BRIDGE LOAN AGREEMENT

 

TABLE OF CONTENTS

 

	PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS	1
SECTION 1.01. Certain Defined Terms.	1
SECTION 1.02. Computation of Time Periods.	15
SECTION 1.03. Accounting Terms.	15
ARTICLE II THE COMMITMENTS AND LOANS	15
SECTION 2.01. Loans.	15
SECTION 2.02. Borrowings, Conversions and Continuations of Loans.	15
SECTION 2.03. Prepayments; Maturity.	16
SECTION 2.04. Voluntary Termination or Reduction of Commitments.	17
SECTION 2.05. Interest.	17
SECTION 2.06. Fees.	18
SECTION 2.07. Computation of Interest and Fees.	19
SECTION 2.08 Evidence of Debt.	19
SECTION 2.09. Payments Generally.	19
SECTION 2.10. Increased Costs; Capital Adequacy; Illegality.	21
SECTION 2.11. Taxes.	22
SECTION 2.12. Sharing of Payments, Etc.	23
SECTION 2.13. Tax Forms.	23
SECTION 2.14. Defaulting Banks.	24
ARTICLE III CONDITIONS OF LENDING	25
SECTION 3.01. Conditions Precedent to Initial Loans.	25
ARTICLE IV REPRESENTATIONS AND WARRANTIES	26
SECTION 4.01. Representations and Warranties of the Borrower.	26
ARTICLE V COVENANTS OF THE BORROWER	28
SECTION 5.01. Affirmative Covenants.	28
SECTION 5.02. Negative Covenants.	31
SECTION 5.03. Financial Covenant.	32
ARTICLE VI EVENTS OF DEFAULT	32
SECTION 6.01. Events of Default.	32
ARTICLE VII AGENCY	35
SECTION 7.01. Appointment and Authority.	35
SECTION 7.02. Agent Individually.	35
SECTION 7.03. Duties of Agent; Exculpatory Provisions.	36
SECTION 7.04. Reliance by Agent.	37
SECTION 7.05. Delegation of Duties.	37
SECTION 7.06. Resignation of Agent.	37
SECTION 7.07. Non-Reliance on Agents and Other Banks.	38

 

 

SECTION 7.08. No Other Duties, etc.	39
SECTION 7.09. Indemnification.	39
ARTICLE VIII MISCELLANEOUS	40
SECTION 8.01. Amendments, Etc.	40
SECTION 8.02. Notices; Communications, Etc.	40
SECTION 8.03. No Waiver; Remedies.	43
SECTION 8.04. Costs, Expenses and Taxes.	43
SECTION 8.05. Right of Set-off.	44
SECTION 8.06. Binding Effect.	45
SECTION 8.07. Assignments and Participations.	45
SECTION 8.08. Governing Law; Submission to Jurisdiction; Service of Process.	47
SECTION 8.09. Execution in Counterparts.	48
SECTION 8.10. Waiver of Jury Trial.	48
SECTION 8.11. USA Patriot Act Notification.	48
SECTION 8.12. Confidentiality.	48
SECTION 8.13. Treatment of Information.	49

 

 

SCHEDULES

 

Schedule I	Commitments
Schedule 4.01(h)	ERISA
EXHIBITS
Exhibit A	Form of Note
Exhibit B	Form of Loan Notice
Exhibit C	Form of Assignment and Acceptance
Exhibit D	Form of Opinion of Counsel for the Borrower
Exhibit E	Form of Compliance Certificate

 

 

BRIDGE LOAN AGREEMENT

 

Dated as of December 3, 2010

 

Caterpillar Inc., a Delaware corporation (the “ Borrower ”), the financial institutions listed on the signature pages hereof (together with their respective successors and assigns, the “ Banks ”) and JPMorgan Chase Bank, N.A., as agent (the “ Agent ”) for the Banks hereunder, agree as follows:

 

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01.  Certain Defined Terms .   As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“ Accumulated Other Comprehensive Income ” means, on any date of determination, the accumulated other comprehensive income (loss) balance as presented in the Borrower’s financial statements compiled in accordance with generally accepted accounting principles.

 

“ Activities ” has the meaning specified in Section 7.02(b) .

 

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

 

“ 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.

 

“ Agent’s Group ” has the meaning specified in Section 7.02(b) .

 

“ Agent’s Office ” means the Agent’s office at the address as set forth in Section 8.02 or such other office as the Agent may from time to time notify the Borrower and the Banks.

 

“ Agreement ” means this Bridge Loan Agreement as it may from time to time be amended, restated, supplemented or otherwise modified.

 

“ Applicable Lending Office ” means, with respect to each Bank, such Bank’s Domestic Lending Office in the case of a Base Rate Loan and such Bank’s Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

 

1

 

“ Applicable Rate ” means, from time to time, the rate per annum, corresponding to the applicable date and Credit Rating as set forth below:

 

		Credit Ratings S&P/Moody’s
		Pricing Level I: A/A2				Pricing Level II: A-/A3				Pricing Level III: BBB+/Baa1				Pricing Level IV: BBB/Baa2
		Euro- Dollar		Base Rate		Euro Dollar		Base Rate		Euro- Dollar		Base Rate		Euro- Dollar		Base Rate
Closing Date until 89 days following the Closing Date		1.25	%	0.25	%	1.50	%	0.50	%	1.75	%	0.75	%	2.00	%	1.00	%
90 th  Day following the Closing Date until 179 th  day following the Closing Date		1.50	%	0.50	%	1.75	%	0.75	%	2.00	%	1.00	%	2.25	%	1.25	%
180 th  day following the Closing Date until 269 th  day following the Closing Date		1.875	%	.875	%	2.125	%	1.125	%	2.375	%	1.375	%	2.625	%	1.625	%
From the 270 th  day following the Closing Date and thereafter		2.375	%	1.375	%	2.625	%	1.625	%	2.875	%	1.875	%	3.125	%	2.125	%

