the provisions of Section 4.3 shall apply to all amounts thereafter paid by the Company or such Successor Bank for the account of such Defaulting Bank under this Agreement (whether on account of principal, interest, commitment fees or other amounts), provided, that, such termination or assignment shall not be deemed to be a waiver or release of any claim the Company, the Agent, or any Bank may have against such Defaulting Bank.

 

Section 4.2.                            Voluntary Prepayments.  The Company may voluntarily prepay Committed Loans without premium or penalty, except as may be required pursuant to subsection (d) below, in whole or in part; provided, that, (a) each prepayment shall be in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (b) the Company shall give the Agent at its Notice Office (which shall promptly advise each Bank) not less than two Business Days’ prior notice thereof for prepayments of LIBOR Rate Loans and same day notice thereof for prepayments of Base Rate Loans specifying the Committed Loans to be prepaid and the date and amount of prepayment, (c) any prepayment of principal of any Committed Loan shall include accrued interest to the date of prepayment on the principal amount being prepaid and (d) any prepayment of a LIBOR Rate Loan shall be subject to the provisions of Section 6.4. Any notice of prepayment in full of all Committed Loans hereunder or reduction of Commitments in full may state that such notice is conditioned upon the effectiveness of other credit facilities or capital raising, in which case such notice may be revoked by the Company (by notice to the Agent on or prior to the specified effective date) if such condition is not satisfied.

 

Section 4.3.                    Defaulting Banks.

 

(a)                               No Commitment of any Bank shall be increased or otherwise affected, and, except as otherwise expressly provided in this Section 4.3 or otherwise specifically provided herein, performance by the Company of its obligations shall not be excused or otherwise modified as a result of the operation of this Section 4.3.  The rights and remedies against a Defaulting Bank under this Section 4.3 are in addition to any other rights and remedies which the Company, the Agent or any Bank may have against such Defaulting Bank.

 

 

(b)                              If the Company and the Agent agree in writing in their reasonable determination that a Defaulting Bank should no longer be deemed to be a Defaulting Bank, the 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, that Bank will, to the extent applicable, purchase that portion of outstanding Commitments of the other Banks or take such other actions as the Agent may determine to be necessary to cause the Commitments to be held on a pro rata basis by the Banks in accordance with their respective Percentages, whereupon such Bank will cease to be a Defaulting Bank; provided, that, no adjustments will be made retroactively or with duplication with respect to fees accrued or payments made by or on behalf of the Company while that Bank was a Defaulting Bank; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Bank to Bank will constitute a waiver or release of any claim of any party hereunder arising from such Bank’s having been a Defaulting Bank.

 

(c)                               Notwithstanding anything to the contrary contained in this Agreement, any payment of principal, interest, commitment fees or other amounts received by the Agent for the account of any Defaulting Bank under this Agreement (whether voluntary or mandatory, at maturity or otherwise) shall be applied at such time or times as may be determined by the Agent as follows:  first, to the payment of any amounts owing by such Defaulting Bank to the Agent hereunder; second, as the Company may request (so long as no Event of Default shall have occurred and be continuing), to the funding of any Committed Loan in respect of which that Defaulting Bank has failed to fund its portion thereof as required by this Agreement, as determined by the Agent;  third, to the payment of any amounts owing to the Banks as a result of any judgment of a court of competent jurisdiction obtained by any Bank against such Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations under this Agreement; fourth, so long as no Event of Default shall have occurred and be continuing, to the payment of any amounts owing to the Company as a result of any judgment of a court of competent jurisdiction obtained by the Company against such Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations under this Agreement; and fifth, to such Defaulting Bank 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 Committed Loan in respect of which such Defaulting Bank has not fully funded its appropriate share, and (y) such Committed Loans were made at a time when the applicable conditions set forth in Section 9 were satisfied or waived, such payment shall be applied solely to pay the Committed Loans of all Non-Defaulting Banks on a pro rata basis prior to being applied to the payment of any Committed Loans of such Defaulting Bank and provided, further, that any amounts held as cash collateral for funding obligations of a Defaulting Bank shall be returned to such Defaulting Bank upon the termination of this Agreement and the satisfaction of such Defaulting Bank’s obligations hereunder.  Any payments, prepayments or other amounts paid or payable to a Defaulting Bank that are applied (or held) to pay amounts owed by a Defaulting Bank or to post cash collateral pursuant to this Section 4.3 shall be deemed paid to and redirected by such Defaulting Bank, and each Bank irrevocably consents hereto.

 

 

SECTION 5.                                   MAKING AND PRORATION OF PAYMENTS; SET-OFF; TAXES.

 

Section 5.1.                            Making of Payments.  Except as provided in Section 2.2(d), payments (including those made pursuant to Section 4.1) of principal of, or interest on, the Committed Loans and all payments of fees and any other payments required to be made by the Company to the Agent hereunder shall be made by the Company to the Agent in immediately available funds at its Payment Office not later than 12:00 Noon, New York City time, on the date due; and funds received after that hour shall be deemed to have been received by the Agent on the next following Business Day.  Subject to Sections 3.4 and 4.3, the Agent shall promptly remit to each Bank its share (if any) of each such payment.  All payments under Section 6 and all payments required to be made hereunder to any Person other than the Agent shall be made by the Company when due directly to the Persons entitled thereto in immediately available funds.

 

Section 5.2.                            Pro Rata Treatment; Sharing.

 

(a)                               Except as required pursuant to Section 3.4, Section 4.3, Section 6 or Section 12.9, each payment or prepayment of principal of any Committed Loans, each payment of interest on the Committed Loans and each payment of the commitment fee shall be allocated pro rata among the Banks in accordance with their respective Percentages.

 

(b)                              If any Bank or other holder of a Committed Loan shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise) on account of principal of, interest on or fees or other amounts with respect to any Committed Loan in excess of the share of payments and other recoveries (exclusive of payments or recoveries under Section 6 or pursuant to Section 12.9) such Bank or other holder would have received if such payment had been distributed pursuant to the provisions of Section 5.2(a), such Bank or other holder shall purchase from the other Banks or holders, in a manner to be specified by the Agent, such participations in the Committed Loans held by them as shall be necessary so that all such payments of principal and interest with respect to the Committed Loans shall be shared by the Banks and other holders pro rata in accordance with their respective Percentages; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Bank or holder, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

 

Section 5.3.                            Set-off.  The Company agrees that the Agent, each Arranger, each Bank, each Participant and any of their respective branches or agencies, to the extent permitted by applicable law, has all rights of set-off and banker’s lien provided by applicable law, and the Company further agrees that at any time, (i) any amount owing by the Company under this Agreement is due to any such Person or (ii) any Event of Default exists, each such Person, to the extent permitted by applicable law, may apply to the payment of any amount payable hereunder any and all balances, credits, deposits, accounts or moneys of the Company then or thereafter with such Person.

 

Section 5.4.                            Taxes, etc.  (a) All payments made by the Company to the Agent, any Bank, any Assignee or any Participant under this Agreement and the Committed Notes shall be made without any set off or counterclaim and free and clear of and without

 

 

deduction for or on account of any present or future Covered Taxes (except to the extent that such withholding or deduction is compelled by law).  If the Company is compelled by law to make any such deductions or withholdings of any Taxes it will:

 

(i)                                  pay to the relevant authorities the full amount required to be so withheld or deducted,

 

(ii)                              pay such additional amounts as may be necessary in order that the net amount received by the Agent, each Bank, each Assignee and each Participant after such deductions or withholdings for Covered Taxes (including any required deductions or withholdings of Covered Taxes on such additional amounts) shall equal the amount such payee would have received had no such deductions or withholdings been made, and

 

(iii)                          promptly forward to the Agent (for delivery to such payee) an official receipt or other documentation satisfactory to the Agent evidencing such payment to such authorities.

 

Moreover, if any Covered Taxes are directly asserted against the Agent, any Bank, any Assignee or any Participant, such payee may pay such Covered Taxes, and, upon receipt of an official receipt or other reasonably satisfactory documentation evidencing such payment, the Company shall promptly pay such additional amount (including, without limitation, any reasonable expenses with respect thereto) as may be necessary in order that the net amount received by such payee after the payment of such Covered Taxes (including any Covered Taxes on such additional amounts) shall equal the amount such payee would have received had no such Covered Taxes been asserted (provided, that, the Agent, the Banks, and any Assignee or Participant shall use reasonable efforts, to the extent consistent with applicable laws and regulations, to minimize to the extent possible any material amounts of such Covered Taxes if they can do so without material cost or legal or regulatory disadvantage).  For purposes of this Section 5.4, a distribution hereunder by the Agent or any Bank to or for the account of any Bank, Assignee or Participant shall be deemed to be a payment by the Company.  The Company’s agreement under this Section 5.4 shall survive repayment of the Committed Loans, cancellation of the Committed Notes or any termination of this Agreement.

 

(b)                              In consideration of, and as a condition to, the Company’s undertakings in Section 5.4(a), each Bank other than a Bank that is organized and existing under the laws of the United States of America or any State thereof or the District of Columbia (a “Non-U.S. Bank”) agrees to execute and deliver to the Agent and the Company, on or prior to the date on which such Non-U.S. Bank becomes a Bank under this Agreement, and at the time or times reasonably requested by the Company or the Agent (i) to the extent it acts for its own account with respect to any portion of any sums paid or payable to such Non-U.S. Bank under this Agreement, two original copies of IRS Forms W-8BEN, W-8ECI or W-8EXP (or any successor forms), as appropriate, properly completed and duly executed by such Non-U.S. Bank, and, in the case of a Non-U.S. Bank claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, a certificate substantially in the form of Exhibit H to the effect that such Non-U.S. Bank is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Company within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax

 

 

Compliance Certificate”), claiming complete exemption from (or a reduced rate of) withholding and deduction of United States Federal Taxes, (ii) to the extent it does not act or has ceased to act for its own account with respect to any portion of any sums paid or payable to such Bank under this Agreement (for example, in the case of a typical participation by such Non-U.S. Bank or where such Non-U.S. Bank is a partnership), (1) for the portion of any such sums paid or payable with respect to which such Non-U.S. Bank acts for its own account, two original copies of the forms or statements required to be provided by such Non-U.S. Bank under subsection (i) of this Section 5.4(b), properly completed and duly executed by such Non-U.S. Bank and claiming complete exemption from (or a reduced rate of) withholding and deduction of United States Federal Taxes, and (2) for the portion of any such sums paid or payable with respect to which such Non-U.S. Bank does not act or has ceased to act for its own account, two original copies of IRS Form W-8IMY (or any successor forms), properly completed and duly executed by such Non-U.S. Bank, together with IRS Form W-8BEN, IRS Form W-8ECI, IRS Form W-8EXP (or any successor forms), a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable, provided, that if the Non-U.S. Bank is a partnership and one or more direct or indirect partners of such Non-U.S. Bank are claiming the portfolio interest exemption, such Non-U.S. Bank may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner, (iii) any other properly completed and duly executed form or forms reasonably requested by the Company or the Agent as a basis for claiming complete exemption from (or a reduced rate of) withholding and deduction of Taxes, together with such supplementary documentation reasonably requested by the Company or the Agent to permit the Company or the Agent to determine the withholding (including backup withholding) or deduction required to be made and whether such Non-U.S. Bank is subject to information reporting requirements.

 

(c)                               Each Bank that is organized and existing under the laws of the United States of America, any State thereof or the District of Columbia (a “U.S. Bank”) agrees to execute and deliver to the Agent and the Company, on or before the date of this Agreement or on or before the date such Bank becomes a Bank hereunder (and from time to time thereafter upon the reasonable request of the Company or the Agent) a copy of IRS Form W-9 (or any successor forms) properly completed and duly executed by such U.S. Bank, and claiming that it is organized and existing under the laws of the United States of America or any State thereof or such other documentation or information prescribed by applicable law or reasonably requested by the Company or the Agent as will enable the Company or the Agent, as the case may be, to determine whether or not such U.S. Bank is subject to backup withholding or information reporting requirements.

 

(d)                             If a payment made to a Non-U.S. Bank under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Non-U.S. Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Non-U.S. Bank shall deliver to the Company and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Company or the Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Company or the Agent as may be necessary for the Company and the Agent to comply with their obligations under FATCA and to determine that

 

 

such Non-U.S. Bank has complied with such Non-U.S. Bank’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.

 

(e)                               Each Bank hereby agrees, from time to time after the initial delivery by such Bank of any forms or other information pursuant to Section 5.4(b) or 5.4(c), whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence so delivered obsolete or inaccurate in any material respect, that such Bank shall promptly (and in all events, prior to the next applicable payment date), deliver to the Agent and the Company two original copies of any renewal, amendment or additional or successor forms, properly completed and duly executed, together with any other certificate or statement of exemption required by applicable law or regulation in order to confirm or establish such Bank’s complete exemption from (or entitlement to a reduced rate of) withholding and deduction of United States Federal Taxes with respect to payments to such Bank under this Agreement, (ii) if applicable, in the case of a change in law after the date on which such Bank became a Bank hereunder that results in a withholding or deduction of United States Federal Taxes on payments hereunder to such Bank, establish the status of such Bank as other than a United States person for United States Federal tax purposes and, to the extent entitled under an applicable treaty or other law, claim the benefit of an exemption or a reduced rate of withholding and deduction of United States Federal Taxes with respect to any such payments under an applicable tax treaty of the United States, and/or (iii) if applicable, confirm or establish that such Bank does not act for its own account with respect to any portion of any such payments.

 

(f)                                If the Company determines in good faith that a reasonable basis exists for contesting a Covered Tax with respect to which the Company has paid an additional amount under this Section 5.4, the Agent and the Banks, as applicable, shall, subject to Section 5.4(g), cooperate with the Company in challenging such Covered Tax at the Company’s expense if requested by the Company (it being understood and agreed that neither the Agent nor any Bank shall have any obligation to contest, or any responsibility for contesting, any Tax).  If the Agent or a Bank has actual knowledge that it is entitled to receive a refund (whether by way of a direct payment or by clearly identifiable offset to an amount otherwise owed to the relevant taxing authority) in respect of a Covered Tax with respect to which the Company has paid an additional amount under this Section 5.4, it shall promptly notify the Company of the availability of such refund (unless it was made aware of such refund by the Company) and shall, within 30 days after the receipt of a request from the Company, apply for such refund at the Company’s expense.  If the Agent or any Bank receives a refund (whether by way of a direct payment or by clearly identifiable offset to an amount otherwise owed to the relevant taxing authority) of any Covered Tax with respect to which the Company has paid an additional amount under this Section 5.4 which, in the reasonable good faith judgment of the Agent or such Bank, as the case may be, is allocable to such payment made under this Section 5.4, the amount of such refund (together with any interest received thereon) shall be paid to the Company, but only to the extent of the additional amounts received from the Company, provided, that, in the case of a Covered Tax the Company was required to deduct and withhold under this Section 5.4, the Company deducted and withheld such Covered Tax in full as and when required pursuant to this Section 5.4, provided, further, that if all or any portion of such refund subsequently becomes unavailable or must be returned, the Company shall repay to the Agent or Bank that paid over such refund to the Company an amount equal to any portion of the refund that must be returned, plus any interest, penalties or other charges imposed with respect thereto.

 

 

(g)                              Notwithstanding any other provision of paragraphs (b), (c), (d) or (e) of this Section 5.4, an Agent or Bank shall not be required to deliver any form that such Agent or Bank is not legally able to deliver.  Nothing contained in this Section 5.4 shall require any Agent, Bank, Assignee or Participant to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Company or any other Person.

 

(h)                              Each Bank will, at the Company’s request, designate a different Funding Office if such designation will avoid the need for, or reduce the amount of, amounts required to be paid by the Company under this Section 5.4 and will not, in such Bank’s sole discretion, be otherwise disadvantageous to such Bank.

 

(i)                                  The applicable Bank, acting solely for this purpose as a non-fiduciary agent of the Company (solely for tax purposes), shall maintain a register on which it enters the name and address of each Participant, and the principal amounts (and stated interest) of each such Participant’s interest in such Bank’s rights and/or obligations under this Agreement (the “Participant Register”); provided, that, no Bank shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Committed Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Committed Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Bank shall treat each Person whose name is recorded in the Participant Register as the owner of the applicable rights and/or obligations of such Bank under this Agreement.

 

SECTION 6.                                   INCREASED COSTS AND SPECIAL PROVISIONS FOR LIBOR RATE LOANS.

 

Section 6.1.                            Increased Costs.  (a)If after the date hereof, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or the making or issuance of any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency and compliance by any Bank (or any Funding Office of such Bank) therewith, then, subject to the provisions of Section 5.4, which shall provide the sole source of additional amounts payable to any Bank with respect to the matters covered therein,

 

(A)                          shall subject any Bank (or any Funding Office of such Bank) to any present or future tax, duty or other charge with respect to its LIBOR Rate Loans (except for (i) Covered Taxes, (ii) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (iii) Connection Income Taxes);

 

(B)                           shall impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve included in the determination of interest pursuant to Section 3.1), special deposit, assessment (including any assessment for insurance of

 

 

deposits) or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or any Funding Office of such Bank); or

 

(C)                           shall impose on any Bank (or any Funding Office of such Bank) any other condition affecting its LIBOR Rate Loans, its Committed Notes or its obligation to make or maintain LIBOR Rate Loans;

 

and the result of any of the foregoing is to increase the cost to (or to impose an additional cost on) such Bank (or any Funding Office of such Bank) of making or maintaining any LIBOR Rate Loan, or to reduce the amount of any sum received or receivable by such Bank (or such Bank’s Funding Office) under this Agreement or under its Committed Notes with respect thereto, then within 10 days after demand by such Bank (which demand shall be accompanied by a statement setting forth the basis of such demand), the Company shall pay directly to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or such reduction (without duplication of any amounts which have been paid or reimbursed).

 

(b)                              If, after the date hereof, any Bank shall determine that the adoption, effectiveness or phase-in of any applicable law, rule, guideline or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or the making or issuance of any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency and compliance by any Bank (or any Funding Office of such Bank or such Bank’s holding company) therewith, has or would have the effect of reducing the rate of return on the capital of such Bank or such Bank’s holding company as a consequence of its obligations hereunder to a level below that which such Bank or such Bank’s holding company could have achieved but for such adoption, change or compliance (taking into consideration such Bank’s or such Bank’s holding company’s policies with respect to capital adequacy), then, from time to time, within 10 days after demand by such Bank (which demand shall be accompanied by a statement setting forth the basis of such demand), the Company shall pay directly to such Bank such additional amount or amounts as will compensate such Bank or such Bank’s holding company for such reduction.

 

(c)                               Each Bank shall promptly notify the Company and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section 6.1 and will designate a different Funding Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in such Bank’s sole judgment, be otherwise disadvantageous to such Bank.  The Company shall not be required to compensate a Bank pursuant to this Section 6.1 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Bank notifies the Company of the change in law or other event occurring after the date hereof giving rise to such increased costs or reductions, and of such Bank’s intention to claim compensation therefor (except that, if the change in law or other such event is retroactive, then the nine month period referred to above shall be extended to include the period of retroactive effect thereof).

 

(d)                             Notwithstanding anything to the contrary herein, it is understood and agreed that any changes resulting from requests, rules, guidelines or directives (x) issued in

 

 

connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) 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, for the purposes of this Agreement, be deemed to be adopted subsequent to the date hereof; provided, however, that no Bank shall be entitled to receive any compensation or reimbursement hereunder with respect to any such changes unless such requirements are generally applicable to (and for which reimbursement is generally being sought by the applicable Bank in respect of) credit transactions similar to this transaction from borrowers similarly situated to the Company; provided, further, that no Bank shall be required to disclose any confidential or proprietary information in connection therewith.

 

Section 6.2.                            Basis for Determining Interest Rate Inadequate or Unfair.  If with respect to the Loan Period for any LIBOR Rate Loan:

 

(a)                               the Reuters Page is not available and the Agent is advised by two or more Reference Banks that deposits in Dollars (in the applicable amounts) are not being offered to such Reference Banks in the relevant market for such Loan Period, or the Agent otherwise determines (which determination shall be binding and conclusive on all parties) that, by reason of circumstances affecting the Base LIBOR market, adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or

 

(b)                              the Required Banks advise the Agent that the LIBOR Rate as determined by the Agent will not adequately and fairly reflect the cost to such Required Banks of maintaining or funding LIBOR Rate Loans for such Loan Period, or that the making or funding of LIBOR Rate Loans has become impracticable as a result of an event occurring after the date of this Agreement which in such Required Banks’ opinion materially affects LIBOR Rate Loans,

 

then (i) the Agent shall promptly notify the other parties thereof and (ii) so long as such circumstances shall continue, no Bank shall be under any obligation to make any LIBOR Rate Loan or convert any Base Rate Loan into a LIBOR Rate Loan.

 

Section 6.3.                            Changes in Law Rendering Certain Loans Unlawful.  In the event that any change in (including the adoption of any new) applicable laws or regulations, or in the interpretation of applicable laws or regulations by any Governmental Authority or other regulatory body charged with the administration thereof, should make it (or in the good faith judgment of such Bank raise a substantial question as to whether it is) unlawful for a Bank to make, maintain or fund any LIBOR Rate Loan, then (a) such Bank shall promptly notify each of the other parties hereto, (b) upon the effectiveness of such event and so long as such unlawfulness shall continue, the obligation of such Bank to make LIBOR Rate Loans shall be suspended and any request by the Company for LIBOR Rate Loans shall, as to such Bank, be deemed to be a request for a Base Rate Loan, and (c) on the last day of the current Loan Period for such Bank’s LIBOR Rate Loans (or, in any event, if such Bank so requests on such earlier date as may be required by the relevant law, regulation or interpretation) such Bank’s Committed Loans which are LIBOR Rate Loans shall cease to be maintained as LIBOR Rate Loans and shall thereafter bear interest at a floating rate per annum equal to the Base Rate.  If at any time

 

 

the event giving rise to such unlawfulness shall no longer exist, then such Bank shall promptly notify the Company and the Agent.

 

Section 6.4.                            Funding Losses.  The Company hereby agrees that upon demand by any Bank (which demand shall be accompanied by a statement setting forth the basis for the calculations of the amount being claimed) the Company will indemnify such Bank against any net loss or expense which such Bank may sustain or incur (including, without limitation, any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Bank to fund or maintain any LIBOR Rate Loan), as reasonably determined by such Bank, as a result of (a) any payment or mandatory or voluntary prepayment (including, without limitation, any payment pursuant to Section 6.3 or 12.9(b) or any payment resulting from acceleration) or Conversion of any LIBOR Rate Loan of such Bank on a date other than the last day of the Loan Period for such Loan or (b) any failure of the Company to borrow any Committed Loans on the originally scheduled Funding Date specified therefor pursuant to this Agreement (including, without limitation, any failure to borrow resulting from any failure to satisfy the conditions precedent to such borrowing).  For this purpose, all notices to the Agent pursuant to this Agreement shall be deemed to be irrevocable.

 

Section 6.5.                            Discretion of Banks as to Manner of Funding.  Notwithstanding any provision of this Agreement to the contrary (but subject to Section 6.1(c)), each Bank shall be entitled to fund and maintain its funding of all or any part of its Committed Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Bank had actually funded and maintained each LIBOR Rate Loan during the Loan Period for such LIBOR Rate Loan through the purchase of deposits having a maturity corresponding to such Loan Period and bearing an interest rate equal to the rate borne by such LIBOR Rate Loan for such Loan Period.

 

Section 6.6.                            Conclusiveness of Statements; Survival of Provisions.  Determinations and statements of any Bank pursuant to this Section 6 shall be conclusive absent demonstrable error, and each Bank may use reasonable averaging and attribution methods in determining compensation pursuant to Section 6.1 or 6.4.  The provisions of this Section 6 shall survive termination of this Agreement and payment of the Committed Loans.

 

SECTION 7.                                   REPRESENTATIONS AND WARRANTIES.

 

To induce the Banks to enter into this Agreement and to make Committed Loans hereunder, the Company hereby makes the following representations and warranties to the Agent and the Banks, which representations and warranties shall survive the execution and delivery of this Agreement and the Committed Notes and the disbursement of the initial Committed Loans hereunder:

 

Section 7.1.                            Organization, etc. (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of California; (b) each corporate Subsidiary is a corporation duly organized, validly existing and in good standing, to the extent applicable, under the laws of the jurisdiction of its incorporation; (c) each other Subsidiary (if any) is an entity duly organized and validly existing under the laws of the jurisdiction of its organization; and (d) each of the Company and each Subsidiary has the power

 

 

to own its property and to carry on its business as now being conducted and is duly qualified and in good standing as a foreign corporation or other entity authorized to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except, in each of cases (a), (b), (c) and (d) above, where the failure to be so qualified or in good standing could not reasonably be expected to have a Material Adverse Effect.

 

Section 7.2.                            Authorization; Consents; No Conflict.  The execution and delivery by the Company of this Agreement and the Committed Notes, the borrowings hereunder and the performance by the Company of its obligations under this Agreement and the Committed Notes (a) are within the corporate powers of the Company, (b) have been duly authorized by all necessary corporate action on the part of the Company, (c) have received all necessary approvals, authorizations, consents, registrations, notices, exemptions and licenses (if any shall be required) from Governmental Authorities and other Persons, except for any such approvals, authorizations, consents, registrations, notices, exemptions or licenses non-receipt of which could not reasonably be expected to have a Material Adverse Effect, (d) do not and will not contravene or conflict with any provision of (i) law, (ii) any judgment, decree or order to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound, (iii) the charter, by-laws or other organizational documents of the Company or any Subsidiary or (iv) any provision of any agreement or instrument binding on the Company or any Subsidiary, or any agreement or instrument of which the Company is aware affecting the properties of the Company or any Subsidiary, except with respect to (i), (ii) and (iv) above, for any such contravention or conflict which could not reasonably be expected to have a Material Adverse Effect and (e) do not and will not result in or require the creation or imposition of any Lien on any of the Company’s or its Subsidiaries’ properties.

 

Section 7.3.                            Validity and Binding Nature.  This Agreement is, and the Committed Notes (if any) when duly executed and delivered will be, legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

Section 7.4.                            Financial Statements.  The Company’s audited consolidated financial statements as at December 31, 2011, and unaudited consolidated financial statements as at June 30, 2012, a copy of each of which has been furnished to each Bank, have been prepared in conformity with generally accepted accounting principles in the United States of AmericaGAAP applied on a basis consistent with that of the preceding fiscal year (other than as required or permitted by generally accepted accounting principles in the United States of AmericaGAAP, subject, in the case of unaudited financial statements, to changes resulting from audit and year-end adjustments) and fairly present the financial condition of the Company and its Subsidiaries as at such dates and the results of their operations for the applicable time periods then ended.

 

Section 7.5.                            Litigation and Contingent Liabilities.  All Litigation Actions, taken as a whole, could not reasonably be expected to have a Material Adverse Effect.  As of the Closing Date, other than any liability incident to such Litigation Actions or provided for or disclosed in the financial statements referred to in Section 7.4, neither the Company nor

 

 

any Subsidiary has any contingent liabilities which are material to the business, credit, operations or financial condition of the Company and its Subsidiaries taken as a whole.

 

Section 7.6.                            Employee Benefit Plans.  Except as could not reasonably be expected to have a Material Adverse Effect, each employee benefit plan (as defined in Section 3(3) of ERISA) maintained or sponsored by the Company or any Subsidiary complies in all material respects with all applicable requirements of law and regulations.  During the term of this Agreement, (i) no steps have been taken to terminate any Plan and no contribution failure has occurred with respect to any Plan sufficient to give rise to a lien under Section 303(k) of ERISA, (ii) no Reportable Event has occurred with respect to any Plan,  (iii) no determination has been made that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA); and (iv) neither the Company nor any ERISA Affiliate has either withdrawn or instituted steps to withdraw from any Multiemployer Plan, except in any such case specified in clause (i), (ii), (iii) and (iv) above, for actions which individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.  Except as could not reasonably be expected to have a Material Adverse Effect, no condition exists or event or transaction has occurred in connection with any Plan which could reasonably be expected to result in the incurrence by the Company or any Subsidiary of any material liability, fine or penalty (imposed by Section 4975 of the Code or Section 502(i) of ERISA or otherwise).  Neither the Company nor any ERISA Affiliate is a member of, or contributes to, any Multiemployer Plan as to which the potential withdrawal liability based upon the most recent actuarial report could reasonably be expected to have a Material Adverse Effect.  Except as could not reasonably be expected to have a Material Adverse Effect, neither the Company nor any Subsidiary has any contingent liability with respect to any post retirement benefit under an employee welfare benefit plan (as defined in Section 3(1) of ERISA), other than liability for continuation coverage described in Part 6 of Title I of ERISA.

 

Section 7.7.                            Investment Company Act.  The Company is not an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

 

Section 7.8.                            Regulation U.  Neither the Company nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System as amended from time to time).

 

Section 7.9.                            Information(a)  .  All information with respect to the Company contained in the August 2012 information memorandum (the “Information Memorandum”) furnished by the Agent to the Banks and all other information furnished by the Company to the Agent or any Bank, other than in each case independent third party appraisals of aircraft and independent third party generated industry information, is, to the best of the Company’s knowledge after due inquiry, true and accurate in every material respect as of the date thereof, and none of such information contains any material misstatement of fact or omits to state any material fact necessary to make such information not misleading when read together with the Company’s filing on Forms 10-K, 10-Q and (to the extent issued after the most recent filing on Form 10-Q) 8-K with the Securities and Exchange Commission; provided, that, with respect to projected and pro forma financial information, the Company represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the

 

 

time of preparation and delivery; it being understood that such projections may vary from actual results and that such variances may be material.

 

Section 7.10.                    Compliance with Applicable Laws, etc.  The Company and its Subsidiaries are in compliance with the requirements of all applicable laws, rules, regulations and orders of all Governmental Authorities (including, without limitation, ERISA and all applicable environmental laws), except for noncompliance that could not reasonably be expected to have a Material Adverse Effect.  Neither the Company nor any Subsidiary is in default under any agreement or instrument to which the Company or such Subsidiary is a party or by which it or any of its properties or assets is bound, which default could reasonably be expected to have a Material Adverse Effect on the business, credit, operations or financial condition of the Company and its Subsidiaries taken as a whole.  No Event of Default or Unmatured Event of Default has occurred and is continuing.

 

Section 7.11.                    Insurance.  Each of the Company and each Subsidiary maintains, or, in the case of any property owned by the Company or any Subsidiary and leased to lessees, has contractually required such lessees to maintain, insurance with financially sound and reputable insurers to such extent and against such hazards and liabilities as is commonly maintained, or caused to be maintained, as the case may be, by companies similarly situated.

 

Section 7.12.                    Taxes.  Each of the Company and each Subsidiary has filed all material tax returns which are required to have been filed and has paid, or made adequate provisions for the payment of, all of its Taxes which are due and payable, except such Taxes, if any, as are being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by generally accepted accounting principlesGAAP have been established and except where failure to pay such Taxes, individually or in the aggregate, cannot reasonably be expected to have a Material Adverse Effect.

 

Section 7.13.                    Use of Proceeds.  The proceeds of the Committed Loans will be used by the Company for general corporate purposes.

 

Section 7.14.                    Pari Passu.  All obligations and liabilities of the Company hereunder shall rank at least equally and ratably (pari passu) in priority with all other unsubordinated, unsecured obligations of the Company to any other creditor.

 

Section 7.15.                    OFAC, Etc.. None of the Company or any Significant Subsidiary is or will become a Person or entity described by section 1 of Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions with Persons Who, Commit, Threaten to Commit, or Support Terrorism (12 C.F.R. 595), and none of the Company or any Significant Subsidiary is acting for or on behalf of any Person on any list promulgated under the USA Patriot Act Title III of 107 Public Law 56 (October 26, 2001).

 

 

SECTION 8.                                   COVENANTS.

 

Until the expiration or termination of the Commitments, and thereafter until all obligations of the Company hereunder and under the Committed Notes are paid in full (other than unasserted contingent indemnification obligations), the Company agrees that, unless at any time the Required Banks shall otherwise expressly consent in writing, it will:

 

Section 8.1.                            Reports, Certificates and Other Information.  Furnish to the Agent with sufficient copies for each Bank which the Agent shall promptly make available to each Bank:

 

8.1.1                Audited Financial Statements.  As soon as available, and in any event within 95 days after each fiscal year of the Company, a copy of the audited financial statements and annual audit report of the Company and its Subsidiaries for such fiscal year prepared on a consolidated basis and in conformity with generally accepted accounting principles in the United States of AmericaGAAP and certified by PricewaterhouseCoopers LLP or by another independent certified public accountant of recognized national standing selected by the Company. As soon as available, and in any event within 95 days after each fiscal year of AerCap, a copy of the audited consolidated balance sheet and related statements of operations, shareholders’ equity and cash flows and annual audit report of AerCap and its subsidiaries for such fiscal year (setting forth in each case in comparative form the figures for the previous fiscal year) prepared on a consolidated basis and in conformity with GAAP and certified by PricewaterhouseCoopers Accountants N.V. or by another independent certified public accountant of recognized national standing selected by AerCap.

