EXHIBIT 10.9
EXECUTION COPY
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CREDIT AGREEMENT
Dated as of October 30, 2003
between
COLLEGIATE FUNDING SERVICES, L.L.C.,
as Borrower
CFSL HOLDINGS CORP.
and
CFSL ACQUISITION CORP.,
as Parent Guarantors
THE SUBSIDIARY GUARANTORS REFERRED TO HEREIN,
as Subsidiary Guarantors
THE LENDERS NAMED HEREIN,
as Lenders
and
JPMORGAN CHASE BANK,
as Administrative Agent
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.................................................... 1
SECTION 1.02. Terms Generally.................................................. 23
SECTION 1.03. Accounting Terms; GAAP........................................... 24
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments.................................................. 24
SECTION 2.02. Loans and Borrowings............................................. 24
SECTION 2.03. Requests for Borrowings.......................................... 25
SECTION 2.04. Funding of Borrowings............................................ 26
SECTION 2.05. Interest Elections............................................... 27
SECTION 2.06. Termination and Reduction of the Commitments..................... 28
SECTION 2.07. Repayment of Loans; Evidence of Debt............................. 29
SECTION 2.08. Prepayment of Loans.............................................. 30
SECTION 2.09. Fees............................................................. 33
SECTION 2.10. Interest......................................................... 33
SECTION 2.11. Alternate Rate of Interest....................................... 34
SECTION 2.12. Increased Costs.................................................. 34
SECTION 2.13. Break Funding Payments........................................... 35
SECTION 2.14. Taxes............................................................ 36
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs...... 37
SECTION 2.16. Mitigation Obligations; Replacement of Lenders................... 39
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee.................................................... 40
SECTION 3.02. Obligations Unconditional........................................ 40
SECTION 3.03. Reinstatement.................................................... 41
SECTION 3.04. Subrogation...................................................... 41
SECTION 3.05. Remedies......................................................... 41
SECTION 3.06. Instrument for the Payment of Money.............................. 42
(i)
SECTION 3.07. Continuing Guarantee............................................. 42
SECTION 3.08. Rights of Contribution........................................... 42
SECTION 3.09. General Limitation on Guarantee Obligations...................... 43
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Organization; Powers............................................. 43
SECTION 4.02. Authorization; Enforceability.................................... 43
SECTION 4.03. Governmental Approvals; No Conflicts............................. 44
SECTION 4.04. Financial Condition; No Material Adverse Change.................. 44
SECTION 4.05. Properties....................................................... 45
SECTION 4.06. Litigation and Certain Other Matters............................. 45
SECTION 4.07. Environmental Matters............................................ 45
SECTION 4.08. Compliance with Laws and Agreements.............................. 46
SECTION 4.09. Investment and Holding Company Status............................ 46
SECTION 4.10. Taxes............................................................ 46
SECTION 4.11. ERISA............................................................ 46
SECTION 4.12. Disclosure....................................................... 47
SECTION 4.13. Use of Credit.................................................... 47
SECTION 4.14. Material Agreements and Liens.................................... 47
SECTION 4.15. Subsidiaries and Investments..................................... 48
SECTION 4.16. Real Property.................................................... 48
SECTION 4.17. Labor Matters.................................................... 48
SECTION 4.18. Security Documents............................................... 49
SECTION 4.19. Solvency......................................................... 49
SECTION 4.20. Delivery of Certain Documents.................................... 49
SECTION 4.21. Securitization Assets............................................ 49
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date................................................... 50
SECTION 5.02. Each Credit Event................................................ 51
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01. Financial Statements and Other Information....................... 52
SECTION 6.02. Notices of Material Events....................................... 54
SECTION 6.03. Existence; Conduct of Business................................... 55
SECTION 6.04. Payment of Obligations........................................... 55
(ii)
SECTION 6.05. Maintenance of Properties........................................ 55
SECTION 6.06. Insurance........................................................ 55
SECTION 6.07. Books and Records; Inspection Rights............................. 55
SECTION 6.08. Compliance with Laws............................................. 56
SECTION 6.09. Compliance with Contractual Obligations.......................... 56
SECTION 6.10. Certain Obligations Respecting Subsidiaries; Further Assurances.. 56
SECTION 6.11. Use of Proceeds.................................................. 57
SECTION 6.12. Compliance Certificate........................................... 58
SECTION 6.13. Landlord Lien Waivers............................................ 58
SECTION 6.14. Assumption Agreement............................................. 58
SECTION 6.15. Additional Equity Proceeds....................................... 58
ARTICLE VII
NEGATIVE COVENANTS
SECTION 7.01. Indebtedness..................................................... 59
SECTION 7.02. Liens............................................................ 59
SECTION 7.03. Fundamental Changes.............................................. 60
SECTION 7.04. Lines of Business................................................ 61
SECTION 7.05. Investments...................................................... 62
SECTION 7.06. Restricted Payments.............................................. 63
SECTION 7.07. Transactions with Affiliates..................................... 63
SECTION 7.08. Restrictive Agreements........................................... 64
SECTION 7.09. Certain Financial Covenants...................................... 64
SECTION 7.10. Modifications of Seller Notes.................................... 66
SECTION 7.11. Certain Prepayments.............................................. 66
SECTION 7.12. Sale and Leaseback............................................... 66
SECTION 7.13. Passive Holding Company Status................................... 67
ARTICLE VIII
EVENTS OF DEFAULT............................... 67
ARTICLE IX
THE ADMINISTRATIVE AGENT............................ 71
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices......................................................... 73
(iii)
SECTION 10.02. Waivers; Amendments............................................. 74
SECTION 10.03. Expenses; Indemnity; Damage Waiver.............................. 75
SECTION 10.04. Successors and Assigns.......................................... 77
SECTION 10.05. Survival........................................................ 80
SECTION 10.06. Counterparts; Integration; Effectiveness........................ 80
SECTION 10.07. Severability.................................................... 81
SECTION 10.08. Right of Setoff................................................. 81
SECTION 10.09. Governing Law; Jurisdiction; Etc................................ 81
SECTION 10.10. WAIVER OF JURY TRIAL............................................ 82
SECTION 10.11. Headings........................................................ 82
SECTION 10.12. Treatment of Certain Information; Confidentiality............... 82
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Restrictive Agreements
SCHEDULE IV - Litigation
SCHEDULE V - Environmental Matters
SCHEDULE VI - Subsidiaries and Investments
SCHEDULE VII - Real Property
EXHIBIT A - Form of Assignment and Assumption
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Guarantee Assumption Agreement
EXHIBIT D-1 - Form of Opinion of General Counsel to the Obligors
EXHIBIT D-2 - Form of Opinion of Virginia Counsel to the Obligors
EXHIBIT D-3 - Form of Opinion of New York Counsel to the Obligors
EXHIBIT E - Form of Opinion of Special New York Counsel to JPMCB
(iv)
CREDIT AGREEMENT dated as of October 30, 2003, between COLLEGIATE
FUNDING SERVICES, L.L.C., CFSL HOLDINGS CORP., CFSL ACQUISITION CORP., the
SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto, and JPMORGAN CHASE
BANK, as Administrative Agent.
Each of the Parent Guarantors (as hereinafter defined) and the
Borrower (as so defined) has requested that the Lenders (as so defined) make
loans to the Borrower, under the guarantee of the Guarantors (as so defined), in
an aggregate principal amount not exceeding $45,000,000, to finance the
operations of the Borrower and the Subsidiary Guarantors (as so defined) and to
refinance certain existing indebtedness of the Borrower. The Lenders are
prepared to make such loans upon the terms and conditions hereof, and,
accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Account Control Agreement" means the Residual Payments Account
Control Agreement dated as of July 23, 2003, between the Borrower, Collegiate
Funding of Delaware, L.L.C., TCW/Crescent Mezzanine Management III, L.L.C., in
its capacity as collateral agent for the benefit of holders of certain notes
issued by the Borrower, Collegiate Funding Services Resources I, LLC, and U.S.
Bank National Association, in its capacity as indenture trustee under the
Indenture and as securities intermediary, as amended and in effect from time to
time.
"Adjusted Eurodollar Rate" means, for the Interest Period for any
Eurodollar Borrowing, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the Eurodollar Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate for such Interest Period.
"Administrative Agent" means JPMCB, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
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"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Affiliated Party" means the Borrower, the Parent Guarantors or any
of their Subsidiaries.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate for such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, as the case may be.
"Ancillary Agreements" means the Consulting Agreement, the
Management Agreement, the Indenture, the Warehouse Agreement, the Origination
Agreements and the Seller Notes.
"Applicable Margin" means: (a) with respect to any ABR Loan, 2.50%
per annum; and (b) with respect to any Eurodollar Loan, 3.50% per annum.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Approved Fund" means any Person (other than a natural person) that
is engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"Assignment and Assumption" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Commitment Termination Date
and the date of termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
Credit Agreement
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"Borrower" means Collegiate Funding Services, L.L.C., a Virginia
limited liability company.
"Borrowing" means (a) all ABR Loans made, converted or continued on
the same date or (b) all Eurodollar Loans that have the same Interest Period.
"Borrowing Request" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"Business Day" means any day (a) that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed and (b) if such day relates to a borrowing of, a payment
or prepayment of principal of or interest on, a continuation or conversion of or
into, or the Interest Period for, a Eurodollar Borrowing, or to a notice by the
Borrower with respect to any such borrowing, payment, prepayment, continuation,
conversion, or Interest Period, that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" means, for any period, expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) made by the Parent or any of its Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs) during such period computed in
accordance with GAAP.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CFSL" means CFSL Acquisition Corp., a Delaware corporation.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
Credit Agreement
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"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.06
or 2.08(b) and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04. The initial amount
of each Lender's Commitment is set forth on Schedule I, or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Commitment, as
applicable. The initial aggregate amount of the Lenders' Commitments is
$45,000,000.
"Commitment Reduction Dates" means the Quarterly Dates falling on or
nearest to March 31, June 30, September 30 and December 31 of each year,
commencing with December 31, 2003, through and including the Commitment
Termination Date.
"Commitment Termination Date" means the Business Day falling on or
nearest to September 30, 2006.
"Consulting Agreement" means the Consulting Services Agreement dated
May 17, 2002, by and between CFSL and NOBS Capital Ventures, L.L.C., a Virginia
limited liability company.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Documents" means, collectively, this Agreement and the
Security Documents.
"Debt Incurrence" means the incurrence by the Parent or any of its
Subsidiaries after the Effective Date of any Indebtedness, other than
Indebtedness permitted under this Agreement as in effect on the date hereof.
"Debt Service" means, for any period, the sum, for the Parent and
its Subsidiaries (determined on a combined basis without duplication in
accordance with GAAP), of the following: (a) in the case of Loans under this
Agreement, the aggregate amount of payments of principal of such Loans that,
giving effect to Commitment reductions or terminations scheduled to be made
during such period pursuant to Section 2.06(a), were required to be made
pursuant to Section 2.07(a) during such period plus (b) in the case of any other
Indebtedness (other than Loans), all regularly scheduled payments or prepayments
of principal of such Indebtedness (including the principal component of any
payments in respect of Capital Lease Obligations and Synthetic Lease
Obligations) made or payable during such period plus (c) all Interest Expense
for such period.
Credit Agreement
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"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Department of Education" means the United States Department of
Education, or any Governmental Authority succeeding to any or all of the
functions of said Department.
"Disclosed Matters" means the actions, suits and proceedings
disclosed in Schedule IV and the environmental matters disclosed in Schedule V.
"Disposition" means any sale, assignment, transfer or other
disposition (including as a result of casualty or condemnation) of any property
(whether now owned or hereafter acquired) by the Parent or any of its
Subsidiaries to any other Person excluding (i) any sale, assignment, transfer or
other disposition of student loans in the ordinary course of business, (ii) the
conveyance, sale, lease, transfer or other disposition of Securitization Program
Assets in connection with any Permitted Securitization and (iii) any sale,
assignment, transfer or other disposition of property for aggregate
consideration of less then $10,000.
"Disqualified Stock" means any capital stock or other ownership
interest that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder thereof), or upon the happening of any event, (a) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at any time (whether before or after the maturity of the Advances) at
the option of the holder thereof, in whole or in part, (b) is secured by any
assets of the Parent or any of its Subsidiaries, (c) is exchangeable or
convertible at the option of the holder into Indebtedness of the Parent or any
of its Subsidiaries or (d) provides for the mandatory payment of dividends,
i.e., regardless of whether or not the board of directors has declared any
dividends.
Notwithstanding the preceding sentence, any capital stock or other
ownership interest that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Parent to repurchase such capital
stock or other ownership interest upon the occurrence of a change of control or
an asset sale shall not constitute Disqualified Stock if the terms of such
capital stock or other ownership interest provide that the Parent may not
repurchase or redeem any such capital stock or other ownership interest pursuant
to such provisions unless such repurchase or redemption complies with the
provisions of Section 7.06.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Subsidiary" means any Subsidiary other than a Foreign
Subsidiary.
Credit Agreement
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"EBITDA" means, for any period, the sum, for the Parent and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following:
(a) Net Income plus
(b) any provision for (or minus any benefit from) income or
franchise taxes to the extent included in determining Net Income minus
(c) Securitization Subsidiary income not available for debt service
to the extent included in determining Net Income plus
(d) payments associated with loan sale fees and servicing fees from
any Securitization Subsidiary to the Parent or any of its Subsidiaries to
the extent not included in determining Net Income minus
(e) non-refundable capitalized costs excluding costs of
Securitization Subsidiaries associated with origination of student loans
net of any associated amortization costs (in accordance with Statement of
Financial Accounting Standards No. 91, as in effect on the date hereof, to
the extent included in determining Net Income plus
(f) amortization and depreciation to the extent deducted in
determining Net Income plus
(g) Interest Expense (whether paid or accrued and including
amortization of original issue discount) to the extent deducted in
determining Net Income plus
(h) payments made to Persons pursuant to the Management Agreement
and the Consulting Agreement in amounts permitted by this Agreement plus
(j) Lease Rental payments in amounts permitted by this Agreement
minus
(k) any Restricted Payment, other than any Restricted Payment made
in accordance with Section 7.06(a).
"Effective Date" means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Claim" means, with respect to any Person, any written
or oral notice, claim, demand or other communication (collectively, a "claim")
by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other property, personal injuries, fines or
Credit Agreement
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penalties arising out of, based on or resulting from (i) the presence, or
Release into the environment, of any Hazardous Materials at any location,
whether or not owned by such Person, or (ii) circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include any claim by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages (including punitive damages), contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment as a result of the presence, exposure or
Release of Hazardous Materials.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Equity Issuance" means (a) any issuance or sale by the Parent or
any of its Subsidiaries after the Effective Date of (i) any of its capital
stock, (ii) any warrants or options exercisable in respect of its capital stock
(other than any warrants or options issued to directors, officers or employees
of the Parent or any of its Subsidiaries pursuant to employee benefit plans
established in the ordinary course of business and any capital stock of the
Parent or any of its Subsidiaries (including the Borrower) issued upon the
exercise of such warrants or options) or (iii) any other security or instrument
representing an equity interest (or the right to obtain any equity interest) in
the Parent or any of its Subsidiaries or (b) the receipt by the Parent or any of
its Subsidiaries after the Effective Date of any capital contribution (whether
or not evidenced by any equity security issued by the recipient of such
contribution); provided that Equity Issuance shall not include (x) any such
issuance or sale by any Subsidiary of the Parent to the Parent or any wholly
owned Subsidiary of the Parent , (y) any capital contribution by the Parent or
any wholly owned Subsidiary of the Parent to any Subsidiary of the Parent or (z)
any such issuance or sale by any Securitization Subsidiary of the Parent .
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any shareholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the
Credit Agreement
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Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans constituting such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted Eurodollar
Rate.
"Eurodollar Rate" means, for the Interest Period for any Eurodollar
Borrowing, the rate appearing at which eurodollar deposits for one, two, three
or six months (as selected by the Borrower) on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for the offering of Dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the Eurodollar Rate
for such Interest Period shall be the rate at which Dollar deposits of
$5,000,000 and for a maturity comparable to such Interest 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 Business Days prior to the commencement of such Interest Period.
"Event of Default" has the meaning assigned to such term in Article
VIII.
Credit Agreement
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"Excess Cash Balance" means, as at any date, the aggregate amount of
cash, cash equivalents and marketable securities held by the Parent and its
Subsidiaries as at the close of business on such date minus (i) $5,000,000 and
(ii) cash of a Securitization Subsidiary that, under the Securitization
Documents to which such Securitization Subsidiary is party, is subject to
restrictions, direct or indirect, on the payment of dividends or the making of
distributions to the Parent.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.16(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
or is attributable to such Foreign Lender's failure or inability (other than as
a result of a Change in Law) to comply with Section 2.14(e), except to the
extent that such Foreign Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.14(a).