 

If the Credit Ratings assigned by S&P and Moody’s fall in different Pricing Levels, then the higher of such Credit Ratings shall apply (with the Credit Rating for Pricing Level I being the highest and the Credit Rating for Pricing Level IV being the lowest), unless there is a split in Credit Ratings of more than one Pricing Level, in which case the Applicable Rate shall be determined by reference to a Credit Rating that is one Pricing Level lower than the higher of the Borrower’s two Credit Ratings.  If the Borrower shall maintain a Credit Rating from only one of S&P and Moody’s, then that single Credit Rating shall apply.  If the Borrower shall fail to maintain any Credit Rating, then the Applicable Rate shall be based on Pricing Level IV.

 

“ Approved Electronic Communications ” means each Communication that the Borrower is obligated to, or otherwise chooses to, provide to the Agent pursuant to this Agreement or the transactions contemplated herein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided , however , that, solely with respect to delivery of any such Communication by the Borrower to the Agent and without limiting or otherwise affecting either the Agent’s right to effect delivery of such Communication by posting such Communication to the Approved Electronic Platform or the protections afforded hereby to the Agent in connection with any such posting, “Approved Electronic Communication” shall exclude any notice that relates to a request for an extension of credit

 

2

 

(including any election of an interest rate or Interest Period relating thereto), (ii) any notice pursuant to Section 2.03 and any other notice relating to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) all notices of any Event of Default or unmatured Event of Default, (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article III or any other condition to any Loan or other extension of credit hereunder or any condition precedent to the effectiveness of this Agreement and (v) service of process.

 

“ Approved Electronic Platform ” has the meaning specified in Section 8.02(d) .

 

“ Arranger ” means J.P. Morgan Securities LLC.

 

“ Assignment and Acceptance ” means an assignment and acceptance entered into by an assigning Bank and an assignee, and accepted by the Agent, in accordance with Section 8.07 and in substantially the form of Exhibit C hereto.

 

“ Availability Period ” means the period from and including the Effective Date to and including November 30, 2011; provided , however , that in the event the Termination Date (as defined in the Merger Agreement) is extended pursuant to Section 7.01(b)(i) of the Merger Agreement, such latter date shall be similarly extended, but in no event later than June 30, 2012.

 

“ Bank ” has the meaning specified in the introductory paragraph hereof.

 

“ Bank Insolvency Event ” means, with respect to any Bank, that (i) such Bank or its Parent Company has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Bank or its Parent Company or its assets to be, insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) such Bank or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Bank or its Parent Company, or such Bank or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment.

 

“ Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 1/2 of 1% and (c) as long as none of the conditions described in Section 2.10(c) or (d) shall exist, the Eurodollar Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the avoidance of doubt, the Eurodollar Rate for any day shall be based on the rate appearing on the Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of such page) at approximately 11:00 a.m. London time on such day.  Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Rate or the Eurodollar Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Rate or the Eurodollar Rate, respectively.

 

3

 

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

 

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

 

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

 

“ Borrowing ” means a borrowing consisting of simultaneous Loans of the same Type made, converted or continued on the same date and, in the case of Eurodollar Rate Loans, having the same Interest Period.

 

“ Business Day ” means a day of the year (i) on which banks are not required or authorized to close in New York City or Chicago, Illinois and (ii) if the applicable Business Day relates to any Eurodollar Rate Loan, on which dealings are carried on in the London interbank market.

 

“ CFSC ” means Caterpillar Financial Services Corporation, a Delaware corporation.

 

“ Change of Control ” means an event or series of events by which:

 

(a)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 35% or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis; or

 

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

 

“ Closing Company Material Adverse Effect ” means a Company Material Adverse Effect, but not taking into account in such determination any adverse effect from any state of facts, change, development, event, effect, condition, occurrence, action or omission that is reasonably apparent from the Company Letter  (except as otherwise provided therein) or from the description of the factual matters set forth in the Filed SEC Documents (excluding for this purpose disclosures in

 

4

 

the Filed SEC Documents that are (x) in the “Risk Factors” sections of the Filed SEC Documents or (y) cautionary, predictive or forward-looking in nature).  For purposes of the foregoing, “ Company Letter ” and “ Filed SEC Documents ” have the respective meanings described thereto in the Merger Agreement as in effect on the date of execution and delivery thereof.

 

“ Closing Date ” means the date on which the Merger is consummated.

 

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

 

“ Commitment ” means, as to each Bank, its obligation to make Loans to the Borrower pursuant to Article II , in an aggregate principal amount not to exceed the amount set forth opposite such Bank’s name on Schedule I or in the Assignment and Acceptance pursuant to which such Bank becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“ Commitment Termination Date ” means the earliest of (i) the Closing Date, (ii) the last day of the Availability Period and (iii) the date of any termination of the Total Commitment pursuant to Section 2.03 , 2.04 or 6.01 .

 

“ Communications ” means each notice, demand, communication, information, document and other material provided for hereunder or otherwise transmitted between the parties hereto relating to this Agreement, the Borrower or its Affiliates, or the transactions contemplated by this Agreement, including, without limitation, all Approved Electronic Communications.

 

“ Company ” means Bucyrus International, Inc., a Delaware corporation.