 

8.1.2                Interim Reports.  As soon as available, and in any event within 50 days after each quarter (except the last quarter) of each fiscal year of the Company, a copy of the unaudited financial statements of the Company and its Subsidiaries for such quarter prepared in a manner consistent with the audited financial statements referred to in Section 8.1.1 (except as required or permitted by generally accepted accounting principles in the United States of AmericaGAAP), signed by an Authorized Officer and consisting of at least a balance sheet as at the close of such quarter and statements of earnings and cash flows for such quarter and for the period from the beginning of such fiscal year to the close of such quarter. As soon as available, and in any event within 50 days after each quarter (except the last quarter) of each fiscal year of AerCap, a copy of the unaudited consolidated balance sheet and related statements of operations, shareholders’ equity and cash flows of AerCap and its subsidiaries as of the end of and for such quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the corresponding period or periods of the previous fiscal year, all certified by an Authorized Officer of AerCap as presenting fairly, in all material respects the financial condition and results of operations of AerCap and the AerCap Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year end audit adjustments, the auditor’s year end report and the absence of footnotes.

 

 

8.1.3                Certificates.  (a) Contemporaneously with the furnishing of a copy of each annual audit report and of each set of quarterly statements provided for in this Section 8.1, deliver a certificate of the Company dated the date of delivery of such annual report or such quarterly statements and signed by an Authorized Officer, to the effect that no Event of Default or Unmatured Event of Default has occurred and is continuing, or, if there is any such event, describing it and the steps, if any, being taken to cure it and containing a computation of, and showing compliance with, each of the financial ratios and restrictions contained in this Section 8 and (b) contemporaneously with the furnishing of each annual audit report and each set of quarterly statements provided for in Section 8.1, deliver a Pricing Certificate; provided, that any change to pricing determined after the Company delivers such Pricing Certificate in connection with the audited financial statements pursuant to Section 8.1.1 shall apply retroactively to the date that is 50 days after the end of the applicable fiscal year; provided, further, that if such retroactive application would result in any increase in pricing, such retroactive increase will be deemed not to result in any Event of Default or Unmatured Event of Default hereunder.

 

8.1.4                Certain Notices.  Forthwith upon learning of the occurrence of any of the following, provide written notice thereof, describing the same and the steps being taken by the Company or the Subsidiary affected with respect thereto:

 

(i)                                  the occurrence of an Event of Default or an Unmatured Event of Default;

 

(ii)                              the institution of any Litigation Action; provided, that, the Company need not give notice of any new Litigation Action unless such Litigation Action, together with all other pending Litigation Actions, could reasonably be expected to have a Material Adverse Effect;

 

(iii)                          the entry of any judgment or decree against the Company or any Subsidiary if the aggregate amount of all judgments and decrees then outstanding against the Company and all Subsidiaries exceeds $50,000,000 after deducting (i) the amount with respect to which the Company or any Subsidiary is insured and with respect to which the insurer has not denied coverage in writing and (ii) the amount for which the Company or any Subsidiary is otherwise indemnified if the terms of such indemnification are satisfactory to the Agent and the Required Banks;

 

(iv)                          the occurrence of a Reportable Event with respect to any Plan; the institution of any steps by the Company, any ERISA Affiliate, the PBGC or any other Person to terminate any Plan; the institution of any steps by the Company or any ERISA Affiliate to withdraw from any Plan; the incurrence of any material increase in the contingent liability of the Company or any Subsidiary with respect to any post-retirement welfare benefits; the failure of the Company or any other Person to make a required contribution to a Plan if such failure is sufficient to give rise to a lien under Section 303(k) of ERISA or a determination is made that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA);

 

 

provided, however, that no notice shall be required of any of the foregoing unless the circumstance could reasonably be expected to have a Material Adverse Effect; or

 

(v)                              the occurrence of a material adverse change in the business, credit, operations or financial condition of the Company and its Subsidiaries taken as a whole.

 

8.1.5                Other Information.  From time to time provide such other information concerning the Company and its Subsidiaries (not including reports and other materials to the extent filed with the Securities and Exchange Commission) as any Bank or the Agent may reasonably request.

 

Financial information required to be delivered pursuant to Sections 8.1.1 and 8.1.2 above shall be deemed to have been delivered if such information, or one or more annual or quarterly reports containing such information, shall have been posted by the Agent on any Platform (as defined herein) or similar site to which the Banks have been granted access or such reports shall be available on the website of the Securities and Exchange Commission at http://www.sec.gov or on the Company’s website at http://www.ilfc.com; provided, that the Company shall provide paper copies of such financial information if requested by the Agent or any Bank.  Information, reports or certificates required to be delivered pursuant to this Section 8.1 may be delivered by electronic communications pursuant to procedures approved by the Administrative Agent.

 

Section 8.2.                            Existence.  (a) Maintain and preserve, and, subject to the first proviso in Section 8.9, cause each Subsidiary to maintain and preserve, its respective existence as a corporation or other form of business organization, as the case may be, and (b) take all reasonable action to maintain all rights, privileges, licenses, patents, patent rights, copyrights, trademarks, trade names, franchises and other authority, except in each case (other than with respect to the Company in connection with clause (a) above) to the extent that failure to do so could not reasonably be expected to result in a Material Adverse Effect; provided, however, that notwithstanding anything to the contrary herein, (a) any Subsidiary may be merged or consolidated with or into (i) any other Subsidiary or (ii) into the Company (with the Company as the surviving corporation) and (b) any Subsidiary may be converted from one form of business organization into any other form of business organization.  In addition, notwithstanding anything to the contrary herein, the Company may merge, consolidate with or transfer all or substantially all of its assets to another newly created, Wholly-owned Subsidiary of AIG (any such merger, consolidation or transfer in compliance herewith, including (1) and (2) below, an “AIG Reorganization Transaction”) so long as, (1) such newly created subsidiary has no Indebtedness that would not be permitted under this Agreement prior to any such merger, consolidation or transfer and (2) to the extent the Company is not the resulting or surviving entity, such subsidiary expressly assumes all of the Company’s obligations for the payment or repayment of borrowed money (including deposits and reimbursement obligations arising from drawings pursuant to letters of credit) that are in the form of, or represented by, a bond, note, certificated debt security or other debt security or that are documented by a term loan agreement, revolving loan agreement or similar credit agreement, including for the avoidance of doubt all of the Company’s obligations under this Agreement, which assumption of the Company’s

 

 

obligations under this Agreement shall be effected pursuant to documentation reasonably satisfactory to the Agent, it being understood that each Bank agrees that any such AIG Reorganization Transaction that complies with clauses (1) and (2) hereof shall be permitted under this Section 8.2 and Sections 10.1 and 12.14 hereof without any further consent required from any such Bank; provided, that, to the extent any Person assumes and relieves all or substantially all of the Company’s obligations for the payment or repayment of borrowed money (including deposits and reimbursement obligations arising from drawings pursuant to letters of credit) that are in the form of, or represented by, a bond, note, certificated debt security or other debt security or that are documented by a term loan agreement, revolving loan agreement or similar credit agreement, all of the Company’s obligations under this Agreement shall be assumed by such Person, which assumption of the Company’s obligations under this Agreement shall be effected pursuant to documentation reasonably satisfactory to the Agent.

 

Section 8.3.                            Nature of Business.  Subject to Section 8.2, engage on a consolidated basis with its Subsidiaries in substantially the same fields of business as it and its Subsidiaries on a consolidated basis are engaged in on the date hereof (or fields of business related or ancillary thereto).

 

Section 8.4.                            Books, Records and Access.

 

(a)                               Maintain, and cause each Subsidiary to maintain in all material respects complete and accurate books and records in which full and correct entries in all material respects and in conformity with generally accepted accounting principles in the United States of AmericaGAAP shall be made of all dealings and transactions in relation to its respective business and activities.

 

(b)                              Permit, and cause each Subsidiary to permit, access by the Agent and each Bank to the books and records of the Company and such Subsidiary during normal business hours, and permit, and cause each Subsidiary to permit, the Agent and each Bank to make copies of such books and records upon reasonable notice and as often as may be reasonably requested.

 

Section 8.5.                            Insurance.  Maintain, and cause each Subsidiary to maintain, such insurance as is described in Section 7.11.

 

Section 8.6.                            Repair.  Maintain, preserve and keep, and cause each Subsidiary to maintain, preserve and keep, its properties in good repair, working order and condition, ordinary wear and tear excepted, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.  In the case of properties leased by the Company or any Subsidiary to lessees, the Company may satisfy its obligations related to such properties under the previous sentence by contractually requiring, or by causing each Subsidiary to contractually require, such lessees to perform such obligations.

 

Section 8.7.                            Taxes.  Pay or cause to be paid, and cause each Subsidiary to pay, or cause to be paid, prior to the imposition of any penalty or fine, all of its Taxes, unless and only to the extent that the Company or such Subsidiary, as the case may be, is contesting any such Taxes in good faith and by appropriate proceedings and the Company or such Subsidiary has set aside on its books such reserves or other appropriate provisions therefor as may be

 

 

required by generally accepted accounting principles in the United States of AmericaGAAP, except where failure to pay such Taxes, individually or in the aggregate, cannot reasonably be expected to have a Material Adverse Effect.

 

Section 8.8.                            Compliance.  Comply, and cause each Subsidiary to comply with all statutes (including without limitation ERISA) and governmental rules and regulations applicable to it except to the extent noncompliance could not reasonably be expected to have a Material Adverse Effect.

 

Section 8.9.                            Sale of Assets.  Not, and not permit any Subsidiary to, transfer, convey, lease (except for in the ordinary course of business) or otherwise dispose of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole; provided, however, that any Wholly-owned Subsidiary may sell, transfer, convey, lease or assign all or a substantial part of its assets to the Company or another Wholly-owned Subsidiary if immediately thereafter and after giving effect thereto no Event of Default or Unmatured Event of Default shall have occurred and be continuing; provided, further that this Section 8.9 shall not prohibit any transaction otherwise permitted by Section 8.2.

 

Section 8.10.                    Consolidated Indebtedness to Shareholder’s Equity.  Not permit the ratio of Consolidated Indebtedness to Shareholder’s Equity, (i) from and including the date immediately following the Transaction Closing Date to December 30, 2014, to exceed 400% at any time (such ratio600%, and (ii) from and including December 31, 2014 to October 9, 2015, to exceed 570% (such ratios to be calculated in a manner consistent with the calculations set forth on Schedule 1 to Exhibit C).

 

Section 8.11.                    Interest Coverage Ratio.  Not permit the Interest Coverage Ratio on the last day of any quarter of any fiscal year of the Company to be less than 150200%.

 

Section 8.12. [Intentionally Omitted].

 

Section 8.12.                   Unencumbered Assets. Not permit the ratio of (A) Unencumbered Assets to (B) the aggregate outstanding principal amount of AerCap’s consolidated unsecured Financial Indebtedness minus, to the extent included in Financial Indebtedness, the aggregate amount outstanding of Hybrid Capital Securities, in each case on the last day of any quarter of any fiscal year of AerCap to be less than 135%.

 

Section 8.13.                    Restricted Payments.  Not declare or pay any dividends whatsoever or make any distribution on any capital stock of the Company (except in shares of, or warrants or rights to subscribe for or purchase shares of, capital stock of the Company), and not permit any Subsidiary to, make any payment to acquire or retire shares of capital stock of the Company, in each case at any time when (i) an Event of Default as described in Section 10.1 has occurred and is continuing and there are Committed Loans outstanding hereunder or (ii) an Event of Default as described in Section 10.1.1 has occurred and is continuing and there are no Committed Loans outstanding hereunder; provided, however, that notwithstanding the foregoing, this Section 8.13 shall not prohibit (x) the payment of dividends on any of the Company’s market auction preferred stock that was sold to the public pursuant to an effective registration statement

 

 

under the Securities Act of 1933 or (y) the payment of dividends within 30 days of the declaration thereof if such declaration was not prohibited by this Section 8.13.

 

Section 8.14.                    Liens.  Not, and not permit AerCap or any AerCap Subsidiary to, create or permit to exist any Lien upon or with respect to any of its properties or assets of any kind, now owned or hereafter acquired, or on any income or profits therefrom, except for:

 

(a)                               Liens existing on January 31, 2011the Transaction Closing Date that are reflected in the consolidated financial statements of AerCap or the Company, in each case dated prior to such date;

 

(b)                              Liens to secure the payment of all or any part of the purchase price of any property or assets or to secure any Indebtedness incurred by the CompanyAerCap or aan AerCap Subsidiary to finance the acquisition of any property or asset.  For the avoidance of doubt, Liens securing Indebtedness relating to ECA Financings or Eximbank financings shall be permitted hereunder;

 

(c)                               Liens securing the Indebtedness of aan AerCap Subsidiary owing to the CompanyAerCap or to aan AerCap Wholly-owned Subsidiary;

 

(d)                             Liens on property of a Person existing at the time such Person is merged into or consolidated with the CompanyAerCap or aan AerCap Subsidiary or at the time of a purchase, lease or other acquisition of the properties of a Person as an entirety or substantially as an entirety by the CompanyAerCap or aan AerCap Subsidiary; provided, that, any such Lien shall not extend to or cover any assets or properties of the CompanyAerCap or such AerCap Subsidiary owned by the CompanyAerCap or such AerCap Subsidiary prior to such merger, consolidation, purchase, lease or acquisition, unless otherwise permitted under this Section 8.14;

 

(e)                               leases, subleases or licenses granted to others in the ordinary and usual course of the Company’sAerCap’s business;

 

(f)                                easements, rights of way, restrictions and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of the CompanyAerCap or any AerCap Subsidiary;

 

(g)                              bankers’ Liens arising by law or by contract in the ordinary and usual course of the Company’sAerCap’s business;

 

(h)                              Liens incurred or deposits made in the ordinary course of business in connection with surety and appeal bonds, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); provided, however, that the obligation so secured is not overdue or is being contested in good faith and by appropriate proceedings diligently pursued;

 

 

(i)                                  any replacement or successive replacement in whole or in part of any Lien referred to in the foregoing clauses (a) to (h), inclusive; provided, however, that the principal amount of any Indebtedness secured by the Lien shall not be increased and the principal repayment schedule and maturity of such Indebtedness shall not be extended and (i) such replacement shall be limited to all or a part of the property which secured the Lien so replaced (plus improvements and construction on such property) or (ii) if the property which secured the Lien so replaced has been destroyed, condemned or damaged and pursuant to the terms of the Lien other property has been substituted therefor, then such replacement shall be limited to all or part of such substituted property;

 

(j)                                  Liens created by or resulting from any litigation or other proceeding which is being contested in good faith by appropriate proceedings, including Liens arising out of judgments or awards against the CompanyAerCap or any AerCap Subsidiary with respect to which the CompanyAerCap or such AerCap Subsidiary is in good faith prosecuting an appeal or proceedings for review; Liens incurred by the CompanyAerCap or any AerCap Subsidiary for the purpose of obtaining a stay or discharge in the course of any litigation or other proceeding to which the CompanyAerCap or such AerCap Subsidiary is a party; or Liens created by or resulting from any litigation or other proceeding that would not result in an Event of Default hereunder;

 

(k)                              carrier’s, warehouseman’s, hangar keeper’s, mechanic’s, repairer’s, landlord’s and materialmen’s Liens, Liens for Taxes, assessments and other governmental charges and other Liens arising in the ordinary course of business, by operation of law or under customary terms of repair or modification agreements or any engine or parts-pooling arrangements, in each case securing obligations that are not incurred in connection with the obtaining of any advance or credit and which are either not overdue or are being contested in good faith and by appropriate proceedings diligently pursued; and

 

(l)                                  other Liens securing Indebtedness of the CompanyAerCap or any AerCap Subsidiary in an aggregate amount which, together with all other outstanding Indebtedness of the Company and the Subsidiaries secured by Liens not listed in clauses (a) through (k) of this Section 8.14, does not at the time exceed 30% of the Consolidated Tangible Net Assets of the Company as shown on its audited consolidated financial statements; provided that at the time such Indebtedness is incurred (or, in the case of unsecured Indebtedness that is subsequently secured by Liens, at the time such Indebtedness becomes secured) the ratio of (A) Unencumbered Assets  as of the end of the  fiscal year precedingmost recently ended fiscal period for which financial statements have been delivered pursuant to Section 8.1 (except that (i) “cash and cash equivalents” and Financial Indebtedness shall be measured on the applicable date of determination on a pro forma basis, (ii) any Aircraft Assets acquired subsequent to such date may, at the Company’s option, be included in the determination of Unencumbered Assets valued as of the date of acquisition and as determined by the Company in good faith and (iii) if the outstanding amount of Financial Indebtedness on the applicable date of determination has been reduced since the end of the most recently ended fiscal period for which financial statements have been delivered pursuant to Section 8.1 with the proceeds of any sale or other disposition of Aircraft Assets, the book value of such Aircraft Assets sold or

 

 

otherwise disposed of shall be excluded) to (B) the aggregate outstanding principal amount of AerCap’s consolidated unsecured Financial Indebtedness on the date of determination  on a pro forma basis minus, to the extent included in Financial Indebtedness as of such date, the aggregate amount outstanding of Hybrid Capital Securities, is not less than 135%.

 

 

Section 8.15.                    Use of Proceeds.  Not permit any proceeds of the Committed Loans to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time; or for the purpose, whether immediate, incidental or ultimate, of acquiring directly or indirectly any of the outstanding shares of voting stock of any corporation which (i) has announced that it will oppose such acquisition or (ii) has commenced any litigation which alleges that any such acquisition violates, or will violate, applicable law.

 

Section 8.16.                   [Intentionally Omitted.]Additional Material Indebtedness.  In the event that the Company or any of its Subsidiaries shall, on or after October 9, 2012, incur any Indebtedness in an amount equal to or greater than $50.0 million outstanding under any single credit facility or other agreement not in effect on the Closing Date (any such Indebtedness in excess of such threshold being “Additional Material Indebtedness”), and in any such case, the terms of such Additional Material Indebtedness shall restrict the incurrence of Liens by the Company and its Subsidiaries securing the Company’s Indebtedness under this Agreement (as in effect on the date hereof) (any provision of such Additional Material Indebtedness that is so restrictive, an “Additional Indebtedness Lien Covenant”), and such Additional Indebtedness Lien Covenant is more restrictive than the provisions of Section 8.14, taken as a whole, then such Additional Indebtedness Lien Covenant shall specifically permit the Company to incur Liens to secure the aggregate amount of Indebtedness and other obligations arising under or in connection with this Agreement as in effect on the date the Company or any of its Subsidiaries incur such Additional Material Indebtedness; provided, that (i) this Section 8.16 shall not prohibit or limit any Additional Indebtedness Lien Covenant (1) if such Additional Indebtedness Lien Covenant, considered as a whole with the other provisions governing such Additional Material Indebtedness, is not more restrictive than the provisions of Section 8.14, taken as a whole; (2) incurred or provided in favor of any holder of Additional Material Indebtedness in respect of capital leases, synthetic lease obligations and purchase money obligations for fixed or capital assets in the ordinary course of business or solely to the extent any such Additional Indebtedness Lien Covenant relates to the property financed by or the subject of such Additional Material Indebtedness and proceeds thereof; or (3) set forth in any credit facility or other agreement amending, extending or refinancing any Indebtedness (including any Indebtedness outstanding as of the Closing Date) if the applicable Additional Indebtedness Lien Covenant is not more restrictive than the applicable restriction set forth in the Indebtedness being amended, extended or refinanced; and (ii) in the event such Additional Indebtedness Lien Covenant shall apply only to a particular Subsidiary (or a particular Subsidiary and its Subsidiaries) and such Subsidiary and such Subsidiary’s Subsidiaries, as the case may be, do not own all or substantially all of the consolidated assets of the Company and its Subsidiaries, then the requirements of this Section 8.16 shall not apply; provided, further, the lien covenants in the Company’s indentures and other credit arrangements existing as of the Closing Date shall be deemed not to be more restrictive, taken as a whole, than Section 8.14.

 

Section 8.17.                   Limitation on Issuances of Guarantees of Indebtedness.

 

(a)                              From and after the Transaction Closing Date, neither the Company nor AerCap will cause or permit any AerCap Subsidiary to be an obligor or a guarantor under the Acquired Company Acquisition Facility, unless such AerCap Subsidiary is a

 

 

Guarantor or executes and delivers to the Agent a Guarantee Assumption Agreement, concurrently with such AerCap Subsidiary becoming an obligor or a guarantor under the Acquired Company Acquisition Facility.

 

(b)                             From and after the Transaction Closing Date, neither the Company nor AerCap will cause or permit any AerCap Subsidiary (other than a Securitization Subsidiary or an Obligor), directly or indirectly, to guarantee any Capital Markets Debt or unsecured Credit Facility (other than Standard Securitization Undertakings in connection with a Qualified Securitization Financing) of AerCap or any other Obligor (other than the Company or any Subsidiary) unless such AerCap Subsidiary, within five Business Days of the date on which it guarantees Capital Markets Debt or an unsecured Credit Facility of AerCap or any other Obligor (other than the Company or any Subsidiary), executes and delivers to the Agent a Guarantee Assumption Agreement.

 

Section 8.18.                   Subsidiary Guarantors.  In each case to the extent such Person is not a party to this Agreement on the Transaction Closing Date, the Company and AerCap will cause any AerCap Subsidiary that is required under Section 8.17 to become a Subsidiary Guarantor to (i) become a “Subsidiary Guarantor” hereunder pursuant to a Guarantee Assumption Agreement and (ii) deliver such proof of corporate or similar action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by AerCap pursuant to the First Amendment.

 

SECTION 9.                                   CONDITIONS TO LENDING.

 

Section 9.1.                            Conditions Precedent to All Committed Loans.  Each Bank’s obligation to make each Committed Loan on the date of original borrowing thereof is subject to the following conditions precedent:

 

9.1.1                No Default.  (a) No Event of Default or Unmatured Event of Default has occurred and is continuing or will result from the making of such Committed Loan, (b) the representations and warranties contained in Section 7 are true and correct in all material respects as of the date of such requested Committed Loan, with the same effect as though made on the date of such Committed Loan, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date (it being understood that each request for a Committed Loan shall automatically constitute a representation and warranty by the Company that, as at the requested date of such Committed Loan, (x) all conditions under this Section 9.1.1 shall be satisfied and (y) after the making of such Committed Loan the aggregate principal amount of all outstanding Committed Loans will not exceed the Aggregate Commitment).

 

9.1.2                Documents.  The Agent shall have received (a) a certificate signed by an Authorized Officer of the Company as to compliance with Section 9.1.1, which requirement shall be deemed satisfied by the submission of a properly completed Committed Loan Request and (b) such other documents as the Agent may reasonably request in support of such Committed Loan.

 

 

Section 9.2.                            Conditions to the Availability of the Commitments.  The obligations of each Bank hereunder are subject to the satisfaction of each of the following conditions precedent, and the Banks’ Commitments shall not become available until the date on which the Agent has determined that each of the following conditions precedent shall have been satisfied or, to the extent not so satisfied, waived in writing by the Required Banks (the “Closing Date”):

 

9.2.1                Revolving Credit Agreement.  The Agent shall have received this Agreement duly executed and delivered by each of the Banks and the Company and each of the Banks shall have received a fully executed Committed Note, if such Committed Note is requested by any Bank pursuant to Section 11.11.

 

9.2.2                Evidence of Corporate Action.  The Agent shall have received certified copies of all corporate actions taken by the Company to authorize this Agreement and the Committed Notes.

 

9.2.3                Incumbency and Signatures.  The Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Company certifying the names of the officer or officers of the Company authorized to sign this Agreement, the Committed Notes and the other documents provided for in this Agreement to be executed by the Company, together with a sample of the true signature of each such officer (it being understood that the Agent and each Bank may conclusively rely on such certificate until formally advised by a like certificate of any changes therein).

 

9.2.4                Good Standing Certificates.  The Agent shall have received such good standing certificates of state officials with respect to the incorporation of the Company, or other matters, as the Agent or the Banks may reasonably request.

 

9.2.5                Opinions of Company Counsel.  The Agent shall have received favorable written opinions of Gibson, Dunn & Crutcher LLP, counsel for the Company, in form satisfactory to the Administrative Agent, and the General Counsel or Deputy General Counsel or any Corporate Counsel of the Company, in form satisfactory to the Administrative Agent.

 

9.2.6                Opinion of Agent’s Counsel.  The Agent shall have received a favorable written opinion of Shearman & Sterling LLP, special New York counsel to the Agent, with respect to such legal matters as the Agent reasonably may require.

 

9.2.7                Other Documents.  The Agent shall have received such other certificates and documents as the Agent or the Banks reasonably may require (including, without limitation, such documents and information as is necessary to satisfy its “know your customer” or related requirements).

 

9.2.8                Fees.  The Agent shall have received (a) for the account of the Agent the Agent’s fees payable on the Closing Date pursuant to Section 3.5 hereof and (b) all accrued fees payable on the Closing Date owing to the Agent, Lead Arrangers and Banks from the Company pursuant to written agreements as in effect on the date hereof.

 

 

9.2.9                Termination of Commitments. Evidence satisfactory to the Agent that the commitments under the Existing Credit Agreement have been terminated and all accrued fees, expenses, interest, principal and other amounts thereunder have been paid, and each of the Banks that is a party to the Existing Credit Agreement hereby waives any requirement of prior notice in respect of the termination of commitments or prepayment of advances under the Existing Credit Agreement.

 

9.2.10        Material Adverse Change.  The Agent shall have received a certificate of an Authorized Officer confirming that since the date of the audited financial statements identified in Section 7.4 hereof, there shall not have occurred any material adverse change in the business, credit, operations or financial condition of the Company and its Subsidiaries taken as a whole.

 

SECTION 10.                           EVENTS OF DEFAULT AND THEIR EFFECT.

 

Section 10.1.                    Events of Default.  Each of the following shall constitute an Event of Default under this Agreement:

 

10.1.1        Non-Payment of the Committed Loans, etc.  Default in the payment when due of any principal of any Committed Loan or default and continuance thereof for three Business Days in the payment when due of any interest on any Committed Loan, any fees or any other amounts payable by the Company hereunder.

 

10.1.2        Non-Payment of Other Indebtedness for Borrowed Money.  (a) Default in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any principal of, interest on or fees incurred in connection with any other Indebtedness of, or Guaranteed by, the Company, AerCap or any Significant Subsidiary Guarantor beyond the period of grace, if any, provided in the instrument or agreement pursuant to which such Indebtedness was created (except (i) any such Indebtedness of any AerCap Subsidiary to the CompanyAerCap or to any other AerCap Subsidiary and (ii) any Indebtedness hereunder) and, if a default in the payment of interest or fees, continuance of such default for five days, in the case of interest, or 30 days, in the case of fees, or (b) default in the performance or observance of any obligation or condition with respect to any such other Indebtedness ifor (other than in respect of any Indebtedness secured by Liens over Aircraft Assets or the Equity Interests of an AerCap Subsidiary owning Aircraft Assets) any other event shall occur, the effect of suchwhich default (subject to any applicable grace period) is to accelerate the maturity of anyor other event is to cause, or to permit the holder or holders of such Indebtedness  or beneficiary or beneficiaries of such Guaranty (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, (with or without the giving of notice, the lapse of time or both but in each case after any applicable period of grace, if any, shall have lapsed) such Indebtedness to become due prior to its stated maturity or the obligations under such Guaranty to become payable; provided, however, that the aggregate principal amount of all Indebtedness as to which there has occurred any default as described in clause (a) or (b) above shall equal or exceed $50,000,000; provided further, however, that clause (b) above shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness.

 

 

10.1.3        Bankruptcy, Insolvency, etc.  The Company or any Significant Subsidiary becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or the Company or any Significant Subsidiary applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for the Company or such Significant Subsidiary or a material portion of the property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for the Company or any Significant Subsidiary or for a substantial part of the property of any thereof and is not discharged within 60 days; or any warrant of attachment or similar legal process is issued against any substantial part of the property of the Company or any of its Significant Subsidiaries which is not released within 60 days of service; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding (except the voluntary dissolution, not under any bankruptcy or insolvency law, of a Significant Subsidiary), is commenced in respect of the Company or any Significant Subsidiary, and, if such case or proceeding is not commenced by the Company or such Significant Subsidiary it is consented to or acquiesced in by the Company or such Significant Subsidiary or remains for 60 days undismissed; or the Company or any Significant Subsidiary takes any corporate action to authorize, or in furtherance of, any of the foregoing.

 

10.1.4        Non-Compliance with this Agreement.  Failure by the Company to comply with or to perform any of the Company’s covenants herein or any other provision of this Agreement (and not constituting an Event of Default under any of the other provisions of this Section 10.1) and continuance of such failure for 60 days (or, if the Company failed to give notice of such noncompliance or nonperformance pursuant to Section 8.1.4 within one Business Day after obtaining actual knowledge thereof, 60 days less the number of days elapsed between the date the Company obtained such actual knowledge and the date the Company gives the notice pursuant to Section 8.1.4, but in no event less than one Business Day) after notice thereof to the Company from the Agent, any Bank, or the holder of any Note.

 

10.1.5        Representations and Warranties.  Any representation or warranty made by the Company herein or any Guarantor in any Guarantee Assumption Agreement is untrue or misleading in any material respect when made or deemed made; or any schedule, statement, report, notice, or other writing furnished by the Company to the Agent or any Bank is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified; or any certification made or deemed made by the Company to the Agent or any Bank is untrue or misleading in any material respect on or as of the date made or deemed made.

 

10.1.6        Employee Benefit Plans.  The occurrence of any of the following events, provided, that, such event would reasonably be expected to require payment by the Company or a Subsidiary of an amount in excess of $25,000,000:  (i) the institution by the Company or any ERISA Affiliate of steps to terminate any Plan, (ii) the institution by the PBGC of steps to terminate any Plan; or (iii) a contribution failure occurs with respect

 

 

to a Plan sufficient to give rise to a lien under Section 303(k) of ERISA securing an amount in excess of $25,000,000.

 

10.1.7        Judgments.  There shall be entered against the Company or any Subsidiary one or more judgments or decrees in excess of $50,000,000 in the aggregate at any one time outstanding for the Company and all Subsidiaries and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof, excluding those judgments or decrees for and to the extent to which the Company or any Subsidiary (i) is insured and with respect to which the insurer has not denied coverage in writing or (ii) is otherwise indemnified if the terms of such indemnification are satisfactory to the Required Banks.

 

Section 10.2.                    Effect of Event of Default.  If any Event of Default described in Section 10.1.3 shall occur, the Commitments (if they have not theretofore terminated) shall immediately terminate and all Committed Loans and all interest and other amounts due hereunder shall become immediately due and payable, all without presentment, demand or notice of any kind; and, in the case of any other Event of Default, the Agent may, and upon written request of the Required Banks shall, declare the Commitments (if they have not theretofore terminated) to be terminated and all Committed Loans and all interest and other amounts due hereunder to be due and payable, whereupon the Commitments (if they have not theretofore terminated) shall immediately terminate and all Committed Loans and all interest and other amounts due hereunder shall become immediately due and payable, all without presentment, demand or notice of any kind.  The Agent shall promptly advise the Company and each Bank of any such declaration, but failure to do so shall not impair the effect of such declaration.

 

SECTION 11.                           THE AGENT.

 

Section 11.1.                    Authorization and Authority.  Each Bank hereby irrevocably appoints Citibank, N.A. to act on its behalf as the Agent hereunder and under the Committed Notes and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.  Subject to the provisions of Section 11.4, the Agent will take such action permitted by any agreement delivered in connection with this Agreement as may be requested in writing by the Required Banks or if required under Section 12.1, all of the Banks.  Other than as expressly set forth herein, the Agent shall promptly remit in immediately available funds to each Bank its share of all payments received by the Agent for the account of such Bank, and shall promptly transmit to each Bank (or share with each Bank the contents of) each notice it receives from the Company pursuant to this Agreement.  Other than Section 11.9, the provisions of this Section 11 are solely for the benefit of the Agent and the Banks, and the Company shall have no rights as a third party beneficiary of any of such provisions.

 

Section 11.2.                    Agent Individually.  (a) The Person serving as the Agent, if a Bank hereunder, shall have the same rights and powers in its capacity as a Bank as any other Bank and may exercise the same as though it were not the Agent and the term “Bank” or “Banks” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the 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 Company or any Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to the Banks.