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FFELP Loans" means student loans made pursuant to the Federal
Family Education Loan Program under the Higher Education Act.
"Financial Officer" means, with respect to the Parent, the chief
financial officer, principal accounting officer, treasurer or controller of the
Parent and, with respect to the Borrower, the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Fixed Charges Ratio" means, (a) as at any date prior to and
including September 30, 2004, the ratio of (i) EBITDA for the period beginning
October 1, 2003 and ending on the last day of the fiscal quarter ending on or
most recently ended prior to such date, to (ii) the sum of (w) Debt Service for
such period plus (x) Lease Rentals for such period plus
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(y) cash income taxes payable by the Parent and its Subsidiaries in respect of
such period plus (z) payments made to Persons pursuant to the Management
Agreement, the Consulting Agreement and the Broker Agreement during such period
and (b) for any date on or after December 31, 2004, the ratio of (i) EBITDA for
the period of four fiscal quarters ending on or most recently ended prior to
such date to (ii) the sum of (w) Debt Service for such period plus (x) Lease
Rentals for such period plus (y) cash income taxes payable by the Parent and its
Subsidiaries in respect of such period plus (z) payments made to Persons
pursuant to the Management Agreement, the Consulting Agreement and the Broker
Agreement during such period.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary organized under the laws
of any jurisdiction other than the United States of America, any State thereof
or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States
of America, or of any other nation, or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
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"Guarantee Assumption Agreement" means a Guarantee Assumption
Agreement substantially in the form of Exhibit C by an entity that, pursuant to
Section 6.10(a) is required to become a "Subsidiary Guarantor" hereunder in
favor of the Administrative Agent.
"Guarantor" means each Parent Guarantor and each Subsidiary
Guarantor.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Higher Education Act" means the Higher Education Act of 1965, as
amended from time to time.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of the type referred to in any of clauses (a) through (f) above of
others, (h) all Capital Lease Obligations and Synthetic Lease Obligations of
such Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (j)
all obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances, provided that the term "Indebtedness" shall not include any
Securitization Program Obligations of a Securitization Subsidiary of the Parent.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
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"Indenture" means the Indenture of Trust, dated as of November 1,
2001, among Collegiate Funding Services Education Loan Trust I, as the issuer,
U.S. Bank National Association, as lender trustee, and U.S. Bank National
Association, as Indenture trustee.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of July 23, 2003, among TCW/Crescent Mezzanine Management III, L.L.C., in its
capacity as agent for the benefit of holders of certain notes issued by the
Borrower, Collegiate Funding Services Resources I, LLC, U.S. Bank National
Association, in its capacity as indenture trustee under the Indenture, Citicorp
North America, Inc., in its capacity as agent for lenders the Indenture, and the
Borrower, as amended and in effect from time to time.
"Interest Coverage Ratio" means, as at any date, the ratio of (a)
EBITDA for the period of four quarters ending on, or most recently ended prior
to, such date to (b) Interest Expense for such period.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.05.
"Interest Expense" means, for any period, the sum, for the Parent
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest in respect of
Indebtedness (including the interest component of any payments in respect of
Capital Lease Obligations and Synthetic Lease Obligations) accrued or
capitalized during such period (whether or not actually paid during such period)
plus (b) the net amount payable (or minus the net amount receivable) under
Hedging Agreements relating to interest during such period (whether or not
actually paid or received during such period).
"Interest Payment Date" means (a) with respect to any ABR Loan, each
Quarterly Date and (b) with respect to any Eurodollar Loan, the last day of each
Interest Period therefor and, in the case of any Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at three-month intervals after the first day of such Interest
Period.
"Interest Period" means, for any Eurodollar Loan or Borrowing, the
period commencing on the date of such Loan or Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as specified in the applicable Borrowing Request or
Interest Election Request; provided that (i) if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Loan initially shall be the
date
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on which such Loan is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Loan, and the date of a Borrowing
comprising Loans that have been converted or continued shall be the effective
date of the most recent conversion or continuation of such Loans.
"Investment" means, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person), but excluding any such advance, loan or extension of credit having
a term not exceeding 90 days arising in connection with the sale of inventory or
supplies by such Person in the ordinary course of business; (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person; or (d) the
entering into of any Hedging Agreement.
"JPMCB" means JPMorgan Chase Bank.
"Lease Rentals" means, with respect to any period, the sum of the
rental and other obligations required to be paid during such period by the
Parent or any of its Subsidiaries as lessee under all leases of real or personal
property (other than Capital Lease Obligations), excluding any amount required
to be paid by the lessee (whether or not therein designated as rental or
additional rental) on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, provided that if, at the date of
determination, any such rental or other obligations are contingent or not
otherwise definitely determinable by the terms of the related lease agreement,
the amount of such obligations (a) shall be assumed to be equal to the amount of
such obligations for the period of twelve consecutive calendar months
immediately preceding the date of determination or (b) if the related lease
agreement was not in effect during such preceding twelve-month period, shall be
the amount estimated by a Financial Officer of the Parent on a reasonable basis
and in good faith.
"Lenders" means the Persons listed on Schedule I and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
"Leverage Ratio" means, as at any date, the ratio of (i) the
aggregate amount of Indebtedness for borrowed money or otherwise appearing as a
liability on the balance sheet of the Parent and its Subsidiaries in accordance
with GAAP of the Parent and its Subsidiaries (determined on a consolidated basis
without duplication in accordance) as at such date to
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(ii) EBITDA for the period of four fiscal quarters ending on or most recently
ended prior to such date.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Lightyear" means, collectively, Lightyear Capital LLC and any
entity Controlled by Lightyear Capital LLC.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Management Agreement" means the Management Agreement dated as of
May 17, 2002 by and among the Parent, the Borrower, CFSL and Lightyear Capital
LLC.
"Margin Stock" means "margin stock" within the meaning of
Regulations T, U and X of the Board.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or prospects, of
the Parent and its Subsidiaries taken as a whole or (b) the validity or
enforceability of any of the Credit Documents or the rights and remedies of the
Administrative Agent and the Lenders thereunder.
"Material Indebtedness" means Indebtedness (other than the Loans),
or obligations in respect of one or more Hedging Agreements, of any one or more
Related Parties of the Borrower in an aggregate principal amount exceeding
$500,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Available Proceeds" means:
(a) in the case of any Disposition, the aggregate amount of all cash
payments, and the fair market value of any non-cash consideration,
received by the Parent and its Subsidiaries directly or indirectly in
connection with such Disposition; provided that
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(i) Net Available Proceeds shall be net of the amount of any legal, title
and recording tax expenses, commissions and other fees and expenses paid
by the Parent and its Subsidiaries in connection with such Disposition and
(ii) Net Available Proceeds shall be net of any repayments by the Parent
or any of its Subsidiaries of Indebtedness to the extent that (x) such
Indebtedness is secured by a Lien on the property that is the subject of
such Disposition (other than a Lien that is junior to the Liens in favor
of the Administrative Agent pursuant to the Security Documents) and (y)
the transferee of (or holder of a Lien on) such property requires that
such Indebtedness be repaid as a condition to the purchase of such
property;
(b) in the case of any Equity Issuance, the aggregate amount of all
cash received by the Parent and its Subsidiaries in respect of such Equity
Issuance net of reasonable expenses incurred by the Parent and its
Subsidiaries in connection therewith; and
(c) in the case of any Debt Incurrence, the aggregate amount of all
cash received by the Parent and its Subsidiaries in respect of such Debt
Incurrence net of reasonable expenses incurred by the Parent and its
Subsidiaries in connection therewith.
"Net Income" means, for the Parent and its Subsidiaries (determined
on a consolidated basis without duplication in accordance with GAAP), the
aggregate of the net income (loss) for such period, provided that the net income
(loss) of any Subsidiary of the Parent (other than the Borrower) that is subject
to restrictions, direct or indirect, on the payment of dividends or the making
of distributions to the Parent (other than restrictions solely existing pursuant
to this Agreement) shall be excluded from "Net Income" to the extent of such
restrictions.
"Non-FFELP Loans" means student loans made other than pursuant to
the Federal Family Education Loan Program under the Higher Education Act and
marketed to the respective borrowers, or managed, by the Borrower or any of its
Subsidiaries.
"Obligor" means the Borrower and each Guarantor.
"Operating Agreement" means the Second Amended and Restated
Operating Agreement of the Borrower entered into as of May 17, 2002 by CFSL, as
the sole member of the Borrower.
"Origination Agreements" means, collectively, (a) the Real World
Consolidation Loan Origination Responsibility Agreement dated as of April 1,
2003, by and between the Borrower and Mississippi Higher Education Assistance
Corporation, (b) the Real World Consolidation Loan Origination Responsibility
Agreement dated as of February 1, 2001, by and between the Borrower and The
Brazos Higher Education Service Corporation, Inc. ("Brazos"), (c) the Heal
Refinancing Origination Responsibility Agreement dated as of February 1, 2001,
by and between the Borrower and Brazos, (d) the Consolidation Loan Origination
Responsibility
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Agreement dated as of December 3, 2002, by and between the Borrower and Brazos,
(e) the Consolidation Loan Origination Responsibility Agreement dated as of
November 15, 1999, by and between the Borrower and The Student Loan Corporation,
(f) the Consolidation Loan Origination Responsibility Agreement dated as of
November 1, 2000, by and between the Borrower and ClassNotes Inc., (g) the
Private Consolidation Loan Origination Responsibility Agreement dated as of June
12, 2001, by and between the Borrower and First Union National Bank of Delaware
and (h) the Second Amended and Restated Loan Servicing Agreement between
Mississippi Higher Education Assistance Corporation, CFS-SunTech Servicing LLC
and Collegiate Funding Services, L.L.C. entered into as of April 14, 2003 with
an effective date as of April 15, 2003.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Credit Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Credit
Document.
"Parent" means CFSL Holdings Corp., a Delaware corporation.
"Parent Guarantor" means the Parent and CFSL.
"Participant" has the meaning set forth in Section 10.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 6.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) cash deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
Credit Agreement
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(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VIII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from Standard & Poor's Ratings
Services, a Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or from ▇▇▇▇▇'▇
Investors Services, Inc;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) of this
definition and entered into with a financial institution satisfying the
criteria described in clause (c) of this definition; and
(e) "Eligible Investments" (as defined in any Securitization
Document, the Indenture or the Warehouse Agreement).
"Permitted Securitization" means any transaction or series of
transactions that may be entered into by the Borrower or any Subsidiary of the
Borrower, as applicable, pursuant to which a Securitization Subsidiary may sell,
convey or otherwise transfer to another Securitization Subsidiary, or may grant
a security interest in, any Securitization Program Asset (whether existing on
the date hereof or arising thereafter); provided that:
Credit Agreement
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(a) no portion of the Indebtedness or other obligations (contingent
or otherwise) of any Securitization Subsidiary (i) is Guaranteed by the
Borrower or any of its Subsidiaries (other than a Securitization
Subsidiary), (ii) is recourse to or obligates the Borrower or any of its
Subsidiaries (other than a Securitization Subsidiary) in any way, other
than pursuant to representations, warranties, covenants and indemnities
that, in the good faith judgment of the board of managers of the Borrower
or the board of directors of such Subsidiary, as applicable, are
reasonably customary in student loan receivables transactions, or (iii)
subject any property of the Borrower or any of its Subsidiaries, directly
or indirectly, contingently or otherwise, to the satisfaction of
obligations incurred in such transactions;
(b) neither the Borrower nor any of its Subsidiaries (other than the
applicable Securitization Subsidiary) has any material contract,
arrangement or understanding with a Securitization Subsidiary other than
on terms no less favorable to the Borrower or such Subsidiary than those
that might be obtained at the time from Persons that are not Affiliates of
the Borrower;
(c) neither the Borrower nor any of its Subsidiaries (other than the
applicable Securitization Subsidiary) has any obligation to maintain or
preserve the financial condition of a Securitization Subsidiary or cause
such entity to achieve certain levels of operating results;
(d) the creditworthiness of the student loans under such
securitization transaction is substantially similar to the Eligible Loans
(as defined in the Indenture);
(e) the Borrower has delivered to the Administrative Agent such
customary opinions of counsel covering matters incidental or related to
any such securitization transaction as the Administrative Agent may
reasonably request; and
(f) no Default shall have occurred and be continuing or would result
from such securitization transaction.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
Credit Agreement
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"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMCB as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Qualified Parent Guarantor Obligations" means, collectively,
obligations of the following categories incurred from time to time by either
Parent Guarantor on behalf of the Borrower and its Subsidiaries: (i) directors'
fees, and fees, costs and expenses in respect of professional and related
services which may be rendered to the Borrower and its Subsidiaries from time to
time, including the fees and expenses of accountants, lawyers, investment
bankers and other consultants retained in connection with matters affecting the
Borrower and its Subsidiaries collectively, (ii) premiums, fees and expenses in
connection with insurance policies and employee benefit programs (including
workmen's compensation) maintained on behalf of the Borrower or any of its
Subsidiaries, (iii) fees, costs and expenses incurred in connection with
acquisitions and financings, including banking and underwriting fees (including
underwriters discounts) and (iv) fees, costs and expenses in connection with the
purchase by the Borrower and its Subsidiaries of data communications services.
"Qualified Public Offering" means the offering, issuance and sale by
the Parent of at least 20% (by number of shares) of the voting stock of the
Parent in one or more bona fide public offerings pursuant to a registration
statement or registration statements filed with the Securities and Exchange
Commission pursuant to the provisions of the Securities Act of 1933, as amended.
"Quarterly Dates" means the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the Effective Date.
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
"Required Lenders" means, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing more than 50% of the sum of
the total Revolving Credit Exposures and unused Commitments at such time.
Credit Agreement
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"Restricted Payment" means, with respect to any Person, (i) any
dividend or other distribution by such Person (in cash, property or obligations)
on, or dividend or other distribution (in cash, property or obligations) with
respect to, or other payments or distributions on account of, or the setting
apart of money for a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any portion of any capital stock
or other ownership interest in such Person, or of any warrants, options or other
rights to acquire any such capital stock or other ownership interest, such as
"phantom stock" payments, where the amount thereof is calculated with reference
to fair market or equity value of such Person or any of its Subsidiaries, but
excluding dividends payable solely in shares of common stock (other than
Disqualified Stock) of such Person and (ii) payments made to Persons pursuant to
the Management Agreement.
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the aggregate outstanding principal amount of such Lender's Loans at such
time.
"Securitization Documents" means (a) any agreement or agreements
evidencing a Permitted Securitization, in each case, as amended, modified,
supplemented or restated and in effect from time to time and entered into by the
Borrower or any of its Subsidiaries, and (b) each other instrument, agreement
and other document entered into by the Borrower or such Subsidiary relating to
the transactions contemplated by the agreements referred in clause (a) above.
"Securitization Program Assets" means (a) all student loans which
are transferred by the Borrower or any of its Subsidiaries pursuant to any
Securitization Document, (b) all Securitization Related Assets and (c) all
collections (including recoveries) and other proceeds of the assets described in
clauses (a) and (b) above.
"Securitization Program Obligations" means (a) notes, trust
certificates, undivided interests, partnership interests or other interests
representing the right to be paid a specified principal amount plus interest
thereon and expense reimbursement related thereto in respect of the
Securitization Program Assets pursuant to any Permitted Securitization payable
by any Securitization Subsidiary, and (b) related obligations of the Borrower or
any of its Subsidiaries, including any obligation in respect of breach of
warranty claims and indemnity provisions related to any of the foregoing.
"Securitization Related Assets" means (a) any rights arising under
any Securitization Document (including rights in respect of Liens securing, or
any other credit support in respect of, the obligations under such
Securitization Document of holders of Securitization Program Obligations), (b)
any proceeds thereof and any segregated lockboxes or accounts in which such
proceeds are deposited, (c) spread accounts and other similar accounts (and any
amounts on deposit therein) established in connection with the Permitted
Securitization evidenced by any such Securitization Document for the benefit of
holders of Securitization Program Obligations, (d) any warranty, indemnity,
dilution and other intercompany claim arising out of any such Securitization
Document for the benefit of holders of Securitization Program
Credit Agreement
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Obligations and (e) other assets which are customarily transferred or in respect
of which security interests are customarily granted in connection with asset
securitization transactions involving student loans.