 

“ Company Material Adverse Effect ” means any state of facts, change, development, event, effect, condition, occurrence, action or omission that would, individually or in the aggregate, reasonably be likely to (i) result in a material adverse effect on the business, assets, properties, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (ii) prevent, substantially impede or substantially delay the consummation by the Company of the Merger or the other transactions contemplated by the Merger Agreement, other than, any such state of facts, change, development, event, effect, condition, occurrence, action or omission to the extent relating to or resulting from (A) changes or conditions affecting the economy or financial markets in general or changes in political or regulatory conditions generally, (B) changes in the businesses and industries in which the Company and its Subsidiaries operate, to the extent such changes do not affect the Company and its Subsidiaries, taken as a whole, in a materially disproportionate manner relative to other participants of similar size and scope in such businesses and industries, (C) the announcement of the Merger Agreement (including any impact on or disruptions in relationships with customers, suppliers, distributors, dealers, employees or other similar relationships), (D) changes in Law or GAAP (as such terms are defined in the Merger Agreement), or any interpretation thereof, (E) any failure to meet financial projections, forecasts, estimates or budgets, provided, that, the exception in this clause shall not exclude a determination that a fact, change, effect, development, event, condition, occurrence, action or omission underlying such failure has resulted in a Company Material Adverse Effect, (F) any action or forbearance from taking an action, required by the

 

5

 

terms of the Merger Agreement or to which the Borrower otherwise consents in writing, or which the Borrower requests, (G) change in prices or trading volume of the Company Common Stock (as defined in the Merger Agreement), provided, that, the exception in this clause shall not exclude a determination that a fact, change, effect, development, event, condition, occurrence, action or omission underlying such decline has resulted in a Company Material Adverse Effect or (H) acts of terrorism not directed at the Company or any of its Subsidiaries or war (whether or not declared) or natural disasters occurring after the date hereof.

 

“ Consolidated Net Tangible Assets ” means as of any particular time, for the Borrower, the aggregate amount of assets after deducting therefrom (a) all current liabilities, (b) any current liability which has been reclassified as a long-term liability because such liability by its terms is extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed, and (c) all goodwill, excess of cost over assets acquired, patents, copyrights, trademarks, trade names, unamortized debt discount and expense and other like intangibles, all as shown in the most recent consolidated financial statements of the Borrower and its Subsidiaries prepared in accordance with generally accepted accounting principles.

 

“ Consolidated Net Worth ” means as at any date, the consolidated stockholders’ equity (including preferred stock but excluding “Pension and other post-retirement benefits” that are reflected in “Accumulated Other Comprehensive Income (loss)”) of the Borrower at such date.

 

“ 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 Rating ” means, at any time, the credit rating on the Borrower’s long-term senior unsecured debt then most recently publicly announced by either Moody’s or S&P, and “ Credit Ratings ” means such credit ratings from both Moody’s and S&P.

 

“ Debt ” means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above, and (vi) liabilities in respect of unfunded vested benefits under Plans covered by Title IV of ERISA.

 

“ Default Rate ” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided , however , that, with respect to a Eurodollar Rate Loan until the end of the then current Interest Period applicable thereto, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable law.

 

6

 

“ Defaulting Bank ” means, at any time, a Bank as to which the Agent has notified the Borrower that (i) such Bank has failed for three or more consecutive Business Days to comply with its obligations under this Agreement to make available its ratable portion of a Borrowing (a “ funding obligation ”) and such failure is continuing, unless such failure arises out of a good faith dispute between the applicable Bank and either the Borrower or the Agent, (ii) such Bank has notified the Agent in writing that it does not intend to comply with any of its funding obligations under this Agreement (unless such noncompliance arises out of a good faith dispute between the applicable Bank and either the Borrower or the Agent), or has made a public statement that it will not comply with any such funding obligation hereunder (unless such noncompliance arises out of a good faith dispute between the applicable Bank and either the Borrower or the Agent), or generally under other agreements in which it commits to extend credit, (iii) such Bank has, for three or more consecutive Business Days, failed to confirm in writing to the Agent, in response to a written request of the Agent, that it will comply with its funding obligations hereunder, provided that such Bank shall cease to be a Defaulting Bank under this clause (iii) upon receipt of such confirmation, or (iv) a Bank Insolvency Event has occurred and is continuing with respect to such Bank; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in such Bank or its Parent Company by a Governmental Authority or an instrumentality thereof.  The Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.

 

“ Disposition ” or “ Dispose ” means, with respect to any Person, (i) any sale, transfer, license, lease or other disposition of any property or assets by such Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith and (ii) any Equity Issuance by any Subsidiary of such Person (excluding any such Equity Issuance that would, if made by the Borrower, constitute an Excluded Equity Issuance); provided that the term Disposition shall not include any loss of or damage to, or any condemnation or other taking of, any property or assets.

 

“ Dollars ” and the sign “ $ ” each means lawful money of the United States of America.

 

“ Domestic Lending Office ” means, with respect to any Bank, the office of such Bank specified as its “ Domestic Lending Office ” in its Administrative Questionnaire or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Agent.

 

“ Effective Date ” means the date this Agreement becomes effective in accordance with Section 8.06 .

 

“ Eligible Financial Institution ” means, as of the date of any assignment as contemplated in Section 8.07(a)(i) , a commercial bank or financial institution (i) with a credit rating on its long-term senior unsecured debt of either (a) “AA-” or better from S&P or (b) “Aa3” or better from Moody’s; and (ii) having shareholders’ equity of not less than $5,000,000,000.