 

(b)                              Each Bank understands that the Person serving as Agent, acting in its individual capacity, and its Affiliates (collectively, the “Agent’s Group”) are engaged in a wide range of financial services and businesses (including investment management, financing, securities trading, corporate and investment banking and research) (such services and businesses are collectively referred to in this Section 11.2 as “Activities”) and may engage in the Activities with or on behalf of the Company or its Affiliates.  Furthermore, the Agent’s Group may, in undertaking the Activities, engage in trading in financial products or undertake other investment businesses for its own account or on behalf of others (including the Company and its Affiliates and including holding, for its own account or on behalf of others, equity, debt and similar positions in the Company or its Affiliates), including trading in or holding long, short or derivative positions in securities, loans or other financial products of one or more of the Company and its Affiliates.  Each Bank understands and agrees that in engaging in the Activities, the Agent’s Group may receive or otherwise obtain information concerning the Company and its Affiliates (including information concerning the ability of the Company to perform its obligations hereunder) which information may not be available to any of the Banks that are not members of the Agent’s Group.  None of the Agent nor any member of the Agent’s Group shall have any duty to disclose to any Bank or use on behalf of the Banks, and shall not be liable for the failure to so disclose or use, any information whatsoever about or derived from the Activities or otherwise (including any information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Company) or to account for any revenue or profits obtained in connection with the Activities, except that the Agent shall deliver or otherwise make available to each Bank such documents as are expressly required by this Agreement to be transmitted by the Agent to the Banks.

 

(c)                               Each Bank further understands that there may be situations where members of the Agent’s Group or their respective customers (including the Company and its Affiliates) either now have or may in the future have interests or take actions that may conflict with the interests of any one or more of the Banks (including the interests of the Banks hereunder).  Each Bank agrees that no member of the Agent’s Group is or shall be required to restrict its activities as a result of the Person serving as Agent being a member of the Agent’s Group, and that each member of the Agent’s Group may undertake any Activities without further consultation with or notification to any Bank.  None of (i) this Agreement, (ii) the receipt by the Agent’s Group of information (including “Information” as defined in Section 12.6) concerning the Company or its Affiliates (including information concerning the ability of the Company to perform its obligations hereunder) nor (iii) any other matter shall give rise to any fiduciary, equitable or contractual (other than the administrative duties of the Agent expressly provided hereunder) duties (including without limitation any duty of trust or confidence) owing by the Agent or any member of the Agent’s Group to any Bank including any such duty that would prevent or restrict the Agent’s Group from acting on behalf of customers (including the Company or its Affiliates) or for its own account.

 

 

Section 11.3.                    Indemnification.  The Banks agree to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Company and without releasing the Company from its obligation to do so, to the extent applicable), ratably according to their respective Percentages (determined at the time such indemnity is sought), from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses which may at any time (including, without limitation, at any time following the repayment of the Committed Loans) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of this Agreement, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided, that, no Bank shall be liable for the payment to the Agent of any portion of such actions, causes of action, suits, losses, liabilities, damages and expenses resulting from the Agent’s or its employees’ or agents’ gross negligence or willful misconduct.  Without limiting the foregoing, subject to Section 12.5 each Bank agrees to reimburse the Agent promptly upon demand for its ratable share (determined at the time such reimbursement is sought) of any out-of-pocket expenses (including reasonable counsel fees) incurred by the Agent in such capacity in connection with the preparation, execution or enforcement of, or legal advice in respect of rights or responsibilities under, this Agreement or any amendments or supplements hereto or thereto to the extent that the Agent is not reimbursed for such expenses by the Company.  All obligations provided for in this Section 11.3 shall survive repayment of the Committed Loans, cancellation of the Committed Notes or any termination of this Agreement.

 

Section 11.4.                    Action on Instructions of the Required Banks.  As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Committed Loans), the Agent shall not be required to exercise any discretion or take any action, but the Agent shall in all cases be fully protected in acting or refraining from acting upon the written instructions from (i) the Required Banks, except for instructions which under the express provisions hereof must be received by the Agent from all Banks and (ii) in the case of such instructions, from all Banks.  In no event will the Agent be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law.  The relationship between the Agent and the Banks is and shall be that of agent and principal only and nothing herein contained shall be construed to constitute the Agent a trustee for any holder of a Committed Loan or of a participation therein nor to impose on the Agent duties and obligations other than those expressly provided for herein.

 

Section 11.5.                    Payments.  (a)The Agent shall be entitled to assume that each Bank has made its Committed Loan available in accordance with Section 2.2(c) unless such Bank notifies the Agent at its Notice Office prior to 11:00 a.m., New York City time, on the Funding Date for such Committed Loan that it does not intend to make such Committed Loan available, it being understood that no such notice shall relieve such Bank of any of its obligations under this Agreement.  If the Agent makes any payment to the Company on the assumption that a Bank has made the proceeds of such Committed Loan available to the Agent but such Bank has not in fact made the proceeds of such Committed Loan available to the Agent, such Bank shall pay to the Agent on demand an amount equal to the amount of such Bank’s Committed Loan, together with interest thereon for each day that elapses from and including such Funding Date to but excluding the Business Day on which the proceeds of such Bank’s Committed Loan become immediately available to the Agent at its Payment Office prior to 12:00 Noon, New York City 

 

 

time, at the Federal Funds Rate for each such day, based upon a year of 360 days.  A certificate of the Agent submitted to any Bank with respect to any amounts owing under this Section 11.5(a) shall be conclusive absent demonstrable error.  If the proceeds of such Bank’s Committed Loan are not made available to the Agent at its Payment Office by such Bank within three Business Days of such Funding Date, the Agent shall be entitled to recover such amount upon two Business Days’ demand from the Company, together with interest thereon for each day that elapses from and including such Funding Date to but excluding the Business Day on which such proceeds become immediately available to the Agent prior to 12:00 Noon, New York City time, at the rate per annum applicable to Base Rate Loans hereunder, based upon a year of 360 days.  Nothing in this paragraph (a) shall relieve any Bank of any obligation it may have hereunder to make any Committed Loan or prejudice any rights which the Company may have against any Bank as a result of any default by such Bank hereunder.

 

(a)                               The Agent shall be entitled to assume that the Company has made all payments due hereunder from the Company on the due date thereof unless it receives notification prior to any such due date from the Company that the Company does not intend to make any such payment, it being understood that no such notice shall relieve the Company of any of its obligations under this Agreement.  If the Agent distributes any payment to a Bank hereunder in the belief that the Company has paid to the Agent the amount thereof but the Company has not in fact paid to the Agent such amount, such Bank shall pay to the Agent on demand (which shall be made by facsimile or personal delivery) an amount equal to the amount of the payment made by the Agent to such Bank, together with interest thereon for each day that elapses from and including the date on which the Agent made such payment to but excluding the Business Day on which the amount of such payment is returned to the Agent at its Payment Office in immediately available funds prior to 12:00 Noon, New York City time, at the Federal Funds Rate for each such day, based upon a year of 360 days.  If the amount of such payment is not returned to the Agent in immediately available funds within three Business Days after demand by the Agent, such Bank shall pay to the Agent on demand an amount calculated in the manner specified in the preceding sentence after substituting the term “Base Rate” for the term “Federal Funds Rate”.  A certificate of the Agent submitted to any Bank with respect to amounts owing under this Section 11.5(b) shall be conclusive absent demonstrable error.

 

Section 11.6.                    Duties of Agent; Exculpatory Provisions.  (a)  The Agent’s duties hereunder are solely ministerial and administrative in nature and the Agent shall not have any duties or obligations except those expressly set forth herein.  Without limiting the generality of the foregoing, the Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, but shall be required to act or refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written direction of the Required Banks (or such other number or percentage of the Banks as shall be expressly provided for herein), provided, that, the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent or any of its Affiliates to liability or that is contrary to this Agreement or applicable law.

 

(b)                              The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Banks (or such other number or percentage of the Banks as shall be necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 12.1, 11.1 or 10.1) or (ii) in the absence of its 

 

 

own gross negligence, bad faith or willful misconduct.  The Agent shall be deemed not to have knowledge of any Unmatured Event of Default or Event of Default or the event or events that give or may give rise to any Unmatured Event of Default or Event of Default unless and until the Company or any Bank shall have given notice to the Agent describing such Event of Default and such event or events.

 

(c)                               Neither the Agent nor any member of the Agent’s Group shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty, representation or other information made or supplied by or on behalf of the Company or any of its Subsidiaries in or in connection with this Agreement or the Information Memorandum, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith or the adequacy, accuracy and/or completeness of the information contained therein, (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 Unmatured Event of Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document or the perfection or priority of any Lien or security interest created or purported to be created hereby or (v) the satisfaction of any condition set forth in Section 9 or elsewhere herein, other than (but subject to the foregoing clause (ii)) to confirm receipt of items expressly required to be delivered to the Agent.

 

(d)                             Nothing in this Agreement shall require the Agent or any of its Related Parties to carry out any “know your customer” or other checks in relation to any person on behalf of any Bank and each Bank confirms to the Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or any of its Related Parties.

 

Section 11.7.                    Reliance by Agent.  The 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 correct and to have been signed, sent or otherwise authenticated by the proper Person or Persons.  The 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 Committed Loan, that by its terms must be fulfilled to the satisfaction of a Bank, the Agent may presume that such condition is satisfactory to such Bank unless an officer of the Agent responsible for the transactions contemplated hereby shall have received notice to the contrary from such Bank prior to the making of such Committed Loan, and such Bank shall not have made available to the Agent such Bank’s ratable portion of the applicable Committed Loan.  The Agent may consult with legal counsel (who may be counsel for the Company), 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.

 

Section 11.8.                    Delegation of Duties.  The Agent may perform any and all of its duties and exercise its rights and powers hereunder by or through any one or more sub agents appointed by the Agent.  The 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.  Each such sub agent and the Related Parties of the Agent and each such sub agent shall be entitled to the benefits of all provisions of this Section 11 and Section 12.5 and subject to the duties and obligations of the Agent under the Agreement (as though such sub-agents were the “Agent” hereunder) as if set forth in full herein with respect thereto.  The Agent shall not be responsible for the negligence or misconduct of any sub-agent that it selects in the absence of gross negligence, bad faith or willful misconduct.

 

Section 11.9.                    Resignation of Agent.  The Agent may resign as Agent upon 30 days’ notice to the Banks and the Company.  Upon receipt of any such notice of resignation, the Required Banks shall have the right, in consultation with the Company, to appoint a successor reasonably acceptable to the Company (such consent of the Company not to be unreasonably withheld or delayed and not required if an Event of Default has occurred and is continuing) from among the Banks, which shall be a commercial bank organized under the laws of the United States of America or any State thereof or the District of Columbia or under the laws of another country which is doing business in the United States of America and having a combined capital, surplus and undivided profits of at least $1,000,000,000.  If no such successor shall have been so appointed by the Required Banks and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation (such 30-day period, the “Bank Appointment Period”), then the retiring Agent may on behalf of the Banks, appoint a successor Agent meeting the qualifications set forth above.  In addition and without any obligation on the part of the retiring Agent to appoint, on behalf of the Banks, a successor Agent, the retiring Agent may at any time upon or after the end of the Bank Appointment Period notify the Company and the Banks that no qualifying Person has accepted appointment as successor Agent and the effective date of such retiring Agent’s resignation.  Upon the resignation effective date established in such notice and regardless of whether a successor Agent has been appointed and accepted such appointment, the retiring Agent’s resignation shall nonetheless become effective and (i) the retiring Agent shall be discharged from its duties and obligations as Agent hereunder (other than with respect to its own gross negligence, bad faith or willful misconduct concerning any actions taken or omitted to be taken by it while it was Agent under this Agreement) and (ii) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Bank directly, until such time as the Required Banks appoint a successor Agent as provided for above in this paragraph.  Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties as Agent of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations as Agent hereunder (if not already discharged therefrom as provided above in this paragraph).  The fees payable by the Company to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor.  After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

 

Section 11.10.            Non-Reliance on Agent and Other Banks.  (a)  Each Bank confirms to the Agent, each other Bank and each of their respective Related Parties that it (i) possesses (individually or through its Related Parties) such knowledge and experience in financial and business matters that it is capable, without reliance on the Agent, any other Bank or 

 

 

any of their respective Related Parties, of evaluating the merits and risks (including tax, legal, regulatory, credit, accounting and other financial matters) of (x) entering into this Agreement, (y) making Committed Loans and other extensions of credit hereunder and (z) in taking or not taking actions hereunder and thereunder, (ii) is financially able to bear such risks and (iii) has determined that entering into this Agreement and making Committed Loans and other extensions of credit hereunder is suitable and appropriate for it.

 

(b)                              Each Bank acknowledges that (i) it is solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with this Agreement, (ii) that it has, independently and without reliance upon the Agent, any other Bank or any of their respective Related Parties, made its own appraisal and investigation of all risks associated with, and its own credit analysis and decision to enter into, this Agreement based on such documents and information, as it has deemed appropriate and (iii) it will, independently and without reliance upon the Agent, any other Bank or any of their respective Related Parties, continue to be solely responsible for making its own appraisal and investigation of all risks arising under or in connection with, and its own credit analysis and decision to take or not take action under, this Agreement based on such documents and information as it shall from time to time deem appropriate, which may include, in each case:

 

(i)                                  the financial condition, status and capitalization of the Company;

 

(ii)                              the legality, validity, effectiveness, adequacy or enforceability of this Agreement and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement;

 

(iii)                          determining compliance or non-compliance with any condition hereunder to the making of a Committed Loan and the form and substance of all evidence delivered in connection with establishing the satisfaction of each such condition;

 

(iv)                          the adequacy, accuracy and/or completeness of the Information Memorandum and any other information delivered by the Agent, any other Bank or by any of their respective Related Parties under or in connection with this Agreement, the transactions contemplated hereby and thereby or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement.

 

Section 11.11.            The Register; the Committed Notes.

 

(a)                               The Agent, acting on behalf of the Company, shall maintain at the Payment Office a register for the inscription of the names and addresses of Banks and the Commitments and Committed Loans of, and principal amounts and interest owing to, each Bank from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Company, the Banks, and the Agent may treat each Person whose name is inscribed in the Register as a Bank hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Company, the Agent, or any Bank at any reasonable time and from time to time upon reasonable prior notice.

 

(b)                              The Agent shall inscribe in the Register the Commitments and the Committed Loans from time to time of each Bank, the amount of each Bank’s participation in 

 

 

outstanding Committed Loans and each repayment or prepayment in respect of the principal amount of the Committed Loans of each Bank, the principal and other amounts owing from time to time by the Company in respect of each Committed Loan to each Bank of such Committed Loans and the dates on which the Loan Period for each such Committed Loan shall begin and end.  Any such inscription shall be conclusive and binding on the Company and each Bank, absent manifest or demonstrable error; provided, that, failure to make any such inscription, or any error in such inscription, shall not affect any of the Company’s obligations in respect of the applicable Committed Loans; and provided further, that, in such case, the Company and the Agent shall be entitled to continue to deal solely and directly with the Bank inscribed in the Register with respect to such Committed Loans.

 

(c)                               Each Bank shall record on its internal records the amount of each Committed Loan made by it and each payment in respect thereof; provided, that, in the event of any inconsistency between the Register and any Bank’s records, the inscriptions in the Register shall govern, absent manifest or demonstrable error.

 

(d)                             If so requested by any Bank by written notice to the Company (with a copy to Agent) at least two Business Days prior to the Closing Date or at any time thereafter, the Company shall execute and deliver to such Bank (and/or, if so specified in such notice, any Person who is an assignee of such Bank pursuant to Section 12.4.1 hereof) promptly after receipt of such notice, a Committed Note substantially in the form of Exhibit B hereto.

 

Section 11.12.            No Other Duties, etc.  Anything herein to the contrary notwithstanding, no Person acting as “Book Runner”, “Lead Arranger”, “Documentation Agent” or “Syndication Agent” listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement, except in its capacity, as applicable, as the Agent or as a Bank hereunder.

 

SECTION 12.                           GENERAL.

 

Section 12.1.                    Waiver; Amendments.  No delay on the part of the Agent, any Bank, or the holder of any Committed Loan in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy.  No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the Committed Notes shall in any event be effective unless the same shall be in writing and signed and delivered by the Company, the Agent and by the Non-Defaulting Banks having an aggregate Percentage of not less than the aggregate Percentage expressly designated herein with respect thereto or, in the absence of such designation as to any provision of this Agreement or the Committed Notes, by the Required Banks, and then any amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  No amendment, modification, waiver or consent (i) shall change the definition of “Required Banks” or “Percentage” in Section 1, amend, waive, change or otherwise modify the terms of Section 3.6, Section 5.2(a), Section 10.1.1, or this Section 12.1 or otherwise change the aggregate Percentage required to effect an amendment, modification, waiver or consent without the written consent of the Company and all Non-Defaulting Banks, (ii) shall modify or waive any of the conditions precedent specified in 

 

 

Section 9.1 for the making of any Committed Loan without the written consent of the Company and the Bank which is to make such Committed Loan or (iii) shall (other than in accordance with Section 12.9(a)) extend the scheduled maturity, increase the amount of, or reduce the principal amount of, or rate of interest on, reduce or waive any fee hereunder or extend the due date for or waive any amount payable under, any Commitment or Committed Loan without the written consent of the Company and the applicable Bank holding the Commitment or Committed Loan adversely affected thereby.  No provisions of Section 12 or any provision herein affecting the rights and duties of the Agent in its capacity as such shall be amended, modified or waived without the Agent’s written consent.

 

Section 12.2.                    Notices.

 

(a)                               Subject to paragraphs (b) through (f) of this Section 12.2, all notices, requests and demands to or upon the respective parties hereto to be effective shall be either (x) in writing (including by telecopy, encrypted or unencrypted) or (y) as and to the extent set forth in Section 12.2(b) and in the proviso to this Section 12.2(a) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered or, in the case of telecopy or e-mail notice, when received, addressed to the Company, the Agent or such Bank (or other holder) at its address shown across from its name on Schedule III hereto or at such other address as it may, by written notice received by the other parties to this Agreement, have designated as its address for such purpose; provided, that any notice, request or demand to or upon the Agent or the Banks pursuant to Sections 2.2(a) or 4.2 shall not be effective until received.

 

(b)                              The Company hereby agrees that, unless otherwise requested by the Agent, it will provide to the Agent all information, documents and other materials that it is obligated to furnish to the Agent pursuant to this Agreement, including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing, borrowing or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Unmatured Event of Default or Event of Default under this Agreement, (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any borrowing or other extension of credit hereunder or (v) initiates or responds to legal process (all such non-excluded information being referred to herein collectively as the “Communications”) by transmitting the Communications in an electronic/soft medium (with such Communications to contain any required signatures) in a format acceptable to the Agent to global.loans.support@citi.com (or such other e-mail address designated by the Agent from time to time); provided, that, if requested in writing by any Bank, the Company will provide to such Bank a hard copy of its financial statements required to be provided hereunder.

 

(c)                               Each party hereto agrees that the Agent may make the Communications available to the Banks by posting the Communications on DebtDomain or another relevant website, if any, to which each Bank and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent) (the “Platform”).  Nothing in this Section 12.2

 

 

shall prejudice the right of the Agent to make the Communications available to the Banks in any other manner specified in this Agreement.

 

(d)       The Company hereby acknowledges that certain of the Banks may be “public-side” Banks (i.e., Banks that do not wish to receive material non-public information with respect to the Company or its securities) (each, a “Public Bank”).  The Company hereby agrees that (i) Communications that are to be made available on the Platform to Public Banks 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, (ii) by marking Communications “PUBLIC,” the Company shall be deemed to have authorized the Agent and the Banks to treat such Communications as either publicly available information or not material information (although it may be sensitive and proprietary) with respect to the Company or its securities for purposes of United States Federal and state securities laws, (iii) all Communications marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Bank,” and (iv) the Agent shall be entitled to treat any Communications that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Bank.”

 

(e)        Each Bank agrees that e-mail notice to it (at the address provided pursuant to the next sentence and deemed delivered as provided in the next paragraph) specifying that Communications have been posted to the Platform shall constitute effective delivery of such Communications to such Bank for purposes of this Agreement.  Each Bank agrees (i) to notify the Agent in writing (including by electronic communication) from time to time to ensure that the Agent has on record an effective e-mail address for such Bank to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such e-mail address.

 

(f)        Each party hereto acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available,” (iii) none of the Agent, its affiliates nor any of their respective officers, directors, employees, agents, advisors or representatives (collectively, the “Citigroup Parties”) warrants the adequacy, accuracy or completeness of the Communications or the Platform, and each Citigroup Party expressly disclaims liability for errors or omissions in any Communications or the Platform, and (iv) no warranty of any kind, express, implied or statutory, including, without limitation, 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 Citigroup Party in connection with any Communications or the Platform.

 

Section 12.3.     Computations.

 

(a)        Subject to Section 12.3(b), where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, at any time and to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with generally accepted accounting principles in the United States of AmericaGAAP as in effect from time to time.  If

 

 

there should be any material change in generally accepted accounting principles in the United States of AmericaGAAP after the date hereof which materially affects the financial covenants in this Agreement, the parties hereto agree to negotiate in good faith appropriate revisions of such covenants (it being understood, however, that such covenants shall remain in full force and effect in accordance with their existing terms pending the execution by the Company and the Required Banks of any such amendment).

 

(b)        Notwithstanding the foregoing or any other provision of this Agreement, the adoption or issuance of any accounting standards after the Closing Date will not cause any rental obligation that was not or would not have been Capitalized Rentals prior to such adoption or issuance to be deemed Capitalized Rentals.

 

(c)        In the event that (i) any accounting standard that is adopted or issued after the Closing Date would, but for the provisions of Section 12.3(b), cause any rental obligation that was not or would not have been Capitalized Rentals prior to such adoption or issuance to be deemed Capitalized Rentals and (ii) the effect of Section 12.3(b) shall materially impact the calculation of the financial covenants in this Agreement, then the Company thereafter shall provide, at the time of delivery of financial statements pursuant to Sections 8.1.1 and 8.1.2, to the Administrative Agent and the Banks financial statements and other documents required or as reasonably requested under this Agreement to, as applicable, provide an unaudited estimated reconciliation of such financial covenant at the close of each quarterly period with respect to the treatment of Capitalized Leases and Capitalized Rentals, calculated using generally accepted accounting principles in the United States of AmericaGAAP as in effect before such adoption or issuance and generally accepted accounting principles in the United States of AmericaGAAP in effect after such adoption or issuance.

 

Section 12.4.     Assignments; Participations.  Each Bank may assign, or sell participations in, its Committed Loans and its Commitment to one or more other Persons in accordance with this Section 12.4 (and, subject to compliance by the applicable Bank with Section 12.6, the Company consents to the disclosure of any information obtained by any Bank in connection herewith to any actual or prospective Assignee or Participant).

 

12.4.1  Assignments.  Any Bank may with the written consents of the Company and the Agent (which consents will not be unreasonably withheld or delayed) at any time assign and delegate to one or more Eligible Assignees (any Person to whom an assignment and delegation is made being herein called an “Assignee”) all or any fraction of such Bank’s Committed Loans and Commitment; each such assignment of a Bank’s Commitment shall be in the minimum amount of $10,000,000 or in integral multiples of $1,000,000 in excess thereof; provided, that, any such Assignee will comply, if applicable, with the provisions contained in Section 5.4(b), Section 5.4(c), Section 5.4(d), Section 5.4(e), Section 5.4(f)  and Section 5.4(h) (subject to Section 5.4(g)); provided, further, the Company may withhold consent to the assignment of any Bank’s Committed Loans and Commitment to an Assignee for whom it is illegal to make a LIBOR Rate Loan described in Section 12.9(b)(iii) or that the Company would be required to compensate for any withholding or deductions described in clauses (i) or (ii) of Section 12.9(b) that are in excess of any such withholding or deductions the Company would be required to compensate to such assigning Bank, and any such withholding of consent by the Company is and hereby will be deemed to be reasonable; provided, further, that the Company

 

 

and the Agent shall be entitled to continue to deal solely and directly with such assigning Bank in connection with the interests so assigned and delegated to an Assignee until such assigning Bank and/or such Assignee shall have consummated such assignment; and provided, further, that in the event the Company is assigned any Committed Loans or Commitments hereunder, the Company’s vote in its capacity as a Bank on account of such Committed Loans or Commitments on any amendment, modification or waiver of, or consent with respect to, any provision of this Agreement pursuant to which the Banks have voting rights hereunder shall be deemed to be voted in favor and/or against approval in direct proportion to the votes of the other Banks that have voted in favor and/or against approval of such matter:

 

(i)         given written notice of such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee, substantially in the form of Exhibit F, to the Company and the Agent;

 

(ii)        provided evidence satisfactory to the Company and the Agent that, as of the date of such assignment and delegation the Company will not be required to pay any costs, fees, taxes or other amounts of any kind or nature (including under Section 12.5) with respect to the interest assigned in excess of those payable by the Company with respect to such interest prior to such assignment;

 

(iii)       paid to the Agent for the account of the Agent a processing fee of $3,500; and

 

(iv)       provided to the Agent evidence reasonably satisfactory to the Agent that the assigning Bank has complied with the provisions of Section 11.10.

 

Upon receipt of the foregoing items and the consents of the Company and the Agent, and subject to the acceptance and recordation of the assignment by the Agent pursuant to Section 11.11, (x) the Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder have been assigned and delegated to such Assignee, such Assignee shall have the rights and obligations of a Bank hereunder and under the other instruments and documents executed in connection herewith and (y) the assigning Bank, to the extent that rights and obligations hereunder have been assigned and delegated by it, shall be released from its obligations hereunder, except as specified in the last sentence of Section 12.6.  The Agent may from time to time (and upon the request of the Company or any Bank after any change therein shall) distribute a revised Schedule I indicating any changes in the Banks party hereto or the respective Percentages of such Banks and update the Register.  Within five Business Days after the Company’s receipt of notice from the Agent of the effectiveness of any such assignment and delegation, if requested by the Assignee in accordance with Section 11.11, the Company shall execute and deliver to the Agent (for delivery to the relevant Assignee) new Committed Notes in favor of such Assignee and, if the assigning Bank has retained Committed Loans and a Commitment hereunder and if so requested by such Bank in accordance with Section 11.11, replacement Committed Notes in favor of the assigning Bank (such Committed Notes to be in exchange for, but not in payment of, the Committed Notes previously held by such assigning Bank).  Each such Committed Note shall be dated the date of the predecessor Committed Notes.  The assigning Bank shall promptly mark the predecessor Committed Notes,

 

 

if any, “exchanged” and deliver them to the Company.  Any attempted assignment and delegation not made in accordance with this Section 12.4.1 shall be null and void.

 

The foregoing consent requirement shall not be applicable in the case of, and this Section 12.4.1 shall not restrict, any assignment or other transfer by any Bank of all or any portion of such Bank’s Committed Loans or Commitment to (i) any Federal Reserve Bank (provided, that, such Federal Reserve Bank shall not be considered a “Bank” for purposes of this Agreement), or (ii) any Affiliate of such Bank (provided, that, the assigning or transferring Bank shall give notice of such assignment or transfer to the Agent and the Company; provided, further, if such Affiliate is a Disqualified Person, then the foregoing consent requirement from the Company remains applicable to such assignment).  Further, the foregoing consent requirement of the Company shall not be applicable if an Event of Default has occurred and is continuing.

 

Notwithstanding any other provision set forth in this Agreement, any Bank may at any time create a security interest in all or any portion of its rights under this Agreement to secure obligations of such Bank to a Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System or other similar central bank; provided, that, no such pledge or assignment of a security interest shall release a Bank from any of its obligations hereunder or substitute any such pledgee or assignee for such Bank party hereto.

 

The Company, each Bank, and each Assignee acknowledge and agree that after receipt by the Agent of the items and consents required by this Section 12.4.1 each Assignee shall be considered a Bank for all purposes of this Agreement (including without limitation Sections 5.4, 6.1, 6.4, 12.5 and 12.6) and by its acceptance of an assignment herein, each Assignee agrees to be bound by the provisions of this Agreement (including without limitation Section 5.4).

 

12.4.2  Participations.  Any Bank may at any time without the consent of the Company sell to one or more commercial banks or other Persons (any such commercial bank or other Person being herein called a “Participant”) participating interests in any of its Committed Loans, its Commitment or any other interest of such Bank hereunder; provided, however, that

 

(a)        no participation contemplated in this Section 12.4.2 shall relieve such Bank from its Commitment or its other obligations hereunder;

 

(b)        such Bank shall remain solely responsible for the performance of its Commitment and such other obligations hereunder and such Bank shall retain the sole right and responsibility to enforce the obligations of the Company hereunder, including the right to approve any amendment, modification or waiver of any provision of this Agreement (subject to Section 12.4.2(d) below);

 

(c)        the Company and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement;

 

(d)       no Participant, unless such Participant is an Affiliate of such Bank, or is itself a Bank, shall be entitled to require such Bank to take or refrain from taking any action hereunder, except that such Bank may agree with any Participant that such Bank

 

 

will not, without such Participant’s consent, take any actions of the type described in the third sentence of Section 12.1;

 

(e)        the Company shall not be required to pay any amount under Sections 3.1, 5.4 or 6.1 that is greater than the amount which the Company would have been required to pay had no participating interest been sold;

 

(f)        no Participant may further participate any interest in any Committed Loan (and each participation agreement shall contain a restriction to such effect);

 

(g)        to the extent permitted by applicable law, each Participant shall be considered a Bank for purposes of Section 5.4, Section 6.1, Section 6.4, Section 12.5 and Section 12.6 and by its acceptance of a participating interest in any Committed Loan, Commitment or any other interest of a Bank hereunder, each Participant agrees that it is bound by, and agrees to deliver all documentation required under, the provisions of Section 5.2(b) and Section 5.4 as if such Participant were a Bank (it being understood that the documentation required under Section 5.4 shall be delivered to the participating Bank); and

 

(h)        such Bank shall have provided to the Agent evidence reasonably satisfactory to the Agent that such Bank has complied with the provisions of the last sentence of Section 11.6.

 

Any Bank (a “Granting Bank”) may grant to a special purpose funding vehicle organized under the laws of the United States of America or any State thereof (a “SPV”) of such Granting Bank, identified as such in writing from time to time by the Granting Bank to the Agent and the Company, the option to provide to the Company all or any part of its Committed Loans that such Granting Bank would otherwise be obligated to make to the Company pursuant to this Agreement; provided, that, (i) such SPV shall be deemed to be a Participant for purposes of this Section 12.4.2, (ii) nothing herein shall constitute a commitment by any SPV to make any Committed Loan, (iii) if a SPV elects not to exercise such option or otherwise fails to provide all or any part of such Committed Loan, the Granting Bank shall be obligated to make such Committed Loan pursuant to the terms hereof and (iv) the Company shall not be required to pay any amount under Sections 12.5 or 12.6 that is greater than the amount which the Company would have been required to pay had such SPV not provided the Company with any part of any Committed Loan of such Granting Bank.  The making of a Committed Loan by a SPV hereunder shall utilize the Commitment of the Granting Bank to the same extent, and as if, such Committed Loan were made by such Granting Bank.  Each party hereto hereby agrees that no SPV shall be liable for any indemnity or similar payment obligation under this Agreement (any indemnity, liability or other payment obligation, including but not limited to any tax liabilities that occur by reason of such funding by the SPV, shall remain the obligation of the Granting Bank).  In furtherance of the foregoing, each party hereto 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 indebtedness of any SPV, it will not institute against, or join any other Person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof.  In addition, notwithstanding anything contrary

 

 

contained in this Section 12.4.2, any SPV may (i) with notice to, but without the prior written consent of, the Company and the Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Committed Loans to the Granting Bank providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Committed Loans and (ii) disclose on a confidential basis any non-public information relating to its Committed Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPV.  This paragraph may not be amended without the written consent of any SPV at the time holding all or any part of any Committed Loans under this Agreement (which consent shall not be unreasonably withheld or delayed).