"Securitization Subsidiary" means any special purpose wholly owned
Subsidiary of the Borrower created in connection with the transactions
contemplated by a Permitted Securitization, which Subsidiary engages in no
activities other than those incidental to such Permitted Securitization and is
designated as a "securitization subsidiary" by the board of managers of the
Borrower. No such designation by the board of managers of the Borrower shall be
effective unless (i) at the time thereof and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing, (ii) after
giving effect thereto the Borrower shall be in pro forma compliance with the
requirements of Section 7.09 (such pro forma compliance to be determined under
the assumption that such designation (and any transactions in which such
Subsidiary will engage) had occurred at the beginning of the four-quarter period
(or such other period used in the calculation of the requirements of Section
7.09) ending on or most recently ended prior to the date of such designation)
and (iii) the Administrative Agent shall have received copies of resolutions of
the board of managers of the Borrower giving effect to such designation and a
certificate of a Financial Officer of the Borrower certifying, to the best of
such Financial Officer's knowledge and belief after consulting with counsel,
that such designation, and the transactions in which such Subsidiary will
engage, comply with the requirements of this definition and the definition of
"Permitted Securitization".
"Security Agreement" means a Security Agreement substantially in the
form of Exhibit B between the Borrower, each of the Guarantors and the
Administrative Agent, as the same shall be modified and supplemented and in
effect from time to time.
"Security Documents" means, collectively, the Security Agreement,
the Guarantee Assumption Agreements and all Uniform Commercial Code financing
statements required by the Security Agreement to be filed with respect to the
security interests in personal property and fixtures created pursuant to the
Security Agreement.
"Seller Notes" means the 10% Subordinated Notes due 2007 of CFSL
issued to NOBS Capital Ventures, L.L.C., pursuant to the Purchase Agreement,
dated as of April 15, 2002, by and among CFSL, the Borrower, The ▇▇▇▇▇▇▇ Group,
Inc., NOBS Capital Ventures, L.L.C., ▇▇▇▇▇ ▇▇▇▇▇ and the additional sellers
named therein, in aggregate principal amount not to exceed $15,000,000.
"Senior Secured Notes" means the 11.0% Senior Secured Notes due
March 21, 2007 issued under the Amended and Restated Securities Purchase
Agreement dated as of May 17, 2002 by and among the Borrower, CFSL, the Parent,
certain other guarantors referred to therein, the purchasers listed on the
signature pages thereto and TCW/Crescent Mezzanine Management III, L.L.C., as
collateral agent.
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"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay such debts and liabilities as they mature
and (d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Statutory Reserve Rate" means, for the Interest Period for any
Eurodollar Borrowing, a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the
arithmetic mean, taken over each day in such Interest Period, of the aggregate
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board to
which the Administrative Agent is subject for eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent. Unless otherwise
specified, "Subsidiary" means a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each of the Subsidiaries of the
Borrower identified under the caption "SUBSIDIARY GUARANTORS" on the signature
pages hereto and each Subsidiary of the Borrower that becomes a "Subsidiary
Guarantor" after the date hereof pursuant to Section 6.10(a).
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"Synthetic Lease Obligations" of any Person means, as at any date,
the monetary obligations of such Person under (a) a so-called synthetic or
tax-retention lease, or (b) an agreement for the use or possession or property
creating obligations that do not appear on the balance sheet of such Person but
which, for United States Federal income tax purposes, is characterized as the
indebtedness of such Person (without regard to accounting treatment).
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by each
Obligor of this Agreement and the other Credit Documents to which such Obligor
is intended to be a party, the borrowing of Loans and the use of the proceeds
thereof.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans constituting such
Borrowing, is determined by reference to the Adjusted Eurodollar Rate or the
Alternate Base Rate.
"Warehouse Agreement" means the Indenture dated July 23, 2003 among
Collegiate Funding Services Resources I, LLC; CRC Funding, LLC, as Conduit
Lender; Citicorp North America, Inc., as Agent; U.S. Bank National Association,
as Eligible Lender Trustee; Collegiate Funding Portfolio Administration, L.L.C.,
as Administrator; and Collegiate Funding Master Servicing, L.L.C., as Master
Servicer.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same
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meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect as of the date hereof; 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 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. To enable the ready
and consistent determination of compliance with the covenants set forth in
Article VII, the Borrower will not change the last day of its fiscal year from
December 31, or the last days of the first three fiscal quarters in each of its
fiscal years from March 31, June 30 and September 30, respectively.
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (a) such Lender's Revolving Credit Exposure exceeding such
Lender's Commitment or (b) the total Revolving Credit Exposures exceeding the
total Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.
SECTION 2.02. Loans and Borrowings.
(a) Obligations of Lenders. Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Type of Loans. Subject to Section 2.11, each Borrowing shall be
constituted entirely of ABR Loans or of Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or
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foreign branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.
(c) Minimum Amounts; Limitation on Number of Borrowings. Each
Eurodollar Borrowing shall be in an aggregate amount of $1,000,000 or a larger
multiple of $1,000,000. Each ABR Borrowing shall be in an aggregate amount equal
to $1,000,000 or a larger multiple of $1,000,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments. Borrowings of more than one Type may be outstanding at the
same time.
(d) Limitations on Interest Periods. Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request (or
to elect to convert to or continue as a Eurodollar Borrowing) any Borrowing if
the Interest Period requested therefor would: (i) end after the Commitment
Termination Date; or (ii) commence before and end after any Commitment Reduction
Date unless, after giving effect thereto, the aggregate principal amount of the
Loans having Interest Periods that end after such Commitment Reduction Date
shall be equal to or less than the aggregate amount of the Commitments on such
Commitment Reduction Date.
SECTION 2.03. Requests for Borrowings.
(a) Notice by the Borrower. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (i) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing or (ii) in the
case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower.
(b) Content of Borrowing Requests. Each telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
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(iv) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the
term "Interest Period" and permitted under Section 2.02(d); and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.04.
(c) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
(d) Failure to Elect. If no election as to the Type of a Borrowing
is specified, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Eurodollar Borrowing,
then the requested Borrowing shall be made instead as an ABR Borrowing.
SECTION 2.04. Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request.
(b) Presumption by the Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the
Federal Funds Effective Rate or (ii) in the case of the Borrower, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
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SECTION 2.05. Interest Elections.
(a) Elections by the Borrower. The Loans constituting each Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Borrowing, shall have the Interest Period
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a Borrowing of a different Type or to continue such
Borrowing as a Borrowing of the same Type and, in the case of a Eurodollar
Borrowing, may elect the Interest Period therefor, all as provided in this
Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans constituting such
Borrowing, and the Loans constituting each such portion shall be considered a
separate Borrowing.
(b) Notice of Elections. To make an election pursuant to this
Section, the Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under Section
2.03 if the Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Content of Interest Election Requests. Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) of this paragraph shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which shall
be a period contemplated by the definition of the term "Interest Period"
and permitted under Section 2.02(d).
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(d) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
(e) Failure to Elect; Events of Default. If the Borrower fails to
deliver a timely and complete Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period therefor, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Borrower, then, so long as an Event of Default is continuing (i)
no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period therefor.
SECTION 2.06. Termination and Reduction of the Commitments.
(a) Scheduled Termination and Reduction. Unless previously
terminated, the Commitments shall terminate on the Commitment Termination Date.
In addition, the aggregate amount of the Commitments shall be automatically
reduced on each Commitment Reduction Date set forth in column (A) below to the
amount (subject to reduction pursuant to paragraph (d) of this Section) set
forth in column (B) below opposite such Commitment Reduction Date:
(A) (B)
Commitment Commitments
Reduction Date Reduced to the
Falling on or Following
Nearest to: Amounts ($):
----------- ------------
12/31/03 $ 41,250,000
03/31/04 $ 37,500,000
06/30/04 $ 33,750,000
09/30/04 $ 30,000,000
12/31/04 $ 26,250,000
03/31/05 $ 22,500,000
06/30/05 $ 18,750,000
09/30/05 $ 15,000,000
12/31/05 $ 11,250,000
03/31/06 $ 7,500,000
06/30/06 $ 3,750,000
Commitment Termination Date $ 0
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(b) Voluntary Termination or Reduction. The Borrower may at any time
terminate, or from time to time reduce, the Commitments; provided that (i) each
reduction of the Commitments pursuant to this Section, other than any reduction
made in connection with a Restricted Payment described in Section 7.06(a), shall
be in an amount that is $2,000,000 or a larger multiple of $500,000 and (ii) the
Borrower shall not terminate or reduce the Commitments if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 2.08, the
total Revolving Credit Exposures would exceed the total Commitments.
(c) Notice of Voluntary Termination or Reduction. The Borrower shall
notify the Administrative Agent of any election to terminate or reduce the
Commitments under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments delivered
by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.
(d) Voluntary Commitment Reductions Carry Forward. Each reduction in
the aggregate amount of the Commitments pursuant to paragraph (b) of this
Section, other than any reduction made in connection with a Restricted Payment
described in Section 7.06(a), or Section 2.08(b) on any date shall result in an
automatic and simultaneous reduction (but not below zero) in the aggregate
amount of the Commitments for each Commitment Reduction Date (as reflected in
column (B) at the end of paragraph (a) of this Section) after such date in an
amount equal to the amount of such reduction.
(e) Effect of Termination or Reduction. Any termination or reduction
of the Commitments shall be permanent. Each reduction of the Commitments shall
be made ratably among the Lenders in accordance with their respective
Commitments.
SECTION 2.07. Repayment of Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to pay
to the Administrative Agent for account of the Lenders the outstanding principal
amount of the Loans on the Commitment Termination Date. In addition, if
following any Commitment Reduction Date the total Revolving Credit Exposures
shall exceed the Commitments, the Borrower shall prepay Loans in an aggregate
amount equal to such excess.
(b) Manner of Payment. Prior to any repayment or prepayment of any
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be paid and shall notify the Administrative Agent by telephone (confirmed by
telecopy) of such selection not later than 11:00 a.m., New York City time, three
Business Days before the scheduled date of
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such repayment; provided that each repayment of Borrowings shall be applied to
repay any outstanding ABR Borrowings before any other Borrowings. If the
Borrower fails to make a timely selection of the Borrowing or Borrowings to be
repaid or prepaid, such payment shall be applied, first, to pay any outstanding
ABR Borrowings and, second, to other Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be repaid first). Each payment of a Borrowing shall
be applied ratably to the Loans included in such Borrowing.
(c) Maintenance of Records by Lenders. Each Lender shall maintain in
accordance with its usual practice records evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(d) Maintenance of Records by the Administrative Agent. The
Administrative Agent shall maintain records in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and each Interest Period
therefor, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for account of
the Lenders and each Lender's share thereof.
(e) Effect of Entries. The entries made in the records maintained
pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence
of the existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such records
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.
(f) Promissory Notes. 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 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 10.04) be represented by one or more promissory
notes in such form payable to the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).
SECTION 2.08. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to the requirements of this Section.
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(b) Mandatory Prepayments. The Borrower will prepay the Loans,
and/or the Commitments shall be subject to automatic reduction, as follows:
(i) Equity Issuance. Upon any Equity Issuance, the Borrower shall
prepay the Loans, and/or the Commitments shall be subject to automatic
reduction, in an aggregate amount equal to 50% of the Net Available
Proceeds thereof, such prepayment and/or reduction to be effected in each
case in the manner and to the extent specified in clause (v) of this
paragraph.
(ii) Excess Cash Balance. Not later than the date 10 Business Days
after the last day of each fiscal year of the Borrower commencing with the
fiscal year ending December 31, 2004, and for each fiscal year thereafter,
the Borrower shall prepay the Loans, and/or the Commitments shall be
subject to automatic reduction, in an aggregate amount equal to the 100%
of the Excess Cash Balance as at such last day. Such prepayment and/or
reduction is to be effected in each case in the manner and to the extent
specified in clause (v) of this paragraph.
(iii) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders pursuant to Section
7.03 to any Disposition not otherwise permitted hereunder, in the event
that the Net Available Proceeds of any Disposition (herein, the "Current
Disposition"), and of all prior Dispositions taking place within the
calendar year ending on the date of the Current Disposition as to which a
prepayment has not yet been made under this paragraph, shall exceed
$250,000 then, no later than five Business Days prior to the occurrence of
the Current Disposition, the Borrower will deliver to the Lenders a
statement, certified by a Financial Officer of the Borrower, in form and
detail satisfactory to the Administrative Agent, of the amount of the Net
Available Proceeds of the Current Disposition and of all such prior
Dispositions and will prepay the Loans, and/or the Commitments shall be
subject to automatic reduction, in an aggregate amount equal to 100% of
the Net Available Proceeds of the Current Disposition and such prior
Dispositions, such prepayment and/or reduction to be effected in each case
in the manner and to the extent specified in clause (v) of this paragraph,
provided that, notwithstanding the foregoing, the Borrower shall not be
required to make a prepayment under this clause (iii) to the extent that
(A) the Borrower advises the Administrative Agent at the time
of the relevant Disposition that it intends to reinvest such Net
Available Proceeds in tangible real or personal property to be used
by the Borrower and its Subsidiaries in their business,
(B) such Net Available Proceeds are held by the Borrower in a
segregated investment or other account until so used to make such
reinvestment as contemplated above, and
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(C) such Net Available Proceeds are in fact so applied to such
reinvestment within 180 days of such Disposition (it being
understood that, in the event Net Available Proceeds from more than
one Disposition are held by the Borrower, such Net Available
Proceeds shall be deemed to be utilized in the same order in which
such Dispositions occurred and, accordingly, any such Net Available
Proceeds so held for more than 180 days shall be forthwith applied
to the prepayment of Loans as provided above).
(iv) Debt Incurrence. Upon any Debt Incurrence, the Borrower shall
prepay the Loans, and/or the Commitments shall be subject to automatic
reduction, in an aggregate amount equal to 100% of the Net Available
Proceeds thereof, such prepayment and/or reduction to be effected in each
case in the manner and to the extent specified in clause (v) of this
paragraph.
(v) Application. Prepayments and/or reductions of Commitments
pursuant to clauses (i), (iii) and (iv) of this paragraph shall be applied
to reduce the aggregate amount of the Commitments (and to the extent that,
after giving effect to such reduction, the total Revolving Credit
Exposures would exceed the Commitments, the Borrower shall prepay Loans in
an aggregate amount equal to such excess). Prepayment pursuant to clause
(ii) of this paragraph shall be applied first to prepay outstanding Loans
and, to the extent that the aggregate amount of such required prepayment
shall be greater than the aggregate outstanding amount of Loans on the
date of such prepayment, to the reduction of Commitments.
(c) Notices, Etc. The Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment or (ii) in the case
of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.06, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.06. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of a
Borrowing of the same Type as provided in Section 2.02, except as necessary to
apply fully the required amount of a mandatory prepayment. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.10 and shall be made in the manner specified in Section
2.07(b).
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SECTION 2.09. Fees.
(a) Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for account of each Lender a commitment fee, which shall accrue at a rate
per annum equal to 0.5% on the average daily unused amount of the Commitment of
such Lender during the period from and including the date hereof to but
excluding the earlier of the date such Commitment terminates and the Commitment
Termination Date. Accrued commitment fees shall be payable in arrears on each
Quarterly Date and on the earlier of the date the Commitments terminate and the
Commitment Termination Date, commencing on the first such date to occur after
the date hereof. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(b) Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
(c) Payment of Fees. All fees payable hereunder shall be paid on the
dates due, in immediately available funds, to the Administrative Agent for
distribution, in the case of facility fees, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances.
SECTION 2.10. Interest.
(a) ABR Loans. The Loans constituting each ABR Borrowing shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin.
(b) Eurodollar Loans. The Loans constituting each Eurodollar
Borrowing shall bear interest at a rate per annum equal to the Adjusted
Eurodollar Rate for the Interest Period for such Borrowing plus the Applicable
Margin.
(c) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration, by mandatory prepayment or otherwise, such overdue amount shall
bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided above or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of
this Section.
(d) Payment of Interest. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan
prior to the Commitment Termination Date), accrued interest on the principal
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amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Borrowing
prior to the end of the Interest Period therefor, accrued interest on such
Borrowing shall be payable on the effective date of such conversion.