 

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

 

7

 

“ Equity Issuance ” means any issuance or sale by the Borrower after the Effective Date of (i) any of its Equity Interests or (ii) any other security or instrument representing an Equity Interest (or the right to obtain any Equity Interest) in it.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute.

 

“ ERISA Affiliate ” means each trade or business (whether or not incorporated) which, together with the Borrower or a Subsidiary of the Borrower, would be deemed to be a “single employer” within the meaning of Section 4001 of ERISA.

 

“ ERISA Termination Event ” means (i) a “Reportable Event” described in Section 4043 of ERISA and the regulations issued thereunder (other than a “Reportable Event” not subject to the provision for 30-day notice to the PBGC under such regulations), or (ii) the withdrawal of the Borrower or any of its ERISA Affiliates from a “single employer” Plan during a plan year in which it was a “substantial employer”, both of such terms as defined in Section 4001(a) of ERISA, or (iii) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, or (iv) the institution of proceedings to terminate a Plan by the PBGC or (v) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or (vi) the partial or complete withdrawal of the Borrower or any ERISA Affiliate of the Borrower from a “multiemployer plan” as defined in Section 4001(a) of ERISA.

 

“ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“ Eurodollar Base Rate ” means, with respect to a Eurodollar Rate Loan for the relevant Interest Period, the rate appearing on Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of such 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 page, as determined by the 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 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 Base Rate” with respect to such Eurodollar Rate Loan 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 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.

 

“ Eurodollar Lending Office ” means, with respect to any Bank, the office of such Bank specified as its “Eurodollar Lending Office” in its Administrative Questionnaire (or, if no such office is specified, its Domestic Lending Office), or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Agent.

 

8

 

“ Eurodollar Rate ” means, with respect to any Interest Period, an interest rate obtained by dividing (i) the Eurodollar Base Rate applicable to such Interest Period by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage, such Eurodollar Rate to be adjusted automatically on and as of the effective date of any change in the Eurodollar Rate Reserve Percentage.

 

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

 

“ Eurodollar Rate Reserve Percentage ” means, for any date, that percentage (expressed as a decimal) which is in effect on such date, as prescribed by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of Eurocurrency Liabilities having a term equal to the applicable Interest Period (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar Rate Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any bank to United States residents).

 

“ Events of Default ” has the meaning specified in Section 6.01 .

 

“ Excluded Equity Issuances ” means any Equity Issuance of the Borrower pursuant to employee and other benefit plans, stock option or stock purchase plans, management equity plans, equity compensation plans, other benefit plans or compensation arrangements or accommodations for management, directors or employees of the Borrower existing on the Effective Date or established thereafter in the ordinary course of business or pursuant to dividend reinvestment plans established for the benefit of the common stock holders of the Borrower.

 

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

 

“ Fee Letter ” means the letter agreement so titled dated November 14, 2010 among the Borrower, JPMorgan and the Arranger.

 

“ Foreign Subsidiary ” means (i) any Subsidiary of the Borrower that is not organized under the laws of the United States of America or any political subdivision thereof or (ii) any Subsidiary of any Person described in the foregoing clause (i).

 

“ Governmental Authority ” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court,

 

9

 

in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

 

“ Information Memorandum ” means the Confidential Information Memorandum dated November 2010 in the form approved by the Borrower concerning the Borrower and its Subsidiaries which, at the Borrower’s request and on its behalf, was prepared in relation to the transactions contemplated by this Agreement and distributed by the Arranger to selected financial institutions before the date of this Agreement.

 

“ Insignificant Subsidiary ” means, on any date, any Subsidiary of the Borrower whose aggregate asset value, as reasonably calculated by the Borrower in accordance with generally accepted accounting principles, is at less than or equal to $50,000,000 on such date.

 

“ Interest Payment Date ” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; and (b) as to any Base Rate Loan, the last day of each February, May, August and November and the Maturity Date.

 

“ Interest Period ” means, for each Loan comprising part of the same Borrowing, the period commencing on the date of such Loan and ending on the last day of the period selected by the Borrower pursuant to the provisions below.  The duration of each such Interest Period shall be 1, 2, or 3 months, in each case as the Borrower may, in the related Loan Notice, select; provided , however , that:

 

(i)            the duration of any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date;

 

(ii)           Interest Periods commencing on the same date for Loans comprising part of the same Borrowing shall be of the same duration; and

 

(iii)          whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day.

 

“ JPMorgan ” means JPMorgan Chase Bank, N.A.

 

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

 

“ Loans ” means the loans made by the Banks to the Borrower pursuant to this Agreement.

 

“ Majority Banks ” means at any time Banks holding more than 50% of the Total Commitment, or if the Commitments have been terminated, Banks holding more than 50% of the then aggregate unpaid principal amount of the Loans.

 

10

 

“ Margin Stock ” has the meaning set forth in Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“ Maturity Date ” means the first anniversary of the Closing Date.

 

“ Merger ” means the merger of a Subsidiary of the Borrower with and into the Company pursuant to the Merger Agreement.

 

“ Merger Agreement ” means the Agreement and Plan of Merger dated as of November 14, 2010 among the Borrower, Badger Merger Sub, Inc. and the Company.

 

“ Moody’s ” means Moody’s Investors Service, Inc. or any successor thereto, and if Moody’s ceases to issue ratings of the type described herein with respect to the Borrower, then the Borrower and the Agent, with the consent of the Majority Banks, shall agree upon a mutually acceptable replacement debt rating agency and shall further agree, upon determination of such replacement agency, to determine appropriate equivalent ratings levels to replace those contained herein.