 

Section 12.5.     Costs, Expenses and Taxes.  The Company agrees to pay on demand (a) all reasonable out-of-pocket costs and expenses of the Agent (including the reasonable fees and out-of-pocket expenses of a single counsel for the Agent (and of local counsel, if any, who may be retained by said counsel)), in connection with the preparation, execution, delivery and administration of this Agreement, the Committed Notes and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith and (b) all out-of-pocket costs and expenses (including reasonable attorneys’ fees and legal expenses and allocated costs of staff counsel) incurred by the Agent and each Bank in connection with the enforcement of this Agreement, the Committed Notes or any such other instruments or documents.  Each Bank agrees to reimburse the Agent for such Bank’s pro rata share (based upon its respective Percentage determined at the time such reimbursement is sought) of any such costs or expenses incurred by the Agent on behalf of all the Banks and not paid by the Company other than any fees and out-of-pocket expenses of counsel for the Agent which exceed the amount which the Company has agreed with the Agent to reimburse.  In addition, without duplication of the provisions of Section 5.4, the Company agrees to pay, and to hold the Agent and the Banks harmless from all liability for, any stamp, court or documentary, intangible, recording, filing or similar Taxes which may be payable in connection with the execution, delivery and enforcement of this Agreement, the borrowings hereunder, the issuance of the Committed Notes (if any) or the execution, delivery and enforcement of any other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith, except, in each case, any such Taxes that are Other Connection Taxes imposed with respect to an assignment or participation.  All obligations provided for in this Section 12.5 shall survive repayment of the Committed Loans, cancellation of the Committed Notes or any termination of this Agreement.

 

Section 12.6.     Confidentiality.  Each of the Agent and the Banks agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives (it being understood that (i) no disclosure of Information shall be made by the Agent or any Bank to an Affiliate and such Affiliate’s respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives if such Affiliate is a Disqualified Person and (ii) the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal

 

 

process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any Committed Note or any action or proceeding relating to this Agreement or any Committed Note or the enforcement of rights hereunder or thereunder, (f) subject to a confidentiality agreement with or other contractual, legal, or fiduciary obligation of confidentiality to the Company containing provisions substantially the same as those of this Section 12.6, to (i) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective party (or its managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives) to any swap or derivative or similar transaction under which payments are to be made by reference to the Company and its obligations, this Agreement or payments hereunder, (iii) any rating agency, or (iv) the CUSIP Service Bureau or any similar organization, (g) with the prior written consent of the Company or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 12.6 or (y) becomes available to the Agent, any Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Company.  With respect to any disclosure under Section 12.6(c), each of the Agent and the Banks, as applicable, shall use commercially reasonable efforts to promptly notify the Company, to the extent legally permissible and practicable  under the circumstances, so as to permit the Company to obtain a protective order as to such disclosure, and each of the Agent and the Banks will reasonably cooperate (to the extent practicable and permitted by their respective then existing policies) with the Company for such purpose.

 

For purposes of this Section, “Information” means all information received from the Company or any of its Subsidiaries relating to the Company or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Agent or any Bank on a nonconfidential basis prior to disclosure by the Company or any of its Subsidiaries, provided, that, in the case of information received from the Company or any of its Subsidiaries after the date hereof, such information is clearly identified 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.  With respect to any Bank or Agent, the obligations of such Bank or Agent pursuant to this Section 12.6 shall terminate on the first anniversary of the earlier of the Termination Date and the date on which such Bank or Agent ceases to be a party hereto.

 

Section 12.7.     Indemnification.  In consideration of the execution and delivery of this Agreement by the Agent and the Banks, but without duplication of the provisions of Section 5.4, the Company hereby agrees to indemnify, exonerate and hold each of the Banks, the Agent, the Arrangers, the Affiliates of each of the Banks and the Agent, and each of the officers, directors, employees and agents of the Banks, the Agent and the Affiliates of each of the Banks and the Agent (collectively herein called the “Bank Parties” and individually called a “Bank Party”) free and harmless from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses, including, without limitation, reasonable attorneys’ fees and disbursements (collectively herein called the “Indemnified Liabilities”), incurred by the Bank Parties or any of them as a result of, or arising out of, or relating to (i) this Agreement, the Committed Notes (if any) or the Committed Loans or (ii) the direct or indirect use of proceeds of any of the Committed Loans or any credit extended hereunder, except for (x) any such

 

 

Indemnified Liabilities arising on account of such Bank Party’s gross negligence, bad faith or willful misconduct as determined by a court of competent jurisdiction in a final and nonappealable judgment and (y) to the extent such Indemnified Liabilities result from any dispute solely among Indemnified Parties other than any claims against Agent in its capacity or in fulfilling its role as Agent under this Agreement and other than any claims arising out of any act or omission on the part of the Company, and if and to the extent that the foregoing undertaking may be unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.  The Company agrees not to assert any claim against the Bank Parties on any theory of liability, for consequential, indirect, special or punitive damages arising out of or otherwise relating to this Agreement and the Committed Notes (if any) or any of the transactions contemplated hereby or thereby or the actual or proposed use of the proceeds of the Committed Loans.  All obligations provided for in this Section 12.7 shall survive repayment of the Committed Loans, cancellation of the Committed Notes (if any) or any termination of this Agreement. This Section 12.7 shall not apply with respect to Taxes other than Taxes that represent losses, claims, damages or similar items arising from any non-Tax claim.

 

Section 12.8.     Regulation U.  Each Bank represents that it in good faith is not relying, either directly or indirectly, upon any margin stock (as such term is defined in Regulation U promulgated by the Board of Governors of the Federal Reserve System) as collateral security for the extension or maintenance by it of any credit provided for in this Agreement.

 

Section 12.9.     Extension of Termination Dates; Removal of Banks; Substitution of Banks.  (a)Not more than 60 days nor less than 30 days prior to any two anniversaries of the Closing Date (each such date, an “Anniversary Date”), the Company may, at its option, request all the Banks then party to this Agreement to extend their scheduled Termination Dates by an additional one year period, or such shorter period as agreed upon by the Company and the Agent, by means of a letter, addressed to the Agent (who shall promptly deliver such letter to each Bank), substantially in the form of Exhibit G.  Each Bank electing (in its sole discretion) to extend its scheduled Termination Date shall execute and deliver not earlier than the 30th day nor later than the 20th day prior to such Anniversary Date counterparts of such letter to the Company and the Agent, who shall notify the Company, in writing, of the Banks’ decisions no later than 15 days prior to such Anniversary Date, whereupon (unless Banks with an aggregate Percentage of 50% or more decline to extend their respective scheduled Termination Dates, in which event the Agent shall notify all the Banks and the Company thereof and no such extension shall occur) such Bank’s scheduled Termination Date shall be extended, effective only as of the date that is such Bank’s then-current scheduled Termination Date, to the date that is one year, or such shorter period as agreed as provided above, after such Bank’s then-current scheduled Termination Date.  Any Bank that declines or fails to respond to the Company’s request for such extension shall be deemed to have not extended its scheduled Termination Date. Notwithstanding anything to the contrary in this Agreement, the Company shall not effectuate such extension of the Termination Date more than twice during the term of this Agreement.

 

(a)        In addition to its rights to remove any Defaulting Bank under Section 4.1(b), with respect to any Bank (i) on account of which the Company is required to make any deductions or withholdings or pay any additional amounts, as contemplated by Section 5.4, (ii)

 

 

on account of which the Company is required to pay any additional amounts, as contemplated by Section 6.1, (iii) for which it is illegal to make a LIBOR Rate Loan, as contemplated by Section 6.3, (iv) which has declined to (a) extend such Bank’s scheduled Termination Date under Section 12.9, or (b) consent to an amendment, modification or waiver and, in each case, Banks with an aggregate Percentage in excess of 50% have elected to extend their respective Termination Dates or consent to such amendment, modification or waiver, the Company may in its discretion, upon not less than 30 days’ prior written notice to the Agent and each Bank, remove such Bank as a party hereto.  Each such notice shall specify the date of such removal (which shall be a Business Day), which shall thereupon become the scheduled Termination Date for such Bank.

 

(b)        In the event that any Bank does not extend its scheduled Termination Date pursuant to subsection (a) above or is the subject of a notice of removal pursuant to subsection (b) above, then, at any time prior to the Termination Date for such Bank (a “Terminating Bank”), the Company may, at its option, arrange to have one or more other Eligible Assignees (which may be a Bank or Banks, or if not a Bank, shall be reasonably acceptable to the Agent (such acceptance not to be unreasonably withheld or delayed), and each of which shall herein be called a “Successor Bank”) with the approval of the Agent (such approval not to be unreasonably withheld or delayed) succeed to all or a percentage of the Terminating Bank’s outstanding Committed Loans, if any, and rights under this Agreement and assume all or a like percentage (as the case may be) of such Terminating Bank’s undertaking to make Committed Loans pursuant hereto and other obligations hereunder (as if (i) in the case of any Bank electing not to extend its scheduled Termination Date pursuant to subsection (a) above, such Successor Bank had extended its scheduled Termination Date pursuant to such subsection (a) and (ii) in the case of any Bank that is the subject of a notice of removal pursuant to subsection (b) above, no such notice of removal had been given by the Company); provided, that, prior to replacing any Terminating Bank with any Successor Bank, the Company shall have given each Bank which has agreed to extend its Termination Date an opportunity to increase its Commitment by all or a portion of the Terminating Banks’ Commitments.  Such succession and assumption shall be effected by means of one or more agreements supplemental to this Agreement among the Terminating Bank, the Successor Bank, the Company and the Agent.  On and as of the effective date of each such supplemental agreement (i) each Successor Bank party thereto shall be and become a Bank for all purposes of this Agreement and to the same extent as any other Bank hereunder and shall be bound by and entitled to the benefits of this Agreement in the same manner as any other Bank and (ii) the Company agrees to pay to the Agent for the account of the Agent a processing fee of $3,500 for each such Successor Bank which is not a Bank.

 

(c)        On the Termination Date for any Terminating Bank, such Terminating Bank’s Commitment shall terminate and the Company shall pay in full all of such Terminating Bank’s Committed Loans (except to the extent assigned pursuant to subsection (c) above) and all other amounts payable to such Bank hereunder (including any amounts payable pursuant to Section 5.4 on account of such payment); provided, that, if an Event of Default or Unmatured Event of Default exists on the date scheduled as any Terminating Bank’s Termination Date, payment of such Terminating Bank’s Committed Loans shall be postponed to (and, for purposes of calculating commitment fees under Section 3.4 and determining the Required Banks (except as provided below), but for no other purpose, such Terminating Bank’s Commitment shall continue until) the first Business Day thereafter on which (i) no Event of Default or Unmatured

 

 

Event of Default exists (without regard to any waiver or amendment that makes this Agreement less restrictive for the Company, other than as described in clause (ii) below) or (ii) the Required Banks (which for purposes of this subsection (d) shall be determined based upon the respective Percentages and aggregate Commitments of all Banks other than any Terminating Bank whose scheduled Termination Date has been extended pursuant to this proviso) waive or amend the provisions of this Agreement to cure all existing Events of Default or Unmatured Events of Default or agree to permit any borrowing hereunder notwithstanding the existence of any such event.  In the event that Citibank or its Affiliates shall become a Terminating Bank, the provisions of Section 11.9 shall apply with respect to Citibank in its capacity as Agent.

 

(d)       To the extent that all or a portion of any Terminating Bank’s obligations are not assumed pursuant to subsection (c) above, the Aggregate Commitment shall be reduced on the applicable Termination Date and each Bank’s percentage of the reduced Aggregate Commitment shall be revised pro rata to reflect such Terminating Bank’s absence.  The Agent shall distribute a revised Schedule I indicating such revisions promptly after the applicable Termination Date and update the Register accordingly.  Such revised Schedule I shall be deemed conclusive in the absence of demonstrable error.

 

Section 12.10.   Captions.  Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

 

Section 12.11.   Governing Law; Jurisdiction; Severability.  THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.  THE COMPANY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF SITTING IN NEW YORK COUNTY, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.  All obligations of the Company and the rights of the Agent, the Banks and any other holders of the Committed Loans expressed herein or in the Committed Notes (if any) shall be in addition to and not in limitation of those provided by applicable law.  Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement

 

 

shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

Section 12.12.   Counterparts; Effectiveness.  This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement.  Delivery of a counterpart via facsimile or electronic mail, including by email with a “.pdf” copy hereof attached, shall constitute delivery of an original counterpart.  When counterparts of this Agreement executed by each party shall have been lodged with the Agent (or, in the case of any Bank as to which an executed counterpart shall not have been so lodged, the Agent shall have received facsimile, electronic mail or other written confirmation of execution of a counterpart hereof by such Bank), this Agreement shall become effective as of the date hereof and the Agent shall so inform all of the parties hereto.

 

Section 12.13.   Further Assurances.  The Company agrees to do such other acts and things, and to deliver to the Agent and each Bank such additional agreements, powers and instruments, as the Agent or any Bank may reasonably require or deem advisable to carry into effect the purposes of this Agreement or to better assure and confirm unto the Agent and each Bank their respective rights, powers and remedies hereunder.

 

Section 12.14.   Successors and Assigns.  This Agreement shall be binding upon the Company, the Banks and the Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Banks and the Agent and the respective successors and assigns of the Banks and the Agent.  Except as expressly provided herein, the Company may not assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of all of the Banks.

 

Section 12.15.   Judgment.  (a)  If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase Dollars with such other currency at the Agent’s principal office in New York at 11:00 A.M. (New York time) on the Business Day preceding that on which final judgment is given.

 

(a)        If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in another currency into Dollars, the parties agree to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase such currency with Dollars at the Agent’s principal office in New York at 11:00 A.M. (New York time) on the Business Day preceding that on which final judgment is given.

 

(b)        The obligation of the Company in respect of any sum due from it in any currency (the “Primary Currency”) to any Bank or the Agent hereunder shall, notwithstanding any judgment in any other currency, be discharged only to the extent that on the Business Day following receipt by such Bank or the Agent (as the case may be), of any sum adjudged to be so due in such other currency, such Bank or the Agent (as the case may be) may in accordance with

 

 

normal banking procedures purchase the applicable Primary Currency with such other currency; if the amount of the applicable Primary Currency so purchased is less than such sum due to such Bank or the Agent (as the case may be) in the applicable Primary Currency, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Bank or the Agent (as the case may be) against such loss, and if the amount of the applicable Primary Currency so purchased exceeds such sum due to any Bank or the Agent (as the case may be) in the applicable Primary Currency, such Bank or the Agent (as the case may be) agrees to remit to the Company such excess.

 

Section 12.16.   Waiver of Jury Trial.  THE COMPANY, THE AGENT AND EACH BANK HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY COMMITTED NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

Section 12.17.   No Fiduciary Relationship.  The Company acknowledges that neither the Agent nor any Bank has any fiduciary relationship with, or fiduciary duty to, the Company arising out of or in connection with this Agreement, the Committed Notes (if any) or the transactions contemplated hereby, and the relationship between the Agent and the Banks, on the one hand, and the Company, on the other, in connection herewith or therewith is solely that of creditor and debtor.  This Agreement does not create a joint venture among the parties.

 

Section 12.18.   USA Patriot Act.  Each Bank and the Agent (for itself in such capacity and not on behalf of any Bank) hereby notifies the Company 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 Company, which information includes the name and address of the Company and other information that will allow such Bank or the Agent, as applicable, to identify the Company in accordance with the Act.  The Company shall provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Agent or any Banks in order to assist the Agent and the Banks in maintaining compliance with the Act.

 

SECTION 13.                       GUARANTY.

 

Section 13.1.     The Guaranty  The Guarantors hereby jointly and severally guarantee to each Bank and the Agent and their respective successors and assigns the prompt payment in full when due upon the expiration of any applicable remedial period (whether at stated maturity, by acceleration or otherwise) of the obligations, whether direct or indirect, absolute or contingent, now or hereafter from time to time owing to the Banks or the Agent by the Company or any other Obligor under this Agreement or any of the other Loan Documents, in each case strictly in accordance with the terms hereof and thereof and including all monetary obligations incurred during the pendency of any bankruptcy, insolvency, examinership, receivership or other similar proceeding of the Company, regardless of whether allowed or

 

 

allowable in such proceeding (such obligations being herein collectively called the “Guaranteed Obligations”).  The Guarantors hereby further jointly and severally agree that if the Company shall fail to pay in full when due upon the expiration of any applicable remedial period (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

Section 13.2.     Obligations Unconditional.  The obligations of the Guarantors under Section 13.1 are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Company under this Agreement or any other agreement or instrument referred to herein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 13 that the obligations of the Guarantors hereunder shall be primary obligations, absolute and unconditional, joint and several, under any and all circumstances (and any defenses thereto are hereby waived by the Guarantors).  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder (and any such defense are hereby waived), which shall remain absolute and unconditional as described above:

 

(i)  at any time or from time to time, without notice to the Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

 

(ii)  any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein shall be done or omitted;

 

(iii)  the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or any other agreement or instrument referred to herein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

 

(iv)  any law or regulation of any jurisdiction or any other event affecting any term of a Guaranteed Obligation; or

 

(v)  any lien or security interest granted to, or in favor of, the Agent or any Bank or Banks as security for any of the Guaranteed Obligations shall fail to be perfected.

 

The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Agent or any Bank exhaust any right, power or remedy or proceed against the Company under this Agreement or any other agreement or instrument referred to herein, or against any other Person under any other

 

 

guarantee of, or security for, any of the Guaranteed Obligations.  The Guarantors expressly confirm that they shall obtain substantial direct and indirect benefit from the giving of the Guaranty pursuant to this Agreement.

 

Section 13.3.     Reinstatement.  The obligations of the Guarantors under this Section shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Company in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy, liquidation, examinership or reorganization or otherwise, and the Guarantors jointly and severally agree that they will indemnify the Agent and each Bank on demand for all reasonable costs and expenses (including fees of counsel) incurred by the Agent or such Bank in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, liquidation, examinership, insolvency or similar law.

 

Section 13.4.     Subrogation.  The Guarantors hereby jointly and severally agree that until the payment and satisfaction in full of all Guaranteed Obligations and the expiration and termination of the Commitments of the Banks under this Agreement they shall not exercise any right or remedy arising by reason of any performance by them of their guarantee in Section 13.1, whether by subrogation or otherwise, against the Company or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.

 

Section 13.5.     Remedies.  The Guarantors jointly and severally agree that, as between the Guarantors and the Banks, the obligations of the Company under this Agreement may be declared to be forthwith due and payable as provided in Section 10 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 10) for purposes of Section 13.1 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Company and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Company) shall forthwith become due and payable by the Guarantors for purposes of Section 13.1.

 

Section 13.6.     Continuing Guaranty.  The guarantee in this Section 13 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising.

 

Section 13.7.     Indemnity and Rights of Contribution.  The Company and the Guarantors hereby agree, as between themselves, that (a) if a payment of any Guaranteed Obligations shall be made by any Subsidiary Guarantor under this Agreement, the Company shall indemnify such Subsidiary Guarantor for the full amount of such payment and (b) if any Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations that shall not have been fully indemnified by the Company, then the other Subsidiary Guarantors shall, on demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor an amount equal to such Subsidiary Guarantor’s Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, debts and liabilities of such

 

 

Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations.  The payment obligation of the Company to any Subsidiary Guarantor or of a Subsidiary Guarantor to any Excess Funding Guarantor under this Section shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Obligor under the other provisions of this Agreements, including this Section 13, and such Subsidiary Guarantor or Excess Funding Guarantor, as the case may be, shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations.

 

For purposes of this Section, (i) “Excess Funding Guarantor” means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “Excess Payment” means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (iii) “Pro Rata Share” means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the aggregate present fair saleable value of all properties of such Subsidiary Guarantor (excluding any shares of stock or other equity interest of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any obligations of the other Subsidiary Guarantors that have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable value of all properties of all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of the Subsidiary Guarantors hereunder) of all of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the Transaction Closing Date, as of the Transaction Closing Date, and (B) with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.

 

Section 13.8.     General Limitation on Guarantee Obligations.  In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 13.1 would otherwise, taking into account the provisions of Section 13.7, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 13.1, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Bank, the Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

 

Section 13.9.     Releases.

 

(a)        In the event of (i) a sale or other transfer or disposition of all of the Capital Stock in any Subsidiary Guarantor to any Person that is not an Affiliate of AerCap in compliance with Section 8.9 or (ii) the sale or other transfer or disposition, by way of merger, consolidation or otherwise,  of assets or Capital Stock of a Subsidiary Guarantor substantially as an entirety to a Person that is not an Affiliate of AerCap in compliance with the terms of Section 8.9, then,

 

 

without any further action on the part of the Agent or any Bank, such Subsidiary Guarantor (or the Person concurrently acquiring such assets of such Subsidiary Guarantor) shall be deemed automatically and unconditionally released and discharged of any obligations under the guarantee of such Subsidiary Guarantor of the Guaranteed Obligations, as evidenced by a written instrument or confirmation executed by the Agent, upon the request and at the expense of the Company.  Upon delivery by the Company to the Agent of an officers’ certificate stating that such sale or other disposition was made by AerCap in accordance with the provisions of this Agreement, including Section 8.9, the Agent will execute any documents required in order to evidence the release of any Subsidiary Guarantor from its obligations under its guarantee of the Guaranteed Obligations.

 

(b)                             In addition, the guarantee of a Subsidiary Guarantor of the Guaranteed Obligations will be released:

 

(i) if the Subsidiary Guarantor (other than the Company or any Subsidiary that is or becomes a Subsidiary Guarantor on the Transaction Closing Date) ceases to be a guarantor under any Capital Markets Debt or unsecured Credit Facilities, including the guarantee that resulted in the obligation of such Subsidiary Guarantor to guarantee the Guaranteed Obligations, and is released or discharged from all obligations thereunder; or

 

(ii) upon the expiration or termination of the Commitments and the payment in full of all obligations of the Obligors under this Agreement and under the Committed Notes (other than unasserted contingent indemnification and expense reimbursement obligations).

 

(c)                               Any Subsidiary Guarantor not released from its obligations under its guarantee of the Guaranteed Obligations as provided in this Section 13.9 will remain liable for the full amount of the Guaranteed Obligations as provided in this Section 13.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
 
    	
INTERNATIONAL LEASE FINANCE
    
	
 
    	
 
    	
CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
 
    	
AGENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CITIBANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
 
    	
BANKS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CITIBANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

Annex II

 

FORM OF GUARANTEE AND ASSUMPTION AGREEMENT

 

GUARANTEE ASSUMPTION AGREEMENT dated as of [DATE] by [NAME OF ADDITIONAL SUBSIDIARY GUARANTOR], a [ ] (the “Additional Subsidiary Guarantor”), in favor of Citibank, N.A., as Administrative Agent for the Banks party to the Credit Agreement referred to below (in such capacity, together with its successors in such capacity, the “Agent”).  International Lease Finance Corporation, a California corporation (the “Company”), the Banks referred to therein and the Agent are parties to that $2,300,000,000 Three-Year Revolving Credit Agreement, dated as of October 9, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used but not otherwise defined herein shall have the meaning specified in the Credit Agreement.

 

Pursuant to Section 8.18 of the Credit Agreement, the Additional Subsidiary Guarantor hereby agrees to become a “Subsidiary Guarantor” for all purposes of the Credit Agreement.  Without limiting the foregoing, the Additional Subsidiary Guarantor hereby, jointly and severally with the other Subsidiary Guarantors, guarantees to each Bank and the Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of all Guaranteed Obligations (as defined in Section 13.1 of the Credit Agreement) in the same manner and to the same extent as is provided in Section 13 of the Credit Agreement.  In addition, the Additional Subsidiary Guarantor hereby makes the representations and warranties set forth in Sections 7.1, 7.2, [and] 7.3(1) with respect to itself and its obligations under this Guarantee Assumption Agreement, as if each reference in such Sections to the Credit Agreement included reference to this Guarantee Assumption Agreement.

 

The Additional Subsidiary Guarantor hereby instructs its counsel to deliver the opinions referred to in Section 8.18 of the Credit Agreement to the Banks and the Agent.

 

[Signature Page Follows]

 

 

 

 

1                       For the Guarantee and Assumption Agreement to be entered into by AerCap Holdings N.V. add the following: “, 7.7 and 7.15 (it being understood that for purposes of Section 7.15 “Significant Subsidiaries” shall mean (i) any Obligor that is a Subsidiary of AerCap and (ii) any other Subsidiary or an AerCap Subsidiary which is so defined pursuant to Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange Commission)”

 

 

IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

 

	
 
    	
[ADDITIONAL SUBSIDIARY   GUARANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Acknowledged and   Agreed, as of the date
    	
 
    
	
first above written:
    	
 
    
	
 
    	
 
    
	
Citibank, N.A.,
    	
 
    
	
  as   Agent
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    	
 
    

 

 

Annex III

 

For the Fiscal Quarter/Year ended [DATE]

 

Schedule 1 to Exhibit C

 

CONSOLIDATED INDEBTEDNESS TO SHAREHOLDER’S EQUITY
 (Required by Sections 8.1.3 and 8.10 of the Credit Agreement)

 

	
 
    	
As of the Date   Hereof
   (Dollars in Thousands)
    
	
Consolidated Indebtedness
    	
 
    
	
Indebtedness
    	
$[               ]
    
	
Less:
    	
 
    
	
The   amount of current and deferred income taxes and rentals received in advance   of AerCap and the AerCap Subsidiaries (to the extent constituting   Indebtedness)
    	
[               ]
    
	
Less:
    	
[               ]
    
	
Aggregate   amount outstanding of Hybrid Capital Securities multiplied by the   Hybrid Capital Securities Percentage
    	
[               ]
    
	
Adjustments   in relation to Indebtedness denominated in any currency other than Dollars   and any related derivative liability, in each case to the extent arising from   currency fluctuations (such exclusions to apply only to the extent the   resulting liability is hedged by AerCap or such AerCap Subsidiary)
    	
[               ]
    
	
Net   obligations of any Person under any swap contracts that are not yet due and   payable
    	
[               ]
    
	
Trade   payables outstanding in the ordinary course of business, but not overdue by   more than 90 days
    	
[               ]
    
	
The   lesser of (i) $2,000,000,000 and (ii) the aggregate amount of “cash   and cash equivalents” or any line item of similar import (but in any event,   excluding “restricted cash” or any line item of similar import and excluding   “cash and cash equivalents” or any line item of similar import subject to any   Lien (other than (x) Liens arising by operation of law and   (y) bankers’ Liens arising in the ordinary course of business))   reflected on a consolidated balance sheet of AerCap prepared as of such date   of determination in accordance with GAAP
    	
[               ]
    
	
Consolidated   Indebtedness (A)
    	
[               ]
    
	
Shareholder’s Equity   (B)
    	
[               ]
    
	
Ratio of Consolidated   Indebtedness to Shareholder’s Equity ((A) divided by (B))2
    	
[    ]%3
    

 

2                        As calculated pursuant to Section 8.10 of the Credit Agreement and the definitions of Consolidated Indebtedness and Shareholder’s Equity set forth in Section 1.2 of the Credit Agreement.

 

3                        For compliance, not permitted to exceed at any time the applicable ratio set forth in Section 8.10 of the Credit Agreement for the applicable period set forth in such Section.

 

 

Annex IV

 

For the Fiscal Quarter/Year ended [DATE]

 

Schedule 2 to Exhibit C

 

INTEREST COVERAGE RATIO
 (Required by Sections 8.1.3 and 8.11 of the Credit Agreement)

 

	
 
    	
For the Four   Consecutive Fiscal
   Quarters Ended on the Date Hereof
   (Dollars in Thousands)
    
	
EBITDA4
    	
 
    
	
Net   Income
    	
$[             ]
    
	
Add:
    	
 
    
	
Consolidated Interest   Expense
    	
[               ]
    
	
Income tax expense
    	
[               ]
    
	
Depreciation and   depletion expense
    	
[               ]
    
	
Amortization expense
    	
[               ]
    
	
Amount   of any extraordinary, unusual or nonrecurring non-cash restructuring charges
    	
[               ]
    
	
Add   (to the extent deducted in determining net income):
    	
 
    
	
Extraordinary, unusual   or nonrecurring losses
    	
[               ]
    
	
Non-cash items
    	
[               ]
    
	
Less   (to the extent added in determining net income):
    	
 
    
	
Extraordinary, unusual   or nonrecurring gains
    	
[               ]
    
	
Non-cash items
    	
[               ]
    
	
EBITDA   (A):
    	
[               ]
    
	
Consolidated Interest   Expense (1):
    	
[               ]
    
	
Cash dividend   payments on any series of preferred stock (excluding items eliminated in   consolidation) (2):
    	
[               ]
    
	
Sum of (1) plus   (2) equals (B):
    	
[               ]
    
	
Interest Coverage Ratio   ((A) divided by (B))5
    	
[    ]%6
    

 

 

4                        For the purposes of calculating EBITDA for any four quarter period, such calculation shall be made (i) after giving effect to any Acquisition consummated during such period and (ii) assuming that such Acquisition occurred at the beginning of such period; provided, that any pro forma calculation made by the Company either (i) based on Regulation S-X or (ii) as calculated in good faith and set forth in an officer’s certificate of the Company, in reasonable detail, (and in the case of this clause (ii), based on audited financials of the target company) shall be acceptable

 

5                        As calculated pursuant to Section 8.11 of the Credit Agreement and the definition of Interest Coverage Ratio set forth in Section 1.2 of the Credit Agreement.

 

6                       For compliance, must not be less than 200% on the last day of any quarter of any fiscal year of the Company.

 

 

2Exhibit 10.1

 

EXECUTION COPY

 

U.S. $50,000,000

 

TERM LOAN CREDIT AGREEMENT

 

dated as of January 31, 2014

 

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC

as the Borrower,

 

VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS

FROM TIME TO TIME PARTIES HERETO,

as the Lenders,

 

GOLDMAN SACHS BANK USA,
 as the Administrative Agent,

 

and

 

GOLDMAN SACHS BANK USA,
 as Sole Lead Arranger and Sole Bookrunner

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE 1   DEFINITIONS
    	
1
    
	
1.1
    	
Defined Terms
    	
1
    
	
1.2
    	
Accounting Terms; GAAP
    	
12
    
	
1.3
    	
Interpretation
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 2   AMOUNT AND TERMS OF CREDIT
    	
13
    
	
2.1
    	
Commitments
    	
13
    
	
2.2
    	
Minimum Amount of Each   Borrowing; Maximum Number of Borrowings
    	
14
    
	
2.3
    	
Notice of Borrowing
    	
14
    
	
2.4
    	
Disbursement of Funds
    	
14
    
	
2.5
    	
Repayment of Loans;   Evidence of Debt
    	
15
    
	
2.6
    	
Changes in Type of Loan
    	
16
    
	
2.7
    	
Pro Rata Borrowings
    	
17
    
	
2.8
    	
Interest and Fees
    	
17
    
	
2.9
    	
Interest Periods
    	
18
    
	
2.10
    	
Increased   Costs, Illegality, etc.
    	
19
    
	
2.11
    	
Compensation
    	
21
    
	
2.12
    	
Change of Lending Office
    	
22
    
	
2.13
    	
Notice of Certain Costs
    	
22
    
	
2.14
    	
Defaulting Lenders
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE 3   [RESERVED]
    	
23
    
	
 
    	
 
    
	
ARTICLE 4   TERMINATION OF COMMITMENTS
    	
23
    
	
4.1
    	
Mandatory Termination of   Commitments
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE 5   PAYMENTS
    	
23
    
	
5.1
    	
Voluntary Prepayments and   Mandatory Prepayments
    	
23
    
	
5.2
    	
Method and Place of Payment
    	
23
    
	
5.3
    	
Net Payments
    	
24
    
	
5.4
    	
Computations of Interest   and Fees
    	
27
    
	
 
    	
 
    	
 
    
	
ARTICLE 6   CONDITIONS PRECEDENT
    	
28
    
	
6.1
    	
Conditions Precedent to   Initial Effectiveness
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE 7   REPRESENTATIONS AND WARRANTIES
    	
30
    
	
7.1
    	
Organizational Status
    	
30
    

 

i

 

	
7.2
    	
Capacity, Power and Authority
    	
30
    
	
7.3
    	
No Violation
    	
31
    
	
7.4
    	
Litigation
    	
31
    
	
7.5
    	
Governmental Approvals
    	
31
    
	
7.6
    	
True and Complete   Disclosure
    	
31
    
	
7.7
    	
Financial Condition;   Financial Statements
    	
32
    
	
7.8
    	
Tax Returns and Payments
    	
32
    
	
7.9
    	
Environmental Matters
    	
32
    
	
7.10
    	
Properties
    	
33
    
	
7.11
    	
Pension and Welfare Plans
    	
33
    
	
7.12
    	
Regulations U and X
    	
33
    
	
7.13
    	
Investment Company Act
    	
33
    
	
7.14
    	
Sanctions Laws and   Regulations
    	
33
    
	
7.15
    	
No Material Adverse Change
    	
34
    
	
7.16
    	
Deemed Repetition of   Representations and Warranties
    	
34
    
	
 
    	
 
    	
 
    
	
ARTICLE 8   AFFIRMATIVE COVENANTS
    	
34
    
	
8.1
    	
Information Covenants
    	
34
    
	
8.2
    	
Books, Record and   Inspections
    	
37
    
	
8.3
    	
Maintenance of Insurance
    	
37
    
	
8.4
    	
Payment of Taxes
    	
37
    
	
8.5
    	
Organizational Existence
    	
37
    
	
8.6
    	
Compliance with Statutes,   Obligations, etc.
    	