(e) Computation. All interest hereunder shall be computed on the
basis of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate 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 Alternate
Base Rate or Adjusted Eurodollar Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.11. Alternate Rate of Interest. If prior to the
commencement of the Interest Period for any Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted Eurodollar Rate for such Interest
Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted Eurodollar Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their
respective Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or the
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing (unless prepaid) shall be continued as, or converted to, an
ABR Borrowing and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION 2.12. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted Eurodollar Rate); or
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(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of this Agreement or the Loans made by
such Lender to a level below that which such Lender or such Lender's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided, further, that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the six-month period
referred to above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.13. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of an Interest
Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice is permitted to be revocable under Section 2.08(c) and is
revoked in accordance herewith), or (d) the assignment as a result of a request
by the Borrower pursuant to
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Section 2.16(b) of any Eurodollar Loan other than on the last day of an Interest
Period therefor, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of
a Eurodollar Loan, the loss to any Lender attributable to any such event shall
be deemed to include an amount determined by such Lender to be equal to the
excess, if any, of (i) the amount of interest that such Lender would pay for a
deposit equal to the principal amount of such Loan for the period from the date
of such payment, conversion, failure or assignment to the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow,
convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the Adjusted Eurodollar Rate for such
Interest Period, over (ii) the amount of interest that such Lender would earn on
such principal amount for such period if such Lender were to invest such
principal amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for Dollar deposits from other banks in
the eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.14. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that, if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes by the Borrower. In addition, the
Borrower shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to
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the Borrower by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Payments by the Obligors. Each Obligor shall make each payment
required to be made by it hereunder (whether of principal, interest or fees, or
under Section 2.12, 2.13 or 2.14, or otherwise) or under any other Credit
Document (except to the extent otherwise provided therein) prior to 12:00 noon,
New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, except as otherwise
expressly provided in the relevant Credit Document and except payments pursuant
to Sections 2.12, 2.13, 2.14 and 10.03, which shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder or under any other Credit Document (except to the extent
otherwise provided therein) shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, interest and fees then due hereunder, such
funds shall be applied (i) first, to pay interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, to pay principal
then due hereunder,
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ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided
herein: (i) each Borrowing shall be made from the Lenders, each payment of
commitment fee under Section 2.09 shall be made for account of the Lenders, and
each termination or reduction of the amount of the Commitments under Section
2.06 shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (ii) each Borrowing
shall be allocated pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of the making of Loans) or their respective
Loans that are to be included in such Borrowing (in the case of conversions and
continuations of Loans); (iii) each payment or prepayment of principal of Loans
by the Borrower shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of the Loans held by them; and (iv)
each payment of interest on Loans by the Borrower shall be made for account of
the Lenders pro rata in accordance with the amounts of interest on such Loans
then due and payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Loans and accrued interest thereon then due than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Obligor pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Obligor
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Obligor rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Obligor in the amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the
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Lenders the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by the Administrative Agent. If any Lender
shall fail to make any payment required to be made by it pursuant to Section
2.04(b) or 2.15(e), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied obligations
are fully paid.
SECTION 2.16. Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender
requests compensation under Section 2.12, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for account of
any Lender pursuant to Section 2.14, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.12 or 2.14, 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.
(b) Replacement of Lenders. If any Lender requests compensation
under Section 2.12, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for account of any Lender pursuant
to Section 2.14, or if any Lender defaults in its obligation to fund Loans
hereunder, 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 10.04), 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)
the Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) 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)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.12 or payments required to be made pursuant to
Section 2.14, such assignment will result in a reduction in such compensation or
payments. A Lender shall not
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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.
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee. The Guarantors hereby jointly and
severally guarantee to each Lender and the Administrative Agent and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on the Loans made by the Lenders to the Borrower and all other amounts
from time to time owing to the Lenders or the Administrative Agent by the
Borrower under this Agreement and by any Obligor under any of the other Credit
Documents, in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the "Guaranteed Obligations"). The
Guarantors hereby further jointly and severally agree that, if the Borrower
shall fail to pay in full when due (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 3.02. Obligations Unconditional. The obligations of the
Guarantors under Section 3.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of the Borrower 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 that the obligations of the Guarantors hereunder shall be absolute and
unconditional, joint and several, under any and all circumstances. 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, 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;
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(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; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders 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 Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Borrower 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.
SECTION 3.03. Reinstatement. The obligations of the Guarantors under
this Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower 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
or reorganization or otherwise, and the Guarantors jointly and severally agree
that they will indemnify the Administrative Agent and each Lender on demand for
all reasonable costs and expenses (including fees of counsel) incurred by the
Administrative Agent or such Lender 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, insolvency or similar law.
SECTION 3.04. 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 Lenders under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section 3.01,
whether by subrogation or otherwise, against the Borrower or any other guarantor
of any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
SECTION 3.05. Remedies. The Guarantors jointly and severally agree
that, as between the Guarantors and the Lenders, the obligations of the Borrower
under this Agreement may be declared to be forthwith due and payable as provided
in Article VIII (and shall be deemed to have become automatically due and
payable in the circumstances provided in Article VIII) for purposes of Section
3.01 notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due
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and payable) as against the Borrower 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 Borrower) shall
forthwith become due and payable by the Guarantors for purposes of Section 3.01.
SECTION 3.06. Instrument for the Payment of Money. Each Guarantor
hereby acknowledges that the guarantee in this Article constitutes an instrument
for the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
SECTION 3.07. Continuing Guarantee. The guarantee in this Article is
a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
SECTION 3.08. Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that, 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, each other
Subsidiary Guarantor 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 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 Subsidiary Guarantor under the other provisions of this
Article and such Excess Funding Guarantor 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 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 any other Subsidiary Guarantor 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 Borrower and
the Subsidiary Guarantors hereunder and under the other Credit Documents) of
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all of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary
Guarantor that is a party hereto on the Effective Date, as of the Effective
Date, and (B) with respect to any other Subsidiary Guarantor, as of the date
such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
SECTION 3.09. 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 Subsidiary Guarantor under
Section 3.01 would otherwise, taking into account the provisions of Section
3.08, 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 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative 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.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the Parent Guarantors represents and
warrants to the Lenders that:
SECTION 4.01. Organization; Powers. Each of the Parent and its
Subsidiaries (including the Borrower) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 4.02. Authorization; Enforceability. The Transactions are
within each Obligor's limited liability company and other powers and have been
duly authorized by all necessary limited liability company and other and, if
required, by all necessary member or shareholder action. This Agreement has been
duly executed and delivered by each Obligor and constitutes, and each of the
other Credit Documents to which it is a party when executed and delivered by
such Obligor will constitute, a legal, valid and binding obligation of such
Obligor, enforceable against each Obligor in accordance with its terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
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SECTION 4.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except for (i) such as have
been obtained or made and are in full force and effect and (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) will not violate any applicable law or regulation or the Operating Agreement
or the charter, by-laws or other organizational documents of the Parent or any
of its Subsidiaries (including the Borrower) or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Parent or any of its Subsidiaries
(including the Borrower) or assets, or give rise to a right thereunder to
require any payment to be made by any such Person, and (d) except for the Liens
created pursuant to the Security Documents, will not result in the creation or
imposition of any Lien on any asset of the Parent or any of its Subsidiaries
(including the Borrower).
SECTION 4.04. Financial Condition; No Material Adverse Change.
(a) Financial Condition. The Parent and the Borrower have heretofore
furnished to the Lenders the following financial statements:
(i) the consolidated balance sheet and statements of income,
members' equity and cash flows of the Parent and its Subsidiaries (A) as
of and for the fiscal years ended December 31, 2001 and 2002, reported on
by Ernst & Young LLP, independent public accountants, and (B) as of and
for the fiscal quarter and the portion of the fiscal year ended June 30,
2003, certified by the chief financial officer of the Parent; and
(ii) the consolidated balance sheet and statements of income,
members' equity and cash flows of the Borrower and its Subsidiaries (A) as
of and for the fiscal years ended December 31, 2001 and 2002, reported on
by Ernst & Young LLP, independent public accountants, and (B) as of and
for the fiscal quarter and the portion of the fiscal year ended June 30,
2003, certified by the chief financial officer of the Borrower.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Parent and
the Borrower and their respective Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clauses (i)(B)
and (ii)(B) of the first sentence of this paragraph. As of the date hereof,
except as reflected in such financial statements, there are no material
contingent liabilities, material liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated material losses from any
unfavorable commitments of the Borrower or any of its Subsidiaries.
(b) No Material Adverse Change. Since December 31, 2002, there has
been no event, development or circumstance that has had a material adverse
effect on the business, assets,
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property, condition (financial or otherwise) or prospects of the Parent and its
Subsidiaries (including the Borrower), taken as a whole.
SECTION 4.05. Properties.
(a) Property Generally. Each of the Borrower and its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, subject only to Liens permitted by Section
7.02 and except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Intellectual Property. Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.06. Litigation and Certain Other Matters.
(a) Actions, Suits and Proceedings. There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement or the Transactions.
(b) Disclosed Matters. Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in
the aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
(c) Absence of Default. No Default or Event of Default has occurred
and is continuing.
SECTION 4.07. Environmental Matters. Each of the Borrower and its
Subsidiaries has obtained all environmental, health and safety permits, licenses
and other authorizations required under all Environmental Laws to carry on its
business as now being or as proposed to be conducted, except to the extent
failure to have any such permit, license or authorization could not (either
individually or in the aggregate) reasonably be expected to result in a Material
Adverse Effect. Each of such permits, licenses and authorizations is in full
force and effect and each of the Borrower and its Subsidiaries is in compliance
with the terms and conditions thereof, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any
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applicable Environmental Law or in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated or
approved thereunder, except to the extent failure to comply therewith would not
(either individually or in the aggregate) have a Material Adverse Effect. In
addition, no notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and, to the Borrower's knowledge, no investigation or review is
pending or threatened by any governmental or other entity with respect to any
alleged failure by the Borrower or any of its Subsidiaries to have any
environmental, health or safety permit, license or other authorization required
under any Environmental Law in connection with the conduct of the business of
the Borrower or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, discharge or disposal, or any
Release of any Hazardous Materials generated by the Borrower or any of its
Subsidiaries.
All environmental investigations, studies, audits, tests, reviews or
other analyses conducted by or that are in the possession of the Borrower or any
of its Subsidiaries in relation to facts, circumstances or conditions at or
affecting any site or facility now or previously owned, operated or leased by
the Borrower or any of its Subsidiaries and that could result in a Material
Adverse Effect have been made available to the Lenders.
SECTION 4.08. Compliance with Laws and Agreements. Each of the
Parent and its Subsidiaries (including the Borrower) is in compliance with all
laws, regulations and orders of any Governmental Authority applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.09. Investment and Holding Company Status. Neither the
Parent nor any of its Subsidiaries (including the Borrower) is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.10. Taxes. Each of the Parent and its Subsidiaries
(including the Borrower) has timely filed or caused to be filed all Tax returns,
information statements and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
such Person has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.11. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse
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Effect. Neither Parent Guarantor nor any of their Subsidiaries maintains any
defined-benefit Plans.
SECTION 4.12. Disclosure. The Borrower and the Parent have disclosed
to the Lenders all agreements, instruments and corporate or other restrictions
to which it or any of its Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Obligors to
the Lenders in connection with the negotiation of this Agreement and the other
Credit Documents or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower and the Parent represent only that such information
was prepared in good faith based upon assumptions believed to be reasonable at
the time.
SECTION 4.13. Use of Credit. Neither the Parent nor any of its
Subsidiaries (including the Borrower) is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying Margin Stock,
and no part of the proceeds of any Loan hereunder will be used to buy or carry
any Margin Stock.
SECTION 4.14. Material Agreements and Liens.
(a) Material Agreements. Part A of Schedule II is a complete and
correct list of each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, the Parent or any of its
Subsidiaries (including the Borrower) outstanding on the date hereof the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $100,000, and the aggregate principal or face amount outstanding or that
may become outstanding under each such arrangement is correctly described in
Part A of Schedule II, and a true and complete copy of each such credit
agreement, loan agreement, indenture, purchase agreement, guarantee, letter or
credit or other arrangement has heretofore been furnished to the Lenders.
(b) Liens. Part B of Schedule II is a complete and correct list of
each Lien securing Indebtedness of any Person outstanding on the date hereof the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $100,000 and covering any property of the Borrower or any of its
Subsidiaries, and the aggregate Indebtedness secured (or that may be secured) by
each such Lien and the property covered by each such Lien is correctly described
in Part B of Schedule II.
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SECTION 4.15. Subsidiaries and Investments.
(a) Subsidiaries. Set forth in Part A of Schedule VI is a complete
and correct list of all of the Subsidiaries of the Parent as of the date hereof,
together with, for each such Subsidiary, (i) the jurisdiction of organization of
such Subsidiary, (ii) each Person holding ownership interests in such Subsidiary
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests and (iv) a notation identifying whether or not such Subsidiary is a
Securitization Subsidiary. Except as disclosed in Part A of Schedule VI, (x)
each of the Parent and its Subsidiaries owns, free and clear of Liens (other
than Liens created pursuant to the Security Documents), and has the unencumbered
right to vote, all outstanding ownership interests in each Person shown to be
held by it in Part A of Schedule VI, (y) all of the issued and outstanding
capital stock of each such Person organized as a corporation is validly issued,
fully paid and nonassessable and (z) there are no outstanding Equity Rights with
respect to such Person.
(b) Investments. Set forth in Part B of Schedule VI is a complete
and correct list of all Investments (other than Investments disclosed in Part A
of Schedule VI and other than Investments of the types referred to in clauses
(b), (c), (d), (e), (f), (g) and (h) of Section 7.05) held by the Parent or any
of its Subsidiaries in any Person on the date hereof and, for each such
Investment, (x) the identity of the Person or Persons holding such Investment
and (y) the nature of such Investment. Except as disclosed in Part B of Schedule
VI, each of the Parent and its Subsidiaries owns, free and clear of all Liens
(other than Liens created pursuant to the Security Documents), all such
Investments.
(c) Restrictions on Subsidiaries. None of the Subsidiaries of the
Parent is, on the date hereof, subject to any indenture, agreement, instrument
or other arrangement of the type described in Section 7.08.
SECTION 4.16. Real Property. Set forth on Schedule VII is a list, as
of the date hereof, of all of the real property interests held by the Borrower
and its Subsidiaries, indicating in each case whether the respective property is
owned or leased, the identity of the owner or lessee and the location of the
respective property.
SECTION 4.17. Labor Matters. Neither the Parent nor any of its
Subsidiaries, nor any Person for whom the Parent or any of its Subsidiaries is
or may be responsible by law or contract, is a party to any collective
bargaining agreement. In addition, with respect to the Parent and its
Subsidiaries, and any Person for whom the Parent or any of its Subsidiaries is
or may be responsible by law or contract, there is (a) no unfair labor practice
charge or complaint pending or, to the knowledge of the Parent and the Borrower,
threatened before the National Labor Relations Board or any corresponding state,
local or foreign agency, and no grievance, arbitration or similar proceeding
arising out of or under any collective bargaining agreement or other grievance
procedure is so pending or, to the knowledge of
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the Parent and the Borrower, threatened, (b) no strike, labor dispute, slowdown
or stoppage pending or, to the knowledge of the Parent and the Borrower,
threatened, (c) no union representation claim or question existing (within the
meaning of the National Labor Relations Act of 1935, as amended), and (d) no
union organizing activity taking place except for such changes, claims, strikes,
labor disputes, slowdowns, stoppages, questions and activities that,
individually or in the aggregate could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.18. Security Documents. The Security Documents to which
each Obligor is a party create valid and perfected first priority security
interests in the collateral securing the payment of the obligations owing to the
Administrative Agent and the Lenders under this Agreement and the other Credit
Documents, subject to no equal or prior Lien, except as expressly permitted
under this Agreement and the other Credit Documents.
SECTION 4.19. Solvency. The Parent (both individually and
collectively with its Subsidiaries) is Solvent.
SECTION 4.20. Delivery of Certain Documents. The Borrower has
heretofore delivered to the Administrative Agent and each Lender complete and
correct copies of the Ancillary Agreements and the Operating Agreement
(including all schedules and exhibits relating thereto), in each case as in
effect on the date hereof.
SECTION 4.21. Securitization Assets. The Borrower has heretofore
delivered to each Lender a report setting out, with respect to each
Securitization Subsidiary:
(i) a detailed description (by class, principal amount, interest
rate, maturity and amortization schedule, if applicable) of each series of
Indebtedness issued by such Securitization Subsidiary with respect to each
Permitted Securitization undertaken by it;
(ii) with respect to the student loan portfolio as of September 30,
2003 of such Securitization Subsidiary, the information set forth in pages
S-20 through S-25 inclusive of the Prospectus Supplement dated February
13, 2003 for the $838,775,000 Student Loan Asset-Backed Notes, Series
2003-A Issued by Collegiate Funding Services Educational Loan Trust
2003-A, and
(iii) complete and correct copies of each indenture, servicing
agreement or other material agreement constituting Securitization
Documents for each Permitted Securitization undertaken by such
Securitization Subsidiary.
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ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which the
Administrative Agent shall have received each of the following documents, each
of which shall be satisfactory to the Administrative Agent (and to the extent
specified below, to each Lender) in form and substance (or such condition shall
have been waived in accordance with Section 10.02):
(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page to this
Agreement) that such party has signed a counterpart of this Agreement.