 

“ Net Cash Proceeds ” means, (a) with respect to any Disposition by the Borrower or any Subsidiary, the aggregate amount of all cash proceeds (including any cash proceeds received by way of deferred payment of principal pursuant to a note or installment receivable, purchase price adjustment, or otherwise, but only as and when received) received by the Borrower or a Subsidiary in respect of such Disposition, net of (i) all attorneys’ fees, accountants’ fees, brokerage, consultant and other customary fees and commissions, title and recording tax expenses and other fees and expenses incurred by the Borrower or a Subsidiary in connection with such Disposition, (ii) all taxes (including taxes arising out of the distribution of such cash proceeds by a Foreign Subsidiary directly or indirectly to the Borrower or a Subsidiary by one or more intermediate Subsidiaries or another Subsidiary organized and existing under the laws of the United States of America or any political subdivision thereof (such taxes, “ Specified Taxes ”)) paid or reasonably estimated to be payable as a result thereof, (iii) any liabilities or obligations associated with the property or assets Disposed of in such Disposition and retained, indemnified or insured by the Borrower or a Subsidiary after such Disposition, including without limitation pension and other post-employment benefit liabilities, liabilities related to environmental matters, and liabilities relating to any indemnification obligations associated with such Disposition, (iv) all payments made, and all installment payments required to be made, with respect to any obligation (x) that is secured by any property or assets subject to such Disposition, in accordance with the terms of any Lien upon such property or assets, or (y) that must by its terms, or in order to obtain a necessary consent to such Disposition, or by applicable law, be repaid out of the proceeds from such Disposition, (v) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Disposition, or to any other Person (other than the Borrower or a Subsidiary) owning a beneficial interest in the property or assets Disposed of in such Disposition, (vi) the amount of any purchase price or similar adjustment (x) claimed by any Person to be owed by the Borrower or a Subsidiary, until such time as such claim shall have been settled or otherwise finally resolved or (y) paid or payable by the Borrower or a Subsidiary, in either case in respect of such Disposition and (vii) amounts applied or committed to be applied to the purchase price of property or assets useful in the business of the Borrower or its Subsidiaries within 365 days after

 

11

 

the receipt of such proceeds, (b) with respect to any Property Loss Event, the aggregate amount of all cash proceeds received by the Borrower or any Subsidiary unless the repatriation to the United States of the related proceeds is prohibited or delayed by applicable local law or would in the good faith judgment of the Borrower have an adverse tax consequence, net of (i) amounts applied or committed to be applied, to the restoration or repair of damaged property or assets or to the purchase price of replacement property or assets or other similar property or assets useful in the business of the Borrower or its Subsidiaries within 365 days after the receipt of such proceeds and (ii) taxes, including Specified Taxes, and (c) with respect to any other Reduction Event, the aggregate amount of all cash proceeds received by the Borrower or any Subsidiary in respect of such Reduction Event, net of fees, expenses, costs, underwriting discounts and commissions incurred by the Borrower or such Subsidiary in connection therewith and net of taxes paid or estimated to be payable as a result thereof (including Specified Taxes).

 

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

 

“ Note ” means a promissory note executed by the Borrower in favor of a Bank pursuant to Section 2.08 , substantially in the form of Exhibit A .

 

“ Other Credit Agreements ” means (a) that certain Credit Agreement (364-Day Facility), dated as of September 16, 2010, among the Borrower and certain of its Subsidiaries, as borrowers thereunder, certain financial institutions party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Japan Local Currency Agent, Citibank International plc, as Local Currency Agent, and Citibank, N.A., as agent for such banks, (b) that certain Credit Agreement (Five-Year Facility), dated as of September 20, 2007, among the Borrower and certain of its Subsidiaries, as borrowers thereunder, certain financial institutions party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as agent for such banks, and (c) that certain Credit Agreement (4-Year Facility), dated as of September 16, 2010, among the Borrower and certain of its Subsidiaries, as borrowers thereunder, certain financial institutions party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Japan Local Currency Agent, Citibank International plc, as Local Currency Agent, and Citibank, N.A., as agent for such banks, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

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

 

“ PBGC ” means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“ Permitted Assignee ” means a Person approved by the Borrower for purposes of Section 8.07 by way of written notice to the Agent.  The Agent shall notify any Bank upon request whether a Person is or is not a Permitted Assignee.

 

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

 

12

 

“ Plan ” means any multiemployer plan or single employer plan, as defined in Section 4001 and subject to Title IV of ERISA, which is maintained, or at any time during the five calendar years preceding the date of this Agreement was maintained, for employees of the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate.

 

“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMorgan as its prime rate in effect at its office located at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

 

“ Pro Rata Share ” means, with respect to each Bank, a fraction (expressed as a percentage, carried out to the ninth decimal place), (x) at any time on or prior to the funding of the Loans, the numerator of which is the amount of the Commitment of such Bank at such time and the denominator of which is the amount of the Total Commitment at such time; and (y) at any time after the funding of the Loans, the numerator of which is the aggregate outstanding principal amount of the Loans of such Bank at such time and the denominator of which is the aggregate outstanding principal amount of the Loans at such time.

 

“ Property Loss Event ” means (a) any loss of or damage to property or assets of the Borrower and its Subsidiaries that results in the receipt by such Person of proceeds of insurance (other than business interruption insurance) exceeding $250,000,000 (individually or in the aggregate) or (b) any taking of property or assets of the Borrower and its Subsidiaries that results in the receipt by such Person of a compensation payment in respect thereof exceeding $250,000,000 (individually or in the aggregate). !

 

“ Purchase Claims ” means the outstanding liens on or claims against or in respect of any of the accounts receivable of the Borrower or any of its Subsidiaries arising out of the sale or securitization by the Borrower of any of its Subsidiaries of such accounts receivable.