38
    
	
8.7
    	
Good Repair
    	
38
    
	
8.8
    	
Transactions with   Affiliates
    	
38
    
	
8.9
    	
End of Fiscal Years; Fiscal   Quarters
    	
38
    
	
8.10
    	
Use of Proceeds
    	
39
    
	
8.11
    	
Changes in Business
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE 9   NEGATIVE COVENANTS
    	
39
    
	
9.1
    	
Limitation on Liens
    	
39
    
	
9.2
    	
Limitation on Fundamental   Changes
    	
41
    
	
9.3
    	
Limitation on Dividends
    	
42
    
	
9.4
    	
Debt to Capitalization   Ratio
    	
42
    
	
9.5
    	
Limitation on Sale-Lease   Back Transactions
    	
42
    
	
9.6
    	
Sanctions Laws and   Regulations
    	
42
    

 

ii

 

	
ARTICLE 10   EVENTS OF DEFAULT
    	
43
    
	
10.1
    	
Payments
    	
43
    
	
10.2
    	
Representations, etc.
    	
43
    
	
10.3
    	
Covenants
    	
43
    
	
10.4
    	
Default Under Other   Agreements
    	
43
    
	
10.5
    	
Bankruptcy, etc.
    	
44
    
	
10.6
    	
Judgments
    	
44
    
	
10.7
    	
Change of Ownership
    	
44
    
	
10.8
    	
Pension Plans
    	
45
    
	
10.9
    	
Remedies
    	
45
    
	
10.10
    	
Remedies Cumulative
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE 11   THE ADMINISTRATIVE AGENT
    	
46
    
	
 
    	
 
    
	
ARTICLE 12   MISCELLANEOUS
    	
49
    
	
12.1
    	
Amendments and Waivers
    	
49
    
	
12.2
    	
Notices
    	
50
    
	
12.3
    	
No Waiver; Cumulative   Remedies
    	
52
    
	
12.4
    	
Survival of Representations   and Warranties
    	
52
    
	
12.5
    	
Payment of Expenses and Taxes
    	
52
    
	
12.6
    	
Successors and Assigns;   Participations and Assignments
    	
53
    
	
12.7
    	
Replacements of Lenders   under Certain Circumstances
    	
57
    
	
12.8
    	
Adjustments; Set-off
    	
57
    
	
12.9
    	
Marshalling; Payments Set   Aside
    	
59
    
	
12.10
    	
Counterparts
    	
59
    
	
12.11
    	
Severability
    	
59
    
	
12.12
    	
Integration
    	
59
    
	
12.13
    	
Governing Law
    	
59
    
	
12.14
    	
Submission to Jurisdiction;   Waivers
    	
60
    
	
12.15
    	
Acknowledgements
    	
60
    
	
12.16
    	
Waivers of Jury Trial
    	
60
    
	
12.17
    	
Confidentiality
    	
61
    
	
12.18
    	
Treatment of Loans
    	
61
    
	
12.19
    	
USA Patriot Act
    	
62
    
	
12.20
    	
No Fiduciary Duty
    	
62
    

 

iii

 

SCHEDULES:

 

	
Schedule I
    	
Commitments
    
	
Schedule II
    	
Environmental Matters
    
	
Schedule III
    	
Pension and Welfare Matters
    
	
Schedule IV
    	
Outstanding Liens on Closing Date
    

 

EXHIBITS:

 

	
Exhibit A
    	
Form of Notice of Borrowing
    
	
Exhibit B
    	
Form of Notice of Continuation
    
	
Exhibit C
    	
Form of Prepayment Notice
    
	
Exhibit D
    	
Form of Closing Date Certificate
    
	
Exhibit E
    	
Form of Compliance Certificate
    
	
Exhibit F
    	
Form of Assignment and Assumption
    

 

iv

 

TERM LOAN CREDIT AGREEMENT, dated as of January 31, 2014, among MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC a Michigan limited liability company (the “Borrower”), various financial institutions and other Persons from time to time parties hereto as lenders (each a “Lender” and, collectively, the “Lenders”) and GOLDMAN SACHS BANK USA, as administrative agent (in such capacity, the “Administrative Agent”).

 

The Borrower has requested that the Lenders make senior term loans to it on the date hereof in an aggregate principal amount of $50,000,000. The Lenders are prepared to make such loans upon the terms and conditions hereof, and, accordingly, the parties hereto agree as follows:

 

ARTICLE 1
 DEFINITIONS

 

As used herein, the following terms shall have the meanings specified in this Article 1 unless the context otherwise requires (it being understood that defined terms in this Agreement shall include in the singular number the plural and in the plural the singular):

 

1.1          Defined Terms.

 

“ABR” shall mean, for any day, a rate per annum equal to the greatest of (a) the rate of interest (however designated) established by the Administrative Agent as its prime rate in effect at its principal office in New York, New York, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) LIBOR for a one month interest period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1.00%.  Any change in the ABR due to a change in any of the foregoing rates shall be effective as of the opening of business on the effective date of such change in such rate.

 

“ABR Loan” shall mean each Loan bearing interest at the rate provided in Section 2.8(a).

 

“Administrative Agent” shall have the meaning provided in the preamble to this Agreement and shall include such other financial institution as may be appointed as the successor administrative agent in the manner and to the extent described in Article 11.

 

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

 

“Affiliate” shall mean, with respect to any Person, (a) any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person, and (b) any other Person in which such Person directly or indirectly through Subsidiaries has a 10% or greater equity interest. A Person shall be deemed to control a Person if such Person possesses, directly or indirectly, the power (i) to vote 10% or more of the Voting Stock having ordinary voting power for the election of directors (or the equivalent) of such other Person or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of Capital Stock, by contract or otherwise.

 

“Agreement” shall mean this Term Loan Credit Agreement, as the same may be amended, modified, supplemented, restated or replaced from time to time.

 

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower and its affiliated companies concerning or relating to bribery or corruption, including, without limitation, the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

 

“Applicable Margin” shall mean, for any day, the applicable rate per annum of 1.00%  in the case of LIBOR Loans and 0.00% in the case of ABR Loans.

 

“Approved Fund” shall mean 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 and that is administered or managed by a Lender, an Affiliate of a Lender or an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Arranger” shall mean Goldman Sachs Bank USA.

 

“Assignee” shall have the meaning provided in Section 12.6(b)(i).

 

“Assignment and Assumption” shall mean an assignment and assumption agreement substantially in the form of Exhibit F hereto or otherwise in a form that is reasonably satisfactory to the Administrative Agent and delivered by each Assignee to the Administrative Agent pursuant to Section 12.6(b)(ii)(C).

 

“Assignment Effective Date” shall have the meaning provided in Section 12.6(b)(iii).

 

“Attributable Value” shall mean, with respect to any Sale and Leaseback Transaction, as of the time of determination, the lesser of (i) the sale price of the property or assets so leased multiplied by a fraction the numerator of which is the remaining portion of the base term of the lease included in such Sale and Leaseback Transaction and the denominator of which is the base term of such lease, and (ii) the total obligation (discounted to present value at the rate of interest specified by the terms of such lease) of the lessee for rental payments (other than amounts required to be paid on account of property taxes as well as maintenance, repairs, insurance, water rates and other items which do not constitute payments for property rights) during the remaining portion of the base term of the lease included in such Sale and Leaseback Transaction.

 

“Authorized Officer”, as applied to any Person, shall mean the Chief Executive Officer, the President, any Executive Vice-President, any Senior Executive Vice President, any Senior Vice-President, the Chief Financial Officer, the Treasurer, the Secretary or General Counsel of such Person or any other senior officer of such Person designated as such in writing to the Administrative Agent by such Person.

 

“Bankruptcy Code” shall have the meaning provided in Section 10.5.

 

“Bankruptcy Event” shall mean, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to,

 

2

 

approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person 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 Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

“Borrower” shall have the meaning provided in the recitals to this Agreement.

 

“Borrowing” shall mean the incurrence of one Type of Loan on a given date (or resulting from conversions or continuations on a given date) and having, in the case of LIBOR Loans, the same LIBOR Period (provided that ABR Loans incurred pursuant to Section 2.10(b) shall be considered part of any related Borrowing of LIBOR Loans).

 

“Business” shall have the meaning provided in Section 8.11.

 

“Business Day” shall mean (a) for all purposes other than as covered by clause (b) below, any day excluding Saturday, Sunday and any day that shall be in the City of New York a legal holiday or a day on which banking institutions are authorized or required by law or other governmental actions to close, and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, LIBOR Loans, any day that is a Business Day described in clause (a) excluding any day that shall be in the City of London a legal holiday or a day on which banking institutions are authorized or required by law or other governmental actions to close.

 

“Capital Lease”, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is, or is required to be, accounted for as a finance lease obligation on the balance sheet of that Person.

 

“Capital Stock” shall mean common shares, preferred shares or other equivalent equity interests (howsoever designated) of capital stock of a corporation, equity preferred or common interests or membership interests in a limited liability company, limited or general partnership interests in a partnership or any other equivalent of such ownership interest.

 

“Capitalized Lease Obligations” shall mean, as applied to any Person, all obligations under Capital Leases of such Person and its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP.

 

“Change of Ownership” shall mean and be deemed to have occurred if (i) any person or group (within the meaning of the Securities and Exchange Act of 1934, as amended, and the rules of the Securities and Exchange Commission thereunder) shall become, directly or indirectly, the beneficial owner of capital stock representing more than 35% of the ordinary voting power represented by the issued and outstanding Voting Stock of Holdco; and/or (ii) Holdco ceases to own, directly or indirectly, 100% of the Voting Stock of the Borrower; and/or (iii) a majority of the incumbent directors of Holdco cease to be persons who were either (x) directors of Holdco on the Closing Date or (y) new directors (such persons being called herein

 

3

 

“New Members”) appointed or nominated for election by one or more persons who were members of the board of directors of Holdco on the Closing Date or who were appointed or nominated by one or more such New Members whether or not they were members on the Closing Date.

 

“Closing Date” shall mean January 31, 2014.

 

“Closing Date Certificate” shall have the meaning provided in Section 6.1(b).

 

“Code” shall mean the Internal Revenue Code of 1986, and the regulations thereunder, in each case as amended, reformed or otherwise modified from time to time.

 

“Commitment” shall mean, with respect to a Lender, the amount set forth on Schedule I as such Lender’s “Commitment”.

 

“Commitment Percentage” shall mean, with respect to any Lender, the percentage of the Total Commitment represented by such Lender’s Commitment as set forth on Schedule I.  If the Total Commitments have terminated or expired, the Commitment Percentages shall be determined based upon the outstanding Loans of such Lender, as a percentage of the aggregate  outstanding principal balance of all Loans at the time of determination.

 

“Compliance Certificate” shall have the meaning provided in Section 8.1(c).

 

“Confidential Information” shall have the meaning provided in Section 12.17.

 

“Control”, “Controls” and “Controlled”, when used with respect to any Person, shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through ownership of Voting Stock, by contract or otherwise.

 

“Controlled Group”, when used with respect to the Borrower, shall mean all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with such Person, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.

 

“Credit Event” shall mean and include the making (but not the conversion or continuation) of a Loan.

 

“Credit Party” shall mean the Administrative Agent or any Lender.

 

“Debt to Capitalization Ratio” shall mean, with respect to the Borrower, as of any date of determination, the ratio of (a) Total Debt for the Borrower as of such date to (b) Total Capitalization for the Borrower as of such date.

 

“Default” shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

 

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“Defaulting Lender” shall mean any Lender, as reasonably determined by the Administrative Agent, that (a) has failed, within three (3) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the condition precedent, together with any applicable default) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the condition precedent, together with any applicable default) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after written request by the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund Loans and other amounts under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s receipt of such certification in form and substance satisfactory to it, or (d) has become, or has a Parent that has become, the subject of a Bankruptcy Event.

 

“Designated Person” shall mean a person or entity that (a) is named on the list of  “Specially Designated Nationals” or “Blocked Persons” on the most current list published by The Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”) available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx or as otherwise published from time to time or (b) is (x) an agency of the government of a country, (y) an organization controlled by a country or (z) a person resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time, as such program may be applicable to such agency, organization or person or (c) otherwise the subject of any current U.S. sanctions administered by OFAC.

 

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

 

“Environmental Claims” shall mean, with respect to any Person, any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of non-compliance, investigations (other than internal reports prepared by such Person or any of its Subsidiaries (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereinafter, “Claims”), including (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged

 

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injury or threat of injury to health, safety (with respect to Hazardous Materials or conditions in the environment) or the environment.

 

“Environmental Law” shall mean any applicable federal, provincial, state, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the environment, human health or safety (with respect to Hazardous Materials or conditions in the environment) or Hazardous Materials.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to Sections of ERISA also refer to any successor Sections thereto.

 

“Event of Default” shall have the meaning provided in Article 10.

 

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

 

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of the per annum rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

 

“Finance Parties” shall mean the Administrative Agent and the Lenders.

 

“F.R.S. Board” shall mean the Board of Governors of the Federal Reserve System or any successor thereto.

 

“GAAP” shall mean generally accepted accounting principles in the United States as in effect from time to time, subject to Section 1.2.

 

“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

 

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“Guarantee Obligations” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect thereof; provided that, the term “Guarantee Obligations” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith or, if the Guarantee Obligation is expressly limited to a specified amount, such specified amount.

 

“Hazardous Material” shall mean (a) any petroleum or petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority.

 

“Holdco” shall mean ITC Holdings Corp., a Michigan corporation.

 

“including” and “include” shall mean including without limiting the generality of any description preceding such term, and, for purposes of this Agreement, the parties hereto agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is followed by or referable to an enumeration of specific matters, to matters similar to the matters specifically mentioned.

 

“Indebtedness” of any Person shall mean (a) all indebtedness of such Person for borrowed money, (b) the deferred purchase price of assets or services that in accordance with GAAP would be classified as a liability on the balance sheet of such Person, (c) the face amount of all letters of credit issued for the account of such Person and, without duplication, all drafts drawn thereunder, (d) all Indebtedness of a second Person secured by any Lien on any property owned by such first Person, whether or not such Indebtedness has been assumed, (e) all Capitalized Lease Obligations of such Person, (f) all existing payment obligations of such Person under interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements, (g) all existing payment obligations of such Person under commodity future contracts and other

 

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similar agreements and (h) without duplication, all Guarantee Obligations of such Person; provided that, Indebtedness shall not include current payables and accrued expenses, in each case arising in the ordinary course of business.

 

“Lender” and “Lenders” shall have the respective meanings provided in the preamble to this Agreement.

 

“LIBOR” shall mean, with respect to each LIBOR Period for each LIBOR Loan, a rate per annum, expressed on the basis of a 360 day year, appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page on such screen) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such LIBOR Period, as the rate for deposits in Dollars in the London interbank market with a maturity comparable to such LIBOR Period.  In the event that such rate does not appear on such page (or on any successor or substitute page on such screen or otherwise on such screen), “LIBOR” shall be determined by reference to such other comparable publicly available service for displaying interest rates applicable to deposits in Dollars in the London interbank market as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which deposits in Dollars in amounts in same day funds comparable to the principal amount of the applicable LIBOR Loan and for a maturity comparable to such LIBOR Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such LIBOR Period.

 

“LIBOR Loan” shall mean each Loan bearing interest at the rate provided in Section 2.8(b).

 

“LIBOR Period” shall mean, with respect to a LIBOR Loan, the interest period selected by the Borrower for such LIBOR Loan in accordance with Section 2.9.

 

“Lien” shall mean any mortgage, pledge, security interest, hypothecation, assignment by way of security, lien (statutory or other) or similar encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof).

 

“Loan” shall have the meaning provided in Section 2.1(a).

 

“Material Adverse Effect” shall mean a circumstance or condition affecting the business, assets, operations, properties or financial condition of the Borrower and its Subsidiaries taken as a whole that would materially adversely affect the ability of the Borrower to perform its obligations under this Agreement.

 

“Maturity Date” shall mean February 2, 2015.

 

“METC First Mortgage Indenture” shall mean the First Mortgage Indenture, dated as of December 10, 2003, between the Borrower and The Bank of New York Mellon Trust Company, N.A. (f/k/a The Bank of New York Trust Company, N.A.) (as successor to JPMorgan Chase Bank, N.A.), as Trustee, as the same may be amended, supplemented or otherwise modified and in effect from time to time.

 

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“Minimum Borrowing Amount” shall mean $500,000.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business.

 

“Net Cash Proceeds” shall mean, in connection with any Specified Debt Incurrence, the cash proceeds received by the Borrower or any Subsidiary from such incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions, escrows and other customary fees and expenses actually incurred and paid in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any tax sharing arrangements).

 

“Net Tangible Assets” shall mean, at any date, the gross book value as shown by the Borrower’s books of all its real and personal property (including any regulatory or intangible assets includible in the Borrower’s transmission rates), exclusive of licenses, patents, patent applications, copyrights, trademarks, trade names, goodwill, experimental or organizational expense and other like intangibles, treasury stock and unamortized debt discount and expense, less the sum of: (i) all reserves for depreciation, obsolescence, depletion and amortization of its properties as shown by the Borrower’s books and all other proper reserves which in accordance with GAAP should be provided in connection with the Borrower’s business; and (ii) all Indebtedness and other liabilities of the Borrower other than (a) secured Indebtedness under the METC First Mortgage Indenture, (b) reserves which have been deducted pursuant to clause (i) above and (c) capital stock and surplus.

 

“Non-U.S. Lender” shall mean any Lender that is not a “United States person”, as defined under Section 7701(a)(30) of the Code.

 

“Notice of Borrowing” shall mean the Notice of Borrowing provided pursuant to Section 2.3(a), substantially in the form of Exhibit A.

 

“Notice of Continuation” shall have the meaning provided in Section 2.6(a).

 

“Organic Document” shall mean, relative to any Person, its articles or certificate of incorporation, articles of organization, bylaws, certificate of partnership, partnership agreement, certificate of formation, limited liability agreement, operating agreement and all shareholder agreements, voting trusts and similar arrangements applicable to any of such Person’s Capital Stock.

 

“Other Taxes” shall have the meaning provided in Section 12.5.

 

“Parent” shall mean, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

 

“Participant” shall have the meaning provided in Section 12.6(c)(i).

 

“Participant Register” shall have the meaning provided in Section 12.6(c)(i).

 

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“Pension Plan” shall mean a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the Borrower or any corporation, trade or business that is, along with the Borrower, a member of a Controlled Group, is a contributing employer or a sponsor.

 

“Permitted Liens” shall mean (a) Liens for taxes, assessments, customs duties or governmental charges or claims not yet due or which are being contested in good faith and by appropriate proceedings for which appropriate provisions have been established in accordance with GAAP; (b) Liens in respect of property or assets of the Borrower or any of its Subsidiaries imposed by law, such as carriers’, warehousemen’s and or mechanics’ Liens, and other similar Liens arising in the ordinary course of business and Liens arising under zoning laws and ordinances and municipal bylaws and regulations, in each case so long as such Liens arise in the ordinary course of business and do not individually or in the aggregate have a Material Adverse Effect; (c) Liens arising from judgments or decrees in circumstances not constituting an Event of Default under Section 10.6; (d) Liens (other than those arising by Requirement of Law that are not permitted by clause (a) of this definition) incurred or deposits made 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, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business; (e) ground leases in respect of real property on which facilities owned or leased by the Borrower or any of its Subsidiaries are located; (f) easements, rights-of-way, restrictive covenants or agreements, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the business of the Borrower and its Subsidiaries taken as a whole; (g) any interest or title of a lessor or secured by a lessor’s interest under any lease permitted by this Agreement; (h) Liens incurred by the licensing of trademarks by the Borrower or any of its Subsidiaries to others in the ordinary course of business; and (i) leases or subleases granted to others, not interfering in any material respect with the business of the Borrower and its Subsidiaries taken as a whole.

 

“Person” shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any Governmental Authority.

 

“Projections” shall have the meaning provided in Section 6.1(h).

 

“Real Estate” shall have the meaning provided in Section 8.1(e).

 

“Register” shall have the meaning provided in Section 12.6(b)(iv).

 

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

 

“Required Lenders” shall mean, at any date, Lenders having or holding more than 50% of the outstanding principal amount of all Loans on such date.

 

“Requirement of Law” shall mean, as to any Person, the Organic Documents of such Person, and any law, treaty, rule, regulation, guideline, policy or determination of an arbitrator or

 

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a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or assets or to which such Person or any of its property or assets is subject and whether or not having the force of law.

 

“Revolving Credit Agreement” shall mean that certain Revolving Credit Agreement, dated as of May 17, 2011, among the Borrower, the various financial institutions and other persons from time to time referred to as “Lenders” therein, and JPMorgan Chase Bank, N.A., as the Administrative Agent.

 

“Sale and Leaseback Transaction” shall have the meaning provided in Section 9.5.

 

“S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger or consolidation to its business.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Solvent” shall mean, in reference to the Borrower, (i) the fair value of the assets of the Borrower, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of the Borrower will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrower will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Borrower will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Closing Date.

 

“Specified Debt Incurrence” shall mean any incurrence of Indebtedness of the type set forth in clause (a) of the definition thereof by the Borrower or any Subsidiary other than (i) any Indebtedness owed to the Borrower or any of its Subsidiaries and (ii) Indebtedness under the Revolving Credit Agreement.

 

“Subsidiary” of any Person shall mean and include (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock or issued share capital of any class or classes of such corporation shall have or might have voting power by reason of the happening of any, contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than a 50% equity interest and more than a 50% voting interest at the time and (c) any other corporation, partnership, joint venture or other entity (i) the accounts of which would be consolidated with those of such Person in such Person’s consolidated financial statements if such statements were prepared in accordance with GAAP and (ii) that is controlled (as defined in clause (b) of the definition of such term in the definition of the term “Affiliate”) by such Person. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of the Borrower.

 

“Successor Borrower” shall have the meaning provided in Section 9.2(a).

 

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“Taxes” shall have the meaning provided in Section 5.3(a)(i).

 

“Total Capitalization” shall mean, as of any date of determination, the sum, without duplication, of (a) Total Debt and (b) the total stockholders’ equity of the Borrower as determined in accordance with GAAP; provided that the term “Total Capitalization” shall exclude the non-cash effects of the March 31, 2006 FAS Statement titled “Employers’ Accounting for Defined Pension and Postretirement Plans”.

 

“Total Commitment” shall mean the sum of the Commitments of all the Lenders, which is $50,000,000 on the Closing Date.

 

“Total Debt” shall mean, as of any date of determination, (a) the sum, without duplication, of (i) all Indebtedness of the Borrower and its Subsidiaries for borrowed money outstanding on such date, (ii) all Capitalized Lease Obligations of the Borrower and its Subsidiaries outstanding on such date and (iii) all Indebtedness of the Borrower and its Subsidiaries of the types described in clauses (b) and (d) of the definition of Indebtedness (but in the case of clause (d), only to the extent such Indebtedness is assumed by the Borrower or any Subsidiary), all calculated on a consolidated basis in accordance with GAAP and to the extent reflected as Indebtedness on the consolidated balance sheet of the Borrower in accordance with GAAP minus (b) the aggregate amount of cash held by the Borrower and its Subsidiaries as at such date and included in the cash accounts listed on the consolidated balance sheet of the Borrower and its Subsidiaries and deposited with the Administrative Agent to the extent the use thereof for application to payment of Indebtedness of the Borrower and its Subsidiaries is not prohibited by law or any contract to which the Borrower or any of its Subsidiaries is a party (but in each case excluding equity securities that are mandatorily redeemable 91 or more days after the Maturity Date and that are classified as hybrid securities by Moody’s and/or S&P).

 

“Type” shall mean as to any Loan, its nature as an ABR Loan or a LIBOR Loan.

 

“United States” and “US” shall mean the United States of America.

 

“USA PATRIOT Act” has the meaning specified in Section 12.19.

 

“Voting Stock” shall mean Capital Stock of a Person which carries voting rights or the right to Control such Person under any circumstances; provided that Capital Stock which carries the right to vote or Control conditionally upon the happening of an event shall not be considered Voting Stock until the occurrence of such event and then only during the continuance of such event.

 

“Welfare Plan” shall mean a “welfare plan”, as such term is defined in Section 3(1) of ERISA.

 

1.2                               Accounting Terms; GAAP.

 

Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in

 

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GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein, (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof and (iii) without giving effect to any changes in GAAP occurring after the Closing Date, the effect of which would be to cause leases in effect as of September 30, 2013 and treated as operating leases under GAAP as of September 30, 2013 to be reclassified as capital leases under GAAP, provided that this clause (iii) shall only apply to the extent of the lesser of (x) the actual annual amount of such operating leases and (y) $500,000 annually (and any excess in excess of such minimum amount shall be included as capital leases).

 

1.3                               Interpretation.

 

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Unless the context requires otherwise all references herein to Sections and Schedules shall be construed to refer to Sections of, and Schedules to, this Agreement.

 

ARTICLE 2
 AMOUNT AND TERMS OF CREDIT

 

2.1                               Commitments.

 

(a)                                 Subject to and upon the terms and conditions herein set forth, each Lender severally agrees to make a term loan (each a “Loan” and, collectively, the “Loans”) to the Borrower, on the Closing Date, which Loans (i) may, at the option of the Borrower, be incurred and maintained as, and/or converted into, ABR Loans or LIBOR Loans and (ii) may be repaid in accordance with the provisions hereof and shall be repaid in full on the Maturity Date.  Amounts repaid or prepaid in respect of the Loans may not be reborrowed.

 

(b)                                 The Borrower shall use the proceeds from the Loans for the repayment of indebtedness under the Revolving Credit Agreement, to pay fees and expenses incurred in connection with this Agreement and for general corporate purposes of the Borrower and its Subsidiaries.

 

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2.2                               Minimum Amount of Each Borrowing; Maximum Number of Borrowings.

 

The aggregate principal amount of each Borrowing of Loans shall be in a multiple of $100,000 and shall not be less than the Minimum Borrowing Amount. More than one Borrowing may occur on any date; provided that at no time shall there be outstanding more than four (4) Borrowings of LIBOR Loans under this Agreement.

 

2.3                               Notice of Borrowing. (a)       To request the Loans to be made hereunder on the Closing Date, the Borrower shall give the Administrative Agent at an office of the Administrative Agent set forth for the Administrative Agent in Section 12.2(a)(ii), (i) the written Notice of Borrowing (including an electronic writing) prior to 12:00 Noon (New York time) at least two Business Days prior to the proposed day of the Borrowing of LIBOR Loans and (ii) the written Notice of Borrowing (including an electronic writing) prior to 12:00 Noon (New York time) on the Business Day prior to the proposed day of the Borrowing of ABR Loans. Such Notice of Borrowing shall be irrevocable and shall specify (i) the aggregate principal amount of the Loans to be made pursuant to such Borrowing, (ii) the date of Borrowing (which shall be a Business Day), (iii) whether the Borrowing shall consist of ABR Loans or LIBOR Loans, (iv) if such Borrowing shall consist of LIBOR Loans, the LIBOR Period to be initially applicable thereto and (v) the number and location of the account to which funds are to be disbursed. The Administrative Agent shall promptly give each Lender written notice (or telephonic notice promptly confirmed in writing) of the matters covered by the Notice of Borrowing.

 

(b)                                 Without in any way limiting the obligation of the Borrower to confirm in writing any notice it may give hereunder by telephone, the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice believed by the Administrative Agent in good faith to be from an Authorized Officer of the sole manager of the Borrower. In each such case the Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of any such telephonic notice.

 

2.4                               Disbursement of Funds.

 

(a)                                 No later than 12:00 Noon (New York time) on the Closing Date, each Lender will make available its pro rata portion of the Borrowing requested to be made on such date in an amount equal to its Commitment in the manner provided below.

 

(b)                                 Each Lender shall make available all amounts it is to fund under the Borrowing on the Closing Date in immediately available funds to the Administrative Agent at an office of the Administrative Agent from time to time notified by the Administrative Agent to the Lenders (but initially the office set forth for the Administrative Agent in Section 12.2(a)(ii)), and the Administrative Agent will make available to the Borrower by depositing such funds as specified in the Notice of Borrowing, the aggregate of the amounts so made available. Unless the Administrative Agent shall have been notified by any Lender prior to the Closing Date that such Lender does not intend to make available to the Administrative Agent its portion of the Borrowing to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the Borrower a corresponding amount.  If such corresponding amount

 

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is not in fact made available to the Administrative Agent by such Lender and the Administrative Agent has made available same to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if paid by such Lender, at the Federal Funds Effective Rate or (ii) if paid by the Borrower, the then-applicable rate of interest, calculated in accordance with Section 2.8, for the respective Loans.

 

(c)                                  Nothing in this Section 2.4 shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that the Borrower may have against any Lender as a result of any default by such Lender hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to fulfill its commitments hereunder).

 

2.5                               Repayment of Loans; Evidence of Debt.

 

(a)                                 The Borrower shall, for the benefit of the Lenders, on the Maturity Date, repay to the Administrative Agent the then-unpaid Loans.

 

(b)                                 Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to the appropriate lending office of such Lender resulting from the Loan made by such lending office of such Lender from time to time, including the amounts and currency of principal and interest payable and paid to such lending office of such Lender from time to time under this Agreement.

 

(c)                                  The Administrative Agent shall maintain the Register pursuant to Section 12.6, and a sub-account for each Lender, in which Register and sub-accounts (taken together) shall be recorded (i) the amount of each Loan made hereunder, the Type of each Loan made and the LIBOR Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof.

 

(d)                                 The entries made in the Register and accounts and subaccounts maintained pursuant to paragraphs (b) and (c) of this Section shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided that the failure of any Lender or the Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement. In the event that there is an inconsistency between the accounts maintained by a Lender pursuant to Section 2.5(b)

 

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and the Register maintained by the Administrative Agent pursuant to Section 12.6, the said Register shall prevail.

 

(e)                                  All payments to be made by the Administrative Agent to any Lender hereunder shall be made in accordance with the payment instructions of such Lender set forth on the signature page of such Lender hereunder or, if such Lender is an Assignee, set forth in the Assignment and Assumption of such Lender.

 

(f)                                   Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 12.6) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

 

2.6                               Changes in Type of Loan.

 

(a)                                 The Borrower shall have the option on any Business Day to convert all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Loans made to the Borrower of one Type into a Borrowing or Borrowings of another permitted Type or to continue the outstanding principal amount of any LIBOR Loans as LIBOR Loans for an additional LIBOR Period; provided that (i) no partial continuation of LIBOR Loans shall reduce the outstanding principal amount of LIBOR Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount, (ii) ABR Loans may not be converted into LIBOR Loans, if a Default or Event of Default is in existence on the date of the proposed conversion and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such conversion, (iii) LIBOR Loans may not be continued as LIBOR Loans for an additional LIBOR Period if a Default or Event of Default is in existence on the date of the proposed continuation and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such continuation, (iv) no LIBOR Period in excess of one month may be selected for any LIBOR Loan if a Default or Event of Default is in existence on the date of the proposed continuation and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such longer LIBOR Period, (v) Borrowings resulting from continuations or conversions pursuant to this Section 2.6 shall be limited in number as provided in Section 2.2 and (vi) the outstanding principal amount of a Loan of one Type may not be converted into a Borrowing of another permitted Type until the end of the current LIBOR Period for such Loan. Each such continuation or conversion shall be effected by the Borrower by giving the Administrative Agent at the location set forth in Section 12.2 prior to 12:00 Noon (New York time) at least three Business Days’ prior written notice substantially in the form of Exhibit B (or telephonic notice promptly confirmed in writing) (each a “Notice of Continuation”) specifying the Loans to be so continued or converted, the Type of Loans to be continued or converted into and, if such Loans are to be converted or continued as LIBOR Loans, the LIBOR Period to be initially applicable thereto. The Administrative Agent shall give each Lender notice as promptly as practicable of

 

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any such proposed continuation or conversion affecting any of its Loans. This Section 2.6 shall not be construed to permit the Borrower to change the currency of any Borrowing.

 

(b)                                 If any Default or Event of Default is in existence at the time of any proposed continuation of any LIBOR Loans and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such continuation, such LIBOR Loans shall be automatically converted on the last day of the current LIBOR Period into ABR Loans.

 

(c)                                  If upon the expiration of any LIBOR Period, the Borrower has failed to elect a new LIBOR Period to be applicable thereto as provided in paragraph (a) above, the Borrower shall be deemed to have elected to convert such Borrowing of LIBOR Loans, as the case may be, into a Borrowing of ABR Loans, as the case may be, effective as of the expiration date of such current LIBOR Period.