(b) Opinions of Counsels to the Obligors. A favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of (i) the General Counsel of the Borrower,
substantially in the form of Exhibit D-1, (ii) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, LLC, New York counsel for the Obligors, substantially in the
form of Exhibit D-2 and (iii) ▇▇▇▇▇▇▇ ▇▇▇▇, a Professional Corporation,
Virginia counsel for the Obligors, substantially in the form of Exhibit
D-3, and in each case covering such other matters relating to the
Borrower, this Agreement or the Transactions as the Required Lenders shall
reasonably request (and each Obligor hereby instructs such counsels to
deliver such opinions to the Lenders and the Administrative Agent).
(c) Opinion of Special New York Counsel to JPMCB. An opinion, dated
the Effective Date, of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, special New
York counsel to JPMCB, substantially in the form of Exhibit E (and JPMCB
hereby instructs such counsel to deliver such opinion to the Lenders).
(d) Corporate Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Obligor, the
authorization of the Transactions and any other legal matters relating to
the Obligors, this Agreement or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
(e) Officer's Certificate. A certificate, dated the Effective Date
and signed by a Financial Officer of the Borrower, confirming compliance
with the conditions set forth in the lettered clauses of the first
sentence of Section 5.02.
(f) Security Agreement. The Security Agreement, duly executed and
delivered by the Obligors and the Administrative Agent and the
certificates identified under the name of such Obligor in Annex 3 thereto,
in each case accompanied by undated stock
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powers executed in blank. In addition, each Obligor shall have taken such
other action as the Administrative Agent shall have requested in order to
perfect the security interests created pursuant to the Security Agreement.
(g) Repayment of Senior Secured Notes. Evidence that the aggregate
outstanding principal of and interest on, and all other amounts owing in
respect of, the Senior Secured Notes shall have been (or shall be
simultaneously) paid in full and all Liens securing the Senior Secured
Notes shall have been released (or arrangements for such release
satisfactory to the Administrative Agent have been made).
(h) New Equity Proceeds. The Borrower shall have received aggregate
net cash proceeds (all of which shall have been contributed by the Parent
or CFSL to the Borrower as additional equity capital) of at least
$20,000,000 in respect of the issuance of equity of the Parent or CFSL
pursuant to arrangements and documentation in form and substance
satisfactory to the Required Lenders (and in any event consistent with the
requirements of Section 7.06).
(i) Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to JPMCB may reasonably
request.
The obligation of each Lender to make its initial Loan hereunder is
also subject to the payment or delivery by the Borrower and the Parent of such
fees and other consideration as the Borrower and the Parent shall have agreed to
pay or deliver to any Lender or an affiliate thereof or the Administrative Agent
in connection herewith, including the reasonable fees and expenses of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, special New York counsel to JPMCB, in connection
with the negotiation, preparation, execution and delivery of this Agreement and
the other Credit Documents and the Loans hereunder (to the extent that
statements for such fees and expenses have been delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 10.02) on or prior to 3:00 p.m., New
York City time, on October 31, 2003 (and, in the event such conditions are not
so satisfied or waived, the Commitments shall terminate at such time).
SECTION 5.02. Each Credit Event. The obligation of each Lender to
make any Loan is additionally subject to the satisfaction of the following
conditions:
(a) the representations and warranties of the Borrower and the
Parent set forth in this Agreement, and of each Obligor in each of the
other Credit Documents to which it is a party, shall be true and correct
on and as of the date of such Loan; and
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(b) at the time of and immediately after giving effect to such Loan,
no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in the preceding
sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, each of the Borrower and the Parent Guarantors covenants and
agrees with the Lenders that:
SECTION 6.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Borrower
and the Parent, the audited consolidated balance sheet and related
statements of operations, members' equity and cash flows of the Borrower
and its Subsidiaries (and, separately stated, of the Parent and its
Subsidiaries) as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all
reported on by Ernst & Young LLP or other independent public accountants
of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as
to the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition
and results of operations of the Borrower and its Subsidiaries (and of the
Parent and its Subsidiaries) on a consolidated basis in accordance with
GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower and the Parent, the
consolidated balance sheet and related statements of operations, members'
equity and cash flows of the Borrower and its Subsidiaries (and,
separately stated, of the Parent and its Subsidiaries) as of the end of
and for such fiscal 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 a
Financial Officer of the Borrower (or of the Parent, as the case may be)
as presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its Subsidiaries (and of the
Parent and its Subsidiaries) on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments
and the absence of footnotes;
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(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer of
the Borrower and a certificate of a Financial Officer of the Parent (i)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken by the Borrower (or the Parent, as the case may be) with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 7.01, 7.05, 7.06, and 7.09 and
(iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 4.04 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines);
(e) As soon as available, and in any event within 45 days after the
end of each fiscal quarter of the Borrower, a report with respect to the
student loan portfolio of the Borrower and its Subsidiaries, which report
shall include an identification of each type of student loan outstanding,
the performance of each such student loan, the default rates applicable
thereto and the respective entity owning such student loan;
(f) promptly upon receipt thereof, and in any event on at least an
annual basis, the audited financial statements, the SAS 70 report provided
to the Borrower or any of its Subsidiaries by the servicers (whether or
not a Subsidiary of the Borrower) of the student loans of the Borrower or
any of its Subsidiaries, and such other information and reports as the
Lenders, through the Administrative Agent, may request from time to time
to determine compliance with Section 7.09(f);
(g) within 45 days after the last day of each fiscal quarter of the
Borrower, notice of all Department of Education audits of, or any other
actions of a material nature by, the Department of Education with respect
to the Borrower, any of its Subsidiaries and any Affiliate of the Borrower
or any of its Subsidiaries and, to the extent that the Borrower has
knowledge thereof, of any servicer or student loan guarantor applicable to
any student loans owned by the Borrower or any of its Subsidiaries and, in
each case, notice of the results thereof (including the rate of
reimbursement by the Department of Education for such student loan
guarantors to the extent that such rate is below the maximum permitted
under the Higher Education Act) in each case except to the extent such
audits or other actions could not reasonably be expected to result in a
Material Adverse Effect;
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(h) as soon as available and in any event within 45 days after the
beginning of each fiscal year of the Borrower, (i) projections (setting
forth an itemization of the principal assumptions relating thereto) for
each fiscal year of the Borrower through the Commitment Termination Date
(broken out on a quarter-by-quarter basis for the current fiscal year) of
the anticipated consolidated statement of earnings and cash flows of the
Borrower and its Subsidiaries, and the related consolidated balance
sheets, together with a certificate of a Financial Officer to the effect
that such projections have been prepared in good faith based upon methods
and data that the Borrower believes to be fair, accurate and reasonable in
the circumstances and (ii) promptly after any event or circumstance
becomes known to the Borrower that could reasonably be expected to result
in a material change in such projections (either positive or negative),
notice of such change; and
(i) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Parent or any of its Subsidiaries, or compliance with the terms of this
Agreement and the other Credit Documents, as the Administrative Agent or
any Lender may reasonably request.
SECTION 6.02. Notices of Material Events. The Borrower (for itself
and on behalf of the Parent) will furnish to the Administrative Agent and each
Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Parent or any of its Affiliates (including the Borrower) that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $250,000;
(d) the assertion of any Environmental Claim by any Person against,
or with respect to the activities of, the Borrower or any of its
Subsidiaries and any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations, other than
any Environmental Claim or alleged violation that, if adversely
determined, would not (either individually or in the aggregate) have a
Material Adverse Effect;
(e) the occurrence of any change in applicable Federal, State or
local law or regulation (including any prospective change that has been
enacted or promulgated but with a deferred effective date that has not yet
occurred) that could reasonably be expected to result in a Material
Adverse Effect, specifying the details thereof and any action taken
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or proposed to be taken by the Borrower (or the Parent, as the case may
be) with respect thereto; and
(f) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer of the Borrower or the Parent, as the case may be, setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken by the Borrower or the Parent, as the case
may be, with respect thereto.
SECTION 6.03. Existence; Conduct of Business. The Parent will, and
will cause each of its Subsidiaries (including the Borrower) to, do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 7.03.
SECTION 6.04. Payment of Obligations. The Parent will, and will
cause each of its Subsidiaries (including the Borrower) to, pay its obligations,
including tax liabilities, that, if not paid, could result in a Material Adverse
Effect before the same shall become delinquent or in default, except where (a)
the validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Parent or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 6.05. Maintenance of Properties. The Parent will, and will
cause each of its Subsidiaries (including the Borrower) to, keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 6.06. Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, or may self-insure, and with respect to property and risks
of a character usually maintained by Persons engaged in the same or similar
business similarly situated, against loss, damage and liability of the kinds and
in the amounts customarily maintained by such corporations, provided that the
Borrower will in any event maintain (with respect to itself and each of its
Subsidiaries) (i) casualty insurance and (ii) reinsurance of Non-FFELP Loans
with The Education Resources Institute (▇▇▇▇) or other similar insurers, in each
case in such amounts as are then customary for Persons engaged in the same or
similar business similarly situated.
SECTION 6.07. Books and Records; Inspection Rights. The Parent will,
and will cause each of its Subsidiaries (including the Borrower) to, keep proper
books of record and account in which full, true and correct entries (in all
material respects) are made of all dealings
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and transactions in relation to its business and activities. The Parent will,
and will cause each of its Subsidiaries (including the Borrower) to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 6.08. Compliance with Laws. The Parent will, and will cause
each of its Subsidiaries (including the Borrower) to, comply with all laws,
rules, regulations (including Environmental Laws) and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 6.09. Compliance with Contractual Obligations. The Parent
will, and will cause each of its Subsidiaries (including the Borrower) to,
comply with all of its contractual obligations, hereunder and otherwise, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6.10. Certain Obligations Respecting Subsidiaries; Further
Assurances.
(a) Subsidiary Guarantors. The Borrower will take such action, and
will cause each of its Subsidiaries to take such action, from time to time as
shall be necessary to ensure that all Subsidiaries of the Borrower, other than
Foreign Subsidiaries and Securitization Subsidiaries, are "Subsidiary
Guarantors" hereunder. Without limiting the generality of the foregoing, in the
event that the Borrower or any of its Subsidiaries shall form or acquire any new
Subsidiary that shall constitute a Subsidiary (other than a Foreign Subsidiary
or a Securitization Subsidiary) hereunder, the Borrower and its Subsidiaries
will cause such new Subsidiary to
(i) become a "Subsidiary Guarantor" hereunder, and an "Obligor"
under the Security Agreement pursuant to a Guarantee Assumption Agreement,
(ii) cause such Subsidiary to take such action (including delivering
such shares of stock, executing and delivering such Uniform Commercial
Code financing statements and executing and delivering mortgages or deeds
of trust covering the real property and fixtures owned or leased by such
Subsidiary) as shall be necessary to create and perfect valid and
enforceable first priority Liens on substantially all of the property of
such new Subsidiary as collateral security for the obligations of such new
Subsidiary hereunder and
(iii) deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent with
those delivered by each Obligor pursuant to Section 5.01 on the Effective
Date or as the Administrative Agent shall have requested.
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(b) Ownership of Subsidiaries. The Borrower will, and will cause
each of its Subsidiaries to, take such action from time to time as shall be
necessary to ensure that each of its Subsidiaries (other than any Securitization
Subsidiary) is a wholly owned Subsidiary of the Borrower. In the event that any
additional shares of stock or other ownership interests shall be issued by any
Subsidiary to any Obligor, the respective Obligor agrees forthwith to deliver to
the Administrative Agent pursuant to the Security Agreement the certificates
evidencing such shares of stock or other ownership interest, accompanied by
undated stock or other powers executed in blank and to take such other action as
the Administrative Agent shall reasonably request to perfect the security
interest created therein pursuant to the Security Agreement, provided that in no
event shall any Securitization Subsidiary be required to pledge any of the
foregoing owned by it.
(c) Further Assurances. The Parent will, and will cause each of its
Subsidiaries to, take such action from time to time (including filing
appropriate Uniform Commercial Code financing statements and executing and
delivering such assignments, security agreements and other instruments) as shall
be reasonably requested by the Administrative Agent to create, in favor of the
Administrative Agent for the benefit of the Lenders (and any affiliate thereof
that is a party to any Hedging Agreement entered into with the Borrower),
perfected security interests and Liens in substantially all of the property of
such Obligor as collateral security for its obligations hereunder; provided that
any such security interest or Lien shall be subject to the relevant requirements
of the Security Documents.
If any Obligor shall acquire any real property interest, including
improvements, after the Effective Date having a fair market value of $250,000 or
more (or shall make improvements upon any existing real property interest
resulting in the fair market value of such interest together with such
improvements being equal to $250,000 or more), then (subject, in the case of any
such interest that is a leasehold interest, to the delivery of any required
landlord or other consent) it will (or, as applicable, will cause the respective
Subsidiary holding such real property interest to) execute and deliver in favor
of the Administrative Agent a mortgage, deed of trust or deed to secure debt (as
appropriate for the jurisdiction in which such respective real property is
situated) pursuant to which such Obligor will create a Lien upon such real
property interest (and improvements) in favor of the Administrative Agent for
the benefit of the Lenders (and any affiliate thereof that is a party to any
Hedging Agreement entered into with the Borrower) as collateral security for the
obligations of such Obligor under this Agreement or, as applicable, under the
respective Guarantee Assumption Agreement to which such Obligor is a party, and
will deliver (or, or in case of landlords' or other consents, will use its best
efforts to cause the Persons to deliver) such opinions of counsel, landlords'
and other consents, and title insurance policies as the Administrative Agent
shall reasonably request in connection therewith.
SECTION 6.11. Use of Proceeds. The proceeds of the Loans shall be
used only (a) to repay outstanding principal of and interest on, and other
amounts owing in respect of, the Senior Secured Notes and (b) for the general
operating purposes of the Borrower and its
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Subsidiaries, provided that (i) no more than $40,000,000 of the proceeds of the
Loans shall be applied to the repayment of the Senior Secured Notes and (ii) in
no event shall any portion of the proceeds of the Loans be used directly or
indirectly to finance the purchase of student loan receivables, it being
understood that this Section shall not limit the Borrower's ability to purchase
either completed applications for FFELP Loans or recently disbursed FFELP Loans,
in each case in the ordinary course of business.
SECTION 6.12. Compliance Certificate. The Parent will, and will
cause the Borrower to, within 30 days after the date hereof, agree with the
Administrative Agent and the Lenders on a reasonable form of certificate of
Financial Officer of the Parent and a reasonable form of certificate of
Financial Officer of the Borrower to be delivered pursuant to the provisions of
Section 6.01(c).
SECTION 6.13. Landlord Lien Waivers. The Parent will, and will cause
its Subsidiaries to, within 30 days after the date hereof, use its commercially
reasonable efforts to obtain from each landlord listed on Schedule VII hereto
such landlord's agreement to (i) permit the Administrative Agent, after the
occurrence and during the continuance of an Event of Default, to enter such
landlord's premises listed on such Schedule for the purpose of removing
Collateral (as defined in the Security Agreement) located therein and (ii) waive
or release any Lien such landlord may hold with respect to any such Collateral,
in each case subject to the terms of the Security Agreement.
SECTION 6.14. Assumption Agreement. The Parent will, within 30 days
after the date hereof, cause the Borrower, Collegiate Funding Services Resources
I, LLC and Collegiate Funding of Delaware, L.L.C. to enter with the
Administrative Agent into an assumption agreement, in a form to be agreed upon,
pursuant to which, among other things, the Administrative Agent and the Lenders
are substituted for TCW/Crescent Mezzanine Management III, L.L.C. and the
"Noteholders", respectively, under the Intercreditor Agreement and the Account
Control Agreement.
SECTION 6.15. Additional Equity Proceeds. The Parent or CFSL will,
within 35 days after the date hereof, contribute to the Borrower as additional
equity capital aggregate net cash proceeds in an amount which, when aggregated
to the amount heretofore contributed pursuant to Section 5.01(h), is least
$25,000,000 in respect of the issuance of equity of the Parent or CFSL pursuant
to arrangements and documentation in form and substance satisfactory to the
Required Lenders (and in any event consistent with the requirements of Section
7.06).