 

“ Reduction Amount ” means, in relation to any Reduction Event, the largest integral multiple of $1,000,000 that does not exceed the amount of the related Net Cash Proceeds.

 

“ Reduction Event ” means any Specified Asset Sale, Property Loss Event, Specified Debt Financing or Specified Equity Issuance.

 

“ Register ” has the meaning specified in Section 8.07(c) .

 

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and such Person’s and such Person’s Affiliates’ respective managers, administrators, members, trustees, partners, directors, officers, employees, agents, fund managers and advisors.

 

“ Restricting Information ” means material non-public information with respect to the Borrower or its securities.

 

“ S&P ” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor thereto, and if S&P ceases to issue ratings of the type described herein with respect to the Borrower, then the Borrower and the Agent, with the consent of the Majority

 

13

 

Banks, shall agree upon a mutually acceptable replacement debt rating agency and shall further agree, upon determination of such replacement agency, to determine appropriate equivalent ratings levels to replace those contained herein.

 

“ Specified Asset Sale ” means any Disposition or series of related Dispositions by the Borrower or any of its Subsidiaries to the same buyer (or affiliated buyers) outside the ordinary course of business; provided that “Specified Asset Sale” shall not include (i) a Disposition or series of related Dispositions the Net Cash Proceeds of which do not exceed $250,000,000 in the aggregate for such Disposition or series of related Dispositions, (ii) Dispositions by the Borrower to any Subsidiary, (iii) Dispositions by any Subsidiary to the Borrower or any other Subsidiary, (iv) Dispositions by Foreign Subsidiaries to the extent that, in the case of this clause (iv), repatriation to the United States of the related proceeds is prohibited or delayed by applicable local law or would in the good faith judgment of the Borrower have an adverse tax consequence or (v) Dispositions in connection with receivables facilities or securitization facilities excluded from the definition of “Specified Debt Financing” pursuant to clause (i) thereof.

 

“ Specified Debt Financing ” means any issuance of debt securities (whether in a public offering or a private placement) or borrowing of term loans (other than the Loans) by the Borrower or any of its Subsidiaries (other than CFSC and its Subsidiaries) for gross proceeds exceeding $250,000,000, but excluding (i) incurrence of Debt pursuant to credit facilities (including, without limitation, pursuant to the Other Credit Agreements), receivables facilities or securitization facilities existing on the Effective Date (including any refinancing, renewals, increases or extensions thereof) or issuance of commercial paper supported by such facilities, (ii) any Debt incurred in the ordinary course of business, (iii) any transactions between the Borrower and any Subsidiary, (iv) any transactions between or among Subsidiaries and (v) incurrence of Debt by Caterpillar Japan Ltd. in an aggregate principal amount not to exceed ¥70,000,000,000 (Japanese Yen).

 

“ Specified Equity Issuance ” means any Equity Issuance by the Borrower other than an Excluded Equity Issuance.

 

“ Specified Representations ” means the representations and warranties of the Borrower contained in Section 4.01(a)(i), (b), (c) , (d)  and (g) .

 

“ Specified Taxes ” has the meaning specified in the definition of “Net Cash Proceeds”.

 

“ Subsidiary ” means, with respect to any Person, (i) a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person, or by such Person and one or more other Subsidiaries of such Person or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.  For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

 

14

 

“ Total Commitment ” means, at any time, the sum of all of the Banks’ Commitments at such time.

 

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

 

“ USA Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56,115 Stat. 272 (2001), as amended.

 

SECTION 1.02.  Computation of Time Periods .  In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.

 

SECTION 1.03.  Accounting Terms .  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e)  and all references contained herein to generally accepted accounting principles shall mean United States generally accepted accounting principles.

 

ARTICLE II
THE COMMITMENTS AND LOANS

 

SECTION 2.01.  Loans .  Subject to the terms and conditions set forth herein, each Bank severally agrees to make one or more Loans to the Borrower on a single Business Day during the Availability Period, in an aggregate amount not to exceed the amount of such Bank’s Commitment.  The Commitments shall terminate on the Commitment Termination Date (after the making of any Loans to be made hereunder on such date in accordance with the terms and conditions hereof).  The Commitments are not revolving in nature, and amounts borrowed under this Section 2.01 and repaid under Section 2.03(a)  or prepaid under Section 2.03(b)  may not be reborrowed.  Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

 

SECTION 2.02.  Borrowings, Conversions and Continuations of Loans .

 

(a)  Each borrowing of Loans, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Agent, which may be given by telephone.  Each such notice must be received by the Agent not later than 9:00 a.m. (New York City time) (i) three Business Days prior to the requested date of any borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any borrowing of Base Rate Loans.  Each telephonic notice by the Borrower pursuant to this Section 2.02(a)  must be confirmed promptly by delivery to the Agent of a written Loan Notice, appropriately completed.  Each borrowing, conversion or continuation of Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a borrowing of Loans, a conversion of Loans from one Type to the other, or a continuation of

 

15

 

Eurodollar Rate Loans, (ii) the requested date of the borrowing (which date shall be the Closing Date), conversion or continuation, as the case may be (which, in each case, shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto.  If the Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

 

(b)  Following receipt of a Loan Notice, the Agent shall promptly notify each Bank of the amount of its Pro Rata Share of the Loans, and if no timely notice of a continuation is provided by the Borrower, the Agent shall notify each Bank of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a) .  In the case of a borrowing of Loans, each Bank shall make the amount of its Pro Rata Share of such Loans available to the Agent in immediately available funds at the Agent’s Office not later than 11:00 a.m. on the Business Day specified in the applicable Loan Notice.  Upon satisfaction of the applicable conditions set forth in Article III , the Agent shall promptly make all funds so received available to the Borrower in like funds as received by the Agent either by (i) crediting the account of the Borrower on the books of JPMorgan with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Agent by the Borrower.