 

2.7                               Pro Rata Borrowings.

 

The Borrowing of Loans under this Agreement shall be made by the Lenders pro rata on the basis of their respective Commitment Percentages. It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder.

 

2.8                               Interest and Fees.

 

(a)                                 The unpaid principal amount of each ABR Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise and both before and after default and judgment) at a rate per annum that shall at all times be equal to the Applicable Margin for ABR Loans plus the ABR in effect from time to time.

 

(b)                                 The unpaid principal amount of each LIBOR Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise and both before and after default and judgment) at a rate per annum that shall at all times be equal to the Applicable Margin for LIBOR Loans plus the relevant LIBOR.

 

(c)                                  If all or a portion of (i) the principal amount of any Loan or (ii) any interest thereon or fees payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum that is (x) in the case of overdue principal, equal to the rate that would otherwise be applicable thereto plus, to the extent permitted by applicable law, 2.00% (after as well as before maturity and judgment), (y) in the case of any overdue interest with respect to any Loan, equal to the rate of interest applicable to such Loan plus, to the extent permitted by applicable law, 2.00%, or (z) in the case of any overdue fees or other amounts owing hereunder, equal to the rate of interest then applicable to Loans maintained as ABR Loans plus 2.00%, in each case from and including the date of such non-payment to but excluding the date on which such amount is paid in full (after as well as before maturity and judgment). All interest payable pursuant to this Section 2.8(c) shall be payable upon demand.

 

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(d)                                 Interest on each Loan shall accrue from and including the date such Loan is made to but excluding the date of any repayment thereof and shall, except as otherwise provided pursuant to Section 2.8(c), be payable (i) in respect of each ABR Loan, quarterly in arrears on the last Business Day of each of March, June, September and December (for the three-month period (or portion thereof) ended on such day), (ii) in respect of each LIBOR Loan, on the last day of each LIBOR Period applicable thereto and, in the case of a LIBOR Period in excess of three months, on each date occurring at three-month intervals after the first day of such LIBOR Period and (iii) in respect of each Loan on any payment or prepayment (on the amount paid or prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

 

(e)                                  All computations of interest hereunder shall be made in accordance with Section 5.4.

 

(f)                                   The Administrative Agent, upon determining the interest rate for any Borrowing of LIBOR Loans, shall promptly notify the Borrower and the Lenders thereof. Each such determination shall, absent clearly demonstrable error, be final and conclusive and binding on all parties hereto.

 

2.9                               Interest Periods.

 

At the time the Borrower gives the Notice of Borrowing or a Notice of Continuation in respect of the making of, or conversion into or continuation as, a Borrowing of LIBOR Loans prior to 12:00 Noon (New York time) on the third Business Day prior to the applicable date of making or conversion or continuation of such LIBOR Loans, the Borrower shall have the right to elect by giving the Administrative Agent written notice of (or telephonic notice promptly confirmed in writing) the LIBOR Period applicable to such Borrowing, which LIBOR Period shall, at the option of the Borrower, be one week or one, two, three or six months. Notwithstanding anything to the contrary contained above:

 

(a)                                 the initial LIBOR Period for any Borrowing of LIBOR Loans shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of ABR Loans) and each LIBOR Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding LIBOR Period expires;

 

(b)                                 if any LIBOR Period relating to a Borrowing of LIBOR Loans begins on the last Business Day of a calendar month or begins on a day for which there is no numerically corresponding day in the calendar month at the end of such LIBOR Period, such LIBOR Period shall end on the last Business Day of the calendar month at the end of such LIBOR Period;

 

(c)                                  if any LIBOR Period would otherwise expire on a day that is not a Business Day, such LIBOR Period shall expire on the next succeeding Business Day; provided that if any LIBOR Period in respect of a LIBOR Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such LIBOR Period shall expire on the next preceding Business Day; and

 

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(d)                                 the Borrower shall not be entitled to elect any LIBOR Period in respect of any LIBOR Loan if such LIBOR Period would extend beyond the Maturity Date.

 

2.10                        Increased Costs, Illegality, etc.

 

(a)                                 In the event that the Administrative Agent or any Lender shall have reasonably determined (which determination shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto):

 

(i)                                     on any date for determining LIBOR for a Borrowing of LIBOR Loans for any LIBOR Period that by reason of any changes arising on or after the date hereof affecting the London interbank market (x) deposits in Dollars in the principal amounts of the Loans comprising such Borrowing are not readily available to such Lender in the London interbank market or (y) adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of LIBOR; or

 

(ii)                                  at any time, that the Administrative Agent or such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Loans (other than any such increase or reduction attributable to (A) Taxes, (B) Other Taxes, (C) taxes excluded by Section 5.3(a)(i) or Section 5.3(a)(ii) or (D) taxes excluded by Section 5.3(b)) because of (x) any change since the date hereof in any applicable law, governmental rule, regulation, guideline or order (or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline or order), such as, for example, but not limited to, a change in official reserve requirements (including any reserve requirements specified under regulations issued from time to time by the F.R.S. Board and then applicable to assets or liabilities consisting of and including “Eurocurrency Liabilities” as therein defined or the imposition of any tax on the Administrative Agent or any Lender on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto), and/or (y) with respect to LIBOR Loans only, other circumstances affecting the London interbank market; or

 

(iii)                               at any time, that the making or continuance of any LIBOR Loan has become unlawful by compliance by such Lender in good faith with any law, governmental rule, regulation, guideline or order (or would conflict with any such governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or has become impracticable as a result of a contingency occurring after the date hereof that materially and adversely affects the London interbank market;

 

then, and in any such event, the Administrative Agent or such Lender shall within a reasonable time thereafter give notice (if by telephone confirmed in writing) to the Borrower and, as the case may be, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the case of clause (i) above, LIBOR Loans shall no longer be available from such Lender (and such Lender’s obligation to make such Loans shall be suspended) until such time as such Lender notifies the Administrative Agent, the Borrower and the Lenders that the circumstances giving rise to such

 

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notice by the Administrative Agent no longer exist (which notice such Lender agrees to give at such time when such circumstances no longer exist), and the Notice of Borrowing or any Notice of Continuation given by the Borrower with respect to LIBOR Loans that have not yet been incurred shall be deemed, with respect to such Lender only, to be the Notice of Borrowing or a Notice of Continuation for ABR Loans, (y) in the case of clause (ii) above, the Borrower shall pay to the Administrative Agent or such Lender, within five (5) days after receipt of written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine) as shall be required to compensate the Administrative Agent or such Lender for such increased costs or reductions in amounts receivable hereunder (it being agreed that a written notice as to the additional amounts owed to the Administrative Agent or such Lender, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower by the Administrative Agent or such Lender shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto, provided that the determination of such additional amounts shall be made in good faith (and not on an arbitrary or capricious basis) and consistent with similarly situated customers of the applicable Lender (after consideration of such factors as such Lender then reasonably determines to be relevant)) and (z) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event, within the time period required by law.

 

(b)                                 At any time that any LIBOR Loan is affected by the circumstances described in Section 2.10(a)(ii) or 2.10(a)(iii), the Borrower may (and in the case of a LIBOR Loan affected pursuant to Section 2.10(a)(iii) shall) either (i) if the affected LIBOR Loan is then being made pursuant to a Credit Event or Borrowing by way of conversion into a LIBOR Loan, cancel said Credit Event or Borrowing by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the Borrower was notified by a Lender pursuant to Section 2.10(a)(ii) or 2.10(a)(iii), or (ii) if the affected LIBOR Loan is then outstanding, upon at least three Business Days notice to the Administrative Agent, require the affected Lender to convert each such LIBOR Loan into an ABR Loan; provided that if more than one Lender is affected at any time, then all affected Lenders must be treated in the same manner pursuant to this Section 2.10(b).

 

(c)                                  If, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy or liquidity requirements, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, or compliance by a Lender or its parent with any request or directive made or adopted after the date hereof regarding capital adequacy or liquidity requirements (whether or not having the force of law) of any such Governmental Authority, has or would have the effect of reducing the rate of return on such Lender’s or its parent’s capital or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s or its parent’s policies with respect to capital adequacy and liquidity requirements), then within five (5) days after written demand (as described below) by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or its parent for such reduction, it being understood and agreed, however, that a Lender shall not be entitled to such compensation as a result of such Lender’s compliance with, or pursuant to any request or directive to comply with, any such law,

 

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rule or regulation as in effect on the date hereof. Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.10(c) (provided that such determination of additional amounts shall be made in good faith (and not on an arbitrary or capricious basis) and consistent with similarly situated customers of the applicable Lender (after consideration of such factors as such Lender then reasonably determines to be relevant)), will give prompt written notice thereof to the Borrower, which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts (it being agreed that a written notice as to the additional amounts owed to the Administrative Agent or such Lender, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower by the Administrative Agent or such Lender shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto, provided that the determination of such additional amounts shall be made in good faith (and not on an arbitrary or capricious basis) and consistent with similarly situated customers of the applicable Lender (after consideration of such factors as such Lender then reasonably determines to be relevant), although the failure to give any such notice shall not, subject to Section 2.13, release or diminish the Borrower’s obligations to pay additional amounts pursuant to this Section 2.10(c) upon receipt of such notice.

 

(d)                                 For purposes of this Section 2.10, and notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, requirements, guidelines and directives thereunder or issued in connection therewith or in implementation thereof and (ii) all requests, rules, guidelines, requirements and 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 shall be deemed to have been enacted, adopted and issued after the date hereof, regardless of the date enacted, adopted, issued or implemented.

 

Subject to Section 2.13, the provisions of this Section 2.10 shall survive the repayment of the Loans and all other amounts payable hereunder.

 

2.11                        Compensation.

 

If (a) any payment of principal of any LIBOR Loan, or any continuation of any LIBOR Loan, is made by the Borrower (or a replacement Lender in the case of Section 12.7) to or for the account of a Lender other than on the last day of the LIBOR Period pursuant to Section 2.5, 2.6, 2.10, 5.1 or 12.7, as a result of acceleration of the maturity of the Loans pursuant to Article 10 or for any other reason, (b) any Borrowing of LIBOR Loans is not made as a result of a withdrawn Notice of Borrowing, (c) any ABR Loan is not converted into a LIBOR Loan as a result of a withdrawn Notice of Continuation, (d) any LIBOR Loan is not continued as a LIBOR Loan as a result of a withdrawn Notice of Continuation or (e) any prepayment of principal of any LIBOR Loan is not made as a result of a withdrawn notice of prepayment pursuant to Section 5.1(a), the Borrower shall, after receipt of a written request by such Lender (which request shall set forth in reasonable detail the basis for requesting such amount), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that such Lender may reasonably incur as a result of such payment, failure to convert, failure to continue or failure to prepay, including any loss, cost or expense (excluding loss of anticipated profits) actually incurred by reason of the liquidation or

 

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reemployment of deposits or other funds acquired by any Lender to fund or maintain such LIBOR Loan.

 

2.12                        Change of Lending Office.

 

If any Lender requests compensation under Section 2.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.3, then such Lender shall, if requested by the Borrower, use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.10 or 5.3, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

2.13                        Notice of Certain Costs.

 

Notwithstanding anything in this Agreement to the contrary, to the extent any notice required by Section 2.10, 2.11 or 5.3 is given by the Administrative Agent or any Lender more than 180 days after the Administrative Agent or such Lender has knowledge (or should have had knowledge) of the occurrence of the event giving rise to the additional cost, reduction in amounts, loss, tax or other additional amounts described in such Sections (provided that no Lender shall be deemed to have knowledge of any such event referred to in Section 2.10(d) prior to the incurrence of any such additional cost, reduction in amounts, loss, tax or other additional amounts), then the Administrative Agent or such Lender shall not be entitled to compensation under Section 2.10, 2.11 or 5.3, as the case may be, for any such amounts incurred or accruing prior to the giving of such notice.

 

2.14                        Defaulting Lenders.

 

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then, for so long as such Lender is a Defaulting Lender, the Commitment and Loans of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 12.1; provided, that this limitation shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby.

 

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ARTICLE 3

[RESERVED].

 

ARTICLE 4

TERMINATION OF COMMITMENTS

 

4.1                               Mandatory Termination of Commitments.

 

The Total Commitment shall terminate at the earlier to occur of (a) 5:00 p.m. (New York time) on the Closing Date and (b) the making of the Loans hereunder.

 

ARTICLE 5

PAYMENTS

 

5.1                               Voluntary Prepayments and Mandatory Prepayments.

 

(a)                                 The Borrower shall have the right to prepay any Borrowing, without premium or penalty, in whole or in part at any time and from time to time. Such prepayment of Loans shall be subject to the following conditions: (i) the Borrower shall give the Administrative Agent written notice substantially in the form of Exhibit C (or telephonic notice promptly confirmed in writing) of its intent to make such prepayment, the amount of such prepayment and (in the case of LIBOR Loans) the specific Borrowing(s) to be prepaid, which notice shall be given by the Borrower no later than 10:00 a.m. (New York time) three Business Days prior to the date of such prepayment and shall promptly be transmitted by the Administrative Agent to each of the Lenders; (ii) each partial prepayment of Loans shall be in an amount that is a multiple of $100,000 and in an aggregate principal amount of at least $5,000,000; provided that no partial prepayment of LIBOR Loans made pursuant to a single Borrowing shall reduce the outstanding LIBOR Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount for LIBOR Loans; and (iii) any prepayment of LIBOR Loans pursuant to this Section 5.1(a) on any day other than the last day of a LIBOR Period applicable thereto shall be subject to compliance by the Borrower with the applicable provisions of Section 2.11. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.

 

(b)                                 Not later than the fifth (5th) Business Day following the receipt by the Borrower or a Subsidiary of any Net Cash Proceeds from any Specified Debt Incurrence occurring on or after the Closing Date, the Borrower shall prepay the Loans in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds.  The Borrower shall notify the Administrative Agent of the expected occurrence of any Specified Debt Incurrence at least two Business Days prior to the consummation of such Specified Debt Incurrence and such notice shall be accompanied by a reasonably detailed calculation of the expected Net Cash Proceeds thereof.  Promptly following receipt of such notice, the Administrative Agent shall advise the Lenders of the contents of such notice, including the expected Net Cash Proceeds specified therein.

 

5.2                               Method and Place of Payment.

 

(a)                                 Except as otherwise specifically provided herein, all payments to be made by the Borrower under this Agreement shall be made, without set-off, counterclaim or deduction of any kind, to the Administrative Agent for the ratable account of all the Lenders not later than 12:00 Noon (New York time) on the date when due. Such payments shall be made in immediately available funds at the office of the Administrative Agent from time to time notified by the Administrative Agent to the Borrower (but initially the office set forth for the Administrative Agent in Section 12.2(a)(ii)), it being understood that written or facsimile notice by the Borrower to the Administrative Agent to make a payment from the funds in its account at an office of the Administrative Agent shall constitute the making of such payment to the extent of such funds held in such account. The Administrative Agent will thereafter cause to be distributed on the

 

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same day (if payment was actually received by the Administrative Agent prior to 2:00 p.m. (New York time) on such day, otherwise the next Business Day) like funds relating to the payment of principal or interest ratably to the Lenders entitled thereto. A payment shall be deemed to have been made by the Administrative Agent on the date on which it is required to be made under this Agreement if the Administrative Agent has, on or before such date, taken steps to make such payment in accordance with the regulations or operating procedures of the clearing or settlement system used by the Administrative Agent in order to make such payment.

 

(b)                                 Any payments under this Agreement that are made later than 12:00 Noon (New York time) shall be deemed to have been made on the next succeeding Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension.

 

5.3                               Net Payments.

 

(a)                                 All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any current or future income or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding (i) any net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent or any Lender, (ii) any such taxes attributable to the failure of the Administrative Agent or any Lender to comply with Section 5.3(c) and (iii) any such taxes imposed on the Administrative Agent or any Lender as a result of a current or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement) (“Taxes”) except to the extent that such deduction or withholding is required by any applicable law, as modified by the administrative practice of any relevant Governmental Authority then in effect. If any such Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder, the Borrower shall:

 

(A)                               promptly notify the Administrative Agent of such requirement;

 

(B)                               promptly pay to the relevant Governmental Authority when due the full amount required to be deducted or withheld (including the full amount of Taxes required to be deducted or withheld from any additional amount paid by the Borrower to the Administrative Agent or such Lender under this Section 5.3(a);

 

(C)                               as promptly as possible thereafter, forward to the Administrative Agent and such Lender an official receipt (or a certified copy), or other documentation reasonably acceptable to the Administrative Agent and such Lender, evidencing such payment to such Governmental Authority; and

 

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(D)                               pay to the Administrative Agent or such Lender, in addition to the payment to which the Administrative Agent or such Lender is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by the Administrative Agent or such Lender, after deduction or withholding for any such Taxes, will equal the full amount the Administrative Agent or such Lender would have received had no such deduction or withholding been required.

 

If the Borrower fails to pay to the relevant Governmental Authority when due any Taxes that it was required to deduct or withhold under this Section 5.3(a) in respect of any payment to or for the benefit of the Administrative Agent or any Lender under this Agreement or fails to furnish the Administrative Agent or such Lender, as applicable, with the documentation referred to in this Section 5.3(a) when required to do so, the Borrower shall forthwith on demand fully indemnify the Administrative Agent or such Lender for any incremental taxes, interest, costs or penalties that may become payable by the Administrative Agent or such Lender as a result of such failure.

 

The Borrower’s obligations under this Section 5.3(a) shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

(b)                                 Notwithstanding Section 5.3(a), the Borrower shall not be required to indemnify or pay any additional amounts in respect of withholding tax applicable to any amount payable under this Agreement pursuant to Section 5.3(a) above to any Non-U.S. Lender, except if any such Loans were assigned, participated or transferred to such Non-U.S. Lender at the request or with the consent of the Borrower or were assigned, participated or transferred to such Non-U.S. Lender following the occurrence of and during the continuance of an Event of Default pursuant to Section 10.1 or 10.5. The Borrower shall not be required to indemnify or pay any additional amounts in respect of any U.S. federal withholding Taxes imposed under FATCA.

 

(c)                                  Any Lender that is entitled to an exemption from or reduction of Tax with respect to payments made under this Agreement shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 5.3(c)(i) and (c)(ii) below) shall not be required if in the Person’s reasonable judgment such completion, execution or submission would subject such Person to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Person. Without limiting the generality of the foregoing:

 

(i)                                     The Administrative Agent and each Lender that is a “United States person,” as defined under Section 7701(a)(30) of the Code, shall deliver to the Borrower 

 

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and, as the case may be, the Administrative Agent on or prior to the date on which such Person becomes a party under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of Internal Revenue Service Form W-9 certifying that such Person is exempt from U.S. federal backup withholding tax;

 

(ii)                                  Each Non-U.S. Lender shall:

 

(A)                               deliver to the Borrower and the Administrative Agent two copies of either (x) in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, United States Internal Revenue Service Form W-8BEN, (together with a certificate representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code)), or (y) Internal Revenue Service Form W-8BEN or W-8ECI, in each case properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S. Federal withholding tax on payments by the Borrower under this Agreement;

 

(B)                               to the extent such Non-U.S. Lender is not the beneficial owner, deliver executed originals of Internal Revenue Service Form W-8IMY, accompanied by Internal Revenue Service Form W-8ECI, W-8BEN, W-9, a certificate described in clause (A), and/or other certification documents from each beneficial owner, as applicable; provided that if the Non-U.S. Lender is a partnership and one or more direct or indirect partners of such Non-U.S. Lender are claiming the portfolio interest exemption, such Non-U.S. Lender may provide the certificate described in clause (A) on behalf of each such direct and indirect partner;

 

Each Lender and the Administrative Agent agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and, as the case may be, the Administrative Agent in writing of its legal inability to do so. Each Person that shall become a Participant pursuant to Section 12.6 or a Lender pursuant to Section 12.6 shall, upon the effectiveness of the related transfer, be required to provide all the forms and statements required pursuant to this Section 5.3(c), provided that in the case of a Participant such Participant shall furnish all such required forms and statements to the Lender from which the related participation shall have been purchased.

 

(d)                                 If the Borrower determines in good faith that a reasonable basis exists for contesting any Taxes for which indemnification has been demanded hereunder, the relevant Lender or the Administrative Agent, as applicable, shall cooperate with the Borrower in challenging such Taxes at the Borrower’s expense if so requested by the Borrower. If any Lender or the Administrative Agent, as applicable, receives a refund of, or credit for, a Tax for which a

 

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payment has been made by the Borrower pursuant to this Agreement, which refund or credit in the good faith judgment of such Lender or the Administrative Agent, as the case may be, is attributable to such payment made by the Borrower, then the Lender or the Administrative Agent, as the case may be, shall reimburse the Borrower for such amount as the Lender or the Administrative Agent, as the case may be, determines to be the proportion of the refund or credit as will leave it, after such reimbursement, in no better or worse position than it would have been in if the payment had not been required. A Lender or Administrative Agent shall claim any refund or credit that it determines is available to it, unless it concludes in its reasonable discretion that it would be adversely affected by making such a claim. Neither such Lender nor the Administrative Agent shall be obliged to disclose any information regarding its tax affairs or computations to the Borrower in connection with this paragraph (d) or any other provision of this Section 5.3.

 

(e)                                  Each Lender shall severally indemnify the Administrative Agent for any taxes (but, in the case of any Taxes or Other Taxes, only to the extent that the Borrower has not already indemnified the Administrative Agent for such Taxes or Other Taxes and without limiting the obligation of the Borrower to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with this Agreement and any reasonable expenses arising therefrom or with respect thereto, whether or not such taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 5.3(e) shall be paid within ten (10) days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

 

(f)                                   If a payment made to a Lender under this Agreement or any related loan document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (f), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

5.4                               Computations of Interest and Fees.

 

(a)                                 All interest and fees hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the ABR at times when the ABR is based on the prime rate of the Administrative Agent shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable ABR or LIBOR rate

 

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shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

(b)                                 All interest payments to be made under this Agreement shall be paid without allowance or deduction for deemed re-investment or otherwise, both before and after maturity and before and after default and/or judgment, if any, until payment of the amount on which such interest is accruing, and interest will accrue on overdue interest, if any.

 

(c)                                  The amount of costs and expenses required to be paid or reimbursed by the Borrower pursuant to Section 12.5 or any other provision of this Agreement shall bear interest until paid, as well after as before demand, default, maturity and judgment, at the highest rate provided for in Section 2.8(c).

 

(d)                                 If interest is not paid on the indebtedness of the Borrower to the Lenders hereunder, or any part thereof, as and when interest is due and payable hereunder, unpaid interest shall bear interest until paid, as well after as before demand, default, maturity and judgment, at the rates provided for in Section 2.8(c).

 

ARTICLE 6

CONDITIONS PRECEDENT

 

6.1                               Conditions Precedent to Initial Effectiveness.

 

The obligation of each Lender to make the Loan to be made by it on the Closing Date shall become effective on the date on which each of the following conditions are satisfied or waived by each Lender:

 

(a)                                 Credit Agreement.  The Administrative Agent shall have received this Agreement, executed and delivered by a duly authorized officer of each of the parties hereto.

 

(b)                                 Closing Date Certificate.  The Administrative Agent shall have received a certificate of the Borrower, dated the Closing Date, substantially in the form of Exhibit D, with appropriate insertions, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the sole manager of the Borrower (the “Closing Date Certificate”).

 

(c)                                  Proceedings of the Borrower.  The Administrative Agent shall have received a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the sole manager of the Borrower authorizing (a) the execution, delivery and performance of this Agreement (and any agreements relating thereto) and (b) the extensions of credit contemplated hereunder.

 

(d)                                 Organic Documents.  The Administrative Agent shall have received (i) true and complete copies of the articles of organization (which shall be certified as of a recent date by the Michigan Department of Licensing and Regulatory Affairs) and operating agreement of the Borrower, (ii) a certificate of good standing with respect to the Borrower issued by its jurisdiction of organization (which shall be certified as of a

 

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recent date by the Michigan Department of Licensing and Regulatory Affairs) and (iii) to the extent reasonably requested in writing by any of the Lenders, all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, at least two Business Days prior to the Closing Date.

 

(e)                                  Payment of Fees and Reimbursement of Expenses.  The Administrative Agent, the Arranger and the Lenders shall have received all amounts due and payable on or prior to the Closing Date.  Without limiting the foregoing, the Administrative Agent shall have received payment and/or reimbursement of the Administrative Agent’s and its affiliates’ out of pocket fees and expenses (including, to the extent invoiced, reasonable fees and expenses of counsel for the Administrative Agent) in connection with this Agreement.

 

(f)                                   Legal Opinions.  The Administrative Agent shall have received in form and substance reasonably satisfactory to it the executed legal opinions of (i) counsel to the Borrower with respect to the execution and delivery of this Agreement by the Borrower, the validity, binding effect, legality and enforceability of this Agreement, compliance with certain applicable law and such other matters as the Administrative Agent may reasonably request in form and substance satisfactory to the Administrative Agent and (ii) special Michigan counsel to the Borrower with respect to the status and capacity of the Borrower, the due authorization of this Agreement, compliance with the Organic Documents of the Borrower and with certain applicable law and such other matters as the Administrative Agent may reasonably request in form and substance satisfactory to the Administrative Agent.

 

(g)                                  Governmental Approvals.  The Administrative Agent shall have received evidence that all governmental approvals necessary in connection with the transactions contemplated hereby (including, without limitation, approvals from the United States Federal Energy Regulatory Commission and approval of the 204 financing application) shall have been obtained and are in full force and effect.

 

(h)                                 Financial Statements.  The Lenders shall have received (i) satisfactory audited consolidated financial statements of the Borrower for the fiscal years ended December 31, 2011 and December 31, 2012, (ii) satisfactory unaudited interim consolidated financial statements of the Borrower for the quarterly period ended September 30, 2013 and (iii) satisfactory financial statement projections through and including the Borrower’s 2014 fiscal year (the “Projections”).

 

(i)                                     Notice of Borrowing.  The Administrative Agent shall have received the Notice of Borrowing (in writing or by email) meeting the requirements of Section 2.3.

 

(j)                                    No Default; Representations and Warranties True and Correct.  On the Closing Date and also after giving effect to the Borrowing to be made on the Closing Date (i) there shall exist no Default or Event of Default and (ii) all representations and warranties made by the Borrower contained herein shall be true and correct in all material respects (or in all respects if the applicable representation or warranty is qualified by

 

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materiality or Material Adverse Effect) with the same effect as though such representations and warranties had been made on and as of the Closing Date (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (or in all respects if the applicable representation or warranty is qualified by materiality or Material Adverse Effect) as of such earlier date).

 

(k)                                 Solvency Certificate.  The Administrative Agent and the Lenders shall have received a certificate of value, solvency and other appropriate factual information in form and substance reasonably satisfactory to the Administrative Agent and Arranger from the chief financial officer or treasurer of the Borrower’s sole manager in his or her representative capacity supporting the conclusions that as of the Closing Date, the Borrower is Solvent and will be Solvent subsequent to incurring the Indebtedness contemplated under this Agreement.

 

The acceptance of the proceeds of the Loans shall constitute a representation and warranty by the Borrower to each of the Lenders that all the applicable conditions specified above are satisfied as of the Closing Date.

 

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders to enter into this Agreement and to make the Loans as provided for herein, the Borrower (as to itself and each of its Subsidiaries) makes the following representations and warranties to, and agreements with, the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans.

 

7.1                               Organizational Status.

 

The Borrower is validly organized and existing and in good standing under the laws of the state or jurisdiction of its organization, is duly qualified to do business and is in good standing as a foreign entity in each jurisdiction where the nature of its business requires such qualification (except where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect), and has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its obligations under this Agreement, to own and hold under lease its property and to conduct its business substantially as currently conducted by it.

 

7.2                               Capacity, Power and Authority.

 

The Borrower has the capacity, power and authority to execute, deliver and carry out the terms and provisions of this Agreement and has taken all necessary action, partnership, corporate or otherwise, to authorize the execution, delivery and performance of this Agreement. The Borrower has duly executed and delivered this Agreement and this Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and subject to general principles of equity.

 

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7.3                               No Violation.

 

Neither the execution, delivery nor performance by the Borrower of this Agreement nor compliance with the terms and provisions thereof will (a) contravene any applicable provision of any material law, statute, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority, (b) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of the Borrower or any of its Subsidiaries pursuant to, the terms of any material indenture, loan agreement, lease agreement, mortgage, deed of trust, agreement or other material instrument to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or (c) violate any provision of the Borrower’s Organic Documents.

 

7.4                               Litigation.

 

There are no actions, suits or proceedings pending or, to the knowledge of the Borrower or any of its Subsidiaries (after due internal inquiry), threatened with respect to the Business, the Borrower or any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect.

 

7.5                               Governmental Approvals.

 

No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or notice to, any Governmental Authority (other than those that have been, or on the Closing Date will be, obtained and are in full force and effect) is required to authorize or is required in connection with (a) the execution, delivery and performance of this Agreement or (b) the legality, validity, binding effect or enforceability of this Agreement.

 

7.6                               True and Complete Disclosure.

 

To the knowledge of the Borrower, after due inquiry:

 

(a)                                 All written factual information and data (taken as a whole) heretofore or contemporaneously furnished (other than any projections and pro forma financial information and information of a general industry nature), by or on behalf of the Borrower or any of its Subsidiaries or any of their respective authorized consultants, agents or representatives in writing to the Administrative Agent and/or any Lender on or before the Closing Date (including all information contained in this Agreement) for purposes of or in connection with this Agreement or any transaction contemplated herein was true and complete in all material respects on the date as of which such information or data is dated or certified and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, taken as a whole, not materially misleading at such time in light of the circumstances under which such statements were made.

 

(b)                                 The Projections were prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made, it being recognized by the Administrative Agent and the Lenders that such projections are not to be viewed as facts, that whether such projections

 

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will be achieved will depend on future events, some of which are not within the Borrower’s control, and that actual results during the period or periods covered by any such projections may differ from the projected results and that such variances can be significant.

 

7.7                               Financial Condition; Financial Statements.

 

The Borrower has heretofore furnished to the Lenders (i) the financial statements with respect to the Borrower and its Subsidiaries for the fiscal year ended December 31, 2012 and with respect to the fiscal quarter ended September 30, 2013 and (ii) the Projections.  The financial statements referred to in clause (i) of the immediately preceding sentence present fairly in all material respects the consolidated financial position of the Borrower and its Subsidiaries at the respective dates of said statements and the results of operations for the respective periods covered thereby, subject, in the case of quarterly financial statements, to changes resulting from audit and normal year-end adjustments and other adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period.  All such financial statements have been prepared in accordance with GAAP consistently applied, except to the extent provided in the notes to said financial statements.  All balance sheets, all statements of income and of cash flow and all other financial information of each of the Borrower and its Subsidiaries furnished pursuant to Section 8.1 have been and will for periods following the Closing Date be prepared in accordance with GAAP consistently applied, and do or will present fairly the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods covered thereby, subject, in the case of quarterly financial statements to changes resulting from audit and normal year-end adjustments and other adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period.

 

7.8                               Tax Returns and Payments.

 

Each of the Borrower and its Subsidiaries has filed all material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes and assessments payable by it that have become due, other than those not yet delinquent or contested in good faith. The Borrower and each of its respective Subsidiaries have paid, or have provided adequate reserves (in the good faith judgment of the management of the Borrower) in accordance with GAAP for the payment of, all material income taxes applicable for all prior fiscal years and for the current fiscal year to the Closing Date.

 

7.9                               Environmental Matters.

 

Except as set forth in Schedule II:

 

(a)                                 Other than instances of noncompliance that could not reasonably be expected to have a Material Adverse Effect: (i) the Borrower and each of its Subsidiaries are in compliance with all Environmental Laws in all jurisdictions in which the Borrower and each of its Subsidiaries are currently doing business (including having obtained all material permits required under Environmental Laws) and (ii) the Borrower will comply and cause each of its Subsidiaries to comply with all such Environmental Laws (including all permits required under Environmental Laws); and

 

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(b)                                 Neither the Borrower nor any of its Subsidiaries has treated, stored, transported or disposed of Hazardous Materials at or from any currently or formerly owned Real Estate or facility relating to its business in a manner that could reasonably be expected to have a Material Adverse Effect.

 

7.10                        Properties.

 

The Borrower and each of its Subsidiaries has good title to or a leasehold or easement interest in all of its properties that are necessary for the operation of its respective business as currently conducted and as proposed to be conducted, free and clear in each case of all Liens (other than any Liens permitted by this Agreement) except where the failure to have such good title could not reasonably be expected to have a Material Adverse Effect.