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ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full, each of the Borrower and the Parent covenants and agrees with the Lenders
that:
SECTION 7.01. Indebtedness. The Parent will not, nor will it permit
any of its Subsidiaries (including the Borrower) to, create, incur, assume or
permit to exist any Indebtedness, or issue any Disqualified Stock, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Part A
of Schedule II, or, to the extent not meeting the minimum thresholds for
required listing on Schedule II pursuant to Section 4.14, in an aggregate
amount not exceeding $1,000,000 (excluding, however, following the making
of the initial Loans hereunder, the Indebtedness to be repaid with the
proceeds of such Loans, as indicated on Schedule II) and (other than as
expressly indicated on Schedule II) extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding principal
amount thereof;
(c) Indebtedness of the Borrower to any Subsidiary Guarantor and of
any Subsidiary Guarantor to the Borrower or any other Subsidiary
Guarantor;
(d) Guarantees by the Borrower of Indebtedness of any Subsidiary
Guarantor and by any Subsidiary Guarantor of Indebtedness of the Borrower
or any other Subsidiary Guarantor; and
(e) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations, Synthetic Lease
Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof; provided that (i) such Indebtedness is incurred
prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount
of Indebtedness permitted by this clause (e) shall not exceed $3,000,000
at any time outstanding.
SECTION 7.02. Liens. The Parent will not, nor will it permit any of
its Subsidiaries to, create, incur, assume or permit to exist any Lien on any
asset now owned or
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hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
(a) Liens created pursuant to the Security Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property of the Parent or any of its
Subsidiaries (including the Borrower) existing on the date hereof and set
forth in Part B of Schedule II, or, to the extent not meeting the minimum
thresholds for required listing on Schedule II pursuant to Section 4.14,
in an aggregate amount not exceeding $1,000,000 (excluding, however,
following the making of the initial Loans hereunder, Liens securing
Indebtedness to be repaid with the proceeds of such Loans, as indicated on
Schedule II); provided that (i) no such Lien shall extend to any other
property of the Parent or any of its Subsidiaries and (ii) any such Lien
shall secure only those obligations which it secures on the date hereof
and extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(d) any Lien existing on any property prior to the acquisition
thereof by the Borrower or any Subsidiary;
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by Section 7.01(e), (ii)
such security interests and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of
such construction or improvement, (iii) the Indebtedness secured thereby
does not exceed the cost of acquiring, constructing or improving such
fixed or capital assets and (iv) such security interests shall not apply
to any other property or assets of the Borrower or any Subsidiary;
(f) Liens on Securitization Program Assets securing Securitization
Program Obligations; and
(g) Liens not otherwise permitted under this Section 7.02 so long as
neither (i) the aggregate outstanding principal amount of the Indebtedness
secured thereby nor (ii) the aggregate fair market value of the assets
subject thereto (determined as of the date of the incurrence of such
Lien), exceeds $1,000,000 at any one time.
SECTION 7.03. Fundamental Changes. The Parent will not, nor will it
permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution). The Parent will not, nor will it permit
any of its Subsidiaries to, acquire any business or property from, or capital
stock of, or be a party to any acquisition of, any Person except for purchases
of inventory and
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other property to be sold or used in the ordinary course of business and
Investments permitted under Section 7.05(i). The Parent will not, nor will it
permit any of its Subsidiaries to, convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or a substantial
part of its business or property, whether now owned or hereafter acquired
(including receivables and leasehold interests, but excluding (x) obsolete or
worn-out property, tools or equipment no longer used or useful in its business
so long as the amount thereof sold in any single fiscal year by the Borrower and
its Subsidiaries shall not have a fair market value in excess of $250,000, (y)
any inventory or other property sold or disposed of in the ordinary course of
business and on ordinary business terms and (z) any other assets having a fair
market value not exceeding $1,000,000 in the aggregate for any fiscal year of
the Borrower).
Notwithstanding the foregoing provisions of this Section:
(a) any Subsidiary of the Borrower (other than a Securitization
Subsidiary) may be merged or consolidated with or into any other such
Subsidiary, and any Securitization Subsidiary may be merged or
consolidated with or into any other Securitization Subsidiary; provided
that, if any such transaction shall be between a Subsidiary and a wholly
owned Subsidiary, the wholly owned Subsidiary shall be the continuing or
surviving corporation;
(b) any Subsidiary of the Borrower (other than a Securitization
Subsidiary) may sell, lease, transfer or otherwise dispose of any or all
of its property (upon voluntary liquidation or otherwise) to the Borrower
or any wholly owned Subsidiary of the Borrower, and any Securitization
Subsidiary may sell, lease, transfer or otherwise dispose of any or all of
its property (upon voluntary liquidation or otherwise) to any other
Securitization Subsidiary;
(c) the capital stock of any Subsidiary of the Borrower may be sold,
transferred or otherwise disposed of to the Borrower or any wholly owned
Subsidiary of the Borrower; and
(d) the Borrower or any of its Subsidiaries may convey, sell, lease,
transfer or otherwise dispose of Securitization Program Assets in
connection with any Permitted Securitization.
SECTION 7.04. Lines of Business. The Parent will not, nor will it
permit any of its Subsidiaries to, engage to any material extent in any business
other than the business of (a) marketing, origination, servicing, consolidation,
purchase and sale of (i) student loans made pursuant to the Higher Education Act
to a borrower to finance his or her education that is guaranteed by a Guarantee
Agency as defined in the Higher Education Act; (ii) non-FFELP student loans that
are at least 98% guaranteed by Persons other than the Federal Government of the
United States of America or any agencies thereof; and (iii) any entrance and
exit counseling activities or business.
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SECTION 7.05. Investments. The Parent will not, nor will it permit
any of its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding on the date hereof and identified in
Part B of Schedule VI;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Parent in the Borrower;
(e) Investments by the Borrower and its Subsidiaries in the Borrower
and its Subsidiaries, provided that the aggregate amount of such
Investments by the Borrower and its Domestic Subsidiaries in Foreign
Subsidiaries shall not exceed $1,000,000 in the aggregate at any one time;
(f) Hedging Agreements entered into (i) in the ordinary course of
the Borrower's financial planning and not for speculative purposes or (ii)
by any Securitization Subsidiary in connection with any Permitted
Securitization so long as such Hedging Agreement is approved by the
ratings agency that assigns a rating to such Permitted Securitization and
none of the Parent or any of its other Subsidiaries (other than a
Securitization Subsidiary) is obligated in respect thereof;
(g) Investments consisting of security deposits with utilities and
other like Persons made in the ordinary course of business;
(h) Investments made in connection with a Permitted Securitization;
and
(i) additional Investments by the Borrower and its Subsidiaries up
to but not exceeding $5,000,000 in the aggregate at any one time.
For purposes of clauses (e) and (i) of this Section, the aggregate amount of an
Investment at any time shall be deemed to be equal to (A) the aggregate amount
of cash, together with the aggregate fair market value of property, loaned,
advanced, contributed, transferred or otherwise invested that gives rise to such
Investment minus (B) the aggregate amount of dividends, distributions or other
payments received in cash in respect of such Investment; the amount of an
Investment shall not in any event be reduced by reason of any write-off of such
Investment nor increased by any increase in the amount of earnings retained in
the Person in which such Investment is made that have not been dividended,
distributed or otherwise paid out.
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SECTION 7.06. Restricted Payments. Neither the Parent nor the
Borrower will, nor will either of them permit any of its Subsidiaries to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except that the Borrower may make Restricted Payments to the Parent
(and the Parent may make Restricted Payments to its shareholders), provided that
(a) such Restricted Payment from the Borrower to the Parent
Guarantors (and from the Parent Guarantors to their respective
shareholders) is made in connection with a redemption of the preferred
stock of the Parent Guarantors issued on the Effective Date (as
contemplated in Section 5.01(h)) or thereafter pursuant to Section 6.15,
and provided, further, that in no event shall any such redemption be
permitted unless (i) such redemption occurs on or after October 1, 2004,
(ii) the average aggregate outstanding amount of the Loans for the 30 days
prior to such redemption does not exceed $25,000,000, (iii) at the time of
such redemption and after giving effect thereto, no Default has occurred
and is continuing, (iv) the aggregate amount of such preferred equity to
be redeemed does not exceed $10,000,000, and (v) if the Commitments exceed
$25,000,000 immediately prior to such redemption, the Borrower shall have
reduced the Commitments to an amount not to exceed $25,000,000 pursuant to
Section 2.06(b);
(b) the Borrower may make payments to the Parent Guarantors to
enable the Parent Guarantors to satisfy Qualified Parent Guarantor
Obligations;
(c) the Borrower may make payments to Persons pursuant to the
Management Agreement (as in effect on the date hereof and without giving
effect to any modifications thereto after the date hereof), provided that
no such payment may be made by the Borrower after the occurrence and
during the continuance of any Default or Event of Default; and
(d) the Borrower may make Restricted Payments in respect of one or
more employee compensation plans (including "phantom stock" payments
referred to in the definition of the term "Restricted Payments" in Section
1.01) maintained for employees of the Borrower and its Subsidiaries so
long as the aggregate amount of such Restricted Payments made in any
single fiscal year shall not exceed $75,000 and the aggregate amount of
such Restricted Payments made during the term of this Agreement shall not
exceed $225,000.
Nothing herein shall be deemed to prohibit the payment of dividends
by any Subsidiary of the Borrower to the Borrower or to any other Subsidiary of
the Borrower.
SECTION 7.07. Transactions with Affiliates. The Parent will not, nor
will it permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property to, or purchase, lease or otherwise acquire any property from, or
otherwise engage in any other transactions with, any of its Affiliates, except
(a) transactions in the ordinary course of business at prices and on
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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 or among the Borrower and its wholly owned Subsidiaries not
involving any other Affiliate and (c) any Restricted Payment permitted by
Section 7.06.
SECTION 7.08. Restrictive Agreements. The Parent will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Parent or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Parent or
any other Subsidiary; provided that:
(i) the foregoing shall not apply to (w) restrictions and conditions
imposed by law or by this Agreement, (x) restrictions and conditions
existing on the date hereof identified on Schedule III (but shall apply to
any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (y) customary
restrictions and conditions contained in agreements relating to the sale
of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale
is permitted hereunder and (z) restrictions and conditions agreed to by
any Securitization Subsidiary that are applicable to such Securitization
Subsidiary and its assets; and
(ii) clause (a) of the foregoing shall not apply to (x) restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only
to the assets securing such Indebtedness and (y) customary provisions in
leases and other contracts restricting the assignment thereof.
SECTION 7.09. Certain Financial Covenants.
(a) Leverage Ratio. The Parent will not permit the Leverage Ratio to
exceed the following respective ratios at any time during the following
respective periods:
Period: Ratio:
------------------------------------- ---------
From the Effective Date
through December 31, 2003 2.50 to 1
From January 1, 2004
through March 31, 2004 2.75 to 1
From April 1, 2004
through June 30, 2004 2.00 to 1
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From July 1, 2004
through September 30, 2004 2.25 to 1
From October 1, 2004 and at all times
thereafter 2.00 to 1
(b) Interest Coverage Ratio. The Parent will not permit the Interest
Coverage Ratio to be less than the following respective ratios for any period of
four quarters ending at any time during the following respective periods:
Period: Ratio:
------------------------------------- ---------
From the Effective Date
through June 30, 2004 3.50 to 1
From July 1, 2004
through June 30, 2005 4.50 to 1
From July 1, 2005
and at all times thereafter 5.50 to 1
(c) Fixed Charges Ratio. The Parent will not permit the Fixed
Charges Ratio to be less than the following respective ratios at any time during
the following respective periods:
Period: Ratio:
------------------------------------- ---------
From the Effective Date
through December 31, 2003 2.90 to 1
From January 1, 2004
through March 31, 2004 1.90 to 1
From April 1, 2004
through June 30, 2004 1.80 to 1
From July 1, 2004
through September 30, 2004 1.10 to 1
From October 1, 2004 and at all times
thereafter 1.20 to 1
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provided that, if the Department of Education, on or about May 15, 2004,
officially amends the interest rate for FFELP Loans to a rate lower than 3.42%
per annum, (i) the ratio during the period from April 1, 2004 through June 30,
2004 shall be 1.10 to 1, and (ii) the ratio during the period from July 1, 2004
through September 30, 2004 shall be 1.30 to 1.
(d) Capital Expenditures. The Parent will not permit the aggregate
amount of Capital Expenditures by the Obligors to exceed $5,000,000 in any
fiscal year.
(e) Non-FFELP Loans. The Parent will not permit the ratio of (a) the
aggregate outstanding principal amount of Non-FFELP Loans managed by the Parent
and its Subsidiaries to (b) the aggregate outstanding principal amount of all
loans managed by the Parent and its Subsidiaries at any time to exceed 0.15 to
1.
(f) Servicing Performance. The Borrower will, and will cause each of
its Subsidiaries to, not permit the percentage of student loans that are no
longer entitled to the U.S. Government guarantees under applicable Department of
Education thresholds at any date to exceed 2% of the aggregate student loan
portfolio held by the Borrower and its Subsidiaries (including all
Securitization Subsidiaries).
(g) Operating Leases. The Parent will not permit the aggregate
Rental Payments of the Parent and its Subsidiaries to exceed $2,000,000 during
any fiscal year of the Parent.
SECTION 7.10. Modifications of Seller Notes. The Borrower will not
consent to any modification, supplement or waiver of any of the provisions of
any the Seller Notes without the prior consent of the Administrative Agent (with
the approval of the Required Lenders).
SECTION 7.11. Certain Prepayments. The Borrower will not, and will
not permit any of its Subsidiaries to, purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
or make any voluntary payment or prepayment of the principal of or interest on,
or any other amount owing in respect of, the Seller Notes, except for regularly
scheduled payments, prepayments or redemptions of principal and interest in
respect thereof required pursuant to the Seller Notes.
SECTION 7.12. Sale and Leaseback. The Parent will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into any
transaction or arrangement (or series of transactions or arrangements) relating
to any property pursuant to which the Parent or any of its Subsidiaries sells,
transfers or otherwise disposes of such property to any Person and the Borrower
or any such Subsidiary leases (as lessee) such property or substantially similar
property.
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SECTION 7.13. Passive Holding Company Status. The Parent will not
own any property other than cash and membership interests in the Borrower, and
will not engage in any business other than in respect of Qualified Parent
Guarantor Obligations.
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or under any other Credit
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of any Obligor in or in connection with this Agreement or any other
Credit Document or any amendment or modification hereof or thereof, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any other Credit
Document or any amendment or modification hereof or thereof, shall prove
to have been incorrect in any material respect when made or deemed made;
(d) the Borrower or the Parent (as applicable) shall fail to observe
or perform any covenant, condition or agreement contained in Section 6.02,
6.03 (with respect to the Borrower's existence), 6.09 or 6.10 or in
Article VII or any Obligor shall default in the performance of any of its
obligations contained in Section 4.02 or 5.02 of the Security Agreement;
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article) or any other Credit
Document and such failure shall continue unremedied for a period of 30 or
more days after notice thereof from the Administrative Agent (given at the
request of any Lender) to the Borrower;
(f) any Affiliated Party shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
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(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of any Affiliated Party or its debts, or of a
substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Affiliated Party or
for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for a period of 60 or
more days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) any Affiliated Party shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to
the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Affiliated Party or
for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;
(j) any Affiliated Party shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $500,000 shall be rendered against any Affiliated
Party or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Affiliated Party to
enforce any such judgment;
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(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in a Material
Adverse Effect;
(m) an Environmental Claim shall have been asserted against the
Borrower or any of its Subsidiaries that, in the opinion of the Required
Lenders, is reasonably likely to be determined adversely to the Borrower
or any of its Subsidiaries, and the amount thereof (either individually or
in the aggregate) could reasonably be expected to result in a Material
Adverse Effect (insofar as such amount is payable by the Borrower or any
of its Subsidiaries but after deducting any portion thereof that is
reasonably expected to be paid by other creditworthy Persons jointly and
severally liable therefor);
(n) Any one or more of the following events shall occur and be
continuing:
(i) the Parent Guarantors shall cease to collectively own 100%
of the issued and outstanding membership interests of all classes of
the Borrower;
(ii) prior to a Qualified Public Offering, Lightyear shall
cease to own, collectively, on a fully-diluted basis (i.e., giving
effect to the exercise of any warrants, options and conversion and
other rights), capital stock representing at least 66% of the
aggregate fair market value (or, if greater, the aggregate
liquidation value) of the capital stock of all classes of the Parent
and cease to hold at least 66% of the aggregate shares of voting
capital stock of the Parent (representing at least 66% of the votes
that may be cast in an election of directors of the Parent);
(iii) after a Qualified Public Offering, (A) Lightyear shall
cease to own, collectively, on a fully-diluted basis (i.e., giving
effect to the exercise of any warrants, options and conversion and
other rights), capital stock representing at least 20% of the
aggregate fair market value (or, if greater, the aggregate
liquidation value) of the capital stock of all classes of the Parent
and cease to hold at least 20% of the aggregate shares of voting
capital stock of the Parent (representing at least 20% of the votes
that may be cast in an election of directors of the Parent), or (B)
any Person or group (as such term is defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) owns, directly or
indirectly, more of the outstanding shares of voting capital stock
of the Parent than Lightyear; or
(iv) during any period of 12 consecutive calendar months, a
majority of the Board of Directors of the Parent shall no longer be
composed of individuals (A) who were members of said Board on the
first day of such period, (B) whose election or nomination to said
Board was approved by individuals referred to in clause (A) above
constituting at the time of such election or nomination at least a
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majority of said Board or (C) whose election or nomination to said
Board was approved by individuals referred to in clauses (A) and (B)
above constituting at the time of such election or nomination at
least a majority of said Board;
(o) the Borrower shall be terminated, dissolved or liquidated (as a
matter of law or otherwise) or proceedings shall be commenced by any
Person (including the Borrower) seeking the termination, dissolution or
liquidation of the Borrower;
(p) the Liens created by the Security Documents shall at any time
not constitute a valid and perfected Lien on any material portion of the
collateral intended to be covered thereby (to the extent perfection by
filing, registration, recordation or possession is required herein or
therein) in favor of the Administrative Agent, free and clear of all other
Liens (other than Liens permitted under Section 7.02 or under the
respective Security Documents), or, except for expiration in accordance
with its terms, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by any Obligor;
(q) either (i) there shall occur any material change in applicable
Federal, State or local law or regulation (including any prospective
change that has been enacted or promulgated but with a deferred effective
date that has not yet occurred) that, in the reasonable judgment of the
Required Lenders, has had a material adverse effect on the business,
operations, property or condition (financial or otherwise) of the Borrower
and its Subsidiaries, taken as a whole or (ii) the implementation of the
reauthorization of the Higher Education Act after the Effective Date
reflects modifications that, in the reasonable judgment of the Required
Lenders, would have, a material adverse effect on the business,
operations, property or condition (financial or otherwise) of the Borrower
and its Subsidiaries, taken as a whole; or
then, and in every such event (other than an event with respect to any Obligor
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Obligors accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Obligor; and in case of any
event with respect to any Obligor described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Obligors accrued hereunder,
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shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by each Obligor.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent hereunder and under the other Credit Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.