 

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

 

(d)  The Agent shall promptly notify the Borrower and the Banks of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate.  The determination of the Eurodollar Rate by the Agent shall be conclusive in the absence of manifest error.

 

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

 

SECTION 2.03.  Prepayments; Maturity .

 

(a)   Voluntary Prepayments . The Borrower may, upon notice to the Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that such notice must be received by the Agent not later than 9:00 a.m., (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Loans. Any prepayment of Loans shall be in a principal amount of $5,000,000 or a

 

16

 

whole multiple of $1,000,000 in excess thereof or, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid.  The Agent will promptly notify each Bank of its receipt of each such notice, and of the amount of such Bank’s Pro Rata Share of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 8.04(b) .  Each such prepayment shall be applied to the Loans of the Banks in accordance with their respective Pro Rata Shares.

 

(b)   Mandatory Commitment Reductions and Prepayments . Upon the occurrence of any Reduction Event, (i) on or prior to the Closing Date, the Total Commitment shall be permanently and ratably reduced by an amount equal to the related Reduction Amount and (ii) after the Closing Date, the Borrower shall apply an amount equal to the related Reduction Amount to ratably prepay the outstanding Loans, any such prepayment to be effected within five Business Days after receipt by the Borrower or, as applicable, its Subsidiary of the Net Cash Proceeds from such Reduction Event and any such reduction to be effective immediately after receipt by the Borrower or, as applicable, its Subsidiary of the Net Cash Proceeds from such Reduction Event. The Borrower shall notify the Agent of any Reduction Event and the related Reduction Amount not later than the date of such Reduction Event, and the Agent shall promptly notify the Banks thereof.  The requirement that a prepayment be made pursuant to this Section 2.03(b)  shall not give rise to an Event of Default under Section 6.01(d)(iii)  hereof and each Lender that is a lender party to any Other Credit Agreement hereby agrees in such capacity that the requirement that a prepayment be made pursuant to this Section 2.03(b)  shall not give rise to an “event of default” pursuant to the provision of such Other Credit Agreement that corresponds to Section 6.01(d)(iii)  hereof.

 

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

 

SECTION 2.04.  Voluntary Termination or Reduction of Commitments .  The Borrower may, upon notice to the Agent, terminate the Total Commitment, or from time to time permanently reduce the Total Commitment; provided that (i) any such notice shall be received by the Agent not later than 9:00 a.m. three Business Days prior to the date of termination or reduction, and (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof.  The Agent will promptly notify the Banks of any such notice of termination or reduction of the Total Commitment.  Any reduction of the Total Commitment shall be applied to the Commitment of each Bank according to its Pro Rata Share.  All undrawn commitment fees accrued until the effective date of any termination of the Total Commitment shall be paid on the effective date of such termination.

 

SECTION 2.05.  Interest .

 

(a)            Subject to the provisions of Section 2.05(b) , (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii)

 

17

 

each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

 

(b)            If any amount payable by the Borrower under this Agreement or any Note is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable law.  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)            Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.

 

SECTION 2.06.  Fees .

 

(a)            Undrawn Commitment Fee .   The Borrower shall pay to the Agent for the account of each Bank in accordance with its Pro Rata Share, an undrawn commitment fee which shall accrue at the rate of 0.15% per annum on the daily amount of the undrawn Commitment of such Bank during the period from and including the Effective Date to but excluding the Commitment Termination Date.  Accrued fees shall be payable quarterly in arrears on the last day of each February, May, August and November prior to the Commitment Termination Date and on the Commitment Termination Date.

 

(b)            Duration Fee .  If the Loans have not been repaid in full in cash on or prior to:

 

(i)             the 90th day after the Closing Date, a fully earned and non-refundable duration fee equal to 0.50% of the aggregate principal amount of Loans then outstanding shall be due and payable by the Borrower on such date to the Agent for the account of each Bank in accordance with its Pro Rata Share;

 

(ii)            the 180th day after the Closing Date, a fully earned and non-refundable duration fee equal to 0.75% of the aggregate principal amount of Loans then outstanding shall be due and payable by the Borrower on such date to the Agent for the account of each Bank in accordance with its Pro Rata Share; and

 

(iii)           the 270th day after the Closing Date, a fully earned and non-refundable duration fee equal to 1.25% of the aggregate principal amount of Loans then outstanding shall be due and payable by the Borrower on such date to the Agent for the account of each Bank in accordance with its Pro Rata Share.

 

(c)            Other Fees .  The Borrower shall pay to the Agent, the Arranger and the Banks such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and, except to the extent expressly otherwise agreed, shall not be refundable for any reason whatsoever.

 

18

 

SECTION 2.07.  Computation of Interest and Fees .

 

All computations of interest for Base Rate Loans based on the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of interest and all computations of undrawn commitment fees shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid.  Each determination by the Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

SECTION 2.08  Evidence of Debt .

 

The Loans made by each Bank shall be evidenced by one or more accounts or records maintained by such Bank and by the Agent in the ordinary course of business.  The accounts or records maintained by the Agent and each Bank shall be conclusive absent manifest error of the amount of the Loans made by the Banks to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Loans.  In the event of any conflict between the accounts and records maintained by any Bank and the accounts and records of the Agent in respect of such matters, the accounts and records of the Agent shall control in the absence of manifest error.  Upon the request of any Bank made through the Agent, the Borrower shall execute and deliver to such Bank (through the Agent) a Note, which shall evidence such Bank’s Loans in addition to such accounts or records.  Each Bank may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

SECTION 2.09.  Payments Generally .