 

7.11                        Pension and Welfare Plans.

 

During the twelve-consecutive-month period prior to the Closing Date and prior to the date of any Credit Event hereunder, except as could not reasonably be expected have a Material Adverse Effect, (a) no steps have been taken to terminate any Pension Plan, (b) no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 303(k) of ERISA, (c) no condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by the Borrower or any member of the Controlled Group of any liability (other than any liability that relates to the accrual of benefits), fine or penalty and (d) except as disclosed in Schedule III, neither the Borrower nor any member of the Controlled Group has any contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA.

 

7.12                        Regulations U and X.

 

Neither the making of any Loan hereunder nor the use of the proceeds thereof will violate the provisions of F.R.S. Board Regulation U or Regulation X.  Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying “margin stock” (as such term is defined in F.R.S. Board Regulation U).

 

7.13                        Investment Company Act.

 

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

 

7.14                        Sanctions Laws and Regulations.

 

(a)                                 None of the Borrower, any of its directors nor any Subsidiary nor, to the knowledge of the Borrower, any officer or any agents of the Borrower or any Subsidiary acting or benefiting in any capacity in connection with the Loans or any affiliate over which any of the foregoing exercises management control or which exercises management control over the Borrower or any Subsidiary, is a Designated Person.

 

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(b)                                 The Borrower and its directors and Subsidiaries and, to the knowledge of the Borrower, its officers and agents of the Borrower and Subsidiary acting or benefiting in any capacity in connection with the Loans or any affiliate over which any of the foregoing exercises management control or which exercises management control over the Borrower or any Subsidiary, have instituted and maintained policies and procedures designed to promote and achieve compliance with Anti-Corruption Laws.

 

7.15                        No Material Adverse Change.

 

There has been no material adverse change in the business, assets, operations, property or financial condition of the Borrower and its Subsidiaries taken as a whole since December 31, 2012.

 

7.16                        Deemed Repetition of Representations and Warranties.

 

The representations and warranties set out in Sections 7.1 to 7.14 inclusive (and solely in the case of the initial Credit Event, Section 7.15) will be deemed to be repeated by the Borrower as of the date of each request for a new Credit Event, by the Borrower (but not the conversion or continuation of a Borrowing) and as of the date on which a Successor Borrower assumes all of the obligations of the Borrower under this Agreement pursuant to Section 9.2(a) (but after giving effect to such assumption), except to the extent that on or prior to such date (a) the Borrower has advised the Administrative Agent in writing of a variation in any such representation or warranty, and (b) the Required Lenders have approved such variation, and except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date.

 

ARTICLE 8

AFFIRMATIVE COVENANTS

 

The Borrower (on its own behalf and on behalf of each of its Subsidiaries) hereby covenants and agrees that on the Closing Date and thereafter, for so long as this Agreement is in effect and until the Maturity Date:

 

8.1                               Information Covenants.

 

The Borrower will furnish to each Lender and the Administrative Agent:

 

(a)                                 Annual Financial Statements.  As soon as available and in any event on or before the date that is 90 days after the end of each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2013, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the related consolidated statement of operations and cash flows for such fiscal year prepared in accordance with GAAP consistently applied, setting forth comparative consolidated figures for the preceding fiscal year, and audited by an independent auditing firm of recognized national standing whose opinion shall not be qualified as to the scope of audit or as to the status of the Borrower or any of its Subsidiaries as a going concern, together

 

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in any event with a no-default letter from such auditing firm stating that in the course of its regular audit of the business of the Borrower and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, as established by the Auditing Standards Board (United States) and with auditing standards of the Public Company Accounting Oversight Board (United States), such auditing firm has obtained no knowledge of any Default or Event of Default relating to Section 9.4 that has occurred and is continuing or, if in the opinion of such auditing firm such a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof.

 

(b)                                 Quarterly Financial Statements.  As soon as available and in any event on or before the date that is 45 days after the end of each of the first three fiscal quarters in each fiscal year of the Borrower, commencing with the fiscal quarter ending March 31, 2014, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter and the related consolidated statement of operations for such fiscal quarter and for the elapsed portion of the fiscal year ended with the last day of such fiscal quarter, and the related consolidated statement of cash flows and for the elapsed portion of the fiscal year ended with the last day of such fiscal quarter, and setting forth comparative consolidated figures for the related periods in the prior fiscal year or, in the case of such consolidated balance sheet, for the last day of the prior fiscal year, and prepared in accordance with GAAP consistently applied, all of which shall be certified by an Authorized Officer of the sole manager of the Borrower, subject to changes resulting from audit and normal year-end adjustments and other adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period.

 

(c)                                  Officer’s Certificates.  At the time of the delivery of the financial statements provided for in Sections 8.1(a) and (b), a certificate of an Authorized Officer of the sole manager of the Borrower in substantially the form of Exhibit E (a “Compliance Certificate”) to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall be in form and detail satisfactory to the Administrative Agent, acting reasonably, and setting forth the calculations required to establish whether the Borrower was in compliance with the provisions of Section 9.4 as at the end of such fiscal year or period, as the case may be.

 

(d)                                 Notice of Default or Litigation.  Promptly after an Authorized Officer of the sole manager of the Borrower or any of its Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any event that constitutes a Default or Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower proposes to take with respect thereto and (ii) any litigation or governmental proceeding pending or threatened against the Borrower or any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect.

 

(e)                                  Environmental Matters.  Promptly after an Authorized Officer of the sole manager of the Borrower or any of its Subsidiaries obtains knowledge or notice of any one or more of the following environmental matters, unless such environmental matters would not, individually or when aggregated with all other such matters, be reasonably expected to result in a Material Adverse Effect, notice of:

 

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(i)            Any pending or threatened Environmental Claim against the Borrower or any of its Subsidiaries or any Real Estate (as defined below);

 

(ii)           Any condition or occurrence that (x) results in non-compliance by the Borrower or any of its Subsidiaries with any applicable Environmental Law or (y) could reasonably be anticipated to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any Real Estate;

 

(iii)          Any condition or occurrence on any Real Estate that could reasonably be anticipated to cause such Real Estate to be subject to any restrictions on the ownership, occupancy, use or transferability of such Real Estate under any Environmental Law; and

 

(iv)          The taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Real Estate.

 

All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower’s response thereto. The term “Real Estate” shall mean land, buildings and improvements owned or leased by the Borrower or any of its Subsidiaries, but excluding all operating fixtures and equipment, whether or not incorporated into improvements.

 

(f)            Pension Plans.  Promptly after an Authorized Officer of the sole manager of the Borrower or any of its Subsidiaries obtains knowledge thereof where the liability, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, notice of and copies of all documentation relating to (i) the institution of any steps by any Person to terminate any Pension Plan, (ii) the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under Section 303(k) of ERISA, (iii) the taking of any action with respect to a Pension Plan which could result in the requirement that the Borrower or any of its Subsidiaries furnish a bond or other security to such Pension Plan, or (iv) the occurrence of any event with respect to any Pension Plan which could result in the incurrence by the Borrower or any of its Subsidiaries of any material liability, fine or penalty.

 

(g)           Other Information.  Promptly upon filing thereof, copies of any filings or registration statements with, and reports to, any Governmental Authority in any relevant jurisdiction by the Borrower or any of its Subsidiaries pursuant to applicable securities laws (other than amendments to any registration statement (to the extent such registration statement, in the form it becomes effective, is delivered to the Lenders), exhibits to any registration statement) and copies of all financial statements, proxy statements, notices and reports that the Borrower or any of its Subsidiaries shall send to the holders of any publicly issued securities of the Borrower and/or any of its Subsidiaries in their capacity as such holders (in each case to the extent not theretofore delivered to the Lenders pursuant to this Agreement or filed with the Securities and Exchange Commission and publicly available on EDGAR; provided, that the Borrower shall give prompt notice to the Administrative Agent of such filing and if requested by any Lender, the Borrower shall promptly deliver a copy of such filing to such requesting Lender) and, with 

 

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reasonable promptness, such other information (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of any Lender may reasonably request in writing from time to time.

 

8.2          Books, Record and Inspections.

 

The Borrower will, and will cause each of its Subsidiaries, upon reasonably prior notice to the Borrower, to, (i) permit officers and designated representatives of the Administrative Agent or the Required Lenders to visit and inspect any of the properties or assets of the Borrower and its Subsidiaries in whomever’s possession to the extent that it is within the Borrower’s or its Subsidiaries’ control to permit such inspection, and to examine the books of account of the Borrower and any such Subsidiaries and discuss the affairs, finances and accounts of the Borrower and of any such Subsidiaries with, and be advised as to the same by, its and their officers and independent accountants, and (ii) permit officers and designated representatives of Lenders to view copies of contracts of the Borrower and its Subsidiaries (subject to reasonable confidentiality arrangements established by the Borrower), all at such reasonable times during normal business hours and intervals and to such reasonable extent as the Administrative Agent, the Required Lenders or the Lenders, as the case may be, may desire.  The Borrower will keep and maintain, and will cause each of its Subsidiaries to keep and maintain, in all material respects, proper books of record and account in which entries in conformity with GAAP shall be made of all dealings and transactions in relation to their respective businesses and activities.

 

8.3          Maintenance of Insurance.

 

The Borrower will, and will cause each of its Subsidiaries to, at all times maintain in full force and effect, with insurance companies that the Borrower believes (in the good faith judgment of the management of the Borrower) are financially sound and responsible at the time the relevant coverage is placed or renewed, insurance in at least such amounts and against at least such risks (and with such risk retentions) as are usually insured against in the same general area by companies engaged in the same or a similar business.

 

8.4          Payment of Taxes.

 

The Borrower will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all material taxes, assessments and governmental charges or levies imposed upon it or upon its capital, income or profits, or upon any properties belonging to it, prior to the date on which material penalties attach thereto, and all lawful material tax or similar claims that, if unpaid, could reasonably be expected to become a material Lien upon any properties of the Borrower or any of its Subsidiaries; provided that neither the Borrower nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim that is being contested in good faith and by proper proceedings if it has maintained adequate reserves (in the good faith judgment of the management of the Borrower) with respect thereto in accordance with GAAP.

 

8.5          Organizational Existence.

 

The Borrower will do, and will cause each of its Subsidiaries to do, or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its 

 

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organizational rights and authority, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided that, in any case, (a) the Borrower and its Subsidiaries may consummate any transaction permitted under Section 9.2, (b) any Subsidiary of the Borrower may merge with and into any other wholly-owned Subsidiary of the Borrower and (c) except to the extent as could reasonably be expected to have a Material Adverse Effect, any Subsidiary of the Borrower may enter into any merger or consolidation for the purpose of changing its organizational form from a corporation to a limited liability company or from a limited liability company to a corporation.

 

8.6          Compliance with Statutes, Obligations, etc.

 

The Borrower will, and will cause each of its Subsidiaries to, comply with all applicable laws, rules, regulations and orders (including Environmental Laws and Anti-Corruption Laws) to which it may be subject, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

8.7          Good Repair.

 

The Borrower will, and will cause each of its Subsidiaries to, ensure that its properties and equipment used or useful in its business in whomever’s possession they may be to the extent that it is within the Borrower’s or its Subsidiaries’ control to cause the same, are kept in good repair, working order and condition, normal wear and tear excepted, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, to the extent and in the manner customary for companies in similar businesses and consistent with third party leases, except in each case to the extent the failure to do so could not be reasonably expected to have a Material Adverse Effect.

 

8.8          Transactions with Affiliates.

 

The Borrower will conduct, and will cause each of its Subsidiaries to conduct, all transactions with any of its Affiliates on terms that are substantially as favorable to the Borrower or such Subsidiary as it would obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate; provided that the foregoing restrictions shall not apply to (a) transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s length basis from unrelated third parties, (b) transactions between and among the Borrower and its wholly owned Subsidiaries that do not involve any other Affiliate and (c) transactions permitted by Section 9.2 or Section 9.3.

 

8.9          End of Fiscal Years; Fiscal Quarters.

 

The Borrower will, for financial reporting purposes, cause (a) each of its, and each of its Subsidiaries’, fiscal years to be comprised of twelve calendar months ending on December 31 of each year and (b) each of its, and each of its Subsidiaries’, fiscal quarters to end on dates consistent with such fiscal year-end; provided that the Borrower may, upon written notice to the Administrative Agent, change the financial reporting convention specified above to any other financial reporting convention reasonably acceptable to the Administrative Agent, in which case 

 

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the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary in order to reflect such change in financial reporting.

 

8.10        Use of Proceeds/Anti-Corruption Laws.

 

(a)           The Borrower will use the proceeds of all the Loans only for the purposes set forth in Section 2.1(b) and shall not, and shall ensure that none of its Subsidiaries will, directly or indirectly use the proceeds of the Loans for any purpose which would breach any Anti-Corruption Laws.

 

(b)           The Borrower shall, and shall ensure that each of its Subsidiaries will, (i) maintain policies and procedures designed to promote and achieve compliance with Anti-Corruption Laws and (ii) have appropriate controls and safeguards in place designed to prevent any proceeds of the Loans from being used contrary to the representations and undertakings set forth herein.

 

8.11        Changes in Business.

 

From the Closing Date, the Borrower and its Subsidiaries taken as a whole will not fundamentally and substantively alter the character of their business taken as a whole from the business conducted by the Borrower and its Subsidiaries taken as a whole on the Closing Date and other business activities incidental or related to any of the foregoing (the “Business”).

 

ARTICLE 9
 NEGATIVE COVENANTS

 

The Borrower (on its own behalf and on behalf of each of its Subsidiaries) hereby covenants and agrees that on the Closing Date and thereafter until the Maturity Date:

 

9.1          Limitation on Liens.

 

The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any property or assets of any kind (real or personal, tangible or intangible) of the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, except:

 

(a)           Permitted Liens;

 

(b)           Liens securing Indebtedness incurred within 180 days of the acquisition, construction or improvement of fixed or capital assets to finance the acquisition, construction or improvement of such fixed or capital assets; provided that such Liens attach at all times only to the assets financed by such Indebtedness;

 

(c)           Liens existing on the Closing Date and as set out on Schedule IV;

 

(d)           Liens existing on the assets or Capital Stock of any Person that becomes a Subsidiary, or existing on assets acquired; provided that such Liens attach at all times 

 

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only to the same assets that such Liens attached to and secure only the same Indebtedness that such Liens secured, immediately prior to such acquisition;

 

(e)           Liens in favor of the Borrower;

 

(f)            (i) Liens placed upon the Capital Stock or assets of any Subsidiary acquired to secure Indebtedness of the Borrower or any Subsidiary incurred in connection with such acquisition and (ii) Liens placed upon the assets of such Subsidiary acquired pursuant to an acquisition to secure a guarantee by such Subsidiary of any such Indebtedness of the Borrower or any Subsidiary;

 

(g)           Liens (i) on assets of the Borrower (of the same type as constitute collateral under the METC First Mortgage Indenture on the date hereof) to secure Indebtedness of the Borrower under the METC First Mortgage Indenture, including, without limitation, any notes issued thereunder, and (ii) on assets of any Subsidiary (of the same type that constitute collateral under the METC First Mortgage Indenture on the date hereof) to secure Indebtedness of any Subsidiary under any similar mortgage bond indenture, including, without limitation, any notes issued thereunder;

 

(h)           any Lien securing Indebtedness for the payment, prepayment or redemption of which there shall have been irrevocably deposited in trust with the trustee or other holder of such Lien moneys and/or investment securities which (together with the interest reasonably expected to be earned from the investment and reinvestment in investment securities of the moneys and/or the principal of and interest on the investment securities so deposited) shall be sufficient for such purpose; provided, however, that if such Indebtedness is to be redeemed or otherwise prepaid prior to the stated maturity thereof, any notice requisite to such redemption or prepayment shall have been given in accordance with the instrument creating such Lien or irrevocable instructions to give such notice shall have been given to such trustee or other holder;

 

(i)            Liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof or political entity affiliated therewith, to secure partial, progress, advance or other payments, or other obligations, pursuant to any contract or statute to secure any Indebtedness incurred for the purpose of financing all or any part of the cost of acquiring, constructing or improving property subject to such Liens (including Liens incurred in connection with pollution control, industrial revenue or similar financings);

 

(j)            Liens on any property created, assumed or otherwise brought into existence in contemplation of the sale or other disposition of the underlying property, whether directly or indirectly, by way of share disposition or otherwise; provided that 180 days from the creation of such Liens the Borrower or the relevant Subsidiary shall have disposed of such property and any Indebtedness secured by such Liens shall be without recourse to the Borrower or any Subsidiary;

 

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(k)           the replacement, extension or renewal of any Lien permitted by clauses (a) through (j) above upon or in the same assets theretofore subject to such Lien or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor except to the extent otherwise permitted hereunder) of the Indebtedness secured thereby; and

 

(l)            additional Liens so long as the aggregate outstanding principal amount of the obligations so secured (including the imputed principal amount of any Capitalized Lease Obligations) for the Borrower and its Subsidiaries does not exceed $20,000,000 in the aggregate.

 

9.2          Limitation on Fundamental Changes.

 

The Borrower will not enter into any merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all its business units, assets or other properties, except that:

 

(a)           any Subsidiary of the Borrower or any other Person may be merged or consolidated (including by way of liquidation or winding up) with or into the Borrower; provided that (i) either (x) the Borrower shall be the continuing or surviving entity or (y) the debt rating of the Person (if other than the Borrower) who is the continuing or surviving entity (the Borrower or Person, as the case may be, being herein referred to as the “Successor Borrower”) shall after giving effect to such merger or consolidation be BBB- or higher from S&P or Baa3 or higher from Moody’s (provided that in no event shall such Successor Borrower have a debt rating of BB or lower from S&P or Ba2 or lower from Moody’s), (ii) the Successor Borrower shall be an entity organized or existing under the laws of the United States or any State thereof, (iii) the Successor Borrower shall expressly assume all the obligations of the Borrower under this Agreement pursuant to a supplement hereto in form and substance reasonably satisfactory to the Administrative Agent, (iv) no Default or Event of Default is then existing and no Default or Event of Default would result from the consummation of such merger or consolidation, (v) the Borrower shall be in compliance, on a pro forma basis after giving effect to such merger or consolidation, with the covenant set forth in Section 9.4 as such covenant is recomputed as at the last day of the most recently ended fiscal quarter under each such Section as if such merger or consolidation had occurred on the last day of such fiscal quarter, and (vi) the Borrower shall have delivered to the Administrative Agent an officer’s certificate, in form and substance reasonably satisfactory to the Administrative Agent, certifying the compliance referred to in clause (v) above and stating that such merger or consolidation and such supplement to this Agreement comply with this Agreement and a legal opinion (in form and substance reasonably satisfactory to the Administrative Agent) with respect to this Agreement to be delivered, if any, pursuant to clause (iii) above; provided further that if the foregoing are satisfied, such Successor Borrower (if other than the Borrower) will succeed to, and be substituted for, the Borrower under this Agreement; and

 

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(b)           the Borrower may enter into any merger or consolidation for the purpose of changing its organizational form from a corporation to a limited liability company or from a limited liability company to a corporation; provided that such change has no adverse affect on the rights of the Finance Parties.

 

9.3          Limitation on Dividends.

 

If any Default or Event of Default then exists or would result therefrom, the Borrower will not declare or pay any distributions (other than distributions payable solely in its Capital Stock) or return any capital to its shareholders or members or make any other distribution, payment or delivery of property or cash to its shareholders or members as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for consideration, any of its Capital Stock or the Capital Stock of any direct or indirect shareholder or members of the Borrower now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of its Capital Stock), or set aside any funds for any of the foregoing purposes, or permit any of its Subsidiaries to purchase or otherwise acquire for consideration any Capital Stock of the Borrower, now or hereafter outstanding (or any options or warrants or stock appreciation rights issued by such Person with respect to its Capital Stock).

 

9.4          Debt to Capitalization Ratio.

 

The Borrower will not permit its Debt to Capitalization Ratio to be greater than 65%, as of the last day of each fiscal quarter.

 

9.5          Limitation on Sale-Lease Back Transactions.

 

The Borrower will not enter into any sale-leaseback transaction (a “Sale and Leaseback Transaction”) involving any of its property or assets whether now owned or hereafter acquired, whereby the Borrower sells or otherwise transfers such property or assets and thereafter leases or subleases such property or assets or any part thereof or any other property or assets that the Borrower intends to use for substantially the same purpose or purposes as the property or assets sold or otherwise transferred unless (a) the Borrower would be entitled to incur Indebtedness secured by a Lien on such property or assets pursuant to Section 9.1 or (b) the Attributable Value of all Sale and Leaseback Transactions entered into pursuant to this Section 9.5 does not exceed $20,000,000. A Sale and Leaseback Transaction shall not be deemed to result in the creation of a Lien.

 

9.6          Sanctions Laws and Regulations.

 

(a)           The Borrower shall not, directly or indirectly, use or permit the use of the proceeds of the Loans (i) to finance any operations, investments or activities of any Designated Person or to make any payments to any Designated Person, or (ii) in any other manner  that would result in a violation of any current U.S. sanctions administered by OFAC by any party to this Agreement.

 

(b)           The Borrower shall not permit any of the funds or assets of the Borrower that are used to pay any amount due pursuant to this Agreement to constitute funds obtained from transactions with or relating to Designated Persons or countries which are 

 

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the subject of any current U.S. sanctions administered by OFAC, in each case in any manner that would result in a violation of any current sanctions administered by OFAC by any party to this Agreement.

 

ARTICLE 10
 EVENTS OF DEFAULT

 

Each of the following specified events or occurrences described in Sections 10.1 through 10.8 below shall constitute an “Event of Default”:

 

10.1        Payments.

 

The Borrower shall (a) default in the payment when due of any principal of the Loans or (b) default, and such default shall continue for five or more days, in the payment when due of any interest on the Loans or any other amounts owing hereunder.

 

10.2        Representations, etc.

 

Any representation, warranty or statement made or deemed made by the Borrower herein or any certificate delivered or required to be delivered pursuant hereto shall prove to be untrue in any material respect on the date as of which made or deemed made.

 

10.3        Covenants.

 

The Borrower shall (i) default in the due performance or observance by it of any term, covenant or agreement contained in Section 8.1(d), Section 8.5 (solely with respect to the Borrower), Section 8.11 or Article 9, or (ii) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 10.1 or 10.2 or clause (i) of this Section 10.3) contained in this Agreement and such default shall continue unremedied for a period of at least 30 days after the receipt of written notice by the Borrower from the Administrative Agent or the Required Lenders.

 

10.4        Default Under Other Agreements.

 

(a)           The Borrower or any of its Subsidiaries shall (i) default in any payment with respect to any Indebtedness, in excess of $15,000,000 (or, if at any time after the date hereof, clause (a)(i) of Section 10.4 of the Revolving Credit Agreement shall be amended to change the Dollar amount set forth therein, the Dollar amount set forth in such clause (a)(i), as so amended) in the aggregate, beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, any such Indebtedness to become due prior to its stated maturity; or

 

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(b)           without limiting the provisions of clause (a) above, any such Indebtedness shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment, prior to the stated maturity thereof.

 

10.5        Bankruptcy, etc.

 

The Borrower or any Subsidiary shall commence a voluntary case concerning itself under the Bankruptcy Code as now or hereafter in effect, or any successor thereto or any similar legislation in any other applicable jurisdiction (collectively, the “Bankruptcy Code”); or an involuntary case is commenced against the Borrower or any Subsidiary and the petition or application is not contested within 10 days after commencement of the case; or an involuntary case is commenced against the Borrower or any Subsidiary and the petition or application is not dismissed within 45 days after commencement of the case; or a receiver, trustee, liquidator, custodian or similar official is appointed for, or takes charge of, all or substantially all of the property of the Borrower or any Subsidiary or the Borrower or any Subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any Subsidiary itself; or there is commenced against the Borrower or any Subsidiary any such proceeding that remains undismissed for a period of 45 days; or the Borrower or any Subsidiary is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Borrower or any Subsidiary makes a general assignment for the benefit of creditors, files under the Bankruptcy Act or takes a similar action under the Bankruptcy Act; or any corporate or similar action is taken by the Borrower or any Subsidiary for the purpose of effecting any of the foregoing; or the Borrower or any Subsidiary is unable to pay its debts as they fall due, or makes a general assignment for the benefit of or a composition with its creditors generally; or the Borrower or any Subsidiary takes any corporate or similar action or other steps are taken or legal proceedings are started for its winding-up, dissolution, administration or insolvent re-organization or for the appointment of a liquidator, administrator or administrative receiver of it.

 

10.6        Judgments.

 

One or more judgments or decrees shall be entered against the Borrower or any of its Subsidiaries involving a liability of $15,000,000 (or, if at any time after the date hereof, Section 10.6 of the Revolving Credit Agreement shall be amended to change the Dollar amount set forth therein, the Dollar amount set forth in such Section 10.6, as so amended) or more in the aggregate for all such judgments and decrees for the Borrower or any of its Subsidiaries (to the extent not paid or fully covered by insurance provided by a carrier not disputing coverage) and any such judgments or decrees shall not have been satisfied, vacated, discharged or stayed or bonded pending appeal within 60 days from the entry thereof.

 

10.7        Change of Ownership.

 

A Change of Ownership shall occur.

 

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10.8        Pension Plans.

 

Any of the following events shall occur with respect to any Pension Plan: (a) the institution of any steps by the Borrower or any other Person to terminate a Pension Plan if, as a result of such termination, the Borrower or any of its Subsidiaries could be required to make a contribution to such Pension Plan, or could reasonably expect to incur a liability or obligation to such Pension Plan in respect of such termination; or (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 303(k) of ERISA, where in each case under clauses (a) or (b) such contribution, liability, obligation or Lien would reasonably be expected to have a Material Adverse Effect.

 

10.9        Remedies.

 

Upon the occurrence of any Event of Default described above, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Required Lenders (or, if there are two or fewer Lenders, any Lender), by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent to enforce its claims against the Borrower, except as otherwise specifically provided for in this Agreement (provided that, if an Event of Default specified in Section 10.5 shall occur with respect to the Borrower, the result that would occur upon the giving of written notice by the Administrative Agent as specified in clause (i) below shall occur automatically without the giving of any such notice): (i) declare the principal of and any accrued interest in respect of all Loans and all obligations owing hereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and/or (ii) exercise any other remedies that may be available under this Agreement or applicable law.

 

10.10      Remedies Cumulative.

 

The rights and remedies of the Administrative Agent and the Lenders under this Agreement are cumulative and are in addition to and not in substitution for any rights or remedies provided by law or by equity, and any single or partial exercise by the Lenders of any right or remedy for a default or breach of any term, covenant, condition or agreement herein contained shall not be deemed to be a waiver of or to alter, affect, or prejudice any other right or remedy or other rights or remedies to which the Lenders may be lawfully entitled for the same default or breach, and any waiver by the Administrative Agent or the Lenders of the strict observance, performance or compliance with any term, covenant, condition or agreement herein contained, and any indulgence granted by the Administrative Agent or the Lenders shall be deemed not to be a waiver of any subsequent default. In the event that the Administrative Agent or the Lenders shall have proceeded to enforce any such right, remedy or power contained herein and such proceedings shall have been discontinued or abandoned for any reason, by written agreement between the Lenders and the Borrower, then in each such event the Borrower and the Lenders shall be restored to their former positions and the rights, remedies and powers of the Lenders shall continue as if no such proceedings had been taken.

 

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ARTICLE 11
 THE ADMINISTRATIVE AGENT

 

Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.

 

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.  The agency hereby created shall in no way impose any duties or obligations upon the Administrative Agent in its individual capacity as a Lender hereunder.

 

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.1), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.1) or in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by a final and non-appealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article 6 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax.  If the Internal Revenue Service or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold Tax from amounts paid to or for the account of 

 

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any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify the Administrative Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding Tax ineffective or for any other reason, or if the Administrative Agent reasonably determines that a payment was made to a Lender pursuant to this Agreement without deduction of applicable withholding tax from such payment, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as Tax or otherwise, including any penalties or interest and together with all expenses (including legal expenses, allocated internal costs and out-of-pocket expenses) incurred.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

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

 

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower (not to be unreasonably withheld; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing), to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in the United States, or an Affiliate of any such bank. Whether or not a successor Administrative Agent shall have been appointed, such resignation shall become effective in accordance with such retiring Administrative Agent’s notice. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 12.5 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and

 

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their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

 

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender 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 related agreement or any document furnished hereunder or thereunder.

 

In case of the pendency of any proceeding under the Bankruptcy Code, and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on Borrower) shall be entitled and empowered by the Lenders (but not obligated) by intervention in such proceeding or otherwise:

 

(a)   to file a verified statement pursuant to rule 2019 of the Federal Rules of Bankruptcy Procedure that, in its sole opinion, complies with such rule’s disclosure requirements for entities representing more than one creditor;

 

(b)   to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its respective agents and counsel and all other amounts due Administrative Agent under Sections 2.8 and 12.5 allowed in such judicial proceeding; and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due to the Administrative Agent under Sections 2.8 and 12.5.  To the extent that the payment of any such compensation, expenses, disbursements and advances of the Administrative Agent, its agents and counsel, and any other amounts due to the Administrative Agent under Sections 2.8 and 12.5 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien 

 

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on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Lenders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.

 

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

 

Notwithstanding anything herein to the contrary, the Sole Bookrunner and the Sole Lead Arranger  named on the cover page of this Agreement shall not have any duties or liabilities under this Agreement, except in its capacity, if any, as a Lender.

 

ARTICLE 12
 MISCELLANEOUS

 

12.1        Amendments and Waivers.

 

Neither this Agreement, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 12.1.  The Required Lenders may from time to time (a) enter into with the Borrower and Administrative Agent, as applicable, written amendments, supplements or modifications hereto for the purpose of adding or amending any provisions to this Agreement or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder, or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or any Default or Event of Default and its consequences; provided, that no such waiver and no such amendment, supplement or modification shall directly (i) forgive any portion of, or extend or waive the final scheduled maturity date of, any Loan, or reduce the stated rate of, forgive any portion of or extend the date for the payment of any interest or fee payable hereunder (other than as a result of waiving the applicability of any post-default increase in interest rates), or extend the final expiration date of any Lender’s Commitment or increase the amount of any of the Commitments of any Lender, in each case without the written consent of each Lender whose Loan, interest, fee or Commitment is changed as set forth above thereby, or (ii) amend, modify or waive any provision of this Section 12.1 or reduce the percentages specified in the definitions of the terms “Required Lenders” or consent to the assignment or transfer by the Borrower of its rights and obligations under this Agreement (except as permitted pursuant to Section 9.2), in each case without the written consent of each Lender, or (iii) amend, modify or waive any provision of Article 11 without the written consent of the then-current Administrative Agent, or (iv) amend Section 5.2(a) to the extent that it relates to payments for the ratable account of Lenders without the written consent of each Lender directly and adversely affected thereby, in each case without the written consent of all the Lenders except as otherwise specifically provided in this Section 12.1.  For the avoidance of doubt, no consent of the Borrower, the Administrative Agent or any Lender shall be required for an amendment of Section 10.4 or 10.6 resulting from an amendment of the Revolving Credit Agreement as provided in each such Section.

 

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Any such waiver and any such amendment, supplement or modification shall apply equally to each of the affected Lenders and shall be binding upon the Borrower, such Lenders, the Administrative Agent and all future holders of the affected Loans. In the case of any waiver, the Borrower, the Lenders and the Administrative Agent shall be restored to their former positions and rights hereunder, and any Default or Event of Default waived shall be deemed to be cured and not continuing, it being understood that no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

 

12.2        Notices.

 

(a)           Notices Generally.  All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received and, if transmitted by facsimile, shall be deemed given when the confirmation of transmission thereof is received by the transmitter, in each case addressed as follows in the case of the Borrower, the Administrative Agent and as set forth on Schedule I in the case of each Lender (or as set forth in the Assignment and Assumption of any Lender which is an Assignee) or to such other address as may be hereafter notified by the respective parties hereto:

 

(i)            The Borrower:

 

Michigan Electric Transmission Company, LLC
 27175 Energy Way
 Novi, MI 48377

Attention: Rejji P. Hayes
 Facsimile No.:  (248) 305-3174
 Telephone No.:  (248) 946-3680

 

with a copy to:

 

ITC Holdings Corp.