The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Parent or any Subsidiary or other
Affiliate thereof (including the Borrower) as if it were not the Administrative
Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Credit Documents.
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 or by the other Credit Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders, and (c) except
as expressly set forth herein and in the other Credit Documents, 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 Parent or
any of its Subsidiaries (including the Borrower) that is communicated to or
obtained by the Person 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 in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until 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 or any other Credit
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth herein or therein, (iv) the
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validity, enforceability, effectiveness or genuineness of this Agreement, any
other Credit Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein or
therein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
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 an Obligor), 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.
The Administrative Agent may resign at any time by notifying the
Lenders, the Borrower and the Parent. Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, 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's resignation shall nonetheless become effective and (1)
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and (2) the Required Lenders shall perform the duties of
the Administrative Agent (and all payments and communications provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender directly) until such time as the Required Lenders appoint a
successor agent as provided for above in this paragraph. 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 (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). 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 10.03
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shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it 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 other Credit Document or any related agreement or any document furnished
hereunder or thereunder.
Except as otherwise provided in Section 10.02(b) with respect to
this Agreement, the Administrative Agent may, with the prior consent of the
Required Lenders (but not otherwise), consent to any modification, supplement or
waiver under any of the Credit Documents, provided that, without the prior
consent of each Lender, the Administrative Agent shall not (except as provided
herein or in the Security Documents) release all or substantially all of the
collateral or otherwise terminate all or substantially all of the Liens under
any Security Document providing for collateral security, agree to additional
obligations (other than additional obligations hereunder) being secured by all
or substantially all of such collateral security (unless the Lien for such
additional obligations shall be junior to the Lien in favor of the other
obligations secured by such Security Document, in which event the Administrative
Agent may consent to such junior Lien provided that it obtains the consent of
the Required Lenders thereto), alter the relative priorities of the obligations
entitled to the benefits of the Liens created under the Security Documents with
respect to all or substantially all of such collateral or release all or
substantially all of the guarantors under the Security Documents from their
guarantee obligations thereunder, except that no such consent shall be required,
and the Administrative Agent is hereby authorized, to release any Lien covering
property (and to release any such guarantor) that is the subject of either a
disposition of property permitted hereunder or a disposition to which the
Required Lenders have consented.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
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(a) if to the Borrower or any Guarantor, to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇,
ext. 5294);
(b) if to the Administrative Agent, to JPMorgan Chase Bank, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇, Loan
and Agency Services Group (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; Telephone No.
(▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to the Borrower and the Administrative
Agent). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by
the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Obligor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may
be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall
(i) increase the Commitment of any Lender, or extend the date or
decrease the amount of any scheduled reduction thereof pursuant to Section
2.06, without the written consent of such Lender,
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(ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount
of any Loan, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby,
(iv) change Section 2.15(c) or 2.15(d) without the consent of each
Lender affected thereby,
(v) change any of the provisions of this Section or the percentage
in the definition of the term "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders required to waive,
amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, or
(vi) release all or substantially all of the Guarantors from their
guarantee obligations under Article III without the written consent of
each Lender;
provided, further, that (x) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent, and (y) that any modification
or supplement of Article III shall require the consent of each Guarantor
affected thereby.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Lenders and
their respective Affiliates (including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent), in connection with the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Credit Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
expenses incurred by the Administrative Agent or any Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent or any
Lender), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Credit Documents, including its
rights under this Section, or (B) in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans and (iii) and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Security Document or any other document referred to therein.
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(b) Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agent (and any sub-agent thereof), each Lender and each
Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by any
Obligor arising out of, in connection with, or as a result of (i) the execution
or delivery of this Agreement, any other Credit Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or the use or
proposed use of the proceeds therefrom, (iii) any actual or alleged presence or
Release of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Claim related in any
way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee. The
obligations of the Borrower under this paragraph (which are hereby acknowledged
by the Borrower) to indemnify and hold harmless the Indemnitees with respect to
any litigation or other proceeding brought by the Borrower against an Indemnitee
shall not be applicable to the extent arising out of a claim by the Borrower
that such Indemnitee has breached its obligations hereunder and the Borrower
prevails in such litigation or other proceeding.
(c) Reimbursement by Lenders. To the extent that the Borrower for
any reason fails to indefeasibly pay any amount required under paragraph (a) or
(b) of this Section to be paid by it to the Administrative Agent (or any
sub-agent thereof) or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent) or
such Related Party, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of any of
the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
paragraph (c) are several.
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, the Borrower shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this
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Agreement, any other Credit Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof. No Indemnitee referred to in paragraph (b) of this Section
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Credit Documents or the transactions contemplated hereby
or thereby.
(e) Payments. All amounts due under this Section shall be payable
not later than three days after written demand therefor.
SECTION 10.04. Successors and Assigns.
(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) no Obligor may 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 any Obligor 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 with this Section. 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 (e) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Assignments by Lenders.
(i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
(A) the Borrower, 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 under clause (a), (b), (h) or (i)
of Article VIII 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 of any Commitment
to an assignee that is a Lender with a Commitment immediately prior to
giving effect to such assignment.
Credit Agreement
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(ii) 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 Commitment or Loans, the amount of the Commitment or
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 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 under clause (a), (b), (h) or (i) of
Article VIII 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, provided that this clause shall not be construed to
prohibit the assignment of a proportionate part of all the assigning
Lender's rights and obligations in respect of its Commitment or Loans;
(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
(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof pursuant to paragraph (c) of this
Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto 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 2.12,
2.13, 2.14 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.04
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 (e) of
this Section.
(c) Maintenance of Register by the Administrative Agent. The
Administrative Agent, acting for this purpose as an 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 the Commitment of, and principal amount of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms
Credit Agreement
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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 at any reasonable time and from time to time upon
reasonable prior notice.
(d) Effectiveness of Assignment. 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)(ii) of this Section and any written consent to
such assignment required by paragraph (b)(i) of this Section, the Administrative
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph (d).
(e) Participations. 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 and the other Credit Documents (including
all or a portion of its Commitment and the Loans owing to it); provided that (A)
such Lender's obligations under this Agreement and the other Credit Documents
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 Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Credit Documents. 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 the other Credit Documents and to approve any amendment, modification or
waiver of any provision of this Agreement or any other Credit Document; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.12, 2.13 and
2.14 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 10.08 as
though it were a Lender, provided that such Participant agrees to be subject to
Section 2.15(d) as though it were a Lender.
(f) Limitations on Rights of Participants. A Participant shall not
be entitled to receive any greater payment under Section 2.12 or 2.14 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.14 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.14(e) as though it were a
Lender.
Credit Agreement
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(g) 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 any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 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.
(h) No Assignments to the Obligors or Affiliates. Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate any
interest in any Loan held by it hereunder to the Borrower or any of its
Affiliates or Subsidiaries without the prior consent of each Lender.
SECTION 10.05. Survival. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.13, 2.14, 3.03 and 10.03 and Article IX shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract between and among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 5.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page to this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
Credit Agreement
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SECTION 10.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Obligor against any of and all the
obligations of any Obligor now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each Obligor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby 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 or, to the extent
permitted by 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 shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Obligor or its properties in
the courts of any jurisdiction.
(c) Waiver of Venue. Each Obligor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
Credit Agreement
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(d) Service of Process. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
10.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. Each of the Borrower and the
Parent acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower, the
Parent or one or more of their Subsidiaries (in connection with this Agreement
or otherwise) by any Lender or by one or more subsidiaries or affiliates of such
Lender and each of the Borrower and the Parent hereby authorizes each Lender to
share any information delivered to such Lender by the Borrower, the Parent and
their Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such subsidiary or
affiliate, it being understood that any such subsidiary or affiliate receiving
such information shall be bound by the provisions of paragraph (b) of this
Section as if it were a Lender hereunder. Such authorization shall survive the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.
(b) Confidentiality. Each of the Administrative Agent and the
Lenders 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 partners, directors, officers, employees,
agents, advisors and other representatives (it being understood that the Persons
to whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent requested by
Credit Agreement
- 83 -
any regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Credit Document or any action or proceeding relating to this Agreement
or any other Credit Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender or
any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrower.
For purposes of this Section, "Information" means all information
received from the Borrower or any of its Subsidiaries relating to the Borrower
or any of its Subsidiaries or any of their respective businesses, other than any
such information that is available to the Administrative Agent or any Lender on
a nonconfidential basis prior to disclosure by the Borrower or any of its
Subsidiaries, provided that, in the case of information received from the
Borrower or any of its Subsidiaries after the date hereof, such information is
clearly identified at the time of delivery as confidential. 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.
Notwithstanding anything herein to the contrary, any party subject
to confidentiality obligations hereunder or under any other related document
(and any employee, representative or other agent of such party) may disclose to
any and all persons, without limitation of any kind, such party's U.S. federal
income tax treatment and the U.S. federal income tax structure of the
transactions contemplated by this Agreement relating to such party and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, no
such party shall disclose any information relating to such tax treatment or tax
structure to the extent nondisclosure is reasonably necessary in order to comply
with applicable securities laws.
Credit Agreement
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
COLLEGIATE FUNDING SERVICES, L.L.C.
CFSL ACQUISITION CORP.,
as member
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title:
CFSL HOLDINGS CORP.
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title:
CFSL ACQUISITION CORP.
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Credit Agreement
- 85 -
SUBSIDIARY GUARANTORS
▇▇▇▇▇▇▇▇▇▇.▇▇▇, L.L.C.
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title:
CFS SERVICING, LLC
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title:
CFS-SUNTECH SERVICING LLC
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Credit Agreement
- 86 -
LENDERS
JPMORGAN CHASE BANK,
individually and as Administrative Agent
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Credit Agreement
[Execution copy]
================================================================================
AMENDMENT NO. 1
dated as of April 21, 2004
to
CREDIT AGREEMENT
dated as of October 30, 2003
between
COLLEGIATE FUNDING SERVICES, L.L.C.,
as Borrower
COLLEGIATE FUNDING SERVICES, INC.
(f/k/a CFSL Corp., f/k/a CFSL Holdings Corp.)
and
CFSL ACQUISITION CORP.,
as Parent Guarantors
THE SUBSIDIARY GUARANTORS REFERRED TO HEREIN,
as Subsidiary Guarantors
THE LENDERS NAMED HEREIN,
as Lenders
and
JPMORGAN CHASE BANK,
as Administrative Agent
================================================================================
AMENDMENT ▇▇. ▇
▇▇▇▇▇▇▇▇▇ ▇▇. ▇ dated as of April 21, 2004 (this "Amendment No. 1")
to the Credit Agreement referred to below, between COLLEGIATE FUNDING SERVICES,
L.L.C. (the "Borrower"), COLLEGIATE FUNDING SERVICES, INC. (f/k/a CFSL Corp.,
f/k/a CFSL Holdings Corp.) (the "Parent"), CFSL ACQUISITION CORP. ("CFSL"), the
SUBSIDIARY GUARANTORS party hereto (the "Subsidiary Guarantors" and, together
with the Parent and CFSL, the "Guarantors"), the LENDERS party hereto (the
"Lenders"), and JPMORGAN CHASE BANK, as Administrative Agent (the
"Administrative Agent").
The Borrower, the Guarantors, the Lenders and the Administrative
Agent are parties to a Credit Agreement dated as of October 30, 2003 (as
heretofore modified and supplemented and in effect on the date hereof
immediately prior to the effectiveness of this Amendment No. 1, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for loans
to be made by said Lenders to the Borrower in an aggregate principal amount not
exceeding $45,000,000 at any one time outstanding.
The Borrower and the Guarantors have requested that the Lenders
agree to certain amendments to the Credit Agreement, and accordingly, the
parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 4, but effective as of the date hereof, the
Credit Agreement shall be amended as follows:
2.01. General References. References in the Credit Agreement
(including references to the Credit Agreement as amended hereby) to "this
Agreement" (and indirect references such as "hereunder", "hereby", "herein" and
"hereof") shall be deemed to be references to the Credit Agreement as amended
hereby.
2.02. Certain Definitions. Section 1.01 of the Credit Agreement
shall be amended by inserting the following new definitions (to the extent not
already included in said Section 1.01) in the appropriate alphabetical
locations, and by amending in their entirety the following definitions (to the
extent already included in said Section 1.01), as follows:
"Acquisition" means the acquisition by the Borrower or one or more
of its Subsidiaries of 100% of the issued and outstanding shares of
capital stock or all or substantially all of the assets of the Target by
means of a purchase, merger, consolidation or a combination of the
foregoing.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Loans hereunder, expressed as an amount representing
the maximum aggregate amount of such Lender's Revolving Credit Exposure
hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.06 or 2.08(b) and (b) reduced or increased from time
to time pursuant to assignments by or to such
Amendment No. 1
- 2 -
Lender pursuant to Section 10.04. The amount of each Lender's Commitment
is set forth on Schedule I to Amendment No. 1 hereto, or in the Assignment
and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable.
"Commitment Reduction Dates" means the Quarterly Dates falling on or
nearest to March 31, June 30, September 30 and December 31 of each year,
commencing with December 31, 2003, through and including the Commitment
Termination Date, provided that, in the case of the Quarterly Date falling
on or nearest June 30, 2004, the Commitment Reduction Date shall be the
last Business Day of July 2004.
"Consolidating Financial Statements" means the consolidating balance
sheet and related statements of operations of (i) the Borrower, (ii)
CFS-Suntech Servicing LLC, (iii) the Securitization Subsidiaries, taken as
a whole, (iv) after consummation of the Acquisition, eGrad Inc. and (v)
the remaining Subsidiaries of the Borrower, taken as a whole.
"Fixed Charges Ratio" means, (a) as at any date prior to and
including September 30, 2004, the ratio of (i) EBITDA for the period
beginning October 1, 2003 and ending on the last day of the fiscal quarter
ending on or most recently ended prior to such date, to (ii) the sum of
(w) Debt Service for such period plus (x) Lease Rentals for such period
plus (y) cash income taxes payable by the Parent and its Subsidiaries in
respect of such period plus (z) payments made to Persons pursuant to the
Management Agreement, the Consulting Agreement and the Broker Agreement
during such period, provided that, for purposes of the calculation of the
Fixed Charges Ratio as at any date from and including August 1, 2004 to
but excluding September 30, 2004, EBITDA and the sum referred to in clause
(ii) above shall be calculated for the period of ten months ending on July
31, 2004 and (b) for any date on or after October 1, 2004, the ratio of
(i) EBITDA for the period of four fiscal quarters ending on or most
recently ended prior to such date to (ii) the sum of (w) Debt Service for
such period plus (x) Lease Rentals for such period plus (y) cash income
taxes payable by the Parent and its Subsidiaries in respect of such period
plus (z) payments made to Persons pursuant to the Management Agreement,
the Consulting Agreement and the Broker Agreement during such period.