 

(a)            All payments to be made by the Borrower shall be made without condition or deduction for any setoff, deduction or counterclaim.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Agent, for the account of the Banks, at the Agent’s Office in Dollars not later than 12:00 noon on the date specified herein in immediately available funds.  The Agent will promptly distribute to each Bank its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Bank’s Applicable Lending Office.  All payments received by the Agent after the applicable time specified in this Section 2.09(a)  shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

(b)            (i)             Unless the Agent shall have received notice from a Bank prior to the proposed time of any borrowing of Loans that such Bank will not make available to the Agent such Bank’s share of such borrowing, the Agent may assume that such Bank has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Bank has not in fact made its share of the applicable borrowing available to the Agent, then such

 

19

 

Bank and the Borrower severally agree to pay to the Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Agent, at (A) in the case of a payment to be made by such Bank, the greater of (1) the Federal Funds Rate and (2) a rate determined by the Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Agent in connection with the foregoing and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to the related Loan.  If the Borrower and such Bank shall pay such interest to the Agent for the same or an overlapping period, the Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Bank pays its share of the applicable borrowing to the Agent, then the amount so paid shall constitute such Bank’s Loan included in such borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Bank that shall have failed to make such payment to the Agent.

 

(ii)            Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Agent for the account of the Banks that the Borrower will not make such payment, the 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 Banks the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Banks severally agrees to repay to the Agent forthwith on demand the amount so distributed to such Bank in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Agent, at the greater of (1) the Federal Funds Rate and (2) a rate determined by the Agent in accordance with banking industry rules on interbank compensation.

 

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

 

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

 

(d)            The obligations of the Banks hereunder to make Loans and to make payments pursuant to Section 7.09 are several and not joint.  The failure of any Bank to make any Loan on any date required hereunder shall not relieve any other Bank of its corresponding obligation to do so on such date, and no Bank shall be responsible for the failure of any other Bank to so make its Loan.   Nothing contained herein shall impair the rights and remedies of the Borrower against any Bank under applicable law as a result of such Bank’s failure to make any Loan on the date required hereunder.

 

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

 

20

 

SECTION 2.10.  Increased Costs; Capital Adequacy; Illegality .  (a)  If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements, in the case of Eurodollar Rate Loans, to the extent already included in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to any Bank of agreeing to make or making, funding or maintaining Eurodollar Rate Loans, then the Borrower shall from time to time, upon written demand by such Bank (with a copy of such demand to the Agent), pay to the Agent for the account of such Bank additional amounts sufficient to compensate such Bank for such increased cost.  A certificate describing in reasonable detail the amount of such increased cost, submitted to the Borrower and the Agent by such Bank, shall create a rebuttable presumption of such increased cost.

 

(b)  If any Bank determines that compliance with any law or regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Bank or by any Person controlling such Bank and that the amount of such capital is increased by or based upon the existence of such Bank’s Loans or commitment to lend hereunder, then, upon written demand by such Bank (with a copy of such demand to the Agent), the Borrower shall immediately pay to the Agent for the account of such Bank, from time to time as specified by such Bank, additional amounts sufficient to compensate such Bank (or, if applicable, such Person controlling such Bank) in the light of such circumstances, to the extent that such Bank reasonably determines such increase in capital to be allocable to the existence of such Bank’s commitment to lend hereunder.  A certificate describing in reasonable detail such amounts submitted to the Borrower by such Bank shall create a rebuttable presumption of such amounts.

 

(c)  If any Bank shall notify the Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Bank or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Loans or to fund or maintain Eurodollar Rate Loans hereunder, (i) all Eurodollar Rate Loans of such Bank then outstanding shall begin bearing interest at the Base Rate for the Interest Period selected by the Borrower in accordance with the procedures of Section 2.02(a) , notwithstanding any prior election by the Borrower to the contrary, either (x) one Business Day after such notice, or (y) if such Bank may lawfully continue to maintain and fund such Loans at the applicable Eurodollar Rate to a later day during such Interest Period, on such later day (in which case the Borrower shall in addition reimburse such Bank for any resulting losses as provided in Section 8.04(b) ) and (ii) the obligation of such Bank to make Eurodollar Rate Loans shall be suspended until such Bank shall notify the Agent that the circumstances causing such suspension no longer exist, and until such notification has been given, such Bank shall fund its Pro Rata Share of any Borrowing comprised of Eurodollar Rate Loans as a Base Rate Loan.

 

(d)  If the Majority Banks shall, at least one (1) Business Day before the date of any requested Borrowing, notify the Agent that the Eurodollar Rate for Eurodollar Rate Loans comprising such Borrowing will not adequately reflect the cost to such Majority Banks of making or funding their respective Eurodollar Rate Loans for such Borrowing, the Agent shall so notify the Borrower,

 

21

 

and the right of the Borrower to select the Eurodollar Rate for such Borrowing shall be suspended until the Agent shall notify the Borrower and the Banks that the circumstances causing such suspension no longer exist, and each Loan comprising such Borrowing shall be a Base Rate Loan.

 

(e)  In the event that a Bank (an “ Affected Bank ”) demands payment from the Borrower at any time pursuant to subsection (a) or (b) of this Section 2.10 , then from such time and for so long thereafter as such Bank remains an Affected Bank, the Borrower may eith