27175 Energy Way

Novi, MI  48377

Attention: Britt McNulty

E-mail address:  bmcnulty@Itctransco.com

Telephone No.:  (248) 946-3598

 

(ii)           The Administrative Agent:

 

Goldman Sachs Bank USA
 c/o Goldman, Sachs & Co. 
  30 Hudson Street, 36th Floor 
 Jersey City, NJ 07302 
 Attention: SBD Operations 
 Email: gsd.link@gs.com  and  ficc-sbdagency-nydallas@ny.email.gs.com

 

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with copy to:

 

Goldman Sachs Bank USA

200 West Street

New York, New York  10282-2198

Attention: Michelle Latzoni and Jerry Smay

 

provided that any notice, request or demand to or upon the Administrative Agent or the Lenders pursuant to Sections 2.3, 2.6, 2.10, 4.2 and 5.1 shall not be effective until received.

 

(b)           Electronic Communications.  Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

(c)           Communications on Electronic Transmission System.  The Borrower agrees that the Administrative Agent may make communications available to the Lenders by posting such communications on Intralinks or a substantially similar electronic transmission system (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 COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. 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 THE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

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12.3        No Waiver; Cumulative Remedies.

 

No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, 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.

 

12.4        Survival of Representations and Warranties.

 

All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder.

 

12.5        Payment of Expenses and Taxes.

 

(a)           The Borrower agrees (i) to pay or reimburse the Arranger and the Administrative Agent for all their reasonable and documented out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby (including the syndication of the Commitments), including the reasonable fees, disbursements and other charges of one counsel to the Administrative Agent, (ii) to pay or reimburse each Lender and the Administrative Agent for all its reasonable and documented costs and expenses incurred in connection with the enforcement or preservation of any rights under, or “workout” or restructuring of, this Agreement and any such other documents, including the reasonable fees, disbursements and other charges of counsel to each Lender and of counsel to the Administrative Agent, (iii) to pay, indemnify, defend and hold harmless each Lender and the Administrative Agent from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement and any such other documents (collectively, “Other Taxes”), except for any such Other Taxes attributable to an assignment or Participation, and (iv) to pay, indemnify, defend and hold harmless each Lender, the Arranger and the Administrative Agent and their respective directors, officers, partners, employees, trustee, agents and Affiliates (collectively, the “Indemnitees”) from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including reasonable and documented fees, disbursements and other charges of counsel incurred in connection with any investigative, administrative or judicial proceeding commenced or threatened by the Borrower or any other Person, whether or not any such Indemnitee shall be designated as a party or potential party thereto, and any fees or expenses incurred by any Indemnitee in enforcing this indemnity), whether direct, indirect or consequential, whether based on strict liability or negligence, and whether based on any federal, provincial or foreign laws, statutes, rules, regulations or guidelines (including Environmental Laws), common law, equity, contract or otherwise that may be imposed on, incurred by or asserted against any Indemnitee, in any manner arising out of or relating to (A) this Agreement 

 

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and any other agreements or documents contemplated hereby or thereby, the other transactions contemplated hereby (including the execution, delivery, enforcement, performance and administration of this Agreement and the breach by the Borrower of, or default by the Borrower under, any of the provisions of this Agreement or any Loan, or the use or proposed use of the proceeds thereof), (B) the violation of, non-compliance with or liability under, any Environmental Law applicable to the operations of the Borrower or any of its Subsidiaries or applicable to any of the Real Estate, or (C) any Environmental Claim or any Hazardous Materials relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, possession or control, or practice of, the Borrower or any of its Subsidiaries from time to time (all the foregoing in this clause (iv), collectively, the “indemnified liabilities”); provided that the Borrower shall have no obligation hereunder to any Indemnitee with respect to indemnified liabilities arising from the gross negligence or willful misconduct of such Indemnitee as determined by a final non-appealable judgment of a court of competent jurisdiction and provided further that the Borrower shall have no obligation hereunder to any Indemnitee with respect to claims that do not involve an act or omission of the Borrower or any of its affiliates and that is brought by the Administrative Agent, the Arranger or any Lender against any other Lender (other than claims against any of the Administrative Agent, the Arranger, or the Lenders or their Affiliates in their respective capacity as the Administrative Agent, a lead arranger, a documentation agent, a book runner, a syndication agent a documentation agent or any similar role under this Agreement). The agreements in this Section 12.5 shall survive repayment of the Loans and all other amounts payable hereunder.

 

Each of the Lenders, the Arranger and the Administrative Agent agree that any and all of their respective rights under this Agreement and any other agreements contemplated hereby and thereby, including recourse for any obligation or claim for any indemnification thereunder, is limited to recourse to the Borrower and its assets as contemplated hereby, and none of the direct or indirect limited partners, partners, shareholders, members of the Borrower or any of their respective employees, directors or officers shall have any obligations or liability, or be subject to any recourse, in respect of any such obligations or claims hereunder or thereunder.

 

(b)           To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent or the Arranger under paragraph (a) of this Section 12.5, each Lender severally agrees to pay to the Administrative Agent or the Arranger, as the case may be, such Lender’s Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Arranger in its capacity as such.

 

12.6        Successors and Assigns; Participations and Assignments.

 

(a)           Assignments 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 (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance 

 

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with this Section 12.6. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section 12.6) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders.

 

(i)            Assignments Generally. Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (the “Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)          the Borrower (provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within fifteen (15) days after having received notice thereof), provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; and

 

(B)          the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund.

 

(ii)           Certain Conditions to Assignments.  Assignments shall be subject to the following additional conditions:

 

(A)          except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Loans, the amount of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 (or, if less, the aggregate principal amount of such assigning Lender’s Loans) unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

 

(B)          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;

 

(C)          the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

 

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(D)          the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(iii)          Effectiveness of Assignments.  Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 12.6, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto (the “Assignment Effective Date”) 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 2.10, 2.11 and 12.5). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.6 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section 12.6.

 

(iv)          Maintenance of Register.  The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders and principal amount (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent 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 the Borrower and any Lender (but only, in the case of a Lender, at the Administrative Agent’s office set forth for the Administrative Agent in Section 12.2(a)(ii) and with respect to any entry relating to such Lenders’ Commitments or Loans), at any reasonable time and from time to time upon reasonable prior notice.

 

(v)           Acceptance of Assignments by Administrative Agent.  Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section 12.6 and any written consent to such assignment required by paragraph (b) of this Section 12.6, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.4(b), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

 

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(vi)          No Assignment to the Borrower or its Affiliates. No assignment pursuant to this Section 12.6 shall be made to the Borrower or any of its Affiliates.

 

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

 

(c)           Participations.

 

(i)            Participations Generally.  Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the second sentence of Section 12.1 that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.10 and 2.11 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.8 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a nonfiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under this Agreement) except to the extent that such disclosure is necessary to establish that such Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations, which disclosure shall be made by the relevant lender directly and solely to the Internal Revenue Service (unless otherwise required by the Internal Revenue Service). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

(ii)           Limitations on Rights of Participants.  A Participant shall not be entitled to receive any greater payment under Section 2.10 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless

 

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the sale of the participation to such Participant is made with the Borrower’s prior written consent. No Participant shall be entitled to any benefits under Section 5.3 unless such Participant complies with Section 5.3(c).

 

(iii)          No Participation to Natural Persons.  No participation shall be sold to a natural person.

 

(d)           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 to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank or any other central bank having jurisdiction over such Lender, and this Section 12.6 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

12.7        Replacements of Lenders under Certain Circumstances.

 

If any Lender requests compensation under Section 2.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.3, or if any Lender becomes a Defaulting Lender, or if any Lender is affected in the manner described in Section 2.10(a)(iii) and as a result thereof any of the actions described in such Section is required to be taken, then the Borrower may, at its sole expense and effort upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.6) all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) no Default or Event of Default shall have occurred and be continuing at the time of such assignment, (ii) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (iii) the Borrower shall have paid the Administrative Agent the assignment fee specified in Section 12.6, (iv) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (v) in the case of any such assignment resulting from payments required to be made pursuant to Section 2.10 or a claim for compensation under Section 2.11, such assignment will result in a reduction in such compensation or payments and (vi) such assignment does not conflict with applicable law.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

12.8        Adjustments; Set-off.

 

(a)           If any Defaulting Lender shall fail to make any payment required to be made by it pursuant to Section 2.4(b), 12.5(b) or 12.8(c), then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply for the benefit of the Administrative Agent or any Lender any amounts thereafter received by the Administrative

 

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Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under such Sections; in the case of each of (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

 

(b)           After the occurrence and during the continuance of an Event of Default, in addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.

 

(c)           If any Finance Party shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of any Credit Event (other than pursuant to the terms of Section 2.10, 2.11 or 5.3) in excess of its pro rata share of payments obtained by all Finance Parties, such Finance Party shall purchase from the other Finance Parties such participations in Credit Events made by them as shall be necessary to cause such purchasing Finance Party to share the excess payment or other recovery ratably (to the extent such other Finance Parties were entitled to receive a portion of such payment or recovery) with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Finance Party, the purchase shall be rescinded and each Finance Party which has sold a participation to the purchasing Finance Party shall repay to the purchasing Finance Party the purchase price to the ratable extent of such recovery together with an amount equal to such selling Finance Party’s ratable share (according to the proportion of (a) the amount of such selling Finance Party’s required repayment to the purchasing Finance Party to (b) total amount so recovered from the purchasing Finance Party) of any interest or other amount paid or payable by the purchasing Finance Party in respect of the total amount so recovered. The Borrower agrees that any Finance Party purchasing a participation from another Finance Party pursuant to this Section 12.8 may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to clause (b) above) with respect to such participation as fully as if such Finance Party were the direct creditor of the Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law any Finance Party receives a secured claim in lieu of a setoff to which this Section 12.8 applies, such Finance Party shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section 12.8 to share in the benefits of any recovery on such secured claim.

 

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12.9        Marshalling; Payments Set Aside.

 

Neither the Administrative Agent nor any Lender shall be under any obligation to marshal any assets in favor of the Borrower or any other party or against or in payment of any or all of the Borrower’s obligations hereunder. To the extent that the Borrower makes a payment or payments to the Administrative Agent or Lenders (or to the Administrative Agent for the benefit of Lenders), or the Administrative Agent or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other provincial, state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

 

12.10      Counterparts.

 

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

 

12.11      Severability.

 

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

12.12      Integration.

 

This Agreement represents the agreement of the Borrower, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein.

 

12.13      Governing Law.

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED STATES APPLICABLE THEREIN (EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE WHICH MIGHT REFER SUCH CONSTRUCTION TO THE LAWS OF ANOTHER JURISDICTION).

 

59

 

12.14      Submission to Jurisdiction; Waivers.

 

The Borrower hereby irrevocably and unconditionally:

 

(a)           submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York or of the United States for the Southern District of New York, and any appellate court from any thereof, in each case which are located in the Borough of Manhattan in the county of New York;

 

(b)           consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)           agrees that service of process in any such action or proceeding may be effected in accordance with the local rules of civil procedure or by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 12.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d)           agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)           waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 12.14 any special, exemplary, punitive or consequential damages.

 

12.15      Acknowledgements.

 

The Borrower hereby acknowledges that:

 

(a)           it has been advised by counsel in the negotiation, execution and delivery of this Agreement;

 

(b)           neither the Administrative Agent nor any Lender (in any capacity) has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement, and the relationship between Administrative Agent and Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)           no joint venture is created hereby or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders.

 

12.16      Waivers of Jury Trial.

 

THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN

 

60

 

ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

12.17      Confidentiality.

 

The Administrative Agent and each Lender shall hold all non-public information furnished by or on behalf of the Borrower in connection with such Lender’s evaluation of whether to become a Lender hereunder or obtained by such Lender or the Administrative Agent pursuant to the requirements of this Agreement (“Confidential Information”), in accordance with its customary procedure for handling confidential information of this nature and (in the case of a Lender that is a bank) in accordance with safe and sound banking practices and in any event may make disclosure (i) to any other party hereto, (ii) with the consent of the Borrower, (iii) as required or requested by any Governmental Authority, representatives thereof or any nationally recognized rating agency that requires access to information about such Lender’s investment portfolio in connection with ratings issued with respect to such Lender, (iv) pursuant to legal process, (v) in connection with the exercise of any remedies hereunder, (vi) subject to the proviso of the last sentence of this Section 12.17, to any prospective Assignees or Participants or to prospective direct or indirect contractual counterparties in swap agreements to be entered into in connection with Loans made hereunder or (vii) to such Lender’s or the Administrative Agent’s lawyers, professional advisors or independent auditors or Affiliates and to their respective officers, directors, partners, members, employees, legal counsel, independent auditors and other advisors, experts or agents who need to know such information and on a confidential basis; provided that, unless specifically prohibited by applicable law or court order, each Lender and the Administrative Agent shall to the extent practicable notify the Borrower of any request by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition or regulatory compliance of such Lender by such Governmental Authority or in connection with ratings by such rating agency with respect to such Lender) for disclosure of any such non-public information prior to disclosure of such information, and provided further that in no event shall any Lender or the Administrative Agent be obligated or required to return any materials furnished by the Borrower or any Subsidiary of the Borrower. In addition, each Agent and each Lender may disclose the existence of this Agreement and customary information about this Agreement to service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Agreement. Each Lender and the Administrative Agent agrees that it will not provide to prospective Assignees or Participants or to prospective direct or indirect contractual counterparties in swap agreements to be entered into in connection with Loans made hereunder any of the Confidential Information unless such Person shall have previously executed a Confidentiality Agreement substantially in the form prescribed from time to time by the Loan Sales and Trading Association.

 

12.18      Treatment of Loans.

 

(a)           The Borrower does not intend to treat the Loans and related transactions as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event the Borrower determines to take any action inconsistent with such intention, it will promptly notify the Administrative Agent thereof.

 

61

 

(b)           The Borrower acknowledges that the Administrative Agent and one or more of the Lenders may treat its Loans as part of a transaction that is subject to Treasury Regulation Section 1.6011-4 or Section 301.6112-1, and the Administrative Agent and such Lender or Lenders, as applicable, may file such IRS forms or maintain such lists and other records as they may determine is required by such Treasury Regulations.

 

12.19      USA Patriot Act.

 

Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), such Lender may be required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with said Act.

 

12.20      No Fiduciary Duty.

 

The Administrative Agent, the Arranger, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”), may have economic interests that conflict with those of the Borrower and its affiliates. The Borrower agrees that nothing in this Agreement or otherwise shall be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Lenders and the Borrower, its stockholders or its affiliates. The Borrower acknowledges and agrees that (i) the transactions contemplated by this Agreement are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the other, (ii) in connection therewith and with the process leading to such transaction each of the Lenders is acting solely as a principal and not the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other person, (iii) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether any Lender or any of its affiliates has advised or is currently advising the Borrower on other matters) or any other obligation to the Borrower except the obligations expressly set forth in this Agreement and (iv) the Borrower has consulted its own legal and financial advisors to the extent it deemed appropriate. The Borrower further acknowledges and agrees that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower agrees that it shall not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Borrower, in connection with such transaction or the process leading thereto.

 

[Remainder of page intentionally left blank]

 

62

 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

 

 

	
 
    	
MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC,
    
	
 
    	
as the Borrower
    
	
 
    	
 
    
	
 
    	
By: ITC Holdings Corp., its sole manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Michigan Electric Transmission Company, LLC Term Loan Credit Agreement

 

 

	
 
    	
GOLDMAN SACHS BANK USA,
    
	
 
    	
as Administrative Agent and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Michigan Electric Transmission Company, LLC Term Loan Credit Agreement

 

 

SCHEDULE I
 COMMITMENTS

 

	
LENDER
    	
 
    	
ADDRESS FOR NOTICES
    	
 
    	
COMMITMENT
    	
 
    	
COMMITMENT
   PERCENTAGE
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Goldman Sachs Bank   USA
    	
 
    	
Goldman Sachs   Bank USA
   c/o Goldman, Sachs & Co.
    30 Hudson Street, 36th Floor
   Jersey City, NJ 07302
   Attention: SBD Operations
   Email: gsd.link@gs.com and ficc-
   sbdagency-
   nydallas@ny.email.gs.com

 

with copy to:

Goldman Sachs Bank USA
    200 West Street
   New York, New York 10282-2198
    Attention: Michelle Latzoni and
   Jerry Smay
    	
 
    	
$
    	
50,000,000.00
    	
 
    	
100.00
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total amount
    	
 
    	
$
    	
50,000,000.00
    	
 
    	
100
    	
%
    

 

 

SCHEDULE II
 ENVIRONMENTAL MATTERS

 

None.

 

 

SCHEDULE III
 PENSION AND WELFARE MATTERS

 

Michigan Electric Transmission Company Postretirement Welfare Plan as described in Note 11 to the financial statements of ITC Holdings Corp. set forth in the form 10-K of ITC Holdings Corp. for the period ending December 31, 2012.

 

 

SCHEDULE IV
 OUTSTANDING LIENS ON CLOSING DATE

 

None.

 

 

EXHIBIT A

 

Form of Notice of Borrowing

 

NOTICE OF BORROWING

 

TO:                           Goldman Sachs Bank USA
  c/o Goldman, Sachs & Co. 
  30 Hudson Street, 36th Floor 
 Jersey City, NJ 07302 
 Attention: SBD Operations 
 Email: gsd.link@gs.com  and  ficc-sbdagency-nydallas@ny.email.gs.com

 

with copy to:

 

Goldman Sachs Bank USA

200 West Street

New York, New York  10282-2198

Attention: Michelle Latzoni and Jerry Smay

 

Pursuant to the Term Loan Credit Agreement, dated as of  January 31, 2014 (as the same may be amended, modified, supplemented, restated or replaced from time to time, the “Term Loan Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), among Michigan Electric Transmission Company, LLC, a Michigan limited liability company (the “Borrower”), the various financial institutions and other persons from time to time referred to as “Lenders” in the Term Loan Credit Agreement, and Goldman Sachs Bank USA, as the Administrative Agent, this represents the Borrower’s request to borrow as follows:

 

Loan:

 

1.                                      Date of borrowing:

 

2.                                      Amount of borrowing:

 

3.                                      Lender(s):                                      Lenders, in accordance with their Commitments under the Term Loan Credit Agreement

 

4.                                      Interest rate option:

Type:

Tenor:

 

Please wire transfer the proceeds of the Borrowing in accordance with the funds flow memorandum delivered under separate cover.

 

 

The undersigned officer, to the best of his or her knowledge, in his or her capacity as an officer of the sole manager of the Borrower certifies that:

 

(i)                                     All representations and warranties made by the Borrower contained in the Term Loan Credit Agreement are true and correct in all material respects (or in all respects if the applicable representation or warranty is qualified by materiality or Material Adverse Effect) with the same effect as though such representations and warranties had been made on and as of the date hereof (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties are true and correct in all material respects (or in all respects if the applicable representation or warranty is qualified by materiality or Material Adverse Effect) as of such earlier date); and

 

(ii)                                  No event has occurred and is continuing or would result from the consummation of the Borrowing contemplated hereby that would constitute a Default or an Event of Default.

 

Dated:

 

	
 
    	
MICHIGAN ELECTRIC TRANSMISSION
   COMPANY, LLC,
    
	
 
    	
as the Borrower
    
	
 
    	
 
    
	
 
    	
By: ITC Holdings Corp., its sole manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT B

 

Form of Notice of Continuation

 

TO:                           Goldman Sachs Bank USA
  c/o Goldman, Sachs & Co. 
  30 Hudson Street, 36th Floor 
 Jersey City, NJ 07302 
 Attention: SBD Operations 
 Email: gsd.link@gs.com  and  ficc-sbdagency-nydallas@ny.email.gs.com

 

with copy to:

 

Goldman Sachs Bank USA

200 West Street

New York, New York  10282-2198

Attention: Michelle Latzoni and Jerry Smay

 

Pursuant to the Term Loan Credit Agreement, dated as of  January 31, 2014 (as the same may be amended, modified, supplemented, restated or replaced from time to time, the “Term Loan Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), among Michigan Electric Transmission Company, LLC, a Michigan limited liability company (the “Borrower”), the various financial institutions and other persons from time to time referred to as “Lenders” in the Term Loan Credit Agreement, and Goldman Sachs Bank USA, as the Administrative Agent, this represents the Borrower’s request to continue Loans as follows:

 

1.                                      Date of continuation or conversion:

 

                                   ,             

 

2.                                      Amount of Loans being continued or converted:

 

$                                                   

 

3.                                      Nature of continuation or conversion:

 

                          a.                          Conversion of a LIBOR Loan as an ABR Loan
                           b.                          Conversion of an ABR Loan as a LIBOR Loan
                           c.                           Continuation (rollover) of LIBOR Loans as LIBOR Loans

 

4.                                      If Loans are being continued as or converted into LIBOR Loans, the duration of the new LIBOR Period that commences on the continuation or conversion date:

 

                   month(s)

 

	
Dated:
    	
 
    	
 
    

 

	
 
    	
MICHIGAN ELECTRIC TRANSMISSION
    
	
 
    	
COMPANY, LLC,
    
	
 
    	
as the Borrower
    

 

 

	
 
    	
By: ITC Holdings Corp., its sole manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT C

 

Form of Prepayment Notice

 

TO:                           Goldman Sachs Bank USA
  c/o Goldman, Sachs & Co. 
  30 Hudson Street, 36th Floor 
 Jersey City, NJ 07302 
 Attention: SBD Operations 
 Email: gsd.link@gs.com  and  ficc-sbdagency-nydallas@ny.email.gs.com

 

with copy to:

 

Goldman Sachs Bank USA

200 West Street

New York, New York  10282-2198

Attention: Michelle Latzoni and Jerry Smay

 

Pursuant to the Term Loan Credit Agreement, dated as of  January 31, 2014 (as the same may be amended, modified, supplemented, restated or replaced from time to time, the “Term Loan Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), among Michigan Electric Transmission Company, LLC, a Michigan limited liability company (the “Borrower”), the various financial institutions and other persons from time to time referred to as “Lenders” in the Term Loan Credit Agreement, and Goldman Sachs Bank USA, as the Administrative Agent, this represents the Borrower’s request to continue Loans as follows:

 

This Prepayment Notice is delivered to you pursuant to Section 5.1(b) of the Term Loan Credit Agreement.  The Borrower hereby gives notice of a prepayment of Loans as follows:

 

1.                                      (select Type(s) of Loans)

 

o ABR Loans in the aggregate principal amount of $                .

 

o LIBOR Loans with a LIBOR Period ending             , 201    in the aggregate principal amount of $                .

 

2.                                      On                     , 201    (a Business Day).

 

This Prepayment Notice and prepayment contemplated hereby comply with the Agreement, including Section 5.2 of the Term Loan Credit Agreement.

 

	
 
    	
MICHIGAN ELECTRIC TRANSMISSION
   COMPANY, LLC,
    
	
 
    	
as the Borrower
    
	
 
    	
 
    
	
 
    	
By: ITC Holdings Corp., its sole manager
    

 

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT D

 

Form of Closing Date Certificate

 

CLOSING DATE CERTIFICATE

 

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC

 

TO:                         The Lenders and the Administrative Agent (each, as defined below)

 

RE:                          Term Loan Credit Agreement, dated as of  January 31, 2014 (as the same may be amended, modified, supplemented, restated or replaced from time to time, the “Term Loan Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), among Michigan Electric Transmission Company, LLC, a Michigan limited liability company (the “Borrower”), the various financial institutions and other persons from time to time referred to as “Lenders” in the Term Loan Credit Agreement, and Goldman Sachs Bank USA, as the Administrative Agent.

 

I, the undersigned, an Authorized Officer of  the sole manager of the Borrower, hereby certify to the best of my knowledge, information and belief, for and on behalf of the Borrower, and not in my personal capacity, in connection with the initial Borrowing on this date under the Term Loan Credit Agreement, that:

 

1.                                      the conditions precedent set forth in the Term Loan Credit Agreement were satisfied as of the Closing Date;

 

2.                                      attached to this certificate as Schedule A is a true and complete copy of the articles of organization of the Borrower, together with all amendments thereto adopted through the date hereof (as certified by the Michigan Department of Licensing and Regulatory Affairs) and as in effect on the date hereof and the Borrower has not passed, confirmed or consented to any amendments or variations to such articles of organization;

 

3.                                      attached to this certificate as Schedule B is a correct and complete copy of the operating agreement, as amended, of the Borrower and such operating agreement is in full force and effect on the date hereof and as of the date hereof the Borrower has not passed, confirmed or consented to any amendments or variations to such operating agreement;

 

4.                                      attached to this certificate as Schedule C is a correct and complete copy of the approval letter from the United States of America Federal Energy Regulatory Commission of the application pursuant to section 204 of the Federal Power Act, which approval is in full force and effect at the date hereof;

 

5.                                      attached to this certificate as Schedule D is a true and complete copy of the resolutions duly adopted by the sole manager of the Borrower on December 11, 2013 and January 29, 2014, approving and authorizing the execution, delivery and performance of the Term Loan Credit Agreement and the transactions contemplated thereby. Such resolutions have not been amended, modified, revoked or rescinded since the date of adoption thereof, are

 

 

in full force and effect on the date hereof and are the only resolutions that have been adopted by the sole manager of the Borrower with respect to the subject matter thereof;

 

6.                                      the following persons whose names appear on Schedule E attached hereto are duly elected or appointed officers of the sole manager of the Borrower occupying the offices set forth opposite their respective names on Schedule E, and the signature set forth opposite their respective names are their true and genuine signatures, and each of such officers is duly authorized to execute and deliver the Term Loan Credit Agreement on behalf of the Borrower and each of the related documents to which it is a party and any other agreement, instrument or document to be delivered by the Borrower pursuant to the Term Loan Credit Agreement; and

 

7.                                      the law firms of Simpson Thacher & Bartlett LLP and Dykema Gossett PLLC are entitled to rely on this Closing Certificate in connection with their legal opinions to be delivered as of the date hereof in connection with the Term Loan Credit Agreement.

 

 

IN WITNESS WHEREOF, I have signed this Certificate this        day of                 , 2014.

 

 

	
 
    	
 
    
	
 
    	
Name: 
    	
Wendy A. McIntyre
    
	
 
    	
Title: 
    	
Vice President, Secretary and
    
	
 
    	
General Counsel — Enterprise Operations
    

 

I, Rejji P. Hayes, Vice President, Finance and Treasurer of the Borrower’s sole manager, DO HEREBY CERTIFY that Wendy A. McIntyre has been duly elected (or appointed) and has duly qualified as, and on this day is, the Vice President, Secretary and General Counsel — Enterprise Operations of the Borrower’s sole manager, and the signature above is her genuine signature.

 

 

	
 
    	
 
    
	
 
    	
Name: 
    	
Rejji P. Hayes
    
	
 
    	
Title: 
    	
Vice President, Finance and Treasurer
    

 

 

Schedule A

 

Articles of Organization

 

[See Attached]

 

 

Schedule B

 

Operating Agreement

 

[See Attached]

 

 

Schedule C

 

Approval Letter

 

[See Attached]

 

 

Schedule D

 

Resolutions

 

[See Attached]

 

 

Schedule E

 

Incumbency

 

 

	
Cameron M. Bready,
    	
 
    
	
Executive Vice President
    	
 
    
	
and Chief Financial Officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Rejji P. Hayes,
    	
 
    
	
Vice President, Finance and Treasurer
    	
 
    

 

 

EXHIBIT E

 

Form of Compliance Certificate

 

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC

 

TO:        The Lenders and the Administrative Agent

 

The undersigned, an Authorized Officer of the sole manager of Michigan Electric Transmission Company, LLC (the “Borrower”), in such capacity and not personally, hereby certifies to the best of my knowledge, information and belief that:

 

1.                                      I am the duly appointed                                                                                                of ITC Holdings Corp., the sole manager of the Borrower named in the Term Loan Credit Agreement, dated as of  January 31, 2014 (as the same may be amended, modified, supplemented, restated or replaced from time to time, the “Term Loan Credit Agreement”), among Michigan Electric Transmission Company, LLC, a Michigan limited liability company (the “Borrower”), the various financial institutions and other persons from time to time referred to as “Lenders” in the Term Loan Credit Agreement, and Goldman Sachs Bank USA, as the Administrative Agent and as such I am providing this certificate for and on behalf of the Borrower pursuant to Section 8.1(c) of the Term Loan Credit Agreement. Unless the context otherwise requires, capitalized terms in the Term Loan Credit Agreement which appear herein without definitions shall have the meanings ascribed thereto in the Term Loan Credit Agreement.

 

2.                                      I am familiar with and have examined the provisions of the Term Loan Credit Agreement including those of Articles 7, 8, 9 and 10 therein and have reviewed and am familiar with the contents of this certificate.

 

3.                                      Delivered herewith are the financial statements required to be delivered pursuant to Section 8.1[(a)] [(b)] of the Term Loan Credit Agreement.

 

4.                                     No Default or Event of Default has occurred and is continuing as of the date hereof [or if any Default or Event of Default does exist, specify the nature and extent thereof].

 

5.                                      As of the last day of the fiscal quarter ending                 , the financial ratio referred to in Section 9.4 of the Term Loan Credit Agreement is         :         and was calculated as set forth in Schedule I.

 

Dated this day of                   ,           .

 

	
 
    	
 
    
	
[Name and Title]
    	
 
    

 

 

Schedule I

 

Michigan Electric Transmission Company, LLC

 

Debt to Capitalization Ratio(1)

 

	
1. Total Debt as of the last day of the   fiscal quarter ending                     
    	
 
    	
$
    	
 
    	
 
    
	
2. Total Capitalization as of the last day   of the fiscal quarter ending                     
    	
 
    	
 
    	
 
    
	
(a)           Total   Debt
    	
 
    	
$
    	
 
    	
 
    
	
(b)           Total   stockholders’ equity of the Borrower
    	
 
    	
$
    	
 
    	
 
    
	
(c)           Total   Capitalization: The sum of Items 2(a) and 2(b)
    	
 
    	
$
    	
 
    	
 
    
	
3.             DEBT   TO CAPITALIZATION RATIO: the ratio of Item 1 to Item 2
    	
 
    	
 
    	
%
    
	
4. Maximum Debt to Capitalization Ratio   allowed
    	
 
    	
65
    	
%
    
	
5. In compliance
    	
 
    	
YES/NO
    	
 
    

 

(1)  Financial covenants shall be calculated (i) without giving effect to any election by the Borrower or any of its subsidiaries to value any of its indebtedness or liabilities at “fair value” pursuant to Accounting Standards Codification 825-10-25 (formerly referred to as Statement of Financial Accounting Standards 159) or any other accounting standards codification or financial accounting standard having a similar result or effect, (ii) without giving effect to any treatment of indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 to value any such indebtedness in a reduced or bifurcated manner as described therein, and such indebtedness shall at all times be valued at the full stated principal amount thereof and (iii) without giving effect to any changes in GAAP occurring after the Closing Date, the effect of which would be to cause leases in effect as of March 31, 2013 and treated as operating leases under GAAP as of March 31, 2013 to be reclassified as capital leases under GAAP, provided that this clause (iii) shall only apply to the extent of the lesser of (x) the actual annual amount of such operating leases and (y) $500,000 annually (and any excess in excess of such minimum amount shall be included as capital leases).

 

 

EXHIBIT F

 

Form of Assignment and Assumption

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and other rights of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

	
1.
    	
 
    	
Assignor:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Assignee:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
[an Affiliate/Approved Fund of [identify Lender]]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Borrower:
    	
 
    	
Michigan Electric Transmission Company, LLC,   a Michigan limited liability company
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Administrative Agent:
    	
 
    	
Goldman Sachs Bank USA
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Credit Agreement:
    	
 
    	
The Term Loan Credit Agreement dated as of   January 31, 2014 among Borrower, the various financial institutions and   other 
    

 

 

	
 
    	
 
    	
 
    	
 
    	
persons from time to time referred to as   “Lenders”, and Goldman Sachs Bank USA, as the Administrative Agent
    
	
6.
    	
 
    	
Assigned Interest:
    	
 
    	
 
    

 

	
Facility Assigned
    	
 
    	
Aggregate Amount of
   Loans for all Lenders
    	
 
    	
Amount of
   Loans Assigned
    	
 
    	
Percentage Assigned
   of Loans (2)
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    

 

Effective Date:                                    , 201    [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the other Credit Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

 

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

 

	
 
    	
ASSIGNOR
    
	
 
    	
 
    
	
 
    	
[NAME OF ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
ASSIGNEE
    
	
 
    	
 
    
	
 
    	
[NAME OF ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

[Consented to and](3) Accepted:

 

GOLDMAN SACHS BANK USA, as

(2)  Set forth, to at least 9 decimals, as a percentage of the Loans of all Lenders thereunder.

 

(3) To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

 

 

	
Administrative Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
			

 

[Consented to:](4)

 

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC,

as the Borrower

 

	
By: 
    	
ITC Holdings Corp., its sole manager
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

(4)  To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

 

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

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

 

1.2.         Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1(i) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Non-U.S. Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the loan documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the loan documents are required to be performed by it as a Lender.

 

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

 

 

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

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