"Interest Coverage Ratio" means, as at any date, the ratio of (a)
EBITDA for the period of four quarters ending on, or most recently ended
prior to, such date to (b) Interest Expense for such period, provided
that, for purposes of the calculation of the Interest Coverage Ratio at
any date from and including August 1, 2004 to but excluding September 30,
2004, EBITDA and Interest Expense shall be calculated for the period of
twelve months ending on July 31, 2004.
"Leverage Ratio" means, as at any date, the ratio of (i) the
aggregate amount of Indebtedness for borrowed money or otherwise appearing
as a liability on the balance sheet of the Parent and its Subsidiaries in
accordance with GAAP of the Parent and its Subsidiaries (determined on a
consolidated basis without duplication in accordance) as at such date to
(ii) EBITDA for the period of four fiscal quarters ending on or most
recently ended prior to such date, provided that, for purposes of the
calculation of the Leverage Ratio at any date from and including August 1,
2004 to but excluding September 30,
Amendment ▇▇. ▇
- ▇ -
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ calculated for the period of twelve months ending on
July 31, 2004.
"Merger Agreement" means the merger agreement to be entered into
among the Target, the Borrower, Affinity Acquisition Corp. and certain
stockholders of the Target, providing among other things for the
acquisition by the Borrower of all of the issued and outstanding shares of
capital stock of the Target.
"Target" means Members Connect, Inc., a Delaware corporation, d/b/a
Youth Media & Marketing Networks.
2.03. Scheduled Termination and Reduction. Section 2.06(a) of the
Credit Agreement shall be amended to read in its entirety as follows:
"(a) Scheduled Termination and Reduction. Unless previously
terminated, the Commitments shall terminate on the Commitment Termination
Date. In addition, the aggregate amount of the Commitments shall be
automatically reduced on each Commitment Reduction Date set forth in
column (A) below to the amount (subject to reduction pursuant to paragraph
(d) of this Section) set forth in column (B) below opposite such
Commitment Reduction Date:
(A) (B)
Commitment Commitments
Reduction Date Reduced to the
Falling on or Following
Nearest to: Amounts ($):
----------- ------------
7/31/04 ...................... 58,750,000
9/30/04 ...................... 30,000,000
12/31/04 ...................... 26,250,000
3/31/05 ...................... 22,500,000
6/30/05 ...................... 18,750,000
9/30/05 ...................... 15,000,000
12/31/05 ...................... 11,250,000
3/31/06 ...................... 7,500,000
6/30/06 ...................... 3,750,000
Commitment Termination Date .. $0"
2.04. Financial Statements and Other Information. Section 6.01 of
the Credit Agreement shall be amended as follows:
A. clause (a) thereof shall be amended in its entirety to read as
follows:
"(a) within 90 days after the end of each fiscal year of the
Borrower and the Parent, the audited consolidated balance sheet and
related statements of operations, members' equity and cash flows of
the Borrower and its Subsidiaries
Amendment No. 1
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(and, separately stated, of the Parent and its Subsidiaries) and the
unaudited Consolidating Financial Statements as of the end of and
for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, (i) in the case of such
consolidated financial statements, all reported on by Ernst & Young
LLP or other independent public accountants of recognized national
standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope
of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its
Subsidiaries (and of the Parent and its Subsidiaries) on a
consolidated basis in accordance with GAAP consistently applied and
(ii) in the case of such Consolidating Financial Statements, all
certified by a Financial Officer of the Borrower (or of the Parent,
as the case may be) as presenting fairly in all material respects
the respective individual unconsolidated financial condition and
results of operations of the Borrower and each group of the
Borrower's Subsidiaries to which such Consolidating Financial
Statement relate in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of
footnotes;"
B. clause (b) thereof shall be amended by inserting at the end
thereof, immediately before the semicolon, the following proviso:
"provided that the Borrower will in addition furnish to the
Administrative Agent and each Lender, within 45 days after July 31,
2004, financial statements complying with the requirements of this
clause as of July 31, 2004 and for the three-month period ending on
such date and the then elapsed portion of the fiscal year"
2.05. Use of Proceeds. Section 6.11 of the Credit Agreement shall be
amended in its entirety to read as follows:
"SECTION 6.11. Use of Proceeds. The proceeds of the Loans shall be
used only (a) to repay outstanding principal of and interest on, and other
amounts owing in respect of, the Senior Secured Notes, (b) for the general
operating purposes of the Borrower and its Subsidiaries and (c) to pay a
portion of the purchase price for the Acquisition, provided that (i) no
more than $40,000,000 of the proceeds of the Loans shall be applied to the
repayment of the Senior Secured Notes, (ii) in no event shall any portion
of the proceeds of the Loans be used directly or indirectly to finance the
purchase of student loan receivables, it being understood that this
Section shall not limit the Borrower's ability to purchase either
completed applications for FFELP Loans or recently disbursed FFELP Loans,
in each case in the ordinary course of business and (iii) no more than
$36,000,000 of the proceeds of the Loans shall be applied to pay the
purchase price for the Acquisition."
Amendment ▇▇. ▇
- ▇ -
▇.▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The first and second sentences of Section
7.03 of the Credit Agreement shall be amended in their entirety to read as
follows:
"The Parent will not, nor will it permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), except for the Acquisition. The Parent will not, nor will it
permit any of its Subsidiaries to, acquire any business or property from,
or capital stock of, or be a party to any acquisition of, any Person
except for the Acquisition, purchases of inventory and other property to
be sold or used in the ordinary course of business and Investments
permitted under Section 7.05(i)."
2.07. Lines of Business. Section 7.04 of the Credit Agreement shall
be amended in its entirety to read as follows:
"SECTION 7.04. Lines of Business. The Parent will not, nor will it
permit any of its Subsidiaries to, engage to any material extent in any
business other than the business of (a) marketing, origination, servicing,
consolidation, purchase and sale of (i) student loans made pursuant to the
Higher Education Act to a borrower to finance his or her education that is
guaranteed by a Guarantee Agency as defined in the Higher Education Act;
(ii) non-FFELP student loans that are at least 98% guaranteed by Persons
other than the Federal Government of the United States of America or any
agencies thereof; (iii) any entrance and exit counseling activities or
business; and (b) providing publishing technology to universities."
2.08. Investments. Section 7.05 of the Credit Agreement shall be
amended by deleting the word "and" at the end of clause (h) thereof, by
replacing the period at the end of clause (i) thereof with a semicolon, by
inserting the word "and" to the end of clause (i) thereof and by inserting a new
clause (j) at the end thereof to read as follows:
"(j) the Acquisition."
2.09. Certain Financial Covenants. Section 7.09 of the Credit
Agreement shall be amended as follows:
A. clause (a) thereof shall be amended in its entirety to read as
follows:
"(a) Leverage Ratio. The Parent will not permit the Leverage
Ratio to exceed the following respective ratios at any time during
the following respective periods:
Period: Ratio:
------- ------
From the Effective Date
through December 31, 2003 ....... 2.50 to 1
From January 1, 2004
through March 31, 2004 .......... 2.75 to 1
Amendment No. 1
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Period: Ratio:
------- ------
From April 1, 2004
through July 31, 2004 ........... 3.50 to 1
From August 1, 2004
through September 30, 2004 ...... 2.25 to 1
From October 1, 2004 and at
all times thereafter ............ 2.00 to 1";
B. clause (b) thereof shall be amended in its entirety to read as
follows:
"(b) Interest Coverage Ratio. The Parent will not permit the
Interest Coverage Ratio to be less than the following respective
ratios for any period of four quarters ending at any time during the
following respective periods:
Period: Ratio:
------- ------
From the Effective Date
through July 31, 2004 ........... 3.50 to 1
From August 1, 2004
through June 30, 2005 ........... 4.50 to 1
From July 1, 2005 and at all
times thereafter ................ 5.50 to 1";
C. clause (c) thereof shall be amended in its entirety to read as
follows:
"(c) Fixed Charges Ratio. The Parent will not permit the Fixed
Charges Ratio to be less than the following respective ratios at any
time during the following respective periods:
Period: Ratio:
------- ------
From the Effective Date
through December 31, 2003 ....... 2.90 to 1
From January 1, 2004
through March 31, 2004 .......... 1.90 to 1
From April 1, 2004
through July 31, 2004 ........... 1.80 to 1
Amendment No. 1
- 7 -
Period: Ratio:
------- ------
From August 1, 2004
through September 30, 2004 ...... 1.10 to 1
From October 1, 2004 and at
all times thereafter ............ 1.20 to 1
provided that, if the Department of Education, on or about May 15,
2004, officially amends the interest rate for FFELP Loans to a rate
lower than 3.42% per annum, (i) the ratio during the period from
April 1, 2004 through July 31, 2004 shall be 1.10 to 1, and (ii) the
ratio during the period from August 1, 2004 through September 30,
2004 shall be 1.30 to 1."
D. clause (d) thereof shall be amended by replacing the figure
"$5,000,000" appearing therein with the figure "$5,500,000"; and
E. clause (g) thereof shall be amended by replacing the figure
"$2,000,000" appearing therein with the figure "$2,500,000".
2.10. Assignments by Lenders. Section 10.04(b) of the Credit
Agreement shall be amended as follows:
A. clause (i)(A) thereof shall be amended by deleting the words
"clause (a), (b), (h) or (i) of" appearing therein;
B. clause (i)(B) thereof shall be amended by deleting the words ",
provided that no consent of the Administrative Agent shall be required for
an assignment of any Commitment to an assignee that is a Lender with a
Commitment immediately prior to giving effect to such assignment"
appearing therein; and
C. clause (ii)(A) thereof shall be amended by deleting the words
"clause (a), (b), (h) or (i) of" appearing therein.
2.11. USA PATRIOT Act. Article X of the Credit Agreement shall be
amended by inserting at the end thereof a new Section 10.13 to read in its
entirety as follows:
"SECTION 10.13. 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)), it is required
to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in
accordance with said Act."
Section 3. Representations and Warranties. Each Obligor represents
and warrants to the Lenders, both immediately prior to this Amendment No. 1
becoming effective and after giving effect thereto, that (a) the representations
and warranties of such Obligor set forth in Article IV of the Credit Agreement
and in each of the other Credit Documents to which
Amendment No. 1
- 8 -
it is a party, are true and correct on and as of the date hereof with the same
force and effect as if made on and as of the date hereof (or, if any such
representation and warranty is expressly stated to have been made as of a
specific date, as of such specific date) and as if each reference in said
Article IV to "this Agreement" (or words of similar import) or in such other
Credit Documents to "the Credit Agreement" (or words of similar import) included
reference to this Amendment No. 1 and (b) no Default has occurred and is
continuing.
In addition, the Borrower represents and warrants to the Lenders
that each representation and warranty made or deemed made by or on behalf of the
Target in the Merger Agreement will be true and correct on and as of the date of
consummation of the Acquisition with the same force and effect as if made on and
as of the date hereof (or, if any such representation and warranty is expressly
stated to have been made as of a specific date, as of such specific date).
Section 4. Conditions Precedent. The amendments to the Credit
Agreement set forth in Section 2 shall become effective as of the date hereof
upon the satisfaction on or before June 30, 2004 of each of the following
conditions:
4.01. Amendment No. 1. The Administrative Agent shall have received
one or more counterparts of this Amendment No. 1 executed by each Obligor
and each Lender.
4.02. Consummation of the Acquisition. The Administrative Agent
shall have received (a) evidence satisfactory to it that the Acquisition
shall have been (or shall be concurrently) consummated in all material
respects in accordance with the terms of the documents delivered in
connection with the closing of the Acquisition (which documents shall be
satisfactory to the Administrative Agent and the Lenders) and (b) a
certificate of a Financial Officer of the Borrower to such effect, to the
effect that attached thereto are true and complete copies of each document
delivered in connection with the closing of the Acquisition and specifying
the percentage of stockholders of each class of capital stock of the
Target (which shall not be less than 80% of the stockholders of each such
class) who approved the Acquisition. In addition, the Administrative Agent
shall have received copies of the legal opinions delivered to the Borrower
and its Subsidiaries in connection with the Acquisition, together with a
letter from each Person delivering such opinions (or authorization within
such opinions) permitting reliance thereon by the Administrative Agent and
the Lenders.
4.03. Opinions of Counsels to the Obligors. The Administrative Agent
shall have received a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the date hereof) of (i) the
General Counsel of the Borrower, (ii) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLC,
New York counsel for the Obligors and (iii) ▇▇▇▇▇▇▇ ▇▇▇▇, a Professional
Corporation, Virginia counsel for the Obligors, in each case covering such
matters relating to the Obligors, this Amendment No. 1 or the transactions
contemplated hereby as the Lenders shall reasonably request (and each
Obligor hereby instructs such counsels to deliver such opinions to the
Lenders and the Administrative Agent).
Amendment No. 1
- 9 -
4.04. Corporate Documents. The Administrative Agent shall have
received such documents and certificates as the Administrative Agent or
its counsel may reasonably request relating to the organization, existence
and good standing of each Obligor, the authorization of the transactions
contemplated by this Amendment No. 1 and any other legal matters relating
to the Obligors, this Amendment No. 1 or the transactions contemplated
hereby, all in form and substance satisfactory to the Administrative Agent
and its counsel.
4.05. Officer's Certificate. The Administrative Agent shall have
received a certificate, dated the date hereof and signed by a Financial
Officer of the Borrower, in respect of the matters set forth in Section 3,
in form and substance satisfactory to the Administrative Agent and its
counsel.
4.06. Payment of Fees. The Administrative Agent shall have received
evidence satisfactory to the Administrative Agent of payment (or
irrevocable instructions for payment) by the Borrower in full of the fees
provided for in the fee letter dated April 20, 2004 addressed by the
Borrower to the Administrative Agent (including the reasonable accrued
fees and expenses of counsel to JPMCB) in connection with this Amendment
No. 1.
4.07. Other Documents. The Administrative Agent shall have received
such other documents as the Administrative Agent may reasonably request.
Section 5. Confirmation of Guarantees and Security Interests. Each
of the Guarantors, by its execution of this Amendment No. 1, hereby consents to
this Amendment No. 1 and confirms and ratifies that all of its obligations as a
Guarantor under the Credit Agreement (including, without limitation, Article III
thereof) shall continue in full force and effect for the benefit of the
Administrative Agent and the Lenders with respect to the Credit Agreement as
amended hereby. Each of the Obligors, by its execution of this Amendment No. 1,
hereby confirms that the security interests granted by it under each of the
Security Documents to which it is a party shall continue in full force and
effect in favor of the Administrative Agent for the benefit of the Lenders and
the Administrative Agent with respect to the Credit Agreement as amended hereby.
Section 6. Certain Obligations Respecting Subsidiaries; Further
Assurances. Anything in this Amendment No. 1 or in the Credit Agreement as
amended hereby notwithstanding, the Parent and the Borrower hereby agree to
comply with the requirements of Section 6.10 of the Credit Agreement as amended
hereby with respect to the Target and its Subsidiaries within five Business Days
from the date hereof. Failure to observe or perform this covenant shall
constitute an Event of Default under clause (d) of Article VIII of the Credit
Agreement as amended hereby.
Section 7. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same amendatory instrument and any of the parties
hereto may execute this Amendment No. 1 by signing any such
Amendment No. 1
- 10 -
counterpart. This Amendment No. 1 shall be governed by, and construed in
accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 1 to be duly executed and delivered as of the day and year first above
written.
BORROWER
COLLEGIATE FUNDING SERVICES, L.L.C.
by CFSL ACQUISITION CORP.,
as member
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
U.S. Tax I.D. Number for the Borrower:
▇▇-▇▇▇▇▇▇▇
Address for the Borrower:
Collegiate Funding Services, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PARENT GUARANTORS
COLLEGIATE FUNDING SERVICES, INC. (f/k/a CFSL
Corp., f/k/a CFSL Holdings Corp.)
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
Amendment ▇▇. ▇
- ▇▇ -
▇▇▇▇ ACQUISITION CORP.,
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
SUBSIDIARY GUARANTORS
▇▇▇▇▇▇▇▇▇▇.▇▇▇, L.L.C.
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
CFS SERVICING, LLC
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
CFS-SUNTECH SERVICING LLC
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
Amendment ▇▇. ▇
- ▇▇ -
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ CHASE BANK,
individually and as Administrative Agent
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Amendment No. 1
SCHEDULE I
COMMITMENTS
LENDER COMMITMENT AMOUNT
------ -----------------
JPMorgan Chase Bank ................ $31,250,000.00
Bank of America, N.A. .............. $31,250,000.00
Amendment No. 1